Atlantic Yards Won't Be Derailed
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20090622-A--0001-MAIN-CCI-CN_-- 6/19/2009 8:10 PM Page 1 INSIDE REPORT TOP STORIES CRAIN’S Bank that opened FORTUNATE 100 during credit crisis Out: golden parachutes In: golden hellos faces own crunch ® PAGE 2 PAGE 12 Glitz, smarts make family of hoteliers VOL. XXV, NO. 25 WWW.CRAINSNEWYORK.COM JUNE 22-28, 2009 PRICE: $3.00 a hot property PAGE 3 Senate imbroglio Atlantic imperils city, schools and more SALVAGING Yards won’t THE INSIDER, PAGE 8 LEHMAN be derailed past the original 2014 target. Despite foes, The Metropolitan Trans- How turnaround vets ply dark arts watered-down portation Authority will probably vote the next day on to wring value out of biggest flop ever project likely a proposal allowing Forest City to delay delivery of a to proceed $100 million lump-sum pay- BY ERIK IPSEN ment to the MTA for devel- BY THERESA AGOVINO opment rights, and possibly around 8 a.m.on sept.17, Jeff Fitts was scouring the halls at his mid- reduce the payment amount. town office, desperately seeking someone who looked like a 44 regular. forest city ratner’s long- Despite fierce opposition Lehman Brothers had become history’s biggest bankruptcy just 48 delayed, dramatically altered to the shrinking project, bets BEER BELLIES hours earlier, and Mr. Fitts’ restructuring firm had been tapped to sal- Atlantic Yards project faces are running heavily in favor of vage what remained of the 158-year-old investment bank. While Mr. two key votes this week on its state officials’ reaching the Queens entrepreneur latest changes.Critics say the necessary compromises to runs biggest beer Fitts was on the train to work that morning, his boss had called to tell him that he would be the new co-head of Lehman’s vast real estate modifications will dilute— push it along. Far too much garden in the city P. 21 or erase—the plan’s pledged time and money has been in- arm. He was to be at the bank’s 31st-floor boardroom at 10:30 sharp G ANNE FISHER offers public benefits. vested, officials say. It’s also advice to Wall Street for the formal handover of control—wearing the jacket and tie he’d On Tuesday, the Empire unlikely that another devel- career switchers P. 21 See SALVAGING LEHMAN on Page 20 State Development Corp. oper could be found to take board is expected to weigh in over in this economic climate. G MOVERS & SHAKERS on a timetable that would put “Too much has happened the completion date for the on this project,” said Robert Joshua David $4 billion,22-acre project far See ATLANTIC on Page 20 goes to the head of the High Line P. 22 G RÉSUMÉ REVIEW Super Mario’s Job seekers get search tips from the pros P. 22 G GAEL GREENE super payload visits Daniel Boulud’s DBGB. No exec comes And she can’t get close to Gabelli’s enough $800 million-plus P. 23 over past decade BY AARON ELSTEIN INDEX admirers call him Super bloomberg news IN THE MARKETS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _4 Mario. Detractors call him BEHIND THE BUCKS: Mario Gabelli REAL ESTATE DEALS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _9 Grasping Gabelli.Whatever says he’s a player, not just a manager. VALERIE BLOCK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _11 he’s called, money manager NEW MASTERS OF THIS CRAIN’S POLL _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _11 Mario Gabelli is the champ PARTICULAR UNIVERSE: when it comes to extraordi- went public a decade ago, he CLASSIFIEDS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _18 Jerry Pietroforte (left) and Jeff Fitts of restructuring firm nary executive pay. has paid himself $540 million HOT JOBS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _21 Alvarez & Marsal must The famed founder and in cash and pocketed the vast EXECUTIVE MOVES _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _21 rescue what’s left of Lehman chief executive of REPORT majority of the THE WEEK AHEAD Brothers’ real estate _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _23 mutual fund com- CRAIN’S $385 million that See AT DEADLINE on Page 2 holdings. WHAT HE’S READING _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _23 pany Gamco In- FORTUNATE Gamco shelled out buck ennis vestors Inc. paid 100 in dividends and himself $46 million THE LIST, P. 14 stock buybacks. 25 NEXT WEEK: CITY FACTS last year. That’s He’s made addi- 5 more than the CEOs of tional sums from owning CRAIN’S DIVES DEEP INTO Goldman Sachs and Morgan closely held Gabelli Group THE NUMBERS THAT MAKE Stanley combined. Capital Partners, which con- ELECTRONIC EDITION Still, it’s a relatively mod- trols Gamco. Oh, and his NEW YORK TICK est take by Mr. Gabelli’s gold family collects about $1 mil- NEWSPAPER standards.Since his company See SUPER on Page 12 71486 01068 0 20090622-A--0002-MAIN-CCI-CN_-- 6/19/2009 7:08 PM Page 1 IN BRIEF THE CITY’S BARS AND NIGHTCLUBS ARE From heralded launch to GETTING POLITICAL. AFTER YEARS OF FIGHTING with local community boards over everything from liquor license applications to the time a bar is expected to close at night, the industry is hot seat in six months flat trying a new strategy. It is hoping to influence upcoming elections by endorsing candidates who support a vibrant nightlife in The City executive, also says that the bank is grow- That Never Sleeps. On June 22, a group of Instead of capitalizing on recession as planned, ing at a rapid clip, with total assets, in- politicians—including Manhattan Borough new bank is losing money, staff at rapid rate cluding the value of loans on its books, President Scott Stringer and council members more than doubling to $160 million in David Yassky and Eric Gioia—as well as measure allowing out-of-state banks to the first quarter, compared with the pre- celebrities, club owners and others linked to the BY DANIEL MASSEY operate there without having to buy a local vious quarter. And he is about to embark industry, will gather at the launch party for the branch. on a second major capital campaign. Nightlife Preservation Community.The online as heritage bank prepared to open its He cut three teams of New York City SNL Financial analyst Sebastian initiative, sponsored by the New York Nightlife doors last fall—just when the rest of the bankers because, he says, they were “not Hindman says it can often take six to Association, is designed to mobilize voters. banking world was collapsing around eight quarters for a new bank to turn a him—smiling Chief Executive David profit.Herald,however,appears to be los- FEWER PEOPLE ARE SIGNING UP FOR Bagatelle rather incongruously called him- CONFIDENT: David ing money at a brisker-than-normal clip. SATELLITE RADIO. FOR LONG-STRUGGLING self “the happiest banker in New York Bagatelle insists “The fact that they’re losing money Sirius XM, that counts as good news. Fewer City.”Heritage, he insisted, would prosper that changes at isn’t all that surprising,” Mr. Hindman Herald National new customers are leading to lower costs to by deploying a hefty $62 million in initial Bank will move up says.“But the rate at which they’re losing acquire subscribers.They fell 26% last quarter, capital raised and a sparkling-clean bal- the break-even it is.” to $61 per customer, which helped the company ance sheet to lend to businesses at a time point. Mr. Bagatelle contends the bank is on last month report positive “pro forma adjusted when rivals were weighed down by toxic schedule: “Yeah, we lost money, but that income from operations” of $109 million—a assets from the credit bubble. was always the plan.” minute fraction of the $10 billion of net losses Things aren’t so happy now.