VOL. 36, NO. 5 © 2020 CRAIN COMMUNICATIONS INC.

INSTANT EXPERT

Why New Yorkers are no longer Trusted TravelersPAGE 10

ARTS & CULTURE

ST. MARTIN ON BROADWAY’S KEY ECONOMIC ROLEPAGE 17

CRAINSNEWYORK.COM | FEBRUARY 17, 2020 | $3.00

NEW

SPAP

ER

REAL ESTATE

Industry gets reprieve in broker fee battle

An Albany judge’s decision to press pause on a state policy that would have outlawed commissions paid by tenants has disappointed renters and o� ered a reprieve to brokers, who say the business of leasing New York City’s 2 million apartments has been thrown into chaos in the past week.

Brokers and tenants were whip-sawed by the Department of State’s interpretation of rent-reform laws. Seemingly out of nowhere, the de-partment outlawed � nders fees, but days later state Supreme Court Jus-tice Michael Mackey placed a tem-porary restraining order on the pol-icy.

“We were told, overnight, ‘Well, you’ve run your business this way for decades, but you have to make a change right now,’” said Sarah Saltzberg, co-founder of the Bohe-mia Realty Group brokerage. “� e judge’s order was absolutely the right thing to do.”

� e industry mobilized quickly against the policy change. � e Real Estate Board of New York, which represents landlords and thou-sands of brokers, promised to sue as soon as the state published the document Feb. 4. Less than a week later, the rule was placed on hold.

� e lawsuit, which REBNY � led in collaboration with the New York State Association of Realtors, claims there is no clear legislative history to back the state’s interpretation of the rent laws. Broker fees were not

REBNY mobilized quickly against the policy change

BY RYAN DEFFENBAUGH

FOOD FIGHTLocal supermarkets are under siege, but are fruit-and-vegetable street carts to blame?

RETAIL

BY MATTHEW FLAMM

In his more than 30 years running supermarkets in New York, Nick D’Agostino has seen traditional grocers get walloped from all sides.

Along with high rents and new regulations, neighborhood su-permarkets must contend with deep-pocketed, nonunionized newcomers Whole Foods and

BU

CK

EN

NIS

D’AGOSTINO says he has laid off produce workers in his stores as street vendors eat into his pro� ts.

ASKED & ANSWERED Meet Memorial Sloan Kettering’s � rst-ever tech chief PAGE 11SAFETY FIRSTThe city stakes its claim as a cybersecurity hubPAGE 3

See VENDORS on page 18See BROKERS on page 4

P001_CN_20200217.indd 1 2/14/20 5:39 PM

OUR DEALS PUT US AT THE TOP. OUR PEOPLE KEEP US THERE.

For the 23rd consecutive year, CBRE leads New York City in office leasing, completing

21 of the top 50 largest deals in 2019. Our continued success is a direct result of the

exceptional outcomes our sales professionals deliver for every client they serve.

Thank you to our clients, partners, and talented people, who helped CBRE achieve a

record year once again.

Learn more at cbre.com/newyorkcity

CN019586.indd 1 2/11/20 3:24 PM

FEBRUARY 17, 2020 | CRAIN’S NEW YORK BUSINESS | 3

POLITICS

Inside a cast-iron SoHo building, up a stair-case designed by Apple Store architect Pe-ter Bohlin, you’ll � nd a bustling tech hub packed with busy young entrepreneurs preparing for their auditions.Many of them are developing and selling cy-

bersecurity solutions, which are what just about every business desperately wants more of these days.

Cybersecurity o� ers peace of mind—until it doesn’t work, which is often. � ere have been 10,000 publicly noti� ed data breaches  since 2005, according to the Identity � eft Resource Center. Last year alone there were 1,473, a 17% increase from 2018. � e number of personal re-cords exposed last year fell by 65%, but that’s

As hackers’ tactics intensify, the city invests $30 million to become a cybersecurity hubBY AARON ELSTEIN

Council con� rms Taxi and Limousine chief

There's a new commissioner in the drivers seat at the city's cab and for-hire vehi-cle regulator.

� e City Council approved Mayor Bill de Blasio's nomination of Aloysee Heredia Jarmoszuk to lead the Taxi and Limousine Commission on Tuesday. � e of-ten-controversial o� ce has lacked an o� cial czar since the resignation of Meera Joshi in March 2019.

Members of the local legisla-ture lauded Jarmoszuk, the for-mer chief of sta� to Deputy Mayor Laura Aglin, almost as � ercely as they hammered de Blasio's previ-ous nominee Je� ery Roth last year.

"I'm excited about her coming in to lead the TLC," said Bronx

Councilwom-an Vanessa Gibson. "I be-lieve her expe-rience working in the deputy mayor's o� ce and the De-partment of E d u c a t i o n , and really coming to this

with a really unique perspective, is going to be transformative."

But Jarmoszuk takes the wheel at the agency at a contentious time. � e value of yellow cab me-dallions has cratered in recent years—which the administration has blamed on the advent of Uber and Lyft, but which � e New York Times and others have attributed to mounting driver bankruptcies driven by risky loans and the city's own irresponsible auction poli-cies.

Medallion holdersRecently, the council and the

industry convened a task force which outlined a number of mea-sures the city could take to bail out underwater medallion hold-ers. Upper Manhattan Council-man Ydanis Rodriguez, who chairs the Committee on Trans-portation, urged Jarmoszuk to swiftly adopt these proposals as he welcomed her to the job.

"A lot of work has to be done," Rodriguez said. "Drivers are fed up, they're tired. � ey cannot wait for another study, they cannot wait for another task force. � ey need action." ■

BY WILL BREDDERMAN

Jarmoszuk takes the wheel at the agency at a contentious time

COMPUTER COPSB

UCK

EN

NIS

MARGALIT sees great opportunity in the city.

See CYBER on page 19

TECHNOLOGY

JARMOSZUK

TWIT

TER

P003_CN_20200217.indd 3 2/14/20 2:41 PM

mentioned when the law was up for debate in June, REBNY said.

� e restraining order does not guarantee that the courts will side with the real estate groups. � e De-partment of State will present its side in a hearing in March.

“� is is de� nitely more of a pyr-rhic victory,” said Lisa Faham-Selzer, a partner at Manhattan real estate law � rm Kucker Marino. “For now it’s business as usual, but ulti-mately this issue can swing either way, with no one privy to how the judge will rule.”

Even if the real estate industry were to overturn the guidance, Faham-Selzer said, state law-makers could amend the rent-reform laws to out-law broker fees.

� ere also could be ac-tion at the city level.

Councilman Keith Powers, who introduced a bill during the summer to limit the cost of such fees, said he would like to see the state’s pol-icy codi� ed into city law. He has not yet introduced any legislation aimed at doing that, however.

The impact� e state’s guidance on broker

costs was cheered by tenant advo-cacy groups and progressive politi-cians, who described the fees, which range between one month’s rent and 15% of the yearly rent, as a barrier to stable housing.

“For people who have to resort to a variety of sources to help them, high fees can create a barrier from getting an apartment, particularly for people who are in a shelter and trying to get to permanent hous-ing,” said Robert Desir, a sta� attor-ney at the Legal Aid Society in New York City.

� rough the lawsuit and in inter-views, brokers described a state of chaos in the market for the � ve days the guidance was in e� ect. Firms had thousands of pending transactions that were held up in the confusion that followed, with little advice on what to do next.

“� e unwinding of these pend-ing transactions, due to the [De-partment of State’s] erroneous and arbitrary interpretation of [the law] will harm landlords ... brokers ... and most of all consumers, who may not then close on apartments they seek to rent,” the lawsuit charges.

Heather McDonough Domi, a broker with Compass, said the guidance caused enough confu-sion to nearly scuttle a lease she had worked on, even after the terms were agreed to and the checks were cut.

“Do I have to give the check back? Do I have to tell my owner that he has to pay me the check?” asked McDonough Domi, founder and chairwoman of the New York Residential Agent Continuum, a broker advocacy group.

“As many questions as I had, I was hearing the same things from

our members,” McDonough Domi said.

If the state’s guidance stands up to the court challenge, the rule change could threaten the liveli-hood of the city’s more than 25,000 brokers, because it is unclear how many landlords would be willing to absorb the fees and continue to use the agents.

A company such as LCOR, which has a rental portfolio in New York and several other U.S. markets, is better set up to continue paying brokers; most of its apartments are already no-fee or handle leasing in-house.

“But if you are a smaller land-lord, less capitalized, and have a rent-regulated building, this really

changes the way you do business,” said David Sig-man, an executive vice president and principal at LCOR.

� ose landlords could be unable to raise rents to pay for a broker, Sig-man said, “but they don’t have the time to show apartments and vet all of

the potential tenants.”

‘Only-in-New York creation’A long history exists of millions

of New York renters detesting and trying to avoid these fees. A 1967 New York Times article detailed how "many a � nancially pressed apartment hunter ... counts it as a success if he can save at least a bro-ker’s fee.” � irty years later the same publication declared that “the broker’s fee for rentals, like the $9 movie ticket, is an only-in-New York creation.”

Without their services, brokers say, landlords would just push the cost of marketing and leasing their apartments into higher monthly rents. � e listing website Property-Club found that rents increased an average 6% for apartments where the fee was removed in the six days between the guidance and the re-straining order.

“Economic � eory 101 suggests it shouldn’t make any di� erence at all who pays the fee,” said Heski Bar-Isaac, an economics professor at the University of Toronto who has studied the New York rental market.

“If there is going to be a broker involved, somebody’s paying the fee,” Bar-Isaac said.

Paying a fee upfront makes sense for a renter who plans to stay in an apartment for several years and, therefore, would bene� t most from lower rent.

Short-term renters, meanwhile, could save money by skipping out on the fee and accepting a higher monthly cost for the year they rent the apartment.

