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NEW YORK BUSINESS® MARCH 12 - 18, 2018 | PRICE $3.00 TENSION BUILDING AT HUDSON YARDS Related’s lawsuit looks to break a union leader’s grip on city construction PAGE 17
VOL. XXXIV, NO. 11 WWW.CRAINSNEWYORK.COM GENIUS THE LIST SECRET IDEAS LARGEST CEO FOR THE MINORITY-OWNED COMPANIES PAY MTA P. 20 P. 4 P. 15 NEWSPAPER
P001_CN_20180312.indd 1 3/9/18 7:40 PM MARCH 12 - 18, 2018 CRAINSNEW YORK BUSINESS
ON THE COVER
PHOTO: BUCK ENNIS
FROM THE NEWSROOM | AARON ELSTEIN | SENIOR REPORTER Party of one
LAST WEEK WeWork acquired Conduc- tor, a search-engine-optimization company. Now the o ce-sharing rm’s tenants can call WeWork for advice on making their busi- ness rank higher on Google searches. It could prove to be such a useful perk that big land- lords all over town will be compelled to o er the service. SEO rms, your ship truly has come in. I mention that deal because it helps explain why the stock market continued to roll along even as President Donald Trump drove every- one nuts with his “Will he or won’t he?” tari policy, which led to the resignation of Gary Cohn. A number of advisers have le this White House—of the 14 New Yorkers Crain’s identi ed as having an “inside track” to Trump in advance of his inauguration, ve have since le the administration or decided not to join it—but the departure of the P. 17 chief economic adviser marked the rst exodus by someone consid- ered a mainstream policy expert. IN THIS ISSUE Many predicted markets would be roiled by Cohn’s departure, as he was widely seen as the key check on the Trump White House’s 9 VIEWPOINTS UP FRONT Cuomo has failed on climate protectionist instincts. But a er some initial wobbles, the Dow Jones change; blacks are doing better Industrial Average ended the week up 3%, and memories of last 3 EDITORIAL Rethinking the city’s elite 15 THE LIST month’s correction are fading. at’s because the economy is unde- high schools The metro area’s largest niably strong, and it’s rare for the stock market to have a down year minority-owned companies 4 IN CASE YOU MISSED IT when that’s the case. e last time the economy was good and markets “Genius” winners offer big bad was 1994, when the Federal Reserve was raising interest rates. ideas for xing the MTA FEATURES It doesn’t mean stocks will go up from here; they have been on 5 HEALTH CARE a nine-year-long rally, and the Fed is poised to continue raising the 17 HUDSON BARBS Who bene ts from Cigna’s A lawsuit could derail the still ultralow lending rates. But so long as the economy is robust and planned merger? city’s biggest development the likes of WeWork are expanding, the nancial community really 20 STEALTH WEALTH doesn’t seem to care who’s in the room with Trump. How some rms pad At least for now. executives’ paychecks 24 GOTHAM GIGS A writer grew a friendly scavenger hunt into a REAL ESTATE FORUM big business 25 SNAPS APRIL 13 Photos from the city’s biggest RETAIL REALITY CHECK fundraisers and charity events WITH RETAIL RENTS on the decline P. 26 FOR THE RECORD but still high by historical 6 Our tally of the week’s buys, standards, landlords and tenants busts and breakthroughs 6 ASKED & ANSWERED are in a bind. Hear from Saul 27 PHOTO FINISH Scherl of the Howard Hughes New York Times’ podcast editor on building a brand A local bagpiper gears up for Co., as well as owners, brokers the St. Patrick’s Day season and tenants, about strategies for 7 POLITICS survival and success. Actress Cynthia Nixon’s unlikely CORRECTION bid to take down Cuomo NEW YORK Daniel Biederman is no longer associated with ATHLETIC CLUB 8 WHO OWNS THE BLOCK the Grand Central Partnership. His role was 8 to 10 a.m. The ripple effects of misstated in “The future of food carts is [email protected] NY-Presbyterian’s expansion corporate,” published March 5.
Vol. XXXIV, No. 11, March 12, 2018—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double issues the weeks of Jan. 1, June 25, July 9, July 23, Aug. 6, Aug. 20 and Dec. 24, by Crain Communications Inc., 685 Third Ave., New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing of ces. Postmaster: Send address changes to: Crain’s New York Business, Circulation Department, PO Box 433279, Palm Coast, FL 32143-9681. For subscriber service: Call 877-824-9379. Fax 313-446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. (GST No. 13676-0444-RT) ©Entire contents copyright 2018 by Crain Communications Inc. All rights reserved.
2 | CRAIN’S NEW YORK BUSINESS | MARCH 12, 2018
P002_CN_20180312.indd 2 3/9/18 6:36 PM MARCH 12, 2018
AGENDADebate over diversity at test-in high schools misses big picture
he numbers were predictable, as was the reaction. Only 10% of seats at the city’s eight test-in high schools this year were of- fered to black and Latino students, and a chorus of voices said that needs to change. Indeed it does. But the debate that has Traged for years about the subject has overlooked key issues and has been corrupted by false assumptions. First, the context: By state law, admission to Stuyvesant, Bronx Science and Brooklyn Technical high schools is solely by test score. e city chooses to use the same system for ve other public high schools. An algorithm makes the o ers as follows: e top-scoring eighth-grader on the October test gets into his or her rst-choice school, usually Stuyvesant. en the second-best scorer gets into his or her top choice. And so on down the list of about 28,000 test-takers. If students’ preferred school has no seats le by colleges that would accept them from virtually any other school. And when the computer gets to them, they get their next-highest choice. although the extreme rigor at schools such as Stuyvesant bene ts some e process leads to a heavy concentration of high scorers at Stuyve- students, many others endure stress and sleep deprivation and take short- sant, followed by Bronx Science, Tech and then the rest. Not surprisingly, cuts to get by. School becomes more about surviving than learning. many of those students go on to prestigious colleges, prompting people e test-in system is meritocratic but nutty. Colleges and private to believe that the so-called specialized high employers certainly don’t use it. Its defend- schools provide an elite education and a Students endure constant stress, ers say kids who can’t score well enough to gateway to the Ivy League that students of get into a school would be chewed up if, as color are denied because they so rarely get get little sleep and take shortcuts. Mayor Bill de Blasio has suggested, they in. (Of the 902 students Stuyvesant accepted, Education becomes transactional were admitted via an alternative pathway. 10 are black and 27 are Latino.) But consider e test-score apologists overlook the fact that the average SAT score of Stuyvesant stu- that many who pass the exam are nonethe- dents o ered admission to Cornell University is 1520, versus 1380 from less chewed up or come to adopt a transactional view of high school: Get Midwood High School. e same is true for all selective colleges because good grades by any means, load up the transcript and get into a big-name the competition at Stuyvesant is so strong and admissions oces infor- college. Changing that culture is the real challenge for the specialized mally limit the number of students they accept from any one high school. schools. e test-in policy helps drive the culture and dominates the con- at means students at the “best” high schools are routinely rejected versation, drowning out other voices that need to be heard. — THE EDITORS
FINE PRINT The Business Integrity Commission, which caps rates for commercial-waste collection, is proposing a 5.6% increase. Carters have long wanted the cap eliminated, but virtually all price their services below the limit because charging the maximum looks bad. Making a pro t under this system requires that crews rush, which critics say led to seven deaths last year. Department of Sanitation trucks last caused a fatality in 2014.
