‘s INSIDE REPORT TOP STORIES SMALL BUSINESS Wow:A450-sq.-foot Credit unions hope store that generates to open loan spigots $2 million in revenue ® PAGE 13 NEW YORK, NEW YORK P. 6 Robin Hood Foundation VOL. XXVIII, NO. 19 WWW.CRAINSNEWYORK.COM MAY 7-13, 2012 PRICE: $3.00 gala tops the party circuit PAGE 2 FINANCIALFINANCIAL FIXFIX FLOATEDFLOATED Avon rings staffers’ bells to make up lost sales ground PAGE 2 FORFOR HUDSONHUDSON RIVERRIVER PARKPARK LDV is the hottest restaurant group no Housing, hotel for Pier 40 could fund repairs for decades one’s ever heard of PAGE 3 Betsey bankruptcy offers opportunity for Steve Madden PAGE 4 BY THERESA AGOVINO keep the five-mile ribbon of park above quickly dwindling in the wake of two water, according to an internal study that successive years of budget deficits. The nonprofit trust managing the fi- sources have shared with Crain’s. Without an influx of cash, the park nancially struggling Hudson River Park The study, commissioned by the will exhaust its reserve fund in less than has identified a possible solution to its trust, explored a range of options for Pier three years. Meanwhile, roughly $118 problems. Building 800 apartments and 40 with an eye toward identifying ones million is needed just to make basic re- a 150-room hotel on crumbling Pier 40, that would produce the most revenue pairs to Pier 40, a nearly 15-acre expanse BUSINESS LIVES the park’s prime commercial asset, offers with the least amount of traffic. It comes with ball fields and a 775,000-square-foot GOTHAM GIGS the best chance to raise the funds to at a time when the park’s bank account is See HUDSON RIVER PARK on Page 17 He’s no empty suit P. 21 ● ANNE FISHER How the buck ennis Freelancers Union got its start P. 21 ● MOVERS & SHAKERS Soft-drink Taking the bite out of How Barry Diller’s IAC plans Lyme disease P. 22 ● GAEL GREENE NoMad brouhaha attracts crowds, so be to hatch the next Instagram prepared to wait P. 23 bubbles up In-house tech incubators pay innovators INDEX to dream big, sowing seeds for rich returns NY industry’s image THE INSIDER _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _8 ent of Ask.com and Match.com campaign counters NEIGHBORHOOD JOURNAL _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _9 BY MATTHEW FLAMM has rolled out two incubator “labs” government attacks VIEWPOINT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _10 that between them plan to launch REAL ESTATE DEALS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _12 Venture capitalists and tech 10 companies a year. Some could moguls all want to find the next operate as independent businesses, BY SHANE DIXON KAVANAUGH FOR THE RECORD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _16 hot startup, but not everybody can but most will become new entities CLASSIFIEDS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _18 cough up a billion dollars for an In- within IAC. All of them, while Scarred by skirmishes with the HOT JOBS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _21 stagram.Barry Diller’s IAC/Inter- they’re starting up, will have the Bloomberg administration and EXECUTIVE MOVES _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _21 ActiveCorp. is trying a different good things that come with a big haunted by the specter of a soda bloomberg news THE WEEK AHEAD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _23 approach. It plans to build its own. company, like competitive salaries DILLER’S BET: IAC chairman sees 10 new tax, New York’s beverage compa- In the past 18 months, the par- and benefits and corporate infra- startups a year from the homegrown effort. nies are fighting back. structure. IAC’s 50 websites are Coca-Cola Refreshments, also potential clients. Pepsi-Cola Bottling of NY Inc.and 19 5 The model is believed to be startups. In return for its invest- Dr Pepper Snapple Group have unique. Other companies may de- ment, IAC gets a chance to create formed the industry’s first city- velop new enterprises, but they the next generation of cool prod- based trade group to battle ongoing don’t have a dedicated program to ucts at a time of intense competi- attacks against sugary soft drinks by recruit entrepreneurs and engi- tion for new businesses. city and state officials. neers and then give them a corpo- The labs represent a gamble. As an opening salvo, the group, NEWSPAPER rate setting in which to launch See IAC on Page 17 See SODA on Page 20 71486 01068 0 COMMENTARY Avon calling on office staff Time’s up, to put on their sales hats Struggling company has a value of “over $200” ford C. Bernstein & Co.“We news moguls but which reps can now knew the company was fail- summons all hands on snap up for a mere $50.The ing in the U.S., but this feels program assigns employ- like a Scotch tape,short-term t is no surprise that the condemnation of Ru- deck in effort to step ees five different reps to solution.” pert Murdoch and his top lieutenants at pitch each day. It came a week after the up sagging revenues “Every Avon employee arrival of Avon’s new CEO. News Corp. by a British parliamentary com- is becoming an Avon rep- The sales drive also kicked mittee has gotten much more attention than BY CARA S. TRAGER resentative,” said a head- off the same day Avon an- the near-simultaneous, scathing critique of quarters worker, who de- nounced that its first-quarter Arthur Ochs Sulzberger Jr. issued by one of his em- With its earnings sinking,its stock se- clined to be identified. net earnings tumbled 82%, I verely depressed and new Chief Exec- news which in turn triggered ployees at The New York Times. But the coincidence utive Sheri McCoy barely two weeks Why me? a 7.9% drop in its share price, is fascinating. into her job, Avon Products Inc. is Andy Watts, who over- to $19.90. Management is calling on all hands to grab the oars. sees North American mar- also fighting a takeover at- Both guilty with MySpace, Office-bound employees from ad- keting, announced the 82% tempt by beauty firm Coty verdicts came in buying it for $580 ministrative assistants all the way up push on April 24 to a DROP Inc., rejecting its suitor’s sec- the midst of pro- million in 2005, to executives are being drafted into an packed meeting of em- in Avon’s first- ond and most recent $10 bil- tracted crises. Mr. then selling it for ad hoc sales force. As of May 1, par- ployees at Avon’s Third lion bid on April 3. And on Murdoch was de- $35 million last ticipants are reaching out to the com- Avenue headquarters. quarter net top of all that, Avon is the clared “not a fit year.Yet the Post’s pany’s famed army of door-to-door Many were said to be less earnings subject of ongoing Securities person” to run his iPad app is one of sales reps around the nation. than delighted to find and Exchange Commission conglomerate af- the best in the The two-week effort zeroes in on themselves drafted for investigations into the com- ter years of egre- business, and those doorbell ringers in the field who what Avon is calling its “outreach pany’s financial disclosures with ana- gious misdeeds News Corp.’s haven’t placed a new order for supplies campaign.” lysts and possible bribing of officials and cover-ups by digital-only The in more than two weeks.They are be- An Avon spokeswoman said the in China. employees at his MICHAEL Daily, though it ing encouraged to boost sales—and firm doesn’t comment on internal British newspa- GROSS hasn’t set the their own income—by promoting programs.