• AI-powered WHO chatbot is flubbing some answers
    The World Health Organization is wading into the world of AI to provide basic health information through a human-like avatar. But while the bot responds sympathetically to users’ facial expressions, it doesn’t always know what it’s talking about. SARAH, short for Smart AI Resource Assistant for Health, is a virtual health worker that’s available to talk 24/7 in eight different languages to explain topics like mental health, tobacco use and healthy eating. It’s part of the WHO’s campaign to find technology that can both educate people and fill staffing gaps with the world facing a healthcare worker shortage. WHO warns on its website that this early prototype, introduced on April 2, provides responses that “may not always be accurate.” Some of SARAH’s AI training is years behind the latest data. And the bot occasionally provides bizarre answers, known as hallucinations in AI models, that can spread misinformation about public health. SARAH doesn’t have a diagnostic feature like WebMD or Google. In fact, the bot is programmed to not talk about anything outside of the WHO’s purview, including questions on specific drugs. So SARAH often sends people to a WHO website or says that users should “consult with your healthcare provider.” “It lacks depth,” Ramin Javan, radiologist and researcher at George Washington University, said. “But I think it’s because they just don’t want to overstep their boundaries and this is just the first step.” WHO says SARAH is meant to work in partnership with researchers and governments to provide accurate public health. The agency is asking them for advice on how to improve the bot and use it in emergency health situations. But it emphasizes its AI assistant is still a work in progress. “These technologies are not at the point where they are substitutes for interacting with a professional or getting medical advice from an actual trained clinician or health provider,” Alain Labrique, the director of digital health and innovation at WHO, said.  SARAH was trained on OpenAI’s ChatGPT 3.5, which used data through September 2021, so the bot doesn’t have up-to-date information on medical advisories or news events. When asked whether the US Food & Drug Administration has approved the Alzheimer’s drug Lecanemab, for example, SARAH said the drug is still in clinical trials when in fact it was approved for early disease treatment in January 2023. Even the WHO’s own data can trip SARAH up. When asked whether hepatitis deaths are increasing, it could not immediately provide details from a recent WHO report until promoted a second time to check the agency’s website for updated statistics. The agency said it’s checking on whether there’s a lag in updates. And sometimes the AI bot draws a blank. Javan asked SARAH where one could get a mammogram in Washington, DC, and it could not provide a response. None of this is unusual in these early days of AI development. In a study last year looking at how ChatGPT responded to 284 medical questions, researchers at Vanderbilt University Medical Center found that while it provided correct answers most of the time, there were multiple instances where the chatbot was “spectacularly and surprisingly wrong.” Safety and privacy concerns To be able to mimic empathy for question sessions, SARAH accesses computer cameras to store users’ facial expressions for 30 seconds, then deletes the recordings, WHO communications director Jaimie Guerra said. Each visit is anonymous, but users can elect to share their questions with WHO in a survey to improve the experience, though Guerra said any data collected is randomized and not tied to an IP address or person to protect users. Still, using open source data like GPT’s has its own dangers because it is a frequent target of cybercriminals, Jingquan Li, a public health and IT researcher at Hofstra University, said. Some people accessing SARAH through Wi-Fi are vulnerable to malware attacks or video camera hacking. Guerra said attacks trying to access data shouldn’t be a problem because of the anonymous sessions. Government partners and researchers also do not have regular access to the data, including questions that might help track health patterns, unless they ask for the voluntary survey data. Guerra said this means SARAH would not be the most accurate tool to predict the next flu outbreak, for example. SARAH is a continuation of a 2021 WHO virtual health worker project called Florence that provided basic information on Covid-19 and tobacco, and New Zealand-based Soul Machines Ltd. built the avatars for both projects. Soul Machines cannot access the SARAH data, but Chief Executive Officer Greg Cross said in a statement the company is using the GPT data to improve results and experience. Earlier this year, WHO released ethics guidance to its government partners for health-related AI models including promoting data transparency and protecting safety.   While Florence appeared to be a young, nonwhite woman, SARAH appears White. Changing the appearance and updating the avatar isn’t out of the question, Labrique said, and users may be able to choose an avatar preference in future versions. As for SARAH’s gender, when asked it said “I am a chatbot digital health promoter, so I do not have a gender or use personal pronouns. My purpose is to assist you in living a healthy lifestyle. Do you have any questions about quitting tobacco, reducing alcohol consumption, or improving your overall well-being?”