BY GERALD SCHIFMAN ST A 25 WORDS OR LESS GOING INTO OVERTIME TS
THE METROPOLITAN Transportation Authority has A
asked the city for $418 million in emergency funds, ND T H It’s hard to argue with and its overtime costs are soaring. “ Total overtime spending by the MTA last year, a 20% increase from 2016 his numbers. But no $1.2B E CITY one in public of ce Approximate overtime pay per likes sticker shock” MTA employee, 22% higher $16,360 than the NYPD’s average —Jon Orcutt on fellow transportation expert Bruce Schaller’s call for hired Increase in average overtime payments to MTA Bridge and Tunnel workers last cars in Midtown to be charged $20 year, the highest of any MTA agency to $50 an hour, which would double 29%
fares. A proposed per-trip fee of $2 to Number of Long Island Rail Road $5 would have little effect on conges- workers who earned at least tion, an analysis by Schaller found. 174 $100,000 on top of their base pay
SOURCES: Empire Center for Public BUCK ENNIS, GETTY IMAGES Policy, Mayor’s Management Report
MARCH 12, 2018 | CRAIN’S NEW YORK BUSINESS | 3
P003_CN_20180312.indd 3 3/9/18 8:05 PM IN CASE YOU MISSED IT CRAINSNEW YORK BUSINESS president K.C. Crain senior executive vice president Chris Crain group publisher Mary Kramer
EDITORIAL It doesn’t take a genius to see managing editor Brendan O’Connor assistant managing editors Erik Engquist, MTA needs better ideas Jeanhee Kim, Robin D. Schatz copy desk chief Telisha Bryan HE METROPOLITAN TRANSPORTATION AUTHORITY art director Carolyn McClain photographer Buck Ennis doled out almost $2.5 million to eight winners of its senior reporters Joe Anuta, Aaron Elstein, Genius Transit Challenge. Awardees ranged from Matthew Flamm, Daniel Geiger T reporters Will Bredderman, a transit bu , lawyer Craig Avedisian (far right, with MTA Jonathan LaMantia, Caroline Lewis Chairman Joseph Lhota), to Chinese state-owned manufac- data reporter Gerald Schifman turer CRRC, the world’s largest train-car producer. e con- web producer Chris Kobiella test’s putative purpose was to open up the agency’s hidebound columnist Greg David contributors Tom Acitelli, Yoona Ha, bureaucracy to fresh ideas without having to lay out the usual Miriam Kreinin Souccar millions of dollars on consultants. e real aim, it seemed to to contact the newsroom: some observers, was to create an upbeat public-relations cam- www.crainsnewyork.com/staff 212.210.0100 paign for an increasingly reviled organization. 685 Third Ave., New York, NY 10017-4024
It remains to be seen whether any of the proposals were ADVERTISING actually genius and whether New Yorkers will ever see them www.crainsnewyork.com/advertise implemented. Avedisian suggested having longer trains whose advertising director Irene Bar-Am, 212.210.0133, [email protected] front and rear cars would open only at alternating stations—sure to trap and enrage riders. Ansaldo STS and senior account managers the Thales Group proposed replacing parts of the infamous, ancient signaling system with onboard cameras and Lauren Black, Zita Doktor, Rob Pierce, Transport Workers Union Stuart Smilowitz sensors—a major step toward automating the jobs of the , one of the biggest backers of senior marketing coordinator Gov. Andrew Cuomo, who controls the MTA. Charles Fontanilla, 212.210.0145 e most noteworthy winner might be the recipient of the biggest award: engineering rm Bechtel, which [email protected] sales coordinator Devin Arroyo, got $500,000 for its Big B, a semiautomated cra that could cruise the system and install communications infra- 212.210.0701, [email protected] structure. As it happens, a day before announcing the winners, Lhota lamented at a City Council hearing that CUSTOM CONTENT companies such as Bechtel don’t bid on big MTA projects. If the authority’s grants to Bechtel and others brings director of custom content Patty Oppenheimer, 212.210.0711, more global rms into the process, it would increase competition for contracts—and possibly reduce costs. [email protected] Alas, the genius grants focused on technology, not on the dysfunction, politics and misaligned incentives that custom project manager Danielle Brody, largely account for the MTA’s high costs and poor service. Perhaps another competition is in order. — WILL BREDDERMAN [email protected] EVENTS www.crainsnewyork.com/events director of conferences & events Batman vs. Superman: The Auction DATA POINT Welcome to New York Courtney Williams, 212.210.0257, Superhero supremacy will be decided Taylor Swi’s Firey Entertainment [email protected] THE CITY HAS A RECORD 3.47 when copies of Superman’s Action is asking that Douglas Elliman’s case manager of conferences & events Comics #1 and Batman’s Detective MILLION HOUSING UNITS, UP BY against it be dismissed. Elliman sued Adrienne Yee, [email protected] events coordinator Ashlee Schuppius, Comics #27 are sold on comicconnect 117,000 FROM 2011, ACCORDING for the $1.1 million commission that [email protected] .com March 19 to 23. e issues are con- another broker received on the $18 mil- sidered the most valuable comic books. TO A CENSUS BUREAU SURVEY. THE lion TriBeCa townhouse Swi bought. AUDIENCE DEVELOPMENT group director, audience development Firey said Elliman once showed the RENTAL-VACANCY RATE, 3.63%, IS Jennifer Mosley, [email protected] Changing of the guard property but had no part in the deal. Goldman Sachs CEO Lloyd Blankfein THE THIRD-HIGHEST SINCE 1965. REPRINTS reprint account executive Lauren Melesio, reportedly is stepping down by the end Garbage removal 212.210.0707 of the year. He likely will be succeeded e NYPD is looking for two garbage- by one of the rm’s two co-presidents, O ce of Nightlife’s senior executive can thieves. Police said the crooks PRODUCTION production and pre-press director Harvey Schwartz or David Solomon. director. e new agency is slated to get might be reselling the bins, which cost Simone Pryce e 63-year-old Blankfein has been a 12-person advisory board and have a the city $1,300 each, for several hun- media services manager Nicole Spell Goldman’s chief since 2006. $300,000 budget. dred dollars apiece. — CHRIS KOBIELLA SUBSCRIPTION CUSTOMER SERVICE Emissions mission Pay it backward www.crainsnewyork.com/subscribe [email protected] U.N. Secretary-General António Gut- e Joyce eater began a “pay what 877.824.9379 (in the U.S. and Canada). erres named former Mayor Michael you decide” trial for dance matinees. $3.00 a copy for the print edition; or $99.95 Bloomberg special envoy for climate People can reserve seats for $1 and aer one year, $179.95 two years, for print change. Bloomberg is expected to sup- the performance pay what they want subscriptions with digital access. port next year’s U.N. Climate Summit by cash or credit card. e rst show Entire contents ©copyright 2018 and work on implementation of the under the new system sold out. Crain Communications Inc. All rights 2015 Paris climate accord. reserved. ©CityBusiness is a registered Gaining weight trademark of MCP Inc., used under license On burrowed time Restaurant reviewer e Infatuation, agreement. e city is stepping up its use of dry which operates through a website, a CRAIN COMMUNICATIONS INC ice to kill rats in parks, a method not mobile app and social media, bought chairman Keith E. Crain harmful to birds of prey. Dry ice buried Zagat from Google for an undisclosed vice chairman Mary Kay Crain in rat burrows releases carbon dioxide amount. Nine-year-old Infatuation said Barking up the wrong trees president K.C. Crain senior executive vice president Chris Crain that su ocates the rodents in minutes. it will operate Zagat as a separate brand. The Parks Department reversed itself on the crocheted tree “sweat- secretary Lexie Crain Armstrong editor-in-chief emeritus Rance Crain But what are the hours? Lineup change ers” adorning about 24 trunks in chief nancial of cer Robert Recchia New York has its rst nightlife mayor. Former Details editor Dan Peres the West Village. The agency was founder G.D. Crain Jr. [1885-1973] Ariel Palitz, who once owned an East replaced Gary Hoenig as editorial going to remove the colorful wraps chairman Mrs. G.D. Crain Jr. [1911-1996] Village nightclub that she said garnered director of Derek Jeter’s online Players’ until it was told that they increased the most noise complaints in the city Tribune. Hoenig is remaining with the business and foot traf c.
AP IMAGES, FLICKR/MTA for seven straight years, was named the company as a content adviser.
