The Speyers' Residential Hangover
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CNYB 10-27-08 A 1 10/24/2008 9:17 PM Page 1 TOP STORIES ACCOUNTING Redstone’s mess Battle for middle began long before market heats up the credit crisis as demand PAGE 3 ® cools down PAGE 21 Holiday parties will be stingiest in 20 years, survey says VOL. XXIV, NO. 43 WWW.CRAINSNEWYORK.COM OCT. 27-NOV. 2, 2008 PRICE: $3.00 PAGE 3 The silver lining in media industry’s Mayor’s critics many troubles VALERIE BLOCK, PAGE 11 will keep heat on Tallying up the winners and losers troller William Thomp- Bloomberg will son and Rep. Anthony in term limits vote have to make Weiner, who suddenly THE INSIDER, PAGE 12 find themselves running voters forget his against the mayor rather than each other. power play And they will have credibility. Mr. Bloom- BY ERIK ENGQUIST berg’s reputation for be- THE SPEYERS’ ing above politics is in forget next year. tatters. He is viewed Mayor Michael Bloom- with suspicion by good- berg’s re-election cam- ‘Bloomberg government groups, lib- RESIDENTIAL paign starts now. has opened eral activists, powerful His successful push unions,other elected of- to extend term limits Pandora’s ficials and a sizable per- has altered the mayoral box. He can centage of New Yorkers. HANGOVER landscape. Everything no longer Polls leading up to he does will now be seen be seen as last week’s term limits BUSINESS LIVES through the lens of his vote showed the mayor re-election bid. Re- the anti- was still popular with New Yorkers hit the Midas touch deserts firm in move porters covering him politician.’ 70% of the electorate, road to campaign beyond commercial real estate will readily seek critical —Councilman but nearly a third said for their candidates comments from the Bill de Blasio they viewed him more Democratic mayoral negatively because of his PAGE 39 BY THERESA AGOVINO candidates,City Comp- See MAYOR on Page 8 over the past two years, the owners of Stuyvesant Town AT DEADLINE and Peter Cooper Village have beautified the development, planting thousands of trees and shrubs, and adding a gym, a lounge and other amenities. Banks seeking ANXIOUS LANDLORDS ARE RESORTING TO INCREASINGLY Though the sprawling residential complex’s appearance generous deals to woo tenants. has improved dramatically, its finances have turned down- At least one building owner is right ugly. Expenses running above expectations and lag- accounting fix offering tenants a year of free ging revenues have combined to drain cash reserves to the rent in three of its office degree that Moody’s and Standard & Poor’s have down- SEC may suspend mark-to-market rule; towers.The deal is available at graded some of the complexes’ debt in recent weeks. 805 Third Ave. if a tenant pays The downgrades mark a rare public setback for real estate wild stock drops turn up the pressure at least $70 a square foot on a See SPEYERS on Page 8 10-year lease for either a full floor or half a floor. Landlord BY AARON ELSTEIN BLACK HOLES Cohen Brothers Realty Corp. Level 3 assets,* in billions. is also offering the option for slammed by tens of billions in the lower floors of 750 mortgage-related losses, banks in- J.P. Morgan Chase $144 Lexington Ave. and 135 E. cluding Citigroup and Morgan 57th St. As the market Stanley—both of which saw their Citigroup $133 deteriorates, brokers say, such shares tumble by more than 15% in Morgan Stanley $78 rent holidays are going to last week’s market rout—have become more commonplace. come up with a novel way to put an Goldman Sachs $68 end to them. They are asking per- Merrill Lynch $58 MORE THAN 25 LOCAL HEADS mission for their accountants to OF COMPANIES WILL BE put on their rose-colored glasses. Prudential Financial $28 THE PURCHASE running in the ING New York The institutions are lobbying *Assets whose value cannot be determined. City Marathon Sunday, of Stuyvesant Town the Securities and Exchange Sources: Company reports bloomberg news (above) now looks including John Legere, chief / Commission and others to sus- ill-timed. executive of Global Crossing; pend the so-called mark-to-mar- See AT DEADLINE on Page 2 ket accounting requirement that ported by Wachovia, as well as in buck ennis they contend has intensified the the steep losses logged by the credit crisis. The rule, which was shares of several major financial 43 enacted last year, requires banks firms. Banks argue they should be 5 COMINGNEXT WEEK and other companies to value secu- able to value those assets at what The Business of Law Report delves into rities