PLAYING THE NUMBERS Math Museum ® multiplies and NEW YORK BUSINESS prospers PAGE 45 VOL. XXX, NO. 13 WWW.CRAINSNEWYORK.COM MARCH 31-APRIL 6, 2014 PRICE: $3.00 No fooling: Sick days in effect April 1 All employers must give time off; smallest fear they won’t have the cash to compete BY ANDREW J. HAWKINS The city’s expanded paid-sick-leave law goes into effect Tuesday,allowing more than a half-million additional workers to take five paid days off a year but caus- ing a new round of government- induced headaches for small busi- nesses struggling to stay afloat. Take Upper East Side coffee-bar owner Albert Wu, who employs seven people but takes no salary himself. Sometimes,he says,he wakes up in the morning wondering why he even bothers. “Most days, you feel like you’re so busy making sure your espresso shots See SICK DAYS on Page 42 They visit NY, but stay in NJ READ ALL ABOUT THEM! Hotels try luring CLASS OF 2014 Chinese tourists, city’s 40 UNDER 40 fastest-growing market Pete Cashmore, BY LISA FICKENSCHER Lauren Bush Lauren, China has become the city’s fastest- Savneet Singh growing market for overseas tourists, with the number of visitors from the and 37 more country jumping 19% in the past year Pages 13-36 alone, outpacing even the globe- hopping Brazilians. Hotels in the five boroughs,however,are not reaping the rewards, because the price-sensitive travelers are heading to New Jersey, where room rates are significantly cheaper. 13 Currently, China is New York’s 5 fourth-largest market for overseas vis- itors—rising from 13th in 2009. An estimated 646,000 Chinese tourists arrived here last year.What’s more,the world’s most populous nation could NEWSPAPER See CHINESE on Page 44 71486 01068 0 EDITOR’S NOTE Class of ’14 FYICRAINSNEWYORK.COM A memorandum dated Nov. 17, 1995, crossed my desk in February. Fed finds Citibank falls An old-time stamp showed it had been sent via fax(!) by Consolidated short in many areas Edison Inc.’s public information ast Wednesday was a terrible, office, and its author was horrible, no good, very bad day at nominating a young utility executive Citigroup.That’s when the bank for Crain’s New York Business’ annual Glenn Coleman L learned it had flunked its Federal Reserve 40 Under 40 feature: John McAvoy, stress test for the second time in three 35, plant manager for the Indian years, wiping out its plans to reward Point 2 nuclear-power plant in suburban Westchester shareholders with a higher dividend and County.The precocious Mr. McAvoy had graduated more stock buybacks. ¶ Even worse for from Manhattan College at age 19 with a bachelor’s Chief Executive Michael Corbat (right)— degree in engineering, the memo reported, and the who took the helm in 2012, not long after bloomberg nuke he oversaw produced almost one-fifth of the his predecessor failed a similar test—the electricity used by Con Ed’s millions of customers at Fed said it had told Citi to fix certain deficiencies in its capital-planning procedures but the the time. It’s hard to tell from the notes scribbled in bank had failed to do so. Oh, regulators also said that they harbored concerns about the “overall the margins why the editors at Crain’s back then reliability” of Citi’s plans. ¶ In effect, the bank’s most important regulator was saying it doesn’t hadn’t chosen this young man, who seemed to be have confidence in Citi’s management. We’ll soon find out if shareholders feel the same way. Citi’s going places. (I’m guessing it’s because he didn’t work annual meeting April 22 in St. Louis just got a lot more interesting. —aaron elstein in the five boroughs of New York City, one of the cardinal rules of our annual 40 Under 40 search these many years.) Naturally, I showed a copy of the memo SURPLUS WORRIES. A report by the backed housing finance giants Fannie Independent Budget Office predicts Mae and Freddie Mac,agreeing to pay HOORAY! to Mr. McAvoy, now 53, when he visited our office that the city will end 2014 with a $2 $6.3 billion. The sales were made by last month as the newly elevated chief executive of billion surplus, about $244 million Countrywide Financial and Merrill Con Ed. He laughed. I shrugged. Hey, it’s not like any more than anticipated,with a $1.2 bil- Lynch,which BofA acquired in the fi- editor in the long history of Crain’s has ever claimed lion surplus likely in 2015. Some ob- nancial crisis. … CHRISTIE’S HAPPY servers expect the city’s unions—most VERDICT. A $1 million report by New we always get it right. Nonetheless, I’ll argue here, it’s of which work under expired con- Jersey Gov. Chris Christie’s lawyers impressive how often Crain’s has gotten it right