The mortgage for the 44-story, 1.8-million-square-foot tower at 245 Park Ave. is a “loan of concern” because two high-paying tenants could soon leave for other first-class office buildings in Midtown, a ratings firm said yesterday.
SL Green acquired the building near Grand Central Terminal in 2022 from the bankrupt Chinese conglomerate HNA. The developer sold a 50% stake in the building last year to Japan’s Mori Trust for $1 billion and is using the proceeds to help renovate the lobbies, elevators, outdoor plaza, plus install a new golf lounge and rooftop restaurant.
That work is being done to keep tenants such as investment firm Ares Management, the building’s second-largest, whose lease for 210,000 square feet of space expires in two years. The lease for Dutch lender Rabobank, the fourth-largest with 110,000 square feet, also expires in two years. Together the companies lease 18% of the building’s space and pay about 30% of the rent, KBRA said in a report Thursday.
It’s never been more vital for landlords to hang onto top-paying tenants as demand for office space continues to weaken. Another major Manhattan office owner, Vornado Realty Trust CEO Steven Roth, drove that point home this week when he talked about Bloomberg LP agreeing to extend a massive 950,000 square-foot lease in his building at 731 Lexington Ave.
“Every developer in town tried to poach Bloomberg,” he said on a conference call. “And of course, they looked at every opportunity.”
Thanks to investment firms Stonepeak Partners and EQT Partners each signing on for nearly 80,000 square feet last year, 245 Park Ave was 81% leased at the end of 2023. That was higher than 73% a year earlier but lower than the pre-pandemic 91%, KBRA said. Its biggest tenant, Paris-based financial institution Societe Generale, leases 500,000 square feet through 2032.
245 Park carries $1.8 billion in mortgage and other debt. The mortgage carries a 3.7% interest rate and matures in 2027.
SL Green had no immediate comment.
A whopping 724 Metropolitan Transportation Authority workers raked in more than $100,000 in overtime pay last year, contributing to a $663 million, or 9%, jump in the MTA's payroll — the highest-ever level, according to a new report from Albany think tank Empire Center.
Government watchdogs warn that the troubling figures raise questions about staffing strategies at the state-run agency.
"It's always a worrying trend when you see it increasing — it shows the MTA staffing levels may be out of balance, and having more workers in some areas could be more important if there are staff shortages," Rachel Fauss, senior policy advisor for Reinvent Albany, told Crain's Thursday. "It's expensive and raises a lot of questions."
For the second year in a row, in 2023, Metro-North Railroad supervisor Harry Dobson pulled in the highest amount of overtime of any MTA employee. He collected $254,638 for working the extra hours — almost $25,000 more than he collected in 2022 — on top of his annual salary of $117,183, growing his overall take-home pay to $381,255.
Dobson was one of 13 MTA employees last year who were cut checks for more than $200,000 in overtime, including five at the Long Island Rail Road, three at both Metro-North and MTA Police, and one each at the NYC Transit Authority and MTA Bridges and Tunnels, according to the analysis, which was released on Wednesday.
The hefty paychecks follow a similar trend from the previous year. In 2022, 566 employees brought in at least $100,000 in overtime pay, up from 320 in 2021. Another eight workers collected $200,000 in overtime in 2022, rising from four in 2021, Crain's reported last year.
LIRR employees took home the highest per-worker amount in overtime last year, with an average of $26,028. Bridges and Tunnels ranked second with an average of $25,839 and MTA Police with an average of $21,221 in overtime — helping bring the total to $1.37 billion last year, or up 6% from 2022, the analysis reveals.
"There are concerns around certain employees more than others — it's the police who are particularly expensive," said Fauss.
The MTA's overall budget in real dollars, however, is down compared to prior years — even when taking into account labor agreements that have included wage hikes, according to Joana Flores, a spokeswoman for the MTA.
Flores also pointed to the fact that a large chunk of the record increases came from retroactive pay. Police officers, detectives, sergeants and lieutenants at the MTA Police Department, who are represented by the Police Benevolent Association, worked under a contract that expired in 2018 and was settled in 2022, meaning covered employees took home four years' worth of retroactive pay in 2023.
Also worth noting, Flores said, is the MTA's improved service.
"The MTA is providing a ton more service with record on-time performance, and overtime, which is authorized in accordance with collective bargaining agreements, is a strategic tool used to keep trains running and the system safe," said Flores. "That strategy has paid off -- crime is down and on-time performance has surged, with schedules that include a substantially higher number of trains."
