CHRISTIE SCANDAL Cuomo aides look to fill Port Authority’s power vacuum THE INSIDER CRAIN’S® PAGE 8 NEW YORK BUSINESS ap photo VOL. XXX, NO. 2 WWW.CRAINSNEWYORK.COM JANUARY 13-19, 2014 PRICE: $3.00 Business THE DEVELOPER WHO HIT braces for PARTNER KENT SWIG council’s WITH AN ICE BUCKET new boss Allies of Melissa Mark-Viverito try to calm fears as lefty SEEKS A SECOND firebrand takes helm BY CHRIS BRAGG CHANCE—IN THE Moments after being crowned the new City Council speaker last week, Man- hattan’s Melissa Mark-Viverito re- vealed her priorities for the next four years: improve schools, reduce home- REAL ESTATE BIZ, lessness and lower housing costs. “We’ve got to get to work,” Ms. Mark- Viverito said. “There’s a lot to do.” But many business leaders are wary THAT IS of what she will do to them. Ms. Mark-Viverito’s See COUNCIL on Page 60 MADAME Yair Levy wants back in the game, SPEAKER: Melissa Mark- despite a lifetime ban imposed by NY’s Viverito AG. Here’s how he hopes to pull it off ap photo BY DANIEL GEIGER When Yair Levy, 64, emerged late last year as the buyer behind a row of The tweet buildings in Tin Pan Alley, he wasn’t simply trying to rebuild his real estate empire, which he once estimated to have been $400 million. He was looking for redemption. heard by “Most people went through tough times in 2008,” Mr. Levy said. “People think I have a bad name,and that’s why I am trying to explain this story.[People the Street are] mistaken as far as what happened in the past.” Mr. Levy’s story, like so many others’ before him, begins with immigrant entrepreneurship and streetwise investing that turned modest buildings into Drugmaker faces impressive moneymakers.The Great Recession toppled him from his heights, questions on timing STANDING TALL: Yair and a theft scandal led to a lifetime ban from selling real estate securities, Levy disputes the facts during stock offering handed down by the attorney general. that led to his ban from the condo industry by But what cemented his reputation was the incident with the ice bucket. Attorney General Eric BY AARON ELSTEIN In an hourlong interview with Crain’s in December, Mr. Levy said he was Schneiderman. humbled by his losses. No longer would he build high-rise luxury Two years ago, April Moundzouris condominiums like the 58-story residential tower on West 57th Street called was diagnosed with amyotrophic later- al sclerosis, or Lou Gehrig’s disease. buck ennis See DEVELOPER on Page 59 Last week, she shared a glimmer of good news on the Internet: She’s re- sponding well to her treatment in a 02 REPORT REAL ESTATE clinical drug trial. 5 Surprisingly hot properties: Bidding wars are “I believe I’ve been given more time and quality of life,” Ms. Moundzouris breaking out for industrial leases P. 13 wrote on her blog Jan. 4. “I can say be- fore this Neuralstem study, nothing THE LIST Top NYC property sales P. 16 else came close to these results.” NEWSPAPER See BIOTECH on Page 59 71486 01068 0 20140113-NEWS--0002-NAT-CCI-CN_-- 1/10/2014 7:29 PM Page 1 EDITOR’S NOTE D-i-v-o-r-c-e FYICRAINSNEWYORK.COM A veteran Crain’s reader with a reputation as an ideas guy visited last Thursday to talk infrastructure, JPM’s missed Madoff signals about the same time New Jersey hen Charles Ponzi concocted the Gov. Chris Christie was on TV scheme that bears his name in 1920, uttering his umpteenth apology for the Hanover Trust Bank of Boston the scandal known as Bridgegate. W handled his deposits and withdrawals. Investors “Why does there even have to be a Glenn Coleman ended up losing about $225 million in today’s Port Authority of New York and dollars. Bernard Madoff’s Ponzi scheme lasted New Jersey?” the visitor asked. for decades and cost investors about $18 billion, “Why can’t there be a Port Authority of New York and he conducted it “almost exclusively” and a Port Authority of New Jersey?” You mean a through his accounts at JPMorgan Chase starting divorce, I said. He shrugged.Things change. You back in 1986, according to last week’s settlement move on. “But what about the children?” I asked. bloomberg news between the bank and federal prosecutors. Not Christie and Cuomo.The assets: the airports, Documents released by the Justice Department show that some JPMorgan bankers sensed the PATH trains, the World Trade Center. Who something was amiss with Mr. Madoff fairly early. In 1994, one banker complained that he was gets what? How do you split the GW Bridge? “Paint kiting checks—moving money between accounts for the purpose of making them look larger a line in the middle of it?” he coyly suggested. Maybe and collecting more interest—but a more senior banker said that was all right because Mr. he’s right.The two-state marriage that created the Madoff was making so much money for the bank. Later, others in the bank sensed