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VOL. XXXIII, NO. 47 WWW.CRAINSNEWYORK.COM CHECK Merchants like Jay Goltz of Jayson Home—and the landlords who rent to them—are finding new ways to compete in the Amazon age PAGE 12

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P001_CN_20171120.indd 1 11/17/17 7:57 PM NOVEMBER 20 - 26, 2017 CRAINSNEW YORK BUSINESS

FROM THE NEWSROOM | AARON ELSTEIN | SENIOR REPORTER IN THIS ISSUE

Not all bleak on Bleecker 4 IN CASE YOU MISSED IT 5 HEALTH CARE ANTHONY CIRONE loved Li-Lac Chocolates so much that six 6 ASKED & ANSWERED years ago he bought the company. Its roots go back to a shop Too many New that opened on Christopher Street in 1923, when the owner 7 REAL ESTATE York losers in 8 WORKPLACE Washington’s still made the candy on the premises. tax plan Cirone, who had been a customer since the early 1990s, 9 VIEWPOINTS saw big potential for the neighborhood mainstay and in re- 10 THE LIST cent years has opened three more Li-Lac locations around FEATURE: THE STATE OF RETAIL the city, including one on Bleecker Street, long the prime re- tail corridor in Greenwich Village. Unfortunately foot tra c 12 THE NEW LEASING LANDSCAPE has been increasingly disappointing there of late. 14 POLITICIANS SHOP FOR SOLUTIONS “It’s not where it should be,” said Cirone, a former mar- The causes of 15 FOOD HALLS AT THE TABLE keting executive at Bath & Body Works and consumer goods retail’s woes are 16 URGENT CARE IS GOOD MEDICINE giant Unilever. “Our other stores are more vibrant.” Retailers of all kinds are struggling in this age of Amazon, hard to pinpoint, but Cirone doubts his little shop has been all that hurt by the but the results e-tail revolution. Aer all, when folks need a chocolate x, are plain they aren’t likely to wait for it to arrive in the mail. Rather, he reckons, shoppers who in the past would have spent the day P. browsing around the Village have instead been lured over to P. 20 Zachary and the Meatpacking District, Chelsea Market—where Cirone also has a Li-Lac—and JacobJacob Smith the shops around the World Trade Center and inside the Oculus mall. But if the causes are hard to pinpoint, the results are plain. e past few years 20 GOTHAM GIGS have been especially di cult for business owners on Bleecker. Most of the record 21 SNAPS stores, bookshops and tchotchke emporiums that once lined the street have suc- 22 FOR THE RECORD cumbed to rocketing rents. Even the pricey boutiques and chains that replaced 23 PHOTO FINISH them aren’t faring so well. e blocks between Hudson Street and the Bowery are littered with deserted storefronts bearing For Lease signs. Desolation row it is not, CORRECTIONS The landlord for 36 E. 31st St., the Rosen family, but it’s still a jarring sight. was represented by Koeppel Rosen in the deal with As our feature package on the state of retail (beginning on page 12) shows, mer- Arlee Home Fashions. This information was mis- chants all over the city—and the landlords looking to rent to them—are a resilient stated in For the Record, published Nov. 6. lot, consistently seeking new and better ways to make things work. On Bleecker, for Corey Johnson remarked “That’s government” at a Nov. 1 Crain’s event. This quote was misattributed example, retailers are banding together to boost tra c by oering discounts, gis, in “The most important city election is happening raes, even classes to customers who utter the magic words #ShopBleecker. behind closed doors,” published Nov. 13. So if you nd yourself there this holiday season, consider stopping at Li-Lac. Everyone in the Crain’s newsroom agrees: e dark chocolate mints are sublime.

Mary Kramer named group publisher ON THE COVER AS CRAIN COMMUNICATIONS, parent company of Crain’s New York PHOTO: BUCK ENNIS Business, continues to expand its national media footprint, longtime company executive Mary Kramer has been named group publisher of DIGITAL DISPATCHES Crain’s New York Business and Crain’s Chicago Business. Kramer joined the company in 1989 as the editor of Crain’s Detroit Business and in Go to CrainsNewYork.com 2012 became group publisher of Crain’s Detroit Business and Crain’s Cleveland Business. She is a member of the International Women’s Fo- READ In approving a rezoning, the City rum and the Michigan Journalism Hall of Fame. Planning Commission opened the door for a supertall Sutton Place tower to be built. The While other prominent news organizations scale back their local City Council plans to move quickly to quash coverage, Crain’s New York Business continues to serve as the leading source of information on the opportunity. the New York economy and the companies, industries, institutions and innovators driving the ■ city’s growth. Crain’s remains committed to the highest standards of journalism, connecting Wall Street’s nanciers will pocket an average bonus of around $150,000 this businesses across the ve boroughs and delivering top-notch services that enable advertisers, year, according to a forecast from Johnson sponsors and partners to reach inuential audiences in New York and other top markets across Associates. the country. ■ Billie, a SoHo-based service offering razor subscriptions to women, launched last week. It charges $9 per month for Vol. XXXIII, No. 47, Nov. 20, 2017—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double four ve-blade razor issues the weeks of June 26, July 10, July 24, Aug. 7, Aug. 21 and Dec. 19, by Crain Communications Inc., 685 Third Ave., cartridges. 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, 1155 Gratiot Ave., Detroit, MI 48207-2912. ■ Subway For subscriber service: Call 877-824-9379. Fax 313-446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. ridership is down (GST No. 13676-0444-RT) ©Entire contents copyright 2017 by Crain Communications Inc. All rights reserved. despite the city’s > rising population. BUCK ENNIS

2 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 20, 2017

P002_CN_20171120.indd 2 11/17/17 7:52 PM WHAT’S NEW NOVEMBER 20, 2017

AGENDATrade secret: Knicks’ makeover exemplifies addition by subtraction

wo years ago we blasted the Knicks for acquiring faded star Derrick Rose in a move that screamed “quick x” when they desperately needed a new business plan. e team went on to an awful season and let Rose go when it mercifully ended. TLast May we implored the Knicks to start fresh by trading Car melo Anthony, a marquee player whose teams never win much because of his too-oen-overlooked weaknesses, including that he fails to make his team- PORZINGIS is mates better and probably makes them worse. third in scoring in the NBA, but his at editorial concluded: “e Knicks ... have failed to deal Anthony points don’t come and are now watching his age and his trade value move in opposite direc- at the expense of teammates. tions. Knicks President Phil Jackson gured out long ago that his star will never play the kind of team basketball that the Knicks were known for when they won their only two titles, in 1970 and 1973. As a role-playing thusiasm they have not shown for years. e under, meanwhile, have be- forward on those squads and a six-time champion as a coach, he knows come the most ball-hogging out t in the National Basketball Association, that hoops teams are like businesses: ey function best as a cohesive averaging 100 fewer passes per game than the second-most-sel sh team. group—something the ball-dominating Anthony renders impossible. We Oklahoma City’s once-adoring crowds now watch in stulti ed disbelief can only guess that Jackson has held on to his leading scorer on orders as under players stand around and jack up shots. Customers want wins from team owner James Dolan. Otherwise, more than big names—although Anthony’s his failure to act is inexcusable.” Without Anthony, the Knicks are departure has allowed Kristaps Porzingis to Jackson was red, but his successors become a star in his own right, at the age of soon ful lled his goal and sent Anthony sharing the ball, developing new stars 22 no less. An even younger Knick, 19-year- packing. So far it has worked out nicely for and rocking the Garden again old Frank Ntilikina, has already established the Knicks and poorly for Anthony’s new himself as a defensive stopper. Suddenly the squad, the Oklahoma City under. At team’s future looks promising. press time the Knicks, coming o a 31-51 season, were 8-6 and have been We would be remiss to omit that Jackson draed Porzingis and Ntiliki- playing to raucous crowds at Madison Square Garden. e under, who na and created the impetus to trade Anthony. Many have labeled Jackson’s a year ago went 47-35 and made the playos, were 7-7 despite also bring- stint in the Knicks front oce a failure, but he laid a foundation that prom- ing in superstar Paul George. ises to bring glory back to the Garden. Fans who bid him good riddance e Knicks are sharing the ball and playing with a togetherness and en- might wish they had chosen two other words: ank you. — THE EDITORS

FINE PRINT Manhattan Borough President Gale Brewer said supermarkets are “shuttering all over Manhattan” and wants to exempt them from paying commercial rent tax. But Food Trade News reports the number of supermarkets in the borough slipped just 2% last year, to 451, and citywide to 1,678. The tax is a 3.9% surcharge on commercial rents of more than $250,000 annually north of Murray Street and south of 96th Street.

BY GERALD SCHIFMAN STATS

25 WORDS OR LESS PRIVATE MATTER

NEW YORK’S PRIVATE COLLEGES and universities reported fewer freshmen enrolling this year, citing AND THE CITY the debut of a free-tuition program at the state’s public institutions as a factor. But the decline in From Sandy aid to private-school enrollment among residents is not new and may stem from rising costs. “tax reform @Mick Decrease in state-resident CHALLENGING COURSE IN ECONOMICS % freshmen at 48 private Average state private-school cost 6 institutions that serve NY private-school attendees who are state residents MulvaneyOMB tries mainly New Yorkers $56,837 to screw NY. Probably $60,000 48.9% 50% Year-to-year decrease $54,000 48% feels inferior because in jobs caused by 3,200 the enrollment drop $48,000 46% NY subsidizes his Household income $42,000 44% state of S. Carolina” limit for students to $100K qualify for free tuition $36,000 42% —Rep. Peter King, R-N.Y., on the White at CUNY and SUNY schools $30,000 40% House budget director, a former member of Congress 2004 2006 2008 2010 2012 2014

AP IMAGES ADDICTED TO NUMBERS? GET A DAILY DOSE AT @STATSANDTHECITY. SOURCES: National Center for Education Statistics, Commission on Independent Colleges & Universities in New York

NOVEMBER 20, 2017 | CRAIN’S NEW YORK BUSINESS | 3

P003_CN_20171120.indd 3 11/17/17 7:45 PM AGENDA ICYMI CRAINSNEW YORK BUSINESS president K.C. Crain senior executive vice president Chris Crain group publisher Mary Kramer

EDITORIAL Missing the action: OUT OF OFFICE: De managing editor Brendan O’Connor Blasio picked a good assistant managing editors Erik Engquist, Mayor’s well-timed vacay week to hang out in Jeanhee Kim, Robin D. Schatz Connecticut. copy desk chief Telisha Bryan AYOR BILL DE BLASIO spent last week vacationing art director Carolyn McClain in Connecticut, yet he still found time to make his photographer Buck Ennis deputy web editor Peter D’Amato rst purportedly major announcement since the senior reporters Joe Anuta, Aaron Elstein, M Matthew Flamm, Daniel Geiger election with a Daily News op-ed touting his updated housing plan. It received precious little attention, which was no sur- reporters Will Bredderman, Jonathan LaMantia, Caroline Lewis prise. Rolling out something in absentia sends a clear message data reporter Gerald Schifman to the media that it is not worth their time. columnist Greg David Nonetheless, it proved a good week for the mayor to be contributors Tom Acitelli, Theresa Agovino, Miriam Kereinin Souccar, Cara S. Trager missing in action, as his public-housing and correction chiefs to contact the newsroom: were both rocked by scandal. www.crainsnewyork.com/staff Housing Authority Chairwoman Shola Olatoye was accused 212.210.0100 by the Department of Investigation of con rming the comple- 685 Third Ave., New York, NY 10017-4024 tion of lead inspections that she knew weren’t done. Aer holing up to avoid New York Post reporters, she spoke to ADVERTISING www.crainsnewyork.com/advertise WPIX-11 and obliquely blamed her sta for misleading her. On Friday she red two of them and demoted a third. advertising director Irene Bar-Am, Meanwhile, news broke that Correction Commissioner Cynthia Brann asked a subordinate for a $6,000 cashier’s 212.210.0133, [email protected] check to pay the commissioner’s ne for repeatedly using a city car to go shopping. Not only did she compound her senior account managers Lauren Black, Zita Doktor, Rob Pierce, misdeed, but she also did so on the same day the mayor promoted her (aer months of seeking someone better). Stuart Smilowitz e job was available only because Brann’s former boss, Joseph Ponte, had himself taken his city car on per- senior marketing coordinator sonal trips—all the way to his home state of Maine. at is also Brann’s home base and where she banks; hence Charles Fontanilla, 212.210.0145 [email protected] the favor requested of her New York–residing employee. (She reimbursed him with a personal check.) Capping sales coordinator Devin Arroyo, Brann’s week, the city comptroller revealed that Department of Correction spending per detainee has skyrocketed 212.210.0701, [email protected] to $270,876 per year, a 131% increase over the past decade. ONLINE CUSTOM CONTENT What’s next? Undercover Department of Investigation probers walking in o the street and removing Housing director of custom content Authority stoves and refrigerators without Olatoye’s agency ever reporting them missing? Wait, that just hap- Patty Oppenheimer, 212.210.0711, pened—a year aer the troubled housing system was warned to keep better track of its appliances. — ERIK ENGQUIST [email protected] custom project manager Danielle Brody, [email protected]

