Monday, June 1, 2020

Sarah McNally: NYC Needs Legislation That Will Encourage Landlords To Keep Their Storefront Tenants

Credit...

Calla Kessler/The New York Times
A few years ago the empty storefronts on the upper east side of Manhattan became noticeably widespread. First avenue, Upper East Side? Looks like the depression, especially now.

COVID-19 has exacerbated this problem. What kind of city will we have when - or if - this pandemic ends? It's not going to be good, with small storefront owners pushed into bankruptcy by landlords whose incentive to keep tenants at high rents remains in force.

Somebody do something.

Betsy Combier, betsy.combier@gmail.com
Editor, ADVOCATZ.com
Editor, NYC Rubber Room Reporter
Editor, Parentadvocates.org
Editor, New York Court Corruption
Editor, National Public Voice
Editor, NYC Public Voice
Editor, Inside 3020-a Teacher Trials 

What Could Kill My New York Bookstores?
It won’t be Amazon or the coronavirus. It will be artificially high rents.

By Sarah McNally, NY TIMES, May 29, 2020
Ms. McNally is the owner of McNally Jackson Books and Goods for the Study

Every weekday I drive to my four bookstores, pick up our customers’ orders, wedge them into the back of my car and take them to the Cooper Station post office. My route takes me to Williamsburg to Downtown Brooklyn to the South Street Seaport, and ends at my original store in NoLIta.

I sweep the deserted sidewalks — if you own a shop, you’re responsible for the sidewalk — and I wonder how many of the stores and restaurants around mine will be able to reopen and pay the debts they accrued during the lockdown.

So many closed long before the pandemic. I miss my old neighbors in NoLIta, the restaurants and their chefs, the bodega that magically had everything I needed, like Mary Poppins’s carpetbag, the Buddhist monk from the Tibetan store who gave me cardamom for tea, the bar where I had the most beautiful date of my life.

How many more distinctive stores and restaurants can our city lose before we find that we are no longer New York, but a dead-faced simulacrum?

Years before Covid, many city blocks had been reduced to a few overlit national chains — Dunkin’ Donuts, Metro by T-Mobile, Subway, Starbucks — and a whole lot of dark, depressing vacancies. Almost every business owner I spoke to or read about seemed to give the same reason: soaring rents. In some neighborhoods, even as vacancies are increasing, rent keeps rising.

When you think about it, this violates everything we think we know about free markets. From 2007 to 2017, vacant retail space roughly doubled, according to a report by the New York City Comptroller’s Office. Logic would dictate that rents would drop — if no one wants your space, wouldn’t you lower the rent? But in fact, in Manhattan, retail rents rose by 22 percent in that period, according to the report.

In 2018, even the national chains began closing more spaces than they opened. Rents have come down somewhat in a few heavy shopping arteries, but on the streets where I was looking to open stores, rents didn’t seem to budge. In 2019, rent for my NoLIta store jumped from $360,000 a year to $650,000.

You might think that small businesses in New York are simply natural victims of a Darwinian system that favors chains and e-commerce. Amazon makes a good villain. Every time I see a postal worker pushing a dolly full of boxes, I search for a single non-Amazon package — just one to break the feeling that I’m trapped in an Amazon-branded virtual reality. I am usually disappointed.

But this hardly explains our rising rents. If New Yorkers insist on shopping online, then there should be less demand for New York retail space, and it should become less valuable, not more. It is natural for landlords to want to charge as much as they can, but in a rational world, with citywide vacancy rates estimated at about 6 percent to 20 percent, you’d think landlords would prefer some rent to no rent. But when landlords have sufficient income from residential rent, they can afford to leave stores vacant.

Every part of New York has different issues with real estate, but in the neighborhoods I know, landlords are holding out for higher rents, or they feel they can’t lower our rents because of the terms of their mortgages. That makes us victims of the financial industry, not of the free market.

A lender provides a commercial mortgage based on a building’s appraised value, which is based on its rent roll. If landlords lower rent, their buildings become less valuable. Moreover, if a landlord owns many buildings in the same area, and she lowers the rent on even just a store or two, her entire portfolio loses value in the eyes of the bank, because future appraisals will assume a lower market rental rate. That’s why an empty store that theoretically commands a high rent can be a safer option for a landlord than a reliable tenant paying a reasonable rent.

