ILL-SUITED the Rollback of Consumer Nancial Protections Has Left New Yorkers Like Esther Roman Vulnerable to Shady Debt-Collection Lawsuits PAGE 20

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NEW YORK BUSINESS® JULY 23 - AUGUST 5, 2018 | PRICE $3.00, DOUBLE ISSUE

ILL-SUITED The rollback of consumer nancial protections has left New Yorkers like Esther Roman vulnerable to shady debt-collection lawsuits PAGE 20

VOL. XXXIV, NOS. 30, 31 WWW.CRAINSNEWYORK.COM OVERDUE THE LIST 12 WAYS ALTERATIONS TOP PROPERTY TO MAKE IN THE SALES AND MONEY GARMENT OFFICE LEASES IN REAL DISTRICT P. 14 ESTATE P. 8 P. 18 NEWSPAPER

P001_CN_20180723.indd 1 7/20/18 6:12 PM JULY 23 - AUGUST 5, 2018 CRAINSNEW YORK BUSINESS

IN THIS ISSUE

3 EDITORIAL Desegregating public schools 4 IN CASE YOU MISSED IT Good times roll at city’s big banks 5 HEALTH CARE An AI-powered startup looks to cure digital diagnostics P. 6 WHO OWNS THE BLOCK 22 Development is on the rise 22 GOTHAM GIGS in central Harlem Balancing buying local with keeping costs low 7 REAL ESTATE Of ce and retail rents fall 23 FOR THE RECORD in the second quarter Our tally of the week’s buys, busts and breakthroughs 8 VIEWPOINTS A x for a land-use mistake; 26 SNAPS greening the city’s roofs Photos from the city’s biggest fundraisers and charity events 14 THE LIST Priciest Manhattan of ce 27 PHOTO FINISH leases; city’s top property sales A Chelsea tness center eschews steamy workouts 18 MAKING $$$ IN REAL ESTATE Rents are down and retail is CORRECTION rocky, but savvy investors are still turning pro ts Hudson Meridian Construction Group had 113 full-time and full-time-equivalent employ- 20 UNDUE PROCESS ees as of June 30. This gure was misstated Debt-collection lawsuits are in the list of the New York area’s largest P. 20 making a comeback construction rms, published July 9.

Vol. XXXIV, Nos. 30, 31, July 23, 2018—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double issues Jan. 1, June 25, July 9, July 23, Aug. 6, Aug. 20 and Dec. 24, by Crain Communications Inc., 685 Third Ave., New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing of ces. Postmaster: Send address changes to: Crain’s New York Business, Circulation Department, PO Box 433279, Palm Coast, FL 32143-9681. For subscriber service: Call 877-824-9379. Fax 313-446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. (GST No. 13676-0444-RT) ©Entire contents copyright 2018 by Crain Communications Inc. All rights reserved. BUCK ENNIS

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2 | CRAIN’S NEW YORK BUSINESS | JULY 23, 2018

P002_CN_20180723.indd 2 7/20/18 6:09 PM JULY 23, 2018

AGENDAAn organic way to desegregate the city’s school system

he idea of New York as a melting pot is undercut by an in- convenient fact: City schools are the most segregated in the nation. In a place where people of all backgrounds share subway cars and sidewalks, and 64 years a er “separate but equal” Teducation was ruled unconstitutional, how can this be? e segregation of neighborhoods—a result of economic and social forces—is one reason, as young children typically attend schools near their home. And while the city has largely eliminated zones for middle and high schools in recent decades, their admission policies segregate kids in other ways. ey screen applicants using exams, attendance and other metrics that separate children by household income and race. “School choice” lengthened students’ commute and might have exacerbated the segregation problem too. Families contribute to schools’ homogeneity because they prefer ones that are nearby and serve kids like theirs. Many minority parents want But rapidly redistributing kids through radical policies would be political- resources more than diversity for classrooms, believing their schools get ly and practically dicult, given all the baked-in causes of segregation. If less money than white ones, though the city has released no data on that. white children were assigned to far-o or heavily minority schools, more (High-poverty schools get extra public funding, which probably exceeds of their parents would opt for private school or the suburbs. ey could what parents raise at high-income schools.) be retained (as many are now) by grouping But diversity brings benets that money Let poor areas gentrify and rezone their kids with one another in “gi ed and can’t buy. As the website Chalkbeat noted, talented” classes, but that would defeat the racially and economically integrated class- wealthy ones to trigger low-cost units. purpose of diversifying schools—and the rooms boost students’ critical thinking and Then restore zone schools academic benets of tracking are dubious. tolerance and yield academic gains for dis- Ideally, neighborhoods would be diverse advantaged children. Moreover, research and children would attend local schools re- generally shows that high performers are not hindered when grouped with ecting that mix rather than piling on rush-hour trains and buses. at underprivileged peers. A critical mass of motivated learners li s the whole lo y goal can be achieved organically by restoring zone schools, letting student body, so the aim must be for every school to have one. gentrication continue in minority areas and upzoning wealthy ones, Several school districts have integration eorts underway, and new triggering the city’s mandate for residential projects to include aordable Chancellor Richard Carranza wants systemwide reform done yesterday. units. It would take a few years but would be worth the wait. — THE EDITORS

FINE PRINT: Union-owned Amalgamated Bank led last week to go public, six years after U.S. Commerce Secretary Wilbur Ross invested $50 million to help save it from collapse. If the bank’s shares trade at values similar to those of other small banks, the stake held by WL Ross & Co. would be worth $100 million.

BY GERALD SCHIFMAN STATS

25 WORDS OR LESS LENDING RUN AMOK? ONLINE LENDING IS surging in New York, as are claims by state regulators that customers are being gouged. AND THE CIT Y The upgrade ... % Increase in New York online-lending “recognizes the 79 customers from 2015 to 2017 Total of online loans provided ballpark’s proven by 35 companies to New $3B York customers last year, up resiliency through 42% from 2015 periods of variable % Portion of that amount that went to team and economic 83 individuals; businesses borrowed the rest performance” Average median annual percent- APR one online lender charged, % age rate for all individuals on — Moody’s, on why it raised Citi Field’s % 35 percentage points higher than online loans, versus 19.6% for credit rating last week despite another 14.8 62.3 the criminal usury rate limit those deemed “unbanked” or “underbanked” lost season for the New York Mets

SOURCE: State Department of Financial Services ISTOCK

JULY 23, 2018 | CRAIN’S NEW YORK BUSINESS | 3

P003_CN_20180723.indd 3 7/20/18 5:19 PM IN CASE YOU MISSED IT CRAINSNEW YORK BUSINESS president K.C. Crain senior executive vice president Chris Crain group publisher Mary Kramer

EDITORIAL Wall Street’s ups and downs, managing editor Brendan O’Connor MAKING SOME assistant managing editors Erik Engquist, and a chance for NY bankers MONEY: Morgan Jeanhee Kim, Robin D. Schatz Stanley CEO copy desk chief Telisha Bryan LOT HAS CHANGED James Gorman is on art director Carolyn McClain at Morgan Stanley since a roll. photographer Buck Ennis Gorman became chief executive in 2010. e invest- digital editor Gabriella Iannetta ment-banking powerhouse has become a leading senior reporters Joe Anuta, Aaron Elstein, A Matthew Flamm, Daniel Geiger wealth manager, and investors have pushed its market value reporters Will Bredderman, past that of rival Goldman Sachs. “We’ve just had two con- Jonathan LaMantia data reporter Gerald Schifman secutive $10 billion revenue quarters,” Gorman said during a digital fellow Lizeth Beltran conference call last week. “We hadn’t had one in the previous columnist Greg David 320 quarters.” contributors Tom Acitelli, Cara Eisenpress, Cheryl S. Grant, Yoona Ha, Chris Kobiella, Asked what he plans to do next, the CEO replied: “What Miriam Kreinin Souccar about make some money?” to contact the newsroom: www.crainsnewyork.com/staff ese are halcyon days for the Wall Street crowd. e ro- 212.210.0100 bust economy has dealmakers and traders working around-the-clock. Federal examiners brought in aer the - 685 Third Ave., New York, NY 10017-4024 nancial crisis to literally watch over Wall Streeters’ shoulders have vanished. ADVERTISING But it’s not all wine and roses. Commercial banking revenue at JPMorgan Chase fell slightly last quarter, per- www.crainsnewyork.com/advertise advertising director Irene Bar-Am, haps a sign of slowing demand among business borrowers. President Donald Trump and others worry that the Fed- 212.210.0133, [email protected] eral Reserve will curb growth with more interest-rate increases. senior account managers Lauren Black, Zita Doktor, Rob Pierce, Although Wall Street rms are hiring lots of people, they aren’t taking on many here. In the past 12 months New Stuart Smilowitz York has gained 3,700 nancial jobs, according to state Department of Labor gures, while preliminary federal integrated marketing manager Jonathan Yan, 212.210.0290, [email protected] data show 23,000 were added nationally in the securities industry. One explanation: Banks and brokers have been associate art director/marketing moving back-oce jobs to lower-cost cities for about 25 years, a fact highlighted in May when AllianceBernstein Charles Fontanilla, 212.210.0145 [email protected] agreed to shi its headquarters to Nashville, Tenn., though money managers and other senior employees will stay. sales coordinator Devin Arroyo, Unfortunate events elsewhere give New York a chance to reassert its mojo. We’re not talking about Brexit, but 212.210.0701, [email protected] rather the looming retirement of the London Interbank Oered Rate, or Libor. Used to set interest rates for mort- CUSTOM CONTENT director of custom content gages and credit cards, Libor fell into disrepute aer bankers were found to be manipulating it. A new benchmark Patty Oppenheimer, 212.210.0711, will be needed soon. Surely someone in the world’s nancial capital can step up. NYbor, anyone? — AARON ELSTEIN [email protected] custom project manager Danielle Brody, [email protected] EVENTS Culture club DATA POINT reimbursing its 6,000 employees for www.crainsnewyork.com/events e city launched Culture Pass, granting meals that include red meat, poultry or director of conferences & events COMPTROLLER SCOTT STRINGER library cardholders a free annual visit to pork. Company events will be meatless. Courtney Williams, 212.210.0257, [email protected] 33 local museums. A rush for passes SAID ONLY 118 OF THE CITY’S 472 A break from the news cycle manager of conferences & events crashed culturepass.nyc last week. SUBWAY STATIONS COMPLY WITH Ashlee Schuppius, CNN President Je Zucker is stepping [email protected] King Solomon THE AMERICANS WITH DISABILI- away for six weeks for elective heart AUDIENCE DEVELOPMENT Goldman Sachs named President Da- TIES ACT, AFFECTING MORE THAN surgery. Michael Bass, executive vice group director, audience development vid Solomon successor to CEO Lloyd president of programming, will oversee Jennifer Mosley, [email protected] 600,000 NEW YORKERS. Blankfein, who is retiring Oct. 1. the network’s editorial operations. REPRINTS Blankfein has led the bank for 12 years reprint account executive Lauren Melesio, and will remain for a transition period . Lodging grievances 212.210.0707 ruption counts in their retrial. A U.S. e City Council passed a bill forcing PRODUCTION Leading light Supreme Court ruling had led to their Airbnb to disclose the names and ad- production and pre-press director Private-equity rm Lantern Capital 2015 convictions being overturned. dresses of its 40,000 city hosts to an en- Simone Pryce Partners closed a $289 million deal for forcement agency. — CHRIS KOBIELLA media services manager Nicole Spell the Weinstein Co. and renamed the lm Second chance SUBSCRIPTION CUSTOMER SERVICE studio Lantern Entertainment. Lan- New York Public Radio’s WNYC sold www.crainsnewyork.com/subscribe tern’s founder and CEO Andy Mitchell its news and culture website Chicagoist [email protected] and Managing Director Milos Brajovic to Chicago native Chance the Rapper. 877.824.9379 (in the U.S. and Canada). $3.00 a copy for the print edition; or $99.95 are co-presidents of the studio. WNYC had gained ownership when it one year, $179.95 two years, for print acquired and relaunched New York sis- subscriptions with digital access. Gut reaction ter site Gothamist earlier this year. e Entire contents ©copyright 2018 Tenants of 184 Kent Ave. in Williams- sites were shut down last year by previ- Crain Communications Inc. All rights burg sued Kushner Cos. for $10 mil- ous owner Joe Ricketts. reserved. ©CityBusiness is a registered lion, alleging that the developer en- trademark of MCP Inc., used under license gaged in an improper and unsafe gut For what it’s worth agreement. renovation to harass them into leaving Forbes released its list of the world’s CRAIN COMMUNICATIONS INC. their rent-regulated apartments. 50 most valuable sports franchises. chairman Keith E. Crain New York’s Yankees, Knicks, Giants, vice chairman Mary Kay Crain Meals and wheels president K.C. Crain Jets, Nets and Mets were h, seventh, senior executive vice president Chris Crain Insurer Healthrst is sponsoring a $5 eighth, 21st, 36th and 43rd, respective- secretary Lexie Crain Armstrong monthly Citi Bike membership to food- ly. e Bombers, at $4 billion, were the The longest time editor-in-chief emeritus Rance Crain stamp recipients. e usual cost: $14.95. No. 1 baseball team, and the Knicks, at Billy Joel’s 100th show at Madison chief nancial of cer Robert Recchia $3.6 billion, topped the basketball list. Square Garden featured a surprise founder G.D. Crain Jr. [1885-1973] Trials and tribulations appearance by Bruce Springsteen, chairman Mrs. G.D. Crain Jr. [1911-1996] Former state Senate Majority Leader Working a steak-out who performed two of his songs Dean Skelos and his son, Adam Skel- To cut its carbon footprint, Manhattan alongside the Piano Man.