EVENTS Jonesing for an editor DATA POINT Platform speakers www.crainsnewyork.com/events Radhika Jones was named the h ed- Against a backdrop of decreased sub- director of conferences & events THE CITY’S HOTEL-BUILDING BOOM itor-in-chief of Vanity Fair, replacing way ridership, the Metropolitan Trans- Courtney Williams, 212.210.0257, Graydon Carter, who stepped down HAS ADDED 38,600 ROOMS SINCE portation Authority and Transport [email protected] manager of conferences & events aer more than 20 years at the helm. 2008. IT IS ESTIMATED THAT IN THE Workers Union Local 100 signed a deal Jones was the editorial director of e to create 355 “customer-service ambas- Adrienne Yee, [email protected] New York Times books department and NEXT THREE YEARS, AN ADDITIONAL sadors” who will answer riders’ ques- events coordinator Ashlee Schuppius, [email protected] is the rst woman of color to hold the 18,960 WILL BE ADDED TO THE tions in stations across the city. position at the Condé Nast title. REPRINTS CURRENT TOTAL OF 115,000. Paint numbers reprint account executive Lauren Melesio, Well-portioned stake Leonardo Da Vinci’s Salvator Mundi 212.210.0707 SL Green Realty is selling 43% of sold at Christie’s for a record-breaking PRODUCTION 1515 Broadway to Allianz Real Estate and Bart Scott begin their aernoon gig $450.2 million. e painting of Jesus production and pre-press director for $416 million. e deal values the also on Jan. 2. Christ surpassed Picasso’s Les Femmes Simone Pryce 57-story, 1.9-million-square-foot tow- d’Alger (Version ‘O’), which sold for media services manager Nicole Spell er, between West 44th and West 45th One-track mind $179.4 million in 2015. — CHRIS KOBIELLA SUBSCRIPTION CUSTOMER SERVICE streets, at $1.95 billion. Starting in January, Amtrak will re- www.crainsnewyork.com/subscribe construct three Long Island Rail Road [email protected] Bye and sell tracks in Penn Station. e tracks will 877.824.9379 (in the U.S. and Canada). Executive Chairman James Dolan is in- be out of service one at a time to miti- $3.00 a copy for the print edition; or $99.95 terim CEO of Madison Square Garden gate service disruptions. one year, $179.95 two years, for print subscriptions with digital access. Co. aer the sudden departure of David O’Connor, who held the position for Ticketed off Entire contents ©copyright 2017 only 28 months. Irving Azo, Dolan’s A parking-ticket error has forced the Crain Communications Inc. All rights reserved. ©CityBusiness is a registered partner at Azo MSG Entertainment, city to refund $18 million in paid nes trademark of MCP Inc., used under license was reportedly behind O’Connor’s oust- and dismiss another $8 million worth agreement. er. e sports and entertainment com- of tickets. Trac agents issued the CRAIN COMMUNICATIONS INC pany also announced that its 21-year- wrong tickets for failing to display me- chairman Keith E. Crain old WNBA franchise, the New York ter receipts. vice chairman Mary Kay Crain Liberty, is up for sale. Deprogramming The grande dame of dish president K.C. Crain Air apparents Legendary gossip columnist Liz senior executive vice president Chris Crain Lincoln Center Artistic Director Jane secretary Lexie Crain Armstrong Smith died Nov. 12 at 94. Her Gregg Giannotti, co-host of CBS Sports Moss lowered the curtain on the Lin- editor-in-chief emeritus Rance Crain eponymous column ran in the Radio’s Gio and Jones, is replacing Craig coln Center Festival, the three-week chief nancial of cer Robert Recchia Carton as Boomer Esiason’s sidekick on summer cultural event for works from Daily News, Newsday and the New founder G.D. Crain Jr. [1885-1973] York Post from 1976 to 2009 WFAN. e Boomer and Gio show hits around the world. Moss is taking con- chairman Mrs. G.D. Crain Jr. [1911-1996] the air the morning of Jan. 2. WFAN trol of all the summer programming and was syndicated in up to 70 also announced Mike Francesa’s re- and plans to expand the Mostly Mozart newspapers.

GETTY IMAGES placements. Chris Carlin, Maggie Gray Festival.

4 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 20, 2017

P004_CN_20171120.indd 4 11/17/17 7:11 PM AGENDA

CONTINENTAL INDUSTRIES How to fight NYC’s GROUP, INC. 21st floor 7,442 SF diabetes crisis New Lease Michael Joseph Brooklyn leader says city ‘doesn’t have a clue’ Renewals at Colliers BY JONATHAN LAMANTIA FUJITSU 733 THIRD AMERICA Partial 17th floor ity and state o cials have not done enough AVENUE 10,964 SF to help New Yorkers prevent type 2 diabe- Brian Cohen tes, according to Brooklyn Borough Presi- Newmark Knight Frank dent Eric Adams (right). C“If we really want to reverse MARWOOD this condition, there needs to be GROUP & CO. a clear infusion of resources, and 11th floor we need to look at what we are 25,438 SF doing to feed this crisis,” Adams Dennis Someck said during last week’s Crain’s Lee & Associates 2017 health care summit, New York’s Diabetes Crisis: Saving Lives and Cutting Costs. “e city doesn’t have a clue on how to do it right.” Adams, who rst spoke publicly about his type 2 diagnosis last year, shared his own dramatic experi- ence with symptoms including vision loss, nerve dam- age and esophageal sores. By adopting a whole-food, plant-based diet, Adams said, he lost 30 pounds, ban- TOM BOW ished his symptoms and reduced his blood glucose to [email protected] a nondiabetic level. 212.257.6610 Adams said the public sector and city hospitals ASHLEY GEE should devote more resources to diabetes prevention. [email protected] In New York City, about 700,000 people have diabetes, 212.257.6596 according to Health Department data. Yet spending THIRD AVENUE on diabetes-related programming pales in compari- son to money for other public health eorts, such as preventing and treating HIV/AIDS and treating sex- ually transmitted diseases, Crain’s reported in April. Adams took particular aim at the city for serving processed meats—considered carcinogenic by the World Health Organization—in schools, jails and homeless shelters. Last month he and the de Blasio administration announced a Meatless Monday pilot program to start at 15 Brooklyn schools in the spring. “All over this city our patients are going and sitting down with their doctors, [who are] giving informa- In connecti on with the acquisiti on of First Niagara Financial Corporati on by KeyCorp, and tion that will help them live with diabetes,” Adams said. “at’s not the goal. e goal is not living with pursuant to an agreement with the U.S. Department of Justi ce, KeyBank Nati onal Associati on diabetes; it’s preventing it.” off ers the properti es listed below for sale, assignment or sublease to interested depository insti tuti ons off ering deposit and credit products and services. These properti es are currently The city’s view uti lized as bank branches where existi ng branch operati ons are, subject to regulatory approval, e city Health Department said in response that ceasing as of the close of business on December 8, 2017. KeyBank Nati onal Associati on, through it has provided technical assistance to more than 140 clinical practices and community organizations to get local brokers designated below, will entertain off ers on these properti es from qualifi ed depos- more people enrolled in prevention programs. It has itory insti tuti ons and, subject to Department of Justi ce approval, from non-depository bidders trained 200 health coaches to help in that eort. should no commercially appropriate off ers from qualifi ed depository insti tuti ons be received. “e Health Department is committed to imple- KeyBank Lease Local Contact menting evidence-based programs to give New York- Company Branch Address City State Zip Interest Expirati on Broker Phone Email Address Name ers the resources they need to prevent or manage dia- Name Date Name Number

betes,” a spokesman said. Buff alo

Across the city diabetes-prevention programs Cushman Tyler Pine Ave 2407 Pine Ave Niagara Falls NY 14301 Leased 9/30/2021 Wakefi eld 716-878-9625 tbalenti [email protected] Balenti ne recognized by the Centers for Disease Control and Pyramid

Prevention are trying to do just that. Health People, Northtown Cushman Plaza Richard a Bronx nonprot that uses peer-to-peer education 3051 Sheridan Dr Amherst NY 14226 Own N/A Wakefi eld 716-852-7500 [email protected] (Eggert Schechter Pyramid to help people with chronic diseases, has oered the Sheridan) courses at a mental health day program and a senior Hudson Valley center. Participants lost 8% of their body weight on Perlmutt er Spring David 193 Route 59 Spring Valley NY 10977 Leased 8/31/2019 Properti es, 914-262-0026 david@perlmutt erproperti es.com average, beating a CDC benchmark, said Chris Nor- Valley Perlmutt er Inc wood, the nonprot’s executive director. Yon- Perlmutt er David kers-Water- 66 Main St Yonkers NY 10701 Leased 2/28/2020 Properti es, 914-262-0026 david@perlmutt erproperti es.com But Health People doesn’t have a course now for Perlmutt er lack of funding. e city and state health departments front Inc Perlmutt er Oakwood David 2515 South Rd Poughkeepsie NY 12601 Leased 6/30/2018 Properti es, 914-262-0026 david@perlmutt erproperti es.com have failed to make diabetes prevention a priority, she Commons Perlmutt er said. “ey have completely abandoned any eort to Inc ght diabetes,” she said. Rochester Cushman Mount 3603 Mount Read Chris Norwood suggested the city set a goal to lower the Greece NY 14616 Leased 5/31/2030 Wakefi eld 585-248-9426 [email protected] Read Blvd Guinta citywide average HbA1c, a measure of blood glucose, Pyramid

BUCK ENNIS and to fund diabetes-prevention pilots. ■

NOVEMBER 20, 2017 | CRAIN’S NEW YORK BUSINESS | 5

P005_CN_20171120.indd 5 11/17/17 6:16 PM AGENDA ASKED & ANSWERED NONPROFITS INTERVIEW BY CARA EISENPRESS

MARGARETTE PURVIS FOOD BANK FOR NEW YORK CITY

n Thanksgiving the Food Bank for New York City, led by CEO Margarette Purvis, will supply turkey, sweet So many people potatoes and stuf ng to more than 1,000 soup kitchens and food pantries. Each year the 34-year- “are going to work Oold nonpro t gives 64 million free meals—including 19 million and may not be pounds of fresh produce and 56 million pounds of shelf-stable homeless, but products—to the city’s hungry. To make this possible, it receives they’re struggling food donations and purchases provisions with $82 million in government allocations and private gifts.

Is Thanksgiving your busiest period? Thanksgiving is huge, yes. But hunger is always here. Snow days are the worst. My team took a photo from our kitchen on 116th and Frederick Douglass on a past snow day, and the line went two blocks. Those school meals are vital. So we don’t like snow days, and we don’t care for summer. I have to get in front of our donors before they go to the Hamptons to make sure they don’t forget us.