“� at suggests that these di� er-ent payment pro� les are going to be used by landlords to select dif-ferent kinds of tenants,” Bar-Isaac said.

What’s next� e case returns to court March

13.State lawyers likely will provide a

fuller explanation of what prompt-

ed the guidance at the hearing.Department o� cials have kept a

low pro� le throughout the storm that followed the document’s pub-lication, issuing only a single state-ment to the press that clari� ed the policy does not apply retroactively to the rent law’s e� ective date.

� e clari� cation annoyed rent-ers, who could otherwise seek re-funds on fees paid after the law was signed. It is now part of REBNY’s case against the guidance.

“� e DOS’s assertion that [the guidance] does not apply retroac-tively demonstrates that ... this new rule is a drastic departure from current market practice,” the law-suit reads, “and the language of [the law] itself failed to put anyone on notice that commissions paid by tenants to brokers appointed by landlords were somehow being abolished.” ■

4 | CRAIN’S NEW YORK BUSINESS | FEBRUARY 17, 2020

CONFERENCE CALLOUT

Vol. 36, No. 5, Feb. 17, 2020—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for bimonthly in January, July and August and the last issue in December, by Crain Communications Inc., 685 Third Ave., New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing of� ces. Postmaster: Send address changes to: Crain’s New York Business, Circulation Department, PO Box 433279, Palm Coast, FL 32143-9681. For subscriber service: call 877-824-9379; fax 313-446-6777. $3.00 a copy; $129.00 per year. (GST No. 13676-0444-RT) ©Entire contents copyright 2020 by Crain Communications Inc. All rights reserved.

FEB. 19CRAIN’S BUSINESS BREAKFAST FORUM

Join Crain’s New York Business on Feb. 19 as Public Advocate Jumaane Williams discusses his role as an activist and elected of� cial and his advocacy for social justice.

NEW YORK ATHLETIC CLUB

8 to 9:30 a.m. crainsnewyork.com/PublicAdvocate2020

5 THINGS YOU SHOULD KNOW ABOUT THE BROKER FEE LAWSUIT

1. THERE WAS NO DISCUSSION REBNY’s lawsuit argues that the

guidance violated the state’s legis-lative procedure. Broker fees, the � ling asserts, did not come up in debate leading up to the June vote on rent-law reform. As evidence, the � ling includes an exhibit of a description of the legislation that Manhattan state Sen. Brian Kava-nagh, chairman of the Committee on Housing, provided during a hearing on the bill. His remarks do not include a direct reference to broker fees, although he did discuss measures to cut costs for renters before they move in. 

2. CHANGE IS SLOW It was business as usual in the

apartment market for the seven months following approval of the law, the lawsuit says, at least when it came to the payment of commis-sions. Brokers working for landlords still collected their fees from the renters. “This is not surprising since nothing in the language of the act, or in any public announcements or guidance by the DOS, had signaled that [the law] called for a fundamental change in how real estate brokers should be compensated,” the lawsuit says.

3. THERE ARE NO REFUNDSThe day after the guidance came out, renters were disappointed to hear that they couldn’t get a refund

for leases they signed after the law was enacted, only for leases signed beyond the Feb. 4 date of the guidance. A Department of State spokeswoman said in a statement the next day that its interpretation of the law does not apply retroactively. That announcement is now part of the REBNY’s legal argument: “The DOS’s assertion that [the guidance] does not apply retroactively demonstrates that (1) this new rule is a drastic departure from current market practice, and (2) the language of [the law] itself failed to put anyone on notice that commissions paid by tenants to brokers appointed by landlords were somehow being abolished.”

4. MESSAGING HAS BEEN MIXED The lawsuit annexes a page that was still live on the department’s website after it had released the

guidance warning brokers they could be punished for collecting the fees. “It is important to understand that, even if the broker is representing the landlord, in most transactions the tenant is responsible for pay-ing the broker’s commission,” the page reads, as exhibited in the lawsuit. The provided URL in the lawsuit no longer appears as active on the website. 

“The fact that the DOS included this information on its website even after the act was passed, and con-tinues to include it on its website to this day, is a clear indication ... the DOS did not understand the act to have any impact on a broker’s right to collect a commission,” the lawsuit argues. 

5. CONFUSION REMAINSBrokerage � rms received no notice or advice on how to interpret the new guidance, the lawsuit says.

Meanwhile, the � rms had thousands of pending rental transactions that were held up in the confusion that followed. 

“The unwinding of these pending transactions, due to the DOS’s erroneous and arbitrary interpretation of [the law], will harm landlords (who face the prospect of losing substantial rental income they have rea-sonably expected to receive) and brokers (who earned their commissions by working diligently to procure the transactions), and most of all consumers, who may not then close on apartments they seek to rent, and have been misled by the DOS’s erroneous and arbitrary interpretation and improper rulemaking.” 

— R.D.

ISTO

CK

BROKERS FROM PAGE 1

6%RENTS INCREASEon average for apartments where fee was removed

P004_CN_20200217.indd 4 2/14/20 4:46 PM

FEBRUARY 17, 2020 | CRAIN’S NEW YORK BUSINESS | 5

It turns out that some of the fears that Amazon’s arrival in Long Is-land City would push up home prices in the neighborhood were justi�ed, according to experts and data on the doomed deal’s e�ect on the market.

From November 2018 when Am-azon announced that it would build a second headquarters on the Queens waterfront neighborhood to Valentine’s Day two months later when the tech giant abruptly can-celed the blockbuster deal after be-ing hit with a �urry of criticism and opposition, the neighborhood re-corded a surge of buyers.

Patrick W. Smith, a residential sales broker with Corcoran who specializes in LIC deals, calculated that 336 condos were sold in the neighborhood in 2019, an uptick of

over 15% from the year before and over 35% in 2017. About 45% of those condos went into contract during the two-month window when Amazon appeared to be planting its �ag in Long Island City.

“�e Amazon e�ect was real,” Smith said. “It had a major impact on the market in terms of creating a surge of deal activity and upward pressure on prices.”

In 2018 and 2017, about 22% of each respective years’ deal activity went into contract during the same window of time—showing that sales activity roughly doubled in the neighborhood during Ama-zon’s brief arrival in late 2018 and early 2019.

Smith’s report also found that prices rose as a result of the up-swing in activity, with the median sales price rising 14% from 2018 to $993,401 in 2019 and the median price per square foot growing 9% during the same period to $1,304—making the neighborhood one of the most expensive outside of Man-hattan.

Smith acknowledged that some of that increase was due to newly built residential projects and their pricey units hitting the market, but said he believes Amazon bolstered that.

“We had fancy new develop-ments opening up and selling for the �rst time and that pushed up the market. But if Amazon hadn’t arrived, that per square foot growth in prices may have been 6% instead of 9%,” Smith estimated.

Amazon’s decision to walk away from the second headquarters in Long Island City didn’t tank the LIC residential market that had soared

after its arrival.Instead, brokers say it enhanced

its continued upward trajectory by bringing the neighborhood wide-spread attention from buyers and the general public.

“People in Middle America sud-denly knew where Long Island City was. So if you’re a New York City buyer who wasn’t necessarily pay-

ing attention, it certainly put it on your map,” said Eric Benaim, the CEO and president of the Long Is-land City focused residential bro-kerage Modern Spaces. “People are thinking that if LIC was good enough for Amazon, maybe it’s worth a look. So just them selecting the neighborhood has been a big boost to activity and prices here.” ■

Residential rents in LIC rose even without AmazonThe ecommerce giant announced it would build its HQ2 in Queens on Valentine’s Day two years ago

BY DANIEL GEIGER

REAL ESTATE

A forward-thinking real estate firm providing brokerage, property management, and consulting services since 1920.

212.679.5500 adamsre.com

“THE AMAZON EFFECT WAS REAL. IT HAD A MAJOR IMPACT ON THE MARKET.”

BLO

OM

BER

G

P005_CN_20200217.indd 5 2/13/20 3:24 PM

6 | CRAIN’S NEW YORK BUSINESS | FEBRUARY 17, 2020

IN THE MARKETS

Every year since 2014 the city comptroller’s o� ce has asked Charles Schwab Corp. to publish a report disclosing how much of its work-force is female or nonwhite. Schwab has refused.

� e giant San Francisco–based � nancial institution val-ues diversity. It notes it has been named to the Forbes list of America’s best employers for diver-sity and achieved a 100% rating from the Human Rights Campaign Corpo-rate Equality Index since 2004. Schwab greeted Comptroller Scott String-er’s proposal with modest praise, describing it as “perhaps well- intentioned” when � rst introduced.

But Schwab’s stance hardened after Stringer brought the resolu-

tion back for a vote at every annual stockholder meeting, where it usu-ally received only 25% of the vote. (� e comptroller represents the city pension funds, and those funds

hold Schwab stock.) Last year the company argued

that the workforce data sought by Stringer “could be misconstrued in ways that could encumber our ef-forts to achieve greater diversity and inclusion.” It added, “Stock-holders defeated this proposal in

each of the last � ve years.”Soon it may be easier

for companies to muzzle the likes of Stringer. � e Securities and Exchange Commission is consider-ing a rule change that would make it harder for shareholders to intro-duce resolutions voted on at annual meetings. Among other changes, the SEC is proposing to

make it easier for companies to drop resolutions that fail to receive signi� cant increases in support.

� e SEC says investor resolu-tions may place an undue burden on companies, can be a waste of time and re-sources, and may even be obsolete.

“Shareholders now have alternative

ways, such as through social me-dia, to communicate their prefer-ences to companies and e� ect change,” the agency said.

� at’s a crummy argument, be-

cause there’s no way to ensure companies will take a social-media cam-paign seriously. Indeed, there are often good rea-sons for them to ignore online organizing that purports to be grass-roots.