BLOOMBERG NEWS, AP IMAGES os, were found guilty on all eight cor- co-working rm WeWork is no longer

4 | CRAIN’S NEW YORK BUSINESS | JULY 23, 2018

P004_CN_20180723.indd 4 7/20/18 5:12 PM HEALTH CARE

K Health raises $12.5M for

AI-powered symptom-checker app BLOCH, founder of K Health Tech investors bet big on arti cial intelligence BY JONATHAN LAMANTIA

s your stomachache just base of 2.25 million patients $25 million to help improve dilemma. Manhattan-based said. a bout of indigestion or from the Israeli HMO Maccabi cancer care. e AI companies Zocdoc, the appointment Dr. Jason Lock- acute appendicitis? Do Healthcare Services. use reams of medical data that booking platform, asks us- ette, who runs In- you have a tension head- were previously disorganized ers about their symptoms tegrity Family Care Iache or a brain tumor? Some- Investor interest to make treatment decisions and matches them with the in Huntsville, Ala., times it’s hard not to panic e company, founded based on past outcomes. right kind of doctor. WebMD, participated in test- when si ing through pages of in 2016 in Tel Aviv, ocial- K Health oers an online which was acquired last year ing the K Health medical information on the ly launched in New York last demonstration about a patient by investment rm KKR’s In- app starting in internet, where everyone is week with an announcement with a headache. Based on the ternet Brands for $2.8 billion March. He and a “two clicks away from cancer,” that it had raised $12.5 million person’s answers, the app con- last year, released a revamped nurse practitioner said Allon Bloch, the founder from venture capital rms. e cluded that 83% of patients symptom checker tool in April. have used the app to of startup K Health. company has about 40 employ- with similar symptoms had a “Instead of WebMD or Dr. conduct about 500 chats with e company’s app, pow- ees, about 10 of them in Man- tension type headache; 16% Google you nally have some- new and prospective patients. ered by articial intelligence, hattan. had a general headache. en it thing built on real data,” said As K Health moves into new aims to become the go-to In recent months inves- oered common medications Bloch, a serial entrepreneur. markets, it will need to win source for consumers who are tors have poured hundreds of taken by people with similar He still hasn’t settled on over doctors. “Physicians can trying to gure out whether to millions into local health tech symptoms. Users can also book how K Health will generate be averse to change and this just pop an aspirin or head to companies, with a particular an appointment online. About revenue. It’s focusing for now is a new technology,” Lockette the doctor. It asks users a se- interest in articial intelli- eight practices in the city, in- on expanding its customer said. It takes him about 60 to ries of 15 to 20 questions about gence to improve health de- cluding Manhattan’s St. Claire base, which numbers about 90 seconds to review patients’ themselves and their symp- cision making. For example, Medical and Heartbeat Health, 120,000 people in Israel, Al- symptoms on the app, and he toms. e algorithm compares Prognos has raised $42 million are participating. abama and New York. But it typically does three to four the data to the medical charts to help insurers and drug- Several well-established might eventually charge doc- cases a day. “I can do it on an of people of the same age and makers predict disease trends, health tech companies also tors or insurers for access and iPhone,” he said. “I’ve looked gender, drawing from a data- while Paige.ai has attracted are addressing the symptoms keep it free for patients, Bloch at in the grocery store.” ■

JULY 23, 2018 | CRAIN’S NEW YORK BUSINESS | 5

P005_CN_20180723.indd 5 7/20/18 5:15 PM WHO OWNS THE BLOCK REAL ESTATE

55 W. 125TH ST

On the rise in central Harlem Plans for a 17-story building latest sign of ongoing changes in the area

BY TOM ACITELLI 310 LENOX AVE.

The National Basketball Players Association sold its 3-story, 28,746-square-foot head- n July 2001 Bill Clinton set up his quarters in March 2016 for $21 million to 55 W. 125TH ST. post-presidency o ces on the 14th a partnership between L&M Development oor at 55 W. 125th St. in Harlem. Partners, a privately held Manhattan com- Manhattan-based Cogswell Realty, pany run by CEO Ron Meolis, and Chapman which is led by CEO Arthur Stern, and At the time, chants of “We love Bill” Consultancy, a family-run investment rm. the asset and wealth management wing Idrowned out the odd shouts of “go home” Andrew Chapman is a co-owner of the Red of Deutsche Bank own this 15-story, and “slave master” from demonstrators, Rooster Harlem restaurant on the build- 281,071-square-foot of ce building. ing’s ground oor. The players’ union left Deutsche Bank was able to acquire its including those worried about impending for space in the Durst Organization–owned stake via a $117 million recapitalization gentrication. 1133 Sixth Ave. in June 2015. Cogswell and the City In- Clinton’s arrival did not usher in the vestment Fund—a venture between Fisher Bros. and Morgan Stanley—acquired the wave of pricey developments that many building and two others on West 126th locals feared, but the neighborhood just north of Street for $75 million in January 2006. Marcus Garvey Park has certainly seen its share of investment since then. Two charter schools have opened nearby in the past decade, both with nancial backing from Jonathan Gray, chief 5 W. 125TH ST. operating o cer of Aurora Capital Associates, a Manhattan- 54-62 W. 125TH ST. private-equity giant based real estate investment rm run by Bobby Cayre, and A&H Acquisitions, Blackstone Group. The Jay Group, a Long Island–based run by Alex Adjmi, acquired this prop- private investment rm controlled Investors including erty for $15.5 million in December by Avrohom Yitzchok and Joel Kohn, 2012. The venture then developed a Deutsche Bank, Mor- purchased these ve buildings for 6-story, 131,648-square-foot complex with gan Stanley and or $26.5 million in June. The rm 30 apartments and more than 100,000 plans to demolish the 4-story struc- Equities’ Joe Sitt have square feet of commercial and retail space. tures and replace them with a 160- It opened in November 2016. Tenants in- snapped up properties foot building with 141 units, likely clude WeWork, Target and TJ Maxx. in the neighborhood. to be rental apartments. is month a New York City partnership, the Jay Group, led plans for a 17-story, 1 W. 125TH ST. 113,341-square-foot building to replace ve properties at 54-62 W. 125th St. e mixed-use build- Circle Capital F, a family-owned ing would be the tallest property Manhattan rm managed by David Feldman, acquired this on that side of the block. 35 W. 124TH ST. 2-story commercial building, Overall, sale prices in cen- with 30,912 square feet, for Harlem Village Academies, which describes it- tral Harlem are up signicantly $15 million in 2008. self as “a progressive K-12 charter school net- from a few years ago, if slightly work,” purchased this building for $14.9 mil- atter than in 2016 and early lion in 2010 and turned it into a high school. The charter system also owns and operates 2017. e average price for mul- an elementary school at 74 W. 124th St. tifamily dwellings, for instance, Jonathan Gray of Blackstone Group donated 17 W. 125TH ST. $10 million to the system to facilitate its more than doubled from 2012 to Thor Equities, the privately purchase of 74 W. 124th, according to the rst half of this year, to $472 held real estate investment Bloomberg. He also helped nance the pur- and development rm led by a square foot, brokerage Ariel chase of 35 W. 124th. Joe Sitt, bought this 5-story, Property Advisors found. 46,200-square-foot building Sales volume peaked in 2016 for $29.62 million in 2015. It at $1.05 billion from 119 transactions, and this includes 48 apartments and 9,200 square feet of retail year’s pace is on track to match or exceed the $442 space. million generated through 92 deals last year. Cer- tain properties, including multifamily buildings with elevators and undeveloped land, are proving especially lucrative for sellers, said Victor Sozio, executive vice president of Ariel. “For that type of deal,” he said, “a buyer will still pay a very good price.” ■ GOOGLE MAPS, BUCK ENNIS

6 | CRAIN’S NEW YORK BUSINESS | JULY 23, 2018

P006_CN_20180723.indd 6 7/19/18 3:33 PM REAL ESTATE

Despite strong economic indicators, commercial and retail rents fall Vacancy and new of ce space contributed to the decline, though leasing volume is way up BY JOE ANUTA

he city’s economy e pricing trend was driv- empty as rms squeeze the RETAIL buyers of retail property were is good shape, with en in part by a bifurcation in same number of workers into Manhattan retail rent fell again buying space at a discount. year-over-year job the market. Space being built in a smaller area. In addition, as the market continued to growth above 2% such areas as Hudson Yards is new supply is coming on the correct from the heady days INVESTMENT SALES Tand median household income commanding huge rents, while market downtown and on the of 2015, when many spaces e average price per square and tourism inching up. at the majority of product that is West Side. were overpriced. A Cushman foot to purchase a retail prop- should be aiding the oce and not up to that standard Leasing activity, & Wakeeld report showed erty was $2,090 per square foot retail sectors, but many met- is getting le behind. however, was way up asking rents dropped between during the second quarter, rics are headed in the opposite “ e taking rents % during the second 2% and 18% in every submar- down more than 20% from a direction, according to two for much of this new- quarter. Tenants inked ket but Times Square, which year earlier. at is expect- reports released this month. er product is typically 20 deals for 9.4 million inched upward, and the Flat- ed to spur more transactions, Investment sales, which en- higher and can reach DECLINE in square feet, a 70% in- iron District, which was at. with around 60 retail property compass the sale of dierent in the triple-digits second-quarter crease from the same e Herald Square area, where sales expected this year totaling property types, remained at on a per-square-foot retail property period last year and asking rent was $635 per square more than $2 billion. despite many funds and banks basis,” said Mari- purchase prices about 25% above the foot, and Fih Avenue between Overall, however, the I-sales willing to invest. sha Clinton, Avison from a year ago ve-year quarterly av- 49th and 60th streets, where market was essentially at com- Young’s senior re- erage. e trend was it was around $2,700, were hit pared to a year ago, with about COMMERCIAL OFFICE search director for the tristate driven in part by big blocks particularly hard. 300 transactions for roughly Prices fell across Manhattan, area. “As a result, the less mod- of space taken by companies Vacancy was up in ev- $20 billion worth of property. where the average asking rent ern product that is le comes including Pzer, whose lease ery submarket except for the e biggest deal of this year was $76.80 per square foot with a lower asking rent.” ranked second on Crain’s list Flatiron District and Fih has been Google’s purchase of during the second quarter, ac- Vacancy, which increased of the largest so far this year Avenue—more bad news for Chelsea Market for about $2.4 cording to a report from Avi- slightly and remained high (see page 15). e health sec- landlords. But tenants, mostly billion, which topped Crain’s son Young. at is more than around 10%, is exacerbating tor has posted some of the restaurants and bars, were sign- list of top property sales (see 3% lower than last year. the slide. More space is sitting strongest job gains in the city. ing discounted leases and some page 16). ■

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JULY 23, 2018 | CRAIN’S NEW YORK BUSINESS | 7

P007_CN_20180723.indd 7 7/20/18 5:57 PM VIEWPOINTS

Finally, a fix for NYC’s worst land-use mistake Garment District to give way to modern uses in Midtown

IN 1984 Carl Weisbrod is tangled story began in the early history. “Manufacturing couldn’t ll tories and provide low-cost loans. e was desperately seek- 20th century, when the city’s most im- the space that had been reserved for it,” other zoning restrictions will go away. ing Board of Estimate portant retailers moved uptown to the he recalled. e city has at last recognized real- approval of the Koch 30s and the emerging garment factories e Bloomberg administration tried ity. In recent years, architects and de- administration’s plan followed. Department-store owners to do something. In 2007 Planning sign rms have swept in, along with to revitalize Times were appalled as thousands of workers Commission Chairwoman Amanda tech companies and nonpro ts—some Square, just one clogged the streets on their lunch break, Burden promised a plan to revise the in space restricted to manufacturers— block of which that rubbing elbows with their customers. most archaic zoning. It didn’t material- bringing in a new, auent workforce. GREG DAVID year was the scene e Fih Avenue Association was born ize. A 2013 plan to buy two buildings Even more transformational, the dis- of an unprecedent- to force the apparel makers elsewhere. for manufacturing never got o the trict is now home to 42 hotels, with ed 2,300 crimes, 460 of them felonies. Rather than ght, according to the ground, either—blame intractable op- 12 more under construction. Tourists Standing in reform’s way was the In- book Greater Gotham, apparel-factory position from the unions (given a veto have in turn lured restaurants and bars. ternational Ladies’ Garment Workers’ owners relocated to the 40s, south of by then-Council Speaker Christine e zoning did not save a single Union, which feared a revival would Times Square. Even then, notes histo- Quinn), a few loud manufacturers and manufacturing job but cost the city drive up rents in the Gar- rian Michael Wallace, many nostalgia. “e garment center tugs at dearly by depriving businesses of af- ment District immediately thought the other boroughs the heartstrings of many New Yorkers,” fordable Midtown space. Soon busi- to the south, home to many % made more sense than prime Weisbrod said. “It is about the history nesses in manufacturing space will be of the city’s 125,000 apparel- Manhattan real estate. of so many of our grandfathers and how legalized, and landlords wanting to up- manufacturing jobs. 90DECLINE IN NYC Apparel jobs peaked at the city absorbed so many immigrants.” grade will nd receptive lenders. Some Weisbrod doubted the fears apparel jobs about 400,000 in New York in Named planning commissioner by owners—mostly families originally in were justi ed, but politics de- since 1984 the 1940s. By 1990 there were Mayor Bill de Blasio, Weisbrod resolved the garment trade—will continue to manded that Garment Dis- 90,000, a third of which disap- to undo the error. He had to leave the lease manufacturing space rather than trict side streets be rezoned peared in the next decade. A task for his successor but played a role reposition their buildings. for manufacturing only. Apparel jobs Chinatown hub was wiped out by the behind the scenes as de Blasio co- opted e remaining question is whether vanished anyway—fewer than 12,000 post-9/11 disruptions, and the move- opponents into a steering commit- New Yorkers have learned that market remain in the city—in a telling example ment of work abroad continued apace. tee, creating a consensus for change. forces will overwhelm any eort to save of how land-use policy is helpless in the In 2004 fewer than 33,000 remained. Its solution: e city will set aside $20 industries no longer viable in the city. ■ face of economic forces. Aer almost At that point, Weisbrod knew he million to buy a building for manufac- two decades of trying, the city will nal- was in part responsible for one of the turers, oer tax breaks if landlords set GREG DAVID writes a regular column ly end the restrictive zoning this fall. biggest land-use mistakes in the city’s aside 25,000 square feet for small fac- for CrainsNewYork.com.

Greening the city from the top down A failed program for eco-friendly roofs should be xed, not forgotten BY SCOTT STRINGER AND DANIELLE SPIEGEL-FELD

hen storm clouds gath- roofs cover only 1 in 1,000 buildings er, 62 square miles of across the ve boroughs. With the in- roofs keep us dry in centive set to expire next year, the city New York City. Unfor- seems poised to abandon it. tunately,W most of the dozens of inches But we shouldn’t give up now. of rain that hit New York each year cas- e program oers a meager $5.23 cades into our gutters, swelling sewers abatement for each square foot of veg- and oen causing raw sewage to pour etation, about half the minimum that INSTALLING GREEN ROOFS, like these at Rockefeller Center, can qualify properties for a into our waterways. experts say would spur property own- tax break, but it’s so meager that few building owners have bothered. e city is failing to take advantage ers to act. Without adequate compen- of a perfectly good solution to this. By sation, few owners of buildings and transforming barren roofs into verdant homes have applied for the credit, so rotating group of neighborhoods that Tailoring a credit to match com- spaces, we can improve water quality, the city has spent nowhere near the $1 struggle with regular sewer overows munity needs isn’t unprecedented. Of- slash energy use, foster biodiversity million per year Albany authorized. or a lack of green space. And we should cials in Washington, D.C., started to and provide more enjoyable space. e A bigger investment would pay seri- decrease or even eliminate the abate- vary the size of incentive payments for canopy of plants on green roofs drink ous dividends. ment oered to properties elsewhere. green roofs based on location several up stormwater, reducing runo by A study commissioned by the Wash- Rather than having an incentive years ago. If they can do it, so can we. more than 50%. Green roofs also insu- ington state Department of Energy and available everywhere—but not worth New York City was once at the fore- late, drastically cutting the expense and Environment found that every dollar enough to trigger action anywhere— front of innovation to green the urban emissions from heating and cooling. invested in green roofs generated $2 in we could oer a substantial induce- skyscape. We could be again. Here, Yet New York has done an exceed- bene ts by mitigating stormwater run- ment to eect change in the areas that perhaps more than anywhere else, 62 ingly poor job of assisting property o and providing green space. at’s need it most. square miles of real estate is too valu- owners in greening their rooops. why cities including San Francisco, By focusing on a few speci c neigh- able to waste. ■ A centerpiece of the city’s eorts—a Philadelphia and Toronto recently have borhoods each year, we can raise the property-tax abatement—has failed. It implemented bold policies to promote per-square-foot value of the abatement Scott Stringer is city comptroller. can defray the cost of installation by as green roofs. to make it more appealing to building Danielle Spiegel-Feld is executive direc- much as $100,000, but only seven roofs It’s time for New York to catch up. owners. is way, the city can increase tor of the Guarini Center on Environ- have been granted the abatement in the e program should be restructured to the program’s impact without having to mental, Energy and Land Use Law at

BUCK ENNIS program’s nine years. As a result, green provide a more targeted tax credit to a increase its funding. New York University School of Law.