Who comes to New York City’s food pantries and soup kitchens? It’s more and more working poor. When Food Bank rst started, DOSSIER these programs were all about responding to homelessness and homeless men. Now it’s mostly women and women with children. WHO SHE IS CEO, Food Bank for It’s seniors. Soup kitchens and food pantries are not places for New York City children, but 400,000 children rely on them. 2015 REVENUE $82 million 2015 TOTAL Where does the food come from? COMPENSATION $438,529 We have food that comes in from the federal government, the AGE 44 state and the city—most cities don’t have that, so it’s a big deal that we do. The food that’s donated by individuals is harder to GREW UP Jackson, Miss. plan around. If all we could get is pasta, then we buy sauce. RESIDES Harlem EDUCATION Bachelor’s in urban Do you have sophisticated software to power that? studies and public policy, Dillard Our members go online and place orders for the meals they’re University planning for their community and the grocery bags for their clients IN HER BLOOD Her grand- and when they want us to bring it all. The technology also allows mother was a missionary, and us to check for errors and organize the food using ef ciencies. The Purvis spent weekends during her key metric for us is being able to move 120 meals every minute. childhood dropping off homemade food at state hospitals and wrap- Has the change in political parties at the federal level affected Food Bank? ping Christmas presents for poor My biggest concern is not about anything that happens in D.C. but children. “Giving was a part of how she raised all of us. Her favorite the distraction. When people are getting squeezed, there’s a lack phrase was ‘You are blessed to be of empathy. So many people are going to work and may not be a blessing.’ ” homeless, but they’re struggling. The idea of anybody getting some- PITCHING COACH Purvis thing extra can breed “us versus them.” That distracts people from coaches local pantry providers the ways they can make a difference. Change is made locally. such as Mama Tanya—a self- described “ erce mama bear and So then, locally, how are New Yorkers doing? outspoken advocate for black Brooklyn has by pure data the highest number of hungry people. women and girls”—so that they But because of the base of social justice–minded people who get through funding meetings with [say], “We’re going to take care of our Brooklyn,” the gap closes buttoned-up corporate types. “I quicker. Elsewhere there are some trends happening that I don’t told her, ‘Hold it together,’ ” Purvis like—[for example,] we’re attempting to feed the hungry in the said. “She got a grant from Bank of America.” Bronx by giving grants to Manhattan charities to come to the Bronx. That’s not sustainable; that’s not localized in the right way. BUCK ENNIS

What would you need to see in the Bronx? More attention and investment, building the capacity of those charities that are in the Bronx. We built a soup kitchen and started a pantry. It didn’t cost much—a couple of donors helped us do it.

Do something, even if you start small. That makes giving sound accessible. There’s plenty. I’m going to believe in plenty. ■

6 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 20, 2017

P006_CN_20171120.indd 6 11/17/17 4:12 PM AGENDA REAL ESTATE

Hard lessons in development A builder’s 18-year quest to remake a former public school BY WILL BREDDERMAN

espite the plywood barri- and former pro-CHARAS organizer. ers and having closed four “I think he thought the city would look decades ago, 605 E. Ninth the other way.” St.—remembered locally as Lopez, Singer claims, enjoyed a rap- DP.S. 64—still looks unmistakably like a port with Mayor Michael Bloomberg, school. Red brick walls, tall windows, who took oce days aer CHARAS ornate cupolas and a doorway framed was booted from the premises (the by limestone all show the hand of turn- councilwoman later endorsed the may- of-the-century architect C.B.J. Snyder, or’s 2005 re-election bid against former whose legacy played a central role in Bronx Borough President Fernando the city’s decision to declare the struc- Ferrer, a Hispanic Democrat like Lo- ture a landmark in 2006. pez). Singer blamed her sway in the ad- at designation is just one reason ministration for his inability to obtain P.S. 64 has stayed in suspended anima- permits to build his project, even aer tion even as the East Village has radi- downsizing it to 19 stories. cally transformed around it. Another is e developer sued the city, which a restriction in its deed requiring it to tightened requirements for dorms, be a “community facility.” mandating landlords to obtain a 10- But the third reason is a land-use year lease with an accredited institution SCHOOL’S OUT: dispute that ranks among the most un- to move forward with development Singer in front usual and involved in municipal histo- plans. e Appellate Division sided of the languish- ry. Depending on whom you believe, with Singer but was overruled by the ing former owner Gregg Singer is either the victim state’s highest court in 2008. P.S. 64 in the East Village of a decadeslong political conspiracy or he has squandered tens of millions Political opposition of dollars and years of his life pursuing By that time, not only had the city’s schemes to circumvent the deed re- landmarks commission acquiesced strictions and convert the building into to local activists and doomed Singer’s backdoor another use that is not com- duties. Singer ngered Mendez and the a massive youth hostel. high-rise dreams, but Lopez protégé pliant with the community-facilities city for holding up development. Singer bought the property from Rosie Mendez had succeeded her on use restriction,” Mendez said. e investors still hope for a return, the city for $3.15 million in 1998, with the council. Mendez continued her Howard, Mendez and others have ac- but their optimism is diminishing, the imprimatur of the Giuliani admin- predecessor’s tradition of holding ral- cused Singer of using his short-lived per- their attorney said. istration and outgoing City Council- lies opposing Singer’s plans and calling mits to tear away the building’s cornices “ is project has been held up by man Antonio Pagan, since deceased. for CHARAS to somehow return. to allow water to damage the structure opposition by certain community lead- At the time the derelict former school In 2012 Singer inked leases with so severely that he can raze it despite its ers,” said the lawyer, Max Wexelbaum. served as headquarters to the nonprot Cooper Union and the Jorey Ballet landmark status—so-called “demolition “[Singer has] been unable to get a sat- CHARAS, which operated a commu- Center to rent oors for their students, by neglect.” On a recent visit, holes were isfactory tenant that the city has ap- nity center called El Bohio (“the hut”) and in 2015 nally got permits to be- visible in the walls, and pigeons perched proved. Does he have the ability to con- and sublet space to other local orga- gin converting the building to a dorm. on the top-oor raers. Singer said tarps summate this project? We don’t know. nizations. Within a year Singer served But Mendez complained to the Depart- covering the gaps had blown away, and But obviously we view it with a lot of CHARAS with an eviction notice aer ment of Buildings that vague language blamed the facade’s condition on his in- skepticism. My clients have loaned a lot its lease expired and the organization in the leases and clauses letting Singer ability to secure permits. of money. Not a dime has been repaid.” rejected the new landlord’s rent hike. rent leover beds to students of “any Between property taxes; architec- In fact, the saga has delivered lit- Singer won a protracted legal bat- other school” opened the way to the tural, legal and consulting fees; demoli- tle for anyone. Mendez did steer her tle. But his struggles had only begun. long-feared hostel. e city rescinded tion and construction costs; insurance; favored heir, Carlina Rivera—who Pagan’s replacement in 2002, Council- the permits; Cooper Union and Jorey and the initial purchase price, Singer has echoed her calls for “restoring the woman Margarita Lopez, had opposed backed out. estimated the feud will have cost him building to the community”—into the the building’s sale and did not share his at scenario replayed itself this year more than $64 million by May. seat she must vacate Dec. 31. But the pro-development views. Singer said aer Singer signed a lease with Adelphi Not all of that money has been Sing- number of residents who remember El that when he sought other nonprot University. “I believe he has not negoti- er’s. In 2015 two groups of his creditors Bohio has dwindled. tenants, the councilwoman threatened ated in good faith and possibly tried to sued him for alleged lapses in duciary Singer has gathered hundreds of sig- to deny them funding, so he rolled out natures from locals supporting his Uni- a dierent proposal: a vaulting 27-story versity House vision. Yet he is losing dormitory called University House. money and seeing his credit and repu- “I couldn’t get any organizations to tation suer. It is unclear why he would move in, and so I had to look at my oth- continually seek to violate the deed re- er options,” said Singer, noting that a striction, as Mendez claims, if he could dormitory would meet the use restric- put the property to some lucrative use. tion. “It’s my property and it follows the At a town hall with Mendez Oct. 13, rules as dened in the deed.” two days aer Adelphi withdrew, May- Word on the street, East Village or Bill de Blasio declared “the city’s in- denizens told Crain’s, was that Singer terest in reacquiring that building.” But sought to take advantage of loose reg- Singer maintains he has no interest in ulations on dorms to surreptitiously selling, and it is unclear how the city lease beds to travelers with student IDs. could cost-eectively force his hand. “We were absolutely certain from us P.S. 64 seems destined to remain the very beginning that what he really a fossil from the old neighborhood, a wanted to do was build a youth hos- GUT CHECK: Singer (center) anked by local residents Paul Engler, Minerva Rai, Jorge de shell petried for posterity, of no use to

BUCK ENNIS tel,” said Susan Howard, an attorney Yarza and Marissa Miller, who favor development of the property the community or anybody else. ■

NOVEMBER 20, 2017 | CRAIN’S NEW YORK BUSINESS | 7

P007_CN_20171120.indd 7 11/17/17 6:21 PM AGENDA WORKPLACE

Harassment cases start hitting New York business Allegations increase in wake of Weinstein scandal BY CARA EISENPRESS % er a well-known chef tried between employers and their workers, but failed to drag Rachel not contractors or others who might at- 90 PORTION OF tipped work- Waynberg, then a 27-year- tend a company party. And, of course, ers who have been sexually old restaurant marketer, into victims o en do not report harassment. harassed on the job Athe bathroom at a party, he still bragged But more are now doing so. to everyone around that he’d had sex “ere was already an increase a er with her. the Fox News allegations, and actually Last year, as Iman Oubou, the since Donald Trump was elected,” said founder of Swaay, a new-media compa- Nina Frank, an associate in the sexu- 1,202 ny for women entrepreneurs, wrapped al harassment and sex discrimination SEX-BASED HARASSMENT up her rst-ever investment meeting, practice group at Outten & Golden, CASES led with EEOC in the potential backer suggested they a law rm that represents employees. the state last year could “seal the deal” in his hotel room. “We have people come in from all in- When Amy Rose Spiegel, the editor- dustries: a lot of nance, law, retail, in-chief at Brooklyn-based Talkhouse restaurant workers, chefs and public % Media, was 19 and interning at Death & employees. It is everywhere.” Taxes seven years ago, co-founder Ste- 9 phen Rockwell harassed her and other More scandals coming INCREASE IN SUCH CASES interns, she alleged on Twitter Nov. 1. e publishing industry has quickly since 2011 Rockwell stepped down from his exec- followed lm and television in terms of utive post at Billboard the next day. allegations that have had costs for the “I’ve been harassed at nearly every harassers: Lockhart Steele at Vox Me- % job I’ve ever held,” wrote Spiegel. dia, Knight Landesman of Artforum ese three New Yorkers, along with and Billboard’s Rockwell have resigned 27 ONE-YEAR RISE in gender- hundreds of women across the country, or been red. based discrimination have come forward with stories of sexual Restaurants could be next. claims led with NYC’s harassment since the Harvey Weinstein In the wake of allegations in New Or- Human Rights Commission allegations were published last month. leans leading to celebrity chef John Besh ey have implicated the media, the art stepping down from Besh Restaurant SOURCES: Restaurant Opportunities SWAAY’S OUBOU said men often turn business meetings Centers United, Equal Employment world, technology and venture-capital Group, which he founded, accusations with her into something else. Opportunity Commission, New York City companies, restaurants, government in the New York City restaurant world Human Rights Commission and the lm industry—all central seg- are coming to light. Two lawsuits have ments of New York City’s economy. accused Plaza Food Hall chef Todd En- in Big Law,” she said. and into court. If companies deal with But women aren’t just talking about glish and his sta of harassment, and a Educational institutions too: Har- accusations as they arise, then harass- harassment in particular New York former dishwasher at Le Bilboquet led win’s rm is working with two women ment might not yield the hostile envi- industries or companies. ey are a suit last month claiming she had been who have sued Columbia University ronment that leads to complaints and damning an entire work culture where groped in view of the manager, accord- over harassment. Colleges and univer- legal action. inappropriate advances and a power dy- ing to the New York Post. sities employ 200,000 New Yorkers. namic that shields harassers impede vic- For restaurant workers, “there are In advertising, a study by trade or- Enforcing policy tims’ careers and lives. Despite the spate blurry lines—late nights, alcohol,” said ganization 4A’s found that half of wom- Companies with policies must make of accusations on social media—many Waynberg, who recently moved to en had been sexually harassed at agen- an eort to enforce them, said Harwin. of which do not name a harasser—few Washington, D.C., a er more than a de- cies. New York City models have come ose without a human resources de- incidents have resulted in consequences. cade of working with chefs in New York. out with stories of harassment and partment, like some restaurants, have at suggests that the current scandals “ere is a certain group that’s gloried exploitation; one model and activist, to sta up, said Andrew Rigie, execu- are an overture and that New York City, more than others: TV personalities and Cameron Russell, last month published tive director of trade association New with so many of its industries in the people with 10 to 15 restaurants. You on her Instagram page anonymous ac- York City Hospitality Alliance. “Now is crosshairs, could become the epicenter see married chefs, drunk girls. It’s the counts of painful experiences. the time to build one.” of the fallout from this cultural shi . norm,” she said. Silicon Valley’s tech companies and Companies with rapid growth should e number of sex-based harassment Among tipped employees, 90% venture-capital rms have had found- realize they have to scale their human cases led with the have been sexual- ers and partners step down a er ha- resources departments in line with the Equal Employment We have people ly harassed at work, rassment accusations, including at rest of the business, said Matt Steinberg, Opportunity Com- according to the Uber, Social Finance and Draper Fish- an attorney at Akerman who works with mission in New York come in from Restaurant Opportu- er Jurvetson. New York City’s growing employers. “People are recognizing that state rose 9% over “ nities Centers Unit- tech industry has not yet experienced there is real damage and real risk to not all industries: ve years, to 1,202 in ed, which organizes that—but it may. stepping back to see how the workplace 2016. at year the nance, law, workers nationwide. Swaay’s Oubou, who was Miss New is operating in the day-to-day way.” New York City Com- Fast-food workers are York 2015 and has a master’s degree in Whether women’s disclosures will mission on Human retail, restaurants, particularly vulnera- biomedical engineering, said women resound down the city’s wage scale, from Rights counted 124 government. It is ble, with nearly half can feel especially targeted while trying its startup founders and law partners gender-based dis- of women at quick- to raise money from men. “ey turn to the 35% of residents in lower-wage crimination claims, everywhere” service joints report- the meeting into something it’s not sup- jobs, including a record-high 100,000 a designation that ing harassment. posed to be,” she said, “making inap- fast-food workers, is yet to be seen. includes sexual harassment, up from But no environment seems safe. propriate comments and trying to pick Workers at the bottom of the pay scale 98 the year before. Overall, 10% of Women at large law rms, both in New me up.” Before meeting that rst inves- have the least recourse if they are ha- working New Yorkers say they’ve ex- York City and elsewhere, have led tor, she had to persuade him to come rassed or retaliated against for report- perienced some kind of harassment gender-discrimination suits, according down from his room to the hotel lobby. ing something, according to the Na- on the job, according to a poll by the to Alexandra Harwin, an employee- When he did, he greeted her with, “Oh, tional Women’s Law Center, because Cornell Survey Research Institute. e rights lawyer at Sanford Heisler, which you wore that pencil skirt for me?” they lack bargaining power and are numbers do not nearly tell the full sto- is representing a dozen lawyers. “ere Lack of workplace enforcement is least able to withstand a retaliatory cut

