There They Go Again City Council’S Latest Anti-Biz Moves Crain’S® Page 3 New York Business
Total Page:16
File Type:pdf, Size:1020Kb
20150615-NEWS--0001-NAT-CCI-CN_-- 6/12/2015 6:44 PM Page 1 THERE THEY GO AGAIN CITY COUNCIL’S LATEST ANTI-BIZ MOVES CRAIN’S® PAGE 3 NEW YORK BUSINESS VOL. XXXI, NO. 24 WWW.CRAINSNEWYORK.COM JUNE 15-21, 2015 PRICE: $3.00 The Graffiti Paradox Born in New York, beloved by foreigners—but dismissed by the city’s collector class. Can this ‘art’ ever be worth millions? One Bronx biz owner is betting yes BY AARON ELSTEIN Tastemakers at the city’s world-class museums or the art-world arrivistes who plunk down millions for a Picasso or Warhol give little respect to paintings sprayed on buildings, bridges or mailboxes. Vinny Pacifico wants to change that. “I love graffiti,” Mr. Pacifico said.“I love its energy.I love that it’s part of the fabric and history of New York.” The 60-year-old collector owns a meat-cutting and food- BRONX PAINT BOMBERS: distribution empire in the Bronx with an estimated annual Vista Food Exchange in Hunts revenue of $1.5 billion —and in a 2,000-square-foot room near Point is home to a massive collection of graffiti works by his office he maintains a private gallery packed floor-to-ceiling many of the city’s most with hundreds of spray-painted murals by dozens of artists.His famous creators of the genre. graffiti collection is surely one of the largest in the city, if See GRAFFITI on Page 26 buck ennis 24 5 REPORT REAL ESTATE THE LISTS Largest Help really wanted: Experienced architecture and engineering architects a scarce commodity P. 10 firms PAGES 13-15 NEWSPAPER 71486 01068 0 20150615-NEWS--0002-NAT-CCI-CN_-- 6/12/2015 7:03 PM Page 1 EXECUTIVE EDITOR’S NOTE Minority report FYICRAINSNEWYORK.COM Every year, taxpayers fund billions of dollars in capital projects across Wall Street horns in New York with the mandate that contractors hire minority- and on the unicorns women-owned business enterprises itbit, the app that so many to do some of the work—for the joggers can’t do without, is state, that goal is 20% participation; expected to price its initial the city’s is 37%. Getting more Jeremy Smerd F public offering on June 17, much contracts to these businesses is to the joy of the investment laudable, but in practice leads to bankers at Morgan Stanley, Bank of waste and fraud. Yet because the money and America Merrill Lynch and other mandates win support among politicians in minority financial firms helping to sell the communities, it is a sacred cow that no elected leader deal to investors. ¶ The interesting wants to slay. In a nutshell, this is how it works: thing is how rare IPOs like this are Contractors bid on projects knowing that a portion of istockphoto at a time when “unicorns”— the work must be performed by minority-owned startups valued at $1 billion or more—are the talk of Wall Street. Fledgling companies never businesses. Often these businesses don’t have the used to be valued at $1 billion. Google, for instance, hadn’t reached that fabled plateau before capital or the expertise to do the job, even though going public.Today, at least 80 companies supposedly have done it, according to Fortune. Yet IPO they are supposedly vetted as capable by the volume is down by 42% in the U.S. so far this year, reports Thomson Reuters. ¶ This suggests a few government agency putting out the contract. What things. ¶ First, companies like Uber are able to raise all the cash they need, and their venture- often happens next is a work-around that allows the capitalist backers are in no hurry to cash out. ¶ More important, the dearth of IPOs suggests job to get done, these so-called MWBEs to be paid most unicorns aren’t worth $1 billion, and if they started disclosing the sort of financial and the project to move forward. Investigators information required to complete an IPO—stuff like revenues, earnings, growth rates and so inevitably get wind that the subcontractor could not forth—then all the mystique and mystery surrounding them would disappear. ¶ And really, when do all or some of the work and turn the case over to there’s a great party going on, with lots of unicorn sightings, who wants to be the one to end it? prosecutors, who have made these fraud investigations into a cottage industry. Inevitably, companies settle —aaron elstein the criminal charges in order to clear their names and RUPERT MURDOCH ELEVATES SON sents one-tenth of his licenses. expects to save about $17 million a bid on future projects.Then the cycle begins anew. The 84-year-old media mogul is Citibank,which sued Mr.Freidman year from the cuts. The latest evidence of the broken system came in preparing to hand his son James the to recoup $31.5 million in debt, CEO title of 21st