8 | CRAIN’S NEW YORK BUSINESS | JULY 23, 2018

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How the Food & Beverage Industry Can Find Opportunity in Disruption

BRUCE F. BRONSTER THOMAS G. CARLEY J. GRADY COLIN HOWARD DORMAN, CPA Partner Business Banking Vice President Hotel Operations for Partner, Practice Leader, [email protected] Regional Manager Morris Moinian’s Fortuna Food & Beverage Sector 212-237-1067 [email protected] Realty Group [email protected] 646-855-2807 [email protected] 732-205-2040 516-877-9372

The food and beverage industry is in a time of immense transformation. Fortuna Realty Group, which recently acquired the Garden City Hotel on Many players have had to raise their game to keep up with trends like Long Island. greater transparency in ingredient lists and a higher demand for authenticity • Howard Dorman, CPA, partner at accounting ﬁrm Mazars USA LLP. He and sustainable sourcing, along with a push to reduce food waste and the delivers accounting, tax and consulting services to manufacturing and rise of scrappy startup brands—and their acquisitions by big companies distribution companies, with an emphasis on the food and beverage looking for an edge. industry.

In New York City, a culinary mecca, the bar is even higher. Fortunately, the Here’s their take on some key trends a¤ecting food and beverage changes sweeping the industry are bringing opportunities to many ﬁrms. companies in New York City and across the country.

The numbers tell the story: specialty food sales in the U.S. rose to $140.3 million, up 11% from 2015 to 2017, according to figures from the Specialty Crain’s: There has been a lot of disruption in the food and beverage Food Association. Restaurant industry sales hit $798.7 billion in 2017, space. What is causing it? up from $586.7 billion in 2010, after years of steady growth, the National Restaurant Association reported. The grocery store industry saw revenue Dorman: I would like to get away from calling it disruption, but rather reach $641 billion in 2017, up from $520.75 million in 2010, market research consider it to be innovation. Innovation comes about from change, portal Statista found. transformation or a breakthrough—a new method or idea. If you look at one company everyone considers to be the biggest disrupter, Amazon, what has So how can food and beverage companies continue to ride the waves it really done? Amazon created a new shopping portal for a consumer who of change in the industry? Crain’s recently spoke with leading experts to wants whatever they purchase now. The acquisition of Whole Foods just gather their insights on what’s going on and what’s ahead. expands their distribution network and increases their product selection. And everyone has followed them. Walmart bought Jet.com in 2016. The lineup included: • Bruce F. Bronster, a partner in the New York oce of Windels Marx Lane Carley: More than ever, consumers, particularly the younger generations, & Mittendorf LLP, a full-service law firm headquartered in New York City. want to be associated with newer, more authentic brands. As a result, He represents high-profile hospitality groups, restaurants, celebrity smaller companies that previously held only a very small niche in the chefs, investors and personalities, food purveyors and distributors. marketplace have now caught the attention of the consumer and, more • Thomas G. Carley, Business Banking regional manager for Bank of to the point, the consumer’s wallet. This has made the traditional, larger America Merrill Lynch in metropolitan New York. He oversees business companies take notice—so much so that the bigger companies want to banking teams that serve small and midsize companies throughout the bring these ‘disruptors’ under their umbrella and reap the benefits. Many five boroughs and Westchester and Rockland counties. of these newer companies are producing products that are healthier to • J. Grady Colin, vice president of hotel operations for Morris Moinian’s consume and also have stronger environmental, social and governance

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Partner at Windels Marx Lane & Mittendorf LLP Crain’s: What forthcoming changes in the industry do you see impacting food and beverage companies the most as they relate to consumers? “The root of the recent disruption boils down to intense competition. The restaurant Carley: The changing of food label requirements. Consumers in general, and particularly food industry is facing unprecedented pressures buyers, are becoming more conscious of where a to offer not only exceptional food but also a product is produced, its ingredients, where those unique consumer experience.” ingredients are sourced, etc. With consumers being as health-conscious as ever, having better insight into the makeup of their food—with an BRUCE F. BRONSTER emphasis on truer serving sizes, calories, and added sugars—will have a greater influence on their buying decisions than ever before. principals, providing even greater attraction to both consumers and acquiring companies alike. Colin: Creating memorable experiences, and exceeding expectations is key. No matter the price point, guests must feel good about what they have spent Bronster: The root of the recent disruption boils down to intense compe- on the experience. When ambience, gracious service, well-crafted food and tition. The restaurant industry is facing unprecedented pressures to o¤er drink all come together to surprise and delight the guest a memorable not only exceptional food but also a unique consumer experience. In New experience is created that in turn equates to return visits. York City, there are 24,000 food establishments, and most serve high- quality food. There’s a proliferation of excellence, though the experiential Bronster: Food and beverage companies are increasingly trying to micro- aspect has changed. For example, architectural elements of restaurants divide categories to find a specific niche and fill it. For example, there are may play an important role for a diner looking for fine cuisine amid great now dozens of teas, kombucha brands, and every sort of juice known to architecture for the ultimate dining experience. mankind. Food and beverage companies are micro-slicing and micro-dicing the market to sell more to consumers, and marketing and distribution The o¤erings in New York are incredibly diverse. Many di¤erent companies channels are changing to get closer to them. want to upgrade their o¤erings by expanding in di¤erent ways. This shift to focusing beyond the quality of the food to the experiential aspect impacts Dorman: It is obvious that the health and wellness space continues to and adds costs to the already fickle restaurant industry. grow. Consumer food preferences reflect shifts in eating habits, cravings for new flavors (savory, spicy) as well as convenience, freshness and localness. Consumers now expect more from their snacks, requiring them to provide a wide range of health benefits, like strength and energy. We are seeing a sharp rise in private label brands because the new consumer has lost trust in the big brands and finds that the private label brands promote the values they are looking for. I was so surprised to hear that Unilever has over 600 brands but only 20 to 25 make up a majority of their sales and profitability. Why? Trust. People trust specific brands.

Crain’s: What challenges do you see for the food and beverage industry in the future?

Colin: There are several factors that will challenge the future of the food and beverage industry, from the rising costs of food and real estate to increased wages.

Bronster: The recent increase of the minimum wage is huge and really hit the restaurant industry hard— right in the bottom line. In New York City, the minimum wage for employers with 10 or fewer workers rose to $12 from $10.50; and for employers with 11 or more workers, it will be $13 per hour, up from $11. The rest of the state now has a minimum wage of $10.40, up from $9.70. In an industry with such slim margins and a labor-intensive workforce, the impact is a signiﬁcant concern. The intent of the minimum wage increase was to a¤ect the back of the house, though the reality is it has touched the front of the house. Now restaurants must sustain the additional cost.

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Business Banking Regional Manager for Bank of America aected your clients and other companies in the food and beverage space? Merrill Lynch in metropolitan New York Colin: We’ve noticed a resurgence in spending and increased budgets from our corporate “Once established, companies will be held more clients. For example, we are getting more inquiries accountable for how they operate responsibly. and bookings for corporate holiday events. Our This includes establishing and promoting clients are also requesting more than the venue, policies to ethically source ingredients, minimize food and beverage. With an increased budget, food waste and maintain transparency in their they are able to spend more and are adding overall operations.” customized experiences to their events.

Dorman: We’ve seen a positive impact in our THOMAS G. CARLEY portfolio. You have to consider though, in order to capitalize on these tax law changes, the company must be in a good position already, whether it is Carley: First and foremost, in a world where consumers are more a matter of profitability or a very strong balance knowledgeable than ever, a food and beverage company will find it more sheet. We have seen an increase in the investment in capital equipment challenging to establish and then sustain its specialty. As trends quickly and facility upgrades, which, if planned properly, will yield benefits in come and go due to the ease by which prospective buyers can be touched, depreciation, which can shield a company from paying income taxes for understanding and e¤ectively using social media as a marketing/sales tool a certain period of time. We have seen in the supermarket space stores will be a must. being built and rehabilitated to take advantage of these tax changes. Under certain circumstances you will see companies paying lower taxes on their Once established, companies will be held more accountable for how profits due to reduced tax rates, and we are seeing some of these savings they operate responsibly. This includes establishing and promoting being reinvested into the company by adding employees or providing the policies to ethically source ingredients, minimize food waste and maintain current employees with bonuses. I recommend that before you undertake transparency in their overall operations. Regarding ingredients, establishing any significant investments in your company that you consult with your proper supply chains that are cost-e¤ective has always been, and will always financial partners. be, a challenge for companies in this industry. Bronster: Companies have taken a hit in unexpected areas, such as sporting Dorman: There will always be change in the way food is produced, sold and events. Luxury boxes used to be 50 percent deductible, and now there’s zero consumed. I want to keep our future environmental challenges out of this deductibility. Practically speaking, if you have a box at Yankee Stadium that discussion, even though that will be the number one challenge in the years to come, because that would take a whole article by itself.

Consumers drive change. So how does the supply chain stay in front of it? I think transparency in the supply chain will be a very big issue. The large consumer packaged goods companies (CPGs) are addressing that. Tyson made a large investment in technology that will provide the consumer with full transparency as to where the product was made. In retail, convenience stores are becoming mini-markets. Most drug store chains sell fresh and on-the-go food. What will be the fate of our treasured supermarkets? How will they innovate?

Crain’s: As companies seek to produce food that is sustainably harvested and/or manufactured, and consumers seek to consume it, have you seen grow anywhere a change in how small to mid-size companies do _ business or build their supply chain? Helping your business grow here and anywhere. Bronster: If the world stopped producing food this Contact Tom Carley at [email protected] minute, we would have a 23-day supply. Everything bofaml.com/commercial we eat is farm-to-table. It’s a question of access, transportation, timing and supply. Maybe the trend should be aptly named ‘local farm to table.’ The trend is huge, and there has been a measurable change in how the industry is adapting. Certain entities vertically integrate their sourcing. A restaurant, for example, may buy or partner with a dairy farm, so you can see how “Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, strategic sourcing has changed from more traditional methods. advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (”Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered broker- dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith, Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Crain’s: How have the 2017 tax law changes Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed. ©2018 Bank of America Corporation. GCB-156-AD ARTHPGK5

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large companies now want to acquire these Vice President Hotel Operations for Morris Moinian’s smaller brands, not to remove them from the Fortuna Realty Group marketplace, but instead to promote that brand as their own. This is important because “No matter the price point, guests must feel good consumers, more than ever, want to be associated about what they have spent on the experience. with brands that are authentic, ‘better-for-you,’ When the ambience, gracious service, well- and more transparent about their social and environmental views. crafted food and drink all come together to surprise and delight the guest a memorable Dorman: With this overwhelming surge of experience is created that in turn equates to emerging companies comes passion. I believe return visits.” the large CPGs either have lost the passion for new products or cannot keep up with the pace J. GRADY COLIN that the consumer is requiring when it comes to their demands—natural, organic, healthy and fresh, hyper-local. Many of the CPGs have costs $10,000 with food costing $2,500 for each event, that’s a signiﬁcant created incubators and accelerators whereby cost for an industry where margins are notoriously slim. through their venture capital divisions they look to these emerging companies for new products to ﬁll their shelves. Small investments can help Crain’s: How has the emergence of smaller/up-and-coming food small companies go to market; larger investments are used to establish new companies impacted the food and beverage industry? products across the marketplace.

Bronster: Consumers are way more sophisticated in tastes and have Innovative ideas can replace stale brands. Look at the diculties of unprecedented access to food via the internet and delivery options. Lots of Campbell’s. Did they wait too long to make changes? Have their staples micro-companies are emerging, which leads to a new source of competition gone stale? Look at the turmoil that is now a¤ecting them. for traditional companies to reach and retain clientele, especially discerning ones with high incomes. It’s a lot easier to get your product to the consumer. Crain’s: With companies like Uber Eats and Grubhub growing in People will have wild-caught stone crab claws FedExed from Florida. popularity, how do you see this aecting the industry? Will more people favor an at-home dining experience? Carley: Previously, the big food companies largely ignored these niche brands as they posed little threat to change the average food buyer’s Bronster: These are great services lessening the need for people to dine decision-making process. However, with consumer attitudes changing, out. It’s more economical to eat at home, though people inherently like to go out to see and be seen. It’s fun, and it plays to the experiential aspect, though these services certainly make it more attractive to dine in. In addition to these services and in the larger picture, the industry is facing competition from commissaries, supermarkets, and Exceptional Dining, cook-at-home delivery services, like Blue Apron. There’s even a caviar service. That trend will continue, Cocktails, and Catering and more traditional establishments will have to further deﬁne what di¤erentiates them in this highly by David Burke competitive market. Crain’s: Cashless service continues to grow. What hurdles do you see in a broader adoption of the payment form?

Dorman: There have been signiﬁcant steps toward a cashless society in the past several years. I see several key issues to consider. First, an increasing worry is security and privacy concerns. Cash is anonymous, Upscale Cuisine at the Red Salt Room but cashless transactions leave a digital footprint. And how much security do we have in place? With Hand Crafted Cocktails at King Bar new technology comes new avenues of attacks on Outdoor Dining and Drinks at the Patio Bar our digital privacy and security. There will also always Exceptional Catering and Private Events be people resistant to change, which is slowing this transition. Exclusively at the Garden City Hotel Society is certainly moving toward a cashless environment, but it is likely we will see a world in the near future where the consumer has a choice of transactions, where cash and cashless coexist.