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P004_CN_20180312.indd 4 3/9/18 7:01 PM HEALTH CARE
When giants merge, who benefits? Health care advocates don’t expect New Yorkers to see lower drug prices after two multibillion-dollar acquisitions BY CAROLINE LEWIS
igna’s $67 billion deal president and chief executive that consumers will bene t. president of the Medical Soci- said last week that it will o er to acquire Express of Cigna, said last week in a “Obviously consumers ety of the State of New York, patients rebates on drugs Scripts, the nation’s statement. would like less bureaucracy, said he worries that insurer– when the medications are pur- largest pharmacy- But many local health care and at rst blush vertical inte- PBM mergers will only give chased rather than just passing Cbene t manager, was touted advocates are skeptical that gration between insurers and them more power to deny along savings through lower last week by the two health care such consolidation will bene t pharmacy-bene t managers drug coverage or price some premiums. giants as a move that will result consumers by lowering pre- may sound like a good thing,” medicines out of reach. Mark Scherzer, a lawyer who in more consumer choice and scription drug prices. Benjamin said, “but there’s no “My patients’ entire experi- represents health care consum- better-coordinated care. evidence that these integration ence a ects their judgment of ers in New York, said he can It was already a familiar What’s the upside? e orts will make prescriptions me,” Rothberg said. “If I rec- see some cause for optimism in refrain, following on the heels PBMs have faced criticism less expensive.” ommend a course of treatment the Cigna–Express Scripts and of CVS’ December revelation for lacking transparency in She drew a parallel with and for some reason these CVS-Aetna mergers. that it plans to acquire Aetna their role as intermediaries past consolidation among hos- other entities place obsta- “To the extent that PBMs for $69 billion. Pharmacy- that negotiate drug prices with pitals and physician practices. cles in the way of the patient become more a part of the bene t managers teaming up manufacturers on behalf of Health care providers o en getting it, that doesn’t work insurance companies, it may with insurers is the latest wrin- insurers and other payers. argue that mergers will lead to for m e .” actually make them more kle in the mounting trend of Elisabeth Benjamin, vice greater e ciency, resulting in susceptible to regulation in health care consolidation. president of health initiatives better care and lower costs for Feeling the pressure the ways we’ve been seeking,” “Cigna’s acquisition of for the Community Service consumers. A substantial body ere is some evidence that Scherzer said. Express Scripts brings together Society of New York, an orga- of research, however, indicates insurers are feeling pressure to As far as the potential e ect two complementary customer- nization that does research that such consolidation actu- show consumers that they are on prices, he added, “In some centric services companies and advocacy around access to ally drives up costs, in part saving them money on their ways, it’s hard to imagine well positioned to drive greater health care, said the companies because it creates players with prescriptions. UnitedHealth- consumers being worse o in quality and a ordability for involved in such deals should greater negotiating power. care, whose parent company terms of drug costs than they customers,” David Cordani, have to prove to regulators Dr. Charles Rothberg, operates the OptumRx PBM, are now.” ■
MARCH 12, 2018 | CRAIN’S NEW YORK BUSINESS | 5
P005_CN_20180312.indd 5 3/9/18 7:53 PM ASKED & ANSWERED DIGITAL MEDIA INTERVIEW BY MATTHEW FLAMM
SAMANTHA HENIG THE NEW YORK TIMES
lthough she never studied journalism or had There were so any digital training, Samantha Henig grew from many people a Newsweek cub reporter a decade ago into a “ trying to understand web editor adept at helping media properties Adevelop their online identity. In 2015 she began doing the what was happening groundwork for what would become the audio division of The in our country, and New York Times and a fast-growing part of the newspaper’s so were we” digital platform. The division has a smash hit with The Daily, a 20-minute podcast hosted by veteran Times reporter Michael Barbaro that was downloaded more than 200 million times in the past year.
After Newsweek, you went to Slate. Did you just fall into digital editing? When I was getting my start, a lot of traditional journalists didn’t FPO want anything to do with the web. The people who were willing to be a part of that got to take on a lot. It was more of a free-for-all.
How did you go from The New York Times Magazine’s digital editor to head of audio? That was more of a hop than a progression. I was coming back from maternity leave and joining a team that Sam Dolnick [now DOSSIER a Times assistant managing editor] was starting up. He said, “Do you have any interest in podcasts?” And I said, “Sure.” The WHO SHE IS Editorial director leadership wanted someone to spend time focusing on wheth- of audio, The New York Times er there was an opportunity in audio and what that opportunity AGE 33 looked like. BORN Takoma Park, Md. And what have the opportunities turned out to be? RESIDES Ditmas Park, Brooklyn As a business, it’s more than supported by advertising; it’s a EDUCATION Bachelor’s in sociolo- place advertisers want to be. Longer term, we’re thinking how gy, Cornell University it ts into the core Times business as a subscription compa- WHY SOCIOLOGY? “I knew ny. Podcast listeners skew young and female, so getting those pretty early I wanted to be a people exposed to our journalism is really valuable to us. It’s an journalist. But my mother [science audience-acquisition tool in some ways. writer Robin Marantz Henig] told me, ‘Don’t major in English or It seems you had great timing. journalism,’ and I listened to her. We were coming in at a good moment for podcasting generally, Her point was, you can learn to right at the beginning of this latest boom. But as to how our suc- write on the job, but it’s helpful to know about something else that cess has compared to our initial projections, a lot of that is about you want to write about.” The Daily and the unique demand we tapped into with that show. SCALING UP Having the content Did its success take you by surprise? but lacking the technical-production expertise for audio, the Times hired When we were rst laying out our plans, we thought we would Lisa Tobin from WBUR public radio in have a big portfolio of different types of shows and maybe we’d Boston to be executive producer of its get around to guring out news. But news seemed too hard to podcasts. It has attracted a team of audio start with. We totally upended that by jumping into a daily news veterans from All Things Considered and show, and that really paid off because we were the rst there. WNYC as well as podcasting pioneers such as Gimlet Media. “Part of why they all want You got off to a big start. How did that happen? to come here is we do get to build this from We were launching into a crazy news moment, just a week and scratch. It has all the fun of a startup but we are able to tap into the reporting and a half after Trump’s inauguration. Our tagline initially was “This stories of a 1,400-person newsroom.” moment demands an explanation, and this show is on a mission BUCK ENNIS to nd one.” There were just so many people trying to understand what was happening in our country just then, and so were we.
You’re launching a sort of spin-off this spring? It’s a multi-part, deeply reported documentary series that’s been in the works for about a year. It follows [Times reporter] Rukmini Callimachi, and it explores who joins ISIS and why. It’s the kind of story that only the Times can do in audio, and I don’t think you’ve ever heard that style of reporting in a podcast. ■
6 | CRAIN’S NEW YORK BUSINESS | MARCH 12, 2018
P006_CN_20180312.indd 6 3/9/18 4:57 PM POLITICS
Liberal threat to Cuomo: Big name, bigger hurdles Actress Cynthia Nixon can’t repeat success of previous Democratic challenger, experts predict BY WILL BREDDERMAN
iberal lightning won’t strike state a airs. And the governor has twice. at is the warning appeased public employees by ending political gurus have for erst- his feud with their unions; molli ed while Sex and the City star environmentalists by banning fracking, LCynthia Nixon, who reportedly is pre- which utilizes chemical-laced water paring to take on Gov. Andrew Cuomo to extract natural gas; and repeatedly THE GOVERNOR has little to fear from the Sex and the City star, according to analysts. in September’s Democratic primary. reminded constituents that he won Four years ago a political unknown, legislation to legalize same-sex mar- associate law professor Zephyr Teachout riage, raise the minimum wage, tighten the governor does,” said Tusk, an out- fees, which he ooaded to taxpayers. of Fordham, won 34% of the primary gun control and reduce college tuition. spoken critic of Mayor Bill de Blasio. “It’s going to seem to some people vote by running as a le -wing alter- Cuomo also has positioned himself as a De Blasio could prove to be another that it is a de Blasio–Cuomo ght, and native to the incumbent. But political champion of immigrants and frequently problem for Nixon. e actress and it’s not going to help her pull out voters insiders argued that the ever-calculating has criticized President Donald Trump. public education activist lent de Blasio upstate or in the suburbs,” Arzt warned, Cuomo has learned e strategy is her star power when he ran for mayor alluding to the mayor’s lack of popular- from his key mistake The incumbent is working. Rep. Sean in 2013, and NY1 reported that she ity beyond the ve boroughs. in 2014: underesti- Patrick Maloney, a has turned to his consultants, Hilltop e mayor campaigned hard for mating liberals’ dis- well positioned to Putnam County Dem- Public Solutions, in planning her own Cuomo in the 2014 primary and even satisfaction with his win September’s ocrat who is gay, said candidacy. But if de Blasio returns the secured him the nomination of the le - centrist governing. last week he would favor, it could back re on Nixon, given of-center Working Families Party. But “Cuomo did not primary, thanks not support the openly his history of political stumbles. His the governor’s failure to help elect pro- take [Teachout] seri- to strong support gay Nixon. “To have 2014 attempt to elect a Democratic gressive Democrats to the state Senate, ously and did not run a member of the state Senate, for example, was a deba- which was his end of the bargain, trig- a full-out campaign,” from minorities and LGBTQ community cle. Not only did it help install an even gered a rapid souring of relations. veteran consultant questioning [Cuomo’s] stronger GOP leadership structure in It is unclear, however, whether de George Arzt said. labor unions leadership on progres- the Legislature’s upper chamber, but it Blasio and his liberal allies are inclined Arzt noted that sive issues is pretty also triggered several criminal probes to launch an all-out assault on the Teachout fared best in thinly popu- ignorant when you look at his record,” that saddled the mayor with bad pub- powerful governor. “History suggests
