Mayor Eric Adams and Council Speaker Adrienne Adams have maintained a publicly cordial relationship even as they battled over budget cuts and butted heads on legislation. But that decorum could dissolve in the coming months, as lawmakers prepare to campaign against a set of questions the mayor is putting before voters in November that could rewrite the city’s governing document to curb the City Council’s power.
“It is a dangerous attempt to shift power away from the people represented by the City Council to one single individual,” Speaker Adams said during a rally on Thursday, outside the Brooklyn Public Library’s central branch. “Do you want a king?”
She made the remarks minutes before the mayor’s handpicked 13-member Charter Revision Commission met inside to approve the proposed changes, which mirror Mayor Adams’ own grievances against the City Council by slowing the legislative process when it considers bills that affect public safety, and tightening rules about how the council studies the fiscal impact of new laws.
Speaker Adams described the charter commission’s ballot measures as an “attack on democracy,” a claim that was echoed by the other politicians and progressive groups that spoke out against the charter rewrite. The allusion to former President Donald Trump was intentional.
A City Council staffer who spoke on the condition of anonymity argued that the mayor had “laid the groundwork for people to compare him to Trump." (City Hall declined to comment on the provocative comparisons, and skeptics will note that none of the proposed revisions would radically change how the council does its work.)
Council members were clearly conscious of the charter revisions’ unusual placement on a presidential election-year ballot — a change from the most recent City Charter changes in 2019, which took place during a lower-turnout, odd-numbered election years and passed easily. Those 2019 amendments all passed with about three-quarters of the vote, including a measure that instituted ranked-choice voting.
This year, the presidential turnout will alter the landscape.
Adams kickstarted this year’s fast-moving effort just two months ago, in what lawmakers saw as a clear maneuver to block the City Council from adding its own November ballot measure, which would increase its oversight of mayoral appointments.
To persuade New Yorkers to reject the proposals, however, council leaders and their allies may need to mount a paid campaign.
Details of the potential opposition campaign remained unclear on Thursday. But Gale Brewer, a veteran Manhattan City Councilwoman, predicted that “the money will come.”
“And I think we can do it in a very short time period,” Brewer added. (Any campaign could not be paid for by the City Council itself, since it would amount to illegal electioneering; instead, it would need to be funded by outside groups or through elected officials' campaign accounts.)
In a last-minute twist on Thursday, the Charter Revision Commission revealed right before its meeting that it had removed a few of the more controversial measures announced earlier this week. A proposal forcing the council to wait about three months before voting on bills that affect the NYPD, Fire Department or Corrections Department has been shortened to require just a 30-day window. It no longer tasks those departments with filing their own “public safety impact statements” on proposed laws.
Carlo Scissura, the commission’s chair and head of the New York Building Congress, said Thursday that the changes came in response to feedback from the public “and others” in the short time since the proposals were released on Tuesday.
But the City Council showed no immediate signs of being mollified by the changes. Mayor Adams, who has consistently defended the charter rewrite as a sincere effort at improving government responsiveness, praised the final ballot measures as “thoughtful.”
Besides the contested items that affect the City Council, the commission also approved a few less controversial questions that would clarify the Sanitation Department’s street-cleaning authority, enshrine a new City Hall position focused on boosting minority- and women-owned businesses, ease permitting for film shoots and tweak how the city plans for costly capital projects.
Dominated by friends and allies of the mayor, the Charter Revision Commission held a dozen public hearings — many of which were sparsely attended. Although the mayor has come under fire from legislators, he got nothing but praise on Thursday from members of the commission he convened.
"I want to take the time and thank a man that really cares about the city, our very own Mayor Eric Adams,” commissioner Jackie Rowe-Adams, an anti-gun violence advocate, said at the start of the meeting. “He heard the voice of the people.”
Another one bites the dust.
Astoria's Neptune Diner is closing for good on Sunday after four decades in business.
The popular eatery on Astoria Boulevard will join the ghosts of New York institutions past after the property was recently sold to new owners, a member of the family-run diner, which leases the building, confirmed to Crain's.
