GOTHAM GIGS FROM BOMBS TO BIKES Combat engineer puts the pieces back together CRAIN’S® NEW YORK BUSINESS PAGE 8 VOL. XXIX, NO. 2 WWW.CRAINSNEWYORK.COM JANUARY 14-20, 2013 PRICE: $3.00 Repairs on the CUOMO’S Verizon Telecom’s $1B worth of Sandy damage CASINO could offer silver lining for company FLIP BY MATTHEW FLAMM Nearly three months after Super- storm Sandy knocked out power in lower Manhattan, 160 Water St. is Governor does a ‘180,’ sending its own little ghost town, vacant since seawater filled its basement gambling lobbyists scrambling the night of Oct. 29. But the emptiness of the 24- story building means more than just BY CHRIS BRAGG the absence of tenants like the New York City Health and Hospitals A year ago, Gov. Andrew Cuomo made the centerpiece of his State of Corp. Sliced-off copper cables from the State address an ambitious plan to legalize casino gambling in New the Verizon phone system hang from the telecommunications York. A $4 billion convention center in Queens was to be built next to “frame room” walls, its floor still the Aqueduct racino, which seemed certain to become the city’s first puddled in water. When 160 Water full-fledged casino. In the 2013 iteration of the speech last week, the St. reopens next month, the frame governor reversed himself. He said casinos in the city would under- room will re- mine the goal of drawing Gotham’s 52 million tourists upstate. The main empty. first three gambling venues he eyes for the state now appear destined All the phone 300K for north of the metropolitan area. See CASINO on Page 38 and data POUNDS OF switches have copper wire MEANWHILE, IN JAVITSVILLE ... Waving g’bye to guv’s bulldozer notions Page 38 been moved destroyed by Sandy to a closet on have been removed the second and replaced floor, where with high-speed streamlined fiber-optic cable fiber-optic cables will connect to tenants’ phones and computers.There won’t be a copper cable in sight. That’s good news for Verizon Communications and, potentially, its customers downtown. Building by building, and block by block in the underground area around its Broad Street central of- fice, Verizon has been modernizing its infrastructure as part of the biggest repair project in its history. So far, workers have removed 300,000 pounds of copper cable de- stroyed by Sandy and installed miles of fiber-optic cable in its place. darren thompson darren It’s been a logistical operation worthy of a minor war, with the See VERIZON on Page 37 REPORT REAL ESTATE Happy 100th birthday, Grand Central! P. 19 ELECTRONIC EDITION The latest signs of the Times (Square) P. 19 NEWSPAPER Plus: Meet this year’s REBNY honorees P. 28 EDITOR’S NOTE Rebuild, NY FYICRAINSNEWYORK.COM Here we are, nearly three months since Superstorm Sandy slammed our world, and the Crain’s New Morgan Stanley gets out York Business newsroom continues to produce enough Sandy-related the ax—for another whack stories each week to fill an extra n 2007, Morgan Stanley lost $9 billion on issue of the newspaper. So that’s disastrous mortgage-related bets and then saw its HOLD THE LINE: what we’ve decided to do: publish Morgan Glenn Coleman business shrivel during the Great Recession and Stanley CEO James via email each week a digital I Gorman is trying to set his again in the face of new regulations. In response, it has newsletter called Rebuilding NY. firm on the right track. been slashing costs, like its Wall Street rivals. newscom Nearly 30,000 Crain’s online readers are already Last week, reports emerged suggesting that those cuts still have room to run, with another receiving it, keeping up with our staff ’s latest news 1,600 people, including many from its blue-chip investment banking division, to be laid off in articles on the region’s recovery efforts from this coming months. And the shrinkage could get worse. According to The New York Times, the firm storm of the past few centuries. Rebuilding NY also may exit the high-stakes bond trading business, much as Swiss bank UBS did last year in the offers links to other media outlets’ stories that we at wake of its own massive losses. Crain’s think are of interest to local businesses and Although Chief Executive James Gorman (above) deserves credit for trying to make the firm their communities, as well as a resource guide for less reliant on risky trades and generate more revenue in the steadier business of managing people seeking information on insurance and people’s money, the company’s stock price has languished and its outlook remains bleak. Barclays government assistance. Sandy ripped the roof off Capital, for example, estimates the bank’s return on equity—a key measure of success—will be New York’s aging infrastructure, flooded high-rise 5.7% this year, well below Goldman Sachs’ 9.5%. Closing that gap may require Mr. Gorman to condo and commercial towers, and forced businesses part