“Social media is not a replacement for, or even a supplement to, the cur-rent proposal submis-sion and resubmission process,” said Amy O’Brien, head of respon-sible investing at TIAA.

Shareholder resolu-tions are nonbinding, which means boards are free to ignore them if they think it’s in their best interest to defy in-vestors, who use the res-olutions to engage with companies on weighty matters, including global warming, lobbying costs and exec-utive salaries.

Prying eyesResolutions are usually intro-

duced by public pension funds, cranky individual investors, labor groups or even religious orders. � e moment when the sponsor stands up to make her pitch and puts the CEO and the board on the

spot is often the most compelling moment of any annual stockholder meeting, which is why companies often don’t like resolutions very much.

But they have an e� ect in hold-ing companies accountable. Fiona Reynolds, chief executive of Princi-ples for Responsible Investment, observed in the Financial Timesthat an analysis of climate-related

resolutions � led between 2009 and 2017 found that 35% of proposals led the company in question to commit speci� c actions.

Ultimately, change came to Schwab after shareholders applied pressure. Stringer’s resolution got a big increase in support last year, re-ceiving 40% of votes cast. After that result Schwab started releasing the workplace data. ■

SEC wants to muzzle StringerThe government watchdog wants to protect public companies from shareholders

AARON ELSTEIN

In 2011 only about 1,000 people worked as contractors in the gig economy for online plat-forms in the state. Today the number exceeds 150,000.

� at is certainly a star-tling increase, but it doesn’t tell the whole sto-ry. Gig contractors repre-sent only 17.5% of all low-paid independent workers in the state and a small sliver of the total workforce. Yet most of these workers share the same issues.

� e numbers come from the most comprehensive look so far at the gig-economy work-force, released last week by the Center for New York City A� airs at

the New School. � e study is timed to in� uence the intense debate in Albany about whether to force on-

line companies to recognize their workers as employees or to � nd some other means to raise their wages and pay their bene� ts. Its

object is to broaden the discussion to similar workers.

Hustle up� e center took a deep

dive into the American Community Survey and the Census Bureau’s non-employer statistics. It eliminated workers in high-paying industries, such as � nance, informa-

tion and professional services. It also eliminated sectors in which independent contractors are likely to work for multiple organizations,

such as the arts, en-tertainment and recreation, and in which individuals have a college de-gree and set their own fees and the conditions in their contracts.

� e remaining independent contractors work for companies in personal services, construction,

transportation, social assistance and build-ing services. � e eco-nomic statistics on these workers are grim. � eir median income is $20,000, and only transporta-tion and construction even reach $25,000 a year. A quarter are covered by Medicaid, and a � fth have no health insurance, compared with a statewide � gure of 5%.

Demographically most are men (60%) in the prime working ages of 25 to 54 rather than young people just starting out. Half have a high school di-ploma or less. While statewide 44% are people of color, in New York City the � gure is 66%. Minorities account for 87% of those working in transportation in the city.

“A lot of the discussion is that something needs to be done about online-platform workers when this report shows that while that is a

signi� cant number of low-paid and misclassi� ed people, there are a lot of other workers in that same situa-tion,” said James Parrott, one of the primary authors of the study.

� e Flexible Work for New York Coalition, which represents the platform companies, did not re-spond to a request for comment.

Parrott notes that minimum- wage increases in New York boost-ed in� ation-adjusted wages of pay-roll workers between 2013 and 2018. In� ation-adjusted earnings of low-paid independent contrac-tors in personal services have de-clined and risen less than payroll for sta� in the other sectors. ■

Gig-economy workforce soars past 150,000But growth isn’t the whole story for these poorly paid contractors

ON NEW YORK

GREG DAVID

SHAREHOLDER RESOLUTIONS ARE NONBINDING, MEANING BOARDS CAN IGNORE THEM

GET

TY IM

AG

ES

THERE ARE A LOT OF OTHER WORKERS IN THE SAME SITUATION

MOST GIG workers are men ages 25 to 54 with little education.

BU

CK

EN

NIS

STRINGER

P006_CN_20200217.indd 6 2/14/20 2:58 PM

FEBRUARY 17, 2020 | CRAIN’S NEW YORK BUSINESS | 7

Walgreens is planning to add LabCorp services to 15 of its drugstores in the metro area later this year as the pharmacy looks to provide more health services, the company con-�rmed to Crain’s.

LabCorp will o�er diagnostic testing at some locations in Nassau, Su�olk, Westchester and Rockland counties in New York; Fair�eld County in Connecticut; and Hud-son County in New Jersey.

�e LabCorp units will start opening in the middle of the year, a Walgreens spokeswoman said, and the company is �nalizing the spe-ci�c stores. None of the locations will be in New York City, she said.

“�ese sites re�ect Walgreens and LabCorp’s shared objective to provide a di�erentiated, consumer- focused experience that provides access to a broad range of health care services,” the Walgreens spokeswoman said.

Industry trend�e drugstore chain’s work with

LabCorp is one of several examples of retailers pushing further into health care. LabCorp �rst started embedding lab-testing sites in Wal-greens stores in 2017, and the sites are now in nine states. LabCorp

pledged to open at least 600 patient-service centers in Wal-greens locations.

CVS has aggressively added health services to its stores, includ-ing its MinuteClinics and Coram in-fusion centers. In New York 18 CVS locations have optical shops as well. When the chain acquired Aetna in 2018, it said it would create a series of HealthHub locations to help pa-tients manage chronic conditions. Last year it announced plans to open 1,500 HealthHubs by 2021.

�e closest HealthHubs to New York City are in southern New Jer-sey and Philadelphia.

As traditional retail has struggled, the chains have looked for a boost by teaming with other brands. For example, CVS also has made space

within its stores available to Fedex and Sprint in order to get customers in the door. But growing the chains’ in-store health care business has been key, said Brian Tanquilut, a Nashville-based analyst covering the industry for Je�eries.

“It helps them reinforce the strat-egy of being health care–focused as health care shifts to more consum-er settings,” he said.

Tanquilut said the expanded roll-out of LabCorp services inside Wal-greens stores makes it easier for patients to follow through on their doctors’ lab requests and generates more foot tra�c for Walgreens.

“On the surface, CVS is ahead of the game in terms of shifting the focus to health care,” Tanquilut said. ■

Mayor Bill de Blasio tes-ti�ed last week that shifting billions of dol-lars in Medicaid costs from the state to local governments would have dire e�ects.

“Lives are on the line,” the mayor said at a budget hearing in Albany. “We ask the state to remove the cuts to localities and safeguard public health by focusing on �nding e�-ciencies and reforms in the state-run Medicaid program.”

Amid a $6 billion de�cit, the state has continued to point the �nger at local governments when it comes to increased Medicaid spending.

Although the city’s contribution to Medicaid is about $5 billion a year, it could be on the hook for $1.1 billion more if the state’s latest Medicaid redesign team fails to �nd $2.5 billion in savings.

“If we sustain this level of cuts, we will have to reduce health ser-vices for New Yorkers profoundly—closing clinics, laying o� doctors and nurses,” the mayor said. �e e�ects would extend beyond health care to afterschool and youth- employment programs.

A few years ago, New York City Health and Hospitals, which more than 1 million New Yorkers depend on for care, was “teetering on the brink of bankruptcy,” de Blasio said. �e cuts would undermine the �scal progress the public health system has made, he added.

Specialty care in the areas of cancer, heart disease and mental health would be a�ected, de Blasio said.

Last month Dr. Mitchell Katz, president and CEO of the health system, told Crain's, “From Health and Hospitals’ point of view, we want to try to work with the city and state to come up with a budget that lets us take care of our patients.”

Katz said the hospital system would “temporarily take a pause on administrative hiring,” continue to work on exceeding its r evenue-over-expenses target and stay fo-cused on a move to value-based payments.

Alternatives?De Blasio said that elsewhere in

the state, the funding cuts could bankrupt localities.

To avoid them, de Blasio pro-

posed three recommendations. First, he said, the state should work with local governments to achieve savings by weeding out fraud and waste in the program and increas-ing administrative e�ciencies that could better determine when indi-viduals are no longer eligible for Medicaid.

In the city, that could equate to $260 million in savings, the mayor said.

Second, de Blasio called on the

state to revise the Medicaid global gap to re�ect the health care that New Yorkers need and its real costs.

�ird, the mayor recommended that the state ask its wealthiest res-idents to pay their “fair share” of taxes to make sure everyone has access to health care.

State Budget Director Robert Mujica Jr. said in a statement pro-vided to Crain’s that under de Bla-sio’s administration, “the state has paid more than $12 billion cover-

ing the growth in the city’s local Medicaid share and provided $17.8 billion in cumulative school aid in-creases, and this year is increasing funding to the city by $318 million.

“�e mayor’s solution to raise taxes and increase spending with-out any accountability,” he contin-ued, “is a recipe for �scal instability and ine�ciency in a program charged with caring for the most vulnerable among us, and that’s unacceptable.” ■

‘Lives are on the line’ if city has to shoulder bigger Medicaid burden, de Blasio says

HEALTH CARE

Walgreens to roll out LabCorp services in some area drugstores this year

BY JENNIFER HENDERSON

Redefiningwhat you shouldexpect fromyour accountant.

grassicpas.com/story

BLO

OM

BER

G

NYC

MAY

OR

SO

FFIC

EDE BLASIO

CHECKUPTotal investment in city-based health startups

SOURCE: New York City Health Business Leaders

2018

$1.9B

2019

$2.6B

BY JONATHAN LAMANTIA

P007_CN_20200217.indd 7 2/14/20 2:48 PM

8 | CRAIN’S NEW YORK BUSINESS | FEBRUARY 17, 2020

In August travelers � ew into LaGuardia Airport, picked up their luggage and then struck out on foot for a sweat-soaked hike across the Grand Central Parkway to Ditmars Boulevard. � ere, they battled one another for rides to Manhattan.