45 7th STreet, GARDEN CITY, NY 11530 | gardencityhotel.com Bronster: Cashless is here, so the discussion about 516-877-9385 hurdles is over. Cashless systems have streamlined transactions, which translates to cost savings for

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large companies now want to acquire these has earned a sterling reputation. Pay attention to smaller brands, not to remove them from the Partner, Practice Leader, Food & Beverage Sector at that. Word travels fast in this industry. If someone marketplace, but instead to promote that Mazars USA LLP has a strong reputation, you know you won’t have brand as their own. This is important because a delivery problem, and that can disrupt a night consumers, more than ever, want to be associated at any restaurant. with brands that are authentic, ‘better-for-you,’ “With this overwhelming surge of emerging and more transparent about their social and companies comes passion. I believe the large CPGs Crain’s: Can the food and beverage division environmental views. either have lost the passion for new products or of a hotel or a venue truly have a significantly cannot keep up with the pace that the consumer is positive profit impact? Dorman: With this overwhelming surge of requiring when it comes to their demands–natural, emerging companies comes passion. I believe organic, healthy and fresh, hyper-local.” Colin: Absolutely! The restaurants, lounges, bars the large CPGs either have lost the passion for and catered events hosted create sizzle in a new products or cannot keep up with the pace hotel’s identity. The right notable culinary star that the consumer is requiring when it comes HOWARD DORMAN, CPA can bring an elevated sense of style to the hotel to their demands—natural, organic, healthy brand. In the case of The Garden City Hotel, and fresh, hyper-local. Many of the CPGs have Chef David Burke’s cuisine has kept the dining created incubators and accelerators whereby establishments that have eliminated the proverbial middle man, specifically experience evolving and interesting for our loyal through their venture capital divisions they look to these emerging employees. That’s the larger trend. Employment expenses are shifting to guests, while also drawing in a multitude of new faces. The inherent lift with companies for new products to fill their shelves. Small investments can help patrons through technology. Diners can order and pay for their meals with a regard to culinary quality when a big-name, accomplished chef joins ranks small companies go to market; larger investments are used to establish new swipe of a credit card or mobile device. That dynamic will increase. There’s with a luxury hotel just pushes the value way up. products across the marketplace. also a shift on the labor side. Go to a Korean place, you can prepare your own dinner as part of the experience. Dorman: It is about the brand. If the food division delivers consistently Innovative ideas can replace stale brands. Look at the diculties of good food, service and experience, then it can positively impact the overall Campbell’s. Did they wait too long to make changes? Have their staples Carley: As the use of cash has decreased in the marketplace, cashless operations of the facility. If the hotel holds itself out to be a destination place gone stale? Look at the turmoil that is now a¤ecting them. payment options have become ubiquitous. Whether using a payment for vacationers or for events and has a great reputation for its food service, gateway on an app, a digital wallet on a smartphone or smartwatch, or then the result will be positive. For example, we have had our partners retreat Crain’s: With companies like Uber Eats and Grubhub growing in a simple credit card swipe at a terminal, there are plenty of cashless at a beautiful facility for the past few years, but the food service side of the popularity, how do you see this aecting the industry? Will more options available to accommodate most consumers from a technological event has not been good. Because of that, we have decided to change our people favor an at-home dining experience? perspective. However, as is often the case with most innovations and location to accommodate the taste buds. Great location, great rooms, great trends, younger generations are generally quicker to adapt, as older groups golf. Lousy food. That is not acceptable today. n Bronster: These are great services lessening the need for people to dine continue to use what is familiar. Thus, I believe, most of the hurdles that exist out. It’s more economical to eat at home, though people inherently like to are simply a function of time as opposed to technological development. go out to see and be seen. It’s fun, and it plays to the experiential aspect, though these services certainly Crain’s: What are factors to consider when make it more attractive to dine in. In addition to these choosing a food and beverage partner? services and in the larger picture, the industry is facing competition from commissaries, supermarkets, and Colin: Brand alignment is paramount. A potential cook-at-home delivery services, like Blue Apron. partner must fully understand the hotel image and There’s even a caviar service. That trend will continue, style in which it conducts itself. Next the partner must and more traditional establishments will have to commit to integration so that the guest experiences further define what di¤erentiates them in this highly similar standards of service and protocol seamlessly. competitive market. The business agreement should cover specific Crain’s: Cashless service continues to grow. What timelines and contingencies for all deliverables so that hurdles do you see in a broader adoption of the both parties have congruent expectations of how things payment form? will be done. Flexibility on both sides is key.

Dorman: There have been significant steps toward a Carley: Given the dynamic nature of the food and cashless society in the past several years. I see several beverage industry, it is important to have professional key issues to consider. First, an increasing worry is partners who are actively engaged, understand security and privacy concerns. Cash is anonymous, emerging trends, and can proactively advise a company but cashless transactions leave a digital footprint. within the industry. Companies should look for a And how much security do we have in place? With partner with experience in working with both growing new technology comes new avenues of attacks on and mature food and beverage companies, who can our digital privacy and security. There will also always provide industry-specific research and benchmarking be people resistant to change, which is slowing this tools to help make important financial decisions. transition. Consider the cash management tools available for your business, liquidity and foreign exchange services, Society is certainly moving toward a cashless financing for oce space, warehousing, equipment and environment, but it is likely we will see a world in the working capital. near future where the consumer has a choice of transactions, where cash and cashless coexist. Bronster: One of the biggest things is reputation. When doing a deal, I repeatedly hear verbiage about the halo Bronster: Cashless is here, so the discussion about e¤ect in working with celebrity chefs. It’s the reality hurdles is over. Cashless systems have streamlined and benefit of doing business with someone who has transactions, which translates to cost savings for worked long and hard in a demanding industry and

Food&Beverage.indd 5 7/19/2018 4:59:17 PM THE LIST TOP MANHATTAN OFFICE LEASES Biggest transactions in the rst half of 2018, ranked by square feet

SQUARE TENANT LANDLORD(S)/ LANDLORD/SUBLANDLORD ADDRESS FEET QUARTER TENANT REPRESENTATIVE(S) SUBLANDLORD(S) REPRESENTATIVE(S) SUBMARKET 1 277 Park Ave.1 854,000 1st JPMorgan Chase & Co. CBRE/JPMorgan Chase & Co. Stahl Real Estate Cushman & Wake eld Midtown East 2 66 Hudson Blvd.2 798,278 2nd P zer Cushman & Wake eld Tishman Speyer Tishman Speyer Far West Side 3 330 W. 42nd St.1 521,374 2nd DHU Realty/1199SEIU Cushman & Wake eld/CBRE Deco Tower Associates Newmark Knight Frank Times Square 4 390 Madison Ave.2 417,158 1st JPMorgan Chase & Co. JLL/JPMorgan Chase & Co. Clarion Partners L&L Holding Co. Midtown East 5 1271 Sixth Ave.2 406,661 2nd Latham & Watkins CBRE Rockefeller Group CBRE Midtown West 6 230 Park Ave. South2 362,658 2nd Discovery Communications JLL TF Cornerstone Cushman & Wake eld Gramercy Park 7 225 Liberty St.2 324,658 2nd J.Crew JLL Brook eld Of ce Properties JLL Battery Park City 8 770 Broadway3 321,181 2nd Facebook Cushman & Wake eld Vornado Realty Trust Vornado Realty Trust NoHo 9 195 Broadway4 287,620 1st Omnicom Media Group Feld Real Estate J.P. Morgan Investment Management L&L Holding Co. Financial District 10 1230 Sixth Ave.4 279,044 2nd First Republic Bank JLL Tishman Speyer Tishman Speyer Midtown West 11 500 Seventh Ave.2 273,246 1st WeWork Winick Realty Group The Chetrit Group Cushman & Wake eld Garment District 12 237 Park Ave.1 270,533 2nd JPMorgan Chase & Co. JLL/JPMorgan Chase & Co. RXR Realty RXR Realty Midtown East 13 3 World Trade Center2 184,389 1st McKinsey & Co. CBRE Silverstein Properties CBRE Financial District 14 18 W. 18th St.2 164,775 1st WeWork CBRE C.A. White Cushman & Wake eld Chelsea 15 11 W. 42nd St.1 150,000 1st CIT Group Newmark Knight Frank Tishman Speyer Tishman Speyer Midtown West 16 320 W. 31st St.2 146,028 2nd Touro College Cushman & Wake eld/JLL Charand Real Estate Associates Colliers Penn Plaza 17 4 Times Square2 144,567 1st Nasdaq Newmark Knight Frank/ Durst Organization Durst Organization Times Square Cushman & Wake eld 18 1271 Sixth Ave.2 138,000 2nd Blank Rome CBRE Rockefeller Group CBRE Midtown West 19 1325 Sixth Ave.2 136,176 2nd McGraw-Hill Education CBRE Paramount Group JLL Midtown West 20 1 Vanderbilt2 132,647 1st Greenberg Traurig Newmark Knight Frank SL Green Realty Corp. CBRE Midtown East 21 28 Liberty St.2 131,181 2nd Wolters Kluwer Colliers International Fosun International JLL Financial District 22 875 Third Ave.2 131,060 2nd Cerberus Capital Management Newmark Knight Frank Global Holdings Management JLL Midtown East 23 599 Lexington Ave.4 126,395 2nd Cowen Group CBRE Boston Properties Boston Properties/CBRE Midtown East 24 105 E. 17th St.2 125,000 2nd New York University Newmark Knight Frank The Related Cos. The Related Cos. Gramercy Park 25 750 Lexington Ave.2 111,500 1st WeWork Direct deal Cohen Brothers Realty Corp. Cohen Brothers Realty Corp. Lenox Hill 26 1 Park Ave.3 109,656 2nd NYU Langone Cushman & Wake eld Vornado Realty Trust Vornado Realty Trust Murray Hill 27 1 Vanderbilt2 105,539 2nd McDermott Will & Emery Newmark Knight Frank Hines CBRE Midtown East 28 Continental Center2 95,284 2nd National Debt Relief Colliers International MHP Real Estate Services MHP Real Estate Services/ Financial District Cushman & Wake eld 29 805 Third Ave.2 95,200 1st Kroll Bond Rating Agency Savills Studley Cohen Brothers Realty Corp. JLL Midtown East 30 1 Liberty Plaza2 90,596 2nd Convene Direct deal The Blackstone Group Newmark Knight Frank/ Financial District Brook eld Of ce Properties 31 40 W. 53rd St.2 88,345 2nd Pillsbury Winthrop Savills Studley Paramount Group Paramount Group/JLL Midtown West Shaw Pittman 32 530 Broadway1 84,662 2nd Anomaly Partners CBRE Wharton Properties Thor Equities SoHo 33 100 W. 33rd St.4 84,313 1st Haddad Brands Herald Square Properties Vornado Realty Trust Vornado Realty Trust Penn Plaza 34 875 Third Ave.2 81,902 2nd DWS Group JLL Eastgate Realty JLL Midtown East 35 7 Times Square1 80,265 2nd Manatt, Phelps & Phillips Savills Studley Boston Properties Boston Properties Times Square 36 875 Third Ave.2 79,852 2nd Epstein Becker & Green Savills Studley Global Holdings Management JLL/Global Holdings Midtown East Management 37 200 Park Ave.1 79,023 2nd Lendlease Corp. CBRE Tishman Speyer Tishman Speyer Midtown East 38 1 Hudson Square2 77,834 2nd Oscar Health Newmark Knight Frank Hines Newmark Knight Frank Hudson Square 39 767 Fifth Ave.3 77,700 1st Estée Lauder CBRE Boston Properties Boston Properties Midtown East 40 255 Greenwich St.3 77,582 1st Borough of Manhattan CBRE Jack Resnick & Sons Jack Resnick & Sons Financial District Community College 41 770 Broadway 3 77,378 1st Facebook Cushman & Wake eld Vornado Realty Trust Vornado Realty Trust NoHo 42 280 Park Ave.1 75,791 1st Investcorp Newmark Knight Frank Vornado Realty Trust/SL Green Vornado Realty Trust/SL Green Midtown East 43 1095 Sixth Ave.1 71,291 2nd Apollo Management CBRE Callahan Capital Partners Cushman & Wake eld Times Square 44 7 Times Square1 70,754 1st Brown Rudnick CBRE Boston Properties Boston Properties Times Square 45 540 W. 26th St.2 67,100 1st Roc Nation Newmark Knight Frank Savanna Newmark Knight Frank Chelsea 46 230 Park Ave.1 66,579 2nd Desmarais Cushman & Wake eld RXR Realty RXR Realty Midtown East 47 65 E. 55th St.2 65,365 2nd BTIG Newmark Knight Frank Equity Of ce Management Newmark Knight Frank Midtown East 48 630 Fifth Ave.2 63,210 1st Rockefeller Capital Cushman & Wake eld Tishman Speyer Tishman Speyer Midtown West Management 49 666 Third Ave.1 62,952 1st APG Asset Management US CBRE Tishman Speyer Tishman Speyer Midtown East 50 498 Seventh Ave.2 60,407 2nd Trans x Savills Studley JPMorgan Asset Management George Comfort & Sons Garment District

SOURCE: CoStar Group with additional research by Gerald Schifman. This list includes leases with terms of more than two years. 1-Renewal. 2-New lease. 3-Expansion. 4-Renewal and expansion. CoStar Group conducts ongoing research to produce and maintain a database of commercial real estate information.

14 | CRAIN’S NEW YORK BUSINESS | JULY 23, 2018

P014_CN_20180723.indd 14 7/20/18 12:42 PM WE BELIEVE THE CLIENT GIVES EVERY INVESTMENT PURPOSE. EVERY PROPERTY A SOUL. EVERY TRANSACTION A PULSE.

Real estate is a powerful asset. It helps deﬁ ne the business of a company. The spirit of a startup. The values of an investor. We’re 48,000 employees in over 70 countries, helping our clients put ideas into action in New York City and around the world. Across industries. Within budgets. And without fail. What can we do for you? cushwakenytristate.com

IDEAS INTO ACTION

CN018738.indd 1 7/13/18 3:53 PM THE LIST NEW YORK CITY’S TOP PROPERTY SALES Biggest commercial transactions in the rst half of 2018, ranked by price

