New York CIty Council Member Ben Kallos

Crain's New York Tackling the scourge of sidewalk sheds by Aaron Elstein

Tackling the scourge of sidewalk sheds

Foto Care is a Flatiron District survivor that for 50 years has rented equipment to fashion photographers and other shutterbugs who make their living behind a camera. But this gem at 41 W. 22nd St. is harder to find these days because it's entombed under a lengthy sidewalk shed, one of the more than 8,000 unsightly steel-and-wood structures that pop up anytime a city building needs renovation.

"At least it keeps the sidewalk dry in the rain," said Jon Slesinger, a Foto Care digital sales integrator. But colleague Sabrina Cates shook her head. "It casts a big shadow," she said. "The one across the street is much nicer."

No doubt about that. At 20 W. 22nd St. stands a new version of pedestrian protection, an Urban Umbrella. Instead of swallowing the sidewalk in a cavern of poles, cross-braces, corrugated steel and dark green parapets, its white columns, LEDs and translucent ceiling significantly improve the experience of walking through a construction zone.

"It looks like a work of art," said Robert Finkelstein, a broker at ABS Partners Real Estate, the managing and leasing agent for 20 W. 22nd, "because it is."

Another Urban Umbrella was installed while finishing touches were completed on a new Marriott Hotel near Times Square. "It wouldn't have been good for the Marriott brand or for us to open with a green plywood shed in front," said Chris Lewis of hotel owner and operator OTO Development.

In the coming weeks, several more Urban Umbrellas will be popping up around Manhattan, including outside the RedFarm restaurant on the Upper West Side, a SoHo office building and two residential towers on the Upper East Side. They're also in use at construction sites in Toronto and Vancouver, with others planned in London. Backers are banking on them sprouting up everywhere urban sidewalks are covered.

"There is an alternative to what everyone is sick of seeing all over the city," said Urban Umbrella's designer, architect Andres Cortes. "There's no law that says sidewalk sheds have to be ugly."

New Yorkers have heard all this before. Eight years ago Mayor Michael Bloomberg called Urban Umbrella the shed of the 21st century after it won a city-sponsored contest to create a more aesthetically pleasing structure. Alas, few landlords wanted to pay extra for one, and contractors found that the design didn't fit well on the city's busy sidewalks and didn't meet mandatory weight-bearing requirements sufficient to support scaffolding.

That rejection sent Cortes back to the drawing board, and in the past year his company has raised millions in capital to build up an inventory of pipes, poles and other parts and train an in-house labor force to install them.

Despite having just a toehold in the massive Manhattan market, Chief Executive Ben Krall says his phone has been ringing. "When residents see how good this looks, they demand it for their buildings," Krall said. "They're saying to landlords, 'You can't just stick us with the same old crap.'?" Now his biggest challenge is securing enough materials from his manufacturer near Toronto, a task complicated by steel prices soaring in response to the Trump administration's tariffs and burgeoning trade wars.

An urban blight

The "same old crap" Krall referred to currently covers 300 miles of city sidewalks, and some of those sheds have stood so long that they have reached voting age. The endurance champion appears to be a shed at the corner of West 115th Street and Lenox Avenue which, according to neighbors, has been up since 1990. City records confirm that one was installed there that year and again in 2003. There are no records of complaints or violations in the interim, but that doesn't mean the structure wasn't there.

"It's a blight, no other word for it, and people are afraid to walk underneath at night," said Tariq Shahid, president of the West 116th Street Community Association.

There are two reasons for this scourge: the robust economy that's sparked a boom in both new construction and renovations, and city laws meant to protect the public from crumbling façades and falling construction materials. Back in 1979, Grace Gold, a 17-year-old Barnard College student, was struck and killed by falling masonry on the Upper West Side. A year later the city passed a law requiring owners of buildings higher than 6 stories to inspect their properties' street-facing façades every five years. Any structures that needed work had to be equipped with a shed.

In 1998 that statute, Local Law 11, was broadened to require inspections of side and rear façades of some 13,000 buildings. In 2013, after a 35-year-old woman was killed when a balcony railing collapsed, the city added railings to the checklist.

This ever-expanding set of laws is manna from heaven for shed builders. Today local building owners collectively pay as much as $400 million annually for street-level sheds and an additional $800 million for the scaffolding that sits atop them, according to industry officials.

George Mihalko, branch manager of Scaffolding Today in North Bergen, N.J., told Crain's two years ago that the New York market for sheds was "insatiable."

And today? "Still insatiable," Mihalko said.

