2 Art Worlds: Flush MoMA, Struggling Met

Uptown on Thursday morning, one major museum owned up to serious financial problems. Farther downtown on Thursday afternoon, another celebrated serious financial progress.

The bad news at the Metropolitan Museum of Art — ballooning deficits, possible staff cuts and a hold on the planning of a new wing dedicated to Modern and contemporary art — stood in sharp contrast to the jubilant word from the Museum of Modern Art that the entertainment mogul David Geffen had donated $100 million toward an expansion and renovation.

But both developments spoke volumes about the current state of the art world, where Modern and contemporary art dominate the action these days — in auction houses and galleries, as well as museums. Everyone wants in, including a revered institution like the Met, which is striving to play catch-up even as it is struggling to pay the bills.

“The audience for contemporary art has grown exponentially in the last decade,” said Tom Eccles, the executive director of the Center for Curatorial Studies at Bard, adding that the sector’s attendant money and glamour make it “a honey pot” and “the Hollywood” of the art world.

The Met has stiff competition in the Modern and contemporary realm, especially at home. MoMA is expanding and renovating; the Whitney last year opened a widely acclaimed new home downtown; the Guggenheim has multiplied around the world and the New Museum has helped lead an art surge in Lower Manhattan. In addition, the new Broad Museum in Los Angeles is drawing lines around the block since it opened last fall and the San Francisco Museum of Modern Art is about to open its new building next month.

The Met has been notoriously weak in Modern and contemporary art — the art critic Holland Cotter of The New York Times once called the collection “an institutional embarrassment” — and is seen as falling short of its encyclopedic mandate, in part because its longtime former director Philippe de Montebello was wary of following trends.

His successor, Thomas P. Campbell, has made improving that area a priority, which led him to take on the Breuer building, the Whitney’s former home. “It’s a significant commitment,” he said, “but we believe it’s an important one for the programmatic health of this institution.”

The Met’s current restructuring suggests that this emphasis may have contributed to the institution’s current shortfall, which the museum says is due largely to a decline in admissions and retail revenue and an $8.5 million annual debt service on $250 million in bonds issued for infrastructure work to the main building and the Cloisters. The museum has also significantly increased its digital staff.

But the focus on building its Modern and contemporary capacity has also siphoned energy and resources away from the Met’s Fifth Avenue flagship. The museum has had to be concerned with fund-raising for Met Breuer, to cover that location’s $17 million annual operating expenses over the course of an eight-year lease as well as an estimated $15 million renovation of the building. The Met has also rebranded its entire operation at a cost of about $3 million and trained 110 staff members at the Breuer, including some new employees.

In addition, the Met has spent an undisclosed amount on the redesign of its Modern and contemporary galleries on Fifth Avenue, which calls for demolishing the existing Lila Acheson Wallace Wing in the museum’s southwest corner, increasing exhibition space and doubling the size of the Roof Garden.

The Met, which has a budget of $300 million and has carried modest shortfalls for years, is now facing a $10 million deficit.

“If we do nothing — if we just carry on — 18 months from now, at the beginning of fiscal year 2018, the deficit would be four times bigger,” said Daniel H. Weiss, the Met’s president. “That’s not O.K., so we’re going to take action to control that.”

The museum will undergo a 24-month financial overhaul that it said was likely to include staff reductions, reduced programming and a concerted effort to increase revenue in its restaurants and retail operations.

“We’ve had increasing pressure on the budget and knew that we were going to have to take actions to get it back in balance,” Mr. Campbell said.

The museum said it would also suspend the design work on the new wing until money had been raised for the project.

Photo

The southwest corner of the Metropolitan Museum of Art. It faces a $10 million deficit and says staff reductions are likely. CreditBenjamin Norman for The New York Times

Since salaries account for 70 percent of the Met’s expenses, Mr. Weiss said the museum would reduce its head count “by dozens” over the next 12 months. The Met will also freeze hiring and request voluntary buyouts, after which it may resort to layoffs.

Will the Met have to give up on its Modern and contemporary aspirations and settle for sticking to its core skill set? Can it hope to raise money for the new wing when the project is in limbo and the museum is in the middle of cutting staff?

“In a perfect world, these two events wouldn’t be coinciding,” Mr. Weiss said. “But we’ll get through these challenges.”

Meanwhile, MoMA is capitalizing on its strengths, having attracted the largess of Mr. Geffen, a leading art collector with an estimated worth of $6.8 billion, who has long supported the museum with art donations (most recently, a Mark Grotjahn sculpture) and loans (as he did for a 1996 Jasper Johns retrospective).

“When I worked in the mailroom at the William Morris agency I used to brown bag it at the sculpture garden of the Museum of Modern Art,” he said. “It’s where I developed my interest in post-World War II art.”

Mr. Geffen’s donation will go toward MoMA’s fund-raising campaign, which includes $440 million for new construction and renovation.

“These are the kind of gifts you only dream about,” said Glenn D. Lowry, MoMA’s director.

