OCTOBER 7, 2024
BY THE NUMBERS
$775K In 2011, Barbara and Lou Grumet bought a two-bedroom co-op for $775,000 at 100 W. 57th St.
Subway ad for a program that pays family members and friends to provide home-based services | BLOOMBERG
$25M The new holders have proposed to raise the rent to $25 million a year from $4 million.
25K There are between 65 and 100 co-ops with a ground lease in and around the city, housing up to 25,000 people
Lou and Barbara Grumet live in a co-op with a ground lease that is up for renewal next year. | BUCK ENNIS
Georgia firm wins coveted health care contract But its track record sparks fear services could be jeopardized By Amanda D’Ambrosio
tower at 40 Wall St. owned by Donald Trump has one, and last month the ground lease for the Chrysler Building was terminated by Cooper Union after troubled operator RFR Holding defaulted on $21 million in rent payments. Ground leases were rare for apartments until the 1980s but became more popular after a court-ordered policy change. Today, residents are paying the price as ground leaseholders seek to dramatically raise rents to reflect soaring values for New York housing. At the Grumets’ co-op, called Carnegie House and located across from Billionaires Row on 57th Street, the ground lease resets next March 14. The new holders, which own several Manhattan office buildings, have proposed to raise the rent to $25 million a year from $4 million. Residents say such a drastic rent increase will bankrupt their building. They have offered to pay $5.6
Gov. Kathy Hochul handed over a home care program that costs the state $9 billion to financial services firm Public Partnerships LLC last week, along with the colossal task of consolidating one of New York’s most popular Medicaid services from being managed by 700 companies to just one. Hochul’s decision to award the contract to PPL is the latest development in her plan to rein in the ballooning Consumer Directed Personal Assistance Program. The program, which allows New Yorkers to hire family members and friends to provide home-based services, has grown exponentially in the past decade and driven up the state’s Medicaid costs. PPL will lead the charge on whittling down the hundreds of existing companies that facilitate the program, partnering with 30 current middlemen to enroll and educate patients and workers. The firm is ultimately responsible for overseeing the
See CO-OPS on Page 18
See HOME CARE on Page 22
LOSING GROUND Midtown residents risk losing their apartments as co-ops face a wave of ground lease renewals at eye-popping rates | By Aaron Elstein
I
n 2011, Barbara and Lou Grumet bought a two-bedroom co-op for $775,000 at 100 W. 57th St., leaving behind their house in Riverdale for a fully accessible apartment close to Mount Sinai West, Weill Cornell Medical Center and NYU Langone Health. “We use all three hospitals,” said Barbara, a retired dean at Long Island University’s Westchester campus who is 80 years old and uses a wheelchair. “We also like going to
GROUND LEASING
1980s Ground leases were rare for apartments until the 1980s but became more popular after a court-ordered policy change.
Broadway shows,” said Lou, also 80, who uses a cane. But the golden years for these grandparents are under threat by something happening in the dirt below them, something that could force them to move out in as little as six months. That something is a ground lease. In a ground lease, the land underneath has a different owner than the building above. These leases are common in commercial real estate. The office
“We’re not billionaires, we’re thousand-aires. We are the tip of a spear that’s coming straight for co-ops across the city.” — Richard Hirsch, board president, Carnegie House
VOL. 40, NO. 36 l COPYRIGHT 2024 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED
P001_CN_20241007.indd 1
CHASING GIANTS This Midtown startup is leveling the field for MWBE construction firms.
WHO OWNS THE BLOCK Closure of M&J Trimmings alters fabric of Garment District.
PAGE 3
PAGE 4
GOTHAM GIG Bringing a sense of calm to food service industry. PAGE 23
10/4/24
:12 PM