Welcome to the weekly edition of the New York Real Estate newsletter. We’ll take a look at what’s coming up this week and look back at what you might have missed last week.
Last September, then-mayoral candidate Eric Adams rolled out plans to convert distressed hotels into as many as 25,000 units of affordable and supportive housing, aimed at homeless New Yorkers.
But despite being a central part of the conversation around housing since the start of the pandemic — and something state lawmakers created a $100 million program to fund last year, the issue has seen little progress since then, largely due to regulatory hurdles that needed a fix in Albany.
State legislators handed the mayor a win on that front last week, approving a measure to relax certain zoning and building code requirements that have been serious logistical and financial hurdles to successful conversions. Adams said in a statement Friday the legislation “will deliver much needed relief to our homelessness crisis.”
As lawmakers debated regulatory relief in Albany, advocates and supportive housing developers had raised concerns the opportunity for conversions could wane the longer officials waited to act — as the city’s tourism industry continued to recover from the pandemic, and hotel owners became less inclined to sell to affordable housing developers.
Now that the measure has been approved, it remains to be seen how much of an opportunity remains to convert underutilized hotels — and how central of a priority it is going forward for the Adams administration, which is expected to soon roll out a housing plan.
“It certainly feels like the window is closing but the opportunities are still out there, hotel owners are still calling me and brokers are still calling with hotels that are either for sale or owners are exploring the market,” Ted Houghton, president of the nonprofit Gateway Housing, said Friday. He acknowledged some of the potential has likely been missed, and noted California, which also has a massive homelessness crisis, moved faster on the issue at the beginning of the pandemic. “We may find New York catches up quickly or we may find that we really missed an opportunity, it’s hard to tell at this point.”
GOOD MONDAY MORNING. Welcome to POLITICO New York Real Estate. This roundup is for you, so please tell us how we can make it better. Please send tips, ideas, calendar items, releases, promotions, criticisms and corrections to [email protected] and [email protected].
Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories.
TENSION BUILDS ON RETURN TO WORK — The New York Times’ Vivian Giang: “As long as work has existed, employers have tried to size up their employees’ commitment to their jobs. Are you on the fast track? The mommy track? The leadership track? Now, if some corporate leaders have their way, there will be a new test for workplace devotion — and anyone who opts for remote work gets a failing grade. But can C.E.O.s really claw their way back to 2019? This week, Elon Musk issued an ultimatum to Tesla employees requiring them to return to the office for at least 40 hours per week — or lose their jobs. Mr. Musk, who is known for having camped out for weeks at Tesla factories, thinks remote work is an affront to productivity and personal commitment. Last month, he praised Chinese workers for ‘burning the 3 a.m. oil,’ comparing them with American workers who, he said, are ‘trying to avoid going to work at all.’”
HEFTIER CONSTRUCTION FINES — Crain’s Eddie Small: “A new construction safety bill the state Legislature passed Thursday will significantly increase the fines companies face following injuries to or the deaths of construction workers on their sites. The bill is known as Carlos’ Law and is named after 22-year-old construction worker Carlos Moncayo, who died in April 2015 after being buried alive in an unsecured trench at a construction site in the Meatpacking District. The bill gets rid of the current caps on fines and restitution companies face after a construction worker is killed or injured on the job. Fines would now range from a minimum of $500,000 to a maximum of $1 million for felonies and a minimum of $300,000 and a maximum of $500,000 for misdemeanors.”
TOUGH TIME IN ALBANY — POLITICO’s Anna Gronewold and Joe Anuta: Most mayors, buoyed by the international celebrity granted New York City’s chief executive, head to Albany hoping to score big wins with the Legislature, only to return home with their grand plans in tatters. Eric Adams, with his eight years experience in that very legislative body, was supposed to know better. But as his first session as mayor draws to a close, Adams looks to be treading the same frustrated path back down the Hudson River as his predecessors. Adams will be left without two of his biggest asks: The Legislature declined to alter laws giving judges more discretion to set bail. And it gave him a two-year extension of mayoral control of city schools — half of the four years Adams sought — while passing legislation mandating smaller class sizes that has raised alarm over costs with the city schools chancellor. Lawmakers also opted to let a controversial tax break dear to New York City developers lapse.
SHARE ME: Like this newsletter? Please tell a friend to sign up. Just give them this link.
ROSEN BOOTED FROM GRAMERCY PARK LEASE — The Real Deal’s Rich Bockmann: “Aby Rosen has officially overstayed his welcome at the storied Gramercy Park Hotel. Rosen was ejected this week from his lease controlling the hotel by the judge presiding over a lawsuit filed by his landlord, the Goldman family’s Solil Management. The 190-room hotel, which featured Danny Meyer’s Italian restaurant Maialino and works by such artists as Jean-Michel Basquiat and Damien Hirst, shuttered its doors as the start of the pandemic in March 2020 and never reopened.”
OFFICE TOWER UP FOR SALE — Commercial Observer’s Celia Young: “A joint venture between Blackstone Group and RXR Realty put the 40-story 1330 Avenue of the Americas up for sale, looking to get more than $350 million for it, according to a source with knowledge of the deal. A group of investors led by RXR first purchased the tower — previously known as the Financial Times Building — for roughly $400 million in 2010 from Canadian lender Otera Capital, after Otera took over the property when Harry Macklowe was forced to auction it off in 2009 following the financial crisis. Macklowe bought it at a much higher price, for $498 million in 2006.”
— A two-bedroom on Brooklyn’s “most Instagrammable street” has hit the market.
— Cushman & Wakefield, a commercial real estate firm, is looking for new office space in New York City.
— The city is consideringcreating a special nightlife district.
— The state and local gas tax cuts that went into effect are saving Long Island residents 25 cents at the pump.
— George Laufenberg, a former union official who served on the Port Authority of New York and New Jersey, has pleaded guilty to embezzlement.