Welcome to New York City.Airport construction and

weather-induced delays were to blame, according to the Port Authority. But you also could blame a lack of urban planning.

Getting to almost any airport is rough. A trip to Newark requires at least two trains or a bus from the Port Authority Bus Terminal on 42nd Street. A trip to JFK through stop-and-go tra� c on the Belt Parkway or the dreaded Van Wyck

Expressway can leave drivers with white knuckles.

Although it is closer to Manhat-tan, LaGuardia somehow seems the most remote. � e M60 bus can get you there—eventually.

Adding to the pain, once you get there, the airport leaves a lot to be desired. Former Vice President Joe

Biden famously compared it to a third-world country.

Gov. Andrew Cuomo has struck on a solution similar to the AirTrain to JFK, which was built in 1998 despite community opposi-tion. � at tram has alleviated most of the fear of missed � ights, and although it costs a little extra, it’s still cheaper than a cab.

So it would � gure that what worked for travelers � ying out of South Ozone Park also would have worked for the poor souls trekking through northern Queens during the dog days of last summer.

Cuomo’s $2 billion plan to build a similar people mover, which would take passengers from the Willets Point Long Island Rail Road and 7 train stops to Midtown,

seems like the right way forward.

A passenger could hop on the train at 34th Street–Hudson Yards and, according to Port Authority

estimates, be at the terminal in half an hour. � e plan would reduce tra� c congestion, which is good for the environment and good for wilted travelers to and from the city.

Not everyone agrees. Neighbor-hood groups and transit analysts have some notes on the plan. � ey

say more straphangers on the already-congested 7 line would increase travel time. � e LaGuar-dia AirTrain starts farther away from the city center than current bus routes to the airport, and the cost is too high.

� ere are nearly 50 alternative plans, such as building out the N line and increasing bus service.

� e Federal Aviation Adminis-tration, which has embarked on an environmental review, has ignored those suggestions. In fact, there’s been little input from anyone outside the Port Authority or the governor’s o� ce.

It need not be this way. � e JFK

AirTrain faced similar resistance over funding and community impact. But because the neighbor-hoods and transit analysts were given their say, the project went forward. � e tram was projected to move 4 million passengers a year, but it now shuttles more than twice that from outside the terminal.

� e governor and the FAA should let people weigh in and explain their decision-making process if they want the plan to go through swiftly. Otherwise, we could be looking at lawsuits and long delays, which would lead to more gridlock at the terminal. ■

VIEWPOINTSGive New Yorkers a say on the LaGuardia AirTrain project

THE JFK AIRTRAIN FACED SIMILAR RESISTANCE FROM THE COMMUNITY

EDITORIAL

president K.C. Crain

senior executive vice president Chris Crain

group publisher Mary Kramer

publisher/executive editor

Frederick P. Gabriel Jr.

EDITORIAL

assistant managing editors

Christine Haughney (special projects),

Janon Fisher, Gabriella Iannetta (digital)

senior editor Telisha Bryan

associate editor Lizeth Beltran (digital)

art director Carolyn McClain

photographer Buck Ennis

data editor Gerald Schifman

senior reporters Aaron Elstein,

Matthew Flamm, Daniel Geiger,

Jonathan LaMantia

reporters Will Bredderman, Ryan Deffenbaugh,

Jennifer Henderson

columnist Greg David

contributors Tom Acitelli, Ronald DeCicco,

Cara Eisenpress, Cheryl S. Grant,

Steve Krupinski, Danielle McManus Sladek,

Mark Yawdoszyn

to contact the newsroom:

www.crainsnewyork.com/staff

212.210.0100

685 Third Ave., New York, NY 10017-4024

ADVERTISING

www.crainsnewyork.com/advertise

senior account managers Rob Pierce,

Stuart Smilowitz, Tori Weil

account executive Devin Cavallo

integrated marketing manager Jonathan Yan,

212.210.0290, jyan@crainsnewyork.com

associate art director/marketing

Charles Fontanilla, 212.210.0145,

cfontanilla@crainsnewyork.com

people on the move manager Debora Stein,

dstein@crain.com

cnyb coordinator Melissa Shi,

212.210.0217, mshi@crainsnewyork.com

CUSTOM CONTENT

director of custom content

Patty Oppenheimer, 212.210.0711,

poppenheimer@crainsnewyork.com

senior manager, custom content

Sophia Juarez,

sophia.juarez@crainsnewyork.com

EVENTS

www.crainsnewyork.com/events

manager of conferences & events

Ana Jimenez, ajimenez@crainsnewyork

REPRINTS

director, reprints & licensing Lauren Melesio,

212.210.0707, lmelesio@crain.com

PRODUCTION

production and pre-press director

Simone Pryce

media services manager Nicole Spell

SUBSCRIPTION CUSTOMER SERVICE

www.crainsnewyork.com/subscribe

customerservice@crainsnewyork.com

877.824.9379 (in the U.S. and Canada).

$3.00 a copy for the print edition; or

$129.00 one year, for print subscriptions

with digital access.

Entire contents ©copyright 2020

Crain Communications Inc. All rights

reserved. ©CityBusiness is a registered

trademark of MCP Inc., used under license

agreement.

CRAIN COMMUNICATIONS INC.

chairman Keith E. Crain

vice chairman Mary Kay Crain

president K.C. Crain

senior executive vice president Chris Crain

secretary Lexie Crain Armstrong

editor-in-chief emeritus Rance Crain

chief � nancial of� cer Robert Recchia

founder G.D. Crain Jr. [1885-1973]

chairman Mrs. G.D. Crain Jr. [1911-1996]

In the year since Amazon can-celed its HQ2 plans for Queens, predictions about the e� ects on New York’s tech sector have ranged from cynicism to unease.

Many experts suggested the de-bacle would create a cataclysm, from billions in lost tax revenue to tens of thousands of forfeited jobs, in our ecosystem’s growth. But 52 weeks is a long time to collect evi-dence, and so far the verdict is clear: New York has weathered a big breakup, taken positive steps forward and proved more resilient than any of the naysayers thought.

To begin with, consider one fact: Tech’s big four (Google, Apple, Facebook and—yes—Amazon) now plan to have a combined workforce of 20,000 in the city by 2022, according to � e New York Times.

Twenty thousand people is more than just an employment � g-ure. It’s a historical investment in our community and proof that

large tech companies still see the value, space and talent necessary to grow in the city. Equally relevant is the type of jobs these places are seeking to � ll. Big Tech is creating opportunities beyond just coding and software, from sales associates and marketing strategists to graph-ics artists and analytics experts.

Industry giants are only one part of the picture. While the tech sec-tor boasts more than 330,000 jobs, a signi� cant portion of them are found in our vast—yet growing— network of small � rms andearly-stage startups. � at group comprises roughly 9,000 compa-nies, a number that continues to increase while attracting waves of highly skilled workers to the city.

New York is slowly challenging California’s standing as the startup capital of the world.

We’ve seen an uptick in work-force development partnerships, including the Women in Technolo-gy and Entrepreneurship in New York program, a collaboration be-tween Cornell Tech and the City

University of New York. � at pro-gram alone has corresponded with a 94% increase in women obtain-ing computer science degrees at CUNY.

Finally there’s venture capital. Last year startups in the city gar-nered a record $17.2 billion from VC � rms (a 20% year-over–year in-crease); other evidence shows that VCs are siphoning funds out of Sil-icon Valley to pump growth into markets like ours.

None of this is to say that things are perfect or that we are without challenges. It’s likely that the HQ2 meltdown created questions in the minds of some entrepreneurs and investors about doing business in New York.

It’s also true that our ecosystem generally has to address matters such as venture capital being doled out disproportionately. It must ensure that minorities can participate in what’s often seen as a white man’s game. It must change its thinking about tech ed-ucation and guarantee that anyone

can secure funding as long as the idea is good.

Failing to do these things will mean we lose progress (and dol-lars) to prejudice.

Geographic representation is another area needing improve-ment. Right now our tech sector is too concentrated in Lower Man-hattan and Midtown; the outer boroughs miss out on the growth.

Despite these challenges, there’s no doubt that things are still look-ing up for New York tech.

Yes, the HQ2 fallout was a blow, but all the available evidence shows that the innovation econo-my is still humming along. Yes, we need to address certain issues (and tackle forthcoming debates such as those on gig-economy regula-tions), but there’s no question that our sector is up for the challenge.

HQ2 was surely an in� ection point, but one year later it’s clear that moment made us stronger. ■

Julie Samuels is the founder and executive director of Tech:NYC.

HQ2 died, but city tech lives onBig � rms plan to add 20,000 jobs in the next three years

OP-ED

BY JULIE SAMUELS

THE

OFF

ICE

OF

GO

V. A

ND

REW

CU

OM

O

P008_CN_20200217.indd 8 2/14/20 6:06 PM

New York City’s trash prob-lems are mounting. Black bags piled taller than pedes-trians line sidewalks daily, occa-sionally over�owing onto streets or sidewalks for passersby to hurdle over. Leaking waste permeates the air with putrid smells, welcoming tourists with a distinct urban pungency.

�is has been the experience for generations, from colonial times through the era of Lower East Side tenements. It has a�ected quality of life, health, livability and mobility. But it doesn’t have to be like this.

�ere are smart solutions for our trash problems that cities around the world have adopted that inno-vate on design, urban planning and technology. �ese cities have opti-mized trash collection and hidden waste discretely in tech-tethered containers underground and in beaconing bins on streets.