We don’t know what the vacancy rate will be when the shutdown is finally over, but without a plan to help us, it will almost certainly be catastrophic. In France, the government offered to suspend rent for small businesses closed during the lockdown, so that when the country reopened, stores and restaurants could, too.

In New York, by contrast, the meter is ticking every day. When the shutdown is over, small-business owners like me will be expected to pay our back rent, despite months of lost revenue. And our excessively high rents will remain in place even though fewer customers may be allowed in our shops, fewer diners in our restaurants, fewer clients in our salons.

This is a systemic problem, but there has been no systemic solution offered. At the start of the pandemic, state legislators proposed suspending commercial rents for small businesses that have suffered financial losses for 90 days, but the bill is languishing in committee. The City Council passed a law that will keep landlords from enforcing personal guarantees on leases if the tenant has defaulted on rent because of the pandemic. That means my landlord can’t seize my personal assets, like my car, if I were to default. The law is a lifesaver for people when their businesses sink, but it does nothing to keep us afloat.

The federal government has allocated money for small businesses, but we have to spend most of the money immediately on wages, or find a way to pay it back. That money is important for workers across the country. Unfortunately, it won’t help businesses in New York pay back all those months of rent that we will owe.

During the pandemic, as before, the killer of New York storefront business will be rent. Even now, facing a post-Covid twilight, too many landlords would rather have vacant stores than retain paying tenants by helping them through these months of closure. We need intervention to encourage landlords to keep their storefront tenants.

Thursday, May 28, 2020

Mayor de Blasio Wants Trump Bailout After Using NYC Public Money Pots For His Own Purposes

Bill de Blasio
Andrew Burton/Getty Images
NYC Mayor de Blasio has angered New Yorkers with his spending on his wife and other people who do not contribute much to the City in return. We don't want to get into his choice for Department of Education Chancellor, Richard Carranza, but we have to.

Now our Mayor wants to borrow $7 billion from the Federal government.

Can someone stop this train?




‘Deception And Fraud’: HUD Official Accuses Mayor De Blasio And NYCHA Of Wasting Millions In Public Housing Funds

De Blasio Donor Says He Steered Thousands in Bribes to Mayor’s Campaigns




De Blasio and ‘co-mayor’ wife have wasted $1.8B of taxpayer money

Betsy Combier

With no word from Washington, de Blasio eyes drastic budget maneuver


New York City’s finances, a deep well that Mayor Bill de Blasio has tapped to expand the municipal budget, are in crisis: The pending shortfall has surged $1.6 billion over the past month alone, prompting the mayor to seek a power so unusual, it was barred after the city’s 1970s fiscal crisis.

De Blasio’s declaration Wednesday that he wants the option to borrow his way out of the hole — barring a multi-billion dollar coronavirus relief package from the Trump administration — led to a clarion call from fiscal watchdogs for more austerity first.

Scott Stringer, the Democratic city comptroller running to succeed de Blasio, estimated that borrowing to cover $7 billion in expenses now would cost the city nearly $11 billion over the next two decades. He seconded the push for federal funding, but sounded the alarm over City Hall’s extraordinary request.

“While it's too soon to rule out any specific budget action, New Yorkers should know that under the mayor’s proposal our children could be paying over $500 million a year for the next 20 years,” Stringer said. “I urge extreme caution.”

Others were even more dire.

“The city has not come close to what it needs to do to control spending to get its fiscal house in order,” Andrew Rein, head of the Citizens Budget Commission, said in an interview. “Borrowing should be near or at the bottom of any list and we are not close to there yet.”

But other resolutions are anathema to de Blasio, who entered the 2013 mayor’s race with a call to tax the wealthiest New Yorkers to pay for universal pre-kindergarten. (He won the policy, not the tax, after taking office.)

Instead, the mayor is hoping to get through this crisis without substantive budget cuts. He’s bristled at calls to reduce city services or delay raises workers are guaranteed through labor contracts. Layoffs and furloughs are a last resort, he’s said. He’s even skipped his routine demand that Albany raise taxes on top earners and high-end home sales — targets he has eyed virtually every year of his mayoralty.

City officials said he is concerned about the potential exodus of millionaires who keep the economic engines humming, and realizes some New Yorkers may not be able to afford current property tax bills, let alone higher ones.