MoMA will feature a David Geffen Wing: three floors of new galleries in a residential tower designed by Jean Nouvel to the west of the museum on West 53rd Street, currently under construction. And sometime this spring, the museum’s existing fourth-floor exhibition space will be called the David Geffen Galleries.

That means Mr. Geffen’s name will now adorn another major New York arts building in perpetuity, as it does the former Avery Fisher Hall, which received a $100 million gift from him a year ago (and which generated concerns because it covered only a fifth of the projected renovation cost in exchange for perpetual naming rights).

The gift was discussed over the past six months, Mr. Lowry said, and was helped along by Mr. Geffen’s friendship with MoMA’s president, Marie-Josée Kravis.

Mr. Geffen, a California resident who established the Geffen Contemporary at the Museum of Contemporary Art in Los Angeles, dismissed the idea that he was shifting his philanthropy from one coast to another. “I spend time in both California and New York,” he said, “and I have a great affection for both places.”

MoMA has raised $650 million, including Mr. Geffen’s gift, which is unrestricted, meaning it can be directed at the museum’s discretion. “Through David’s generosity,” Mr. Lowry said, “we’re in incredible shape.”

In addition, MoMA continues to raise funds to increase its endowment and to cover operations during construction, when revenue is expected to decline because some galleries will be closed.

The expansion and renovation, designed by Diller Scofidio & Renfro, will add 50,000 square feet of galleries, giving the museum more space to present its collection and exhibitions and allowing it to improve circulation, particularly in the museum’s congested entrance.

Mr. Geffen has also donated to the Los Angeles County Museum of Art; the Spelman and Morehouse College arts education programs; the University of California at Los Angeles School of Theater, Film and Television; the University of Southern California School of Cinematic Arts; and the Geffen Playhouse.

In 2013, he contributed to the Academy of Motion Picture Arts and Sciences for the creation of the Academy Museum of Motion Pictures. His total philanthropic support to U.C.L.A. exceeds $400 million.

Mr. Geffen, who has no dependents, will ultimately leave his art collection, valued at more than $2 billion, to his foundation, which will give the pieces to institutions or sell them and donate the proceeds to his main causes: culture, medicine and education.

As for future substantial donations, Mr. Geffen suggested there may be more in store. “I intend to give away as much of my money as possible while I’m alive to things that I think are valuable,” he said. “So far, it’s a considerable amount of money.”

Correction: April 22, 2016
Because of an editing error, an earlier version of this article referred incorrectly to a gift to the former Avery Fisher Hall by David Geffen last year. Though it was for $100 million, it was not Mr. Geffen’s last donation in that amount. He later gave $100 million to U.C.L.A. to build a middle school and a high school on its campus.

NYC Approaches Green Future With New Building Emissions Standards

Mayor Bill de Blasio announced Friday that he will impose mandates on the commercial real estate sector to achieve dramatic greenhouse gas emissions among the city's building stock — by far the city's biggest contributor to global warming.

In an announcement tied to Earth Day, the mayor's office said the requirements, along with city programs and incentives, would help kickstart the mayor's goal of cutting building emissions dramatically over the next 35 years.

The mandates are a significant development for the city's real estate world. When de Blasio announced a plan two years ago to cut building emissions, he threatened mandates if private developers did not act quickly enough. After more than a year of meetings with a technical working group, the group submitted a report recommending the mandates.

“Cities that lead on climate, lead on buildings,” de Blasio said in a statement. “We’ve set bold goals as we take on climate change and a clear path to meet them. The City has been leading the way by greening our own public facilities. Now, these new initiatives will dramatically reduce emissions from New York City’s over one million buildings, while saving New Yorkers millions and creating thousands of new jobs – and we’ll be providing owners support throughout the process.”

The mayor is expected to address the announcement Friday during remarks a United Nations luncheon commemorating the signing of the Paris accord. 

Among the measures announced Friday, the mayor's office will push new energy codes that will require buildings to complete cost-effective energy conservation measures; require large and mid-size building owners to repair and improve heating distribution systems within the next 10 years; require large and mid-size building owners to assess energy retrofit strategies as part of their required energy audit; and improve efficiency and information transparency in mid-sized buildings and non-residential spaces.

The city estimates the measures will reduce greenhouse gas emissions from buildings by 2.7 million metric tons — the equivalent of taking more than 560,000 cars off the road. The mandates are also expected to save building owners approximately $900 million in energy costs each year and create an estimated 1,300 direct construction-related jobs, the mayor's office said.

The move drew immediate praise form policymakers, including EPA Region II administrator Judith Enck.

“Policies that promote energy efficiency in buildings are extremely effective in driving down greenhouse gas emissions and other air pollutants. This outstanding report positions the City of New York to be a national leader in energy efficiency,” Enck said in a statement. “These policies are good for the environment, will create new jobs and reduce monthly utility bills for tenants and homeowners alike.”