From Buenos Aires to Barcelona, trash is collected in large, color- coded bins on streets where trash can be sorted and collection can be automated and made easier. �e Catalan coastal city has pioneered the smart city model, an approach

to urban planning in which tech-nology and embedded hardware in the environment can provide pre-cise data and automate services such as trash pickup. Combine this with their ambitious zero-waste strategy, which provides incentives for individuals and businesses to separate trash and makes it easier by design, and Barcelona’s urban innovation becomes a model for how New York can address waste issues.

In Milan, underground bins free up sidewalks for pedestrians. �is too has made it one of the highest- ranking cities in the world for its re-cycling—nearly 54% of all waste col-

lected. Add to the list other European cities that o�er un-derground dump-sters, including Za-greb and Belgrade, and it’s clear there are solutions out

there that are breaking new ground. India, which has faced waste

challenges from its explosive popu-lation and economic growth, has laid the underground work for a cleaner, trash-free future. Stroll along sidewalks in Surat and you’ll see smart subterranean bins that ping trash collectors to let them know the containers are full.

Underground waste manage-ment, though, isn’t new to New York. Roosevelt Island’s 40-year-old automated vacuum waste collec-tion system runs a network of pneu-matic tubes that suck trash and the

stink out of urban living and into a centralized collection facility. How-ever, although the trash technology on the island is said to be the largest in the U.S., the serpentine under-ground pipes may be too much for the city’s infrastructure, its planning and construction processes.

So how can the city implement a smart trash solution?

Garbage in, garbage outUnderground dumpsters can be

placed on designated sidewalks or streets. �ese underground waste bins can be custom-built—as one Swiss company is already doing—for the infrastructure of New York’s streets and underground. �e con-tainers can sit at street level, allow-ing normal tra�c �ow or for pedes-trians to walk over them, barely perceptible. When bins are full, sen-sors will alert trash collectors. Ele-vator lifts will then allow the plat-forms or individual bins to rise and be collected by trash collectors or trucks �tted with automated cranes.

A step that elected o�cials can take is to plan and pilot smart un-derground bins in the next major street redesign, such as the 14th Street redesign. From there, a city-wide, multiborough study to assess pedestrian tra�c and waste should be conducted to identify and priori-tize areas of highest need where trash obstructs and o�ends.

Our current ways of handling waste are nothing less than an un-sanitary medieval practice. �e city has allowed entire sidewalks to be

overtaken by refuse that consumes a precious, limited public resource: shared urban space. We have lived as denizens among detritus for too long, and now it’s time for us to take

back our streets and get the stains o� of our sidewalks. ■

Emil Skandul is a technologist and founder of Capitol Foundry.

Turn trash troubles into tech solutionsForeign cities keep garbage off their streets—New York can too

OP-ED

BY EMIL SKANDUL

FEBRUARY 17, 2020 | CRAIN’S NEW YORK BUSINESS | 9

By 2040 New York City’s 65-and-over population is ex-pected to be greater than that of school-age children, an increase of almost 50%, to more than 1.8 mil-lion individuals. 

Currently more than half of older New Yorkers are renters, with 60% spending more than 30% of their income on rent. 

Of the roughly 1.1 million New Yorkers over the age of 65, an esti-mated 20% are living in poverty. As the population ages and the city continues to grapple with how to accommodate its increasing popu-lation overall, it is crucial that in-vestments at all levels of govern-ment are ampli�ed to meet demand and combat this crisis-level short-age of housing supply and not for-get about our seniors who deserve the support to age at home.

To most e�ectively and e�cient-ly serve older residents, the data continue to support the dynamic model of a�ordable senior housing with services—a model that im-proves the quality of life, lowers health care costs and enhances our

community—and the need has never been more urgent. For exam-ple, one study found that residents at one a�ordable-housing building, which included on-site service pro-visions, had 51% lower odds of hos-pitalization than seniors without such support in the surrounding ZIP code.

Senior privilege�e statistics are remarkable, and

it is widely recognized that there is a dire need to create a�ordable se-nior housing, but there are several seemingly insurmountable barriers to do so. As indicated by the New York State Association for A�ord-able Housing, these obstacles in-clude the high cost of land acquisi-tion, the exorbitant cost of required infrastructure and “not in my back-yard” opposition to new develop-ments.

In spite of such challenges, we are heartened by new, exemplary projects that recently have been proposed and leverage a unique public-private partnership to over-come many of the development hurdles, while simultaneously pri-oritizing a�ordability and services

for the senior population. For example, the Go Broome de-

velopment on the Lower East Side, if approved, would add approxi-mately 488 rental homes with 115 units set aside as low-income, per-manently a�ordable senior rental units. 

Importantly, the proposal in-cludes a deep skew carve-out that would provide housing to seniors at income-restricted rents ranging be-tween $365 and $1,265 per month. �ese  rents are underwritten at

30% to 70% of the 2019 area median income, as established by the De-partment of Housing and Urban Development. �e project is the di-rect result of a more than �ve-year visioning process from the Chinese American Planning Council, which will provide all the necessary ser-vices to the senior population, in-cluding case-management assis-tance, translation/interpretation services and educational, recre-ational and cultural classes. In ad-dition, the senior residences would

be complemented by mixed-income, intergenerational housing that would create an inclusive com-munity that is so important to the safety and well-being of those who wish to age in place.

Without signi�cant and strategic intervention, the housing crisis is likely to be exacerbated, unable to support a growing, �nancially- strapped older adult population. Even more pressing is the urgent and timely need for political will to challenge the status quo. 

Change will not happen without consistent support from the local, state and federal governments. We should celebrate the ingenuity and determination of organizations that are seeking the experience and skills of a private developer to fur-ther their mission and expand their reach to more aging New Yorkers. 

To truly make New York a better place to age, together we must work to ensure that all New Yorkers have a place to safely and stably call home. ■

Allison Nickerson is the executive director of LiveOn, a nonpro�t aimed at helping the elderly.

Stop New York’s impending senior housing crisisAs the city’s elderly population grows, affordable homes must be built to handle their needs

OP-ED

BY ALLISON NICKERSON

ISTO

CK

WE HAVE LIVED AS DENIZENS AMONG DETRITUS FOR TOO LONG

P009_CN_20200217.indd 9 2/13/20 4:45 PM

10 | CRAIN’S NEW YORK BUSINESS | FEBRUARY 17, 2020

THE PLAYERS

2The two big personalities involved are President Donald Trump and Gov. Andrew Cuomo, longtime business and political associates recently turned partisan opponents. Cuomo announced plans to travel to the U.S. capital Feb. 13 with a compromise plan: New York’s Department of Motor Vehicles will grant Customs and Border Patrol access to the records of people applying and reapplying to Trusted Traveler programs. But it will not turn over the documents of any other registered vehicle operators or provide the �les to Immigration and Customs Enforcement.

WHAT’S NEXT

5Cuomo conceded shortly after the Feb. 12 announcement of forthcoming negotiations with Trump that the president would probably reject his proposal.

“I believe it is all politics,” he said in an appear-ance on Albany’s WAMC.

His of�ce sounded even less conciliatory in a statement that afternoon, calling Customs and Bor-der Protection’s actions “clearly politically motivat-ed, an abuse of government power and illegal.”

Even if Cuomo’s plan somehow secured the president’s approval, he might need to get the Leg-islature to amend the language of the law to permit some record disclosure to the feds.

New Yorkers could be waiting in line at the airport for a while yet.

The state has promised to take the issue to federal court if no agreement is reached.

10 | CRAIN’S NEW YORK BUSINESS | FEBRUARY 17, 2020

INSTANT EXPERT

BY WILLIAM BREDDERMAN

Here’s why New Yorkers will have trouble �ying

THE ISSUE

1On Feb. 6 U.S. Customs and Border Protection announced that New Yorkers would no longer be eligible to apply for or renew membership in its Trusted Traveler programs: Global Entry, Nexus, Sentri and Fast. These clearances allow preapproved globetrotters and goods to enter the country through expedited lines and kiosks.

At fault, according to the federal agency: the “Green Light” law that Albany enacted

last year, which extended driver’s licens-es to undocumented immigrants—and forbade the Department of Motor Vehi-

cles from sharing information with the federal government. The feds argue this means they cannot ascertain if travelers have criminal or arrest records that would �ag them as a security threat.

Now the state is signaling to Washington that it’s willing to open the books a crack to reopen the express lanes for its travelers.

CUOMO COULD OPEN DRIVERS’ INFORMATION TO WASHINGTON

GET

TY IM

AG

ES, G

OVE

RN

OR

AN

DR

EWCU

OM

O/F

LICK

R, N

YS.D

MV

SOME BACKSTORY

4Trump and Cuomo are Queens natives known for their bluster. But they face utterly different electoral landscapes. The commander in chief is looking for a reaf�rmation of his administration in the fall, and he needs to rile his base to win even the kind of close-bitten victory he enjoyed in 2016. He has often attacked large blue states—including the one where he was born—on immigration and environmental matters to incite supporters in the Midwest and the South. Last week BuzzFeed reported that the administration examined a number of options for singling out and penalizing New York for denying access to DMV records.

YEAH, BUT...

3The latest face-off between Albany and Washington, like many in the past three years, revolves around the issue of immigration—and, implicitly, the fate of undocumented immigrants. The irony is that, because only people with valid immigration papers are eligible for Trusted Traveler programs, there is little chance that an unauthorized foreign national would attempt to use them. Depriving New Yorkers of expedited processing tangles up the travels of citizens, green-card holders and commercial trucks crossing the Canadian border.

