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Month: December 2022

Pass the Dutchie Kemosabe: Native Tribes in New York State Take the Lead on Weed

Published on December 7, 2022

New York State may have legalized recreational marijuana but damn are they slow to dole out licenses to retail dispensaries.  They are only now about to start reviewing applications though they did grant cultivation (growing not selling) licenses in April 2022, according to Chris Alexander, the director of the New York State Office of Cannabis Management.  Still, the pace of getting retail licenses out the door makes one wonder if Mr. Alexander and his team are toking up instead of focusing on the necessary paperwork. No worries though, remote Native American tribes throughout the state are taking matters into their own hands. 

With fun names like “Devil’s Lettuce” and “Platinum Gushers,” tribes have, without state licenses, started selling marijuana out of shipping containers and makeshift stores.  As long as the sales happen on tribal lands, it is “outside [the] purview” of state officials so party on friends. Thinking ahead, tribal members Ross John and his son, Jay John, in Salamanca, NY are looking to book cannabis tourists at their White Pine Lodge and serve up such delights as weed-infused slushies, bong hits, and an assortment of edibles. Where there is opportunity, there is the “white man” and the clock is ticking for these tribal groups.  Soon dispensaries will open statewide—maybe as early as this year—and NY state will want its cut, taxing everyone up and down the supply chain.  Ultimately, the tribes will have to play ball and get on board or else…

Root, Jay, and Jesse Mckinley. “10 Gallons of Gas and a Free Joint: Tribal Pot Shops Thrive in New York.” The New York Times, 4 Oct. 2022, www.nytimes.com/2022/10/04/nyregion/marijuana-native-american-indian.html.
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Checking in on Office Space: NYC and Nationwide

Published on December 1, 2022

As concerns about Covid fade from the American consciousness, work from home (WFH) remains sticky and it’s impacting the office market. It’s been some time since we last checked in on the health of New York City’s office sector and, it turns out, all is not well.  As leases come up for renewal, companies are sometimes opting for smaller space, saddling landlords with millions of square feet in vacant space.  Attendance at office buildings in New York is less than half of pre-pandemic levels and a similar narrative is playing out in Boston, Atlanta, San Francisco, and other cities.

Worse still, more space is expected to hit the market in the coming months and years as companies like Meta, Salesforce, and Lyft lay off workers (more than 100,000 tech workers have lost their jobs this year and more layoffs are expected) and more than 100 million sq. ft. of new office product is expected to come online. Wall Street is anticipating a slump in this space as shares of large landlords are trading close to or below their pandemic lows, underperforming the broader stock market.

What options do landlords have with higher interest rates, low occupancy levels, and a pivot by tenants to smaller spaces in newer better-equipped buildings? Not many: all are hoping for better times but some are throwing in the towel, handing over the keys to their lenders while others are looking to convert office buildings into residential complexes, an expensive and time-consuming option.  Let’s look at some of the numbers:

  • The value of U.S. office buildings could plunge 39% in the coming years;
  • NYC collected $6.8 billion in property tax revenue from office towers in the year ending June 2022 (~9% of its total tax revenue) down from $7.5 billion in the previous fiscal year;
  • The market value of office buildings in NYC fell by $28.6 billion this year, the first decline since 2000; and
  • Office vacancy rates in downtown NYC are at a record high 20.2% and similarly high across the country (19.1%) with some markets like Chicago, Houston and San Francisco exceeding 20%.

With New York office space costing on average about $16,000 a year per employee, you can bet on employers continuing to downsize their space needs during the pending economic downturn. Dark clouds for office landlords are likely to persist for the foreseeable future. 

Eavis, Peter, et al. “Why Office Buildings Are Still in Trouble.” The New York Times, 17 Nov. 2022, www.nytimes.com/2022/11/17/business/office-buildings-real-estate-vacancy.html.
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NYC’s Conundrum: High Density But Still Too Few Units

Published on December 1, 2022
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News alert: there is a significant affordable housing problem in NYC and, sadly, we don’t have the brainpower to fix it.  Or perhaps the truth is more nuanced, no one capable of fixing the problem cares to join the legislative ranks to do so.  Countless development projects in high-density zoned areas in Manhattan where thousands of affordable apartments could have been created were not.  Instead, developers opted to build high-rise, low-density towers or, put more simply, big buildings with few units.  Urban planners say the developers are squandering precious few sites left while builders argue the cost of land and construction is too high for anything but luxury condominiums, without tax incentives and more favorable zoning. 

