New York Governor to Increase Fines on Illegal Cannabis Stores…

From CBS News:

New initiatives are being made to shut down the illicit marijuana businesses that have proliferated like weeds across the state, particularly in the five boroughs. Gov. Kathy Hochul is putting out a new enforcement strategy that would give state agencies increased enforcement authority as well as hefty fines. She wants tough new sanctions to crack down on illegal shops where lengthy rows of various marijuana strains are arranged in clear Plexigas boxes so connoisseurs can smell them before choosing. The governor issued a statement saying that it was intolerable that illicit dispensaries continued to operate.

Having illegal cannabis plants or goods could result in fines of $200,000, and selling without a license might result in daily fines of up to $10,000. In his Manhattan district, Senate Judiciary Chairman Brad Hoylman-Sigal has a large number of unlawful businesses.

“I’m supportive of any efforts to shut these illegal cannabis shops down. They are a nuisance, an eyesore,” according to Hoylman-Sigal. In order to pursue illicit dispensaries that are dodging state cannabis sales taxes, the measure would grant investigators with the state Department of Taxation and Finance the status of peace officers. “These cannabis shops don’t pay taxes. They’re operating way outside the law, but, most importantly, they are dangerous, dangerous to young people, to tourists, and to others who may think that just because a cannabis shop is open on a block — many in my district — that they’re selling a product that has been sanctioned,”, according to Hoylman-Sigal.

The latest suggestion excited Mayor Eric Adams, who has complained that city sanctions are too modest to be a deterrent.”Gov. Hochul clearly recognizes the need for action to strengthen the city’s ability to hold these illicit businesses accountable,” Press Secretary Fabien Levy said. “This enforcement is critical for the health and safety of our families and young people.” The budget is due at the end of the month, so officials hope it will be included.

Flatiron Building up for Auction on March 22, 2023

The Flatiron Building was originally known as the Fuller Building

A landmark Manhattan building’s current owners are at odds, and the property will shortly be put up for auction to the highest bidder.

On March 22, the 121-year-old Flatiron Building, which is now vacant, will be put up for auction in a partition sale as a result of a decision in the ongoing legal dispute between its many landowners.  Following a 2021 lawsuit by Sorgente Group, Jeffrey Gural’s GFP Real Estate, and ABS Real Estate Partners, who collectively own 75% of the property, a New York state judge in January issued an order permitting the auction to proceed, the Real Deal was the first to announce. 

The steel-framed 175 Fifth Avenue skyscraper, which was finished in 1902 and serves as the namesake for the area, was the subject of a lawsuit by the co-owners following a deadlock with Nathan Silverstein, who owns 25% of the structure. 

The parties were stuck in a very expensive standoff over the future of a very expensive piece of real estate because of the shared ownership of the building, which gives every owner veto power on every significant building decision. 

After MacMillan Publishers, who at the time had all 21 floors of the triangular building, declared in 2017 that it would be leaving within two years, the situation became intolerable. 

After that, Silverstein made a number of “preposterous” suggestions, according to Gural, including not upgrading the property between the time MacMillan left and when a new tenant moved in. This was despite the fact that upgrades were legally required to re-rent the building and for fire safety, Gural claimed in an affidavit.

The Real Deal said that Gural wrote that Silverstein had the idea to divide the property into separate ones despite the building being a landmark. This was impossible because of the property’s historic status.

Gural stated in the statement that it “boggles the mind” to suggest that we could nonetheless agree on a plan to physically divide this structure into five smaller, independent properties, none of which would be marketable — and then agree on a plan as to how that work would be financed. We have been attempting to resolve these issues with Mr. Silverstein for years, but he has put off, fought, and ultimately refused to accept the plaintiffs’ suggested business plan.

Meanwhile, Silverstein alleges that Gural attempted to rent the space to Knotel, which Newmark’s Barry Gossin had a large stake in, for a “exceptionally low cost per square foot” and an exceptionally long term after Newmark neglected to advertise the property when MacMillan announced it was departing. 

According to Silverstein’s affidavit, the “proposed rental agreement” would have committed the property to an unproductive lease for an extended length of time. 

According to a prior filing made by Gural, the Sorgente-GFP-ABS consortium would probably make a bid during the auction later this month, according to the Real Deal. 

From the NY Post.