P010_CN_20200217.indd 10 2/14/20 10:50 AM

FEBRUARY 17, 2020 | CRAIN’S NEW YORK BUSINESS | 11

Eric Engelhardt

(212) 667 8704

eengelhardt@durst.org

Karen Kuznick

(212) 667 8705

kkuznick@durst.org

David Falk

(212) 372 2271

dfalk@ngkf.com

Hal Stein

(212) 233 8185

hstein@ngkf.com

Jason Greenstein

(212) 372 2349

jgreenstein@ngkf.com

Travis Wilson

(212) 233 8167

trwilson@ngkf.com

Peter Shimkin

(212) 372 2150

pshimkin@ngkf.com

ONE WORLD TRADE CENTER PROUDLY WELCOMES

ENTIRE 87TH FLOOR

Special thanks to Kirill Azovtsev, Calum Waddell and Seth Godnick

Jones Lang LaSalle

“People say that New York City is the center of the universe, and One World Trade feels like the center of New York City. We’re thrilled to be at the heart of it all.”

—Ric EvansHead of Global Workplace

and Real Estate

where the job was to push boundaries, reimagine what roles the technology and digital teams played, partner with the business parts of the organization in a different fashion and � gure out how we can align the workforces of health care .

In October Claus Jensen joined Memorial Sloan Kettering Cancer Center as its � rst chief digital of� cer and head of technology. Jensen was recruited from CVS Health and Aetna, where he served as chief technology of� cer and head of architecture. His new role—leading MSK’s digital transformation—will include developing tools to improve patient care and research. That will be no small feat, but Jensen feels up to the task, in part because of the many process-based patents he holds.

Why is a digital transformation needed at MSK? We have always pushed the boundaries of what else we can do to take care of not just the physical aspects of the person but the whole person. What’s interesting about digital is that it gives us so much more reach and the ability to have so much more insight. We can curate a patient’s experience to be meaningful across the entire journey of having to deal with cancer.

What kind of experience will you bring to the role?It’s useful to have seen the other half of the health care system. I have a really good understanding of retail pharmacies, pharmacy bene� t managers and health plans and realize that caring for the whole person is as much about logistics in some cases as anything else . I have � ve years’ experience at CVS Health and Aetna,

INTERVIEW BY JENNIFER HENDERSON

ASKED & ANSWEREDWhat will be your speci� c areas of focus?Digital is a journey. In many ways, you’ll never be done. The six steps we’re talking about right now are driving integrated diagnostics, research and experience in the clinical setting ; turning data into actionable insights ;

building an open platform where people can rally around the same mission and plug into the same uni� ed integrated experience; research ; driving innovation at scale ; and reaching into people’s lives

before they become sick.

Can tech make care more affordable?Our purpose is to conquer cancer, not just treat it. I

believe I can help with that by leveraging technology. There are only so many really great cancer nurses and cancer physicians in the world, and the problem goes beyond the means of our physical resources. The cost is important, but isn’t it more important to � nd

a model that is not just affordable but makes your life worth living?

How else does it help in the health care setting? It’s a way to generate new insights. The expectations are changing. The Disneys of the world, and to some degree the technology giants, are spoiling people in other industries in terms of what’s expected. One of the important parts of providing care for people during the most scary part of their life is trust. Ultimately we’re getting better at conquering cancer. I don’t think we can without leveraging data for better insight and technology for more reach and a closer partnership.

You hold a few patents. What are they for?They’re not in cancer care. The patents I have are in a variety of areas, and they’re very technical in nature.

But all of them have to do with how do you build an integrated experience, an integrated set of data and understanding. I think I’m up to about 18 submitted. ■

CLAUS JENSEN Memorial Sloan Kettering Cancer Center

DOSSIER

WHO HE IS Chief digital of� cer and head of technology, Memorial Sloan Kettering Cancer Center

EMPLOYEES Jensen oversees 800 staffers out of the more than 20,000 total at MSK.

TOTAL OPERATING REVENUE About $4.9 billion

BORN Denmark

RESIDES Pawling, Dutchess County

EDUCATION Ph.D. in computer science, Aarhus University, Denmark

FAMILY BUSINESS “I have 10 physicians in my family and three nurses. They’ve always told me I was the black sheep.”

CLEAR MISSION Jensen felt drawn to MSK because of the name it’s made for itself in the health care industry and its mission. “Everybody who has had anything to do with cancer—I certainly have in my family—knows MSK and what it stands for. ”

BU

CK

EN

NIS

P011_CN_20200217.indd 11 2/13/20 3:30 PM

12 | CRAIN’S NEW YORK BUSINESS | FEBRUARY 17, 2020

THE LIST

TOP MANHATTAN OFFICE LEASESLargest transactions in 2019 ranked by square footage

MOUNTING MEGADEALSThe average size of of� ce leases on Crain’s annual list reached a new high last year thanks to three topping 1.2 million square feet.

SOURCES: CoStar, Crain’s research

11NUMBER of top-50 leases from tech � rms, including two apiece from Google and Facebook

335KSQUARE FEET leased by Amazon at 410 10th Ave. The space is less than one-tenth the size of the � rm’s canceled Long Island City headquarters.

350K

300K

250K

200K

WORKING IN THE YARDThe most of� ce leases were taken in Midtown East. Three neighborhoods are tied with eight—one of which is the burgeoning commercial area near Hudson Yards.

#1550 Washington St. will be entirely occupied by Google.

#13Amazon will move into a redeveloped 410 10th Ave.

CO

UR

TES

Y O

F C

OO

KFO

X A

RC

HIT

ECTS

2016 2017 2018 2019

311,426■ Average square feet

ADDRESSSQUARE

FEET QUARTER TENANTTENANT REPRESENTATIVE

LANDLORD(S)/SUBLANDLORD(S)

LANDLORD/SUBLANDLORD REPRESENTATIVE(S) NEIGHBORHOOD DEAL TYPE

1 550 Washington St. 1,300,000 3rd Google CBRE Oxford Properties/Canada Pension Plan Investment Board

Oxford Properties Group/CBRE Hudson Square New lease

2 1 New York Plaza 1,253,589 4th Morgan Stanley Services Group Inc.

JLL Brook� eld Asset Management Brook� eld Of� ce Properties Financial District Renewal/expansion

3 50 Hudson Yards 1,201,409 4th Facebook Cushman & Wake� eld The Related Cos./Mitsui Fudosan America/Oxford Properties

The Related Cos./CBRE Far West Side New lease

4 375 Hudson St. 977,265 2nd Publicis Groupe CBRE Trinity Church Wall Street CBRE Hudson Square Renewal/expansion

5 66 Hudson Blvd. 530,854 4th Debevoise & Plimpton Newmark Knight Frank Tishman Speyer Tishman Speyer Far West Side New lease

6 100 Pearl St. 526,552 1st NYC Health + Hospitals Newmark Knight Frank GFP Real Estate GFP Real Estate/Newmark Knight Frank

Financial District New lease

7 350 Fifth Ave. 501,409 4th LinkedIn Corp. CBRE Empire State Realty Trust JLL/Empire State Realty Trust Midtown West Renewal/expansion

8 2 Manhattan West 481,678 4th Cravath, Swaine & Moore CBRE Brook� eld Asset Management Cushman & Wake� eld Far West Side New lease

9 622 Third Ave. 464,598 2nd McCann-Erickson JLL Cohen Brothers Realty Corp. Cohen Brothers Realty Corp. Murray Hill Renewal

10 55 Water St. 439,080 2nd EmblemHealth Colliers International Retirement Systems of Alabama CBRE Financial District Renewal

11 437 Madison Ave. 362,197 3rd WeWork JLL Kaufman Organization Sage Realty Corp./JLL Midtown East New lease

12 599 Lexington Ave. 338,057 3rd Shearman & Sterling CBRE Boston Properties Boston Properties Midtown East Renewal

13 410 10th Ave. 335,408 4th Amazon JLL SL Green Realty Corp. SL Green Realty Corp./Newmark Knight Frank

Far West Side New lease

14 1271 Sixth Ave. 322,149 2nd AIG JLL Rockefeller Group CBRE Midtown West New lease

15 341 Ninth Ave. 322,000 4th Dentsu Aegis Network Cushman & Wake� eld Tishman Speyer Tishman Speyer Far West Side New lease

16 3 World Trade Center 307,970 4th Uber CBRE Silverstein Properties Silverstein Properties/CBRE Financial District New lease

17 1 Bryant Park 280,000 2nd Akin Gump Strauss Hauer & Feld CBRE The Durst Organization The Durst Organization Midtown West Renewal

18 55 Water St. 270,400 2nd Justworks Cushman & Wake� eld Retirement Systems of Alabama CBRE Financial District New lease

19 30 Hudson Yards 264,787 4th Facebook Cushman & Wake� eld The Related Cos. The Related Cos./CBRE Far West Side New lease

20 125 W. 55th St. 259,649 3rd MacQuarie Equities USA Inc. Savills JPMorgan Asset Management CBRE Midtown West Renewal

21 1 Soho Square 252,639 2nd Flatiron Health Inc. Savills Stellar Management Newmark Knight Frank Hudson Square Renewal/expansion

22 300 Park Ave. 241,657 2nd Colgate-Palmolive Co. CBRE Tishman Speyer Tishman Speyer Midtown East Renewal

23 55 Water St. 219,564 4th L Brands CBRE Retirement Systems of Alabama CBRE Financial District New lease

24 151 W. 42nd St. 215,056 2nd BMO Capital Markets Colliers International The Durst Organization The Durst Organization Theater District New lease

25 620 Sixth Ave. 212,937 2nd WeWork Cushman & Wake� eld RXR Realty RXR Realty Chelsea New lease

Continued on page 14

CO

UR

TESY

OF

SL

GR

EEN

■ Number of deals

Midtown East 10

Far West Side 8

Financial District 8

Midtown West 8

Hudson Square 4

P012_CN_20200217.indd 12 2/12/20 6:33 PM

cushmanwakefi eld.com

AT THE CENTER OFWHAT’S NEXT

OCCUPIER SERVICES INVESTOR SERVICESINDUSTRY AND SPECIALTY ADVISORY GROUPS

INTEGRATED FACILITIES MANAGEMENT

PORTFOLIO ADMINISTRATION

PROJECT & DEVELOPMENT SERVICES

TRANSACTION MANAGEMENT

STRATEGIC CONSULTING

TENANT REPRESENTATION

AGENCY LEASING

ASSET SERVICES

CORPORATE CAPITAL MARKETS & INVESTMENT SALES

EQUITY, DEBT & STRUCTURED FINANCE

PROJECT & DEVELOPMENT SERVICES

STRATEGIC ADVISORY GROUP

VALUATION & ADVISORY

With 3.6 billion square feet under management, 400 o ces in 70 countries, 2018 revenues of $8.2 billion and 51,000 hardworking innovators, this is where the power of real estate is unleashed on behalf of the world’s top owners and occupiers.

