New York City

The Hudson Companies Paradox

The Hudson Companies paradox is simple. This master builder turns into a corporate buffoon when it strays from its core mission. We see it on Roosevelt Island. Lots of it. Hudson builds beautiful, even landmark residences, but badly underperforms when it goes into unfamiliar territory.

The Hudson Companies paradox, president David Kramer.
Hudson president David Kramer owns an impressive track record as a real estate developer.

By David Stone

Partnered with The Related Companies, Hudson is building Southtown, a new community on Roosevelt Island. Seven residential towers are finished and occupied. One nears the finish line, and another is ready to go.

Related: Shops On Main 2020

Market rate homes in Southtowns altered community demographics. Rents went up but so did living standards. The buildings resurrect Edward Logue’s vision for a Roosevelt Island with sweeping waterfront views, one that was lost to budget restrictions, back in the 1970s.

As some decry income inequality, Southtown’s done more to economically integrate Roosevelt Island than Logue’s plans ever could have.

And The House, a tower Hudson built on the Cornell Tech campus, broke records as the largest passive residence in the world when it opened.

But the Hudson Companies paradox of epic fails resides side-by-side with this excellence.

Get the bigger community picture: Roosevelt Island News

The Hudson Companies paradox begins with Main Street retail…

In 2011, Hudson, along with Related, signed a deal with the Roosevelt Island Operating Corporation to take control of retail along a dreary Main Street. RIOC badly mismanaged a struggling collection of businesses, and it board wanted out.

Although Hudson’s website falsely claims the corridor had a 50% vacancy rate, then, the businesses were shaky. Many, maybe most, were behind on rent.

But they served a relatively isolated community with goods and services. There was loyalty in both directions, but by unpaid rents were more than the state could or should handle.

Main Street retailers blamed RIOC, which owns their locations, for their plight. Promised foot traffic never materialized and building maintenance was poor.

RIOC was happy to get out, and Hudson president David Kramer saw promise. In a Wall Street Journal article, he said new management would “shock and awe” with improvements and upgraded businesses.

Starting out under false pretenses set a stage for the Hudson Companies paradox and impossible promises — based on a tired war theme yet — spiced it.

“Shops on Main is now 90% leased,” sings Hudson’s website today. It echoes claims Kramer made to RIOC’s nearly dormant board of directors in October. Only one and one-half spaces were not leased.

But within weeks, “Available” signs were up in two center of town storefronts, the former Bubble Cool and the long vacant stationery store.

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Deceptions

For now, let’s ignore Hudson’s stealth mission to sneak a speakeasy into a string of parks. Who needs that when there’s so much more?

Hudson’s website brags about 90% occupancy for Shops on Main. It says the company swept in to rescue a business district that had a 50% vacancy rate. That’s untrue, and vacancies escalated after Hudson arrived and started evicting businesses.

But about that 90% occupancy rate… Two of the newcomers highlighted are Bubble Cool and Café Eleanor. Been to either recently?

Or Onda, the the long promised Mexican restaurant?

What about the Italian place Hudson said would replace it? Or was that the vacant Bubble Cool? And the hardware store they promised to replace the one they evicted? The yoga studio announced last spring?

But amid a fertile garden of false claims and promises, one stands out for sheer gall.

503 Main Street, Kramer bragged to RIOC’s board would be open with — presumably — Eleanor’s Café by the end of the year. We acknowledge that Kramer didn’t say which year.

Yet at the time, the Department of Buildings had a full stop work order on 503 Main, caused by electrical violations. It was posted in August, two full months earlier.

It’s still in force, and no business is anywhere near opening. Nothing is registered with the Department of Health.

David Kramer is not dishonest nor is his company unethical. But going off its core competency, the Hudson Companies paradox has them scrambling for excuses, explanations that are too frequently false.

Few agree that Main Street is much better than it was eight years ago, and no one believes Kramer’s promise to “shock and awe” came true.

How the RIOC relationship plays into this

Good sense suggests that relationships between government and businesses with whom they contract ought to be arms-length. As this photo of presidents, RIOC’s Susan Rosenthal and Hudson’s Kramer, demonstrates, that’s not the case on Roosevelt Island.

Ironically, RIOC’s all too friendly relationship with Hudson may be partly responsible for the latter’s poor performance. Every enterprise benefits from a loyal opposition keeping it on its toes.

Sometimes, RIOC’s closer to a royal sycophant, if not as completely obsequious.

The unloved RI Monument/Sign/Icon — whatever it’s called — lacks all innovation. Hudson owns it, but it’s the opposite of the impressive Cornell Tech House.

It’s got nothing, as a pinochle player with a hand full of 9s might say. But RIOC, under Rosenthal, defends the paired eight-foot Helvetica fonts as if they really are innovative and artistic.

Any high school class could have come up with a half-dozen better ideas.

But thanks to RIOC’s ever compliant board, blowing off resident protests, it’s got a permanent home in the Roosevelt Island Tram Plaza.

Rosenthal’s an enthusiastic art lover, and Kramer’s no fool. So, it’s hard to believe that neither sees what a mediocre, inadequate installation this is.

And how bad for public relations.

Roosevelt Island deserved better. Residents said so but were ignored.

Why would the masterful creator of modern housing want to champion something as dull as this?

The Hudson Companies paradox and the holidays…

We’ve covered the lousy Winter Wonderland, concocted by Hudson, mostly paid for by RIOC, already, but for the record…

In 2017, RIOC agreed to give Hudson Related a $50,000 annual lease concession in return for their creating a holiday themed Winter Wonderland. The real estate giants promised $25,000 of their own money.

Scratch your head in wonder. Why would Hudson Related stick its nose into that business? And again, why not involve residents in planning?

$75,000 for that…?

2017’s Winter Wonderland was underwhelming, at best. A ripoff of public funds, at worst.

Lampposts strung with lights and wreaths along the Main Street canyon. A bare bones Santa’s sleigh with a measly two reindeer, no Santa and no elves, unloaded in Good Shepherd Plaza.

But that was nothing compared with gray snowflakes and flimsy silhouette trees in Riverwalk Commons.

When a reader wrote that it all looked like something anyone could buy at Target, we disagreed. Target doesn’t sell already heavily used, soiled merchandise.

And 2019? It’s so disappointing, it makes us miss 2017.

Conclusion: The Hudson Companies Paradox and the future

Hopes for the future are mixed. Will Hudson get the message and stick to what it does best and really well? Hope springs eternal, but it won’t solve everything.

Neither RIOC nor Hudson admits that Shops on Main is a failure. Not publicly anyway. So, that run of failure may be permanent.

And there’s zero chance the RI Icon/Monument/Sign will go away.

Egos so heavily invested are hard to dislodge.

But the Winter Wonderland deal expires this year. Will the partners have enough sense to get out while they can and stay out?

Stay tuned.

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