In similarly dire financial straits de Blasio's predecessor, Mike Bloomberg, relied on politically unpopular tax increases: He raised property taxes 18 percent following the Sept. 11 terror attacks and pushed for a 7 percent increase after the financial collapse years later. He repeatedly cut social services and tried to close fire houses and elderly centers. He even wanted to get rid of the office of public advocate, which later served as a mayoral launching pad for de Blasio. And during his final term in office, Bloomberg balked at the demands of municipal unions, leaving the entire workforce without contracts.

De Blasio has an entirely different attitude toward governing. He fought Bloomberg’s cuts when he was in the City Council, barely slashed anything after taking over City Hall in 2014 and has in fact increased the budget some $20 billion during his six years in office.

So instead, he is pinning his hopes on Washington replenishing the city’s coffers while seeking borrowing authority from Albany — in each case leaving the city's fate in the hands of a political adversary. (Gov. Andrew Cuomo threw cold water on the idea Tuesday.)

“We are now $9 billion in the hole between the current fiscal year and the one that begins July 1,” de Blasio said Wednesday. “We project unfortunately beyond next fiscal year additional lost revenue that will hold us back further. There is literally no way that we can solve this problem without federal help or without having to make very, very painful choices that will affect the quality of life in this city.”

De Blasio projected a $7.4 billion revenue shortfall when he released his budget in April, largely due to a loss of personal income taxes as the job market faltered.

City officials attributed the additional $1.6 billion the mayor announced on Wednesday to the grim state New York finds itself in after two months under assault by Covid-19: Even lower sales and real estate taxes than budget officials initially forecast.

The city routinely takes on debt to pay for long-term construction and infrastructure projects, but it is not allowed to borrow for its annual operating budget — a prohibition dating back to the financial crisis of the 1970s. New York City had been borrowing money to stay afloat then borrowing more to pay off prior loans. In the spring of 1975 the banks cut off the city's cash supply.

“The city’s leading bankers who had been its principal lenders came to see the mayor and the governor and told them both that nobody would lend the city a nickel under any terms,” Eugene Keilin, who was general counsel for the budget office at the time, said in a recent panel discussion. “The amount of the borrowing had gotten so high, and the explanations for it so vague that the city was not trusted.”

The administration is still paying off some of those loans today.

Dean Fuleihan, first deputy mayor, acknowledged the rarity of de Blasio's latest request.

“You would only want to do this kind of borrowing in extraordinary times, and that’s exactly what this is,” he said in an interview Wednesday.

De Blasio, during his daily briefing, pointed out that Bloomberg was able to secure a similar ability from Albany after Sept. 11, and Cuomo has gone in the same direction to cope with the state’s finances amid the coronavirus crisis.

“It's not something we want to use or intend to use in the first instance, but it's something we need as a last resort if our federal government isn't there for us,” he said. “If we're going to maintain basic services here in this city, we need some capacity to borrow.”

Nearly 1 million city residents have already filed for unemployment, Broadway hasn’t put on a show in months and stores and restaurants across the five boroughs remain mostly shuttered.

And while officials in Washington, D.C. fight over an aid package for local governments, the de Blasio administration has about one month to devise a balanced spending plan for the start of the new fiscal year on July 1.

“Their basic strategy is to just borrow and beg their way to next January and hope for a new [federal] administration,” said Nicole Gelinas, a senior fellow at the fiscally conservative Manhattan Institute. “But in the long-term, and with the change of the city’s economic well-being, that is not going to get you very far.”

Meanwhile, City Hall is set to pay $1.5 billion in retroactive raises to part of its workforce come October, Gelinas said. She has long criticized the mayor’s practice of allocating future funds for past work, something he did in settling the contracts Bloomberg had allowed to lapse.

Instead of asking for blanket revenue replacement from a divided federal government, Gelinas and the Citizens Budget Commission suggested that the city further cut its expenses.

But the mayor has never embraced budget cuts.

Year after year, he’s asked agencies to voluntarily come up with savings plans, arguing that forced reductions in their spending were a hallmark of the austere Bloomberg years he sought to reverse.

Only a small portion of de Blasio's recent $2.7 billion savings plan comes from recurring cuts. The largest programmatic loss, an annual summer jobs program for teens, will be back in next year’s budget provided the coronavirus is contained.