Mayor Eric Adams in February again flooded the subway with more cops after an uptick in crime the month before. Relying on overtime spending, Adams assigned an additional 1,000 officers to the underground system, Crain's reported at the time. Gov. Kathy Hochul also recently decided to send hundreds of the National Guard into the city's subway to check bags for weapons — a move that proved to be particularly unpopular for raising concerns among would-be tourists that New York is unsafe.
One month after police fatally shot an Ozone Park teen in mental distress, lawmakers have renewed questions about the New York City Police Department’s ability to respond to people in the throes of a crisis.
City Councilmembers pressed NYPD leadership Thursday about the circumstances that led to the death of 19-year-old Win Rozario, who called 911 in an alleged attempt to get help for mental health issues in March.
The renewed attention on Rozario’s death comes a week after Attorney General Letitia James released officer-worn body camera footage showing that officers Matthew Cianfrocco and Salvatore Alongi entered the Rozario family home and shot the teen to death in less than three minutes – even as his mother attempted to shield him with her own body.
During a City Council budget hearing on Thursday, a number of lawmakers sought answers from NYPD leaders about why a mental health call so quickly led to a New Yorker’s death.
Councilmember Yusef Salaam, who represents East Harlem and chairs the public safety committee, said that it was evident that both officers responding to Rozario’s call exhibited “inexperience” in mental health crisis response, from the language they used to their lack of de-escalation tactics, and “to be quite frank, the disregard for the safety of those in that home that day.”
“It seems to me that NYPD officers may not be the best equipped to respond to those incidents themselves,” Salaam said, pointing to crisis response models that include behavioral health clinicians and social workers.
The NYPD allocates $2 million a year to the training of police officers for crisis intervention, said Terri Tobin, chief of interagency operations at the NYPD. The agency’s total proposed budget for the upcoming fiscal year is nearly $6 billion.
Councilmember Diana Ayala, who represents parts of the Bronx, East Harlem and the Upper East Side, said that is “not enough” to adequately prepare officers, and ultimately prevent harm to people with mental illnesses.
“This is not the first rodeo,” Ayala said. “This has happened to too many families.”
Crisis intervention training is a four-day program given to officers to prepare them for de-escalating mental health crises, Olufunmilola Obe, chief of training at the NYPD, said during the hearing. Only half of the officers on patrol have received that training, but the NYPD is implementing annual tactical sessions as a refresher, she said.
Obe added that one part of crisis intervention training depicts real-life scenarios played by NYPD actors. The shooting of Rozario could be presented as one of these scenarios, she said.
New York City also has co-response teams that consist of two law enforcement officials and a behavioral health clinician to respond to mental health crises. But the teams, formed in partnership with the city Health Department, do not respond to 911 calls – they are designed to respond either before or after a crisis occurs.
Currently there are no teams of officers and behavioral health clinicians that respond to 911 calls where there is a mental health emergency, Tobin said.
When pressed about whether the NYPD should offload mental health calls to other city agencies, Tobin responded that the police have worked with the Health Department, the Department of Homeless Services and New York City Health + Hospitals to start a 911 response team that included a social worker, but the funding for that effort was moved to the B-Heard program, which sends EMTs and social workers to mental health-related 911 calls instead of police officers. The expansion of the B-Heard program has since been put on pause due to fiscal constraints and does not currently operate in Rozario’s district.
As the B-Heard program remains on pause, calls for more police resources raise concerns for advocates. Ruth Lowenkron, director of disability justice at New York Lawyers for the Public Interest, said “it’s really distressing that the response to Win Rozario’s death would be to go backwards.”
“We have invested in training police officers,” Lowenkron said. “That doesn’t help if police officers are the wrong people to respond.”
Gov. Kathy Hochul has earmarked $35 million to fund three nonprofits’ supportive housing projects in the Bronx, she announced Thursday, to connect New Yorkers to medical, mental health and substance use care.
Supportive housing units provide vulnerable New Yorkers, such as those with substance use disorder or who experience homelessness, with case management services and refer them to physicians. Bronx-based Samaritan Daytop Village received $15 million in funding, Bronx-based Unique People Services received $10 million and WellLife Network, based in New Hyde Park, received $10 million.
Samaritan Daytop Village will use the funding to help construct a Highbridge building that will be home to 315 apartments, 190 of which will support people who were previously homeless.