Downtown's Tallest Residential Tower Completes World Trade Center–Area Transformation

In late summer, the 175-room Four Seasons Hotel at the newly built 30 Park Place is scheduled to open to guests. The 926-foot-tall, 82-story tower, which has 157 condos starting on the 40th floor, will be the tallest residential tower in downtown Manhattan, besting current record holder 70 Pine St. by 76 feet (though 70 Pine’s tip stretches to 952 feet, well beyond its 850-foot roof).

The tower caps a post-9/11 era of change for the blocks around the World Trade Center. The developer of 30 Park, Silverstein Properties, owned the lease on the former Twin Towers and surrounding buildings. Silverstein has already rebuilt 4 and 7 World Trade Center and is building towers at 2 and 3 World Trade Center.

Silverstein acquired the site for 30 Park Place in 2006. Two years later, at a breakfast event at Cipriani’s in lower Manhattan, Chairman Larry Silverstein unveiled plans for what would have been the city’s tallest residential building. But the Great Recession made financing difficult—and any luxury-condo sales less assured. 

In early 2013, Silverstein finally landed $660 million in financing from Children’s Investment Fund Management LLP, and construction started soon after. Robert A.M. Stern, dean of the Yale School of Architecture, designed the limestone tower, and the Four Seasons brand will provide services to hotel guests and condo owners.

Ten units are listed on the tower’s website, with prices ranging from $3.645 million for a 1,108-square-foot one-bedroom to $32.5 million for a 6,127-square-foot, five-bedroom penthouse.

How Long Should You Wait For the Subway Before Giving Up?

To wait or not to wait, that is the question that engineer Erik Bernhardsson answered in his recent analysis of the MTA’s real-time API. In his post titled NY Subway Math he determined that if you’re in a hurry, you should only wait for a train to arrive for 11 minutes (h/t Technically). At this point, the chance that there’s a serious delay begins to rise. As he notes, “The interesting conclusion is that after about five minutes, the longer you wait, the longer you will have to wait. If you waited for 15 minutes, the median additional waiting time is another 8 minutes. But 8 minutes later if the train still hasn’t come, the median additional waiting time is now another 12 minutes.”

Bernhardsoon started looking at the data to “understand if to what extent waiting for a subway is ‘sunk cost’ vs. an investment.” He illustrates this in the graph above, where you can see how long you’re likely to wait for a train based on how long you’ve already waited. The blue line is the median, and the yellow is the 90th percentile. On a normal day, you’ll wait less than five minutes, but 11 minutes is where you’ll hit that dreaded yellow line that makes mechanical issues, sick passengers, and the like much more plausible.

The ‘Path’ to $4 billion

Architect Santiago Calatrava envisioned an elegant, bird-like PATH station for the high-profile World Trade Center site, but by some accounts what he got was anextravagant symbol of government inefficiency.

Indeed, public perception of the World Trade Center Oculus — which opened last month at the corner of Liberty and Church streets — has been largely soured by its estimated $4 billion price tag that the Port Authority has yet to back up with final numbers. But since Calatrava revealed his design for the station in 2004, the price of the project has ballooned to roughly twice its initial estimation. The overruns were caused by, among other things, the design, the complexity of building underneath the No. 1 subway line, pricey subcontracts, political disputes and Hurricane Sandy.

As costs piled onto the project, the hub’s appearance also changed. Calatrava’s vision of a bird taking flight was dramatically altered when the Bloomberg administration demanded that additional steel be added to the structure for security reasons, a change that led to a bulkier structure. For similar reasons, the hub had to swap its originally planned retractable roof for a skylight that will symbolically open only once a year on September 11. Architecture critics, in turn, have drawn unflattering comparisons of the Oculus to a skeletal stegosaurus.

But the hiccups and design criticisms have not stopped public officials from touting the station as an icon of Lower Manhattan.

“We hope that it will really upend this notion that we shouldn’t serve the public in grand ways and with great design. There’s this idea out there that grand public infrastructure is somehow inappropriate and unjustified,” Downtown Alliance President Jessica Lappin said at a New York Building Congress event in March. “It is big, it is bold, it will inspire for generations.”

An opening ceremony is scheduled for sometime in the spring, as is the opening of Westfield Group’s $1.4 billion shopping center at the hub, whose tenants include Apple, Eataly and an Épicerie Boulud. Passengers are already shuffling in and out of the station and snapping Instagram photos of its blinding white facade and interior.

After-Hours Construction Boom

It’s Saturday morning and the alarm clock is silent — but thanks to a new luxury condominium next door, there’s the deafening roar of a pile driver slamming metal deep into the ground.

For many New Yorkers, this is an increasingly familiar occurrence. According to an analysis by The Real Deal, the city’s Department of Buildings has over the past three years seen a dramatic increase in the volume of after-hour work permits — defined as construction done before 7 a.m. or after 6 p.m. on weekdays or at any hour during the weekend. The number of permits in 2015 — 59,895 — represents a 90 percent spike from 2012, when 31,569 permits were issued. While more permits went toward minor renovations than new buildings —roughly 54.4 percent compared to 32.2 percent, respectively — the list included high-profile new projects like JDS Development Group’s 111 57th Street, Extell Development Company’s Central Park Tower and Vornado Realty Corporation’s 220 Central Park South.