lated areas upstate. She was heavily Maloney told the Daily News. licity and millions of dollars in legal other wise,” Tusk said. ■ FLICKR/GOVERNORANDREWCUOMO, GETTY IMAGES outvoted in all but the whitest precincts of New York City. at underscored Double-edged sword Cuomo’s relative strength among the On the potential challenger’s side, black and Hispanic voters, who form it’s unclear whether Nixon can capital- the bedrock of the Democratic Party, ize on her celebrity or what impact the a bloc he undoubtedly will look to unprecedented wave of women run- draw on again—along with powerful ning for governorships this year will private-sector unions whose support have. e Center for American Women he has cultivated. and Politics counts 80 declared or likely Invitation to Prequalify and to Bid: Updated Notice In addition, business interests will female candidates; there have been only Rehabilitation and Flood Mitigation of the New York Aquarium, Brooklyn, NY continue to fatten the governor’s swol- 39 female governors in U.S. history. len campaign account, which in Janu- “Just because you were on a TV Turner Construction Company, an EEO Employer, is currently soliciting bids for ary contained almost $30.5 million and show 10 years ago or whatever, doesn’t the Rehabilitation and Flood Mitigation of the New York Aquarium from is supplemented by $800,000 in the cof- mean that’s going to translate in a subcontractors and vendors for the following bid packages: fers of the Cuomo-controlled New York Democratic primary,” warned Bradley State Democratic Committee. Tusk, a former aide to Senate Minority BP # 31 Landscaping, (Bid, Payment & Performance Bond Required) Meanwhile, with the White House Leader Charles Schumer and to former and both houses of Congress now con- Mayor Michael Bloomberg. “Teachout Only bids responsive to the entire scope of work will be considered and, to be trolled by Republicans, wealthy New had this authenticity that really seemed successful, bidders must be prequalified by Turner. The landscaping schedule is York liberals have increasingly focused to work for people, and it resonated. It expected to be done in two Phases, Phase One starts, May 1st through July 1st 2018 and Phase Two July 1st 2018 through July 2nd 2019. CertifiedM/WBE and their energies on House and Senate didn’t feel like ‘Here’s this celebrity who Small Business (13 CFR part 121) companies are encouraged to submit. races and have shown less interest in wants attention.’ It felt like somebody who genuinely believed these things.” In order to receive the bid packages, potential bidders must submit a complete Arzt and Tusk noted that Cuomo DAUNTING NUMBERS Subcontractor/Vendor Prequalification Statement. Prior prequalification has avoided being weighed down by the submissions that remain current will be considered as previously submitted or worst ascoes of his second term: cor- may be updated at this time. All bidders must prequalify by the bid deadline by CUOMO would be a formidable ruption charges against former top aide April 10, 2018 and submission of a Prequalification Statement not later than opponent to any challenger. Joseph Percoco and economic devel- March 26, 2017 is strongly encouraged. All bidders must have an acceptable opment advocate Alain Kaloyeros, EMR, and will be subject to government regulations such as 44 CFR and Federal and the deteriorating performance Executive Order 11246. Successful bidders will be required to use LCP Tracker of the subways and Long Island Rail compliance verification software. Note that while this is a New York City $30.5M Road. e Percoco trial did not impli- prevailing wage project, union affiliation is not required. Cuomo’s war chest cate Cuomo; Kaloyeros, whose trial is scheduled to begin in June, is unknown To obtain further information about contracting opportunities and/or the % % in the ve boroughs. And much of the prequalification package and bid solicitation package/s, please contact 62 vs. 34 public remains under the false impres- Kahli Yaba-Baker ([email protected] or 212-229-6000.) Primary results in 2014 against sion that the mayor controls the trains. Teachout, despite the fact that the “ e biggest thing Cuomo has All bids will be publicly opened at office of the Purchasing Department, Bronx Zoo, 2300 Southern Boulevard, Bronx New York, on April 12, 2018 at 11 am. challenger won 30 of 62 counties going for him is that everyone thinks the mayor runs the subways when
Turner_4x6.indd 1 2/26/2018 1:07:09 PM MARCH 12, 2018 | CRAIN’S NEW YORK BUSINESS | 7
P007_CN_20180312.indd 7 3/9/18 7:48 PM WHO OWNS THE BLOCK REAL ESTATE
THE EDGE
Ripple effects of NY-Presbyterian’s growth Hospital’s expansion spurs development in Washington Heights
BY TOM ACITELLI
he Edge Hotel on West 168th Street 505 W. 168TH ST. in Washington Heights opened in late Plans were led with the Buildings 2015 and immediately began draw- 516 W. 169TH ST. Department in February for a 6-story medical facility on this 2,375-square- ing most of its guests from the nearby Brooklyn-based investor Shaul foot vacant lot. The 13,856-square-foot TNew York–Presbyterian/Columbia University Kopelowitz bought this 6-story, building is expected to include 9,982 24-unit apartment building for Medical Center. Instead of staying farther south square feet for community use, with a $5 million in 2015. It was the belowground pediatrics center and six in Manhattan or even over the bridge in fourth time it had traded hands oors of medical of ces. Dr. Marino New Jersey, patients and their families since 2002, when it sold for Torres, a pediatrician af liated with New 560 W. 169TH ST. $880,000. could bunk at the Edge, where rates cur- York–Presbyterian, is listed as the lot’s rently run around $129 a night, a relative The city owns this block- owner. He did not respond to requests bargain for the borough. long property, which houses for comment. e hotel’s debut presaged further the 228-pupil Castle Bridge School. health care–driven changes for the neigh- borhood. On Feb. 26 an NYP-a liated physician led plans with the Buildings 2201 AMSTERDAM AVE. Department for a 6-story development on a vacant lot near West 168th and Amsterdam Avenue. e Manhattan-based KMR Man- agement, led by CEO Shah- building is expected to include medical o ces and ram Yaghoubzadeh, bought community space. this 6-story, 82-unit apart- ose plans were still pending as of ment complex for $8 million early March, but health care–related 514 W. 169TH ST. in 2004. construction is clearly on the rise around Silvershore Properties, a private the city. Hospitals alone are projected to Manhattan-based investment rm launched in 2008 by Jason spend $8.2 billion on local construction Silverstein and David Shoren- from 2016 through 2018, according to stein, bought this 5-story, the New York Building Congress. at 10-unit apartment building for $2.5 million in January. would top the $6 billion they collectively spent from 2013 through 2015. 2180 AMSTERDAM AVE. e current construction boom, A limited-liability company traced to which encompasses both expansions and new 199 Lee Ave. in South Williamsburg, developments, is expected to add 2 million square Brooklyn, bought this 6-story, 30-unit apartment building for $4.52 mil- feet of medical space in the city by 2021. Outpa- lion in 2008. The 3-story building tient facilities account for much of the growth is reportedly home to hundreds of spurt, as health systems aim to reduce costly mailboxes used by landlords from the city’s Orthodox Jewish community to hospital stays and shi more preventive care and collect rent checks. medical treatments to nonhospital settings. e most prominent example is also within 514 W. 168TH ST. NYP’s portfolio: an $896 million, 750,000-square- Oskar Brecher, then a top executive at foot ambulatory-care center on the Upper East the Moinian Group, and Ari Sherizan, Side that is slated to open April 30. ■ a developer whose credits include the W New York Downtown, acquired this former parking lot for $1.4 million in 2012. The pair then built a $22 mil- lion Edge hotel with 11 oors and 515 W. 168TH ST. 54 rooms, with the rst ve oors This 6-story, 84-unit apartment build- reserved for medical of ces. ing has traded hands three times in the past 12 years: in 2006 for $6.53 mil- lion, in 2010 for $6.28 million and in 2016 for $18.2 million. The current owner is Castellan Real Estate Part- ners, a 10-year-old investment and ownership rm in Manhattan that is controlled by brothers John and Paul Salib. GOOGLE MAPS, BUCK ENNIS
8 | CRAIN’S NEW YORK BUSINESS | MARCH 12, 2018
P008_CN_20180312.indd 8 3/9/18 5:05 PM VIEWPOINTS
HOUSING is an illiquid asset with high expenses and Your home is not transaction costs. an investment Myths of leverage, high returns lead buyers to overpay BY ERIK ENGQUIST
ew Yorkers o en buy more e house fetched $400,000, so a er expensive homes than they paying o the loan, the seller was need. Some do because they le with $202,000, having made the consider housing a solid $60,000 down payment. Ninvestment that can be made mostly Notice something missing? their way to riches or the McMansion not be thought of as an investment. e with money they don’t yet have. Also, at’s right: 10 years’ worth of mort- of their dreams. Home values only go six- gure outlay represents not a loss they might be told by real estate bro- gage payments. ( e article’s author up, right? If any industry should be but the cost of residing in the home kers that using leverage—a euphemis- acknowledged the error and took down extra scrupulous, it is real estate, given for 10 years, as opposed to renting or tic way to describe borrowing—can the post.) its contributions to the Great Reces- living with Mom and Dad. (StreetEasy in ate their returns. In reality, the monthly payment on sion. Not only should it not sell lever- reports that millennials in New York But leverage is a double-edged a 30-year, $240,000, 5.5% mortgage is age as some magical money machine, City are the generation most likely to sword. Especially in a pricey market $1,363. Over a decade, that’s $163,560. but it also must lower the volume about consider buying a home and to spend like ours, home shoppers Adding the down payment, the mortgage interest deduction. Even more than they had planned.) should be careful not to over- the investment was $223,560. before the new tax law, only 44% of As investments, homes do not stack spend on the theory that they % e seller walked away with American homeowners could bene t up well. ey are illiquid assets with will not only live better but $202,000. So he spent more from that tax break. Now only 14% can. high transaction costs and steep annual achieve a great return. than $21,000, not including It is true that home-buying pres- expenses. Yes, one can get lucky and 14OF HOMEOWNERS It’s easy to misunderstand in the U.S. bene t other expenses (more on ents the best opportunity to use lever- buy in a neighborhood that suddenly the math. Case in point: Sev- from a mortgage that below). age that most people get. It is easier to gets hot, but studies have shown the eral years ago a real estate pro- deduction e reason for the nega- borrow for a house than to start a busi- long-term return of the U.S. housing fessional in the city published tive return was that the cost ness or play the markets. Leverage can market is similar to in ation. an illustration of a $300,000 of interest ($121,560) more indeed multiply returns for landlords. If a mutual fund had a 3% histori- home purchased with a $60,000 down than wiped out the home’s $100,000 But purchasers of a primary residence cal return, a 5% load, an 8% redemp- payment and a $240,000 mortgage at gain in value. Interest is front-loaded in should know that buying and selling it tion fee and a 4% expense ratio, and 5.5% interest. A er 10 years, the buyer a standard mortgage loan. involves costs and complications that required a 4% acquisition loan, no one sold the home at a $100,000 pro t, or If the cost of borrowing to buy do not exist for, say, securities. would buy it. at’s what a home is. 33%. But the analysis claimed that a non-income-producing home is Take our hypothetical purchase and You can’t reside in a mutual fund, because of leverage, the return on greater than its rise in value, the buyer sale. Closing costs, moving expenses, though. at is an investment. A home investment was actually 236%. is spending, not pro ting. If the house property taxes, insurance, maintenance is a place to live. It should be marketed Too good to be true? You bet. loses value, the loss is greater. and heating/cooling bills would add that way. ■ e example showed that upon e ctional 236% gain was bad math well north of $100,000 to the $21,000 unloading the home, the seller owed yet reminiscent of brokers telling buyers noted above. Erik Engquist is an assistant managing $198,000 on his $240,000 mortgage. in the mid-2000s they could leverage at is why a personal home should editor for Crain’s New York Business.