  • Tech workers are flocking to New York City
    There is a lot of noise surrounding the fate of New York's tech sector. While venture capital investment remains slow, IPOs are starting to return. On Wall Street, the artificial-intelligence craze jolted equities to all-time highs, but money managers continue to hedge their bets. As Crain's has reported, industry analysts remain bullish on New York. Deals may be down, they say, but the city is overflowing with available tech talent. C-suite executives are confident in their companies’ growth in New York, and more tech firms are choosing to do business here than ever before. Is that optimism warranted? Just ask the tech workers who are flocking to New York. Roughly 14.3% of all U.S. tech employees who relocated to a new city last year landed in the Big Apple.  That's according to an analysis from venture capital firm SignalFire, released April 15 and first reported on by the Wall Street Journal. SignalFire mapped the cities where tech workers are leaving and identified the most popular destinations where they are going. The report found that New York was by far the most popular destination for relocating talent in 2023. The 14.3% influx figure was nearly double that of the next most targeted city, which was Austin, Texas. Roughly 10.7% of New York's existing tech workforce left the city, SignalFire found, but the strong inflow of workers outpaced the outflow. "NYC is in the midst of a tech talent boom," the report said. Other cities that saw year-over-year increases in tech talent include Los Angeles, Denver, San Diego, Miami, Dallas, Nashville and Tampa. The largest source for relocating tech talent to New York was San Francisco, with Bay Area transplants making up roughly 37% of the city's tech talent intake. New York also attracted talent from Seattle and Boston. San Francisco continued to attract new talent, the report said, but employees left at a faster rate. For every tech worker who moved from New York to San Francisco, 1.4 workers made the opposite move, according to SignalFire. SignalFire noted that "overall population trends in the post-pandemic period were largely driven by people entering and leaving the tech workforce as the 2021 boom was followed by years of layoffs." Their analysis looked specifically at existing tech workers who relocated in 2023. The sample size, according to WSJ, was roughly 57,000 tech employees on the move.
  • Walter Noel, who ran biggest feeder fund into Madoff, dies at 93
    Walter Noel, who ran the the largest fund to invest with Bernie Madoff and made more than $1 billion in resulting client fees for his firm, has died. He was 93.  He died on Dec. 15 at Yemanja, his family’s property on Mustique, a private Caribbean island, according to his death certificate. The cause was complications due to Alzheimer’s disease. His family has made no public announcement of his death. Noel founded what would become Fairfield Greenwich Group in 1983 to help foreign investors put money into U.S. hedge funds. He was introduced to Madoff by the father-in-law of his partner, Jeffrey Tucker, in 1989 and made his first $1.5 million investment later that year. By the time Madoff was arrested in December 2008 for running history’s biggest Ponzi scheme, the firm had about $7 billion invested with him or roughly half the firm’s total assets. Madoff was sentenced to 150 years in prison after pleading guilty to his crimes. He died in prison in 2021 at age 82. Madoff charged no fees to Fairfield Greenwich and other so-called feeder funds, meaning that those firms kept all the money they charged clients on what would eventually be proven to be fictitious returns. In Fairfield Greenwich’s case, that was 20% of any profit, and in later years a 1% management fee on assets.   With the Madoff investment spinning off a return of at least 10% annually, Fairfield Greenwich made more than $1 billion in fees, according to a July 2010 complaint filed against Fairfield Greenwich’s entities and executives by Irving Picard, the trustee assigned to recoup money for investors. Noel personally received $114 million in partnership distributions between 2002 and 2008, the court document said, a sum that did not include salary or bonuses.   Picard alleged that the executives of Fairfield Greenwich knew or should have known that Madoff was operating a Ponzi scheme and said their relationship was a “de facto partnership.” Picard’s litigation is ongoing. No criminal charges have ever been brought against these parties. Fairfield Greenwich has said it was a victim of Madoff’s duplicity, and at the time of his arrest, the firm and its partners had more than $60 million invested with Madoff. Noel, his Brazilian-born wife, Monica, and their five daughters led an increasingly lavish lifestyle from their base in leafy Greenwich, Connecticut. As Fairfield Greenwich assets ballooned, so did the number of vacation homes. In addition to the estate in Mustique and their mansion in Greenwich, they had places in New York City, Palm Beach and Southampton.   