on their books at current— they insist to be the assets’ true how firms are coping with THE now hugely depressed—market long-term worth. ELECTRONIC EDITION FINANCIAL PANIC. Also, Crain’s annual prices. Just last week, that require- The SEC is scheduled to hold a ranking of the Top 25 firms. ment was a key factor in the stun- meeting on the matter Wednes- NEWSPAPER ning $24 billion quarterly loss re- See BANKS on Page 9 71486 01068 0 CNYB 10-27-08 A 2 10/24/2008 8:57 PM Page 1 $1,000. (Bleacher seats will still be AT DEADLINE available for $12.) And out of the 47 planned luxury suites, the team still Continued from Page 1 Corporate fans take has seven unsold boxes, according Joe Bastianich, New York to Bloomberg News Service, priced restaurateur and owner of Del around $600,000. A team spokes- Posto, Babbo and Becco; woman declined to comment. Michael Capiraso, head of a pass on season tix The Nets recently started offer- advertising agency WPP; James ing fans a “no money down”delayed LeFrak, managing director of payment plan for season ticket re- real estate firm The LeFrak newals at the Izod Center,allowing Organization; Susan Saideman, Teams offering incentive plans to move inventory fans to wait until January to fork president of Mars Retail Group; over the cash. The beleaguered Peter Harkins, CEO of proxy companies looking to unload empty New Jersey team, whose planned solicitation firm D.F. King & BY HILARY POTKEWITZ box seats, and fewer requests Brooklyn arena is on hold pending Co.; and Douglas Lebda, CEO from folks wanting to buy legal challenges,has lost about 20% of LendingTree. About 100,000 in this market, it’s not unusu- them.Sports attorneys have of its season ticket holders this year. people entered the lottery for al for a broker to get a phone clients exploring exit strate- the race, and more than 39,000 call from a client saying, “Sell gies for suite contracts. Jets make smart move are expected to run. everything!” The result is a con- the jets unveiled five- and 15- But when Tony Knopp got fused and scat- year financing plans for seat license THE NY LEAGUE OF the call last week, it wasn’t tered ticket fees in the $1.6 billion stadium CONSERVATION VOTERS IS from a nervous investor look- market. they’re building with the Giants.In trying to make a big splash in a ing to unload stock; it was from “I really a prescient move,the team had sur- Long Island race that could one of New York’s biggest law pity the veyed its season ticket holders ear- decide which party controls the firms telling him to sell all of the guys who lier this year and found that a fi- state Senate.The group is box seats and season tickets the have to sell [boxes and nancing option was in order. spending $175,000 on television firm holds—in every city where it season tickets] for Though markets were not yet in ads and direct mail in an attempt operates.That meant four luxury those teams in new sta- turmoil back then, the housing cri- to unseat Republican State Sen. suites in New York arenas alone. diums right now,” says sis was well under way. Caesar Trunzo, a 36-year “Some people are trying to get Robert Tuchman, pres- While teams are coming up incumbent who faces a strong out of renewing their boxes, but ident of sports consult- with ever-more-attractive sales challenge from Democrat Brian that’s the first time someone gave PRICES UP, ing firm TSE Sports & pitches, they are starting to hit real Foley. It is a key race for us their entire inventory,” says Mr. Entertainment. He advises resistance. Democrats’ hopes of taking Knopp, vice president of business SALES DOWN companies on long-term Embattled AIG may still be control of the state Senate, development at Corporate Events getty images $495 suite deals and arranges cor- locked into a multiyear deal for a which currently has 31 Group Inc. In the past month, the Top ticket price per game porate trips.“The next six to $300,000-plus suite at Madison Republicans and 29 Democrats. consultant has seen a fivefold in- at Mets’ Citi Field 18 months are going to be a Square Garden, but the company The $175,000 campaign is one crease in the number of companies battle,” he adds. did not buy a box in the new Yankee of the largest in the league’s making their boxes available for $2,500 Teams are improvising in- Stadium, the team reported this history though it will be only a events. “We’re trying to talk some Top ticket price per game at new centive plans, and they need month. All of the insurance giant’s fraction of the total cost of the firms off the ledge,” he adds.