“When KKR & Co. co-founder Henry Kravis started the Partnership Fund for New York City in 1996, the effort to support local business ventures was bound to make waves. But it wasn’t until 2010 that a picture of how big its impact would be began to emerge.
That was the year the Partnership Fund’s president and chief executive officer, Maria Gotsch, co-founded the FinTech Innovation Lab with Robert Gach, a senior capital markets consultant with Accenture. The lab connected venture capitalists and start-ups, creating an ecosystem for mentoring and financing that has been replicated internationally.
Today, Kathryn Wylde, President & CEO of the Partnership for New York City, delivered the following testimony on recent title insurance regulations before the New York State Assembly Standing Committee on Insurance:
“The Partnership for New York City represents the city’s business leaders and largest private sector employers. We work together with government, labor and the nonprofit sector to maintain the city’s position as the pre-eminent global center of commerce, innovation and economic opportunity.
New York State is well established as the national leader when it comes to state regulation, enforcement and oversight of the financial services and insurance industries. The policies we establish here are models for other states and the agencies that carry out this work on our behalf are highly respected as best in class among state regulators. We should consider the efforts of the Department of Financial Services to ensure appropriate oversight of the title insurance industry in that context.
Real estate is a key industry for New York City and title insurers have long provided a service that the industry values. They deliver timely evidence of clear title as a condition of virtually every purchase and loan closing.
At the same time, title insurance is only as good as the public records of ownership, easements and liens that may encumber a property. In New York, the title industry has less than a 5 percent rate of losses, far lower than any other so-called “insurance” sector. One must conclude that our public agencies do a good job of record keeping — for which they receive very modest fees. Title insurance companies, on the other hand, are compensated at significantly higher rates than may be justified by either the risks they incur or their legitimate expenses, as demonstrated by the results of the DFS investigation.
In 2008, when New York State faced a significant budget deficit, the Partnership for New York City released a proposal that the state should consider self-insuring title records as a way to generate new revenues and reduce costs for affordable housing. Frankly, members of the real estate and banking industries did not support this position out of concern that government agencies would be less responsive than the private sector to the demands of showing up promptly at closings with a completed record. We did not pursue the issue.
But we did advocate for the state to take a close look at industry rates. In New York, a handful of politically connected companies collected revenues of about $1.1 billion in 2016. Last October, after an extended investigation, DFS issued regulations designed to curb lavish marketing expenses that are promotional and protectionist, rather than a necessary cost of doing business. We support the position of DFS and would also suggest a careful and complete review of the appropriateness of other expenditures allowed under the current rate structure, such as lobbying and political contributions that add unnecessarily to costs passed along to consumers and businesses.
Though technology has made title searches simpler and cheaper, premiums have continued to rise, with New York state having some of the highest insurance rates in the country. In New York, the industry has input into the rate-setting process through the recommendations of the Title Insurance Rate Service Association, Inc. but the public relies on DFS to ensure that the costs passed along to customers are reasonable and necessary. Nationally, only four underwriters own 90 percent of the title insurance market. Given the fact that their premiums are essentially mandated impositions on every transaction, the concentration of power is troubling and requires more strenuous oversight than has historically been the case.
We commend the Assembly Insurance Committee for taking a hard look at the industry and its regulatory environment today. We are not calling for socialization of the industry. But we are suggesting that investigations and tightening of controls by the DFS are necessary and appropriate to contain costs and to ensure that the best interests of residents and businesses in the state are protected.”
“Governor Cuomo made it clear today that he understands that New York faces new challenges in competing to attract talent and business investment to the state as a result of federal tax reform. The business community is prepared to offer its cooperation and expertise to help explore how any negative impact on the state and its resident taxpayers might be offset, through such measures as a payroll tax or a public charitable fund. We applaud the Governor’s commitment to take thoughtful action to cushion the loss of state and local deductibility, which comes down hardest on the top 1% of New York State taxpayers, who account for 42% of total state income tax revenue.
Another important announcement today involves the state’s workforce development efforts, focusing on better alignment with the job opportunities in growing sectors of the economy. Adequate education and skills training are the most productive way to increase upward mobility. There are more than 110,000 jobs waiting for qualified applicants to fill them in New York City alone.”