Four of his five daughters wed men who later worked for Fairfield Greenwich. The daughters and their children were photographed by Bruce Weber for a 2002 Vanity Fair piece entitled "Golden in Greenwich" that described Noel’s offspring as the anti-Hiltons.   Corina, the eldest, married Colombian-born Andres Piedrahita, who led the European and Latin American businesses, working out of London and Madrid. Lisina, the second oldest, wed Yanko Della Schiava, based in Lugano, Switzerland. He was responsible for selling Fairfield’s offshore funds in Southern Europe. The fourth oldest, Alix, married Philip Toub, son of Swiss shipping magnate Said Toub. He marketed the group’s funds in Brazil and the Middle East. Marisa, the youngest, married Matthew Brown, who worked for the firm in New York. Ariane, the middle daughter, married a private equity investor who was not involved in the family business.   Executive recruiter Russell S. Reynolds, a longtime friend of the Noels, told Vanity Fair that he saw Walter and Monica at the Round Hill Club in Greenwich the day after Madoff’s arrest. “Walter was shaking he was so upset,” Reynolds told the magazine. Walter Miller Noel, Jr. was born on June 19, 1930, to Walter Sr. and Corinne Travis Noel and grew up in Nashville, Tennessee. He graduated from Vanderbilt University and got a master’s degree in economics and a law degree from Harvard University. He spent his early career as a consultant with Arthur D. Little in Boston and Lagos, Nigeria. He married the former Monica Haegler in 1962 in Rio de Janeiro, according to the couple’s wedding announcement in the Tennessean. Noel worked in private banking at Bahag Banking in Lausanne, Switzerland, and Citibank before joining Chemical Bank, where he headed the international private banking group. When he was in his early 50s, he left the bank to set up what would become Fairfield Greenwich. Noel is survived by his wife, his five daughters, 20 grandchildren and two great-granchildren.  
  • 5-story residential project to rise in Astoria
    Another new residential project is headed to bustling northwest Queens, although the developer is not in a rush to decide whether this one will be rentals or condos. The project at 23-42 31st Drive in Astoria comes from Bayside-based Bassaly Development, and it will stand five stories and 50 feet tall with 22 residential units, according to plans recently filed with the Department of Buildings. The building will span about 15,000 square feet and feature 11 parking spots and a roof deck. Bassaly hopes to start construction in the next month or so and finish in about a year and a half, according to company principal Andy Bassaly. He is keeping his options open when it comes to making the residential units available to rent or buy and will pay attention to factors like mortgage rates and the new affordable housing tax break expected to be in this year's state budget before committing. "We're open to both," he said. "It really depends on what the market is like a year from now." Demolition permits were filed for the three-story, six-unit residential building at the site in August 2020, and Bassaly bought the site vacant in February 2023 for about $4 million, city records show. Bassaly Development is a second-generation family-run firm that focuses on residential projects in the city and on Long Island. Its projects include the 22-unit Cooper Tower Condominium at the Bayside Long Island Rail Road station and the 82-unit Queens Regency Condominium by the Rego Park Center Mall. Astoria's recent residential boom has not been quite as high-profile as the one in nearby Long Island City, but the Queens neighborhood has still seen a major influx of projects. Developer John Pantanelli is at work on one near the waterfront at 33-35 11th St. that will span about 286,000 square feet with more than 300 residential units, while Miami-based NuVerse Advisors is at work on a condo project at 30-55 Vernon Blvd. with 122 residential units and a roughly $161 million expected sellout. Median rent in northwest Queens dipped to $3,200 last month, and the area saw a record-high number of new leases at 704, according to the latest report from Douglas Elliman and Miller Samuel. Stubbornly high mortgage rates and Manhattan rents likely contributed to the surge in activity, Miller Samuel CEO Jonathan Miller said.