"The neighborhood is coming in, taking pictures, having one last meal," said Sarando Katsihtis, whose father, Peter Katsihtis, has owned the diner with Peter's brother, George, for about 40 years.
The Katsihtis family had managed to stave off closure at least twice before: once in 2015, when rumors circulated online that the roughly, 3,200-square-foot restaurant would shutter amid a scourge of diner closures in the city that were chronicled in Crain's at the time; and again, in 2022, when a nearby rezoning application threatened its existence. Neptune will now officially serve its last meal; its menu runs the gamut from lamb chops to Belgian waffles.
A manager who answered the phone at the property, located at 3105 Astoria Blvd N., Thursday, and who identified himself only as Chris M., said the family had been about to renew their lease, but the property is in contract to be sold.
"Like everybody, I'm upset," he said.
An attorney for the seller, Nick Tsoromokos of the Astoria-based law firm Tsoromokos & Papadopoulos, told Crain's Thursday that his client — the Thomas Anagnostopoulos Family Trust, according to city records — is expected to close on the sale of the building within the next 45 days. He declined to name who is purchasing the building, the price paid or what the new owner has in store for the property, between 31st Street and 32nd streets. Tsoromokos's client, the Anagnostopoulos family, bought the building in 2018 for $10.3 million, records show.
A permit the family filed to the Department of Buildings in 2022, however, called for a 6-story, mixed-use building with 24 dwelling units and either commercial space or a community facility on the ground floor.
The Katsihtis family still runs two other Neptune Diner locations in the city — one in Crown Heights and another in Bayside, Queens. With the closure of the Astoria location, a third is now in the works for Nassau County on Long Island, according to the younger Katsihtis, who declined to provide more details.
Congestion pricing supporters filed a pair of lawsuits Thursday in Manhattan Supreme Court against Governor Kathy Hochul and state agencies including the Department of Transportation, claiming Hochul’s reversal on the tolls violates state law.
One lawsuit filed by civic group The City Club of New York, along with two Hell’s Kitchen residents, argues that Hochul lacks the legal authority to prevent the tolling program from taking effect under the 2019 state law that originally authorized its formation. Attorney Andrew Celli, Jr., who is representing the City Club, said Hochul is stalling the program through the “bureaucratic trick” of refusing to sign a document that should have been an administrative formality for the tolls to take effect.
“This is a case about democracy and executive overreach,” the lawsuit states. “The mandate to implement congestion pricing rests exclusively with the [MTA’s Triborough Bridge and Tunnel Authority]; the Governor has no say in the matter. That is the law.”
A second lawsuit filed by commuter advocates the Riders Alliance, the New York City Environmental Justice Alliance and the Sierra Club argues that Hochul’s decision disregards the Climate Leadership and Community Protection Act, a 2019 law that cites congestion pricing as a means of New York reducing its greenhouse gas emissions.
The lawsuit also contends that the indefinite pause violates the “green amendment” voters approved in 2021 to ensure New Yorkers have a state constitutional right to “clean air and water, and a healthful environment.” Ironically, lawsuits challenging the congestion pricing tolls have sought to use the green amendment to argue that the program will actually exacerbate air pollution in some areas by encouraging new traffic patterns.
“This really sets up what does this constitutional right protect, and again, if it doesn’t protect [congestion pricing] then it’s hard to know exactly what it would protect,” said Dror Ladin, an attorney representing advocates in the lawsuit.
Hochul spokeswoman Maggie Halley bashed the legal battles in a defiant statement that conflates the new lawsuits, which want Hochul to immediately implement the tolls, with several others filed by detractors who aim to prevent congestion pricing altogether.
“Get in line,” said Halley. “There are now 11 separate congestion pricing lawsuits filed by groups trying to weaponize the judicial system to score political points, but Governor Hochul remains focused on what matters: funding transit, reducing congestion, and protecting working New Yorkers.”
Congestion pricing would charge most motorists $15 to enter Manhattan south of 60th Street and is intended to improve the environment by taking pollution-belching cars off the road while raising some $15 billion for upgrades to the MTA’s subway, bus and commuter rail networks.