Jerry Mascuch, Samaritan Daytop Village’s vice president of real estate, told Crain’s social workers and case managers will refer those tenants with mental health conditions to primary and psychiatric care. Workers will connect individuals with other organizations such as Brightpoint Health, Damian Family Care Centers, which can be found throughout the city, Housing Works and Mount Sinai, he added. There are also recovery coaches on staff to help tenants with substance use disorder. Funding for the supportive services is provided by the city's 15/15 supportive housing initiative.
Unique People Services will use the money to build a 111-unit facility at 1806 Anthony Ave. in the Mt. Hope neighborhood. Just under 70 of those units will support formerly homeless New Yorkers with mental health concerns, said Yvette Andre, the nonprofit’s chief executive.
Case managers will connect those tenants to hospitals and providers for psychiatric care, senior director of real estate and development Lisa Downing said, and help them manage their medication in an effort to help more people integrate back into their community after experiencing homelessness. The nonprofit operates hundreds of units of supportive housing around the city for tenants with different needs.
WellLife Network will use their share of the funds to construct similar units, according to Hochul’s office. WellLife currently helps more than 1,000 New Yorkers with mental illness and intellectual and developmental disabilities, including those who were formerly homeless, through supportive housing programs. Representatives did not respond to a request for comment.
The grants for the three organizations, which are administered through the state Office of Temporary and Disability Assistance, is part of a total of $86 million that the state has allocated for supportive, emergency and transitional housing. The remaining organizations that received chunks of money, which they earned through a competitive process, are all located upstate.
The $86 million is part of Hochul’s $25 billion housing plan that aims to create or preserve 100,000 homes across the state, including 10,000 with support services for vulnerable groups.
CLINICAL SERVICES: New York City’s Administration for Children’s Services awarded an $8 million contract to the Forest Hills-based nonprofit Child Center of New York on Thursday to train child protective staff how to assess families who have mental health, substance use or domestic violence concerns. The award is a one-year extension of the Child Center’s current contract for clinical consultation services until the city releases a new bid, a notice filed in the City Record shows.
NIH GRANT: The National Institutes of Health awarded nearly $40 million to Rutgers on Thursday to advance translational science, a field of medicine that transfers lab discoveries into clinical practice. The Rutgers Institute for Translational Medicine and Science will receive the federal funding over seven years and will use it to advance research around a range of areas including diagnostics and therapeutics, medical procedures and behavioral health interventions.
ABORTION IMPACTS: Fewer medical graduates are applying to residency programs in abortion-restrictive states in the two years since the U.S. Supreme Court overturned the federal right to abortion, according to new research from the American Association of Medical Colleges. Residency programs in states with abortion bans saw their applications decrease by an average 4.2%, higher than the 0.6% average decline in states without bans. The specialties most likely to see a drop in applications were ob-gyn, family medicine, internal medicine and emergency medicine.
OverT Bio, a Kips Bay-based biotechnology company focused on building gene therapies for solid tumors, has raised a $16 million seed round. The all-equity funding, announced Monday, was led by Artis Ventures and Wing VC.
OverT aims to use cell engineering to create better treatments for solid tumors, said Mat Legut, the firm’s co-founder and chief executive. The round will allow the company to continue developing two types of technology, make additional hires and move toward getting drug candidates into clinical trials by the end of 2026. OverT currently has 10 employees in New York and aims to have 14 by the end of the year, Legut added.
Solid tumors are currently considered difficult to treat because they’re made up of multiple types of cells, making it hard for drugs to target certain ones and eradicate the diseases, and their microenvironment suppresses the immune system. To that end, Legut’s co-founder Neville Sanjana, who is a pioneer of CRISPR gene editing technology, developed a DNA sequencing platform that screens more than 20,000 genes to see which are best-suited to make medications, Legut said. The platform is called OverTarget.
“Instead of going after some target from a textbook, we’re letting the biology lead the way and seeing, without any assumptions, what is the best possible gene that we can use,” he added.
Scientists at OverT have also developed a second platform, called OverTune, to help T cells in patients’ immune systems work with the therapies. This would help avoid the pitfalls of other therapies which kill cancer cells but also destroy healthy parts of the body, Legut said. He estimated that the seed round would give OverT enough runway to continue operations through the end of 2026 before fundraising again.
OverT was founded in 2022 and counts Alexandria Venture Investments and Civilization Ventures among its investors. It is located inside the Alexandria Center for Life Science.