Measured by borough, Manhattan led the list in 2015 with 35,753 permits, followed by Brooklyn with 13,215, Queens with 6,053, the Bronx with 3,744 and Staten Island with 1,125.

Workload demands

Experts attribute the upward shift to two major dynamics occurring in the city’s construction industry: a massive amount of new building and a shortage in skilled labor. The New York Building Congress estimates that construction spending will reach $41 billion in 2016 — the highest in the city’s history. And although employment in the industry is also on the rise (the Building Congress expects jobs to reach 131,800 in 2017), it isn’t growing fast enough to meet demand.

Under these pressure-cooker circumstances, some say that contractors and developers are exploiting the city’s after-work permitting system to get projects done as expeditiously as possible.

“I think it’s because there’s a lot of construction work, and the after-hour permits are needed because there’s actually a shortage of construction personnel,” said Lance Franklin, CEO of Manhattan-based Triton Construction. “There’s a spike in after-hours work to make up for schedule delays, the lack of available manpower and for trying to meet certain deadlines.”

Franklin said that his firm seeks these types of variances primarily for work on new buildings.

The high number of permits granted for renovations stems from the unpredictability of such projects, he said. Discoveries like an error in a floor plan or, say, asbestos behind a wall can create unforeseen delays and knock a project off schedule. “When you open something up, you never know what you’re going to find,” Franklin said. “The schedules are more challenging. You’re finding things that you’re not expecting.”

Similarly, an executive of another construction company, who asked not to be identified, said that the permits are not difficult to obtain and they go a long way in helping developers stay on schedule.   

“It’s what the city allows, so you try to take advantage of what the city allows,” he said.

Murky reasons

In every borough except Staten Island, the top reason listed in 2015 was public safety. In Manhattan, 81 percent of the permits issued were for this reason.

According to DOB representatives, the agency issues permits for five reasons: public safety, emergency work, undue hardship, construction that will cause minimal noise and city construction projects. However, based on TRD’s examination of hundreds of after-hours permits, the explanations provided are sometimes limited and don’t always spell out how the work qualifies as an act of public safety, often only indicating issues such as“traffic congestion” or “business hours.”

Alex Schnell, a DOB spokesman, said that permits issued for public safety serve as a “proactive safety measure” for work that “can’t be performed or would cause an unreasonable burden” during the weekday due to high levels of traffic. He noted that permits are a privilege that can be revoked.

After a spate of press and noise complaints, the DOB recently launched a “comprehensive evaluation” of how after-hour variances are issued. Schnell said the agency wanted to see if there were “alternative options that could be implemented without creating a danger to the public.”

When asked if the study was a response to the high volume of permits granted, Schnell would only say that it was an issue that DOB Commissioner Rick Chandler wanted to look into.

Apart from time, money is an obvious factor. Richard Lambeck, a clinical associate professor and chair of the construction management department at New York University’s Schack Institute of Real Estate, said the increase in after-hours permits highlights the growing prevalence of non-union construction in the city. Non-union workers, who by some estimates work on 50 percent of new construction in the city, are typically able to work nights and weekends without requiring overtime. In those cases, after-hours permits provide a less expensive avenue to getting the work done more quickly, he said. “The volume of work that is going on in New York City is just tremendous right now,” Lambeck said. “It’s using a lot of labor, and it’s using a lot of material, and the problem with this kind of environment is that you have trouble getting the workers you need to get it done.”

Cash cow

For the city, the after-hours permits have provided a growing stream of income. Applicants pay $80 per workday, plus an initial filing fee, which ranges from $100 (for one to three days of work) to $500 for 14 days. The city raked in $25.3 million in after-hour application fees in 2015, compared to $14 million in 2012, according to the DOB. 

Over the last year, after-hours construction has received increasing attention. In 2014, Council Member Rosie Mendez, whose district includes the Lower East Side, the East Village and Gramercy Park, introduced a bill to set new standards for the permits, but the measure never made it out of committee. The bill is currently being amended and will likely be reintroduced before the end of the year. Council Member Dan Garodnick, one of the bill’s sponsors, said he and other council members are awaiting the results of the DOB’s study. “Nearly every Manhattan elected official called on the DOB to put down its rubber stamp and to start cracking down on unreasonable and illegal after-hours construction,” Garodnick said in a statement. “Developers feel entitled to these permits because of lax oversight and enforcement, and the results are quite painful for our communities.”

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MetroCards will soon be a thing of the past

The days of being asked to swipe again and again at the turnstile could soon be ancient history — as the MTA has begun seeking proposals that would move the subway system toward the post-MetroCard era.

The MTA will release paperwork on Wednesday asking companies to submit proposals for ways of paying for rides with contactless media, such as smart cards or mobile devices.