NEWSCOM ry, though. ey only capture incidents are others that might surface, especially what pushes incidents out of the oce in hours. ■

8 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 20, 2017

P008_CN_20171120.indd 8 11/17/17 6:18 PM AGENDA VIEWPOINTS

Tax-plan losers in New York too many to count—but I’ll try If the wealthy move End of state and local tax deduction is only the beginning away because of the increase in their SO MUCH ATTENTION interest deductions for second homes. is could be especially problematic has been devoted to While a Bloomberg story suggested for private colleges, which last week taxes, the impact on the Republicans’ at- forming a limited liability company as cited Gov. Andrew Cuomo’s free tuition city and state budgets tempt to restrict or a workaround, that would be an option program for state schools in explaining eliminate SALT—the only for the most expensive Hamptons a decline in enrollment. would be devastating state and local tax palaces. Demand for second homes Colleges and universities face a deduction—that oth- would be reduced. series of hits. e wealthiest er provisions of their e Republican plan de- would pay a 1.4% tax on their already going up because of rising GREG DAVID plan that would also livers a body blow to Mayor endowments’ income. Tax- interest rates and, for the city, because have enormous con- Bill de Blasio’s affordable- exempt-bond nancing would of its enormous capital spending. e sequences for New York have gotten housing program by eliminating $0 be eliminated, raising costs added expense from Washington, D.C.’s too little attention. the use of tax-exempt bonds to SECOND-HOME and crimping those who lack tax reform will cut into both budgets. Start with high-end housing. ree nance it. New York state has mortgage inter- access to the taxable market. Finally, a mea culpa. My last column, provisions of the House plan would an allocation of $4.5 billion. est deductible Company reimbursement written too quickly aer the release of substantially change the economics e city uses all of its amount in GOP tax plan for education expenses such the plan, underestimated the impact of owning a home in Manhattan and on aordable units. One- as M.B.A. programs would be- of limiting or ending SALT. It is true the New York suburbs. It would allow third of the apartments to be come taxable income. No one the burden will fall most heavily on the mortgage interest to be deducted only produced by the de Blasio plan are to be uses this money more than employees wealthiest New Yorkers. But the top 1% on the rst $500,000 borrowed, down funded by tax-exempt bonds. Having adding a business degree to help them alone provide 40% of state income tax from $1 million today. It would limit already doubled the city’s nancial move up the corporate ladder. e revenues and three-quarters of the city the property-tax deduction to $10,000, commitment to his program, the mayor impact here would be far-reaching. income tax. If they move to another though suburban homeowners close to has no ability to make up the gap. Few governments in the U.S. shoulder state because of the increase in their the city typically pay twice as much and e Republicans want to eliminate as much debt as New York state and New taxes, the budget impact would be oen more. e combined eect would deductions for student loans, which York City. A recent report from Standard devastating. ■ almost certainly cause a signicant would make college less aordable and & Poor’s Global Ratings outlined all decline in home prices. reduce the number of people able to get the ways that the tax plans will raise the GREG DAVID blogs regularly at e House bill eliminates mortgage- the degree so vital in today’s economy. cost of borrowing for governments. It is CrainsNewYork.com.

FROM OUR READERS She prefers Staten Island ... in her rearview mirror

RE “STATEN ISLAND RISING” landing strip by the West Star program—sadly COAL per year, and the process [Oct. 30]: I moved to Shore Expressway. It’ll be now under threat by the COMFORT of extracting coal also Staten Island in 1970 at the only way to get there GOP—the U.S. remains It’s nice to have raises harmful pollut- age 10. I jumped for joy on time. one of the least-ecient new neighbors, ants, CCTI technology leaving it at 23. As fate SHERRI PASTOLOVE energy users among but “Midtown is far from making coal would have it, being a Long Island developed economies, might soon be environmentally friendly Long Islander now, I nd with upward of 30% of coal country” or even acceptable. myself passing through GET ‘SMART’ commercial energy use [Oct. 16] might Calling it “clean” simply the borough to visit my Pat Sapinsley’s op-ed wasted. e startups that Jessica Lappin and Sen. have residents masks the goal to make mom in New Jersey. “Want to build smart Sapinsley mentions are Charles Schumer aware wondering if Clean Coal coal more competitive. It amazes me how cities instead of dating poised to help us solve that nature does not deal Technologies Inc. is the e bottom line is that anyone can see Staten Is- apps? Come to NYC” such challenges. in U.S. dollars? If we hu- kind of neighbor they there really is no such land as a business savior. [CrainsNewYork. I’m glad Gov. Andrew mans wish to discharge want. thing as clean coal. e ere is no mass transit. com] oers hope that Cuomo has made New our debt to air, water and e article said CEO plant in eastern Missis- On a Saturday drive a few tech startups, aligning York a welcoming place land, we must use the Robin Eves relocated the sippi that was supposed weeks ago, we spent an with state government to do business in clean currencies nature does: company to New York to to prove the feasibility hour and a quarter to get policies, can push back and ecient energy. Now stewardship, attention, “leverage the city’s status of clean-coal technology to the Goethals Bridge. against the president’s Mayor Bill de Blasio’s regeneration, rest. as an international cross- never got o the ground. No reason. Volume. destructive environmen- landslide election win Let us not pretend roads.” But the “clean Now it burns gas. Staten Island still had tal and climate agenda at should give him the con- that scrambling to coal” he claims he can Gov. Andrew Cuomo pockets of natural beauty the federal level. dence to make support protect buildings and in- produce is a snare and is on the right track by in 1970. Since then every e startups’ focus on for clean-energy technol- frastructure serves non– a delusion, and housing committing to end New square inch has been uti- creating “more ecient ogy a high priority at the human beings—or even such an enterprise won’t York’s reliance on coal lized in ghastly fashion. electrical grids” and local level as well. humans—in the long do much to bolster the by 2020, and he needs to e expressway has been “new energy-conscious DAVID GOLDBERG run. Unless we pause to city’s status. make good on that com- widened only to come to business models” sounds Manhattan listen to the web our lives Because CCTI’s tech- mitment. Let’s hope the a grinding halt for two just right to me. Despite depend on, we will con- nology will reduce coal’s presence of this dubious lanes to New Jersey. some gains in energy TEMPTING NATURE tinue to summon ever carbon emissions by just enterprise in Manhattan Businesses run on conservation through Re “We must not be quiet more furious storms. 3% to 4% and a typical won’t deter him. the eorts of dedicated bipartisan measures such before the next storm” HELEN ZUMAN coal plant generates 3.5 MIKE MULLALEY employees. Better build a as the popular Energy [op-ed, Oct. 30]: Are Beacon, N.Y. million tons of carbon Brooklyn

CRAIN’S WELCOMES SUBMISSIONS to its opinion pages. Send letters to [email protected]. Send op-eds of 500 words or fewer to [email protected]. Please

ISTOCK include the writer’s name, company, address and telephone number. Crain’s reserves the right to edit submissions for clarity.

NOVEMBER 20, 2017 | CRAIN’S NEW YORK BUSINESS | 9

P009_CN_20171120.indd 9 11/17/17 3:42 PM AGENDA THE LIST NYC’S LARGEST HEALTH INSURERS Ranked by number of enrolled members

TRENDS CITY SIGN-UPS BRONX QUEUE The state marketplace continues to add many Compared to just four years ago, a smaller share of marketplace enroll- members—although the size of the gains is ees come from Manhattan, with the difference being made up by Bronx, shrinking with each passing year. Queens and Brooklyn residents. $85.3B +3.4% COMBINED 2016 9.7M 709,456 Added enrollees premium revenues of NUMBER OF +1.6% the top insurers to enrolled NYC +0.6% members among provide data, a 5.9% the top nine 409,898 386,052 -0.2% gain from 2015 insurers, a 2.3% gain from last year -5.3% STATEN 2015 2016 2017 BRONX BROOKLYN MANHATTAN QUEENS ISLAND SOURCES: Crain’s research, New York State of Health open-enrollment reports

                                                          
          
              

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10 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 20, 2017

P010_CN_20171120.indd 10 11/17/17 3:38 PM 156 WILLIAM STREET THE DOWNTOWN MEDICAL BUILDING (between Ann & Beekman Street) Suites ranging from 3,000 to 19,385 SF for LEASE Divisions may be considered

• Lower Manhattan's premier medical offi ce building • Directly across the street from New York-Presbyterian/Lower Manhattan Hospital • Ownership will build to suit - Flexibility with respect to term and expansion • Infrastructure available to accommodate Article 28 compliance • Opportunity for medical tenants to collaborate and exist in a healthcare campus environment • Recently completed new lobby

Gastro Surgical Facility • State of the Art Imaging Center • Primary Care Medicine

DOWNTOWN IS NOW A DYNAMIC DESTINATION FOR RESIDENTIAL, OFFICE AND RETAIL 61,000 people live in Lower Manhattan and more than 3,600 additional residential units are currently under construction or scheduled for completion in the next few years. New, state of the art transportation hubs account for 127 million riders in and out of Lower Manhattan each year.

Paul L. Wexler, Licensed Associate Real Estate Broker offi ce: 212.836.1075 l [email protected] l www.healthcare-properties.com

Real estate agents affi liated with The Corcoran Group are independent contractors and are not employees of The Corcoran Group. Equal Housing Opportunity. The Corcoran Group is a licensed real estate broker located at 660 Madison Ave, NY, NY 10065. All information furnished regarding property for sale or rent or regarding fi nancing is from sources deemed reliable, but Corcoran makes no warranty or representation as to the accuracy thereof. All property information is presented subject to errors, omissions, price changes, changed property conditions, and withdrawal of the property from the market, without notice.