SQ. FT. OR ADDRESS/ NO. OF UNITS/ TOP FOUR PROPERTY TYPE/ TRANSACTION PRICE PRICE PER INTEREST 100% VALUE CLOSE SUBMARKET (IN MILLIONS)1 SQ. FT. OR UNIT CONVEYED2 (IN MILLIONS) DATE BUYER(S) SELLER(S) SALES 75 Ninth Ave. (Chelsea Market) $2,399 1,200,000 100% $2,399 3/20 Google Jamestown 1 O ce $1,999 Chelsea 701 Seventh Ave. (Edition) $1,148 452 100% $1,530 3/1 Maeeld Development/ Winthrop Realty Trust/ 2 Hotel $3,384,956 Fortress Investment Witko Times Square Group 1255 Pennsylvania Ave. $887 5,581 100% $887 5/7 Rockpoint Group/ Disque Deane Estate/ 3 (Spring Creek Towers) $158,987 Brooksville Co. Trump Organization Apartment East New York 340 West St. (St. John’s Center) $700 1,200,000 100% $700 1/31 Ontario Municipal Westbrook Partners/ 4 O ce $583 Employees Retirement Atlas Capital Group Greenwich Village System/Canada Pension Plan Investment Board 1065 Sixth Ave. $640 665,000 100% $640 5/23 Savanna Blackstone (Swig Co.) 5 O ce $962 Midtown West 75 Ninth Ave. 1745 Broadway $633 684,515 100% $633 5/1 Invesco on behalf SL Green/Caisse de dépôt TRANSACTION PRICE 6 O ce $925 of QSuper et placement du Québec $2.4 billion Midtown West 1700 Broadway $465 626,000 100% $465 1/23 Rockpoint Group Ruben Cos. 7 O ce $743 Midtown West 10 Hudson Yards $432 1,813,465 20% $2,180 5/16 State Teachers e Related Cos./Ontario 8 O ce $1,202 Retirement Municipal Employees Far West Side System of Ohio Retirement System 330 Hudson St. $385 466,000 100% $385 2/8 AEW Global Caisse de dépôt 9 O ce $826 et placement du Québec/ Hudson Square Callahan Capital Partners 222 E. 41st St. $333 386,500 100% $333 5/29 Commerz Real Columbia Property Trust 10 O ce $860 Murray Hill 990 Sixth Ave. (e Vogue) $316 320 100% $316 1/10 Vanbarton Group Karten family 11 Apartment $987,500 Garment District 600 Lexington Ave. (Manhattan Tower) $305 303,515 100% $305 1/9 W.R. Berkley SL Green 12 O ce $1,005 701 Seventh Ave. Midtown East TRANSACTION PRICE 1180 Sixth Ave. $305 384,000 100% $305 2/15 Northwood Investors HNA Group/MHP 12 O ce $794 Real Estate Services $1.1 billion Midtown West 122-178 W. 97th St. (Stonehenge Village) $287 418 100% $287 3/30 A&E Real Estate Stonehenge Partners/ 14 Apartment $686,603 Caisse de dépôt et Upper West Side placement du Québec 250 E. 57th St. (Aalto57 apartments) $278 169 100% $278 3/9 Ontario Municipal World Wide Group/ 15 Apartment $1,642,012 Employees Retirement Rose Associates Midtown East System 46-06 57th Ave. (FedEx distribution) $263 362,000 100% $263 5/25 American Realty Zirinsky family/ 16 Industrial $725 Advisors SunCap Queens 333 W. 34th St. $255 338,409 100% $255 1/5 Brookeld Asset New York REIT 17 (former Robert Hall building) $754 Management O ce Penn Plaza 1515 Broadway (1 Astor Plaza) $254 1,750,000 13% $1,950 2/1 Allianz SL Green 18 O ce $1,114 Times Square 21 W. End Ave. (Riverside Center tower) $195 616 30% $650 3/21 PFZW Carlyle Group/Greeneld 1255 Pennsylvania Ave. 19 Apartment $1,055,195 Partners TRANSACTION PRICE Lincoln Square $887 million 541 Lexington Ave. (e Maxwell) $190 697 100% $190 5/1 Capstone Equities/ Host Hotels & Resorts 20 Hotel $272,956 Highgate Holdings Midtown East 250 Water St. $183 43,560 100% $183 6/8 Howard Hughes Corp. Milstein Properties 21 Development site $4,195 Financial District 101 W. 57th St. (e Quin) $174 213 100% $174 6/28 Hilton Worldwide UBS/ree Wall Capital 22 Hotel $816,555 Midtown West 1 N. Fourth Place $168 509 40% $419 1/31 Douglaston MacFarlane Partners 23 Apartment $823,183 Development/AIG Williamsburg 2360 Broadway (e Belnord) $165 215 100% $660 3/12 Westbrook Partners HFZ Capital Group 24 Residential condo $3,069,767 Upper West Side 430 W. 15th St. (Live Nation) $159 93,119 100% $159 6/12 Invesco TIAA 25 O ce $1,702 Chelsea 340 West St. SOURCE: Real Capital Analytics with additional research by Gerald Schifman. In case of a tie, deals are listed in numeric order of address. 1-The list does not include sales for which no price was made public as of July 17. 2-Partial-interest transactions are included at the prorated share of the 100% property value. Real Capital Analytics Inc., headquartered in New York TRANSACTION PRICE

City, is an independent data and analytics firm focused on the investment market for commercial real estate. RCA offers data on commercial property transactions around the world. $700 million BUCK ENNIS

16 | CRAIN’S NEW YORK BUSINESS | JULY 23, 2018

P016_CN_20180723.indd 16 7/20/18 1:11 PM SPOTLIGHT ON BROOKLYN

Dumbo development continues apace Because of its unusual buildings and cobblestone streets, and a median residential household income of $160,000 a year, demand in Dumbo is not likely to loos- he market slowed considerably last year for Brook- by some 25%. en up anytime soon. It’s become a brand of sorts, with lyn commercial real estate, yet the decline hasn’t brokers stretching the borders into adjacent Vinegar Hill crept into Dumbo, the waterfront district between The 750,000-square-foot watchtower parcel on Colum- T and as far as the Brooklyn Navy Yard, sometimes includ- the Brooklyn and Manhattan bridges. There, develop- bia Heights will be developed into oce space, sources ing Metrotech in the bargain. ment among the cobblestone streets and reclaimed said. Often referred to as a “cam- warehouses continues to move along at a steady pace. pus,” for its slightly suburban feel, the space may have a single “it” Shares in parcels like the former Jehovah’s Witnesses tenant in its future, such as a Google Watchtower complex continue to change hands among or Amazon, according to Palmese of high-profile developers while luxury brands jockey for a Cushman & Wakefield. piece of the action. Fashion retailer J. Crew has signed a lease on 3,500 square feet in the converted Empire Despite an overbuilt oce market in Stores coee warehouse, Japanese lifestyle company most of Brooklyn, demand in Dum- Muji is said to be aggressively looking for space; and bo remains high with a great deal Soho House, the London-based members-only club of competition among prospective and hotel, opened its Dumbo House outpost in Empire suitors. According to James Berluti, Stores, in May. The hotel’s slick, ground-floor restau- director at Cushman & Wakefield, rant, Cecconi’s, has been fully booked since it opened an 80,000-square-foot vacant loft last year. Danish starchitect Bjarke Ingels has moved building at 50 Jay St. got 40 oers his Manhattan oce to 45 Main St., bang between the from a pool of 200 prospective buy- bridges in Brooklyn. ers. Among the very few properties in play are 29 Jay St., where the own- “Things aren’t sizzling from the macro perspective but ers have filed plans with the Land- there’s always something exciting to talk about in Dum- marks Preservation Commission bo,” said Stephen Palmese, vice chairman, Cushman & for a 7-story oce building, and an Wakefield. “It’s a market that just keeps giving.” interim multiple dwelling at 25 Jay St., which was marketed but never The former Jehovah’s Witnesses Watchtower complex sold. Both will involve a great deal of was in the news again recently when Kushner Compa- bureaucratic paperwork before de- nies sold its 2.5% stake in what was originally a $340 velopment can proceed. Empire Stores is a reclaimed coee warehouse now featuring mixed-use retail, restaurant and oce space with river views. million joint venture with CIM Group and LIVWRK Hold- ings in 2016. The sale went to CIM group, as did a 2.5% Such tight supply in Dumbo is share in an empty, full-block former parking lot at 85 Jay pushing prices upwards, according to Berluti. While of- The storied River Café has been in business at the foot of St., one of the few undeveloped parcels left in the area. fice rents in Downtown Brooklyn are at about $50 per Front Street since the 1970s, but real development in the square foot, Empire Stores can command some $90 neighborhood only began in earnest in 2013, led by Two CIM Group and LIVWRK plan to build a 730-unit condo per square foot for the waterfront location with its un- Trees Management. According to Palmese of Cushman complex on the site, with 90,000 square feet of retail paralleled views of the East River, the two bridges and & Wakefield, there’s more to be done. and public space, pools, roof decks and underground view of the Manhattan skyline. Post-renovation rents in parking for 700 cars. According to Jason Pennington, the watchtower will likely hit $80 per square foot. Retail “We are in the middle innings of a very long game,” managing partner of Ripco Real Estate’s Brooklyn oce, rents in Dumbo range from $60 per square foot to just Palmese said. n the additional 1,000 residents will swell the population below $100 per square foot, sources said.

A LEADER IN THE BROOKLYN COMMERCIAL REAL ESTATE MARKET

Cushman & Wakeﬁ eld puts the client at the center of everything we do. In 2017, we completed sales transactions totaling more than $1 billion in sales volume. That momentum continues into 2018. To our clients, thank you for your trust and loyalty. cushwakenytristate.com

To learn more, contact: Betty Castro Managing Director Managing Principal 718 307 6525 [email protected]

IDEAS INTO ACTION

SpotlightOn_Brooklyn.indd 1 7/19/2018 11:50:10 AM REAL ESTATE HOW TO MAKE Of ce rents are down and retail remains rocky, but there are still plenty of ways to make a buck in this town $$$ IN BY JOE ANUTA AND DANIEL GEIGER REAL ESTATE BUILD WAREHOUSES: e price of warehouse space has shot up in the past year as investors have rushed to serve growing demand from e-commerce tenants. e 1jump in values might normally be a warning sign to buyers, but several investors believe BIO TECH HUBS demand will only increase. e city’s most like Cornell’s on recent report on freight movement projected Roosevelt Island online shopping will grow 15% annually, com- are fueling a pounding the need for distribution hubs to market boom for lab space. facilitate speedy last-mile deliveries. Estimates peg warehouse vacancy rates at below 5%, and developers are betting on surging demand for new spaces that can better accommodate the increasingly sophisticated equipment retailers use to package and sort goods. Innovo Property Group, for instance, is building a 700,000-square-foot, state-of-the-art distribution complex along the Cross Bronx Ex- pressway. Present industrial rents in the high teens don’t justify the more than $225 million project, but Innovo and other developers are banking on rates that will likely reach above $30 per square foot—unprecedented gures in the city’s industrial market.

CHECK OUT HOTELS: e City Council passed a bill last week requiring home-sharing BUY IN WILLIAMSBURG: Beginning next year, amenities or services. “ ere is a huge movement providers such as Airbnb to report data about the Metropolitan Transportation Authori- toward experience,” Convene co-founder Chris Kelly their listings to the mayor’s oce. e measure ty plans to shutter an East River tunnel for 18 said. “ at is where the returns are right now.” Leas- 2was backed by the inuential Hotel Trades Council months of repairs, leaving the nearly 400,000 ing giant JLL recently predicted that by 2030, exible and stands to strengthen the position of those who 3daily L train riders to scramble for other ways into commercial oce space will account for 30% of the own hotels. Airbnb posted roughly 50,000 listings Manhattan. at will depress rents as many would- market. British rm Appear Here has recently landed before the bill’s passage, up to 15,000 of which the be tenants opt to live somewhere else during the stateside and is attempting to apply a similar formu- Mayor’s Oce of Special Enforcement suspects of shutdown. A report from listings website StreetEasy la to ll vacant retail spaces. e company plans to operating illegally. If those units go oine, demand earlier this year showed that rents were already fall- sublease space for shorter intervals at higher price for traditional hotels would theoretically increase. ing even as the rest of the borough held steady. Savvy points. Landlords would be wise to heed the trend. Requirements that new hotels obtain a special per- investors will be looking to buy on the dip as rents mit in certain commercial and manufacturing dis- will likely rebound once the subway work is done. TRY BIOTECH: e health of New York City’s of- tricts will further constrict supply and thus increase ce market used to hinge on the performance of values. ere are 12,000 rooms under construction, GET FLEXIBLE: Retail rents continue to decline Wall Street. But in the past decade tech stole the said Jan Freitag of hotel consulting rm STR, and across the city, and Manhattan oce rents are spotlight as tenants, ranging in size from Silicon the home-sharing crackdown’s impact on pricing re- down around 4% compared to last year, accord- 5Valley giants to small startups, absorbed millions of mains unclear. But with existing hostelries bursting ing to a recent report from Avison Young. But square feet. Now, real estate experts believe biotech at the seams, there appear to be plenty of guests to go 4tech companies including WeWork, Convene and will be the next sector to take o. “ e trend signs around. “Building hotel rooms in New York City is a Knotel have been selling commercial landlords on are all positive,” said Joel Marcus, executive chairman pretty good bet,” Freitag said. “You denitely know the idea that they can better manage space through of Alexandria, a real estate developer that specializes

BUCK ENNIS you are going to get the demand.” short-term or exible subleases that includes extra in building and managing space for life sciences ten-

18 | CRAIN’S NEW YORK BUSINESS | JULY 23, 2018

P018_P019_CN_20180723.indd 18 7/20/18 4:39 PM ants. His rm is close to securing an anchor tenant for its planned 400,000-square-foot building that will be the third and nal property in its 1.1 million- square-foot life sciences campus on First Avenue and East 29th Street. Additionally, the company is reported to be a partner in a joint venture to buy an oce building occupied by P zer on East 42nd Street—a property it plans to ll with life sciences tenants when P zer’s lease expires in 2023. Seeing the potential for growth in the sector, the city has solicited developers to help build another biotech campus, up to 500,000 square feet, in Manhattan or Queens.

GO PUBLIC: Building public projects by winning AS MATERIAL COSTS requests for proposals or pitching the city on af- decline, solar’s fordable housing projects can keep developers value has risen. busy at a time when the market-rate nancials 6do not necessarily pencil out. Maddd Equities and Joy Construction are hoping the state will select its plan for a new soccer stadium in the South Bronx. But sales are slowing. New development prices are think about when investing,” said Ben Brown, head down around 20% compared to last year, and only of Brook eld’s New York oce, “is sticking to buying CATCH SOME RAYS: e cost of installing solar 352 properties sold during the second quarter, a 38% high-quality assets and leverage them conservatively. panels has come down in the past decade, and decline. at’s why many high-pro le brokers have ese properties tend to weather storms and retain installing them now makes economic sense on started turning to resales, which make up the bulk of their value more than inferior properties.” many city rooops. If these cells generate more the market and have much more stable pricing. 7than enough electricity to power the building below, MAKE IT RAIN: In 2004 the city enacted the excess energy can be sold back to Con Edison. PLAY THE LONG GAME: If your investment Local Law 26, requiring landlords to in- e cash-strapped New York City Housing Authori- timeline is long enough, more decisions stall sprinklers in all commercial build- ty is installing a solar array at Queensbridge Houses, start to make sense. Asset management ings 100-feet or taller. With the deadline the nation’s largest public housing development. And rm Brook eld has been one of the city’s 12to comply set for July 1, 2019, many owners are now the City Council is looking to mandate solar or other 11most successful players recently. Even though exec- rushing to get the systems in, creating a surge of green tech on rooops of all new commercial or in- utives there believe the commercial and residential work for sprinkler installers. Richard Jantz of Cush- dustrial projects. Landlords with big enough portfo- markets are late in the cycle—meaning values will man & Wake eld estimates that 2,000 of the 7,000 lios are being encouraged to think of their buildings soon start to decline—the company has not been shy covered buildings still need sprinklers, and Jantz put as energy producers. about acquisitions, most recently agreeing to buy out the total cost of completing those jobs at $1 billion. the Kushner Cos.’ stake in a Midtown oce tower. “You’re starting to see out-of-town rms you’ve nev-

MAKE A BID: Foreclosures, an unfortunate result e key is thinking long term. “e simple answer to er heard of because there’s so much work,” he said. ■ ISTOCK of loose lending regulations and market failures, are nevertheless an opportunity to buy at a discount. Because of a backlog in the state courts— 8and some banks warehousing properties until values increase—auctions for many New York City homes hit by the Great Recession are only now being scheduled. During the second quarter of this year, 881 residences appeared on the docket for a rst-time foreclosure auction, according to PropertyShark, the third-highest number since 2009.

BE A TECHIE: e city’s proptech sector has yet to produce a unicorn that rewards its investors with massive returns. But some institutional owners are investing in startups early enough to 9secure board seats and tailor new products to t their portfolios. Investing a few million dollars is unlikely to pay o directly in the near-term, but by actually using the innovation, companies can trim operating costs and come out ahead. For the real estate startups themselves, there appears to be more money owing into the sector. California-based venture capital fund Fih Wall recently announced a $400 million fund. Brook eld Properties plans to spend around $250 million on tech investments. And Manhattan-based accelerator MetaProp announced a $40 million oat. , Typically investors are looking for easily scalable ways to unlock value in an industry that has been historically resistant to change. ose who hit on a winning idea are handsomely rewarded. .