CN019589.indd 1 2/11/20 1:34 PM

14 | CRAIN’S NEW YORK BUSINESS | FEBRUARY 17, 2020

THE LIST

TOP MANHATTAN OFFICE LEASES

TECH DESCENTTech gobbled up an additional 15% of the Manhattan of� ce lease market in 2019, stealing share away from the � nancial, insurance and real estate sectors.

SOURCE: CBRE

98NUMBER of 2019 Manhattan of� ce transactions with base rents of at least $100 per square foot, the largest total in the decade

52%PORTION of of� ce leases for new and renovated spaces last year, 11 percentage points higher than 2018’s rate

$80

$70

$60

$50

$40

#4Publicis Groupe expanded its footprint at 375 Hudson St. by 41%.

BU

CK

EN

NIS

CO

UR

TES

Y O

F TH

E R

ELATE

D C

OS

.

SOURCE: CoStar Group, with additional research by Gerald Schifman. CoStar conducts extensive research to produce and maintain a database of commercial real estate information. This list includes leases with terms of more than two years.

26 200 Liberty St. 208,022 2nd Financial Industry Regulatory Authority

Cushman & Wake� eld Brook� eld Asset Management Brook� eld Of� ce Properties Battery Park City Renewal

27 555 W. 57th St. 204,782 4th BMW JLL SL Green Realty Corp. SL Green Realty Corp. Lincoln Square Renewal

28 199 Water St. 201,231 1st WeWork Direct deal Jack Resnick & Sons Jack Resnick & Sons/Cushman & Wake� eld

Financial District New lease

29 410 10th Ave. 189,260 2nd First Republic Bank JLL Kaufman Organization Newmark Knight Frank Far West Side New lease

30 66 Hudson Blvd. 189,226 2nd AllianceBernstein Newmark Knight Frank Tishman Speyer Tishman Speyer Far West Side New lease

31 399 Park Ave. 175,000 1st Moelis Cushman & Wake� eld Boston Properties Boston Properties Midtown East Renewal/expansion

32 57 11th Ave. 170,421 2nd Google CBRE RXR Realty RXR Realty Chelsea New lease

33 63 Madison Ave. 162,291 2nd CBS Cushman & Wake� eld Loeb Partners Realty George Comfort & Sons NoMad Renewal

34 1 Hudson Square 161,044 3rd Oscar Health Newmark Knight Frank Trinity Real Estate/Norges Bank Newmark Knight Frank Hudson Square Renewal/expansion

35 110 E. 59th St. 151,980 4th Cantor Fitzgerald Newmark Knight Frank Jack Resnick & Sons Jack Resnick & Sons Midtown East Renewal

36 200 Park Ave. 144,451 1st Hunton Andrews Kurth JLL Irvine Co. Of� ce Properties Tishman Speyer Midtown East Renewal

37 330 Madison Ave. 143,135 4th JLL JLL Abu Dhabi Investment Authority JLL Midtown East Renewal/expansion

38 61 Ninth Ave. 142,342 2nd Yext Newmark Knight Frank Vornado Realty Trust Newmark Knight Frank Chelsea New lease

39 245 Park Ave. 138,264 4th Angelo, Gordon & Co. Newmark Knight Frank SL Green Realty Corp. Cushman & Wake� eld Midtown East Renewal/expansion

40 55 Water St. 130,449 2nd District Council 37 MHP Real Estate Services

Retirement Systems of Alabama Cresa Financial District New lease

41 50 Rockefeller Plaza 125,097 4th Katten Muchin Rosenman Cushman & Wake� eld Tishman Speyer Tishman Speyer Midtown West New lease

42 733 Third Ave. 124,554 3rd EisnerAmper Newmark Knight Frank The Durst Organization The Durst Organization Turtle Bay New lease

43 1250 Broadway 124,101 1st TransPerfect CBRE Global Holdings Management JLL Koreatown New lease

44 1114 Sixth Ave. 122,606 2nd Israel Discount Bank of New York Newmark Knight Frank Brook� eld Asset Management CBRE/Brook� eld Of� ce Properties Inc.

Midtown West New lease

45 425 Park Ave. 120,400 1st Citadel Enterprise Americas JLL L&L Holding Co. L&L Holding Co. Midtown East New lease

46 350 Fifth Ave. 119,226 1st FDIC Direct deal Empire State Realty Trust JLL/Empire State Realty Trust Koreatown Renewal

47 641 Lexington Ave. 112,894 1st New York State Homes & Community

Newmark Knight Frank Rudin Management Rudin Management Midtown East Renewal

48 50 Rockefeller Plaza 110,742 4th Citrin Cooperman CBRE Tishman Speyer Tishman Speyer Midtown West New lease

49 30 Rockefeller Plaza 109,572 1st Sheppard, Mullin, Richter & Hampton

CBRE Tishman Speyer CBRE Midtown West Renewal/expansion

50 1540 Broadway 109,296 4th Adobe Colliers International Edge Fund Advisors CBRE Theater District Renewal/expansion

ASKING FOR THE MOONOverall, Manhattan asking rents nearly doubled in the course of the decade, with the largest increases coming in lower Manhattan.

#3Facebook has arranged for nearly half the space at 50 Hudson Yards.

’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19

$80

2018

■ Financial, insurance and real estate

■ Tech, media, advertising and information

■ Professional services ■ Other

50% 18%

34%

12%

13%

20%

18%35%

2019

ADDRESSSQUARE

FEET QUARTER TENANTTENANT REPRESENTATIVE

LANDLORD(S)/SUBLANDLORD(S)

LANDLORD/SUBLANDLORD REPRESENTATIVE(S) NEIGHBORHOOD DEAL TYPE

P014_CN_20200217.indd 14 2/12/20 6:39 PM

www.135w50.com212.481.1122

It’s all at 135 W 50th Street

• Amenities managed by Industrious• Flexible spaces • Full floors & large blocks (560k SF available)• Meeting & conference rooms• Multipurpose room for 200+ person meetings

• Indoor/Outdoor space within Amenity center • Social lounge with bar• Game room• 12k SF Urbanspace food hall connecting Avenue 6 1/2• New double height lobbies

Inspire. Engage.Amenitize.

ARTIST R EN D ER IN G

ARTIST R EN D ER IN G

CN019590.indd 1 2/11/20 1:35 PM

16 | CRAIN’S NEW YORK BUSINESS | FEBRUARY 17, 2020

Prospect Lefferts Gardens high-rise draws tenants with Manhattan-style amenities The tower has attracted residents from nearby Kings County Hospital

At 26 stories and 318 feet, the recently opened apartment tower at 123 Linden Blvd. looms large over its slice of Brooklyn. Few buildings in the area make it much past 7 stories—and start-ing on 123 Linden’s eighth �oor, resi-dents can see clearly to Manhattan.

�e tower, dubbed PLG, is one of the pricier new developments in the Pros-pect Le�erts Gardens-Flatbush border-lands. Starting rents, accounting for a three-month-free discount, are $2,126 for studios, $2,667 for one-bed-room units, $3,495 for two-bed-room units and $4,518 for three-bedroom units.

High as they might seem, these rents are generally less ex-pensive than those farther west in Brooklyn, in enclaves such as Park Slope, Williams-burg-Greenpoint and Prospect Heights. �e median rent in the borough was $2,991 in Decem-ber, appraiser Miller Samuel found.

PLG, moreover, has an ameni-ties package unique for the im-mediate vicinity. It includes two pools, a �tness center, a coworking lounge and concierge services.

Move-ins started in December, and leasing started a couple of months ear-lier. At least a few dozen apartments are spoken for, said Jacob Entel, director of residential properties for the Moinian Group, which developed the tower with Bushburg Properties.

Entel said the tower has drawn many tenants from Brooklyn. Some want to be near the SUNY Downstate Medical Center-Kings County Hospital, a few blocks to the northeast, he said, while others want to be near Prospect Park to the northwest.

“We’re seeing a lot of people come from within the neighborhood—areas like Park Slope, where it’s still pricier, but a lot of the prod-uct is old,” Entel said.

Newer residential buildings in the area, although not nearly as tall, include 200 Linden Blvd.—where active listings start at more than $2,100 a month for one-bedroom units, according to Streeteasy—and 88-92 Linden, a condo project under construc-tion that hasn’t started sales.

�ese fresher projects are changing the streetscape of where Flatbush meets the Pros-pect Park orbit.

�e buildings at 88-92 Linden and 200 Linden, for instance, replaced structures that included low-rise sin-gle-family houses; 123 Linden itself re-placed a 4-story nursing home. ■

123 LINDEN BLVD.

BU

CK

EN

NIS

, GO

OG

LE M

AP

S

WHO OWNS THE BLOCK

BY TOM ACITELLI123 LINDEN BLVD.