Mr. Madoff Port Authority back in 1921 was a good-government was running a Ponzi scheme and his investment performance was too good to be true.They went innovation that leveraged unprecedented resources so far as to alert British law-enforcement officials, but not U.S. authorities. to construct massive bridges, tunnels, airports and Over and over, different people in different parts of the vast JPMorgan empire came to more. Now it’s less about building the new and more understand something was off about Mr. Madoff, but the pieces were never quite knit together about maintaining the old. It’s a real estate portfolio internally.This says something about the nature of very big banks:They are collections of different that generates $4 billion a year in operating revenue large organizations united by the chief executive’s force of personality. —aaron elstein to help pay off $20 billion in bonds. As for good government, Bridgegate sheds light on one of many CHRISTIE ‘BRIDGEGATE.’ An “embar- rid of $65 million worth of invento- political realities at the Port Authority.This is a joint rassed and humiliated” New Jersey ry and new merchandise from its 39 HOORAY! run by two governors and their patronage Gov. Chris Christie axed a top aide, stores and Rutherford, N.J., distri- THE NEW YORK Bridget Anne Kelly, after emails bution center. … CLOSING THE ROAD RUNNERS appointees. Hundreds of millions of dollars in linked her to George Washington BOOKS ON FIFTH. Barnes & Noble will allow 5,000 more runners to contracts are steered to vendors who often spread Bridge lane closures.The act was one shuttered its outpost on Fifth Av- take part in campaign contributions on both sides of the of political revenge after Fort Lee’s enue and East 18th Street last week. March’s half- Hudson. Splitting up this family would hike the cost mayor declined to endorse the gov- The store’s 56 employees will be laid marathon. ernor for re-election. Mr. Christie off by the end of January. The shop of borrowing for repairs and new infrastructure, but apologized but insisted that he had was the company’s first college book- not prohibitively so, since each state enjoys excellent no prior knowledge of his staff ’s ac- store. Just a half-dozen retail loca- bloomberg news bond ratings. And some Port Authority children tions. (See Page 8.) … EAST VILLAGE tions remain in Manhattan. Mean- OY VEY! GETS IBM’S WATSON. IBM plans to while,the bookseller named Michael remain shared responsibilities. But turning one MORE THAN 100 retired NYPD and FDNY spend $1 billion to create a new busi- Huseby, who currently heads its workers were charged with faking mental overly politicized bureaucracy into two smaller ness centered around Watson, its su- Nook unit,as CEO.… MACY’S POST- illness to get federal disability benefits. bureaucracies would mean a single line of command percomputer best HOLIDAY BLUES. De- from governor to grunt. No more multiple masters. known as a Jeopardy! ‘I do not spite a solid holiday A healthier change for all. champion. The unit, season and prof- with snazzy new believe … in itability over the past headquarters at As- merit pay, but four years, Macy’s THIS WEEK IN CRAIN’S tor Place, already has said it will shed 2,500 more than 2,000 em- I do believe employees and shut- ployees. Watson is ter five stores. The IN THE BOROUGHS-------------------------- 4 expected to help the in special restructuring could IN THE MARKETS----------------------------------6 Armonk, N.Y., tech help the company giant reach its $20 bonusing for save $100 million a executive director of the South SMALL BUSINESS ------------------------------7 billion revenue pro- strategic goals’ year. The shop at the Florida Regional Transportation jections for its big Mall at Bay Plaza, Authority, will succeed him. … THE INSIDER -----------------------------------------------8 —Mayor Bill de Blasio, data and analytics Bronx, is still sched- OSCAR’S NO GROUCH. Venture after Gov. Andrew Cuomo BUSINESS PEOPLE ---------------------------9 services by 2015. … uled to open this fall. capitalist Joshua Kushner’s health LOEHMANN’S CLEAR- announced his desire METRO-NORTH OPINION --------------------------------------------------------10 to create a reward system … insurance startup,Oscar,bagged $30 ANCE SALE. A judge PREZ’S FINAL STOP. million in financing, bringing its GREG DAVID-------------------------------------------- for teachers 11 allowed liquidators A month after a de- total to more than $75 million. The REPORT: REAL ESTATE-------------13 to begin selling the 93-year-old dis- railment killed four passengers and company aims to use technology to count chain’s assets after it filed for injured more than 70 others, create a flexible, user-friendly REAL ESTATE DEALS------------------- 15 bankruptcy for the third time.