The MTA planned to begin charging drivers on June 30, but Hochul abruptly halted the plan on June 5. The new tolls, she said at the time, risked the city’s economic growth and would financially burden businesses and residents grappling with inflation.
Without a congestion pricing revenue replacement, the MTA has said it is preparing to scrap more than $16 billion worth of upgrades to the region’s mass transit and instead focus on essential upkeep to keep the systems functional.
The MTA’s board reluctantly voted on June 26 to pause the implementation of congestion pricing, formalizing Hochul’s postponement. The authority, which is also named in both lawsuits, declined to respond to the legal arguments.
Live in a sleek Chelsea condo tower with protected Hudson River views, and still be able to park your car just outside the door? This became possible when the Annabelle Selldorf-designed residence at 200 Eleventh Avenue was completed in 2010; the building quickly became known for this unique amenity, as well as its peerless city [...]
The post Here’s a $7.35M chance to live in the Annabelle Selldorf-designed Chelsea condo with an automated Sky Garage first appeared on 6sqft.
Southwest Airlines will begin offering assigned seats, ditching the free-for-all policy that has been a defining feature of the carrier for more than half a century.
The airline announced the seismic change to its business model Thursday alongside a new premium-class option and plans for redeye flights — shifts the company sees boosting sales and enhancing its appeal. While Southwest said earlier this year that it was reconsidering the seating policy, it’s now facing heightened pressure to revamp underperforming operations from activist investor Elliott Investment Management.
The strains on Southwest’s business were underscored in the company’s earnings report, also released Thursday. While profit last quarter beat expectations, its guidance for revenue and costs in the current period was worse than Wall Street’s estimates.
“We are taking urgent and deliberate steps to mitigate near-term revenue challenges and implement longer-term transformational initiatives,” Chief Executive Bob Jordan said in a statement. He pointed to the seating changes as pieces of “an ongoing and comprehensive upgrade” to passenger accommodations.
Its shares fell 4% as of 6:52 a.m. in New York following the release of financial results.
The airline has struggled this year with slowing growth, fewer-than-expected aircraft deliveries from Boeing and a series of flight-safety incidents that triggered a Federal Aviation Administration review of the carrier this week. Southwest’s stock has declined modestly this year even as the broader market has gained.
The latest steps represent a strategic shift for the carrier, which has steadfastly maintained open seating while other airlines raked in revenue by charging extra for more-desirable seats. That unfulfilled opportunity is a major tenet of Elliott’s campaign — that Southwest has refused to modernize its business to appeal to today’s travelers.
Adoption of premium seating could open the door for the carrier — which has long appealed primarily to leisure travelers — to potentially offer business- and first-class sections in the future.
Southwest still won’t charge for checked bags. The “bags fly free” policy has been a focal point of Southwest promotions and advertisements, and some analysts have speculated charging for bags could cost the airline customers. It’s the only domestic carrier that doesn’t impose fees to check two.
Southwest will begin offering assigned seats and premium seating with more legroom next year. It will start flying overnight, cross-country routes on Feb. 13. Those flights are already on sale from Las Vegas, Los Angeles and Phoenix to Baltimore/Washington International Thurgood Marshall Airport; Las Vegas to Orlando; and Los Angeles to Nashville.
Southwest didn’t provide specifics on potential revenue from the changes, which also include a redesign of its boarding process. All seats will be assigned, and about one-third will be premium class, but there won’t be a separate cabin for premium offerings. Changes to the onboard layout will require FAA approval.
The airline said it opted to adopt the updates after its own research found that 80% of current customers and 86% of potential passengers prefer an assigned seat, particularly during the larger number of longer flights operated by Southwest now.
Southwest Chief Commercial Officer Ryan Green will be moved to a new position to oversee the transformation and other commercial initiatives.
The carrier has studied various seating options in the past, but always rejected a shift to assigned spots, saying passengers didn’t support such a move.
While Southwest has long stood by some of its central policies, it hasn’t been entirely resistant to change. It began routes to nearby international destinations and, more recently, added flights to Hawaii. The airline previously revamped its boarding system, offered early boarding options at an additional cost and developed a corporate booking tool to win more business travelers.