CN018426.indd 1 11/17/17 6:44 PM

P012_P013_CN_20171120.indd 12 nine-month lease. Street locationwitha JAYSON HOME’SGOLTZ is test-driving a Greene is test-drivingaGreene

BUCK ENNIS, 4URSPACE, GOOGLE MAPS 12 RETAIL RETAIL |

CRAIN’S NEWYORKBUSINESS | BEFORE BEFORE

IN TRANSITION

high, merchantshigh, are leases—and getting them landlords for short-term uncertain and uncertain vacancies With future the of retail AND DANIEL GEIGER YOU YOU

BUY BUY |

NOVEM TRY TRY BY JOEANUTA BER 20,2017 pushing

portant number loans, to but underwrite used quietly owners to face-value their preserve rent, tried an im- storefronts to nearly 200,according to CBRE. Savvier dors have doubled 2014and between today, from 99 Ground-oor vacancies on Manhattan’s prime corri- out for rents that more became unrealistic by day. the leavingin denial, storefronts their empty held as they downturn,As with every some landlords remained city’s market has undergone correction. asobering retail itwhen rents seemed could only go up, the out. aspace Weto try asked, and we got it.” for ashorter lease, thought, Let’s look er,” Goltz said. “I bargaining pow- and we had more rents were slipping, of empty stores, there werea lot had initially sought. years landlord the vethe or more Greene St. in SoHo for just nine months, rather than to roughly take adeal struck 6,000square feet at 138 ranch. fore the he bet be Manhattan do in Jayson Home, might business, way to gauge how best his the like residents—seemed auent and visitors summering its Hamptons—with the Apop-up in environment. retail uncertain an in W Since days freewheeling the of 2014and 2015, “We noticed It turned out not necessary. to be In August Goltz signing a long, expensive lease lease expensive along, signing of City, risk put o by he the was store to New York furniture cago Chi four-decade-old his to bring hen year Jay decided Goltz last “WE NOTICEDTHEREWERE A LOTOFEMPTYSTORES, RENTS WERESLIPPING, BARGAINING POWER”

AND WEHADMORE - - can cost tenants millions of dollars. Temporary agree- environment.this way for city’s the retail market to nd its footing in asimple canized, short-term be leases and e ective (page 14).But as Goltz and many others have real- is considering asuite of merchant-friendly legislation pops are help seeking from city government, which building inthe space cial more valuable. Mom-and- clientelea wider and make apartments or commer of variety (pagehalls 15),whose o erings can attract owners are marketing ground-oor spaceto food a viable path. and tenants are experimenting hopes inthe of nding overcome forces, these brick-and- ping and changes inhow products are marketed. To shi is a ecting industry, the driven by online shop- byfallen 30%,to $711from $1,020. rents along 16corridors the tracked by CBRE have Since fourthdoes. the quarter of 2014,average asking ments. Eventually, though, reality in,as it set always store’s renovations or forgoing some monthly pay - o ered tenants incentives like chipping infor anew Typical ve long-term run to leases 10years and ofe retail—giving idea experiential shoppers What happens next is less predictable. Asystemic

a restaurant, some Instead of leasing to page clinics 16). (see such as urgent-care physical locations, absolutely require wooing tenants that landlords are now for some time. But kicking around just shop—has been more to dothan mortar landlords landlords mortar - 11/17/17 5:55 PM THAT WAS THEN: BIG RETAIL BUYS IN 2014/2015

670 COLUMBUS AVE. ● 36,000 square feet ● $60 million ● Buyer: The Klein Group

730 Fifth Ave. (Crown Building) ● 100,000 square feet ● $825 million ● Buyers: Wharton Properties and GGP purchased the entire building for $13 billion in late 2014, but sold the upper oors for $475 million months later.

503 BROADWAY ● 47,361 square feet ● $280 million ● Buyer: Inditex (parent company of Zara)

ments, typically one to three years, can act as a hedge long lease for 20,000 square feet at 635 Fih Ave., in or product forced in their face.” against being stuck with a bad location. But a test Rockefeller Center, using leovers from French cloth- e focus on social media—where users’ tastes run can also provide valuable performance gures ing brand Façonnable. can shi quickly—has become so strong that some to gauge how much rent a store can aord, should it Saving money on build-outs can also divert more brands are using it to guide their real estate decisions. decide to stay. cash into landlords’ pockets. But these days it’s not as Toronto-based online men’s clothier Frank and much as owners would like. A source said AllSaints’ Oak, for example, tapped #Paid to help it create a Built-in savings landlord, Tishman Speyer, had sought a whopping campaign for which it hired a dozen Instagram in- “ese deals are arming retailers with a range of $18 million a year for the space but agreed to the uencers in major cities including Boston, Los Ange- data that allow them to reliably budget what a given 12-month lease for a “fraction of that.” les and New York to persuade their followers to buy location can support in rent,” said Michael Glanzberg, Nearby, yoga apparel brand Lululemon Athletica Frank and Oak gi cards. e company then nar- a principal at retail-leasing brokerage Sinvin Real Es- recently leased 8,000 square feet for a year at 597 Fih rowed its search to the six locations with the greatest tate who represented landlord Ascot Properties in the Ave. with an option to extend. Reports put the rent response. Last year it opened two locations in Man- Jayson Home deal. at $400,000 a month—so far below what landlord hattan, on Crosby and Mulberry streets. It has already Gucci, for instance, recently signed a two-year Joseph Sitt was seeking that he has had to use other closed them, taking its fast-paced pop-up strategy to lease for around 11,000 square feet at 375 W. Broad- funds to keep the building’s mortgage current. other cities. way. But it maintained an option for an eight-year “Landlords would prefer to have tenants paying While short-term leases might not be the future of extension. Sources familiar with the deal anticipate some rent—rather than none at all—while the market retail, they are one of the ways that rms are trying to the Italian fashion brand will build out the space with corrects itself,” said Brad Mendelson, a retail-leasing feel their way through this unique downturn. In some luxury interiors, as it has in long-term locations. at broker at Colliers International. cases the agreements appear to already be producing could mean a big loss if it decides to leave in 2019. results and helping landlords and tenants strike more But that risk pales in comparison to making a larger Under the in uence traditional deals. Aer opening a pop-up earlier this commitment while retail is in ux. In the past some stores were willing to lose money year on Greene Street, e RealReal, a popular online “Building out a typical SoHo store could cost on a city location to market their brand to the mass- consignment store that specializes in designer and $2 million or more, but a [long] lease is a much larger es of passers-by. Many companies now realize they high-end shoes, apparel and jewelry, signed a ve- liability that could cost $20 million or more over the can better and more cheaply connect with shoppers year lease for a store on Wooster Street that it opened life of a deal,” Glanzberg said. “Having the exibility through digital channels such as social media, espe- Nov. 10. To increase the location’s appeal, the rm is to cancel a lease is worth a lot more than the money cially with the help of inuencers—trendsetters on seeking a liquor license and will have a café to encour- spent to create a space.” platforms like Instagram who have legions of loyal age shoppers to lounge, attend classes and get advice While Gucci is willing to put in serious money, followers. at is fueling a new type of marketing from experts who can authenticate and value items. even for the short term, many other tenants are nd- strategy into hipper corners of the retail market. “We had our pop-up for 20 days, and we knew ing ways to limit build-out costs, giving themselves “When an inuencer posts about a product or we wanted to have a store longer term because of greater leeway to cancel without losing much up- brand, it’s become a much more eective form of ad- the response,” said RealReal founder and CEO Julie front investment. vertising,” said Adam Rivietz, co-founder of #Paid, a Wainwright. “In our new space, you can have a glass Jayson Home, which opened in September, most- marketing rm that helps create social-media cam- of wine, get your watch inspected by our gemologist ly used a retail installation le over from the previ- paigns and partnerships between brands and inu- or your handbag authenticated and talk to our ex- ous tenant, furniture store B&B Italia. Fashion brand encers. “Billboards or the front window in a retail perts. We all want to shop. It just has to be the right AllSaints did something similar aer signing a year- shop are less personal now for shoppers. It’s a brand environment.” ■

NOVEMBER 20, 2017 | CRAIN’S NEW YORK BUSINESS | 13

P012_P013_CN_20171120.indd 13 11/17/17 6:35 PM RETAIL | IN TRANSITION

does not rise with ination. Garodnick noted that the cost of commercial space has since shot up—along with the number of retailers subject to the excise. “ e city with this tax is eectively stepping on the necks of small busi- nesses, and we have the ability to give them relief, and we should,” the councilman said. He has introduced legislation that would raise the cuto to $500,000 a year, and 41 of the council’s 51 members have signed on. Yet it remains bottled up in committee, despite receiving a hearing in Feb- ruary, because the mayor was hesitant to give up tens of millions of dollars in annual revenue while the Trump administration was considering changes that could hurt New York. (Nevertheless, these con- cerns did not stop the city from expanding spending CORNEGY (left) and other City by more than $1 billion this spring.) Using gures Council speaker candidates from scal year 2016, Garodnick’s oce calculated pledge legislative help for small businesses. that his bill would have exempted 36% of businesses that paid the tax while forsaking only 7% of the $754 million it raised. etail rents may be on the decline, but e councilman said he hopes the measure pass- they are still too high for many in- es before term limits take him out of oce at the dependently owned businesses. at end of this year. All eight candidates for council POLS has provoked a number of ideas from speaker support the tax cut. the City Council. Few have passed, “It’s real money for a small business, and it’s the Rthough, and one remains tantalizingly out of reach. sort of thing that could result in hiring more peo- Lawmakers, confronting a proliferation of ple, doing small repair projects,” he said. “On the SHOP FOR chains and empty storefronts, have made propos- other end, it could also keep them alive.” als ranging from exempting more businesses from e mayor’s oce told Crain’s that it continues the commercial rent tax to changing zoning rules. to be open to the proposal, but is still keeping a But legal clouds still hover over the holy grail for wary eye on Washington. SOLUTIONS small-business advocates: rent control for brick- Another concern is that landlords would raise and-mortar retail. rents by the same amount that the tax is lowered, ef- Elected of cials are proposing a slew “You can tell the character of a community by its fectively capturing the cut for themselves. Garodnick of measures to aid merchants and retail corridors,” said Brooklyn Councilman Rob- could not say what might stop them from doing this. restaurateurs battling high rents and ert Cornegy, chairman of the Committee on Small Business. “Every community is beginning to look Commercial rent control competition from chain stores exactly alike: having the same bank and a popular Despite kicking around the idea for nearly 30 [chain] eatery or coee shop instead of the older years, the city has never adopted commercial rent BY WILL BREDDERMAN mom-and-pops.” control. e latest iteration of that notion, called the Gentrication has brought this phenome- Small Business Jobs Survival Act, would give retail non to historically low-income areas like Cor- tenants of good standing a “right of renewal” on negy’s Bedford-Stuyvesant. Last year the council- their leases and establish an independent arbitration man orchestrated the passage of the nation’s rst process if a deal cannot be reached with the property anti-harassment law for business tenants. owner. e arbitrator would decide the rent based on e measure gives legal recourse to owners of a set of criteria. Should the tenant reject the deter- stores and restaurants whose landlord threatens mination, the landlord could not increase the rent them, tampers with utilities, changes the locks, does by more than 10% while looking for a new tenant. unnecessary construction or launches frivolous law- e original tenant would have a right of rst refusal. suits in the hope of pushing them out in favor of a Both the Real Estate Board of New York and higher-paying tenant. e city had previously only the mayor’s oce say the legislation would violate provided these protections to residential renters. the U.S. Constitution’s contracts clause, which bars Cornegy pioneered another tool to assist small government interference in lawful business ar- business that the city has employed for residential rangements. Opponents of the bill have long point- tenants: land use. In August the council—with Cor- ed to a federal court’s 1987 decision in Ross v. City negy’s imprimatur—signed o on a project by BFC of Berkeley that struck down a similar provision in Partners and SMJ Development spanning several that California city. parcels of publicly- and privately-owned land. But a legal panel convened by Bronx Borough Part of the deal was the creation of four President Rubén Díaz Jr. in 2010 concluded that the 1,000-square-foot commercial spaces at below- Small Business Jobs Survival Act would not meet the market rents, with a preference for local owners. same fate. e New York bill, the panel noted, allows Cornegy suggested the council in the future could landlords to refuse renewal to tenants who violated ply developers with tax incentives and looser height the terms of their lease, and permits property owners and density restrictions in exchange for providing to use their premises themselves to open their own smaller, discounted units. business. e California law lacked those provisions. But these proposals would help only businesses “ e proposed New York law does not even raise moving into a new development. Manhattan Coun- the issues that were addressed in the Ross case,” the cilman Daniel Garodnick is pushing another way panel wrote in its report. to assist existing shops and eateries in New York’s Cornegy, for his part, said his committee was priciest neighborhoods: a tax cut. still exploring its legality. Since 1963 the city has collected a commercial “Some people in past administrations have just rent tax. In the 1990s the council eliminated it for said, ‘ is is untenable and unenforceable,’ and le businesses in the outer boroughs and in Manhattan it at that,” he said. “We’ve done the exact opposite. north of 96th Street. e levy is now imposed in We’ve recognized that legally there could be issues, most of Manhattan on businesses paying $250,000 and while we work those out, we try to do what we

BUCK ENNIS or more a year in rent, a threshold set in 2001 that can to help small business.” ■

14 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 20, 2017

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COMMUNAL RETAIL: Gotham Organization’s Jaskiewicz believes food halls encourage neighborhood residents to renew their leases.