FOCUS ON RESALE: In the residential brokerage world, new development is king. In addition to the prestige that comes with helping a developer shepherd a new condo : 10project through the planning process, new development brokers also see a bigger commission. Last quarter, for example, the median price of a newly .. .. .. developed home in Manhattan was $2.7 million— @ . @ . @ . more than double the borough’s overall median.

JULY 23, 2018 | CRAIN’S NEW YORK BUSINESS | 19

P018_P019_CN_20180723.indd 19 7/20/18 4:40 PM

P020_P021_CN_20180723.indd 20 wasn’t served. properly had proofthesuit against her. Luckilyshe had wonajudgment had noideaacollector BLINDSIDED:

BUCK ENNIS 20 FINANCE |

CRAIN’S NEWYORKBUSINESS PROCESS Roman Roman

UNDUE

Debt-collection lawsuits are an that old ruse victimizes roaring back, along with BY AARON ELSTEIN

JULY 23,2018 borrowers

E obtained service. sewer via it found more than 100,000judgments improperly In New 2009the York attorney general’s oce said collectorthe is to free garnishing start wages. in court, adefault judgment is routinely entered, and properly When debtor the served. not does show up out notication and falsely states lawsuit the was faulted debt from sues then abank, debtor the with- workse ruse like Adebt this: collector buys de- debt-collecting business known service. as sewer “Irecalled. couldn’t sleep. Iwas desperate.” of$2,078.50, half was which accumulated interest. from acity marshal saying she was on hook the for dant for better than Roman adecade, got aletter away and only with her children, ages then 15to 32. years old. But Roman Esther lived actually a mile half byed a“Mr. Roman—Relative” 51and between 65 wrongthe address and falsely stated were they accept- papers legal the to had delivered server earlier, aprocess more thanyears 10 with a lawsuit. served never been blindsided. She had bill. old credit-card to pay an failed she’d someone her, sued a er claiming garnished were being her wages agency, said which care health Not long ago, was remarkably tactic the common. Roman of an was victim the old game inthe “I said, ‘Oh my how God, am Igoing to pay?’ A few days a er nding out she’d a defen- been It turned out that Roman was short. She called her employer, She called ahomeshort. $27.99 paycheck was weekly $300 her that January in she noticed when alarmed was Brooklyn, in mother grand a60-year-old Roman, sther SLEEP. IWASDESPERATE” “I SAID, TO PAY?’ ICOULDN’T HOW AMIGOING ” she ” ‘OH MYGOD, - documents. ments and churned out lawsuits using robo-signed Roman, was $10million, ned ordered to pay up In 2015Encore Capital Group, that rm the sued Protection Bureau atop made industry the priority. ulations Consumer federal new the Financial while ocials subjected debt collectors to tough reg new - tempts using Four aGPSdevice. years later, state requiring to process record all servers at delivery - ment. According to state, the 98%of tors, asking would ifthey alast-minute strike - settle a er approached being by attorneys for debt- collec before case plead their judge. the Some room le the were with aboutpews lled 40debtors waiting to bumper crop. On arecent Monday morning, the town Brooklyn is any gauge, year this should a see on oor inDown of 11th the - Courthouse Civil the York State Unied System. Court to nearly 76,000,according to gures from New the suitscollection ve inthe boroughs jumped by 61%, ulations year of kinds. Last number the all of debt- Trumpthe administration rolls back nancial reg- years later. But now are they making acomeback as from 300,000in2008 to fewer than 47,000eight suitscollection inNew led York City plummeting, The rollbackandthecomeback A crackdown followed. In city 2010 the began Data for year this is not available, but scene ifthe e crackdown sent number the of debt-

ors state with false - had pressured debt- found company the consumer bureau of debts a er the $125 million worth stop on collection funds and forced to to $42million inre- defendants in

7/19/18 12:21 PM CHERUBIN and his small team of volunteer lawyers come to court these cases do not have a lawyer, so Sidney Cheru- to advise debtors. bin, director of legal services at the Brooklyn Bar Association’s Volunteer Lawyer Project, shows up four days a week with a small team to help them. “Sometimes the judge will call me over a er telling the defendant, ‘Maybe you should talk to an attorney before you agree to settle,’ ” Cherubin said. One explanation for the surge in cases is that consumers—perhaps inspired by the strong economy—are taking on record amounts of debt through credit-card, car and other loans, totaling $13.2 tril- lion, according to data from the Federal Reserve Bank of New York. Invariably some people bite o more than they can comfortably chew. “ere’s an industry saying: ‘You sue the won’t pays, not the can’t pays,’ ” said Jan Stieger, executive director of the Receivables Management Associa- tion, a trade group for debt collectors. But the defanging of the Consumer Financial Protection Bureau, whose creation was a key part of 2010’s Dodd-Frank Wall Street Reform and Con- sumer Protection Act, has likely emboldened collec- must explain that they cannot legally sue to collect a as they wanted because fewer dud loans were being tors. President Donald Trump has called the agency debt a er a certain amount of time has passed, but sold, in part because the industry feared even more a “total disaster” and its acting director, Mick Mul- the constraint disappears if someone promises to regulation was looming. But now the debt market- vaney, earlier this year asked for a quarterly budget pay or even acknowledges an old debt. place is reviving again. of zero dollars while warning staers to do their jobs While New York authorities cracked the whip, “Our forward ow commitments for 2018 re- with “humility” and not to “push the envelope.” One the debt-collection business experienced a consol- main well above historic levels,” Encore’s Masih said example of the change in approach: On July 13 the idation wave. Encore Capital emerged as the biggest in May. bureau, which had originally sought $60 million in player, and today the San Diego–based rm has e shortage of fresh debts a year or two ago may restitution and debt forgiveness from a Kansas col- 8,500 employees, a $1 billion market capitalization, help explain why Encore tried to collect on Roman’s lection rm, instead ned it just $800,000. e agen- a Nasdaq listing and such high-prole shareholders old bill. An Encore unit, Midland Funding, sued her cy would not comment. as BlackRock and T. Rowe Price. in 2007 and quickly secured a default judgment a er “e bureau continues to be much more of a bal- Earlier this year the company acquired control a court date passed without her knowledge. But the anced regulator, balancing the needs of industries of large British debt collector Cabot Credit Manage- company didn’t enforce the judgment until it gar- and consumers,” Encore Capital Chief Executive ment for $238 million from private-equity rm J.C. nished $6.06 from Roman’s paycheck in December Ashish Masih said in a May conference call, ac- Flowers & Co. Encore’s business is buying written-o 2015 and $20.29 in September 2016, court records cording to a transcript on nancial analysis website loans for pennies on the dollar from banks, health show. en came the $27.99 that she agged in Janu- Seeking Alpha. In 2016 the CFPB began a process to care providers, cellphone carriers and the like, and ary; $26.60 was scheduled for July 2019. At that pace regulate debt collectors on a national basis, it would have taken more than 76 years to but experts say that project is now on the REVERSING COURSE collect all the money Encore sought. back burner. Number of consumer-debt lawsuits led in New York City courts Encore would not comment on the case, Debt collectors aren’t the only ones but in a statement, Sheryl Wright, senior enjoying a regulation rollback. Goldman 300K vice president for corporate and govern- Sachs and Morgan Stanley were on the ment aairs, said litigation is always a last brink of failing their annual stress tests in 250K resort and “only pursued when we’ve al- the spring, which would have limited their ready determined that the debt is valid and stock buybacks and dividend payouts, until 200K the consumer has the ability to pay.” Federal Reserve ocials instructed them Roman found the legal-assistance pro- how to get a passing grade. e Commod- 150K gram Claro and got advice from lawyers at ity Futures Trading Commission last year the New Economy Project. A er she took ordered 80% fewer nes and penalties than 100K 75,633 time o to go to court, her debt was vacated in 2015. e business of packaging sub- by a judge last month. Roman was able to prime mortgages or other consumer loans 50K prove the process server led a false ada- and selling them to investors—a hallmark vit by showing the judge leases and utility of the last decade’s housing bubble—is 0 bills listing her actual address at the time. picking up again. 2008 2010 2014 2017 “It’s a good thing I never threw those Maria Vullo, superintendent of the state things out,” she said. Department of Financial Services, noted DODD-FRANK reforms signed THE NEW YORK STATE PRESIDENT DONALD A few weeks later, at a Midtown hotel, into law; Consumer Financial Department of Financial TRUMP labels CFPB that for the rst time since the nancial Protection Bureau established Services enacts new a “total disaster” New Economy Project lawyers showed up crisis, Wall Street professionals are feeling regulations governing debt and appoints Mick at Encore’s annual stockholders meeting bold enough to cook up deals that test the collectors Mulvaney, an outspoken and played a recording of Roman giving critic of the agency, to boundaries of what’s legal. SOURCE: New York State Uni ed Court System her account for the CEO and his board. An “People are trying to skirt regulations be the acting director employee of the nonprot served Encore by structuring things in a certain way,” she ocials with a mock-summons declaring: said. “It’s happening again. We are back.” nudging people to pay up. Over time the rm collects “Plaintis demand that defendants immediately va- Vullo said she and her sta of 1,400 are doing around twice as much as it paid, analysts say. cate all fraudulently obtained default judgments and their best to ll the void le by federal regulators. “I “ey use a very scientic process and have ana- provide redress for defendants’ systematic extraction must protect New Yorkers because the CFPB is not lytics showing the best time to call people,” said Eric of wealth from New York’s low-income communities going to do it,” she said. “Unfortunately I can’t do it Hagen, an analyst at brokerage rm Keefe Bruyette and communities of color.” for the rest of the country.” & Woods. “ey also text.” Encore has returned some of the money it gar- Sarah Ludwig, founder of the New Econo- nished from Roman. Her lawyers are seeking the re- “Scienti c process” my Project, a nonprot that for years has fought mainder as well as compensation for lost wages and In 2014 state regulators took steps to protect con- debt-collection abuses, describes Encore’s process stress, but the company has refused those demands sumers from debt collectors. ey required collec- dierently. “ey use demographic data and target and is unwilling to discuss the use of false adavits tors to share signicantly more information with people who typically don’t have counsel,” she said. to collect payments, said Susan Shin, New Economy debtors, such as identifying the original creditor “It’s a real bottom-feeding approach.” Project’s legal director. while also clearly spelling out the amount of the In recent years, analysts say, it was dicult for “ey say that’s in the past,” Shin said. “Clearly, debt plus any interest and fees added. Collectors also outts like Encore to buy as much defaulted debt it’s not.” ■

JULY 23, 2018 | CRAIN’S NEW YORK BUSINESS | 21

P020_P021_CN_20180723.indd 21 7/19/18 12:21 PM GOTHAM GIGS

JONES sources radishes and other ingredients from up to 30 farms and suppliers.

BY LANCE PIERCE

Friend of the farmers The purchasing manager at Untitled balances buying local with keeping costs down

hen Danny Meyer and chef Michael An- onion!” Back at the restaurant, Jones updated her purchas- thony opened the restaurant Untitled at ing and budget spreadsheets and analyzed costs and inven- JENNY JONES the Whitney in 2015, Jenny Jones, then at tory. She also educated the cooks so they would know that Gramercy Tavern, set up the purchasing the ingredients they were using were special and pricey. BORN Raleigh, N.C. program.W She arranged to buy fruits and vegetables from She and executive chef Suzanne Cupps eschew French RESIDES Park Slope as many as 30 farms as well as sh, dairy, meat and bread techniques for which every vegetable dice must be uni- EDUCATION Bachelor’s in eco- from various purveyors. Because of the complexity, Jones form, which leads to a lot of waste. nomics and sociology, University of stayed on aer the opening even though Un- “e edges of an apple are round. e North Carolina at Chapel Hill; New titled’s size—just 62 seats—wouldn’t typically “They charge outside of a carrot is the most avorful,” England Culinary Institute justify having a purchasing manager or more what they Jones said. “We’d rather teach cooks to CHEESE THIEF As Jones shops than two or three suppliers. show o the veggies in their more natural Union Square market with a co-work- need to er, they leave bags and boxes on the “It’s a hard way to purchase,” she said. “You form.” is ecacy allows her to splurge on western edge of Union Square. Once can’t put that on the sous chef team.” charge, then expensive produce—and make the most of a purchase of goat cheese disap- Jones compensates for the inecient pur- we decide how small quantities of it. peared. “That was a food-cost fail.” chasing method by keeping costs in line. Un- much to buy Grateful farmers do sometimes oer HARD WORK Occasionally Jones titled allocates up to 28% of revenue to food ” Jones a discount based on bulk—Untitled and her colleagues visit their sup- costs, compared with 22% for restaurants is part of Meyer’s Union Square Hospitality pliers’ farms. One fall they planned to help harvest squash at Alewife that purchase from fewer suppliers, Jones estimated. She Group, aer all. But out of respect for their hard work, she Farm in Dutchess County. Line spends three mornings a week at the Union Square Green- doesn’t drive a hard bargain. cooks backed out at the last min- market, checking out the latest peas and heirloom toma- “ey charge what they need to charge,” she said, “then ute, and a handful of Union Square toes to gauge how they could be used in recipes and how we decide how much to buy.” Hospitality Group managers ended much those dishes would cost. Some farmers, however, can’t resist oering a discount up bent over all day in the hot elds. “We were sore for a week,” One recent day, her mandate caused her to reject hand- to their frequent customer. “Six dollars is retail,” said one Jones said. “What we do is hard, but fuls of tiny beets—“We can’t do anything with them”—as vendor of his potato prices. “Five dollars is restaurant. Four farming is harder.”