Tenants started moving in De-cember at the 26-story, 467-unit tower that the Moinian Group and Bushburg Properties built. Bushburg, led by Solomon Feder and Israel Nieman, acquired what was then a former nursing home for $18.5 million in February 2016 and brought on Moinian later, reportedly in exchange for up to $160 million in �nancing.

200 LINDEN BLVD.

Construction wrapped in 2016 on this 8-story, 69-unit apartment building. An LLC associated with investor and developer Barry Far-kas of Brooklyn acquired the site with three low-rise houses for $6 million in February 2015.

188 LINDEN BLVD.

A group of investors through an LLC based in East Midwood, Brooklyn, acquired this 4-story, 35-unit apartment building for $4.7 million in April 2015.

148 AND 158 LINDEN BLVD.

An LLC associated with Brook– lyn-based Deergrow Development acquired these two 4-story buildings containing 40 apartments for $8 mil-lion in February 2018.

212 LINDEN BLVD.

The 8-story, 23-unit apartment building was �nished in 2018. An LLC associated with Brook-lyn-based Brodmore Ventures ac-quired the site of the building—a house—for $2.2 million in Sep-tember 2015.

95 LINDEN BLVD.

Akelius Real Estate Man-agement, the U.S. arm of a Swedish investment house, acquired this 6–story, 120-unit apartment building for $45.1 million in August 2015. Akelius also acquired Nos. 40 and 58 Linden in separate deals at the same time.

88-92 LINDEN BLVD.

Brookland Capital, a proli�c invest-ment and development �rm based in Brooklyn and led by Boaz Gilad, is building a 9-story, 68-unit condo on this site. The company acquired the site, which included houses and a garage, for $6.5 million in 2015. Brookland was silent regarding when the project, which is under construc-tion, might be completed. 162 LINDEN BLVD.

In an illustration of what smaller apartment buildings along the Lin-den corridor go for, an LLC associ-ated with private investors acquired this 4-story, six-unit building for just over $1 million in July 2011.

143 LINDEN BLVD.

Pinnacle Group, the Man-hattan-based landlord and developer led by CEO Joel Saul Wiener, got this 6-story, 53-unit apartment building for $4.1. million in November 2005.

P016_CN_20200217.indd 16 2/13/20 11:37 AM

FEBRUARY 17, 2020 | CRAIN’S NEW YORK BUSINESS | 17

How has Broadway changed since you began at the Broadway League?We have a much wider variety of shows, which is changing the demographics of Broadway. In the last two seasons, 3 million of the attendees were under 18 years of age. When I moved to New York in 1995, there were almost no shows for people under 25. Disney had just opened Beauty and the Beast. Today we have three Disney shows and Wicked, Beetlejuice, Mean Girls and Harry Potter, just to name a few. We also have changes in ethnicity. The Latino audience is growing, and we’re working on all other segments of the business.

Is there anything else contributing to its appeal?Broadway has become part of pop culture. The Hamilton season gave us a real shot in the arm because it got national and international press and created interest around the world. And there are more kinds of shows than there ever have been. There really is something for everyone.

It seems as though there are so many headaches for producers. What is the biggest challenge they face today?It’s the rising costs. We have the highest-paid theatrical employees in the world. The costs are a third higher than in London. And technology has become so much more expensive. Shows are expected to use more “wow” aspects, and that’s expensive. Marketing also has changed dramatically. Now you have

to market to so many different generations of audiences, so you need to do that in different ways.

What do you say to those who complain about rising ticket prices?People love to talk about our theater ticket prices. But only 3% to 5% of our tickets are premium tickets. Half of our tickets are un-der $100. It’s not just about premium pricing. It’s about dynamic pricing. You may charge more for an aisle seat in the orchestra. But that might allow you to charge less for a mezzanine seat.

There’s a theater shortage now. Should or will developers build more theaters?The cost to build theaters is dramatic. The costs don’t �nancially work. Even with the Broadway boom, the cost to do these shows is so dramatic that you can �ll the house and still barely have money left over to cover running costs and pay your investors.

How has New York City’s tourism boom contributed?Sixty percent to 70% of our theatergoers are from outside the tristate area. It’s signi�cant. Another positive factor is the growth in international business. Those tourists come for longer, so they see more shows.

What are some of the new initiatives you have started at the Broadway League?We started Viva Broadway, an audience-development program to enhance Latino attendance. Broadway Bridges, an educational program that just �nished its third year, allows every New York City high school student to see a show before graduation for $10. That will help with our continuing efforts to build audiences.

The past decade has been one prolonged stand-ing ovation for the Great White Way. Both gross ticket sales and attendance have broken Broadway records every season since 2009—except one, when attendance dipped because of an unusual number of snowstorms. Last season attendance hit 14.8 million, and ticket sales came in at $1.8 billion. Charlotte St. Martin, head of the trade organization the Broadway League since 2006, presides over all of it. She will share her insights at Crain’s Business of Broadway breakfast March 19.

INTERVIEWED BY MIRIAM KREINAN SOUCCAR

Charlotte St. Martin Broadway LeagueTransforming the city’s economy one show at a time

What are you most looking forward to seeing this spring?I love all my children, but I do love the big musical. I’m looking forward to seeing Company, with Bobby

being a woman. And West Side Story, which is a completely different West Side Story, much like Oklahoma! was last season. I see 100 nights of theater a year. ■

ARTS & CULTURE

“BROADWAY HAS BECOME A PART OF POP CULTURE”

BU

CK

EN

NIS

P017_CN_20200217.indd 17 2/13/20 4:38 PM

18 | CRAIN’S NEW YORK BUSINESS | FEBRUARY 17, 2020

Trader Joe’s, e-commerce gro-cers Amazon Fresh and Fresh Di-rect, and even drugstores CVS, Wal-greens and Rite-Aid, as they add groceries to their shelves.

But D’Agostino, who now pre-sides over a shrunken empire of Gristedes and D’Agostino stores, sees an additional competitor—one he thinks has an unfair advan-tage—eating away at his bottom line: fruit-and-vegetable street ven-dors, who often set up shop not far from supermarket doors.

� ere are roughly 3,000 licensed street vendors in New York; 376 of them sell fresh fruit and vegetables from their carts, according to the city’s Health Department, which oversees the sector.

Advocates say the vendors are hardworking immigrants whose impact on supermarket sales is wildly overblown. For many shop-pers they represent convenience—no standing in line at the cash regis-ter—and bargain prices. � e vendors themselves say they are just trying to scrape by without run-ning afoul of often-confusing regu-lations.

But to embattled supermarket owners, they threaten store pro� ts and hundreds of union jobs.

“To the public, street vendors look like they’re small businesses, but in many cases they’re starting to outsell us,” D’Agostino said. “� ey get free rent. And I’m having

to � re people in my produce de-partment.”

Store owners are especially pre-occupied with street vendors right now because of two bills that would change how they are regulated. Both aim to address the black mar-ket that has sprung up in response to the limit on vendor permits, which cost $200 for two years but are illegally rented out for as much as $20,000 for that period.

Not surprisingly, supermarkets, along with bodega owners who are part of a healthy-foods initiative, oppose a bill sponsored by Sen. Jes-sica Ramos that would lift the cap on the number of vendors across the state. Store operators argue that the bill would add to an already

chaotic street scene. � ey are, how-ever, o� ering quali� ed support for a City Council bill that would add 4,000 vendors over a decade—the � rst increase in nearly 40 years—and create a law-enforcement unit dedicated exclusively to vending legislation.

Currently that job falls to the po-lice, who are overstretched, not al-ways conversant in the � ne print of the laws and, depending on whom you ask, overzealous or not zealous enough.

“Right now what we’re looking for is to � nd somebody who can en-force the laws,” D’Agostino said. “I’ve been told by the police, ‘If the guy isn’t bothering anybody, it’s hard for us to enforce the law.’ ”

He is not happy about an in-crease in the number of vendors. � e bill would provide what are called supervisory licenses, costing $400 a year, with existing vendors getting a head start on the line. Un-like with current permits, the new license holders would be required to work the carts themselves. (� e bill also would allow vendors in the Green Carts program to add nuts and bottled water to their fresh-pro-duce selection. Begun under the Bloomberg administration, Green Carts are restricted to so-called food deserts in northern Manhat-tan and parts of the outer bor-oughs.)

Daily battleAdvocates say supermarket op-

erators’ fears of more street ven-dors are misplaced.

“� ey are wor-ried that all the new permits will be-come fruit-and-veg-etable carts,” said Mohamed Attia, di-rector of the advo-cacy group the Street Vendor Proj-ect. “We expect very few will be. Out of the 3,000 permits out there now, a very small portion are fruit-and-vege-table carts.”

Both D’Agostino and Avi Kaner, a co-owner of Mor-ton Williams Super-markets, say there are already too many. � ey de-scribe a daily battle with vendors, some of whom operate out of trucks that stay parked all day in the supermar-

ket’s loading zone, blocking trucks making deliveries. � ey add that even without interfering with store operations, the vendors can siphon o� dollars that are critical to a store’s pro� t margin, which can be as little as 1% of sales.

“If the peddler sells $2,000 a day [worth of groceries], that’s $2,000 a day that comes out of our stores,” Kaner said. “It hurts the neighbor-hood stores more. If there’s a Whole Foods store with a peddler outside, it doesn’t a� ect them as much, be-cause of their high [sales] volume. But it’s devastating to the smaller stores.”

Kaner and D’Agostino see neigh-borhood stores engaged in a life-and-death struggle, particularly in

Manhattan, where businesses be-low 96th Street with rent above $250,000 a year must pay a 3.9% commercial rent tax. In 2013, when Food Trade News started counting New York stores, there were 30 Gristedes and 13 D’Agostino loca-tions in Manhattan. � e two com-panies, which combined opera-tions in 2016—and are kept alive by pro� ts from owner John Catsima-tidis’ other businesse