Century Fox—a wants to auction off the medallions. COOPER UNION PREZ RESIGNS April in the form of a damning report from the sign that he may finally be relin- Mr. Freidman plans to appeal the Jamshed Bharucha will step down as Metropolitan Transportation Authority’s inspector quishing power at his decision. the science and arts school’s presi- general.The audit looked at 17 federally funded media empire. Mr. dent at the end of the month amid a contracts and concluded that the MTA’s Department Murdoch will retain his ‘When I go to TUNE INTO APPLE probe by the state attorney general executive chairman po- New York, no The creator of into the management of its finances. of Diversity and Civil Rights failed to carry out its sition at the television iTunes, which The announcement followed the own oversight, such as confirming that subcontrac- and film giant as well as one ever asks pioneered sell- resignation of five trustees from the tors getting paid actually did the work or even at News Corp. ing music 23-person Cooper Union board. showed up at a construction site. Contractors have how you digitally, will AMTRAK ENGINEER launch a music- IN MEMORIAM been saying for years that the misguided system sets WASN’T ON PHONE compare them. streaming serv- Vincent Musetto,a former New York them up for failure. Now the government is failing Brandon Bostian, the But to answer ice to take on Post editor,died at 74.He was known us, too. Expect to hear more about this dysfunctional engineer of the Amtrak Spotify and for penning the famous “Headless train that derailed in your question: Pandora. Apple body in topless bar”headline that ac- system as new prosecutions come down the pike. Philadelphia May 12, Music will be companied a story about a vicious killing eight people and Chicago is a $10-per- crime in Queens on the cover of the injuring at least 200,was better’ month sub- paper’s April 15, 1983, issue. THIS WEEK IN CRAIN’S not using his cellphone —JPMorgan Chase scription-based —amanda fung at the time of the acci- streaming serv- IN THE BOROUGHS CEO Jamie Dimon, --------------- 3 dent, investigators with at a Chicago luncheon ice. The tech- IN THE MARKETS--------------------4 the National Trans- nology giant THE INSIDER--------------------------6 portation Safety Board found. It re- also unveiled a 24-hour global Inter- mains unclear why the New York- net radio station. HEALTH CARE ------------------------7 bound train was traveling more than OPINION--------------------------------8 double the speed limit. BLUE APRON’S PURSE STRINGS GREG DAVID --------------------------9 Blue Apron raised $135 million in a MEREDITH WHITNEY SHUTS FUND round of funding led by Fidelity In- REPORT: REAL ESTATE ----------10 The former banking analyst and Wall vestments. The SoHo-based recipe- THE LISTS ----------------------------13 Street star said she is done managing in-a-box startup will use the money GOTHAM GIGS CLASSIFIEDS -----------------------22 money and shuttered her hedge fund, to expand nationally. Its latest cash No, you can’t eat Danielle 2 WTC DESIGN SOURCE MEETING Kenbelle Capital. Ms. Whitney re- infusion comes as rivals Hello Fresh Trofe’s biodegradable ----------------29 cently resolved a lawsuit against her and Plated recently raised their own Developer Larry Silverstein mushroom lamps. P. 28 SNAPS---------------------------------30 fund by BlueCrest Capital Manage- funds. unveiled the Bjarke Ingels de- ment,which wants to get back its $46 sign for 2 World Trade Center, vol. xxxi, no. 24, june 15, 2015—Crain’s New York Business (issn 8756-789x) is published weekly, except for double issues the weeks of June 29, July 13, July 27, Aug. 10, million after months of losses. J.CREW SLIMS DOWN the 80-story, 1,340-square- Aug. 24 and Dec. 21, by Crain Communications Inc., 685 Third Ave., New York, NY The Manhattan-based retailer cut foot tower that 21st Century 10017. Periodicals postage paid at New York, N.Y., and additional mailing offices. Post- TAXI KING LOSES master: Send address changes to: Crain’s New York Business, Circulation Department, 1155 175 jobs and, in a move to revive Fox and News Corp. will call Gratiot Avenue, Detroit, MI 48207-2912. A Manhattan judge ordered the sales, replaced its women’s design home. The spire will be the for subscriber service: Call (877) 824-9379.Fax (313) 446-6777.$3.00 a copy,$99.95 one seizure of about 90 taxi medallions chief.Somsack Sikhounmuong,who second-tallest and final tower year, $179.95 two years. (GST No. 13676-0444-RT) ©Entire contents copyright 2015 by Crain Communications Inc. All rights reserved. Peri- and vehicles controlled by Gene had led design for its Madewell to be erected on the site of the odicals with ride-along enclosed in version 2 only.