Oldest Cheese Store Closes in Little Italy

From the NY Post:

This 130-year-old business’s Manhattan storefront is parma-gone and mozzarel-ocating to the Garden State. 

Alleva Dairy’s longtime 188 Grand St. home may be gor-gone-zola, but the over-one-century-old Italian grocer isn’t letting the grate become the enemy of the good. Instead of throwing in the cheesecloth, they’re up and moving to New Jersey. 

“After serious consideration, Alleva Dairy at 188 Grand Street will close on Wednesday, March 1 at 6 P.M.,” said owner Karen King, who bought the fromage factory with her late husband John “Cha Cha” Ciarcia — a friend of Tony Danza and descendent of Alleva’s founding family — in 2014. “I am so thankful for the support I have received from my devoted customers, neighbors, the news media and strangers from across the country.” 

Alleva Dairy.
The closure follows a court battle over the more than $500,000 worth of back rent owned to the building’s landlord.
Alleva Dairy
Alleva Dairy’s longtime 188 Grand St. home will be moving to New Jersey.

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alleva dairy moves to jersey
Karen King in a truck with Alleva’s signs.

Nothing gouda can stay in New York, it seems, as Alleva — which opened in 1892 and is billed as the nation’s oldest cheese store — is now banking on doing feta beyond the boroughs.

“Thanks to the vision, generosity and commitment of businessman and developer, Jack Morris, President and CEO, of Edgewood Properties, Alleva Dairy will be opening a 3,700-square-foot store at 9 Polito Ave. in Lyndhurst, NJ,” King continued, adding that “One thing is certain, Alleva Dairy will continue and will be bigger and better than before.”

Real Estate Board of New York (REBNY) Releases Report Measuring Visitation Rates in Office Buildings in Manhattan

This report was recently released by REBNY:

To date, much of the discussion of NYC’s office visit and/or the rate of return to office has focused on estimating a single market average. Such headline rates have been helpful to gauge the direction of the overall market, and in fact show gains in workers being in the office from 2020 levels. However, a single rate does not capture significant differences between buildings. To get a fuller perspective, REBNY performed a preliminary analysis of Placer.ai location data. Results indicate that this location data provides a more nuanced and comprehensive picture of Manhattan’s office building visitation rates.

Preliminary analysis of Placer.ai data in 2022 indicates*:

  • Average building visitation rates in 2022 surpassed 60% of pre-pandemic baselines
  • Visitation rates in nearly two-thirds of buildings exceeded 50% of pre-pandemic baselines
  • Class A properties displayed stronger growth (66.3% average visitation rate) in comparison to Class B properties (53.6% average visitation rate)

*All totals are based on Placer.ai location intelligence data for 250 office buildings from January to mid-December in 2021 and 2022, compared to the same period in 2019.

More information on this study was reported by the NY Post.

Hilton Grand Vacations has Purchased a Timeshare Hotel in Midtown

According to Commercial Observer, Hilton Grand Vacations paid $136 million to buy a 161-key timeshare hotel in Midtown Manhattan from private equity firm 54 Madison Partners. The troubled property, located at 12 East 48th St., was first constructed by developer Hidrock Realty just before the pandemic. Hilton Grand Vacations is the most recent in a long line of different owners. Hidrock was unable to “substantially complete” the 31-story hotel before the end of 2019; 54 Madison Partners provided mezzanine debt; and Midland National Life Insurance served as the senior lender. 54 Madison Partners later used this information to claim that Hidrock had defaulted on the loan in January 2020. Later that year, it took control of the property. The Hilton-operated The Central at 5th hotel opened its doors in the summer of 2021 with rooms starting at $350 per night. With the acquisition of the hotel from 54 Madison Partners, Hilton Grand Vacations has acquired its fifth timeshare hotel, a deal that enables owners to stay for a specific amount of time each year by purchasing a share in the property.

New McDonald’s Opening in Times Square

McDonald’s has signed a lease at the former Duane Reade location on the northwest corner of West 42nd Street and Eighth Avenue at 681 Eight Avenue. The store is currently being built out. This new location is across the street from the Five Below and Target stores on West 4McDonald’s Moves into Former Duane Reade at W. 42nd and Eighth Avenue.

