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BankNote building, in Hunts Point, South Bronx

Cryptocurrency Comes to The Bronx

BankNote building, in Hunts Point, South Bronx

One August weekend, a dozen 18- and 19-year-olds filed into a large, former industrial building in the South Bronx for a class on how to better manage their money. Once a factory where pennies were minted and paper money was printed in the early 20th century, the landmark Hunts Point BankNote building found a new purpose in 2014 when it was converted into office spaces.

And for two full summer days, an entrepreneurship incubator inside the former money factory became a boot camp about the 21st century’s answer to currency woes: cryptocurrency, a form of digital currency that allows people to make financial transactions without using a bank.

Cryptocurrency allows individuals to make peer-to-peer transactions whose authenticity is verified by a network of computers rather than a third-party institution like a bank. People using cryptocurrency can use digital wallet apps to pay for goods and services.

It’s often heralded as a solution for developing countries where banks are scarce, but Morrisania high school teacher Carlos Acevedo argues that the cryptocurrency industry could have just as much impact closer to home.

“My point of view was that you don’t need to go that far,” said Acevedo, who lives in the suburbs of New York and has taught English in the Bronx high school for the last seven years. “You’re four miles from the World Trade Center, and this is the unbanked right here.”

Acevedo hopes that the technology can help Morrisania and East Tremont, where 28 percent of the residents don’t have bank accounts, according to a 2013 study from the Urban Institute. That can mean paying additional fees when cashing checks or paying bills, and a higher likelihood to turn to predatory lenders in times of financial difficulty.

The Bronx has adopted cryptocurrency faster than almost anywhere else in New York because banks are so scarce, said Leighton Banton, a program assistant at BXL, an entrepreneurship incubator inside BankNote that hosted Acevedo’s class for the weekend.

“There are so many corporations that say they can’t make their way out here,” Banton said. “But I see people using Bitcoin ATMs all the time. They have more faith in the cryptocurrency than in the actual financial systems we have.”

The idea for this crypto boot camp came two years ago when Acevedo realized that even his most diligent Advanced Placement English students knew nothing about managing their personal finances. Many of his students’ parents had no bank accounts.

He began teaching voluntary classes after school hours to help them learn about bank accounts, credit cards and money management.

“Eighty to 90 percent of my students will have talked about having to send money home to family members,” said Acevedo, “or not being able to have a credit card, or having to pay money to get to a bank branch because they don’t have one near them.”

Acevedo said that in addition to a lack of financial knowledge among his students, there’s a noticeable absence of banks in the Bronx. In the four-mile stretch that he commutes every day, from Fordham University to the high school he teaches at in Morrisania, he barely sees any branches.

Despite more than two dozen ATMs, there are just six bank branches in his corner of the South Bronx, including one municipal credit union. Even other South Bronx neighborhoods are better served than Morrisania: Pelham Bay has 10 bank branches, eight of which are only a few hundred meters apart. By comparison, Manhattan’s Upper West Side has 38 branches.

“People get the short end of the stick and they don’t know what to do,” said Tashima Lee, one of the boot camp’s attendees and a former Acevedo student who became interested in cryptocurrency after one of the teacher’s financial lessons. “And they end up spending money because they burn it in a flash.”

For South Bronx residents, it made sense to find alternative ways to make essential financial transactions – like cashing a salary check – that didn’t involve paying to take public transport, or relying on restrictive opening hours.

Cryptocurrency provides a different way for South Bronx residents to make their financial transactions where banks are most scarce; despite the short time that the technology has been around, there are already seven cryptocurrency ATMs in Morrisania alone.

As a part of his education initiative, the Crypto Community Project, Acevedo rounded up eleven industry leaders from national firms including the Electric Coin Company and Gemini to speak to his former students about cryptocurrency and blockchain technologies (which underpin the security of cryptocurrency transactions) for a two-day boot camp.

In addition to lectures, the class gave students the chance to put theory into practice, using a digital wallet to purchase ice cream at the local ANC theater.

Leighton Banton said Acevedo’s initiative means that Bronx residents have a chance at becoming active participants rather than just consumers with cryptocurrencies.

“There are so many corporations that say they can’t make their way out here,” Banton said. “But I see people using Bitcoin ATMs all the time. They have more faith in the cryptocurrency than in the actual financial systems we have.”

Banton said Acevedo’s initiative means that Bronx residents have a chance at becoming active participants rather than just consumers with cryptocurrencies.

“Black and brown Bronx kids can get a $100,000 job without college if they apply themselves to this,” said Banton. “I know that someone from that program is going to be a millionaire one day, because of something they learned here.”

Jemima Joseph, an 18-year-old former Acevedo student, said that while she hadn’t spent the cryptocurrency during the workshop, she sees the potential it offers for when it comes to sending money to family outside of the U.S. She hopes that one day it will make it easier and cheaper for her to send money to relatives in Togo and Nigeria.

