An analysis of New York's top real estate news by TRD's Kathryn Brenzel

Vornado CEO Steven Roth and One Penn Plaza (Vornado Realty Trust)

A long hearing on Penn Station revealed that nobody likes to say “Vornado.”

Lawmakers repeatedly brought up the developer — without actually naming the company — and voiced concerns over its ability to lease out the new office space planned for the area around Penn, given the uncertainty in the market.

State officials sought to provide reassurance. Empire State Development CEO Hope Knight repeatedly said the state is confident in the class A office market and that the up to 18 million square feet of new space will be absorbed. And MTA head Janno Lieber noted that the project timeline spans some 20 years, with the final tower projected to be complete in 2044.

"It is not dropping all of these buildings onto the market all at once," he said during the Friday hearing.

There seems to be a lot of anxiety around the idea that Vornado and whoever else is involved in the development will get zoning bonuses but the various transit improvements (the new Gateway tunnel, an expanded Penn Station, a new walkway from Herald Square) won’t be delivered.

Sen. Leroy Comrie cited Bruce Ratner’s involvement, and eventual departure, from Atlantic Yards, the megadevelopment formerly known as Pacific Park, where only a portion of the promised affordable housing units have been completed. (An extension was granted after the 2008 crash.) Comrie asked if there will be any penalty built into project agreements, should the developers abandon ship.

The answer to this question was one that was repeated throughout the hearing: ¯\_(ツ)_/¯

More specifically, state officials said they will make individual agreements with property owners on the eight development sites, in addition to a separate financial deal with the city over the structure of the PILOT program. None of these deals has been finalized, though Knight indicated that her agency is expected to vote on the city agreement sometime next month. Details of said deal will be announced sometime before that.

It is expected that the city will continue to collect taxes on these properties at the current level, adjusted annually, only diverting the increase in taxes resulting from the new development. That structure would last for the duration of the PILOT, which stands for payments in lieu of taxes.

At one point, Sen. Liz Krueger asked if the PILOT will be capped at 40 years — a figure she was told — but Knight would not confirm that. One thing that seems relatively clear is that the state will be on the hook for debt payments for the project, should there be any shortfalls in revenue.

What we're thinking about: Will the mayor push to change the rent board’s process for determining rent increases on stabilized apartments? Send a note to kathryn@therealdeal.com.

CLOSING TIME

Residential: The priciest residential closing recorded Monday was $22.4 million for a condo at 15 Central Park West in Lincoln Square.

Commercial: The most expensive commercial closing of the day was $160 million for a hospital property at 699 92nd Street in Bay Ridge.

Stay current on all of the biggest commercial closings in New York City and beyond with TRD’s Deal Sheet.

NEW TO THE MARKET

The priciest residence to hit the market Monday was a condo at 1965 Broadway in Lincoln Square asking $16 million. Douglas Elliman has the listing.

— Research by Greg Dool

TRD's new podcast "Deconstruct" is essential listening for understanding the great, big world of real estate. Be sure to subscribe to the podcast and check out this week's episode about the multifamily market.

A thing we've learned: Deputy Mayor Meera Joshi would like you to shame others into keeping city streets clean.

The Adams administration announced spending plans for trash pick-up and other sanitation services, including $22 million in new funding for litter basket collection. The baskets will be emptied approximately 50,000 more times per week citywide. Another $7.5 million will be dedicated to combating illegal dumping and $4.5 million for cleaning vacant lots.

“We all make trash, so we all have the power to keep it off of our streets,” Joshi said during a press conference on Monday. “That means feed the can, sweep your street, and property owners, for you that means the sidewalk in front of your property, as well as 18 inches out into the street, that also is your responsibility to keep clean. And continuously, and on a daily basis, shame others into doing the same.”

Elsewhere in New York

— Officials have downgraded the felony charges against a Staten Island ShopRite employee to misdemeanor charges of assault in the third degree, menacing in the third degree and harassment in the second degree, Business Insider reports. Daniel Gill was accused of assaulting Rudy Giuliani while the former mayor was campaigning for his son, who is running for governor. A video of the incident shows Gill slapping Giuliani on the back. An NYPD spokesperson said Gill accompanied the mid-back slap with, “What’s up, scumbag?”

“Our client merely patted Mr. Giuliani, who sustained nothing remotely resembling physical injuries, without malice to simply get his attention, as the video footage clearly showed,” attorneys for Gill said.

Giuliani described the slap as a “very, very heavy shot.”

“He is lucky that he didn't knock me down and I hit my skull and died or got a concussion or got seriously injured,” Giuliani said.

— A state court judge has ruled that the law granting voting rights to noncitizens who are permitted to live, work or go to school in the city violates New York’s constitution, Gothamist reports. “The New York State Constitution expressly states that citizens meeting the age and residency requirements are entitled to register and vote in elections,” Justice Ralph Porzio wrote in his ruling. “Though voting is a right so many citizens take for granted, the City of New York cannot ‘obviate’ the restrictions imposed by the Constitution.” Proponents of the law, including the New York City Immigration Coalition, plan to appeal.

— Mayor Eric Adams on Friday announced plans to increase access to medication abortion at sexual health clinics and the number of professionals at public hospitals who can perform the procedure, Politico New York reports. At a press conference, the mayor told reporters that when he was 15, his partner decided to get an abortion. He later told 1010 WINS that he doesn’t think he would have been mayor today if he had become a parent then. “My life would have been different,” he said on CNN.

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