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Tarnished Silver: Speaker's Arrest Upends Most Everything in Albany

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Tarnished Silver: Speaker's Arrest Upends Most Everything in Albany 20150126-NEWS--0001-NAT-CCI-CN_-- 1/23/2015 7:45 PM Page 1 REPORT TOURISM SIX STARS? Baccarat Hotel stakes its claim CRAIN’S® PAGE 15 NEW YORK BUSINESS VOL. XXXI, NO. 4 WWW.CRAINSNEWYORK.COM JANUARY 26-FEBRUARY 1, 2015 PRICE: $3.00 Fairway must find its way FPO Famed grocer’s stock cheaper $3.71 than a half gallon of milk last week. Meet newest CEO per share BY AARON ELSTEIN istock / The fate of one of New York’s most revered retailers, Fairway Markets, is now in the hands of a veteran grocer who decorates his office with hel- mets used by New England Patriots star Tom Brady and loves going to $3.89 “Fenway Pahk” to see his beloved “Red Sawx.” “I’m so honnah-ed to have the opportunity to turn around Fairway,” AS OF 1/20/15 said Jack Murphy, 66, in his first interview since becoming the super- market’s third chief executive in less than a year. It might come as news to its legions of fans that Fairway is in need of a turnaround, or that the company, which closely identifies itself with crain composite image:crain buck ennis the hustle and bustle of New York, has turned to a Bostonian for a res- See FAIRWAY on Page 23 Tarnished Silver: Speaker’s arrest upends most everything in Albany At stake: school funds, rent regs, tax breaks, tort reform, ethics law lawmakers and lobbyists scrambling ally and by others EDITORIAL: BY ANDREW J. HAWKINS to decipher what it will mean for the as a quixotic obsta- ENOUGH legislative agenda. cle. His alliance ALREADY The arrest of Assembly Speaker Mr.Silver,an assemblyman since with trial lawyers PAGE 12 Sheldon Silver Thursday sent shock 1976 and speaker since 1994, has has blocked re- GREG DAVID: waves through New York, leaving been seen by his friends as a reliable forms craved by WHAT, WHEN business interests, DID CUOMO KNOW? POWER PLAY: 04 while his support Assembly PAGE 13 Speaker Sheldon Silver faces 5 for the teachers’ union has kept ed- corruption charges over $6 million in payments from ucation reformers at bay. law firms and developers. But the corruption,fraud and ex- tortion charges against him will See SILVER on Page 24 ap images NEWSPAPER 71486 01068 0 20150126-NEWS--0002-NAT-CCI-CN_-- 1/23/2015 7:46 PM Page 1 MANAGING EDITOR’S NOTE Fare game FYICRAINSNEWYORK.COM If it seems as though transit fares are getting more expensive every Silver arrest (other) year, that’s because they are. And not just because the lengthens shadow Metropolitan Transportation over major nonprofit met council Authority voted last week to charge $2.75 for a subway ride, the third he criminal charges engulfing Assembly Speaker Sheldon Silver are another blow to a once-prominent social-services organization with which he had deep ties: the Metropolitan Jeremy Smerd consecutive biennial increase. Fares are climbing faster (and faster) than Council on Jewish Poverty. ¶ The Met Council has been struggling since its former CEO, TWilliam Rapfogel the cost of living. Increases every (pictured with Mr. Silver), was sentenced last year to up to 10 years in prison for two years are now baked into the transit authority’s embezzling $9 million from the group. Mr. Silver was longtime friends with Mr. Rapfogel, who budget planning. But how much they go up and who was at the organization for 20 years and whose wife, Judy, is Mr. Silver’s chief of staff. During Mr. takes the hit remains a guessing game. Pegging the Rapfogel’s leadership, the organization received millions of dollars in state funding for its services, hike to inflation would at least make it predictable. which were widely acknowledged to help New Yorkers in poverty, regardless of race or ethnicity. The $2.50 base fare of two years ago would now be And Mr. Silver was a centerpiece at the Met Council’s annual legislative breakfast, a must-attend less than $2.60 if it were tied to the consumer price event for New York’s elected leaders. ¶ After Mr. Rapfogel’s downfall, the Met Council hired as index, and a 30-day unlimited-ride MetroCard CEO former city Finance Commissioner David Frankel, but in August the news broke that Mr. would cost a dollar less than what the MTA said it Frankel would leave his post after a successor was found. He is still there. Sources said the council will starting March 22: $116.50. Sure, pegging fares had been seeking either to merge or outsource the services it provides for about nine months.