Southwest said in April that it had begun evaluating premium products and others changes, well before Elliott disclosed a $1.9 billion stake last month. But until Thursday, the airline said it wouldn’t disclose any details until an investor meeting slated for September.
Elliott wants to oust Jordan and Chairman Gary Kelly for poor execution and a “stubborn unwillingness to evolve the company’s strategy.” They are “not up to the task of modernizing Southwest,” the activist has said.
Southwest earlier this month named a veteran airline industry executive to its board to help address other concerns raised by Elliott. The carrier also adopted a “poison pill” shareholder rights plan to discourage the activist from gaining a larger share.
In addition to policy changes, Southwest said Thursday that it earned an adjusted profit of 58 cents a share in the second quarter. That topped the 51-cent average of analyst estimates compiled by Bloomberg. Operating revenue of $7.4 billion also beat expectations.
Still, the carrier acknowledged challenges from an industrywide capacity glut. Domestic-focused US airlines have had to slash fares to fill planes after the industry added too much capacity in anticipation of a record summer travel season. The discounting has cut into revenue and profit expectations at even the largest US airlines.
Southwest said it’s made changes to better match the supply of seats with demand in the remaining summer, fall and early winter schedules. But fare management issues that reduced unit revenue in the first three months will extend into this quarter.
The recent performance “fell short of what we believe we are capable of delivering,” Jordan said.
Its outlook for key sales and cost measures were worse than Wall Street estimates. Third-quarter revenue for each seat flown a mile, a gauge of demand and fares, will be flat to down 2% year over year, the airline said, while analysts were expecting growth of 4.9%. Non-fuel costs on the same basis will increase as much as 13%, compared with analysts’ estimates for a 6.8% rise.
The New York-based parent of Flagstar Bank has sold off its mortgage servicing business.
Flagstar, long a mortgage heavyweight and headquartered in Troy prior to being acquired by New York Community Bank in late 2022, announced Thursday morning that it had sold its mortgage servicing and third-party mortgage origination business to Mr. Cooper Group in a deal valued at approximately $1.4 billion.
The deal marks the second sale of mortgage loans executed by NYCB in less than a week as executives there say they seek to rebalance the bank and focus on core businesses following significant turmoil in the early part of this year.
The price in the Mr. Cooper deal represents a "premium" based on Flagstar's mortgage business being "well respected throughout the industry," NYCB Chief Executive Joseph Otting said in the release.
"While the mortgage servicing business has made significant contributions to the Bank, we also recognize the inherent financial and operational risk in a volatile interest rate environment, along with increased regulatory oversight for such businesses," Otting said. "We are focused on transforming the Bank into a leading, relationship-focused regional bank. Consistent with that strategy, we will continue to provide residential mortgage products to the Bank's retail and private wealth customers."
During a call with investors Thursday morning, Otting told analysts that the bank has a longstanding relationship with Mr. Cooper and views the deal as "a good and easy transition of our important assets into the company.”
On July 22, NYCB announced the completed sale of approximately $5.9 billion in mortgage warehouse loans to JPMorgan Chase, a deal that "adds a significant amount of liquidity" to the bank, according to Otting.
“Both of these sales are important milestones for us as we look to simplify our business model and strengthen our balance sheet," Otting told analysts. "Collectively, these two transactions we feel bolster our liquidity and increase our capital ratios."
It was not immediately clear how many employees will be affected by the Mr. Cooper deal. Flagstar reported laying off 60 employees in Jackson in mid-June, but additional details on those layoffs were not immediately available Thursday morning.
"This was not a decision we took lightly and I want to thank our teammates in mortgage servicing and third-party mortgage originations and all of the support teams who deliver high-quality service day-in and day-out," Otting said in the release. "Mr. Cooper is a major player in the mortgage origination and servicing business. It was important to us that we commit to a buyer with strong mortgage expertise and reputation, and a shared commitment to customer service excellence and employee values."
Mr. Cooper, based in the Dallas area, last year also acquired the remaining business of Ann Arbor-based mortgage lender Home Point Financial.