They are hoping that such a new system, similar to payment methods already used in taxi cabs and stores, in which customers only have to swipe their phones, will make MetroCards as obsolete at subway tokens.

“Currently, the MTA is basically in the business of creating its own currency, which is very expensive,” said Riders Alliance executive director John Raskin. “The more it can shift that burden to Mastercard and Visa,the less the MTA has to worry about and the better it will be for riders.”

The agency wants interested companies to submit their vision of how riders will pay the fare by June 23. There was no talk of what accommodations would be made for people with out smart phones or credit cards.

It will take quite a while before the new payment system is ready.

Even though the switchover is supposed to be a part of the MTA’s 2015-2019 capital program, the new method won’t be up and running until at least 2021.

Keith Olbermann Lists Trump Palace Condo, Takes Swipe at Trump Campaign

In March, Keith Olbermann wrote an op-ed in the Washington Post announcing plans to move out of his Trump Palace apartment in New York City due to his opposition to the building’s developer, Republican presidential candidate Donald J. Trump. Now, the liberal news and sports commentator is following through, listing the roughly 1,750-square-foot condo for $3.9 million.

The asking price is significantly less than the $4.2 million Mr. Olbermann paid for the apartment in 2007. He said he bought it at around the height of the market and would be disappointed to lose money on the sale, but added he feels it is worth it. “I feel 20 pounds lighter since I left,” said Mr. Olbermann, who moved out of the apartment in March. As a longtime political commentator on MSNBC, Mr. Olbermann was known for his criticism of right-wing politicians.

Mr. Trump said in an email that Mr. Olbermann “is just trying to use ‘Trump’ to get publicity and stay relevant. The prices of Trump apartments are today, the highest they’ve been. When people find out he is leaving Trump Palace, prices will probably go up.”

The apartment is on the 40th floor of Trump Palace, a 55-story tower that was developed by Mr. Trump in the early 1990s and is managed by the Trump Organization, according toGinger Shukrun of Town Residential, who is listing the property with colleague Wendy Jodel. With views of the Empire State Building, Central Park and the George Washington Bridge, the apartment has two bedrooms and a family room that could be converted to a third bedroom, Ms. Shukrun said. The apartment has three balconies and comes with a 71-square-foot storage room in the basement.

Mr. Olbermann said his unit is “a great apartment,” but leaving the building made him feel “less morally icky.” He added that if it wasn’t a Trump building, he never would have moved. “If they had changed the name of it to something more positive like Ebola Palace I would have happily stayed,” he said. He said he has found another home in Manhattan, but declined to identify which building.

Trump Palace is a full-service building with a 24-hour doorman, concierge, garage, gym, and outdoor children’s play area, Ms. Shukrun said.

Luxury-rental plan abandoned at One57 condo tower

Thirty eight units that were once rentals will be sold at prices starting at $3.45 million, much lower than what other units in the West 57th Street building sold for

Manhattan builder Extell Development Co. is retreating from a plan to list 38 units at its One57 tower for lease, choosing to sell them instead as demand for luxury rentals slips amid an abundance of supply.

The apartments, on the 32nd through 38th floors of the West 57th Street skyscraper, will be listed for sale as condominiums at prices starting at $3.45 million, Extell said in a statement on Monday. The builder has concluded that the market for condos in that range, toward the lower end of what's considered luxury, is better than the one for high-end rentals.

"We recognize the demand for efficiently sized, luxury inventory below $10 million,"  Gary Barnett, president of Extell, said in the statement. "There is absolutely no comparable product currently on the market."

Luxury rentals are proliferating in Manhattan as buyers of pricey condos, in many cases out-of-town investors, take possession of their apartments then quickly list them for lease. The added supply is pushing down rents for the most-expensive units. The median monthly rent for a Manhattan luxury apartment—the top 10 percent of the market—fell 3.5% in March from a year earlier to $8,228, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report last week.

"I would be under the assumption that they had no traction on the luxury-rental tack," Jonathan Miller, president of Miller Samuel said of Extell's plan. "The weakest segment of the rental market is luxury rentals."

Extell, which initially planned to reserve the lower floors of the 1,004-foot tower for rentals, tried marketing units for lease on the 37th floor last May, according to listings website StreetEasy. Prices ranged from $13,350 a month for a one-bedroom apartment with 1,021 square feet to $50,366 a month for a three-bedroom home.

Extell had also sought to sell all 38 rental units in a single package to outside investors for $250 million, the Wall Street Journal reported in November.

Fully furnished

The units now listed for sale—the largest of which is a 4,635-square-foot, four-bedroom duplex—will be delivered fully furnished, according to the builder's statement. Seven of the 38 units will be priced at more than $10 million, said Anna LaPorte, a spokeswoman for Extell.

The sale prices will be lower than much of what's already been purchased at One57, where a penthouse that sold for $100.5 million is Manhattan's most expensive completed residential deal. Like residents on the higher floors, buyers of the new units will have access to hotel services from the Park Hyatt New York at the base of the building. Amenities at One57 include a screening room and performance space, on-site parking, an indoor swimming pool and library.