  • New Tesla showroom to launch soon in Gowanus
    No hitting the brakes here. Electric automotive company Tesla is opening up its second showroom in Brooklyn and third in the city, amid layoffs at the Austin-based enterprise elsewhere across the globe, Crain's has learned. The maker of the divisive Cybertruck — which starts at $60,990 and has been beset by accelerator complaints — debuted its New York City dealership in the Meatpacking District at 860 Washington St. in 2009. The second Tesla dealership in the city opened in Red Hook at 160 Van Brunt St. in 2016, and now, a third is planned to open at the Roulston House at 94 Ninth St. — just steps from the fetid Gowanus Canal. A polarizing figure in the business world, Tesla founder and CEO Elon Musk has no apparent plans to back out from his imminent expansion in the borough, according to Joseph Hamway of Industrie Capital Partners, who owns the Ninth Street office building at the corner of Second Avenue as part of a 50-50 partnership with Bobby Cayre of Aurora Capital. The Roulston House opened two years ago and is fully operational as a "successful, creative office" building, according to Hamway, save for the forthcoming Tesla showroom. Hamway declined to say for how much the Musk-owned company is leasing the space.  Hamway told Crain's Thursday that Tesla is "about to" open soon, but could not specify exactly when. He declined to comment on the news that Musk, who also runs the private rocket company SpaceX, is laying off 10% of his global workforce, including 285 employees across two different Tesla locations in Buffalo, according to a notice from the Department of Labor on Wednesday that cited economic reasons. Tesla's stock took a bit of a nosedive this week after the job cut revelations, falling to its lowest level in almost a year, according to reports. City records indicate that the electric-vehicle maker most recently renewed its Certificate of Occupancy with the Department of Buildings last month — a filing that lasts for three months at a time and costs $130. The latest renewal was issued on March 12 and is valid until June 10, according to a spokesperson for the Department of Buildings. Tesla first obtained the required authorization in 2022 for a motor vehicle showroom, auto dealership, auto repair and accessory storage on the entire ground floor, according to city records. The company's iconic red-and-white logo is now hoisted on the facade of the 4-story brick building. Just outside is the site where 37-year-old Sarah Schick was killed by a truck while riding a Citi Bike in early 2023. A white ghost bike now stands at that corner to honor her memory. Tesla did not respond to requests for comment.
  • Luxury firm Legion strikes again with an $87 million purchase in West Chelsea
    Legion Investment Group has landed another one. The luxury developer that splashed onto the Manhattan scene during the pandemic with the hit condo 109 E. 79th St. has picked up a huge parcel in West Chelsea amid a flurry of activity for the firm. Legion, whose chief executive officer is Victor Sigoura, has purchased 540 W. 21st St., a nearly half-acre plot at 11th Avenue near the High Line, for $87.4 million, according to the city register. Originally made up of a row of warehouses – and in the 1990s, nightclubs – No. 540 was previously owned by Casco Development Corp., which put the site into bankruptcy protection last summer after the company failed to come up with enough financing to cover a planned 20-story condo tower that expected a $539 million sellout. Casco had paid $50 million for the property in 2014, when the firm purchased it from a Johnson & Johnson heir, so the firm appears to have nabbed a profit of 75% with the current deal, though bankruptcy court records suggest Casco has a long line of creditors. Deutsche Bank provided Legion with nearly $56 million in acquisition funding for the deal, which went into contract Dec. 28 and closed April 15, the register said. The corner site at the West Side Highway, where Casco did manage to pour a foundation, could accommodate a 141,000-square-foot residential building, according to Legion, which appears to also be considering a 172,000-square-foot commercial building, based on an emailed statement. The property "represents an exceptional opportunity to create a landmark project on one of the last remaining sites of its kind in New York's most dynamic and trafficked neighborhoods,” Sigoura said in the statement. The firm otherwise declined to comment. As multifamily development activity overall has declined, Legion has moved aggressively in a short time frame to build condos on the Upper East Side and in Gramercy, and now possibly in West Chelsea. For instance, the firm has secured permits to demolish six buildings at East 84th Street and Madison Avenue where Legion, working with equity partner Nahla Capital, has filed plans to put up an 18-story, 47-unit tower. Legion has also taken major steps to construct an 11-story condo at a multi-lot site on East 21st Street near Gramercy Park, including offering $45 million to snap up a modest co-op in the face of some opposition. The big bets come as demand for homes can appear tepid even as pricing remains strong. Manhattan had 9,827 sales of co-ops and condos in 2023, the lowest total in a decade except for 2020, when the pandemic essentially shut down markets for a few months, according to data from Douglas Elliman. But 2023’s median sale price of $1.15 million was the second-highest in the decade, behind only the $1.195 million median in 2022, Elliman said. Legion might also be heartened by the reception it got for 109 E. 79th St., its first Manhattan project. The condo near Park Avenue, which launched sales as Covid raged in September 2020, had sold all 31 of its units for a haul of $446 million by 2023. The last unit to sell, a four-bedroom penthouse, fetched $35 million. Casco, which is reportedly controlled by real estate investor Uri Chaitchik, could not be reached by press time.
