They've been around a while, and are state-funded ($2MM fund, I believe) but they've only invested in 3 companies so far... I'm pretty sure there's a lot of people applying so I'm guessing they're being really selective/non-risky (which is usually the case with east coast tech investors compared to west coast ones).
What is wrong with Brooklyn? If you start your company in Manhattan, you're just needlessly increasing your burn rate and reducing the amount of time you have.
I thought the cash was a little low, I mean, this is NYC, after all?
They are providing space (working space, that is, not an apt, I think), though, which makes it a little better - but I like YC's 5k*n idea a lot more.