On climate change and environment, Cuomo has failed to lead
Governor’s budget does not address the crisis at hand BY PETER IWANOWICZ
ov. Andrew Cuomo’s rheto- standards to safeguard our land, air Cuomo’s budget omits carbon pricing ● Regional Greenhouse Gas Initiative. ric as a progressive reformer and water. Until he does, it’s up to state that could raise billions of dollars a New York is one of nine northeastern has not matched the reality legislators to amend the budget so New year from the largest corporate pollut- states in this large-scale eort to cap of his environmental record York can become a progressive bea- ers and reinvest it in clean energy. carbon emissions from electric power Gduring the past several years. He has con on climate policy. Although rarely ● Environmental Protection Fund. facilities and save ratepayers money. been slow with policies to protect com- given credit, the Legislature stepped up Cuomo proposed a $300 million But for the fourth straight year, the munities against climate change and in 2015 with funding for clean water authorization for this major source of governor has proposed to raid the pro- strengthen our environment. and in 2016 for electric-vehicle rebates. funding for large-scale environmental gram’s funds—$23 million this time, Remember how antifrackers had to Cuomo has been particularly weak projects. But the state’s nancial plan is a er $147 million was taken during the chase Cuomo around for years before on the following climate issues this year. at least $50 million short of the cash to past three years. Meanwhile, the pro- he banned the fracking of natural gas? ● The Climate and Community Protec- back it. Cuomo should ensure it is fully gram is running deep de cits. We’re seeing the same lack of leader- tion Act. e governor excluded this funded through additional revenue Government budgets are about ship from him in budget negotiations, far-reaching and bold legislation from raisers such as … more than dollars and cents. ey are but with the Trump administration his executive budget. It would elimi- ● A fee on plastic bags. Last year the moral statements of the values, com- rolling back major environmental pro- nate human-caused climate pollution governor—a er signing a bill to nullify mitments and ideals of the elected o- tections, the stakes are much higher. from all sectors by 2050 and mandate the city’s program to charge a 5-cent cials who create them. Cuomo’s proposed budget largely a complete shi to renewable energy fee on disposable bags—convened Cuomo’s budget shows that he is maintains the status quo and misses while directing resources to disadvan- a statewide task force to address the not living up to his promises on the what this moment in history demands taged communities and workers on the harmful impact of plastic bags. Cuomo climate and environmental issues of the state. It’s a timid document lack- front lines of climate change. has failed to live up to his promise of a that aect the lives and health of New ing robust and aggressive investments ● Carbon pricing. Making carbon pol- statewide solution. His budget ignores Yorkers every day. Our communities to resist Trump’s assault on our envi- luters pay for the environmental harm the issue, even though a statewide fee deserve better. ■ ronment and to put New York on a sus- they cause is an idea with growing could be a major source of revenue for tainable path. support across the political spectrum the Environmental Protection Fund Peter Iwanowicz is executive director of
Cuomo must do more to raise and within the business community. and climate policies. Environmental Advocates of New York. BUCK ENNIS
MARCH 12, 2018 | CRAIN’S NEW YORK BUSINESS | 9
P009_CN_20180312.indd 9 3/8/18 7:15 PM VIEWPOINTS
City’s blacks doing better NYC UNEMPLOYMENT RATES 5.9% as minimum wage rises 5.6% Job gains in government, hospitality and health care were factors 3.7% 3.1%
IN JULY 2009 e New Nationally the improvement African-Americans’ York Times headlined in African-Americans’ economic an article “Black-white prospects is a matter of considerable unemployment rate in White Asian Black Hispanic gap in jobless rate wid- controversy. President Donald Trump the ve boroughs has ens in city,” reporting took credit in the State of the Union the bleak news that speech for December’s 6.8% black fallen sharply and is BLACK UNEMPLOYMENT RATES the African-American unemployment rate, the lowest ever 7.7% unemployment rate recorded. But, as e New York Times signi cantly below the GREG DAVID was almost noted a month later, the black national rate 5.6% 15%, com- unemployment rate—which pared with 9% overall. % bounced back up to 7.7% in ree years later the news January—is still twice that into the gains of African-Americans remained worrisome, as an of whites. at would be in the city, but experts have two major 15GAIN in NYC analysis by the Fiscal Policy considered a near crisis if explanations. e rst is that the situation Institute showed tens of blacks’ median it were the rate for whites. was never as dire as it was portrayed. NYC U.S. thousands of black New Yorkers pay, 2013–2016 And the racial gap in pay Even at the time, economists expressed dropping out of the workforce and opportunities hasn’t skepticism at the numbers because SOURCE: NYS comptroller amid di culty nding jobs narrowed. industries where African-Americans while white workers sidelined % On all counts, African- are heavily represented—health care, by the recession were looking Americans in New York City hospitality and government—did not to hold lower-wage jobs. for jobs again. 78JOB GROWTH are doing better than they experience much employment loss e key question is whether these Today the story is in Bed-Stuy, had been. Not only is the during the downturn. gains are permanent or whether they completely di erent. African- 2009–2017 unemployment rate lower ose three industries have will be erased when the inevitable Americans’ unemployment than it was, but the median expanded rapidly in recent years, (but not yet on the horizon) economic rate in the city fell sharply to pay for black New Yorkers also especially the city government under downturn hits New York. ■ 5.6% last year, signi cantly below the climbed almost 15% between 2013 and Mayor Bill de Blasio, fueling gains. e national rate, an analysis by the state 2016, the largest gain of any racial group. minimum-wage increases have clearly GREG DAVID blogs regularly at comptroller found. No one yet has taken a deep dive also helped, as African-Americans tend CrainsNewYork.com.