  • Deals of the Day: April 18
    Leases City takes space near Penn Station Address: 31 Penn Plaza, ManhattanLandlord: Vanbarton GroupTenant: The City of New YorkLease size: 34,000 square feetLease length: 20 yearsAsset type: OfficeBrokers: CBRE’s Jeffrey Kilimnick represented the tenant. A JLL team led by Kyle Young, Matthew Astrachan, Mitchell Konsker and Thomas Swartz represented the landlord. Asset manager inks lease in Midtown Address: 340 Madison Ave., ManhattanLandlord: RXR Tenant: Northampton Capital PartnersLease size: 5,542 square feetLease length: Three yearsAsset type: OfficeBrokers: Cushman & Wakefield’s David Mainthow and Steven Langton represented the tenant. JLL’s Paul Glickman, Matt Astrachan, Cynthia Wasserberger, Dan Turkewitz and Harrison Potter represented the landlord, along with William Elder and Andrew Ackerman in-house. Korean barbecue joint opening in the Garment District Address: 463 Seventh Ave., ManhattanLandlord: The Arsenal Co.Tenant: SopoLease size: 3,156 square feetAsset type: RetailBrokers: Kassin Sabbagh Realty represented the tenant. Adams & Co.’s David Levy represented the landlord. Sales Condo developer picks up bankrupted parcel in West Chelsea  Address: 540 W. 21st St., ManhattanSeller: Casco Development Corp.Buyer: Legion Investment GroupSale price: $87.4 millionAsset type: Development site Please read more here . Financings Sabet Group refinances Gramercy Park apartment building Address: 332 E. 19th St., ManhattanOwner: Alfred SabetfardLender: GreystoneLoan amount: $9.4 millionAsset type: Multifamily
  • New York's first electric skyscraper promises luxury with lower emissions
    In a city that often feels stitched together by scaffolding, the development known as the Alloy Block — on a bustling street in downtown Brooklyn, across from the red-and-silver sign of the Brooklyn Academy of Music — long seemed like just another construction site. But there’s something unique about the project’s first phase, a 44-story tower that opened this spring. Surrounded by buildings that rely heavily on gas and oil for energy, 505 State Street is New York’s first all-electric skyscraper. Energy-efficient buildings like it will be crucial to the city’s push to cut its greenhouse gas emissions 80% over 2019 levels by 2050. Nationwide, the biggest single source of emissions is transportation, dominated by low-occupancy cars and trucks. But in New York, most people use mass transit instead of driving. That means buildings “are by far the largest source” of climate pollution in the city, said Christopher Halfnight, senior director of research and policy at the Urban Green Council, a nonprofit focused on energy efficiency in buildings. Gas- and oil-burning furnaces and water heaters are together responsible for 40% of New York City emissions, according to Halfnight. To try to shrink that, the City Council in 2021 passed a law prohibiting new buildings from burning fuels that emit a certain amount of carbon dioxide. The rules took effect this year for most new structures up to seven stories high. But for towers, they won’t kick in until the middle of 2027. With 505 State, the developer-slash-architect Alloy Development is just getting a head start. That wasn’t always the plan. When Alloy first conceived of the project in 2019, “the assumption was the base building heat would be on gas, and maybe the cooktops would be gas,” AJ Pires, the company’s president, said during a walk through the site on a blustery day this past winter. But two things happened. First, National Grid halted new gas connections in Brooklyn. It was part of a standoff between the utility and state regulators over a billion-dollar gas pipeline; the utility wanted it greenlit but regulators blocked a key permit, citing water-quality concerns. Around the same time, the New York City Council passed Local Law 97, requiring a 40% reduction in GHG emissions from certain buildings by 2030, relative to 2005 emissions. Though the law lacked clear guidance, the double whammy of gas connection woes and pending regulation led Pires and his colleagues to bet the city would over time incentivize electrification, or “penalize anything that was using a carbon-based fuel,” he said. “And that ended up being true.” So they decided to go electric. When team members asked what the complex would look like absent gas, the answers were fairly straightforward. “Instead of a gas boiler, an electric boiler; instead of a gas cooktop, it was an induction cooktop. And literally that was it,” said Pires, noting that they had to revise the design of the electrical room to allow for higher amperage, since more incoming electricity would be needed for a larger electrical load. Luckily, Alloy already had experience designing buildings that conserve energy, like One John Street, a mixed-use residential and commercial development in Dumbo that won an American Institute of Architects-New York award for its high level of sustainability. And they’d already designed the five structures that make up the Alloy Block with tight building envelopes to reduce