"This is a great opportunity for buyers to have access to the One57 quality, lifestyle and amenities, all at this price point," Barnett said in the statement.

L Train Shutdown Details May Finally Be Coming From MTA

There's still a lot that we don't know about the possible shutdown of the L train. What we doknow is that it may be necessary to facilitate repairs to Superstorm Sandy-damaged equipment in its tunnels, and that it could be happening as soon as 2017, but the MTA hasn't exactly been forthcoming with details beyond that.

But some clarity on the situation may finally be coming. According to DNAInfo, state assemblyman Joseph Lentol (who represents L train-adjacent neighborhoods like Bushwick and Williamsburg), confirmed that the MTA agreed to brief community residents on the forthcoming repairs. "We are working with the MTA to secure a location for the first town hall in Brooklyn," he told DNAInfo, stating that it could happen as soon as the first week in May.

Per the report, the MTA may be asking for community feedback and recommendations on the impending shutdown. Considering how many people could be affected by this action—Brooklyn and Manhattan residents, business owners, developers, the list goes on—we're guessing it'll be a fairly heated event.

Michael Bloomberg Closer to Realizing UES Megamansion Dream

For the past couple of decades, former New York City mayor Michael Bloomberg has been oh-so-casually buying up the units at 19 East 79th Street, the Beaux Arts townhouse that sits next to his current palatial residence at 17 East 79th Street. The five-story building has six units, and as of now, Bloomberg owns five of them. According to the New York Observer, he snapped up unit three for $14 million, which just leaves one holdout in the building.

What he'll do with those apartments—or, for that matter, the building—is anyone's guess, though an enormous megamansion seems very likely. Bloomberg isn't the only ultra-wealthy mogulembracing the Frankenhome trend lately; Madonna is the most famous person to build one, but Russian billionaire Roman Abramovich has been trying to make his own enormous multi-house compound—though the Landmarks Preservation Commission hasn't been enthusiastic about his plan.

• Michael Bloomberg Takes $14M Step Closer to Limestone Uber-Mansion [NYO]

Manhattan Rents Are Actually Dropping

Yes, you read that headline right—according to the latest batch of rental market reports, Manhattan rents dropped ever-so-slightly for the first time since 2014. And we say ever-so-slightly, we mean it: According to the Elliman market reports, the average rent decreased one percent from February, and three percent from the same time last year; meanwhile, the median rent dropped about two percent from February, and nearly three percent from the same time last year. "The rate of growth has been falling since August," explains Jonathan Miller, who prepares the Elliman market reports.

The stability is also backed up by the Citi Habitats report, which states that "average rents in March 2016 remained largely unchanged from February." But Citi Habitats notes that year-over-year, "rents for one-bedroom apartments increased the most, with a 4.5% rise. Meanwhile, rents for studio units rose 2.6%, while pricing was up 2.1% and 2.4% for two- and three-bedroom homes respectively."

Additionally, both real-estate groups found that the number of concessions landlords are offering in Manhattan has risen—according to Citi Habitats, to the highest level since 2010. But since landlords are offering more perks like a month of free rent, that means fewer people are leaving their apartments; the vacancy rate also dropped from the same time last month.

So there's some good news, but it's maybe not time to get too excited. "I’m skeptical it will continue since the market sits in a robust local economy," Miller says. "I see it moving sideways for a little while—bumping up and down a bit but showing stability overall." Plus, per Miller, "rent growth remains strongest in lower half of the market and softest at the top"—so apartments that are nominally affordable aren't getting any cheaper.

Especially if you're looking in Brooklyn, where rental prices actually rose both month-over-month and year-over-year. The gap between Manhattan and Brooklyn median rents is officially only $525, and the median rent in Brooklyn rose to about $2,775. And in northwest Queens (which is the only area Elliman tracks in the borough), prices also decreased—median rents by about five percent, and average rents by about three percent. Landlord concessions are also up in both boroughs.

And still, this doesn't mean that things are affordable by any means—the average and median rents are still well above $2,500 in all three boroughs. But the terrifying ascent of the past few years may finally be over.

Prices chopped for over 30% of NYC penthouses

So this is what a “penthouse correction” looks like?

Of the 261 penthouse units for sale in Manhattan as of April 1, more than 35 percent of them had price chops since being listed, according to data compiled by listings portal StreetEasy at The Real Deal’s request. The median penthouse price was $6.7 million, and the average discount was nearly 10 percent, the analysis found.

The steepest cut was at Walker Tower, where the 5,995-square foot penthouse is now asking $55 million, down from $70 million, a 21.4 percent reduction.

At 165 Perry Street, a $25.5 million penthouse had $14.3 million chopped off the original asking price of $39.8 million. And at 12 East 13th Street, the 5,704-square-foot penthouse is now asking $19.55 million, an $11 million drop from the original price of $30.5 million.