Staten Island needs cohesive vision on growth Current development is unsustainable, but a new course is being charted BY EUGENE FLOTTERON
ith New York City’s attractive and resilient Staten Island A master growing population that o ers live-work-play opportuni- plan is needed, and a new string of ties while maintaining and enhanc- and there is sig- BIG THINGS: The outlet developments on Stat- ing existing communities to rival any ni cant interest mall planned for the borough is a sign of enW Island’s North Shore, continued or metro-area location. in this initiative economic vitality. even accelerated growth in the borough With its charming character and from city lead- seems likely. e island is a sleeping gi- signi cant resources, Staten Island is ers and groups, ant, with budding economic, cultural poised for progress and a revival of including the and recreation initiatives. Construc- its status as a regional destination. Yet Staten Island Chamber of Commerce including an annual summit for Staten tion is active, and the employment base with its infrastructure and transpor- and the Staten Island Economic Devel- Island business leaders in mid-April. is showing signs of life. Investments are tation issues—and lack of a cohesive opment Corp. Both organizations tout We will seek substantive input from announced on what seems like a daily vision—the borough is in danger of the success they have helped foment, the borough’s citizens, entrepreneurs basis. aggravating several critical challenges. and they see advantages to proposing and o cials. What’s missing is a blueprint for Among the most important are sub- a unifying vision of the borough’s path To move further toward a local channeling this growth in a way that par transit options and a heavy reliance forward. economy bene ting more people, with bene ts all Staten Islanders and the on automobiles. Routes for bicycles are Community involvement and a reliable and e cient transit options region as a whole. During the past limited and uninviting. Plus, the bor- study of potential outcomes are equal- and more attractive cultural and tour- year, a team of architects, planners and ough needs improved roadway main- ly critical elements of master planning. ist o erings, a large-scale plan is nec- transportation specialists have worked tenance and snow removal along with Recent experiences in East Harlem essary. It’s the key to better solutions. together to create “A Vision for Staten better streetscapes. underscore the bene ts of big-picture, And by holistically engaging the bor- Island.” e 90-page preliminary mas- Development is nearing record lev- neighborhood-sensitive planning. Yet ough’s communities, leadership and ter plan—created pro bono by Cetra- els on the island, especially on its east- on Staten Island, we could see the rst private developers, we can solve more Ruddy and Swiss transit expert Arnd ern shore. However, much of the de- boroughwide opportunity to proactive- issues all at once. ■ Bätzner—grew from our response to velopment is reactive, and some plans ly address growth. Crain’s 2017 question “Can New York already unveiled seem likely to exac- We believe a comprehensive and Eugene Flotteron, a native and resident City support a population of 9 million erbate congestion and other problems holistic approach is necessary to en- of Staten Island, is a principal of Cetra- by 2040?” It tackles everything from that residents and borough o cials sure sustainable development on the Ruddy Architecture and the lead archi- the borough’s history and current tra- face every day. Increased job opportu- island. roughout the year the team tect for the rm’s Corporate Commons jectory to transit needs and growth nities and leisure options are possible led by CetraRuddy will present our 3, a 320,000-square-foot o ce building
SHOP ARCHITECTS opportunities. e goal: a sustainable, but oen lack support. ndings in a variety of public forums, under construction there.
10 | CRAIN’S NEW YORK BUSINESS | MARCH 12, 2018
P010_CN_20180312.indd 10 3/8/18 7:25 PM A ROUNDTABLE DISCUSSIONSPECIAL ADVERTISING SECTION ADVERTISING SECTION
The Middle-Market Landscape in New York City
MICHAEL FANELLI MICHAEL LAVEMAN GREG WANK Partner Partner Partner 212.372.1883 212.891.8750 212.840.3456 [email protected] [email protected] [email protected]
It’s a great time to be running a middle-market fi rm for many companies in New business income, which will lower the e ective tax rate to below 30%, down from York City. The Tax Cuts and Jobs Act is ushering in a substantial corporate tax 39.6%. This will enable pass-through owners to invest back into their businesses. cut that is expected to make U.S. companies more competitive with rivals from around the world. That would make a di erence for many fi rms in New York City Greg Wank: The Tax Cuts and Jobs Act is the largest tax bill since 1986 and will and other major cities, given the high overhead that comes with operating in a substantially impact middle-market companies and their owners in 2018 and prime location. beyond. The bill signifi cantly reduces the income tax rate for corporations and eliminates the corporate alternative minimum tax (AMT). It also signifi cantly Meanwhile, valuations are on the upswing for middle-market companies. As a increases individual AMT and estate tax exemptions. And it makes major changes result, it’s a good time for owners who want to cash out to start thinking about related to the taxation of foreign income. their exit strategy. It’s not all good news for the middle-market, however. The Tax Cuts and Jobs Nonetheless, there are some challenges ahead. Middle-market fi rms need to stay Act also eliminates or limits many tax deductions, and much of the tax relief is on their toes to prevent cybersecurity breaches. In the wake of high-profi le data only temporary. Additionally, the signifi cant changes to employer deductions for breaches, CEOs and boards are expected to have the right systems in place to business-related meals and entertainment could impact how businesses entertain protect sensitive client data. and socialize with clients, employees and contacts. Overall, for privately-held, middle-market companies, there are a variety of changes that must be analyzed To gain insight into how leaders at middle-market fi rms can get in front of these to determine the true impact on the business. and other developments, Crain’s Custom Studio spoke with a brain trust of experts from the accounting and advisory world who work frequently with middle-market Michael Fanelli: The choice of entity for which a middle-market business operates fi rms: should also be considered, which also requires a discussion around succession planning and the owner’s annual cash fl ow needs in order to know what entity •Michael Fanelli, CPA, a partner in the transaction advisory services practice at would be best to operate from a tax cash fl ow perspective over time. Focusing RSM US LLP and the leader of the New York transaction and advisory services on capital needs and e£ ciently using the new enhanced capital expenditure team provisions will be important, as will modeling out whether the new limits on the •Michael Laveman, CPA, a tax partner with EisnerAmper use of interest expense and net operating losses to determine any impact on the •Greg Wank, CPA, CGMA, an accounting and advisory partner at Anchin, Block & business. Considering which elements of tax reform the state tax authorities Anchin LLP follow will be another important part of planning under tax reform.
How will tax reform impact business for middle-market companies? Based on tax reform, how can middle-market fi rms minimize their e ective tax rate? Michael Laveman: Overall, large corporate entities should see the biggest impact as the combination of a drop from a 35% federal corporate tax rate to a 21% Michael Fanelli: Qualifying a business for the new 20% qualifi ed business income federal corporate tax rate will likely result in share buybacks, investment in capital deduction if a pass-through entity or taking advantage of the new 21% corporate expenditures, R&D spending and M&A activity. Most owners of pass-through tax rate could help middle-market fi rms reduce their e ective tax rate and provide entities will also benefi t as a result of the new 20% deduction against qualifi ed for more earnings to be reinvested into the business and/or its employees and
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If a fi rm is considering a potential exit strategy A partner in the transaction advisory services practice at RSM US LLP in 2018, what will its leaders need to do to and the leader of the New York transaction and advisory services team prepare their business for that event?
Michael Fanelli: Preparing your family-owned or owner-operated middle-market business can be a “The role and importance of the CFO are being daunting task. We suggest business owners prepare impacted significantly by today’s digital world as as early as possible for this event. Preparation should not be performed alone, as hiring expert advisers they become evangelists for driving technology, (tax, legal, investment banking, accounting, etc.) becomes critical to driving the highest sales value data, and analytics throughout an organization.” of your company, while allowing you to continue to manage your business. Other key aspects include (but are not limited to) clear articulation of your MICHAEL FANELLI vision. Where can the business grow to in say, three, fi ve, or seven years? Also, try to mitigate the risk of keeping the key business management in your head. Making yourself redundant and grooming a owners. supporting management team can become critical.
Greg Wank: The Tax Cuts and Jobs Act substantially reduces the federal income Greg Wank: Focusing on margins and profi tability are important when considering tax rate on C corporations to 21%. This could have an impact on entity choice an exit, but incentivizing key employees and leaders to remain for the long term for middle-market fi rms going forward, as well as warrant an assessment of the can be just as important. Many exits are contingent on the continued growth and merits to revoking an existing S-corp. election. There is a substantial new incentive success of the company, and exiting executives with nontransferable intelligence to invest in property and equipment via a 100% deduction of certain capital and intellectual capital can seriously damage a transaction amount. Right sizing expenditures. expenses, investing in marketing and business growth, building strong internal controls, and developing better processes can all be key factors in building Michael Laveman: Many factors come into play in making the decision to switch business value. from a pass-through structure to a corporate structure, including the type of business involved, where the company is located and how much money can be What are some of the di erences between selling a middle-market business reinvested into the business as opposed to distributed to shareholders/equity to a private equity fi rm vs. a corporate strategic buyer? holders. Interest expense deductibility is another area that businesses should focus on. Business interest expense deductions are now limited, so fi nancing Michael Fanelli: In the current M&A marketplace, private equity fi rms and arrangements should also be reviewed. corporate strategic buyers are looking more and more similar. However, there are still di erences worth noting. Typically, a private equity fi rm is going to have a shorter-term investment horizon (many times three to fi ve years), while corporates may invest for the long-term. Private equity fi rms bring signifi cant fi nancial acumen to the business, which may include higher leverage. However, often they also bring operating partners with years of operational experience in one’s industry.
