A severe grounding mistake
The white wire is connected to the ground, which is simply wrong.
If as you say, this is AC cable, then the jacket/shield for the AC cable is a valid grounding path, meaning the boxes ground automatically when attached with a cable clamp listed for that purpose. When you have an installation where the cable or conduit provides the grounding path, it is perfectly common to see panels with no ground wires at all.
A receptacle can ground one of several ways.
By hard-flush contact between the yoke and the box metal (i.e. Where the screws go), provided it is flush, clean, rust-free and does not have those common paper "squares" to capture the screws. This can be via metal spacers.
By a self-grounding apparatus in that same location which uses springs etc. to assure hard contact.
Via a wire to a grounding screw on the metal box. Many boxes have holes tapped #10-32 for this purpose. Any grounding screw must be -32 or finer thread; a sheetmetal screw won't do.
Via a wire to a grounding clip that grabs the edge of the box.
One could re-task the blue wire to be ground, by removing ALL of its insulation, at all accessible points, but I would be very, very reluctant to do that. This being NYC it's possible you have 208V not 240V, and the blue wire would let you bring three 120V circuits here.
I note the existing wiring and configuration, noting that the white wire surely goes to a neutral bar and the black and red to a 2-pole breaker.
You can accomplish one circuit simply by capping off the red wire, and attaching black and white to a 120V/20A duplex receptacle.
You can convert to a multi-wire branch circuit for 2 full 20A circuits here, as manassehkatz describes. That will need to stay on a 2-pole breaker. (Being a GE Qline panel, we don't need to warn you about duplex breakers - they don't exist in Qline.)
Several things make me think you may actually have 208V here.
- You're in New York City.
- Someone used /4 AC cable (why on earth would they do that unless the blue wire could be useful?)
- On this panel, look at the bottom two rows. The buses are spaced extra far apart, and the stabs come out on little extension bars screwed onto the bus. Usually they do that to make space for a third bus in the middle. Pop off that fat 20A breaker and look at the next row up. Does it have exactly the same stab arrangement as the bottom row? Or is the stab different from the bottom two, like a little "island" of its own? The latter indicates a 3-phase panel.
- Look for 4 supply wires (3 hots + neutral) instead of 3.
- Look for 208V between 2 hots, not 240V.
If it is a 3-phase panel, that 2-pole breaker can be replaced with a 3-pole breaker, and the blue wire can be put to good use.
You would need to either replace the junction box with a 2-gang or 3-gang, or come off the top of it with something Legrand Wiremold surface conduit starter kit, then a few inches of surface conduit over to a surface mount receptacle or two. You could fit 3 receptacles, each getting 1 hot wire and sharing the neutral, or 2 receptacles, with one split as in "2 circuits" above, and the other using the single wire.
In such a case, you must pigtail neutral, not use the receptacle as a splice for neutral.