This week, New York State awarded over $64 million dollars to fund local projects that were recommended by Governor Cuomo’s NYC Regional Economic Development Council (REDC). This is the seventh round of funding awarded through a process where a council comprised of local business, labor, academic and civic leaders establishes regional priorities and helps evaluate applications for state funding. This round will support over 120 companies and nonprofit organizations to carry out economic and workforce development projects across the five boroughs.
The industry priority of the NYC REDC this year was life sciences. Two growing companies in this field that will receive capital and tax credits through the REDC process are Celmatix, a health company using genomics and big data to empower women’s fertility decisions, and Cresilon, which manufactures a plant-based gel to stop bleeding.
Awards will also support a number of workforce training programs that feature collaborative partnerships between employers, nonprofits and educational institutions. For example, City University of New York will receive funding for an IT Support Program that will prepare unemployed workers with training and industry credentials that qualify them for jobs in the rapidly growing tech sector. Historic Greenwood Cemetery will train youth for careers in stone masonry and construction.
B.Amsterdam, which operates one of Europe’s largest tech incubators, was granted nearly $2 million to support its plan to open a U.S. operation in the Brooklyn Navy Yard. B.NYC will be a tech accelerator for international entrepreneurs. A recent study by the Partnership for New York City found that tech is the most promising area to increase foreign direct investment in the city, creating new jobs and economic activity.
“REDC funding for New York City’s priority projects will help close the skills gap, provide affordable space for the emerging tech companies, support neighborhood development and improve the region’s infrastructure, all of which are critical to ensuring that the city’s continued growth and prosperity are widely shared,” said Winston Fisher, Partner at Fisher Brothers and co-chair of the NYC Regional Economic Development Council.
“Life sciences investments from the REDC help strengthen an important and well-paying sector that plays an increasingly dominant role in the innovation economy. This additional state funding reinforces our efforts to effectively compete with other life science centers,” said Cheryl A. Moore, President & COO of the New York Genome Center and co-chair of the NYC Regional Economic Development Council.
“The REDC process offers a great opportunity to reflect local priorities in the state’s economic development program,” said Kathryn Wylde, President & CEO of the Partnership for New York City and a member of the NYC REDC. “Outreach by the REDC members has brought a greater diversity of funding applications, many from small businesses and NGOs that would never have otherwise gotten through the traditional funding process. The regional and more transparent approach to economic development through the REDC process has brought benefits well beyond the dollars awarded.”
Total REDC awards to New York City since 2010 total $465.2 million. Funded projects will result in more than $3.3 billion in private and other public investment.
NEW YORK — December 13, 2017 — Kasisto, creators of KAI, the leading conversational AI platform for finance, today announced a $17 million Series B funding round led by Oak HC/FT with participation from existing investors Propel Venture Partners, Two Sigma Ventures, Commerce Ventures, Mastercard and Partnership Fund for New York City. KAI enables financial institutions to acquire new customers as well as engage, support, and generate additional revenue from existing customers via human-like, intelligent conversations with smart-bots and virtual assistants, anytime, anywhere.
SEATTLE, Wash. and NEW YORK – December 13, 2017 – Accelerator Corporation a leading life science investment and management firm, today announced the appointments of Kendall Mohler, Ph.D., to the newly created position of chief development officer, and Ian Howes to chief financial officer. The firm also announced that it has changed its name to Accelerator Life Science Partners. The new name reflects Accelerator’s commitment to developing robust, long-term partnerships with its portfolio companies and to nurturing innovation and entrepreneurship within the life science community. This commitment is shared by Accelerator’s current investors, including AbbVie, Alexandria Venture Investments, ARCH Venture Partners, Eli Lilly and Company, Johnson & Johnson Innovation – JJDC, Inc., the Partnership Fund for New York City, Pfizer Venture Investments, Watson Fund, WRF Capital, WuXi AppTec and 180 Degree Capital Corp.
“The growth of Amazon has been very good for Homer Logistics but not because the e-commerce giant uses the Midtown-based courier service for deliveries. Rather, the three-year old startup can thank Amazon’s competitors for its rapid growth this year.