“This isn’t a short-term accomplishment,’ she said, when asked what the practical use of cryptocurrencies to her now. “It will take a while, but I see it gaining momentum.”

Posted in Bronx Beats, Bronx Neighborhoods, Featured, Money, Morrisania, Morrisania, south bronx, Southern BronxComments (0)

Healthcare startups still struggling while the industry booms

The historic Banknote building in Hunts Point houses as many as eight healthcare startups in South Bronx. (SAHELI ROY CHOUDHURY / The Bronx Ink)

The historic Banknote Building in Hunts Point houses as many as eight healthcare startups in the South Bronx. (SAHELI ROY CHOUDHURY / The Bronx Ink)

In a cubicle on the second floor of the historic Banknote Building in Hunts Point, Thelvis Alston worked the phones one September afternoon, canvassing potential clients for the new data services startup he helps to run. Sector-Wide Health, which opened in January last year, has faced stiff competition from larger companies ever since the Affordable Care Act contributed to this growing economic sector in the borough.

The company has had a “difficult” start, said Alston, a 41-year-old Bronx native and vice president of operations.  Building a client base of doctors who want help digitizing their medical records has been “slow but steady.” Bronx’s healthcare industry has been on the upswing over the last five years. One reason for the mini-boom is the Affordable Care Act, which offers more medical access to more people throughout the borough. Between 2009 and 2013, the sector added nearly 5,000 new jobs in private hospitals, clinics, and other agencies. But the growth has not affected all businesses equally. Small businesses such as Sector-Wide Health have trouble breaking into a market face with so many larger healthcare organizations and agencies that are significantly better funded, like the Urban Health Plan for example.

Alston believes there is still an untapped need by doctors need to digitize their medical records to comply with new regulations for Medicaid and Medicare incentives under the Affordable Care Act. Sector-Wide Health are best situated to fill that need. Alston regularly meets with neighborhood doctors to identify what type of digitization software would work best for their practice. He then guides them through the transition process. “It’s about talking to doctors just to get them comfortable with the thought of where their business is going to go in the next ten years,” Alston said. Sector-Wide Health’s growing number of clients mainly include private practitioners and small clinics in the Bronx.

Joe Carrano, another Bronx native, remains upbeat about the prospects for healthcare outfits, both big and small, in the borough. “The industry is huge and healthcare technology is really growing here right now,” said the 25-year-old Carrano, who is director at the Bronx Business Incubator in Hunts Point. The incubator houses 66 start-ups and eight of them, including Sector-Wide Health, are in the business of providing healthcare and healthcare-related service.

Carrano believes the Bronx has more room for growth, for the healthcare and healthcare-related industry, than any other borough. Its close location to Manhattan and its relatively cheap real estate makes it attractive for investors, he said. The incubator provides startups with consultations, networking opportunities, and affordable office space. It has approximately 180 workspaces, comprising virtual offices, physical workstations, conference rooms, and meeting areas. “It’s up to entrepreneurs in the Bronx to shape the development of the business community,” said Carrano.

For Sector-Wide Health, the road ahead is uphill. It is still relatively new, has a comparatively low budget, and comprises a small team of employees. The Affordable Care Act, Alston believes, provided an important point of entry into the market. In order to survive against bigger, better-endowed competitors, the startup has to quickly carve out a niche area of service.

Some entrepreneurs believe the Affordable Care Act works against small businesses in an already saturated healthcare industry. One of them is Michael Harris, a registered nurse and owner of a startup called Transparency in Registered Nursing. His startup, founded in 2009, brings “high-tech nurses into the homes of patients” for both emergency treatments and long-term outpatient care. Harris believes the Act “drove out small businesses” that have no interest in doing business with the insurance plans that are part of the marketplace. Unless businesses sign up to be part of the marketplace, he said, they cannot exist within the healthcare ecosystem created by the Act.

Harris’ gripe with the Act boils down to “nine insurance companies in downtown New York State” that control the marketplace, and the participating hospitals and practitioners that provide “substandard treatment.” He said those are the main reasons why he did not sign his company up to be part of it. Harris would not specify which of the nine insurance companies he talks about but there are at least 16 participating in the Affordable Care Act marketplace in New York State. As a result, he now markets his services mainly to people who can afford insurance plans that offer “unbiased, out-of-network benefits.”

Alston does not share Harris’ skepticism and remains optimistic about the future for healthcare startups. He thinks opportunities and benefits created by the Affordable Care Act will eventually benefit small business outfits. “People will catch up,” he said with a smile.