STRENGTH IN NUMBERS Real estate developers and artisanal food vendors carve out a mutually bene cial relationship BY CARA EISENPRESS

wo years before Downtown Brooklyn’s York City prices, dozens of small, sometimes rotating vendors, who sign subleases for individual counters City Point mall was expected to open, food vendors collectively can. and their own or shared kitchen and storage spaces. but a er construction had already be- “Retail is suering,” said Eldon Scott, president of Sometimes a single operator produces all the food gun, the developer decided to rethink Urban space NYC, which runs Urban space Vander- at various themed counters. Typically the price per the 70,000-square-foot lower level. e bilt, a soon-to-open Lexington Avenue location and a square foot for kiosks is double what a restaurateur Tplan had been to lease out large-format spaces to handful of temporary outdoor markets. “Everyone is might pay for a freestanding location, but the spaces three or four big-box stores. e new tack was lunch. turning to food and beverage, and food and beverage can be so small—80 square feet even, at around $150 Switching up the design and the construction plan, can’t make up all the dierence.” per square foot—that the monthly payment remains one of the developers, Acadia Re- aordable. Leases can be for terms alty Trust, decided to dedicate the as short as three months, and some oor to food—a 20,000-square-foot “IN THE PAST DEVELOPERS DIDN’T agreements include revenue shar- Trader Joe’s and a 36,000-square- ing, sometimes above a certain sales foot space featuring homegrown but WANT THE BRAIN DAMAGE OF DEALING threshold. Managers can minimize little-known food vendors. vacancies, sometimes setting up a new “It’s a giant kitchen,” said Christo- WITH 30 DIFFERENT TENANTS. vendor within weeks. pher Conlon, executive vice president NOW IT GIVES THEM AN EDGE” Developers have varying goals for for leasing at Acadia. e project, the halls. For Urbanspace, a food hall renamed the DeKalb Market Hall, is a business that earns money on the opened this year and has been more margin between the rent it pays out successful than anticipated, with sales volume double A food hall is a mall-style food court but with lo- and the amount the restaurants pay it. As competition what the team expected in year one. A plan to expand cal, usually independent vendors instead of national heats up, Urbanspace’s product—call it the thoughtful the hall by 7,500 square feet, with a bar and music chains. Chelsea Market, which opened in 1997, was curation of cool, local food makers—could be dilut- venue, is in the works. Conlon concedes that the sales the rst. But it wasn’t until Eataly landed near Madi- ed. But Gotham Organization considers its halls ame- volume for the big-box plan might have been similar. son Square Park that others followed suit. Since 2011 nities for residents who live in the 1,800 apartments “But not similar foot trac or excitement,” he said. the number of food halls has gone from two to 30, above its developments Gotham West in Hell’s Kitch- For the real estate industry, a ground-oor food with more on the way. en and Ashland in Downtown Brooklyn. It evaluates hall can seem like a cure-all for retail, because while At its core, the business is simple. A management its halls in part by the retention rate of residents, not

BUCK ENNIS even national chains may not be able to aord New company that leases or owns a large space recruits CONTINUED ON PAGE 16

NOVEMBER 20, 2017 | CRAIN’S NEW YORK BUSINESS | 15

P015_P016_CN_20171120.indd 15 11/17/17 5:50 PM RETAIL | IN TRANSITION

pro t, said Chris Jaskiewicz, president of Gotham Properties and Hospitality. In the past real estate developers “didn’t want the brain damage of dealing with a food hall and 30 dif- ferent tenants,” said Garrick Brown, vice president of retail research at Cushman & Wake eld. “Now they’ll take it on. It gives them an edge.” The case for vendors Tyler Kord, chef and partner at the No. 7 Sub sand- wich shop at e Ace Hotel, got a message in 2012 that e Plaza had called. He assumed it was a prank. e Plaza wanted to talk about its planned food hall. Kord and his partners went to look at the space and decided to open a second sandwich shop there. It HEALTH CARE AS COMMODITY: serves the business crowd at lunch and tourists the Shami of CityMD says urgent rest of the day. As an anchor vendor in the rapidly care is meeting consumer demand. expanding scene, Kord now gets lots of calls. “It’s like being in e Plaza has brought us to the attention of anyone opening a food hall anywhere,” he said. For Adam Sobel, who had popular vegan food truck e Cinnamon Snail, opening stalls at e Pennsy above Penn Station and City Acres Mar- ket in the Financial District has been a boost to his URGENT CARE IS business too. He was able to get into Pennsy for un- der $10,000, instead of the $200,000 he estimated he would have needed for his own shop. It has become the highest-grossing vendor there, he said. LATEST RETAIL RX He was relieved he did not need to become an ex- Walk-in health clinics are welcome tenants for landlords in a sluggish retail market pert in marketing, linen services and permitting. And he pays a percentage of his sales back to the markets, BY JONATHAN LAMANTIA so he is not on the hook for too much if a market is not busy one day. e visibility has led to oers for additional locations, but he is discerning. “I don’t nce an upstart with its self-ser- While they will not help landlords ll up a shut- think the volume is signi cant enough to go into as a vice, low-priced footwear retail tered department store, urgent-care chains have promotional thing.” concept, Payless ShoeSource has showed a voracious appetite for storefronts in high- Not to mention that expanding into too many lo- struggled of late. But even before ly visible spaces. cations might disqualify him from the artisan desig- the retailer led for bankrupt- CityMD is looking to add space in commercial nation that food hall managers seek or prevent him cy protection earlier this year and announced districts near transportation hubs. A new location from putting in enough time at his stalls to be suc- Othe closure of up to 22 stores in New York City, is slated to open at 5 Penn Plaza early next month. cessful. ere are only so many artisanal purveyors an unlikely savior had swooped in: urgent care. And the company shows no signs of slowing its pace for whom the economics of a food hall stand also As landlords face rising vacancy rates across the of expansion. It prizes storefronts where potential make sense with their business strategy. Meanwhile, city, urgent-care centers are eagerly snapping up patients will pass by its neon red sign twice a day as total square footage in the halls is increasing, but space abandoned by foundering retailers. e larg- they go to and from work, school or the gym. e so too are asking rents and oen the share of sales est local player is CityMD, with 21 walk-in health chain looks for about 30 feet of frontage and corner percentages and maintenance costs vendors have to clinics in Manhattan and 25 more throughout the locations, but it oen settles for midblock sites in pay to operators, leading to cracks in the opportunity city. CityMD has signed leases at six former Payless Manhattan, Birnbaum said. both for vendors and for operators. stores in the city. Shami declined to discuss leasing details, and the Brandon Hoy, a partner at Roberta’s, a regular at “With the depressed market we’re in, CityMD is company doesn’t disclose revenue. But he said most Urbanspace’s temporary outdoor markets, says the taking a lot of space that a bank would have taken of its clinics occupy about 3,000 square feet on aver- business equation is the same as signing a brick-and- in 2006,” said Benjamin Birnbaum, executive man- age and see 50 to 100 patients a day. mortar lease. Labor costs can add up even in small aging director at Newmark Knight Frank, who rep- CityMD’s competitors have also scooped up re- spaces, and without a commissary—which Roberta’s resents CityMD in all its leasing deals. tail locations. GoHealth has 15 outposts in the city, has—having multiple locations can mean multiples Since its inception in 2010, CityMD has grown while ProHealth Care has 17. of work. And unless the food hall oers a build- to 82 clinics in three states, attracting customers Retail broker Michael Stone, executive director out, opening expenses can range from $100,000 to with the promise of quick and convenient care from in Colliers International’s New York retail group, $350,000. For Hoy, revenue would have to be at least emergency room–trained physicians. has been working with GoHealth, a private-equity- $1.5 million to make opening a single kiosk worth it. “It’s a function of meeting consumer demand,” said backed chain based in Atlanta, since 2014. at year Other than e Plaza, Kord has not opened for Dr. Nedal Shami, chief strategy ocer. “Ten years ago the company started its joint venture with North- more than a three-month pop-up in other halls. “e you had the emergency department as option one well Health, New York’s largest health system, to deals have been so expensive lately that I haven’t been and primary care as option two.” Urgent care, he said, open clinics throughout the region. intrigued,” he said. “I don’t want No. 7 Sub to be some- is answering the need for a middle option. At GoHealth’s rst location, in Forest Hills, thing people associate with food halls necessarily.” Private-equity rm Warburg Pincus bought a ma- Queens, the company took more than 2,500 square In the end successful entrepreneurs say they value jority stake in the company in April in a deal Reuters feet from Apple Bank, which was cutting its square the communal feeling and the built-in marketing that said valued the urgent-care chain at $600 million. footage in half. And when Apple Bank downsized comes from operating in such close proximity to their ere are about 500 urgent-care centers state- at First Avenue and 81st Street in Manhattan, Go- peers. e vendors have access to a shared dining wide, with more than 190 in the city as of April, Health took over that space too. room, marketing, foot trac, reduced build-out costs according to the Urgent Care Association of Amer- “We’ve replaced Payless stores, RadioShacks, lo- and maintenance to clean the bathrooms and mop ica. ese clinics’ demand for space is welcome in cal and general retail,” Stone said. “ose are tenants the oor. “A lot of us have been together for years,” a sluggish retail market. In Manhattan asking rents replaced by the next generation.” said Hoy of his fellow food makers. have declined in three-quarters of the areas tracked While equating health care with retail may seem Restaurateurs have found that they have strength by CBRE, according to its third-quarter market re- odd, he said that GoHealth looks for a lot of the in numbers, because food businesses are on better port, released in October. same qualities in prospective locations as other cli- footing when their mutual customers can eat fried “When I started working with them, medical as ents do. e chain likes to locate its centers near su- chicken sandwiches one day, wood- red pizza the a retail use wasn’t at the front of a landlord’s mind,” permarkets, subway stations and drugstores. next and vegan doughnuts in the midaernoon. Birnbaum said. “My job of nding landlords and “Urgent care is trying to bring health care acces- “If we see carnage, it’s in standalone restaurants,” convincing them of the CityMD story has only be- sibility to customers where they live their lives,” he

BUCK ENNIS said Brown. ■ come easier each year.” said. “It’s not that dissimilar from a Starbucks.” ■