BUCK ENNIS well as the season’s rst spring onions—“at’s like $1 an dollars is Jenny Jones.” — CARA EISENPRESS

22 | CRAIN’S NEW YORK BUSINESS | JULY 23, 2018

P022_CN_20180723.indd 22 7/19/18 3:35 PM FOR THE RECORD*

NEW IN TOWN in Chelsea, Madame Zhu’s REAL ESTATE lease to relocate to 48-35 and the landlord, Trinity cupy 35,500 square feet on critically acclaimed Chinese 36th St., Queens. e Real Estate. the third oor and 15,575 ■ Eleventy restaurant chain focuses on RETAIL 70-year-old ower shop square feet on the seventh 77 Greene St. bar food, including skewers ■ TeamLab signed a lease moved from 46-12 70th St. ■ Perkins Coie inked a deal oor of the building. CBRE e Italian suit maker for and small plates. for 55,000 square feet at e asking rent was $20 per to move into 57,971 square represented the landlord, men and women opened its 51 34th St., Brooklyn. e square foot. TEK Realty Ad- feet of o ce space at 1155 Sapir Organization, in the rst U.S. store, in SoHo. ■ Printed Matter Japanese digital-arts col- visors handled the lease for Sixth Ave. e international transaction. Newmark 38 St. Marks Place lective is slated to open an the company. Greiner-Maltz law rm will occupy the Knight Frank represented ■ Respect Your Universe e nonpro t that sells and exhibition space at Industry represented the landlord, SL entire 20th through 22nd the tenant. 76 N. Fourth St., Brooklyn distributes artists’ books City’s Building 7. e asking International. oors and half of the 23rd is Vancouver-based men’s expanded to a second store, rent was from $15 to $40 oor. e asking rent for the ■ LinkedIn signed an athleticwear brand landed in the East Village. per square foot. e own- COMMERCIAL 15-year lease was around expansion lease for 30,165 in Williamsburg, where it ers—Jamestown Properties; ■ Oscar Health has agreed $80 per square foot. e square feet at 350 Fifth Ave. o ers shoppers a water bar. Belvedere Capital; Angelo, to take 78,000 square landlord, Durst Organi- e social media network STOCK TRANSACTIONS Gordon & Co.; Cammeby’s feet at 75 Varick St. e zation, was represented now occupies 312,947 ■ Silver Spoon Animation International; and FBE health care company is in-house. CBRE brokered square feet at the Empire 630 Flushing Ave., ■ AmerisourceBergen Ltd.—dealt directly with the planning to move from for the tenant. State Building. e asking Brooklyn Corp. (ABC-N) tenant. 295 Lafayette St., where it rent for the seven-and-a- is motion-capture studio CEO Steven Collis sold occupies 39,000 square feet ■ Solomon Page Group half-year deal was $72 per in Williamsburg rents to 21,350 shares of common ■ American Multi-Cinema of space. e asking rent signed a renewal and square foot. e landlord, amateurs and professionals. stock for $84.63 per share inked a 15-year deal for for the seven-year deal was expansion lease for 52,500 Empire State Realty Trust, July 2 in a transaction worth 42,713 square feet at 2318 not disclosed. Newmark square feet at 260 Madison handled the deal in-house. ■ Stay Gold $1,806,850. He now holds Broadway. e asking rent Knight Frank handled the Ave. e sta ng and execu- CBRE brokered for the 360 Third Ave. 266,575 shares. was not disclosed. A team transaction for the tenant tive search rm used to oc- tenant. – YOONA HA is cocktail lounge in Kips from Cushman & Wake eld Bay serves bourbon-based ■ YEXT Inc. (YEXT-N) brokered for the owner, slushies. Chief Technology O cer Ashkenazy Acquisitions, as GET YOUR NEWS ON THE RECORD * Tom Dixon sold 32,500 well as for the tenant. e To submit company openings, moves or real estate deals, or to receive further information, shares of common stock lease comes with an option email [email protected]. MOVES AND EXPANSIONS at prices around $19 per to extend it for two to 10 For the Record is a listing to help businesspeople in New York nd opportunities, potential share July 2 and July 3. e years. new clients and updates on customers. Stock transactions are insider transactions at New ■ Hao Noodle transactions were worth York companies obtained from Thomson Reuters and listed by size. Real estate listings are 343 W. 14th St. $634,258. He now holds ■ Atlas Floral Decorators in order of square footage. In its second local outpost, 37,764 shares. signed a 10,000-square-foot

IS PLEASED TO ANNOUNCE A NEW LEASE AT 261 Fifth Avenue Entire 25th and 26th Floors 23,000 RSF

THE FEIL ORGANIZATION Owner/Manager Congratulations to Frank Coco 7 Penn Plaza, NY 10001 and Owen Hane of JLL for 212.279.7600 Brokering the Transaction www.feilorg.com

NOTHING BEATS 65 YEARS OF STABILITY.

JULY 23, 2018 | CRAIN’S NEW YORK BUSINESS | 23

P023_CN_20180723.indd 23 7/19/18 12:34 PM TO PLACE A CLASSIFIED AD, CALL 1 212-210-0189 OR EMAIL [email protected]

POSITION AVAILABLE PUBLIC & LEGAL NOTICES

Notice of Formation of LNS CAPITAL V, HKS Harlem’s Finest LLC Arts of Org Software Engineer III (Elsevier, Inc., Notice of Formation of The Waglan LLC Arts. of Org. filed with Secy. of filed with NY Sec of State (SSNY) on 2/ Group LLC. Articles of Organization filed New York, NY) Perform research, State of NY (SSNY) on 06/11/18. Of- 23/18. Office: New York County. SSNY with the Secretary of State of NY design, & software development fice location: NY County. SSNY desig- designated as agent of LLC upon whom (SSNY) on 05/24/2018. Office loca- nated as agent of LLC upon whom proc- process may be served. SSNY shall DVVLJQPHQWVZLQDVSHFLÀFVRIWZDUH tion: New York County. SSNY has been ess against it may be served. SSNY mail process to: 218 Lenox Ave, NY, designated as agent upon whom proc- functional area or product line. Em- shall mail process to c/o Timothy P. NY 10027. General Purposes. ess against it may be served. The Post SOR\HHUHSRUWVWR(OVHYLHU,QFRIÀFH Terry, 667 Madison Ave., 24th Fl., NY, Office address to which the SSNY shall NY 10065. Purpose: Any lawful activity. in New York, NY but may telecom- Notice of Qualification of Qu Labs, LP. mail a copy of any process against the Appl. for Auth. filed with NY Dept. of LLC served upon him/her is: United mute from any location in the U.S. NOTICE OF FORMATION of 140 FUL- State on 2/14/18. Office location: States Corporation Agents, Inc. 7014 Apply w/resume to: Leticia Andrade, TON ASSOCIATES LLC. Art. of Org. New York County. NY Sec. of State 13th Avenue, Suite 202, Brooklyn, NY RELX Group, 1100 Alderman Drive, filed with the Secy of State of NY designated agent of the LP upon 11228. The principal address of the (SSNY) on 6/28/18. Off. Loc.: New whom process against it may be Alpharetta, GA 30005. No relo. avail. LLC is 245 E 63rd St, #21N, NY, NY York County. SSNY has been desig. as served, and shall mail process to Van- 10065. Purpose: any lawful act or activ- No 3rd party responses. EOE. agent upon whom process against it guard Corporate Services Ltd, 307 ity. may be served. The address to which Hamilton St, Albany NY 12210. DE the SSNY shall mail a copy to is: c/o addr. of LP c/o Vanguard Corporate US Association for UNHCR seeks Director, NOTICE OF FORMATION OF NextGen Hidrock Properties, 40 Wall Street, Services Ltd, 3500 S Dupont Hwy, Do- The Hive in New York, NY to oversee strategic Strategic Advisors, LLC. Articles of Or- 45th Floor, New York, NY 10005 Pur- ver, DE 19901. Cert. of LP. filed with planning & execution of fundraising. Req. ganization filed with the Secretary of pose: Any lawful act . DE Sec. of State, 401 Federal St., Do- MBA, MS in Statistics, Econ., or rel. (or foreign ver, DE 19901 on 9/6/17. Names State of NY (SSNY) on 2/21/2018. Of- ed. equiv.) + 3 yrs exp in market research, and addresses of all General Partners fice location: NEW YORK County. SSNY predictive modeling, and analytics. Resume to Notice of Qualification of GELLER has been designated as agent upon MULTI-VINTAGE III, LLC Appl. for Auth. available from the NY Sec. of State. [email protected] Purpose: any lawful activity. whom process against it may be filed with Secy. of State of NY (SSNY) served. The Post Office address to on 06/08/18. Office location: NY Coun- Notice of Qualification of PARIAN GLOB- which the SSNY shall mail a copy of ty. LLC formed in Delaware (DE) on 06/ any process against the LLC served TELECOMMUNICATIONS 05/18. Princ. office of LLC: 909 Third AL MANAGEMENT LP Appl. for Auth. filed with Secy. of State of NY (SSNY) upon him/her is: 333 East 43rd Street Ave., NY, NY 10022. SSNY designated #814 NY, NY. The principal business as agent of LLC upon whom process on 06/14/18. Office location: NY Coun- ty. LP formed in Delaware (DE) on 02/ address of the LLC is: 730 Lawrence against it may be served. SSNY shall Ave, Westfield NJ 07090. Purpose: any mail process to the LLC, Attn: Edward 20/18. Princ. office of LP: 43 E. 10th St., 5B, NY, NY 10003. Duration of LP lawful act or activity TWO WAY RADIO Hornstein at the princ. office of the LLC. DE addr. of LLC: c/o Corporation is Perpetual. SSNY designated as COMMUNICATIONS Service Co., 251 Little Falls Dr., Wil- agent of LP upon whom process Notice of Qualification of SONY IN- mington, DE 19808. Cert. of Form. filed against it may be served. SSNY shall TERACTIVE ENTERTAINMENT LLC • PICKUP AND DELIVERY with Secy. of State of the State of DE, mail process to Corporation Service Co. Appl. for Auth. filed with Secy. of • 48 HOUR TURNAROUND Div. of Corps., John G. Townsend Bldg., (CSC), 80 State St., Albany, NY 12207- State of NY (SSNY) on 06/15/18. ON REPAIRS Federal and Duke of York Sts., Dover, 2543. Name and addr. of each general Office location: NY County. LLC • EMERGENCY SERVICE DE 19901. Purpose: Any lawful activi- partner are available from SSNY. DE formed in California (CA) on 12/ addr. of LP: CSC, 251 Little Falls Dr., • CUSTOM ENGRAVING ty. 21/16. SSNY designated as agent Wilmington, DE 19808. Cert. of LP filed of LLC upon whom process against • RENTALS with DE Secy. of State, Div. of Corps., Notice of Qualification of BRIZO GP, it may be served. SSNY shall mail • WIDE AREA SYSTEMS 401 Federal St., Ste. 4, Dover, DE LLC Appl. for Auth. filed with Secy. of process to c/o Corporation Service 19901. Purpose: Investment manage- State of NY (SSNY) on 06/01/18. Of- Co., 80 State St., Albany, NY ment. fice location: NY County. LLC formed in 12207-2543. DE addr. of LLC: The Largest Motorola Dealer in Delaware (DE) on 05/29/18. SSNY 2207 Bridgepoint Pkwy., San Mar- Notice of Formation of SAProp Associ- New York State designated as agent of LLC upon whom co, CA 94404. Cert. of Form. filed ates, LLC Arts. of Org. filed with Secy. with Secy. of State, 1500 11th St., th process against it may be served. 250 West 40 St. of State of NY (SSNY) on 06/15/18. Of- SSNY shall mail process to the LLC, Sacramento, CA 95814. Purpose: New York, NY 10018 fice location: NY County. SSNY desig- Attn: Benjamin Isaac, 142 W. 57th St., Any lawful activity. nated as agent of LLC upon whom proc- 212-532-7400 11th Fl., NY, NY 10019. DE addr. of www.metrocomradio.com ess against it may be served. SSNY LLC: c/o Corporation Service Co., 251 Notice of Qualification of ALLYNIUM shall mail process to c/o Holland & Little Falls Dr., Wilmington, DE 19808. BRAND SOLUTIONS, LLC Appl. for Auth. Knight LLP, Attn: M. James Spitzer, Jr., Cert. of Form. filed with Secy. of State filed with Secy. of State of NY (SSNY) Esq., 31 W. 52nd St., NY, NY 10019. PUBLIC & LEGAL of the State of DE, Div. of Corps., John on 06/27/18. Office location: NY Coun- Purpose: Any lawful activity. NOTICES G. Townsend Bldg., Federal and Duke ty. LLC formed in Ohio (OH) on 06/ of York Sts., Dover, DE 19901. Pur- 22/18. Princ. office of LLC: 118 Herit- pose: Any lawful activity Notice of Formation of 8 THOMAS LLC age Dr., Pataskala, OH 43062. SSNY Notice is hereby given a license, num- Arts. of Org. filed with Secy. of State of designated as agent of LLC upon whom NY (SSNY) on 06/21/18. Office loca- process against it may be served. ber 1311462 for Catering Establish- NOTICE OF FORMATION OF Samuel tion: NY County. SSNY designated as SSNY shall mail process to c/o Corpo- ment on-premises Liquor has been ap- Borinsky, LCSW, Psychoanalyst, PLLC. agent of LLC upon whom process ration Service Co., 80 State St., Alba- plied for by the undersigned to sell liq- Articles of Organization filed with Secre- against it may be served. SSNY shall ny, NY 12207-2543. Cert. of Form. uor under the Alcoholic Beverage Con- tary of State of NY (SSNY) on 06/ mail process to the LLC, 70 Little West filed with Secy. of State of OH, 180 E. trol Law at 15 East 583 Park Avenue, 11/2018. Office location: NEW YORK St., Unit 12E, NY, NY 10280. Purpose: Broad St., 11th Fl., Columbus, OH New York, NY 10065 for on premises County. SSNY has been designated as Real estate ownership. 43215. Purpose: Any lawful activity consumption. Rose Group Park Avenue agent upon whom process may be LLC d/b/a 585 Park Avenue served, and shall mail copy of process Notice of Formation of formalighting Notice of Formation of Rosie Filmwaze against the PLLC to 34 W. 22nd St., LLC Arts. of Org. filed with Secy. of LLC. Arts. of Org. filed with NY Dept. of Notice of Formation of MP REAL ES- 2H, NY, NY 10010. The principal busi- State of NY (SSNY) on 05/31/18. Of- State on 4/12/18. Office location: New TATE CAPITAL, LLC Arts. of Org. filed ness address of PLLC is: 34 W. 22nd fice location: NY County. Princ. office York County. NY Sec. of State designat- with Secy. of State of NY (SSNY) on 06 St., 2H, New York, NY 10010. Purpose: of LLC: 164 W. 25th St., 12th Fl., Man- ed agent of the LLC upon whom proc- /13/18. Office location: NY County. any lawful act or activity. hattan, NY 10001. SSNY designated ess against it may be served, and shall Princ. office of LLC: 220 E. 42nd St., as agent of LLC upon whom process mail process to 426 W Broadway, #2G, 29th Fl., NY, NY 10017. SSNY desig- Notice of Qualification of BROOKFIELD against it may be served. SSNY shall New York, NY 10012. Purpose: any nated as agent of LLC upon whom proc- RENEWABLE ENERGY MARKETING US mail process to Corporation Service lawful activity. ess against it may be served. SSNY LLC Appl. for Auth. filed with Secy. of Co., 80 State St., Albany, NY 12207- shall mail process to Federman State of NY (SSNY) on 06/25/18. Of- 2543. Purpose: General trading. Steifman LLP, Attn: Andrew Lampert at fice location: NY County. LLC formed in NOTICE OF FORMATION OF LIMITED LIA- the princ. office of the LLC. Purpose: Delaware (DE) on 04/14/08. SSNY BILITY COMPANY. NAME: TIFFANY Any lawful activity. designated as agent of LLC upon whom Notice of Formation of MERCANTILE LENTZ LLC. Articles of Organization process against it may be served. MERGER SUB I, LLC Arts. of Org. filed were filed with the Secretary of State of Notice of Formation of CHEROKEE VII. SSNY shall mail process to c/o Corpo- with Secy. of State of NY (SSNY) on 05 New York (SSNY) on 04/30/2018. Of- LLC Arts. of Org. filed with Secy. of ration Service Co. (CSC), 80 State St., /25/18. Office location: NY County. fice Location: 321 E 43rd St, Apt 608, State of NY (SSNY) on 05/30/18. Of- Albany, NY 12207-2543. DE addr. of SSNY designated as agent of LLC upon New York NY 10017. New York County. fice location: NY County. SSNY desig- LLC: c/o CSC, 251 Little Falls Dr., Wil- whom process against it may be SSNY has been designated as agent of nated as agent of LLC upon whom proc- mington, DE 19808. Cert. of Form. filed served. SSNY shall mail process to Cor- the LLC upon whom process against it ess against it may be served. SSNY with Secy. of State, Div. of Corps., John poration Service Co., 80 State St., Alba- may be served. SSNY shall mail a copy shall mail process to Corporation Serv- G. Townsend Bldg., 401 Federal St., ny, NY 12207, regd. agent upon whom of process to the LLC 321 E 43rd St, ice Co., 80 State St., Albany, NY Ste. 4, Dover, DE 19901. Purpose: and at which process may be served. Apt 608, New York NY 10017. Pur- 12207. Purpose: Any lawful activity. Any lawful activity. Purpose: Any lawful activity. pose: any lawful activity.