“What we have in New York City right now is a ‘penthouse correction,’” CNBC’s Robert Frank said during a television segment last month. “All these developers chased the very top end of the market because it was so lucrative…. And that’s the area – particularly in Midtown – where we’re going to see dramatic decreases in price.”

The recent cuts shouldn’t be a total surprise, given the growing sense that Manhattan’s ultra-luxury residential market is saturated and experiencing a slowdown amid global economic uncertainty. “There’s too much luxury inventory in a crowded neighborhood,” said Douglas Elliman’s Frances Katzen.

The overall market dynamic has also shifted in buyers’ favor, particularly on the high end. “Sellers have to find themselves a way to become more flexible,” said Brown Harris Stevens’ Kathy Sloane. “It’s a buyers’ market and buyers are saying, ‘Fine, we won’t bid.’”

In addition to StreetEasy’s list, other cuts include the penthouse unit at 11 North Moore, where the price dropped from $40 million to $29.995 million last fall.

Meanwhile, Madison Equities and Property Markets Group just split the $45 million triplex penthouse at 10 Sullivan into two units, one asking $11 million and the other asking $29.5 million. “We thought it was too expensive for the market and where the market was,” PMG’s Kevin Maloney told Bloomberg in February.

In November, CIM Group and Macklowe Properties took the same approach for full-floor units on five floors of 432 Park Avenue.

Not every penthouse is seeing a price reduction. “But there are penthouses that may have been priced way beyond the marketplace,” said Steve Kliegerman, president of Halstead Property Development Marketing

For many of the developers, the profits are sitting in the penthouse and they’ll be patient, Kliegerman added. “Sometimes penthouses don’t reflect the marketplace because the developer has a different motivation,” he said. “Hopefully, they’ve already paid off their loans, so now they’re looking to maximize their profits.”

Sloane pointed out that unlike the resale market, new condo developers are reluctant to drop prices. At Zeckendorf Development’s 520 Park Avenue, Sloane – who is not involved in the project – speculated that the developers wouldn’t lower the penthouse price of $130 million but may still accept an offer of $100 million or $110 million.

Elliman’s Raphael De Niro, speaking with Frank on the CNBC segment, likened New York City real estate to an “eight-lane superhighway.”

“There’s a lot of traffic coming and going in both directions and occasionally things slow down,” he said.

World's Largest Starbucks Coming to Chelsea

Being that Starbucks is the number one thing New York City needs more of, the chain announced this morning that it has plans to open a new roastery in Chelsea in 2018 (h/t DNAinfo). This is no ordinary roastery. The shop will anchor the new office building designed by 432 Park Avenuearchitect Rafael Viñoly at 61 Ninth Avenue, the former site of Prince Lumber. At 20,000 square feet, it'll be the largest Starbucks in the world, Fortune says. To put that into context, that means the Starbucks will be about the same size as a Barnes & Noble.

The new shop will follow the same model as the company's roastery in Seattle, the birthplace of the chain, meaning that it won't only be a place for computer campers, bathroom-seekers, and unrooted coffee snobbery. It will also be a place to learn about the craft of roasting and brewing coffee, Fortune says. The new store will go by the name The Starbucks Reserve Roastery and Tasting Room and will open in 2018.

Viñoly's nine-story office building is set to be complete in 2017, according to new estimates.

In 1927, NYC Almost Got a 16-Mile Highway Along Building Rooftops

In the early 20th century, engineers and architects were certainly thinking outside the box when it came to city planning here in New York. There was the proposal to fill in the Hudson River for traffic and housing, the idea to create a giant conveyor belt to carry people between Grand Central and Times Square, and the plan tostack the city like a layered cake. Though these ideas sound whacky, they were born from the rise of the automobile and suburbinization. With many Americans moving out of urban centers, planners sought new ways to reimagine the modern city and entice car-loving prospects.

Another such idea is this 1927 one for a 16-mile elevated highway that would have traveled across building rooftops from the Battery all the way to Yonkers. Conceived by engineer John K. Hencken, it required all buildings to be uniform at 12 stories. Within them would have been standard uses — residences, offices, schools, theaters, restaurants — and elevators to take cars from the street to the skyway.

Sure it’s crazy and was never built, but at the time, Hencken’s proposal was “approved by a number of eminent engineers and city planners. They say it is entirely feasible from an engineering standpoint,” according to a Popular Science article in which it was featured. The article continued: “Our artist pictures here an ingenious new plan for solving NYC’s traffic problems by a remarkable system of roof-top boulevards running more than sixteen miles in a straight line through the heart of the city. Bridging of cross streets for free movement of traffic; moving platforms for speedy and convenient service; healthful elevated playgrounds for children; underground railway freight service—these are some of its outstanding features.”