A few examples that highlight the issue include:

  • (i) 60 East 86th Street with 14 apartments (zoning allowed for 77 units)
  • (ii) 15 West 96th Street with 21 apartments (66 units possible)
  • (iii) 200 East 75th Street with 36 apartments (144 units possible)
  • (iv) 1165 Madison Avenue with 11 apartments (88 units possible)

City Councilwoman, Gale Brewer, asks “in a city that’s desperate for housing…how can you allow a builder to build fewer units” and that none of the newly built projects contain anything affordable is “boggling” to her.  The fact that she is dumbfounded and confused is telling but also disheartening that leaders like her can’t understand basic principles of capitalism. Make no mistake: for each of these projects, the developers played by the rules working within zoning regulations and in-place height restrictions. Force their hand and developers will build only what is economically viable. In this case, multi-million dollar condominiums that sell at a brisk pace to the uber wealthy where bigger units command premiums is what makes sense.  

There are proposals out there but they require legislators to work with builders (instead of demonizing them) and they include reinstating tax benefits and increasing density in exchange for affordable apartments or obligating apartments eliminated during demolition be built back.  To Ms. Brewer and others of her ilk, you can blame the developers or whomever, but your failures are entirely your own responsibility.  All NYC residents and especially those of little means deserve better from their so-called leaders. 

Chen, Stefanos. “Taller Towers, Fewer Homes.” The New York Times, 23 Sept. 2022, www.nytimes.com/2022/09/23/realestate/nyc-apartments-housing-shortage.html.
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A Sordid Little NYC Gem Hits the Market for $25 Million: The Liberty Inn

Published on December 1, 2022
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Downtown in NYC’s West Village neighborhood sits a 7,000 SF structure beside the West Side Highway.  It is the last hourly rate hotel ($95 for two hours and $155 for six hours in case you are in the area) in Manhattan’s meatpacking district—a relic with a rich history of sordid behavior. 

The hotel is billed as the “most sexiest” in the city (sophomoric and clunky to say nothing of the grammar) providing a sanctuary for bouts of afternoon passion, clandestine affairs and lunchtime quickies.  All activities that remain elusive to this humble author suggesting I may have picked the wrong profession. This kinky little spot was once known as the Strand Hotel, a boardinghouse for sailors. Reporters even once rented rooms to file reports about survivors of the Titanic when they arrived at Pier 54.  In the 1960s, it was known as the Hide-a-Way Motel (who names these things), which later shared space with a gay nightclub, the Anvil (where drag performances by the likes of Ruby Rims, Candy Stevens and The Famous Yuba entertained patrons). 

The Liberty is designed with a narrow purpose as evidenced by room designs and certain unique fixtures.  Certain rooms are bathed in red light, filled with erotic wall art, have hot tubs and ceiling mirrors presumably reflecting back at you all of your physical shortcomings and life’s missteps. You can even find “The Liberator” at the Liberty Inn, a black stump-like apparatus used for lovers to contort themselves into imaginative and physically challenging positions. 

The owner, Edward Raboy, who uses the alias Robert Boyd—and, why not, when in this line of business—is the son of the owner of the Hide-a-Way (it’s true apples stay close to the tree when they fall).  Raboy acknowledges the West Village has changed dramatically from its wilder days where ample drugs and meatpacking of all kinds was considered groovy.  In his view, the Liberty Inn no longer fits within the current context of the gentrified West Village (or does it) and, as Raboy explains “it’s been a fabulous run” but its time for him to run along and let the next chapter of the storied hotel be told.  

Vadukul, Alex. “For Sale: The ‘sexiest’ Hourly Rate Hotel in Manhattan.” The New York Times, 10 Aug. 2022, www.nytimes.com/2022/08/10/style/hourly-rate-hotel-manhattan.html.
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