16 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 20, 2017

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SSNY shall mail proc- 12207-2543. DE addr. of LLC: 251 Lit- 10/19/17. Office location: NY County. Secy. of State of NY (SSNY) on ess to Corporation Service Co. (CSC), tle Falls Dr., Wilmington, DE 19808- LLC formed in Delaware (DE) on 10/12/17. Office location: NY County. 80 State St., Albany, NY 12207. DE 1674. Cert. of Form. filed with Secy. of 08/21/17. SSNY designated as agent LLC formed in Delaware (DE) on addr. of LLC: CSC, 251 Little Falls Dr., State DE, 401 Federal, Ste. #4, Dover, of LLC upon whom process against it 09/07/17. SSNY designated as agent Wilmington, DE 19808. Cert. of Form. DE 19901. Purpose: Data analytics may be served. SSNY shall mail proc- of LLC upon whom process against it filed with Secy. of State, Div. of Corps., consulting firm. ess to the LLC, 335 Madison Ave., 4th may be served. SSNY shall mail proc- 489 Fifth Ave., NY, NY 10017. Pur- Fl., NY, NY 10017. DE addr. of LLC: ess to c/o Corporation Service Co. pose: Real estate. Notice of Formation of 10 East Ever- c/o Corporation Service Co., 251 Little (CSC), 80 State St., Albany, NY 12207- green LLC. Arts. of Org. filed Secy. of Falls Dr., Wilmington, DE 19808. Cert. 2543. DE addr. of LLC: c/o CSC, 251 of Form. filed with DE Secy. of State, Little Falls Dr., Wilmington, DE 19808. State of NY (SSNY) on 10/3/17. Office Notice of Formation of Simpli Digital John G. Townsend Bldg., 401 Federal Cert. of Form. filed with Secy. of State location: NY County. SSNY designated LLC. Arts of Org filed with Secy of State St., Ste. #4, Dover, DE 19901. Pur- of DE, 401 Federal St., Dover, DE as agent of LLC upon whom process of NY (SSNY) on 9/13/17. Office loca- pose: Any lawful activity. 19901. Purpose: Any lawful activity. against it may be served. SSNY shall tion: NY Co. SSNY designated agent mail process to: c/o Kamber Manage- upon whom process may be served and ment Company LLC, 551 Fifth Ave., Notice of Formation of MATRIX HIGHLINE shall mail copy of process against LLC Ste. 2200, NY, NY 10176. Purpose: GP LLC Arts. of Org. filed with Secy. of Notice of Qualification of NOELLE ART to principal bus. address: 45 Tudor City any lawful activity. State of NY (SSNY) on 09/21/17. Office PARTNERS, L.L.C. Appl. for Auth. filed Place, #907, NY, NY 10017. Purpose: location: NY County. SSNY designated with Secy. of State of NY (SSNY) on any lawful act. Notice of formation of Samantha Cara, as agent of LLC upon whom process 10/19/17. Office location: NY County. LLC. Arts of Org filed with Secy. of Stat against it may be served. SSNY shall LLC formed in Delaware (DE) on of NY (SSNY) on 6/13/17. Office loca- mail process to Baker Hostetler LLP, 45 10/17/17. SSNY designated as agent Notice of Formation of SHF TANYA TOW- tion: NY County. SSNY designated Rockefeller Plaza, NY, NY 10111. Pur- of LLC upon whom process against it ERS LLC. Arts. of Org. filed with Secy. agent upon whom process may be pose: Any lawful activity. may be served. SSNY shall mail proc- of State of NY (SSNY) on 10/31/17. Of- served and shall mail copy of process ess to c/o Corporation Service Co., 80 fice location: NY County. SSNY desig- against LLC to US Corp. Agents INC, NOTICE OF FORMATION OF INSPACE NY State St., Albany, NY 12207-2543. DE nated as agent of LLC upon whom proc- 7014 13th Ave. #202, Brooklyn, NY LLC . Organization filed with the SS of addr. of LLC: 251 Little Falls Dr., Wil- ess against it may be served. SSNY 11228. Purpose: any lawful act. NY on 08/17/17. NEW YORK County. mington, DE 19808-1674. Cert. of shall mail process to: c/o Settlement The address to which the SSNY shall Form. filed with DE Secy. of State, Div. Housing Fund, Inc., 247 W. 37th St., mail a copy of process against the LLC, of Corps., 401 Federal St., Dover, DE 4th Fl., NY, NY 10018. Purpose: any Joseph A. Racanelli MD PLLC Filed is: 400 E 54th St. NY, NY 10022. 19901. Purpose: Any lawful activity. lawful activity. 10/19/17 Office: New York Co. SSNY designated as agent for process & shall mail to: 1107 Park Avenue, New York, NY 10128. Purpose: Medicine

Notice of Qualification of WELD CAPI- TAL MANAGEMENT LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 10/05/17. Office location: NY Coun- ty. LLC formed in Delaware (DE) on 10/03/17. Princ. office of LLC: 450 Lexington Ave., 4th Fl., NY, NY 10017. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to the LLC, Attn: Minhua Zhang at the princ. office of the LLC. DE addr. of LLC: c/o Corporation Service Co., 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Harriet Smith Wind- sor, Secy. of State of the State of DE, Div. of Corps., John G. Townsend Bldg., Federal & Duke of York Sts., Dover, DE 19901. Purpose: Any lawful activity.

18 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 20, 2017

P018-19_CN_20171120.indd 26 11/17/2017 2:51:22 PM TO PLACE A CLASSIFIED AD, CALL 1 800 444 6007 OR VISIT CRAINSNEWYORK.COM

PUBLIC & LEGAL NOTICES

Notice of Qualification of SUGAR HILL Notice is hereby given that a license, Notice of Qualification of RIDGEVIEW Notice of Qualification of DANSKAMMER OFFSHORE ONE PPW HOLDINGS, LLC 1302755 for wine/beer has been ap- PROPERTY OWNER, LLC Appl. for Auth. HOLDINGS LLC Appl. for Auth. filed with Appl. for Auth. filed with Secy. of State plied for by Dhaulagiri Kitchen Inc. to filed with Secy. of State of NY (SSNY) Secy. of State of NY (SSNY) on of NY (SSNY) on 10/20/17. Office loca- sell wine/beer at retail in a restaurant on 11/10/17. Office location: NY Coun- 10/12/17. Office location: NY County. tion: NY County. LLC formed in Dela- under the Alcoholic Beverage Control ty. LLC formed in Delaware (DE) on LLC formed in Delaware (DE) on ware (DE) on 10/18/17. Princ. office of Law at 124 Lexington Avenue New 09/29/17. Princ. office of LLC: 667 09/07/17. SSNY designated as agent of LLC: 256 W. 116th St., 2nd Fl., NY, NY York, NY 10016 for on premises con- Madison Ave., 19th Fl., NY, NY 10065. LLC upon whom process against it may 10026. NYS fictitious name: SUGAR sumption. SSNY designated as agent of LLC upon be served. SSNY shall mail process to HILL OFFSHORE ONE PPW HOLDINGS I. whom process against it may be NOTICE OF FORMATION OF New York c/o Corporation Service Co. (CSC), 80 SSNY designated as agent of LLC upon served. SSNY shall mail process to c/o Medical Surgeons PLLC. Articles of State St., Albany, NY 12207-2543. DE whom process against it may be Corporation Service Co., 80 State St., Organization filed with the Secretary of addr. of LLC: c/o CSC, 251 Little Falls served. SSNY shall mail process to Albany, NY 12207-2543. DE addr. of State of NY (SSNY) on 10-24-2017. Of- Dr., Wilmington, DE 19808. Cert. of Attn: Margaret B. Grossman at the LLC: 251 Little Falls Dr., Wilmington, fice location: NEW YORK County. SSNY Form. filed with Secy. of State of DE, princ. office of the LLC. DE addr. of DE 19808. Cert. of Form. filed with has been designated as agent upon 401 Federal St., Dover, DE 19901. Pur- LLC: c/o Corporation Service Co., 251 Secy. of State of DE, 401 Federal St., whom process against it may be pose: Any lawful activity. Little Falls Dr., Wilmington, DE 19808. Ste. 4, Dover, DE 19901. Purpose: served. The Post Office address to 1133 ST. JAMES LLC, Arts. of Org. filed Cert. of Form. filed with Secy. of State Any lawful activity. which the SSNY shall mail a copy of with the SSNY on 08/24/2017. Office of the State of DE, Div. of Corps., John any process against the PLLC served Vinum LLC Art. Of Org. Filed Sec. of loc: NY County. SSNY has been desig- G. Townsend Bldg., Federal & Duke of upon him/her is: National Registered State of NY 2/15/2017. Off. Loc.: Rich- nated as agent upon whom process York Sts., Dover, DE 19901. As Agents, INC., 1118th Ave New York mond Co. SSNY designated as agent against the LLC may be served. SSNY amended by Cert. of Amendment filed New York 10011.The principal busi- upon whom process against it may be shall mail process to: Kew Manage- with SSNY on 11/08/17, the entity will ness address of the PLLC is: 128 E. served. SSNY to mail copy of process ment Corporation, 1123 Broadway, Ste no longer be using fictitious name. Pur- 62nd St A, New York New York 10065. to The LLC, 338 Graham Ave, Staten Is- 407, NY, NY 10010. Purpose: Any Law- pose: Any lawful activity. Purpose: any lawful act or activity. land, ny 10314. Purpose: Any lawful ful Purpose. act or actiity

NOVEMBER 20, 2017 | CRAIN’S NEW YORK BUSINESS | 19

P018-19_CN_20171120.indd 27 11/17/2017 2:51:26 PM GOTHAM GIGS

DYNAMIC DUET: Zachary and Jacob Smith credit music for their success in business.

BY LANCE PIERCE

In tune Twins, both former professional musicians, join forces to run a tech startup ZACHARY AND or Zachary Smith, CEO of Packet, the best way age, and Jacob followed suit. eir rst business venture JACOB SMITH to focus on competing against the likes of Am- was at age 10, mowing lawns to pay for their instruments. azon, Google and Microso is to put on ear- As teens they began teaching music, which paid better. phones and listen to Berlin Philharmonic rec- While in college, Zachary burnished his minimal musi- AGE 38 Fordings of Beethoven’s symphonies. cian’s income by installing so ware and Windows at Juil- BORN Yorba Linda, Calif. “ey force you to think about what’s not immediate,” liard patrons’ homes. A er graduation he bought into a RESIDE Zachary in Battery Park he said, to see the bigger picture. His twin company that charged artists and doctors City; Jacob in Marlboro, Vt. brother, Jacob, Packet’s head of sales, prefers I learned early $20 a month to get online and quickly at- EDUCATION Zachary has a Beethoven’s 14th String Quartet, Opus 131. “ tracted 400 customers. It sold for $35 mil- bachelor’s in music from Juilliard that the key School; Jacob has a B.F.A. in music, In a city full of tech startups, three-year- lion in 2011. “I learned early that the key business and English literature from old Packet is the only one run by a Juilliard- is to come up to any successful business was to come up Carnegie-Mellon University. trained double-bass player (Zachary) and a with a recurring with a recurring revenue stream,” he said. MICKEY MOUSE CLUB Zachary former bassoonist for the Philadelphia Or- revenue stream Jacob was a nalist for a job with the was recruited to join the Disney chestra (Jacob, younger by one hour and 20 ” Metropolitan Opera orchestra, but when Young Musicians Symphony minutes). Packet provides computing ser- he did not get it, he decided he was tired Orchestra, where he got to play the double bass under conductor John vices for so ware developers and during the past year gen- of making $12,000 a year as a musician. He used the tech Williams and perform “The Pink erated $12 million in revenue, with sales rising by 30% a skills he learned at Carnegie-Mellon to start a search- Panther Theme” with composer month. So bank and Michael Dell are investors. engine optimization rm whose clients were rare-book Henry Mancini. e brothers agree they never would have succeeded in dealers and luxury brands. He le it to his business part- COMMUTER BENEFITS Jacob tech without being musicians rst. e best musicians, they ner, and in 2014 he and Zachary, who had long thought mostly works remotely and serves say, are driven, self-critical and creative—all positive attri- they would work together, launched Packet. as a consultant to the Marlboro butes in business. “I can teach anyone how to use a server,” Jacob recently took 19 staers to see La Boheme at the Music Festival in Vermont. “The truth is, most people who go to Jacob said. “I want people who can anticipate problems.” Met. “I wanted them to understand there were 400 people music school don’t go on to careers eir father was a trucker and their mother a school involved onstage and behind the scenes,” he said. “I want- in music,” he said.

BUCK ENNIS district employee. Zachary embraced music at an early ed them to see what a team can do.” — AARON ELSTEIN

20 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 20, 2017

P020_CN_20171120.indd 20 11/17/2017 1:07:33 PM SNAPS

Crain’s bold-faced names Family, friends and colleagues gathered Nov. 13 as Crain’s inducted six new members into its Hall of Fame: former NYPD Commissioner William Bratton; actor Robert De Niro; Judith Jamison, artistic director emerita of the Alvin Ailey American Dance eater; Martin Lipton, a founding partner of Wachtell Lipton Rosen & Katz; Silverstein Properties Chairman Larry Silverstein; and Merryl Tisch, former chancellor of the New York State Board of Regents.