But sheds aren't just eyesores and claustrophobia triggers; they hurt some small businesses by driving foot traffic across the street. The New York City Hospitality Alliance surveyed 79 restaurants in 2016 and found that 40% lost up to a quarter of their revenue when shrouded by a shed. A third of them lost 50%.

The longevity of many of these structures comes down to simple economics. Installing a 200-foot-long shed costs a landlord around $12,500, plus $1,200 in monthly rent to the builder. But replacing loose bricks and masonry, tightening parapets and waterproofing aging rooftops can cost hundreds of thousands of dollars. Those costs explain why 22% of sheds—about 2,000 in total—stand in front of buildings with a façade that poses a safety hazard but where no repair work is underway, according to the Department of Buildings. The agency conducted a sweep two years ago to weed out unnecessary structures, but in the end only 2% were taken down.

"We're not going to compromise on safety," said Tim Hogan, the Buildings Department's deputy commissioner for enforcement.

There's no law mandating when dormant sheds must be removed, but city Councilman Ben Kallos is trying to create one. In 2016 he introduced a bill that would require private landlords to take down a shed if no work were underway for seven days, with exceptions for bad weather. If a landlord refused to undertake repairs, in some cases the city Department of Housing Preservation and Development could step in and arrange to have the work done.

"It's a law of nature that what goes up must come down," Kallos said, "but not in New York when it comes to sheds."

Kallos' bill hasn't gotten any further than a single hearing in November, mainly because neither the Real Estate Board of New York nor the Rent Stabilization Association, a landlord group, wants the city meddling any further with sheds and construction work. Nor is the de Blasio administration—which already has its hands full managing public housing—interested in getting involved with costly, complex repair projects that come with potentially significant legal risk thanks to the state's scaffolding law, which holds building owners and contractors 100% liable for any gravity-related accident even if they are only partially at fault.

Ken Buettner, president of York Scaffold Equipment, one of the city's largest shed builders, called Kallos' bill well-intentioned. But he also observed that a shed has surrounded the Buildings Department headquarters at 280 Broadway since 2008.

"If the city is unable to repair its own building," Buettner said, "how can it point a righteous finger at a landlord?"

One useful way to break the logjam, he added, would be for the city to provide loan guarantees so cash-poor owners of rent-regulated apartments can borrow what they need to make repairs. Kallos said he is willing to work with anyone on addressing the shed scourge. "It's a big problem," he said, "and I need help from Crain's readers to craft a better bill."

Good looks, at a premium

In this morass, Urban Umbrella's investors see a big opportunity. Krall was so enthused after learning about the product that he cold-called Cortes and offered to help with the business. Drawing on his background at a venture capital firm, Krall lined up investors experienced in manufacturing and scaling up fledgling enterprises, and became CEO in 2016.

The big challenge to date has been keeping the Urban Umbrella looking good while tweaking its design to comply with city regulations. New York building codes require sheds to be strong enough to support 300 pounds per square foot, twice as much weight as mandated by any other city. That rule ensures that they are strong enough to absorb the shock of a brick falling 20 stories. It also explains why they have so many columns and gobble up sidewalk space.

Krall said an Urban Umbrella uses higher-quality steel than most sheds—which means it's more stable and can stand with fewer sidewalk-cluttering columns. The structure's weight-bearing canopy is situated above pedestrians' line of vision, and its translucent ceiling is sturdy enough to withstand a cannon shot.

Even after numerous refinements, an Urban Umbrella still costs significantly more than a standard shed. Krall wouldn't divulge prices, but it cost at least 60% more to park one in front of the Marriott. In order to make the price easier to swallow, Urban Umbrella's management sometimes negotiates a lower upfront installation fee in exchange for higher monthly rent spread out over several years. The structure also can be decorated easily to suit its surroundings, such as when the firm adorned every leg of the West 22nd Street installation for last month's LGBT Pride March. "That took off on social media," Krall said.

The CEO said he believes Urban Umbrella has a road map to success, thanks in part to the fact that the city publicly discloses when individual buildings are due for façade inspections. That information helps Krall and his team identify properties where tenants are likely to be interested in a more aesthetically pleasing option.

Because of the premium cost, it still could be a while before Urban Umbrellas begin showing up in front of most New York co-ops and storefronts. In the meantime, as San Francisco and other cities adopt their own façade-inspection laws, demand for Urban Umbrellas figures to increase, and Cortes predicts his designs will soon be a fixture of streetscapes all over the world.

"As cities get older and continue to densify, and as taller pencil towers continue to be built," Cortes said, "we're going to have to face the problem of how best to not only protect pedestrians but also not rob them of their freedom to enjoy the city."

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