March’s 10 Most-Read Stories

March’s 10 Most-Read Stories

• Skyscraper Proposal Digs Out Central Park and Surrounds It With 1,000-Foot Glass Structure
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• Katie Couric Buys $12M Upper East Side Condo
• Apply for 83 Affordable Apartments in Astoria, Starting at $895/Month
• Queens’ New Skyline: A Rundown of the 30 Developments Coming to Long Island City
• Housing Lottery Launches for Greenpoint Landing’s 33 Eagle Street, Rents Start at $494
• My 1,000sqft: Tour a Newly Transplanted Couple’s Bushwick Apartment Filled With Craigslist Finds
• MAP: Where to Find NYC’s Current Affordable Housing Lotteries
• How Horse Poop Inspired the New York City Stoop
• New Views and Renderings of Eliot Spitzer’s ODA-Designed Williamsburg Mega-Development

100 Varick could become first NYC development funded (almost) entirely from China

Renzo Piano-designed 100 Varick Street could become the first major New York development to get debt, equity and mezzanine financing all from China. The developers’ turn to China comes as U.S. lenders increasingly shy away from funding luxury condo development.

Bizzi & Partners Development, Halpern Real Estate Ventures and Aronov Development are raising EB-5 funds for their 115-unit, 320,000 square-foot luxury condo development in Soho, according to a press release from the leading Chinese EB-5 placement agency, Wailian Overseas Consulting Group. The developers already secured a $320 million construction loan from Bank of China and a $135 million equity investment from Cindat, the U.S. subsidiary Chinese investment firm Cinda Asset Management, as Crain’s reported in January.

It wasn’t immediately clear how much money the developers are raising through the EB-5 program, which offers foreigners U.S. visa in return for investments. Bizzi & Partners declined to comment, while Halpern and Aronov did not respond to requests for comment.

EB-5 investors typically provide mezzanine financing. If Bizzi and its partners manage to raise the funds, 100 Varick would become the first major New York development to get all three major layers of the capital stack – debt, mezzanine and equity – from Chinese sources. Presumably Bizzi, Aronov and Halpern hold equity stakes in the project, meaning it still won’t be entirely Chinese-funded.

Other projects have come close. Vornado Realty Trust secured senior and mezzanine financing for its luxury development at 220 Central Park South from Bank of China, but not equity. Meanwhile, Chinese developers in New York tend to mix in domestic financing. For example Xinyuan Real Estate secured a $165 million construction loan from U.S.-based Fortress Investment Group for its Oosten condo development at 429 Kent Avenue in Williamsburg.

As The Real Deal recently reported, domestic lenders are increasingly shying away from financing luxury developments amid slowing condo sales and global capital markets turbulence.

“Everyone’s a little worried,” Michael Stoler, a managing director at investment firm Madison Realty Capital, told TRD in February. “With anything at $2,500 (per square foot) or more, lenders are very cautious.”

Plans for Karim Rashid's Futuristic Soho Building Have Been Filed

Last summer, provocative designer Karim Rashid held a contest on his Facebook page, letting fans vote on the design of his forthcoming NYC building at 30 Thompson Street. Now, nearly a year after the contest was opened, 6sqft reports that plans for the building have been filed with the city's Department of Buildings.

Here's what we know about it so far: The building will rise about 113 feet, and will have eight apartments over as many floors, in addition to a lobby and off-street parking. According to YIMBY, the apartments themselves (each of which will occupy a full floor) could average as large as 1,700 square feet.

As for the look of the building itself, 6sqft reports that this trippy design was the fan favorite, winning the contest that Rashid had opened up on his Facebook page. True to form for the designer, it's slightly futuristic, with a white exterior and geometric windows overlooking the street.

Ceiling heights are movin’ on up in NYC

Design styles fall in and out of fashion. And just as skirt hems tend to rise, so do ceiling heights.

“Today, 11-foot ceilings are the new eight-foot ceilings,” said Izak Senbahar, the president of the Alexico Group, a developer behind the TriBeCa condo tower 56 Leonard.

One of the luxuries of building a new development is being able to incorporate features that cannot be made by simple renovations in existing buildings. Taking this into account, developers are starting to construct their tony new developments to include ceilings that are higher than the current norm — some from a whopping 11 feet to a sky-high 19 feet.

While creating these expansive spaces is far more costly–  both in construction costs and also in lessening the number of floors — it also distinguishes the building from the competition.

The New York Times reports Arthur Zeckendorf, a principal of Zeckendorf Development, estimated that placing 11-foot ceilings in the 33 units at 520 Park Avenue was adding an extra 10 percent to his building costs, and adding 10 percent more time to the construction schedule for the 54-story structure.

But there is a pay-off. buyers will often opt to pay more for spaces with higher ceiling heights because they offer more comprehensive views and better display areas for art collections, not to mention eliminating any feeling of claustrophobia.

Ashwin Y. Verma, a founder of Siras Development — which is building Soori High Line where 80 percent of the 31 condo units will have 13-to-18-foot ceilings — says new construction will incorporate higher ceiling heights from now on.

“As a developer, the New York market is one of the few places where you can change the story on architecture like this and still get rewarded,” he explains.