the energy needed for heating and cooling. The bigger difficulty was getting the school building authorities on board. The project site includes the current home of Khalil Gibran International Academy, the first English-Arabic public school in the U.S. Its building is an amalgamation of several structures built between 1873 and 1889. “But they were obviously inefficient for today’s high schools,” said Jennifer Maldonado, chief executive of the Educational Construction Fund. The ECF builds public schools across New York state through public-private partnerships. Alloy Development’s plans called for refurbishing the old school for use by the community and apartment residents, and for moving Khalil Gibran into a new building at the center of the complex, along with a new 500-seat elementary school (P.S. 456). That building would meet the standards of Passive House — a design approach in which structures are so tightly constructed that they require very little energy to maintain comfortable interior temperatures. “We declared that it would be a Passive House school building, to sort of set up a pilot for the School Construction Authority to test out new ways of building schools,” said Pires. Whereas the Educational Construction Fund oversees the school’s construction, once it’s finished the School Construction Authority will take possession of the property and be responsible for maintenance and upkeep. Across the city, the SCA maintains more than 1,400 buildings serving 1.1 million students. It is one of the city’s largest builders, and as such is a key part of helping the city lower building emissions. But because it serves a specific population — youth — it also has specific and strict requirements. “There’s little things, like where banisters are put, where entryways are located, where security cameras are placed,” said Maldonado, noting that schools built for younger kids have railings and toilet bowls placed at lower heights than schools constructed for teens. Because this is a busy part of Brooklyn, windows were required to be triple-paned to isolate outside noises. The main challenge was meshing Passive House requirements around heating and cooling with the SCA’s rules for ventilation, cooling and air systems. Engineers, architects and construction managers collaborated to get them in sync, Maldonado said: “In terms of building new buildings, this could potentially be a model moving forward.” Like 505 State Street, the new school building will mark a first — the first Passive House public school in the city. It will open to students in September. Tenants of the residential tower, meanwhile, began moving in on April 5. Market rent ranges from $3,475 for a studio to $11,200 for a three-bedroom, although 45 of the 440 units were set aside as affordable housing. The model unit that Pires showed off looked like any apartment in a new luxury building, with sleek, modernist fixtures and tall windows of triple-pane glass, designed to both quiet the cityscape outdoors and maintain comfortable indoor temperatures. The glass cooktop is induction, which some chefs say is superior to gas for its responsiveness. Each unit is equipped with an Ecobee smart thermostat that not only lets residents schedule when the heating and cooling turn on and off, but can also sense when the apartment is unoccupied and revert to a lower energy setting. But much of what makes the building tick is outside of the tenant’s purview. Heating and cooling operate on what’s known as a water-source heat-pump system. “That means there’s a loop of cold water and a loop of hot water that go to the units that are in the apartments, that then blow air over the loops, and heat and cool the spaces,” said Pires. The water loops recover much of the energy used for warming and chilling, reducing how much the boiler has to work and thereby maximizing efficiency When Andrew Graham, Alloy Development’s asset manager, led us down to the basement, it was startlingly clean, and missing the tang in the air that usually accompanies gas boilers. 505 State Street has an electric resistance boiler instead. Pires noted that the building does have one exception to its all-electric credentials — a backup gas generator in case of emergency, which according to Pires was a building code requirement. The backup generator will kick in if the building loses power, to ensure that the elevator and the lights in the fire egresses work. “It’s not part of the daily operations of the building. It’s not being used. But it does provide life safety services if there’s a blackout,” said Pires. One common concern about electrified buildings is cost, both for developers and tenants. Halfnight pointed to recent research suggesting that for developers, all-electric new construction in New York City “is basically cost-neutral compared to a non-all-electric building.” For renters it’s more complex. Many New York apartment buildings control the heating and cooling centrally and fold the costs into rents rather than give tenants a discrete bill. This isn’t without downsides — unable