with tracts—to be emboldened to boost concluded that he had no involvement our 40 Under 40 picks over the decades, from a 36- their wage demands. in Bridgegate. The RISING ENTREPRENEURSHIP is helping MORE IS LESS. end the long drop in NYC manufacturing year-old executive vice president at American Express … ‘I continue to massive traffic jams jobs, says a Center for an Urban Future Despite 14,700 jobs on the George Wash- study. Co. named Kenneth Chenault (Class of 1988) and a added in February,the be much more ington Bridge last 26-year-old vice president at Perry Ellis Co. named city’s unemployment concerned, September were or- OY VEY! Marc Jacobs (Class of 1989) to a 24-year-old writer- rate squeaked up to chestrated by mere 7.9% from 7.8% the NEW YORK STATE has the most director named Lena Dunham (Class of 2011) and a when it comes underlings, they said. segregated public schools in the nation, month before—its Several independent reports UCLA’s Civil Rights Project. 38-year-old online-photo-library founder named Jon first monthly increase to our security, investigations are on- Oringer (Class of 2013), whose stake in publicly since May 2012. The with the going. … RISING traded Shutterstock Inc. is worth more than $1 rise in jobs was driven SONS. Rupert Mur- by a surge in prospect of a doch’s two sons will billion. OK, enough with the not-so-humble tech-sector and get senior jobs at the bragging.Turn to Page 13 to meet our Class of 2014. professional-services nuclear Australia-born media hiring, but it was out- weapon going mogul’s entertain- weighed by growth in ment and publishing istock THIS WEEK IN CRAIN’S the labor force. ... WTC off in outlets. Lachlan, who SECURITY NETS TWO: Manhattan had left the fold to faces life in prison. … BERNIE’S LITTLE Two CNN producers strike out on his own, HELPERS. Five of Bernard Madoff ’s IN THE BOROUGHS-------------------------- 3 were arrested for try- [than with will join his dad as a former employees were convicted of IN THE MARKETS----------------------------------4 ing to sneak into 1 co-chairman of 21st aiding his $17.5 billion Ponzi scheme. World Trade Center Russia’s Century Fox and Prosecutors unveiled hundreds of ex- SMALL BUSINESS ------------------------------5 in broad daylight. aggressions]’ News Corp. Sibling hibits illustrating their involvement THE INSIDER -----------------------------------------------6 That successful stop, —President Barack Obama James will rise to co- and won convictions on all 31 counts. however, came just a chief operating offi- The five will remain free on bail until REAL ESTATE DEALS ----------------------- 7 day after four men were arrested for cer at 21st Century Fox. … BIN sentencing in July. … PAPER AND OPINION --------------------------------------------------------10 parachuting off the spire’s top in the LADEN’S SON-IN-LAW FACES LIFE. A PLASTIC. The City Council intro- dark and less than a week after a New federal jury in Manhattan found Su- duced a bill that calls for a 10-cent fee ALAIR TOWNSEND -------------------------11 Jersey teenager made it all the way up laiman Abu Ghaith, a son-in-law of on all plastic and paper shopping bags GREG DAVID--------------------------------------------11 in the dead of night. … BANK SETTLE- Osama bin Laden, guilty of conspir- in an effort to curb the number of them MENT. Bank of America settled law- ing to kill Americans in his role as the going into landfills. The move could 40 UNDER 40 --------------------------------------13 GOTHAM GIGS suits stemming from the sale of soured terror group’s spokesman. He will be save the city $10 million a year. CLASSIFIEDS -----------------------------------------38 mortgage securities to federally sentenced on Sept. 8 and potentially —emily laermer Pick a card:Toffer Grant NEW YORK, NEW YORK ---------- helps companies keep tabs on 45 the corporate tab. P. 8 SOURCE LUNCH--------------------------------46 STORIES TO WATCH THIS WEEK vol.xxx,no.13,march 31,2014—Crain’s New York Business(ISSN 8756-789x) is published week- ly,except for double issues the weeks of June 23, July 7, July 21, Aug. 4, Aug. 18 and Dec. 22, by Crain Communications Inc.,685Third Ave.,New York,NY 10017.Periodicals postage paid at New York, N.Y., and additional mailing offices. Postmaster: Send address changes to: March 31: New April 1: Paid-sick- April 2: Alicia April 2: Trade Crain’s New York Business, Circulation Department, 1155 Gratiot Avenue, Detroit, York State Gaming leave law goes into Glen discusses Brooklyn, the MI 48207-2912. for subscriber service: Call (877) 824-9379. 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