And while the city clocked a savings of $50 million on snow removal — since it barely snowed this winter — there is no guarantee that next year’s weather will be as mild.

Only once has the administration tasked its agencies with a mandatory belt-tightening exercise called a "program to eliminate the gap."

“It involves going through carefully and squeezing out the cellulite that builds up in every department,” Alair Townsend, the budget director for former mayor Ed Koch, said in an interview. “If you don’t force it out, it just grows and grows. The mayor never wanted a PEG program. He thought it sounded like cutting services, and cutting services was not progressive.”

Tuesday, May 26, 2020

Seven Members of the FDNY’s Emergency Medical Services Are Being Honored As Part of “EMS Week”


Kudos to our EMS workers for their amazing work during the pandemic!

Betsy Combier
Editor, ADVOCATZ.com
Editor, ADVOCATZ blog
Editor, Parentadvocates.org
Editor, New York Court Corruption
Editor, NYC Rubber Room Reporter
Editor, NYC Public Voice
Editor, National Public Voice
Editor, Inside 3020-a Teacher Trials 

Posters on the FDNY Museum building honor the heroic way EMS workers have responded to the COVID-19 pandemic.
A Tall ‘EMS Week’ Salute To NYC’s Lifesavers
LABOR PRESS, May 21, 2020
By Naeisha Rose
New York, NY – Seven members of the FDNY’s Emergency Medical Services are being honored as part of “EMS Week” — an initiative to promote public safety among New Yorkers and highlight the lifesaving work of the 4,400 EMS workers.

The COVID-19 pandemic has made celebrating these hardworking individuals even more important this year, as they deal with a huge spike in emergencies over last year.

Pre-pandemic, EMS workers responded to approximately 4,000 emergencies daily, according to the FDNY. At the height of the pandemic — March 30th —they responded to 6,500 calls.

“EMS Week is a time each year when we stop to acknowledge and celebrate the tremendous work of our EMTs and Paramedics,” said Fire Commissioner Daniel A. Nigro. “COVID-19 has forced us to postpone or cancel our events this year, but I think every New Yorker – and those around the world – have witnessed the heroic efforts of our members during this pandemic and realized why they are rightfully known as the best in our city.”

This year’s honorees include FDNY Paramedics Xiaotian Bao (Station 8, Manhattan), Juan Gavilanes (Station 31, Brooklyn) and Kimberly Laychock (Division 5, Staten Island); FDNY EMT’s Michael Waternberg (Station 4, Manhattan), Jasmine Miranda (Station 46, Queens) and David Tout-Puissant (Station 8, Manhattan), as well as Captain Lorena Concepcion-Martinez (Station 55, Bronx).

Capt. Concepcion-Martinez, an 18-year veteran less than two years into her new role as captain, is taking the job all in stride despite the new difficulties presented by the pandemic. She was also thrilled by the acknowledgment.

“I’m ecstatic that I was able to represent the EMS and my station,” Capt. Concepcion-Martinez said. “It’s been an absolute honor.”

Capt. Concepcion-Martinez credits her leadership classes, her preparedness and her open personality for helping her manage her team, which consists of 85 members.

“It’s been incredibly difficult to see my members overwhelmed with cardiac arrests — it’s taken a toll on them. But my key thing is to keep the morale going in the station and making sure that we have everything we need and being there to help them psychologically,” the captain added.

The FDNY has a Counseling Service Unit and offers peer-to-peer counselors for its retirees and current members.

“Some of them haven’t been home to see their families, so my key thing was to make sure that they stayed healthy mentally and physically,” Capt. Concepcion-Martinez continued. “I have an open-door policy so that they know they can come to me, ask questions and get whatever they needed.”

Capt. Concepcion-Martinez went to George Washington High School (1997) in Uptown Manhattan, which taught first responder classes. That experience sparked her interest in serving the community. After graduating, she immediately became a cadet at her current station.

Capt. Concepcion-Martinez grew up in Washington Heights and currently lives in Bayshore, L.I., another area hit hard by the pandemic.

“The social distancing and the mask is all relatively new to the people, but we have the luxury most people in the city don’t have — we live in homes and have backyards that they can stretch out and get some sun,” the captain said. “People in other boroughs are cooped up in small apartments, so I’m blessed that I have that.”