¶ Mr. to an index would give the MTA less room to raise Frankel’s hiring appears to have been another misstep. He had no real background in social revenue. Had the 10-cent fare of 1948 kept pace with services and lacked Mr. Rapfogel’s political connections and fundraising prowess, making him a costs, riders would be still be forking out $1 a ride— poor fit for the organization. ¶ “It is always hard to follow a star leader,” said the nonprofit or the price of a token in 1986. But tying rates to the executive. “It is even harder to follow a star who was a crook.” ¶ A spokeswoman for the council actual cost of living would give elected officials less said last year every social service it provided was either expanded or transformed for the better. ¶ political cover to underfund the transit system— “We are fiscally sound and are proud to have achieved these goals,” she said. —theresa agovino either through the fare box or the budget bill.The Independent Budget Office last week suggested that TRAIN TO THE PLANE. Gov. Andrew ter group intends to sue,delaying any Cuomo proposed building an Air- sale of the company. … MARINA HOORAY! the MTA’s ad hoc funding absolves the city (and Train to link the No. 7 subway at OPERATOR. Brookfield Properties POPE Albany) from contributing to the economic engine Willets Point,Queens,to LaGuardia will pay $4.5 million over 10 years, FRANCIS will visit New York that drives New York. Had the city’s $136 million Airport, which is accessible only via plus an upfront capital-improve- City in bus or car. Construction would be ment fee of $450,000, to run the September. contribution to the MTA’s first capital plan in 1982 handled by the Port Authority of North Cove Marina in Battery Park kept up with inflation, the de Blasio administration’s New York and New Jersey and cost City, beating out former operator obligation would be $363 million today. Instead, it’s $450 million, and would take five North Cove Marina Management, $100 million, the same since 2010 and less than what years. … S&P SETTLEMENT. Standard which claims Brookfield won only & Poor’s will pay $77 million to the because of political favoritism. … it was 30 years ago. Now that’s hardly fair fare. Securities and Exchange Commis- STRIKE AVERTED. Nearly all the sion and the attorneys general of workers at the Hunts Point Terminal New York and Massachusetts to set- Produce Market in the Bronx voted OY VEY! THIS WEEK IN CRAIN’S tle allegations that it misled investors in favor of a three-year contract that CASH-STRAPPED Mets owner Fred Wilpon, who lost $700M in Bernie Madoff’s Ponzi after the 2008 finan- provides raises of at scheme, was named chairman of Major cial crisis.The agency least $20 a week,nar- IN THE BOROUGHS-------------------------- 3 ‘I have no League Baseball’s Finance Committee. will be barred from rowly avoiding their IN THE MARKETS----------------------------------4 rating commercial more first strike in nearly UBER THE INSIDER -----------------------------------------------6 mortgage-backed se- 30 years. … curities for a year. … campaigns to TREASURE CHEST. SMALL BUSINESS ------------------------------ 6 BONUS FOR DIMON. run … The car-hailing app BUSINESS PEOPLE ---------------------------8 JPMorgan Chase has raised $1.6 bil- CEO Jamie Dimon because I won lion in convertible ap images; bloomberg news OPINION -------------------------------------------------------- 12 received a $7.4 mil- both of them’ debt from clients of ALAIR TOWNSEND ------------------------- lion cash reward in Goldman Sachs’ pri- Places to Work in New York. … 13 —President Barack 2014, his first bonus vate wealth arm, SACRE BLEU! Paris Mayor Anne GREG DAVID--------------------------------------------13 Obama, to GOP hecklers in three years.His to- during his State of the adding to its $2.8 bil- Hidalgo plans to sue Fox News for REPORT: HOTELS -----------------------------15 tal pay was un- Union speech lion in equity fund- inaccurately reporting that the city changed, at $20 mil- ing. It has amassed has Muslim-run “no-go zones.” … NEW YORK, NEW YORK THE LIST --------------------------------------------------------- 17 lion. … OPERA’S GROUNDBREAKING. Construction Kevin McCollum has a hand more than any other REAL ESTATE------------------------------------------- CADENZA. began for a 51-story, 1.3 million- in several Broadway 19 The bankrupt New York private company backed by venture City Opera said it wants to sell its capital. … SHAZAM SHIMMIES. The square-foot building at 55 Hudson productions this season. P. 25 SOURCE LUNCH--------------------------------26 name and assets to NYCO Renais- music-finding app raised $30 mil- Yards.The tower is being developed CORRECTIONS sance, which bid $1.25 million— lion, sending its valuation to more by Mitsui Fudosan America,the Re- Citigroup has failed the federal banking “stress test” in two of the past three years. This $250,000 less than a rival group led than $1 billion. Last year, Crain’s lated Cos. and Oxford Properties. information was misstated in the deck of the Jan. 19 “‘Stress test’ puts pressure on Citi.” by architect Gene Kaufman.The lat- named Shazam one of the Best —emily laermer Only 7% of primary care physicians in the U.S.
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