“We have the operational capacity to onboard Flagstar’s customers with a smooth and positive experience, which will be our top priority. We also look forward to welcoming Flagstar team members to the Mr. Cooper family," Mr. Cooper Chairman and CEO Jay Bray said in the release Thursday. "We have long respected Flagstar as a mortgage servicer, and we feel very closely aligned with their cultural values.”
A bank on the rebound
The deal to sell mortgage servicing rights to Mr. Cooper coincided with NYCB announcing its second quarter earnings. NYCB has in recent months sought to overhaul its leadership team and board ranks following a near collapse in early 2024 as investors and clients worried about increasing provisions for credit losses.
The earnings report on Thursday showed losses last quarter were about $323 million compared to a $327 million loss in the first quarter.
Still, the bank increased its reserves for potentially bad loans from $315 million at the end of the first quarter to $390 million, largely due to "office loans, and the continuing impact of market conditions on the multi-family portfolio as higher interest rates and inflationary impacts persist," according to the earnings report.
Investors, however, were nonplussed as NYCB stock was trading down more than 10% in early morning market activity.
This article originally appeared in Crain's Detroit Business.
The state Department of Health has approved Beth Israel’s closure plan with some conditions.
The state says Mount Sinai must operate a new urgent care center nearby the site of the Lower East Side hospital for at least three months and develop an agreement with New York City Health + Hospitals to invest in an expansion of Bellevue Hospital’s emergency room and psychiatric emergency department, according to Erin Clary, a spokeswoman for the Health Department.
The health system has pushed to close Beth Israel for the last 10 months because of financial challenges it says are too vast to overcome. The hospital has reportedly faced cash flow deficits that left it with just $29 million in cash reserves by the end of 2023. The hospital loses $18 million per month, according to the submitted closure plan.
The state approval, first reported by Politico, comes shortly after Beth Israel was forced to stay open past its July 12 deadline, awaiting the green light. The hospital still faces an ongoing lawsuit from community members blocking the closure that must play out in court.
Mount Sinai has now asked the state court for an expedited review of that lawsuit so it can officially close Beth Israel, according to Loren Riegelhaupt, an outside communications specialist who represents the health system. There’s no new closure date set yet.
The Health Department’s approval of the Beth Israel closure was based on the agency’s assessment of access to hospital services in Lower Manhattan, Clary said. The conditions required by the Health Department are an effort to prevent patients from experiencing lapses in care.
Mount Sinai is required to develop agreements with other hospitals in the area to ensure that patients who need to be admitted to a hospital can get a bed, specifically those coming from its behavioral health center at 45 Rivington St. The health system opened the $140 million center last year, offering both outpatient mental health services and up to 28-day stays in a psychiatric bed to meet the needs of patients experiencing mental health crises.
The Health Department has also required Mount Sinai to ensure that its behavioral health center is fully staffed – a safeguard to make sure that psychiatric patients who need to be transferred from other hospitals can get a bed.
Mount Sinai is working to fulfill the requirements to close Beth Israel, some of which were a part of the closure plan it submitted. Mount Sinai will open a new 24/7 urgent care clinic two blocks away from the site of Beth Israel on 14th Street, and has agreed to operate an additional ambulance downtown to meet demand in emergency medical transportation, Riegelhaupt said.
Emergency visits at Beth Israel have trended down since April 2022. Although staffed beds have remained constant, the number of occupied emergency room beds has declined from 50% to 17% during that time period, according to the Health Department.
The new urgent care center and expanded emergency room at Bellevue are expected to accept roughly half of the patients who were treated at Beth Israel’s ED but never admitted to the hospital, the agency said. The remaining patients will need to be absorbed by emergency departments at surrounding facilities, which are estimated to see an up to 6% increase in the maximum number of daily visits when the hospital closes.
New York City Comptroller Brad Lander and a coalition of local advocacy groups and lawyers filed two lawsuits against Gov. Kathy Hochul, claiming she didn’t have the legal authority to pause the tolling program last month, as reported by Gothamist. The program was originally scheduled to begin on June 30 but was delayed last minute [...]
The post Hochul is sued over congestion pricing pause first appeared on 6sqft.