Major retailers, desperate to keep up with the Seattle behemoth, are offering same-day delivery service for more and more products. Venture capital–backed Homer Logistics has gone from relying almost entirely on doing restaurant deliveries to getting a small but fast-growing portion of its revenue from serving online retailers and the e-commerce arms of brick-and-mortar stores.
Founder and CEO Adam Price declined to provide dollar figures but said the volume of deliveries is almost triple what it was in 2016. Read More
“Greenpoint Manufacturing and Design Center, led by chief executive officer Brian Coleman, has inked financing totaling $40 million from three lenders to acquire and redevelop an industrial project in Ozone Park, Queens, according to documents filed today with the city.
The intricate accounting behind the project, at 94-15 100th Street, also includes public grants and tax breaks. The deal was arranged in-house at GMDC, which has a development staff of only three people, without the help of a broker.
Drawing on financing from Sterling Bank, Chase Bank and the Partnership for New York City, Coleman’s nonprofit purchased and plans to redevelop the 85,000-square-foot bicycle factory into a multi-tenant manufacturing building. The project, slated for completion in spring 2019, will feature units from 1,200 to 9,000 square feet, which tenants will be able to subdivide or combine to accord with their needs, GMDC said. Read more
Testimony of Kathryn Wylde, President & CEO of the Partnership for New York City, submitted for the City Council Public Housing Committee Hearing on DOI Investigation into Lead-Based Paint Conditions at NYCHA Apartments
Thank you for the opportunity to submit testimony today. We all agree that there can be zero tolerance for exposing children to lead paint poisoning and recognize that this hearing responds to very legitimate concerns about conditions that should not exist in public housing. At the same time, the focus should be on fixing the underlying conditions, not on chastising NYCHA management or the Administration for a bureaucratic error. This is an opportunity for the City Council and all of us to support Shola Olatoye and her team as they struggle against great odds to preserve and renew the nation’s largest inventory of publically-owned affordable housing.
During the past four years, the Partnership has had an opportunity to work with NYCHA leadership on several issues. It is our observation that they are a professional, conscientious and capable group who have made significant strides in overcoming political, financial and bureaucratic challenges that have contributed to the serious deterioration of this essential housing asset.
Debbie Wright, a former HPD Commissioner, and I wrote an op-ed a few weeks ago where we referenced the huge risks of public ownership of affordable housing, pointing out that most other cities blew up or privatized their public housing projects rather than taking on the thankless task of trying to save them. We pushed back against the unrealistic expectations and highly political demands that some officials who should know better are making of NYCHA management, who arguably have the hardest jobs in city government. Among their challenges are inadequate funding, multiple layers of compliance requirements, rigid labor contracts, dilapidated buildings and a tenancy characterized by severe economic and social challenges. Debbie and I contend that you could not find a more capable or committed leader for this enterprise than Shola Olatoye.
The federal government’s commitment to public housing is at a low point, but we cannot let Washington off the hook. It is not feasible for our local tax base to assume responsibility for housing such large numbers of very low-income households without a federal backstop. Attacking NYCHA management for a mistake in a government form is just giving the feds another excuse to cut us off. We need to turn this into a constructive conversation, aimed at helping NYCHA management implement sensible reforms and introduce better systems and new technology. We need to encourage NYCHA to pursue entrepreneurial ventures to raise additional revenues that can help address unmet needs for capital improvements and upgrading of operations.
NYCHA represents a major opportunity for a public-private partnership, drawing upon the resources of the city’s business community, organized labor, and the NGO sector to help identify solutions and advocate for adequate federal funding and regulatory flexibility. At the same time, elected officials will need political courage to make the hard decisions necessary to introduce change at NYCHA. It is easy to attack NYCHA management, but that accomplishes nothing. It will be much harder to develop and implement fiscally responsible solutions to its many problems. That is what we must commit to doing and the Council’s leadership is essential.
Today, Celmatix, a next-generation women’s health company, announced that the Fertilome® genetic test has received full regulatory approval by the New York State (NYS) Department of Health (DOH) Clinical Laboratory Evaluation Program (CLEP). The Fertilome test is the first multigene panel test for reproductive conditions to be approved by NYS, which is known for having the most stringent requirements of the state agencies that regulate laboratory developed tests (LDTs). LDTs are not currently regulated by the FDA.