Capt. Concepcion-Martinez is also married to a firefighter. For a month, their three daughters, ages 15, 3 and 2, all lived with her mother in Manhattan.

“We didn’t want them to get sick,” said the mom who misses their hugs. “We knew it was a reality if one of us got sick, but so far we’ve been lucky.”

In the few moments that she gets downtime, Capt. Concepcion-Martinez streams movies, draws, and listens to salsa and Reggaeton. She’s also been learning to cook new recipes with her husband to decompress during the pandemic.

“I’m looking forward to things getting back to normal and doing a big barbecue for friends and family,” Capt. Concepcion-Martinez said.

She is also very proud of Station 55.

“If a member went out sick another member stepped up,” said Capt. Concepcion-Martinez. “They worked to make sure that the community had ambulances that they needed.”

Commissioner Nigro is just as proud of Capt. Concepcion-Martinez and this year’s fellow honorees.

“The training, professionalism, and unwavering dedication to care for their patients have been on display each and every day as they’ve shouldered the highest call volume in our Department’s history,” said Comm. Nigro. “I’m incredibly proud of their remarkable service.”

Concepcion-Martinez and the other honorees are featured on an EMS Week poster. Memorabilia from the NYC EMS Museum in Fort Totten will also be sent out through the FDNY’s social media. Images from this year’s poster will also be displayed on the exterior of the NYC Fire Museum, located at 278 Spring Street in Manhattan.

“Though the museum is currently closed, New Yorkers can share their gratitude with members of FDNY EMS for their extraordinary efforts during the COVID-19 crisis, by submitting notes, videos, and cards, or other objects through the FDNY Museum’s “Unmasking Our Heroes” project.

Monday, May 18, 2020

Class Action Lawsuit Brought by Parents of St. Bernard’s School Updated Today to Include New Charges of Financial Crimes by Board of Trustees

Credit...Brittainy Newman/The New York Times

On March 18, 2020 I posted the story of parents at St. Bernard's School Filing a class action lawsuit against the Board of Trustees after the Headmaster was fired.

UPDATE: new charges of financial crimes have been filed against the Board of Trustees 

 
Class Action Lawsuit Brought by Parents of St. Bernard’s School Updated Today to Include New Charges of Financial Crimes by Board of Trustees
 
Complaints against school board members allege obstruction of justice in NYAG investigation, securities violations and arbitrary firing of Headmaster
 
New York, NY, May 18, 2020 — Today, a group of concerned parents of St. Bernard’s School has updated a class action lawsuit, originally filed in March, against the members of the Executive Committee of the school’s Board of Trustees over the removal of the school’s headmaster of 35 years. In the new complaint, the parents detail how a small group of board members systematically sought to financially enrich themselves with improper, self-dealing investments of school funds, and then sought to cover up their misconduct by hiring teams of lawyers and public relations spin doctors to mislead other parents and the school community. These board members also repeatedly pursued a personal agenda to advance the interests of their own children at the expense of the larger student body.

Attorneys for the parents have filed complaints with the New York Attorney General’s Office, asking for a thorough and complete investigation of potential financial crimes.

New allegations against members of the school board in today’s amended lawsuit include:

 
—Alleged securities violations involving routine manipulation of St. Bernard’s investment portfolio by a Trustee and Chair of the school’s Investment Committee based on material, non-public inside information about a publicly traded firm listed on the New York Stock Exchange.

—Alleged violations of New York’s General Business Law through solicitation of donations from consumers — the school parents — for the purposes of educational, need-based scholarships and diversity efforts, without disclosing that these funds would actually go toward self-interested transactions benefiting Trustees personally, including wasteful and improper payments to exorbitantly priced law firms of Patterson Belknap Webb & Tyler and Cravath, Swaine & Moore, and the public relations firm Rubenstein.

—Alleged violations of New York’s General Business Law in the form of false advertising by school board members who solicited charitable donations to the school while falsely advertising Johnson as the ongoing headmaster, but knowing full well that he was being forced to leave.

—Deception of parents who chose St. Bernard’s and committed their children to attend the school based on a 10-year educational program under Johnson’s academic leadership that had been clearly advertised to them.

—Usurpation of the full school board’s authority through the hasty, coerced and unilateral dismissal of Headmaster Johnson.