to turn down the heat, New Yorkers often prop open windows in winter — but it also means costs are consistent. Tenants in the Alloy Block will be able to control their own heat, but they’ll also have to pay for it themselves. Pires acknowledged that Alloy — as the landlord — won’t really know the energy costs, relative to conventional heating and cooling, until the building is fully operational. “I’m curious to see what my electricity bill is gonna be like when we turn it on and use it,” he said. As more new buildings in the city go electric, “there’s work to be done to make sure that that transition happens in a way that is equitable and ensures that residents are not paying undue portions of utility bills,” said Halfnight of the Urban Green Council. Rapid changes in technology may allow more dramatic efficiency gains in the later phases of the project. While 505 State Street relies on an electric resistance boiler, the second residential tower will feature newer tech. “We are designing the second building now, and there’s air-source heat pumps that can produce enough hot water that weren’t available five years ago, when we were designing 505 State Street,” said Pires. Heat pumps are more energy efficient than electric resistance boilers. In its enthusiasm for going electric, Alloy Development stands in contrast to others in the real estate and construction sectors who’ve resisted New York’s green building push. In 2022 two Queens co-ops and an LLC that owns a building in Manhattan filed suit in New York Supreme Court to overturn Local Law 97. That case was dismissed late last year. Meanwhile, the state’s All-Electric Building Act — which mirrors the New York City law but with a slightly longer timeline for adoption — is being challenged in a federal district court. Fossil fuel companies, trade associations and unions whose members rely on the availability of gas appliances and systems for their livelihoods filed suit in October 2023. From Pires’s perspective, it’s where the tide is heading and he and his colleagues just got there a little early. Of the engineers who worked on 505 State Street, he said, “if you ask them now what they’re doing on any multifamily building, they’re all-electric — all of them. It’s super great to be able to use the project to promote that type of a future.”
  • Op-ed: Dishonest hospital billing strangles New York communities
    As a social justice advocate deeply invested in the well-being of my broader community, I find myself increasingly troubled by the pervasive impact of a deceptive hospital billing practice called “dishonest billing.” Dishonest billing is when a hospital secretly reclassifies a doctor’s office they own as a hospital setting in order to get more money. The disturbing trend of hospital conglomerates acquiring independent physician practices and subsequently hiking prices for routine doctor services is not merely an issue confined to the healthcare sector; it poses a direct threat to the health and wellbeing of individuals and small businesses, and the impact is exacerbated in vulnerable, underserved communities. As a justice-impacted citizen myself, I know how critical stable employment is to successful reentry efforts. Small businesses are the backbone of our great city and state – according to 2023 data from the U.S. Small Business Administration, New York’s 2.2 million small businesses make up 99.8 percent of all businesses in the state. Given this, one of the most immediate challenges dishonest billing poses is the financial strain it places on small businesses, limiting their ability to provide employees with the benefits they need. As hospital conglomerates flex their acquisition muscles, the prices for routine doctor services skyrocket, leaving small business owners grappling with the difficult decision of balancing employee health coverage and the growth of their enterprises. This dilemma is exacerbated by the fact that these exorbitant costs often force small businesses to choose between providing adequate healthcare benefits and investing in expansion, hiring, and innovation. Justice-impacted individuals cannot succeed without employment that provides quality, affordable healthcare. However, the surge in health care costs resulting from deceptive billing practices, like dishonest billing, puts small business employers in an untenable position. An annual survey by the Business Group on Health found that the average cost of health care per worker increased from $15,862 in 2022 to $17,200 in 2023. The reality of soaring medical expenses leaves small business owners with fewer resources to allocate towards essential business initiatives that directly impact individuals and families in the communities I serve. The consequence of these decisions reverberates beyond the confines of our business walls and extends into the wider community. Small businesses are the backbone of local economies, and when their growth is stunted, so too is the economic vitality of the communities they serve. Reduced expansion and hiring opportunities limit the potential