In many instances, private equity fi rms look to back existing management teams and will invest a majority (say, 80%) We study in the business, while allowing management to keep 20% equity in the business. This provides for a “second bite of the apple” scenario where many times the original seller changing tax can make just as much or more on the sale of the remaining 20% equity interest. Corporates typically seek to acquire laws so you 100% of the business. don’t have to. Greg Wank: An owner of a middle-market company has to weigh existing options and future goals for the business. If it is a pure exit, with no intention of continuing at the RSM and our dedicated team of tax company, the highest bidder usually wins. But for founders advisors constantly monitor the latest or owners who want to remain active in the business and regulations and laws. With extensive continue to benefi t from company success, it is imperative middle market experience, we’re able to tailor solutions to your specific challenges. to weigh the di erences in a transaction. A private equity And our global resources help your fi rm may have a three-to-fi ve-year plan to build and grow company advance with confidence. the company, while a corporate strategic buyer may see the business as a long-term growth driver. In some cases, rsmus.com tremendous investments will be made to accelerate growth and expansion, while others want to increase velocity. The ultimate exit needs to tie to a founder/owner’s goals and to the company’s mission.
M&A valuations remain at some of the highest levels of all time. What are some variables that could impact this going forward?
RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax and consulting firms. Visit rsmus.com/aboutus for more Greg Wank: The economy is strong and in some industries, information regarding RSM US LLP and RSM International. including consumer products, we are seeing the highest
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analytics throughout an organization. In their role as A tax partner with EisnerAmper strategic leaders, CFOs need to build their companies by focusing on fi ve pillars of success within fi nancial operations: people, processes, technology, reporting “Middle-market companies should be very focused and analytics, and controls. Process-led technology enablement will empower progressive fi nance chiefs on cybersecurity. Many high-profile companies have to take the reins as business performance leaders and e ectively drive organizational performance. disclosed significant data breaches over the past few years, and many of them have had some level of How much do middle-market companies need to worry about cybersecurity? What are the protection in place that did not prevent these events leading-edge issues when it comes to data security and privacy? from happening.” Michael Laveman: Middle-market companies should MICHAEL LAVEMAN be very focused on cybersecurity. Many high-profi le companies have disclosed signifi cant data breaches over the past few years, and many of them have had multiples ever in deals. In key strategic expansion areas, valuations and multiples some level of protection in place that did not prevent will continue to grow and owners will realize tremendous value. As an example, if these events from happening. Companies should either have an internal resource Coca-Cola decides to expand in a snacking category, it has the size and pocketbook or an outsourced solution that addresses areas such as hardware, software, sta to go acquire a brand. It doesn’t have to invest in R&D and spend years trying to training, vulnerability testing and beyond. perfect a product. With this in mind, the competition gets sti er and strategic buyers compete private equity, venture capital, and other acquirers. That drives Greg Wank: Proper security training and enterprise security assessments are o ers and competition, increasing valuations and multiples even further. absolutely necessary in today’s marketplace. We see tremendous investments in information security services and think it will only continue to grow as more Michael Fanelli: The current average earnings before interest, taxes, depreciation, breaches are made public. and amortization (EBITDA) multiple has been hovering in the 10-12x range; however, this varies widely depending upon industry and size of the company. How can middle-market companies take advantage of artifi cial intelligence Consistently high valuations have been primarily driven by low-interest rates, and and blockchain? a supply-demand issue, with a tremendous amount of capital chasing too few quality businesses. Greg Wank: AI and Blockchain have the potential to revolutionize the way we do business. Quicker, more e£ cient processes can be built, and technology is allowing For this to change, interest rates would have to increase signifi cantly, more us to create things we never imagined before. We see signifi cant changes on the businesses would need to come to market compared to years past, limited horizon with technology revolutionizing every industry. With disruption like this partner investors would need to move away from investing in the private equity asset class, or a catastrophic global event would need to occur. Otherwise, with the availability of relatively cheap debt, high supply of capital to invest and low number of business for sale, valuations will likely remain high. Are you ready for How has the CFO role at a middle-market fi rm changed over the past year? Where do you see it in, say, fi ve corporate tax change? years?
Greg Wank: CFOs need to think beyond the day-to-day Congress has passed the most sweeping tax law fi nancial picture of a middle-market company. They have changes since 1986. These tax changes will impact to be a fi nancial executive and leader at their fi rm, driving public and private companies, pass-throughs, ideas for growth and expansion, thinking big, and becoming and multinational corporations, not to mention more of a fi nancial visionary for the company. You are their owners and executives. seeing more CFOs ascend to larger operational roles as they assume more responsibility in the executive suite. The evolution of CFOs as leaders will continue, and we are The fact is, every year thousands of corporate excited to see them drive value in the C-suite. clients rely on EisnerAmper’s experience and knowledge. So, are you ready for tax law changes Michael Laveman: The CFO role has gone far beyond in 2018 and beyond? We are. just being responsible for fi nancial reporting and tax compliance. Many CFOs are now actively engaged in a wider range of company issues, including regulatory Learn more at EisnerAmper.com/TAXCHANGE issues, internal controls, technology, investor relations and many others. Although many companies have internal or outsourced personnel to assist them in these areas, more often than not, the CFO is very involved. As the worlds of robotics, artifi cial intelligence and blockchain continue to advance, it is likely that fi ve years from now the CFO will play a leading role in managing these, and perhaps other, areas of a company’s business.
Michael Fanelli: The role and importance of the CFO are being impacted signifi cantly by today’s digital world as they become evangelists for driving technology, data, and
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Roundtable_MiddleMarket.indd 3 3/8/2018 5:20:40 PM A ROUNDTABLEADVERTISING DISCUSSION SUPPLEMENTSPECIAL ADVERTISING TO CRAIN’S SECTION CHICAGO BUSINESS ADVERTISING SECTION
benefits can vary by state and by industry, and are An accounting and advisory partner at Anchin, Block & administered by state or city economic development Anchin LLP agencies, many of which have specialists that help rapidly growing companies access these benefits. We assist companies in identifying applicable programs “Focusing on margins and profitability are and working through the application and negotiation process with these agencies. important when considering an exit, but incentivizing key employees and leaders to remain Implementing these programs frequently requires the evaluation of expansion options in more than for the long term can be just as important.“ one state, so often it is necessary to negotiate these benefits simultaneously across jurisdictions. Ensuring that the program is negotiated and applied before the company finds the lease or begins the expansion is essential. Surprisingly, many smaller and GREG WANK middle-market companies do not take advantage of these programs because of misconception that the programs are geared toward large companies only. comes opportunity. The amazing thing is that it is accessible for middle-market companies, and this can aid their path to growth. Greg Wank: There are significant tax credits and incentives that can be leveraged in 2018. If a middle-market company is considering a relocation, negotiations Michael Laveman: Each day, artificial intelligence is becoming a more commercially with state, city and local o£cials can lead to significant incentives for them. Hiring available tool that businesses can actually use. For instance, our firm has partnered people, expanding into new locations, and investing in R&D are all ways that a with IBM’s Watson to assist us with “smart auditing.” We have been able to teach company can benefit. The R&D credit has been an unbelievable incentive for many the AI technology a set of rules whereby it can then review documents and provide of our clients, in a variety of industries. That access to capital allows tremendous output for us to review. And, based on our input, the technology actually learns. reinvestment into their businesses. This has enabled us to spend less time on routine areas and greater focus on value-added analysis. Businesses with generally labor-intensive, manually driven Are there any incentives firms should be aware of with respect to investing processes are good candidates to consider the implementation of AI. in capital and real estate?
How can middle-market companies access tax credits and incentives in Michael Laveman: Companies should be aware of the new rules related to the 2018? expensing of certain business assets. Both bonus depreciation rules and Section 179 rules were favorably changed in the new tax act. For periods between 9/27/17 Michael Fanelli: The numerous tax credit and incentive programs that are and 1/1/23, businesses can deduct 100% of qualified business assets. In addition, available to middle-market companies throughout the U.S. can include credits and the annual Section 179 deduction has been raised to $1 million with higher phase- incentives for capital investment, job creation and technology development. These out amounts.
It’s important to remember that planning around asset purchases—along with other new rules, such as net operating losses—may need to be considered in determining which of the new asset expensing rules would HOW DOES TAX REFORM be beneficial and, if so, to what degree. Another important consideration is that the purchase of used property will now IMPACT YOU? be eligible for bonus depreciation.
Michael Fanelli: Most states have some type of incentive to support companies that are investing in capital and/or Visit all our resources on real estate. Depending on the state, these programs may be The Tax Cuts & Jobs Act at: limited to specific industries and may be limited to specific bit.ly/anchin-tax-reform locations with each state. Typically, incentives of this type can help companies reduce or eliminate their property taxes, sales taxes and/or income taxes related to a capital or real estate investment. These types of benefits must generally be negotiated for and applied for prior to making the underlying investment.