with more of his 58,000 employees. in the area to scramble for higher, drier ground. It Meanwhile, even mighty Goldman, after cutting more than 1,000 jobs beginning in 2011, has also destroyed an estimated 100,000 homes along more recently turned to thinning the vaunted ranks of its partners, in another sign of Wall the New York and New Jersey coastline, including, Street’s ongoing retreat. —aaron elstein alas, my parents’ Cape Cod charmer in Brigantine, N.J., ruined beyond belief by nearly five feet of floodwater. So, yes, it’s personal. (Damn personal, in RETHINKING STOP-AND-FRISK. Police stores are on hard-hit Staten Island. CRASH LANDINGS. HOORAY! the interest of full disclosure.) But it’s also business. officers in the Bronx are going to have … First thing on to think twice before stopping people Wednesday morning, a ferry shut- FREE WI-FI hits Assuming Congress gets its pathetic act together— on the street.A federal judge has ruled tling more than 300 passengers from Chelsea, against the NYPD’s controversial New Jersey crashed into a pier in low- courtesy of and make it snappy, guys, because my mom and dad Google and the and their neighbors still haven’t heard squat about stop-and-frisk practice, stating that it er Manhattan, injuring 74. A few Chelsea “systematically”violated the constitu- hours later, on the other side of the Improvement their FEMA insurance payouts—the tens of billions tional rights of residents. The judge East River, a 300-foot crane toppled Co. of dollars that will be spent to rebuild New York in said cops can use the tactic only if they on the site of an apartment building the coming years will create opportunities for have “reasonable suspicion of tres- that was under construction in Long buck ennis pass.”… SIGNS OF THE TIMES.The for- Island City, Queens, injuring seven thousands of companies looking to help repair est of parking-regulation signs in workers. Both incidents are under in- OY VEY! people’s lives and livelihoods. If you think that cycle parts of Manhattan will get a much- vestigation. Early reports on the ferry 2012 was the warmest ever in the lower of commercial life might include you or your needed $180,000 makeover,designed laid the blame on a mechanical mal- 48 states, totally frying the previous business, then I invite you to keep up with the latest to make them easier to decipher.The function.… BANKS PAY UP. A group of record set in 1998. 6,300 new signs will max out at 140 major banks agreed to pay $20 billion Sandy-recovery intelligence by subscribing to characters each,down to settle mortgage- Rebuilding NY at CrainsNewYork.com/newsletters. from 250 now.Mean- ‘They were related abuses dating while, cyclists will get to the boom years. more parking spots. running Additionally,Bank of The Department of America agreed to Transportation is around with pay $8.5 billion over THIS WEEK IN CRAIN’S spending $2 million their head its “robo-signing” to turn 12,000 old practices. Whew! knows what they’re doing, said Gov. IN THE BOROUGHS-------------------------- 3 parking-meter poles chopped off’ Now that the banks Andrew Cuomo.But who wants it? A into bike racks. … —JPMorgan Chase CEO have cleaned up their panel ID’d two potential buyers, in- IN THE MARKETS----------------------------------4 SANDY KO’S MANDEE. Jamie Dimon, on some top affairs, experts say, cluding Con Edison, but experts said THE INSIDER -----------------------------------------------6 The superstorm has execs’ reaction to the bank’s they may start lend- neither has the cash nor the appetite. claimed another vic- $6B “London Whale” loss ing again. New rules … RENTS DO IT AGAIN.It’s official:Av- BUSINESS PEOPLE ---------------------------8 tim—Big M. The re- last week from the erage rents in Manhattan rose yet OPINION --------------------------------------------------------12 tailer, which owns discount chain fledgling Consumer Financial Pro- again last year, finishing 2012 up 5%, stores Mandee,Annie Sez and Afaze, tection Bureau are designed to en- according to a report by Citi Habitats. GREG DAVID--------------------------------------------13 filed for Chapter 11 bankruptcy pro- courage more lending—while ensur- Luxury apartment rents in the bor- SMALL BUSINESS --------------------------14 tection, blaming the bad news on ing borrowers don’t get bilked. … ough soared 22%, driven up by folks LIPA, R.I.P. REPORT: REAL ESTATE-------------19 guess what? Totowa, N.J.-based Big Having failed customers who could afford to buy but simply M said it hopes only a handful of its miserably during Sandy, the state- couldn’t find the perfect pad, said THE LIST ---------------------------------------------------------30 129 stores will shutter because of the run Long Island Power Authority Douglas Elliman and Miller Samuel NEW YORK, NEW YORK CLASSIFIEDS -----------------------------------------34 bankruptcy.