for increased employment and economic prosperity, which, in turn, affects the overall quality of life for community members. Furthermore, dishonest billing contributes to a growing sense of disillusionment among Americans who feel caught in a relentless cycle of financial strain. For small business owners, this strain not only impedes their ability to provide competitive wages and benefits but also hinders their capacity to contribute to community development initiatives and support local charities or events. For individuals, this strain discourages people from seeking proactive medical care for routine services as well as mental health services. Policymakers must prioritize the creation of an environment that encourages competition and innovation, allowing smaller health care providers to operate independently and small businesses to offer affordable services to their employees. The New York State Assembly should enact legislation to ban dishonest billing and curb the unchecked power of hospital conglomerates, forcing them to justify and communicate any price increases for routine doctor services. Additionally, New Yorks’ federal representatives should support the Site-based Invoicing and Transparency Enhancement (SITE) Act, sponsored by Sen. Braun (R-IN) and Sen. Hassan (D-NH) which would provide hospital billing transparency for Medicare recipients. As a community, we must unite to demand change and challenge a health care system that places profit over people. By advocating for fair and transparent hospital billing practices, we can work towards a future where small businesses can grow, individuals are given a second chance to access employment with quality health care coverage, and communities can flourish. Dorian Bess is the program development and engagement officer with the Social Justice Network. 
  • SL Green to buy out partner in Midtown tower at ultra-low price
    SL Green made another deal to buy out a partner in a Midtown office building at a low price, then refinanced the mortgage at a surprisingly favorable rate, all of which helped the developer deliver solid first-quarter earnings and raise its forecast for all of 2024. SL Green agreed to buy out Canada Pension Plan Investment Board’s 45% stake in 10 E. 53rd St. for $7 million in cash and about $99 million in assumed debt. CPPIB invested $57 million in 2012. The plan recently sold its 29% stake in the office building at 360 Park Avenue South back to Boston Properties for one dollar. The 37-story 10 E. 53rd holds 385,000 square feet and is 98% occupied with tenants including Swarovski North America and the International Swaps and Derivatives Association. It was the last Manhattan office building owned by CPPIB, according to an annual filing. A decade ago the pension fund owned 1221 Sixth Ave., 600 Lexington Ave., and three others. The fund, which manages more than $400 billion in assets, declined to comment.   This was the second fire-sale transaction struck by SL Green in three months. In January it would buy out an Israeli partner’s 44% stake in 2 Herald Square for no cash. SL Green is the city’s largest commercial landlord with 32 million square feet mostly in Midtown. Its strategy of doubling down on Manhattan real estate, at what could turn out to be bargain prices, is winning rave reviews on Wall Street. “SLG on verge of breakout,” Piper Sandler analyst Alexander Goldfarb predicted in a client note Tuesday, meaning the stock is about to jump in value. Rents are rising in buildings near Grand Central Terminal and he said SL Green is getting around $140 per square foot at 245 Park Ave., considerably more than the prior owner, Chinese conglomerate HNA. Goldfarb added Thursday that SL Green refinanced $2.1 billion worth of debt last quarter at essentially no change in interest rates, a striking achievement when getting an office loan is still difficult. Only $40 million worth of loans were paid down, meaning banks were willing to lend almost as much as before to properties including 280 Park Ave., 100 Park Ave., and 10 E. 53rd. As part of the 280 Park refinancing, SL Green and partner Vornado Realty Trust paid off a $125 million mezzanine loan for just $62.5 million. BMO Capital Markets analyst John Kim described the terms as “surprisingly favorable” for SL Green. All the wheeling and dealing helped SL Green produce $3.07 a share in funds from operations last quarter, double the year-earlier period. The firm bumped up its FFO forecast by 23%, to as high as $7.65 a share for the year. Still, occupancy continued to erode last quarter, to 87.1%, from 88.7% at the end of 2023 and 88.9% a year earlier. The firm leased 634,000 square feet of space, 130,000 more than a year earlier. Rents were down 5.5%, but Goldfarb believes management will deliver on its target of up to 5% growth by year end. Evercore ISI’s Steve Sakwa said new vacancies exceeded new tenants by 120,000 square feet, resulting in “negative absorption.” SL Green shares were little changed in early trading Thursday, at about $50 each.

powered by RSS Just Better 1.4 plugin