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Morning Spew

Dying on My Expensive Midtown Commercial Real Estate Hill Like It’s Monday

Just a few more empty office towers, that should do it!

6:25 AM EDT on August 29, 2022

Hudson Yards. (Fred Moon/Unsplash)

Does 2022 represent the "last stand" for the notion of having a bunch of people work on computers together indoors? Probably not. But hand-wringy stories like these (and there are a terrifying number of them) about office culture pose a very different question from the one that currently vexes New York City: Is it a good idea to spend unfathomable amounts of blood and treasure building massive towers of office space in Midtown? If you're a commercial real estate titan and/or the State of New York, the answer to that question currently appears to be, "Shut up and check out these sick glass towers!!!"

On Monday the New York Times had three reporters examine the Penn Station deal currently in the works that would both spruce up the old rail hub and add some tens of millions of square feet of new office space. Governor Kathy Hochul is emphatically on board, Vornado, the real estate developer chosen to do all the work (and whose CEO gave campaign cash to our current and former governor) is totally on board, and—wait, what's Hudson Yards?

Oh right, that other massive development that leveraged public funds to build staggering amounts of office space in Midtown over some railroad tracks, that isn't even finished yet. How's that going? According to the Times, their office vacancy rate is close to 40 percent, major commercial tenants have bowed out, and Related, the developer, has tried to renegotiate their obligations to the MTA. They hint at Related trying to lure Madison Square Garden over to stop the bleeding (our own Neil deMause wrote about this a few weeks ago).

When Hudson Yards is finally complete (in 2135?) New York taxpayers may be as much as $5.6 billion in the hole; with this Penn Station project, the costs could be as high as $3 billion.

A spokesperson for the state's quasi-corporate arm is the only forceful defender of the Penn Station project on the record, and they give some rah-rah pabulum that sounds like it's coming out of City Hall ("Time and again, history has proved betting against New York is a losing proposition.") It's up to 89-year-old Dick Ravitch to speak plainly about tying a commercial real estate boondoggle to a badly needed infrastructure project.

“Given what has happened to the commercial market, it’s not going to be a source of revenue for a long time until the market turns around,” Mr. Ravitch said. “Where we get the money for Penn Station should be a separate question.”

Open the Times story and control + F "housing crisis" or "apartments" or "record-high residential rents" and you'll see why "should we build more monuments to the empty churn of white-collar work in Midtown?" isn't just a question of urbanism or good governance. It's a moral one.

Here's some good stuff to read:

  • The New York Times did a fantastic Sunday Routine with Parks Department employee Walter Odom, who minds the tennis courts at Fort Greene Park. (You might remember Mr. Odom from Hell Gate’s own recent city parks tennis write-up). It’s a competitive job to get in the Parks Department and Odom had to work his way up. He’s retiring next year, and the baton will be passed to probably another Parks Department lifer. Congrats Walter! And the Times should do more Sunday routines like this—it’s a lot more interesting than most of the other Sunday routines, which, unlike Mr. Odom's, are totally made up!

  • The battle over congestion pricing (which isn’t actually a battle because it’s law and it’s coming regardless) is heating up—now, we’ve got dueling E-ZPass accounts pushing drivers to either side of the issue. Earlier this month, New York’s E-ZPass account holders got an email urging them to support congestion pricing, telling them it “would reduce traffic and help improve the transit system by tolling vehicles that enter or remain in Manhattan’s CBD.” This weekend, reports New Jersey resident and economist Paul Krugman, New Jersey’s E-ZPass is trying to get drivers to fight for their right (to not pay tolls):

Cry more, NJ!

  • A former NYPD officer has filed a lawsuit, claiming he was unjustly fired for his connections to prominent right-wing figures close to the January 6th attack on the U.S. Capitol, Gothamist reports. Greco, a former traffic cop, was an unpaid body guard for Roger Stone, and was with him on January 6th, 2021. Greco was fired after a department trial earlier this month over his relationship to Stone, a convicted felon. In his complaint, Greco says that he was not involved in “any criminal or subversive activities with them or anyone else to overthrow the United States government.”

  • Documented reports on the arrest of Ishtiaq Ahmed, a volunteer at the Makki Masjid Muslim Community Center in Midwood who was enforcing COVID-19 capacity protocols in 2021, when an NYPD community affairs officer, who was blocked from entering the mosque, said he assaulted a congregant trying to get in to pray. Surveillance video shows otherwise. Still, Ahmed’s life was turned upside down after he was arrested for the alleged assault. Now, the NYPD is no longer allowed into the mosque, amidst a rehashing of prior violations of Muslim’s constitutional rights by the NYPD, which concentrated its illegal spying efforts on Makki Masjid in the years after 9/11. “In terms of the sheer number of people detained and disappeared, Makki Masjid was the most devastated,” said one organizer against NYPD spying and interference.

  • The City Comptroller, Public Advocate, and a few City Councilmembers are making an unannounced visit to Rikers Island this morning to check on conditions in the island jail, which continue to be horrific, despite a federal judge signing off on the city’s unambitious plan to improve conditions. Last week, Hell Gate reported that the Department of Corrections took a dashboard designed and compiled by the Comptroller’s office and tried to pass it off as their own—a little window into just how much the DOC prioritizes “transparency.” Guess that’s one way to ask the Comptroller to make a surprise visit to your island fiefdom.

  • And finally, let’s talk baseball before the dreaded football season begins. The Yankees' ill-fated and much-despised closer, Aroldis Chapman, is back on the injured list after a tattoo he got during the season became infected. Gross. On another, happier note, the Major League Players Association announced that they’re going to be organizing the Minor Leagues, after decades of the brutal mistreatment of these professional baseball players. Major League owners have been successfully gutting the Minor Leagues for the past few years, leaving hundreds of ball players without jobs, and robbing a summer joy from a bunch of smaller stadiums across the country. (RIP Staten Island Yankees.) This is your last week to enjoy Minor League baseball in NYC this year—and we couldn’t recommend going to see a Brooklyn Cyclones game more. Tickets are only $10

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