24 | CRAIN’S NEW YORK BUSINESS | JULY 23, 2018

P024-25_CN_20180723.indd 24 7/20/18 3:40 PM TO PLACE A CLASSIFIED AD, CALL 1 212-210-0189 OR EMAIL [email protected]

PUBLIC & LEGAL NOTICES

NOTICE OF FORMATION of NOTICE OF FORMATION of JAW 12T- Notice of formation of AMY Notice of Formation of ENERGETIC BAL- 280THENBABY, LLC.Arts. Of Org. filed 53rd LLC. Art. of Org. filed with the PERLMUTTER MD PLLC. Articles of Or- ANCE LLC Arts. of Org. filed with Secy. with Secy of State of NY (SSNY) on 3/ Secy of State of NY (SSNY) on 5/ ganization filed with the Secretary of of State of NY (SSNY) on 06/04/18. Of- 19/18. Office Location: NY County. 30/18. Off. Loc.: New York County. State of New York SSNY on 05/ fice location: NY County. SSNY desig- SSNY designated agent upon whom SSNY has been desig. as agent upon 15/2018. Office located in New York nated as agent of LLC upon whom proc- process may be served and shall mail whom process against it may be County. SSNY has been designated for ess against it may be served. SSNY copy of process against LLC to US Corp served. The address to which the SSNY service of process. SSNY shall mail shall mail process to Corporation Serv- Agents, Inc. 7014 13th Ave, #202, BK, shall mail a copy to is: The LLC, c/o copy of any process served against the ice Co., 80 State St., Albany, NY NY 11228. Principal business address: Joyce West, 411 East 53rd Street, New LLC 240 E 86TH ST, APT 11K, NEW 12207. Purpose: Any lawful activity. 414 E 119th St, Suite 4RE, NY, NY York, NY 10022. Purpose: Any lawful YORK, NY 10028. Purpose: any lawful 10035. Purpose: any lawful act. act . purpose. NOTICE OF FORMATION OF 15 Hudson Yards 28D LLC. Articles of Organization SHEVA STREET, LLC. Arts. of Org. filed filed with the Secretary of State of NY NOTICE OF FORMATION OF RUE SAINT with the SSNY on 01/21/05. Office: J A CONTI ASSET MANAGEMENT, LLC (SSNY) on 06/21/2018. Office loca- PAUL LLC. Arts. Of Org. filed with Secy New York County. SSNY designated as Art. Of Org. Filed Sec. of State of NY tion: NEW YORK County. SSNY has of State of NY (SSNY) on 6/19/18. Of- agent of the LLC upon whom process 5/16/18. Off. Loc.: 53 Dawson Circle been designated as agent upon whom fice location: NY County. SSNY desig- against it may be served. SSNY shall Staten Island, NY 10314. NRAI Serv- process against it may be served. The nated agent upon whom process may mail copy of process to the LLC, c/o ices designated as agent upon whom Post Office address to which the SSNY be served and shall mail copy of proc- Jonathan Israel, 366 East 8th Street, process against it may be served. shall mail a copy of any process ess against LLC to 1967 Wehrle Drive, No. 4, New York, NY 10009. Purpose: NRAI to mail copy of process to The against the LLC served upon him/her is Suite 1 #086, Buffalo, NY 14221. Pur- Any lawful purpose. LLC,160 Greentree Dr. Ste 101 Dover, 7014 13th Avenue, Suite 202 Brook- pose: any lawful act. DE 19904 . Purpose: Any lawful act or lyn, NY 11228 The principal business NOTICE OF FORMATION OF MIRIAM activity address of the LLC is 15 Hudson BIOLEK, LLC. Articles of Organization NOTICE OF FORMATION of QUANTUM Yards, Apt 28D NY,NY 10001. filed with the Secretary of State of NY RADIANCE CAPITAL LLC. Arts. of Org. (SSNY) on 02/13/2018. Office loca- NOTICE OF FORMATION OF DEEPER filed with Secy. of State of NY (SSNY) Notice of Formation of USA BET LLC tion: NEW YORK County. SSNY has MAGIC STUDIOS LLC. Arts. Of Org. filed on 06/01/18. LLC formed in New York Arts. of Org. filed with Secy. of State of been designated as agent upon whom with Secy of State of NY (SSNY) on 4/ (NY) on 06/13/18. Office Location: NY (SSNY) on 06/06/18. Office loca- process against it may be served. The 13/18 Office location: NY County. New York County. SSNY has been des- tion: NY County. SSNY designated as Post Office address to which the SSNY SSNY designated agent upon whom ignated as agent of the LLC upon whom agent of LLC upon whom process shall mail a copy of any process process maybe served and shall mail process against it may be served. against it may be served. SSNY shall against the LLC served upon him/her copy of process against LLC to Jona- SSNY shall mail a copy of process to mail process to Jeremy P. Kleiman, is: United States Corporation Agents, than Coleman, 408 W 57th St, Apt 6I the LLC, 305 2nd Ave, Ste. 306, NY NY Esq., 18 Columbia Tpke., Ste. 200, Inc., 7014 13th Avenue, Suite 202, NY, NY 10019 Purpose: any lawful act. 10003. Purpose: any lawful activity. Florham Park, NJ 07932. Purpose: Any Brooklyn, NY 11228. The principal busi- lawful activity. ness address of the LLC is: 43 West NOTICE OF FORMATION of ELYIARA. 119th Street, New York, NY 10026. Notice of Qualification of ACG CON- NOTICE OF QUALIFICATION of S3 CAPI- LLC. Arts. Of Org. filed with Secy of Purpose: any lawful act or activity. STRUCTION MANAGEMENT LLC Appl. TAL III GP LLC. Authority filed with NY State of NY (SSNY) on 4/16/18. Office for Auth. filed with Secy. of State of Secy of State (SSNY) on 6/14/18. Of- Location: NY County, SSNY designated ELKHORN MEDIA LLC, Arts. of Org. filed NY (SSNY) on 06/27/18. Office loca- fice location: NY County. LLC formed in agent upon whom process may be with the SSNY on 06/07/2018. Office tion: NY County. LLC formed in Dela- DE 6/11/18. SSNY designated agent served and shall mail copy of process loc: NY County. SSNY has been desig- ware (DE) on 06/07/13. Princ. office upon whom process may be served. against LLC to US Corp Agents, Inc. nated as agent upon whom process of LLC: 450 Park Ave., 4th Fl., NY, NY SSNY shall mail process to: c/o Spruce 7014 13th Ave. #202. BK. NY 11228 against the LLC may be served. SSNY 10022. SSNY designated as agent of Capital Partners, 444 Madison Avenue, Principal business address: 150 W shall mail process to: Corporation Serv- LLC upon whom process against it Floor 41, New York, NY 10022. DE ad- 56th St, Unit 3005 NY, NY 10019. Pur- ice Company, 80 State St., Albany, NY may be served. SSNY shall mail proc- dress of LLC: 160 Greentree Dr., Ste pose: any lawful act. 12207. Purpose: Any Lawful Purpose. ess to the LLC at the princ. office of 101, Dover, DE 19904. Cert of Form. the LLC. DE addr. of LLC: c/o Corpora- filed with DE SOS, 401 Federal St. Ste tion Service Co., 251 Little Falls Dr., 4, Dover, DE 19901. Purpose: any law- Wilmington, DE 19808. Cert. of Form. ful activity. filed with Secy. of State, John G. Town- send Bldg., 401 Federal St. - Ste. 4, Notice of Qualification of WASABI SU- Dover, DE 19901. Purpose: Any law- SHI BENTO 1014 SIXTH AVENUE LLC ful activity. Appl. for Auth. filed with Secy. of State of NY (SSNY) on 03/21/17. Office loca- Formation of Spotlight Kids NYC, LLC tion: NY County. LLC formed in Dela- filed with the Secy. of State of NY ware (DE) on 03/04/16. SSNY desig- (SSNY) on 4/4/18. Office loc.: NY nated as agent of LLC upon whom proc- County. SSNY designated as agent of ess against it may be served. SSNY LLC upon whom process against it may shall mail process to Pavia & Harcourt be served. The address SSNY shall LLP, 230 Park Ave., Ste. 2401, NY, NY mail process to Danielle Burakovsky, 10169. DE addr. of LLC: Corporation 350 Albany St., TH1, New York, NY Service Co., 2711 Centerville Rd., Ste. 10280. Purpose: Any lawful activity 400, Wilmington, DE 19808. Cert. of Form. filed with Secy. of State, 401 Fed- eral St., Ste. 4, Dover, DE 19901. Pur- Notice of Formation of ACREAGE NEW pose: Any lawful activity. YORK, LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 06/29/18. Of- NOTICE OF QUALIFICATION Zenith Mar- fice location: NY County. SSNY desig- keting Group, LLC. Fic. Name: Zenith nated as agent of LLC upon whom proc- Insurance Agency. Application for Au- ess against it may be served. SSNY thority filed with the Secretary of State shall mail process to the LLC, 366 Mad- of New York (SSNY) on 7/6/2018. Of- ison Ave., 11th Fl., NY, NY 10017. Pur- fice Location: New York County. LLC pose: Any lawful activity. formed in Indiana on March 26, 2018. SSNY has been designated as an Notice of Qualification of WASABI SU- agent upon whom process against it SHI BENTO FULTON STREET LLC Appl. may be served. The Post office ad- for Auth. filed with Secy. of State of NY dress to which the SSNY shall mail a (SSNY) on 11/30/17. Office location: copy of any process against the LLC NY County. LLC formed in Delaware served upon him/her is: CT Corpora- (DE) on 09/05/14. SSNY designated tion, 111 Eighth Avenue, New York, as agent of LLC upon whom process NY 10011. The principal business ad- against it may be served. SSNY shall dress of the LLC is: 303 W Main Str, mail process to c/o Pavia & Harcourt Ste 200, Freehold, NJ 07728. Indiana LLP, 230 Park Ave., Ste. 2401, NY, NY address of LLC is: 888 S Harrison 10169. DE addr. of LLC: Corporation Str, Ste 900, Fort Wayne, IN 46802. Service Co., 251 Little Falls Dr., Wil- Certificate of LLC filed with Secretary mington, DE 19808. Cert. of Form. filed of State of Indiana located at 200 W with Secy. of State, 401 Federal St., Washington Street, Ste 201, Indianap- Ste. 4, Dover, DE 19901. Purpose: olis, IN 46204. Purpose: any lawful Any lawful activity. act or activity.

JULY 23, 2018 | CRAIN’S NEW YORK BUSINESS | 25

P024-25_CN_20180723.indd 25 7/20/18 3:40 PM SNAPS BY CHERYL S. GRANT

Creating safe spaces Sanctuary for Families held its annual Zero Tolerance bene t June 5 at Pier 60. e event raised more than $2 million to provide services for survivors of domestic abuse, sex tracking and gender-based violence. “I’ve traveled across the country to photograph scores of survivors,” said honoree Lynn Savarese. “Hearing their voices and sharing their brave stories has been one of the most rewarding experiences of my life.” Rock & Roll Hall of Fame in- ductee Grandmaster Flash provided the entertainment.

Cecile Noel, commissioner of the Mayor’s Oce to Combat Domestic Violence, and Hannah Pennington, assistant commissioner of policy and training, were among the more than 1,000 attendees. Seth Meyers, host of Late Night With Seth Meyers, served as master of ceremonies. His wife, Alexi Ashe Meyers, sta attorney at Sanctuary for Families, and honorees Lynn Savarese, photographer and human rights advocate, and her husband, John Savarese, partner at Wachtell, Lipton, Rosen & Katz, also took part in the festivities.

Ensuring health and well-being locally Cooks with a purpose e 33rd annual Chefs’ Tribute to Citymeals on Wheels took in almost $900,000, which will allow the organization to deliver more than 122,000 meals to the city’s homebound elderly. Board Co-President Robert Grimes, president of R.S. Grimes & Co., and board member Alison Lohr nk Blood, a certi ed public ac- e YMCA’s 44th annual Dodge Award dinner brought in $1.65 million, which will countant, at the June 11 event. be used to support its services. Honoree and former Mayor Michael Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropies; Sharon Greenberger, president and CEO of New York City YMCA; and Edward Skyler, executive vice president of global public aairs at Citigroup, were among the more than 500 guests at the June 6 event.

Board members Suri Kasirer, president of Kasirer Consulting, and Lisa Rosenblum, vice chairman of Altice USA, during the party at Rocke- feller Center.

Mark Reyes and Zion Dawes, recipients of the YMCA’s 2018 von der Heyden scholarships, ank Mary Ellen and Karl von der Heyden during the dinner at Cipriani 42nd Street.

JEFF ZORABEDIAN, CHASI ANNEXY, CHRISTOPHER ERNST, ERIC VITALE ERIC VITALE CHRISTOPHER ERNST, JEFF ZORABEDIAN, CHASI ANNEXY, SEE MORE OF THIS WEEK’S SNAPS AT CRAINSNEWYORK.COM/SNAPS. GET YOUR GALA IN SNAPS. EMAIL [email protected].

26 | CRAIN’S NEW YORK BUSINESS | JULY 23, 2018

P026_CN_20180723.indd 26 7/19/18 12:39 PM PHOTO FINISH Cool sculpting orget hot yoga. Newly opened Brrrn in Chelsea o ers high- intensity gym classes in a room cooled to either 45, 55 or 60 degrees. FA former Division I college wrestler, co-founder Jimmy Martin, le, remembered exercising miserably in high heat to make weight before competitions. “I also realized it wasn’t the safest way to do it,” he said. He shared the idea of cool workouts with his friend and fellow certied personal trainer Johnny Adamic, a member of the Bloomberg obesity task force from 2012 to 2014. Adamic looked into it and learned that exercising in cool temperatures, which creates what is called mild cold stress, revs up the metabolism to keep the body warm. “Holy cow, cold is really good for you,” he recalled thinking. “You burn more fat; you burn more calories.” Aer trial runs in a fridge at Brooklyn’s Sixpoint Brewery, among other chilly locations, Brrrn was born May 1. e pair say morning and eve- ning classes regularly sell out, with prices ranging from $34 for a single session to $720 for 24. Core & Cardio Slide Board, done at 55 degrees, is the most popular. “If you want to have a better time working out and enjoy your tness,” Martin said, “we think you should turn the thermostat d o w n .” — TELISHA BRYAN BUCK ENNIS

JULY 23, 2018 | CRAIN’S NEW YORK BUSINESS | 27

P027_CN_20180723.indd 27 7/19/18 12:10 PM NOMINATIONS ARE NOW OPEN!

RECOGNIZE A WOMAN LEADING THE INDUSTRY

Notable Women is a year-long series celebrating women across the New York metro area’s leading industries.

wwww.crainsnewyork.com/NotableWomenAccounting

For more information, contact Danielle Brody at [email protected] or 212-210-0765.

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