90-year-old owner of Ray’s East Village Candy Store beaten by Two Suspects

As reported by the NY Post, according to police and sources on Saturday, two men were detained in connection with the vicious assault and attempted robbery of the elderly owner of Ray’s Candy Shop in the East Village. The sadistic assault on Ray Alvarez, 90, whose injuries were so severe he now needs to eat through a straw, he told The Post, led to the arrest of Luis Peroza, 39, and Gerald Barth, 55. According to the sources, Barth and Peroza, who are both from the East Village, are thought to have gone on a rampage through the area and damaged Alvarez’ Avenue A store as part of their crimes. According to sources, Barth, who is no stranger to law enforcement, was detained on Wednesday in connection with the attempted robbery of Alvarez as well as a separate robbery. The NYPD reported that Peroza was arrested and charged with assault on Friday, hours before he was led from the 9th Precinct stationhouse on East 5th Street. The tough store owner can only eat through a straw after the attack broke bones in his face and dislocated his jaw. If there had been more police officers in the area, he railed, the beating would never have taken place.

40 Wall Street May be Under “Lender Watch”

Trump’s coveted 40 Wall Street is under “lender watch” due to declining income, according to a report  Bloomberg reported on Friday that Donald Trump’s heavily mortgaged skyscraper at 40 Wall Street is under “lender watch” due to declining revenue and rising expenses.

According to a monthly filing on the building’s remaining $126.5 million mortgage, the vacancy rate at the 72-story building, which is Trump’s most valuable property, increased to nearly 18% in the third quarter of last year, Bloomberg reported. Meanwhile, costs are said to have increased 11% since the mortgage’s inception in 2015.  Trump has frequently boasted about the 1995-purchased structure, which was valued at $540 million in 2015.

Long-term declines in high-rise office leasing in Manhattan were made worse by the COVID-19 pandemic, when many businesses shut down and employees of those that survived were forced to work from home.

According to the filing, Wells Fargo, which is servicing the mortgage on 40 Wall Street, “has reached out to the borrower for a status of leasing developments” and the strategies for enhancing the performance of the asset according to Bloomberg.

40 Wall Street (Wikipedia)

City Recommends Conversion to Underused Offices to Apartments in Central Business Districts

From NYC.gov:

Office Adaptive Reuse Task Force of Mayor Adams Unveils Recommendations to Convert Underused Offices into Homes builds on the initiatives of the Adams administration to revitalize central business districts and increase the supply of housing Including 11 Specific Recommendations Office conversions could provide homes for as many as 40,000 New Yorkers over the course of the next ten years if recommendations are put in place alongside existing regulations. 

The mayor of New York City, Eric Adams, today unveiled suggestions made by a task force organized by the city to encourage the conversion of vacant office space into new housing for New Yorkers. The New York City Office Adaptive Reuse Study, created by the Office Adaptive Reuse Task Force and headed by Dan Garodnick, Director of the Department of City Planning (DCP) in New York City, offers 11 specific recommendations that would alter state statutes and local zoning regulations in an effort to apply the most flexible conversion regulations to an additional 136 million square feet of office space, or roughly the same amount of space as the entire city of Philadelphia. With these recommendations in place and the current city and state regulations, office conversions could potentially create as many as 20,000 homes in the next decade, enough to house up to 40,000 New Yorkers, even though property owners will decide whether to convert their buildings.

“With this study, we have a roadmap to deliver on a vision for a more vibrant, resilient, prosperous, and affordable city,” said Mayor Adams. “The need for housing is desperate, and the opportunity offered by underused office space is clear — we know what we need to do. These concrete reforms would clear red tape and create the incentives to create the housing we need for New Yorkers at all income levels. I want to thank the members of the task force for helping to chart the course, and I look forward to working with them and our partners in city and state government to deliver these much-needed reforms.” “Enabling more offices to convert to housing will help us bring back our commercial districts while also addressing our housing supply crisis,” said Deputy Mayor for Economic and Workforce Development Maria Torres-Springer. “The recommendations in this report will set us on the path to achieving these critical goals, and I look forward to partnering with our colleagues in Albany and the City Council to ‘Get Stuff Built.’” The study outlines a path forward to deliver on goals outlined in “‘New’ New York: Making New York Work for Everyone,” an action plan released in December by Mayor Adams and New York Governor Kathy Hochul — including reimagining the city’s commercial districts as vibrant 24/7 destinations, making Midtown Manhattan and other business districts more mixed-use and flexible, and expanding the city’s supply of housing. It also builds on Mayor Adams’ “Get Stuff Built,” “City of Yes,” and “Housing Our Neighbors” plans, which include significant steps to tackle the city’s severe housing shortage. Increasing opportunities to repurpose underused office space for housing and other uses is critical to achieving those goals. “After every crisis, New York City reinvents itself, which is why it is so important for our codes and regulations to stay flexible. The Office Adaptive Reuse Task Force recommendations will help us meet the moment and rise to each new challenge with a built environment that is as dynamic and diverse as New Yorkers themselves,” said Chief Housing Officer Jessica Katz. “