Posted in Featured, Health, Southern BronxComments (0)

Incubating new businesses in Hunts Point

A rendering of the Sunshine Bronx reception area. Photo courtesy of Sunshine Suites

A rendering of the Sunshine Bronx reception area. Photo courtesy of Sunshine Suites

When Clarisel Gonzalez decided to expand her Mott Haven home-based new media business for journalists and local artists, she knew her hardest task would be finding office space she could afford.

Then, on Nov. 3, Gonzalez discovered Sunshine Bronx, a new city-funded venture that aims to provide affordable office space for 400 local entrepreneurs in Hunts Point’s newly renovated BankNote building. The program offers offices and desks for rent in the historic site, as well as on-site mentorship from successful business-owners to help fledgling new businesses in the Bronx build momentum.

Within five days of the ground breaking, Gonzalez became one of 60 applicants vying for space in the refurbished building which should be fully functional by February 2011. Cheni Yerushalmi, Sunshine Suites co-founder, said the response was “overwhelming but not surprising” due to what he sees as a lack of new business opportunities in the Bronx.

“People are hungry to be their own boss,” Gonzalez said.

Yerushalmi will take an active role in overseeing the activities and progress of the new Bronx “Shiners.”  A wide range of events and seminars will provide tenants with face-to-face access to veteran “Shiners” from Sunshine Suites’ offices in Tribeca and NoHo and give the rookie entrepreneurs opportunities to connect with successful Sunshine alumni and faculty members from Baruch College.

Entrepreneurs are enticed by the opportunity to expand their space and ingenuity. “I was drawn to Sunshine Bronx because if its location and because I really want to get my business out of my home and into an office,” Gonzalez said. “I also really enjoy the idea of networking opportunities because that’s what most of my business is about. It’s nice to have local support.”

Sunshine Bronx is the first business incubator in the borough, joining six others across the city since 2008. The incubator received a $250,000 grant from the New York City Economic Development Corporation, as did the other Sunshine Suites incubators.

“More than 15,000 new businesses were established in the Bronx in 2008,” said Mayor Michael Bloomberg at the ground breaking. “We’re creating the Bronx business incubator to build on that momentum.”

With the help of Sunshine Bronx, Gonzalez aims to take her business from the pixelated computer screen and into real life, which is one of the aims of Sunshine Bronx.

The city began sponsoring the for-profit Sunshine Suites project ten years ago in other boroughs, as a way of boosting the local economy.

Many of the businesses cultivated in the Manhattan incubators have gone on to make millions and send workers back to mentor new business owners. Adobe, the creative computer program master, spent time in Sunshine Suites incubators as a start-up business.

Yerushalmi said that the Bronx was a natural choice for the next incubator, one of three that the city hopes to set up by the end of 2011.

A rendering of the Sunshine Bronx conference room. Photo courtesy of Sunshine Suites

A rendering of the Sunshine Bronx conference room. Photo courtesy of Sunshine Suites

“There’s 1.3 million people in the Bronx, but there’s a severe lack of resources for those who want to start their own businesses,” Yerushalmi said. “Sunshine has a great track record and with the help of Taconic Investment Partners, a Manhattan based real estate developer, we’ve been able to bring a great resource to the Bronx.”

In January 2008, Taconic Investment Management bought the historic BankNote building for $35 million from The Blauner family, which had owned it since the American Bank Note Co. left in 1985.  Taconic said its aim was to rent out space in the building that once printed currency and postage stamps to local community and arts organizations. Taconic Invesment Management signed a 10-year, low, rent-controlled lease with Sunshine.

Yerushalmi expects the 11,000-square-foot space to be self-sustaining within three years by renting out 180 work stations which are split between desks and co-working space for freelancers. Permanent desks rent for $295 a month while co-working stations go for $195 per month.

Sunshine Suites does background checks on all potential renters. Those who have criminal records are not offered space, but other than that there are no other renting requirements.

Gonzalez is looking into obtaining a permanent desk as a way to get out of her home and connect with more local entrepreneurs. “It’s such a great opportunity,” she said. “As soon as I heard about it I had to find out more.”

Cake Apparel Co. and Internet-based organic clothing company also expressed in moving in. Lorin Jones, the company’s marketing representative, said she was searching on Google for shared office space when she stumbled across a press release for Sunshine Bronx. “It looked like a great opportunity and I liked the location,” Jones said. Jones isn’t sure if she’s going to use the space. “I haven’t decided if we’re going to rent yet but it looks like a great way to take our business offline.” Cake Apparel has a large following in New York, Boston and Maryland and is based around the business model that organic clothing can be colorful and fun.

Yerushalmi said the biggest draw to these sites isn’t the cheap space, it’s the mentorship and networking opportunities, which is the aspect that most heavily drew Jones and Gonzalez. “Networking is very important to any business,” Yerushalmi said. “

And with Sunshine no one has to stay home with their cat.

Posted in Bronx Life, Bronx Neighborhoods, Money, Southern BronxComments (1)