Tribeca Enterprises Executive Chairwoman Jane Rosenthal, who introduced Robert De Niro; his wife, Grace Hightower; William Bratton; his wife, CBS News legal analyst Rikki Klieman; and NYPD Commissioner James O’Neill, who introduced Bratton.

Merryl Tisch was introduced by her daughter Jessica Tisch, deputy commissioner for information technology at the NYPD.

Robert Battle, Alvin Ailey American Dance eater artistic director, gave an introduction and accepted the honor on behalf of Judith Jamison, who was unable to attend.

Klara and Larry Silverstein have been married for more than 60 years.

Lobbyist Suri Kasirer and attorney Arthur Attending the event with Martin Lipton were Kenneth Langone, chair of Invemed Aidala attended Associates and a 2016 Hall of Fame inductee; Lipton’s daughter, Samantha, vice the luncheon at e president at MacAndrews & Forbes; Robert Grossman, CEO of NYU Langone Plaza Hotel. Health; and J. Ira Harris, chairman of J.I. Harris & Associates.

BUCK ENNIS SEE MORE OF THIS WEEK’S SNAPS AT CRAINSNEWYORK.COM/SNAPS. GET YOUR GALA IN SNAPS. EMAIL THERESA AGOVINO: [email protected].

NOVEMBER 20, 2017 | CRAIN’S NEW YORK BUSINESS | 21

P021_CN_20171120.indd 21 11/17/17 5:28 PM FOR THE RECORD*

NEW IN TOWN $2,873,385. He now holds at 147 E. 86th St. e additional 27,000 square rent was $68 per square ■ Kaiser Saurborn & Mair 28,730 shares. clothing brand plans to feet at 135 E. 57th St. Now foot. CBRE represented the inked a deal for 5,851 ■ Charc occupy the ground and sec- its Midtown East location, tenant. Avison Young bro- square feet at 30 Broad St. 316 E. 84th St. ■ Shake Shack (SHAK-N) ond oors of the building. between Lexington and kered the deal for the owner, e boutique rm that spe- e owner of Queens’ rst CEO Randall Garutti sold e asking rent was not Park avenues, spans 125,000 Adler Group. cializes in employment law Michelin-starred restaurant, 8,000 shares of common disclosed. e developers, square feet. e asking rent and litigation plans to occu- the now-shuttered Danny stock for $35.62 per share Ceruzzi Properties and was $80 per square foot. ■ Grapeshot signed a py the entire 37th oor for Brown Wine Bar & Kitchen, Oct. 25 in a transaction Kuafu Properties, were e landlord, Cohen Broth- 10-and-a-half-year lease the next eight years. It will opened an Upper East worth $284,936. He now represented by Ripco Real ers Realty, was represented for 9,311 square feet at 111 move from 111 Broadway Side outpost focused on holds 10,961 shares. Estate. RKF brokered the in-house. Savitt Partners Broadway. e Cambridge, in December. e asking charcuterie. deal for the tenant. represented the tenant. England–based ad-technol- rent for the eight-year deal ■ JPMorgan Chase & Co. ogy company plans to move was in the $60s per square ■ The Lobster Club (JPM-N) ■ Gucci agreed to take ■ KCD Worldwide inked from 30 Wall St. during the foot. e landlord, Tribeca 375 Park Ave. Stacey Friedman, general 10,700 square feet at 375 W. a 10-year deal for 13,346 rst quarter of next year. Associates, was represented e nal room in the Major counsel, sold 2,099 shares of Broadway. e luxury label square feet at 475 10th Ave. CBRE represented the land- by Newmark Knight Frank. Food Group’s transfor- common stock for $101.96 plans to move into the space e fashion public relations lord, Capital Properties. e e tenant was represent- mation of the Seagram per share Oct. 26 in a trans- previously occupied by agency plans to move from tenant was represented by ed by Prime Manhattan Building has been imagined action worth $214,019. She Anthropologie. e asking 450 W. 15th St. e asking Cushman & Wakeeld. Realty. ■ as a Japanese restaurant with now holds 19,527 shares. rent for the two-year deal a club atmosphere. was $400 per square foot. e landlord, Pearlmark ■ TechHub BANKRUPTCIES Real Estate Partners, was DEALS ROUNDUP 158 W. 27th St. represented by RKF. TRANSACTION SIZE BUYERS/ e London-based startup ■ A Taste of Mao Inc. TARGET/SELLERS [IN MILLIONS] INVESTORS TRANSACTION TYPE incubator opened its rst 136-40 39th Ave., ■ Blick Art Materials inked AmTrust Financial Services Inc., $949.0 Madison Dearborn Partners FB M&A city-based oce, in Chelsea. Suite 508, Queens a lease for 7,700 square feet certain U.S. fee-based businesses/ LLC (50%) Members have access to e restaurant led for at 41 Flatbush Ave., Brook- AmTrust Financial Services networking events, support Chapter 11 bankruptcy pro- lyn. e retailer of arts and Inc. (Manhattan) sta and oce amenities. tection Oct. 23. e ling cras supplies has six loca- Zodiac Pool Solutions SAS/ $838.3 Fluidra S.A. SB M&A cited estimated assets and tions in the city and plans Rhone Capital LLC (Manhattan) liabilities of $0 to $50,000. to open its second Brooklyn euNetworks Holdings Ltd. $500.0 Stonepeak Infrastructure GCI MOVES AND EXPANSIONS ere were no creditors with store. e asking rent for Partners (Manhattan) unsecured claims listed. the 10-year deal was $125 Infrastructure & Energy $341.9 M III Acquisition Corp. SB M&A ■ John Fluevog per square foot. CPEX Real Alternatives LLC/Oaktree (Manhattan); management of 37 Main St., Brooklyn ■ Greene Avenue Estate represented the land- Capital Management LP Infrastructure & Energy Alternatives e Vancouver, British Restoration Corp. lords, Building and Land LLC; Oaktree Capital Management LP Columbia–based shoemaker 689 Greene Ave., Technology and Quinlan Glass Mountain Pipeline LLC/ $300.0 BlackRock Inc. (Manhattan); SB M&A known for his funky style Brooklyn Development Group. Win- NGL Crude Terminals LLC; Navigator Energy Services LLC opened his rst Brooklyn e owner of the single- ick Realty Group represent- SemGroup Corp. shop, in Dumbo. It will sell family home led for ed the tenant. AuRico Metals Inc./Alamos Gold Inc.; $238.9 Centerra Gold Inc. SB M&A limited-edition styles for Chapter 11 bankruptcy Van Eck Associates Corp. (Manhattan) men and women that are protection Oct. 19. e ■ ClassPass signed a available only at this store. ling cited estimated assets 7,000-square-foot lease at 229 W. 36th St. and 256 W. 38th St. $156.0 Brickman Associates FB M&A and liabilities of $500,001 34 34th St. in Sunset Park, properties in New York/New York (Manhattan); Investcorp Bank REIT Inc. B.S.C. ■ Nordstrom Rack to $1 million. ere were Brooklyn. e company, 865 Sixth Ave. no creditors with unsecured which gives clients monthly MagicJack VocalTec Ltd./ $153.3 B. Riley Principal FB M&A Adams Street Partners LLC; Carnegie Investments LLC Nordstrom opened its h claims listed. membership access to t- Technologies LLC; Hoak & Co.; Kanen city-based o-price store, ness studios, plans to move Wealth Management LLC; Renaissance in Herald Square. e ■ Junction Elmhurst from 80 39th St., Brooklyn, Technologies Corp. (Manhattan); Twinleaf Management LLC 47,000-square-foot space 27 Corp. into the sixth oor of the carries 48 of Nordstrom’s 1461 First Ave., Queens Industry City building and Avendus Capital Private Ltd. $151.6 Gaja Capital Partners; individual GCI top 50 brands. e garage led for Chapter live-stream tness classes. investors; KKR & Co. LP (Manhattan) 11 bankruptcy protection e asking rent for the Intersection Co. (Manhattan) $150.0 ArrowMark Colorado Holdings GCI ■ Tango Oct. 26. e ling cited es- ve-year deal was $30 per LLC; Graham Holdings Co., 145 Montague St., timated assets and liabilities square foot. e landlord, investment arm; NewSpring Capital Brooklyn of $0 to $50,000. ere were Industry City developers Talon Innovations Corp./ $130.0 Ichor Holdings LLC SB M&A e family-run Brooklyn no creditors with unsecured Jamestown and Belvedere Graycliff Partners (Manhattan) Heights women’s boutique claims listed. Capital, were represented Compass (Manhattan) $100.0 Fidelity Investments; GCI reopened aer a revamp. by an in-house team. Lee & Institutional Venture Partners; Associates NYC represented Wellington Management Co. LLP ■ The Arrivals REAL ESTATE the tenant. 42 Crosby St. Beaumont Apartment Complex $99.0 MG Properties Group SB M&A e fashion label known for RETAIL COMMERCIAL in Woodinville, WA/The Guardian Life Insurance Co. of America its puer and leather jackets ■ CJ CGV signed a lease ■ e NYC Department (Manhattan) opened a pop-up shop in for 34,000 square feet at of Youth and Community SoHo. e web-based brand 133-15 39th Ave., Queens. Development agreed to take Selected deals announced for the week ended Nov. 9 involving companies in metro New York. “SB M&A”: Strategic buyer M&A represents a minority or majority acquisition of exist- will operate at this location e South Korean cinema 40,610 square feet at 123 ing shares of a company without the participation of a financial buyer. “FB M&A”: Financial through Jan. 28. chain plans to open a 4-D William St. e asking rent buyer M&A represents a minority or majority acquisition of existing shares of a company multiplex at Tangram in for the 20-year lease was with the participation of a financial buyer. “GCI”: Growth capital investment represents new money invested in a company for a minority stake. Flushing. e theater will be $2.1 million annually for STOCK TRANSACTIONS its third location to open in the rst ve years and $2.6 the U.S. e asking rent was million a year in the 16th

■ American Express $65 per square foot. SCG through 20th years. CBRE GET* YOUR NEWS ON THE RECORD To submit company openings, moves or real estate deals, or to receive further information, (AXP-N) Retail brokered the deal for represented the landlord, email [email protected]. Anré Williams, president the tenant and the land- AR Global. Cushman & ABOUTTHIS SECTION of global merchant services lords, F&T Group and SCG Wakeeld represented the For the Record is a listing to help businesspeople in New York nd opportunities, potential new clients and updates on customers. Bankruptcy lings from the eastern and southern and loyalty, sold 30,761 America. tenant. districts of New York are listed alphabetically. Stock transactions are insider transactions at shares of common stock New York companies obtained from Thomson Reuters and listed by size. Real estate listings for $93.41 per share Oct. ■ Old Navy signed a 15-year ■ WeWork signed an are in order of square footage. 25 in a transaction worth lease for 18,500 square feet expansion lease for an

22 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 20, 2017

P022_CN_20171120.indd 22 11/17/17 3:58 PM PHOTO FINISH

Blue in the face ou can travel to Grand Central any time you like, but you may have a hard time leaving. at is what commuters have found recently, with several exits from Ythe subway walled o. e disruption is the pain before the reward of a $210 million Metropolitan Transportation Authority plan to ease congestion throughout the transportation hub. Real estate rm SL Green agreed to foot the bill and partner with the authority in exchange for the green light to construct a 1,400-foot oce building, 1 Vanderbilt, just west of the terminal. Complicating every rush-hour crush, however, is a project by developer Tishman Speyer to repair water damage. e rm owns the Chrysler Building and blocked o a passage leading to the iconic tower just as the station improvements began. Tishman ex- pects to be done by the end of the month, a spokes- woman said. e job is unrelated to the 1 Vanderbilt improve- ments, but commuters might not be able to tell. e worker seen slipping behind this partition is helping to replace an MTA stairwell to Lexington Avenue. Mere feet away, Tishman’s work is being done behind nearly identical blue walls. Aer inquiries from Crain’s, however, the MTA— no doubt mindful of commuters’ enmity for it— axed a sign to the Tishman wall clarifying who erected it. MTA Chairman Joseph Lhota seemed to be letting straphangers know: It ain’t me. — JOE ANUTA BUCK ENNIS

NOVEMBER 20, 2017 | CRAIN’S NEW YORK BUSINESS | 23

P023_CN_20171120.indd 23 11/17/17 6:57 PM CN018429.indd 1 11/16/17 11:28 AM