To solve our housing shortage, we need every tool possible. Our administration’s housing blueprint, Housing Our Neighbors, calls for leveraging zoning to encourage more affordable and supportive housing citywide, helping families access new neighborhoods with amenities, jobs, and schools close by, which every New Yorker deserves.” “Our ability to remain a global leader in a rapidly evolving and changing economy will depend on our ability to adapt,” said DCP Director and City Planning Commission Chair Garodnick. “Working closely with the City Council and our colleagues in Albany, we will build clear rules and set this city up for success.” Implementing the task force’s recommendations would extend the most flexible conversion regulations to an additional 136 million square feet of office space — roughly the amount of office space in the entire city of Philadelphia. Credit: New York City Mayor’s Office The Office Adaptive Reuse Task Force was convened by the Adams administration in July 2022 following Local Law 43, sponsored by New York City Councilmember Justin Brannan.The task force’s recommendations include: These recommended reforms would be implemented via changes to state law and regulatory changes through a city zoning text amendment.The task force included 12 members with a wide range of experience in architecture, development, economics, finance, law, and advocacy: “From designing the street grid to rebuilding after 9/11, New York City exists in a constant state of evolution and aspiration.

Today, our commercial office buildings offer the opportunity to meet the changing needs of the city, including the critical need for housing,” said HPD Commissioner Adolfo Carrión Jr. “The recommendations from the Office Adaptive Reuse Task Force aim to ensure the city’s built environment keeps us thriving as a city of opportunity.” “It is essential for New York City to be adaptive to the changing needs and dynamics of New Yorkers in this post-pandemic era,” said NYCEDC President and CEO Andrew Kimball. “The recommendations laid out in this report build off those put forth in the ‘Making New York Work for Everyone’ action plan to reimagine 24/7 commercial districts across New York City. These proposals are designed to aid in the transformation of single-use commercial hubs into mixed-use, live-work environments and are necessary to building a more vibrant and inclusive economy for all New Yorkers.” “Outdated regulations that no longer serve their intended purpose are a roadblock to solving some of the most intractable challenges the city is facing today,” said Acting DOB Commissioner Kazimir Vilenchik, P.E. “The necessary changes to the New York State Multiple Dwelling Law and the city’s Zoning Resolution recommended in this study will finally give property owners a pathway to convert their empty office buildings into the housing this city desperately needs. I applaud the task force on their commonsense recommendations to reduce red tape and streamline the conversion process.” “Successfully addressing our city’s dire housing crisis requires creative solutions, and the Council is proud to have passed legislation to create this task force to advance important recommendations for converting underused office space into new housing,” said New York City Council Speaker Adrienne Adams. “Our recovery from the pandemic requires employing concrete tools, flexibility, and thoughtful strategies to create homes for New Yorkers and strengthen our central commercial districts. I look forward to working with the administration and our state partners to confront the housing shortage, ensuring that New York remains an affordable place to live, work, and raise a family for all.”

Borough President Mark Levine. “The task force’s recommendations will help unlock opportunities to turn underutilized office buildings into housing we badly need. I look forward to working with the mayor and Chair Garodnick as we find innovative ways to build more housing and create healthier, more vibrant neighborhoods across the city.” “New York needs to be able to adapt to fully recover from the pandemic and the changes it brought to our society,” said New York City Council Majority Leader Keith Powers. “There is incredible potential in turning unused office space into ways to address our housing crisis and more. I am grateful for the recommendations of this task force and look forward to continuing to partner on our economic recovery.” “New York City is lagging other municipalities in converting office space to housing. That’s why it is so important to take bold steps, right now.” said New York City Councilmember Erik Bottcher. “Our housing shortage poses an existential crisis to New York’s future. I want to thank Mayor Adams and Chair Garodnick for this forward-thinking work.”

Media Contact pressoffice@cityhall.nyc.gov(212) 788-2958