—Failure of the full school board to take an informed vote in deciding whether to terminate Headmaster Johnson, and whether to “ratify” the severance and non-disclosure agreements that Headmaster Johnson signed under false pretenses.
 
 
Jim Walden, the founder and Managing Partner of Walden Macht & Haran, represents the families.  He states, “As we peel away the layers of financial malfeasance and unethical practices of a school board charged with safeguarding a treasured and historic environment of childhood learning, we are saddened to uncover further signs of a leadership cohort that is rotten at its core. The parents of St. Bernard’s School are seeking justice in the preservation of educational paths of their own children, and of one of the nation’s most cherished institutions of classical learning that they all hold very dearly. It is our hope that in the face of newly uncovered facts, the members of the Executive Committee will alleviate the school community of the burden of litigation by resigning and allowing a newly elected board to implement an organizational course correction that authentically serves the interests of the students and the St. Bernard’s community.”

The purpose of this announcement is to ensure St. Bernard’s parents, faculty and alumni are aware that a class action has been filed on their behalf and encourage them to contact Class Counsel Jim Walden at StBernardsLegal@gmail.com, to be advised of their rights. Any communications between parents and the lawyers will be treated as privileged and confidential in anticipation of potential participation in the litigation.

The Headmaster

Since 1985, Stuart H. Johnson III has served the St. Bernard’s community with integrity, academic vision and grace. He has presided over two generations of students, during which time he diversified and modernized the school, expanded its commitment to social consciousness and diversity, all while maintaining rich traditions of rigorous instruction, hard work and citizenship. Parents chose the school because of the healthy academic and social environment it offered under Mr. Johnson’s leadership. They enrolled their children at St. Bernard’s with the understanding that he would oversee their development and the curriculum.

The Executive Committee of the Board of Trustees

In May 2019, the Executive Committee of the St. Bernard’s Board of Trustees unilaterally removed the headmaster from his position without cause or explanation. They forced him to announce his “departure,” leading the Board of Trustees and the parent community to believe he was voluntarily retiring. He was not. Instead, the Executive Committee acted — without the necessary consent of the full board — because, our clients believe, they wanted preferential treatment for certain children in the post-Bernard’s placement process, they sought to admit the children of their friends, and they wanted control over the St. Bernard’s substantial endowment and investments, all of which Johnson had steadfastly fought against.

After news of the termination broke, parents revolted en masse, with more than 600 parents signing a letter asking Mr. Johnson to stay on as headmaster. Immediately following these events, the Executive Committee is further alleged to have breached its fiduciary duties by using school funds (estimated at more than $1 million) to hire an army of lawyers and public relations consultants to obfuscate its misconduct.

The current expense of lawyers and public relations firms engaged by the Executive Committee for the purpose of masking the crisis is estimated at between $30,000 to $50,000 per day, equal to the cost of a full tuition scholarship for a single student for one year, or to substantial raises for teachers. The parent plaintiffs seek to stem this unconscionable outpouring of funds, which now totals hundreds of thousands of dollars and has directly compromised the curricular budget of the school.

After various intermediaries attempted to broker a resolution of the impasse between the Executive Committee and every other part of the St. Bernard’s community, the Executive Committee refused to compromise. Without any further recourse available to them, the parents of St. Bernard’s engaged Walden’s firm to represent them in this action.

Remedy

The plaintiff parents are seeking to restore Mr. Johnson as Headmaster of St. Bernard’s, a court order enjoining and preventing the removal of Johnson as Headmaster. The parents also seek the nullification of the nondisclosure agreement between Johnson and the school, and modification of the clause in Johnson’s employment agreement improperly requiring his early retirement in 2021. Additionally, the Petitioners seek full discovery of the communications between members of the school board regarding Stuart Johnson’s employment, and discovery from Stuart Johnson himself, in order to reveal the nature of the school boards secretive actions, including the unfair tactics that the Executive Committee used to intimidate and coerce Stuart Johnson to leave his position of 35 years.

The parents also ask the court for removal of the Executive Committee members from the school’s Board of Trustees.

Parents and school staff have filed whistleblower complaints with the New York Attorney General’s Office, asking for a thorough and complete investigation of the allegations contained in the complaint.
 — — —

 Media contact: Julia Pacetti, julia@jmpverdant.com, (917) 584-7846

 
Walden Macht & Haran, 1 Battery Park Plaza, New York, NY 10004