For example, a technology or software development company in New York can take advantage of the Excelsior Tax Credit Program with as few as five new jobs created and some capital investment. In New Jersey, manufacturers can take advantage of the New Jersey Grow Tax Credit Program With proper planning, taxpayers can update their tax strategy and work to minimize with as few as 10 jobs. You can also negotiate a reduction in unfavorable consequences. Anchin is working proactively with clients and friends real estate taxes with the relevant jurisdiction where your of the firm to analyze how these changes may affect them. Contact Your Expert facility is located. Partner to see how Anchin can help you navigate tax reform. Greg Wank: Many real estate investment vehicles are favored under the new tax law, thereby increasing their Anchin, Block & Anchin LLP potential after-tax rates of return. As stated earlier, the cost 1375 Broadway, NY, NY 10018 • 212.840.3456 recovery for capital investments in your business has been Clarence Kehoe, CPA, Partner accelerated under the new tax law as well. As the overall tax Leader of Anchin’s Tax Department rate environment drops, company executives have to weigh [email protected] the net returns on investing in people and property in their business compared to returning capital to its stakeholders.
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Roundtable_MiddleMarket.indd 4 3/8/2018 5:20:42 PM THE LIST NY AREA’S LARGEST MINORITY-OWNED COMPANIES Ranked by 2017 revenue ROOMS TO GROW TRENDS Since Bill de Blasio became mayor, certi cations of minority- and women-owned ith a mere $800, Ed Campanella-Rodriguez began his construc- business enterprises—along with the city contracts granted to those rms—are growing tion company in 1987 when he was 26 years old. irty years at a faster rate. MBI Group later, (No. 17) is taking o . Revenue increased by Total certi ed MWBEs MWBEs awarded city contracts 45% last year, to $75.7 million. at growth rate could accelerate 1,200 moreW quickly this year—Campanella-Rodriguez said he believes the company’s 1,131 revenue will climb above the $125 million threshold. at would be the result 5,122 of three-plus years of reorganization at the certi ed minority-owned business. 4,516 4,115 In the past MBI specialized in corporate interiors. Now it’s doing interior 3,700 3,783 1,000 work for a range of medical, institutional and educational clients. Major custom- 3,526 ers last year included the Metropolitan Transportation Authority, Mount Sinai Health System, Columbia University and TD Bank, which enlists MBI to build about 1 of every 4 new locations it constructs in Manhattan. To take on the vol- 800 ume, MBI added sta and reconsidered its organizational structure. “We brought in highly quali ed people and spent more money on salaries,” said Campanella-Rodriguez. “We also assigned people to di erent departments 600 that are almost like studios. ere are heads for each discipline that report to 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 ownership. It’s much more e cient.” — GERALD SCHIFMAN NOTE: Fiscal years are shown. SOURCE: Mayor’s Management Report
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THE LIST NY AREA’S LARGEST MINORITY-OWNED COMPANIES
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16 | CRAIN’S NEW YORK BUSINESS | MARCH 12, 2018
P015_P016_CN_20180312.indd 16 3/8/2018 6:44:17 PM REAL ESTATE HUDSON BARBS A power struggle at the largest private development in the U.S. marks a turning point in the city’s construction industry
BY JOE ANUTA AND DANIEL GEIGER BUCK ENNIS
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CRAIN’S NEWYORKBUSINESS O of working coffee instead serving tradesmen accusedof TRADES 15 HOURLY WAGE $42 WAGES PAID $3B TOTAL COST $20B SQUARE FOOTAGE 18M Council ofGreaterNY TradesConstruction by theBuildingand development halfof for rst workers Hudson Yards project fundamentally challenged—and perhaps changed of union construction be work inwhich will rules projects such as Hudson Yards. market, is one of its last strongholds: large, lucrative is already on retreat the in many segments of the some union of workers. skilled the complete incredibly the complex project without much as it is an e ort to break grip of the most the square-foot undertaking. est private development—a $20billion, 18-million- million over past the ve years at nation’s the larg - e suit schemes the inated asserts costs by $100 developer, apartnership by led e Related Cos. in alawsuit last week led by megaproject’s the ing massive the Hudson Yards complex were alleged co ee and to laborers snacks full-time on break. $42 an hour to swing hammers were instead selling MARKERS YARDS “ is suit may“ is adoor into be awholeworld new At stake for unionized construction labor, which But is not case the about recouping lost money so and ese other abuses by union workers build- BUILDING TENSION recession. in Lower Manhattanthathadstalledduringthe Forest CityRatner’s St., tower 8Spruce a76-story projectstoutilizeaPLAis costs. Oneofthe rst toimproveopers ef ciency, avoid strikes andcut agreements onajob-by-job basis, allowingdevel- still, agreetonegotiateprojectlabor unionleaders 2009 represented represented
to union tounion construction atanearstand- WITH LOCALconstruction of two And two senior making tradesmen two And $600,000. him earned that schedule improbable year, an entire forweek an a days seven 12-hour shi s logging of worker accused is ne construction
of of
developer likely could not with Related—knowing the not to negotiate directly umbrella group represents 15laborthe unions that his pressuredhas also leaders of son Yards as a“prison.” He Hudlies and has described - “union buster” at union- ral developer “greedy” and a drew Cuomo, the has called of ally aclose Gov.bera, An- dispute standards. LaBar that is nasty evenby labor- campaign against Related responded with asmear council trades the hasbera, president, LaBar Gary Avenue. West 33rd Street and 10th square-foot oce tower at well 3-million- as a soaring, of rail the section yards as space over western the idential and mixed-use lions of square feet of res- Yards, includes which - mil second phase of Hudson labor negotiations for the of Greater New York from Tradesstruction Council Buildingthe and- Con tion industry. city’s unionized construc- and lobbying group on the laborpowerful organizer
Led byLed its imposing Related wants to exclude |
M ARCH 12,2018 - -
agreements were on used hundreds of projects to make projects nancially feasible. Although the said that to stick with PLAs unions, needed they and lowerrules costs. Many developers at time the compensation, their agreed to trim work liberalize ing Words,” page his 19)inwhich unions’ workers negotiated aproject labor agreement “Work (see - competitors. thatrules made it more expensive than nonunion ofbecause its wages higher and byzantine work Unionized pinched particularly labor had been wake inthe of Great the struggling still Recession. construction in the Newwhen industry York was Savings proveelusive Related.” is no developer more likely to on succeed than this low at Regional the Plan Association. “And there altogether,” said Julia Vitullo-Martin, senior fel- To job to the win build Hudson Yards, LaBarbera e roots of dispute the reach back to 2013, Manhattan. share for unionlabor, mainlyoutside declineinmarket begins asharp projects.Thus to buildapartment tononunionlabor increasingly turn inQueensandBrooklyn developers ket beginstorecover, residential 2011 AS THE REAL ESTATE mar- that safety procedures were disregarded. paid union members place. intheir It alleges also agreed-upon number of apprentices, using better- no-show jobs and to failed sta work the with the pay their andboost bene ts and contractors allowed thatasserts union workers inated hours their to tion on eastern the of half Hudson Yards. Its suit with its covered which PLA, much of construc the - unionscertain from striking.” contained no-strike clauses, that has not prevented promised, and moreover, even though PLAs have havement. “ ey not resulted cost inthe savings New York, and atrade lobbying group, inastate- John president Banks, Estate of Real the of Board have out to fall begun of favor. cipated reductions. In recent years arrangements the plained that ultimately didnot they anti yield the - throughout city, the many major developers com- While LaBarbera has insistedWhile on LaBarbera that PLA anew Related’s lawsuit makes clear it was not satis ed has“Experience shown PLAs have no value,” said years, awindfallfor unions. construction pays in excessof$3billioninwages over ve development creates20,000unionjobsand a mixed-usetower andaculturalfacility. The includes twoof cetowers, amall, apartments, for phaseofHudsonYards, the rst which Tradesthe BuildingandConstruction Council 2013 RELATED COS. SIGNSaPLAwith
3/8/18 8:29 PM WORKING WORDS
BUILDING AND CONSTRUCTION TRADES COUN- CIL OF GREATER NEW YORK A union umbrella group. The council—which is often colloqui- ally called just Building Trades—speaks for its 15 member unions and often negotiates project labor agreements on their behalf.
TRADE A union dedicated to a particular type of construction work. For example, the car- penters’ union works with wood, ironworkers handle structural steel, and operating engi- neers man cranes.
COLLECTIVE BARGAINING AGREEMENT A contract between an employer and a union that lays out provisions including wages and bene ts for a speci ed time period. In the city’s construction industry, CBAs are made between contractors and the various union trades. The wages and bene ts apply to all projects and all contractors included in the agreement.
PROJECT LABOR AGREEMENT A pact between a developer or contractor and a group of workers for a speci ed project. Typically PLAs are seen as a way to save developers money within an existing CBA, but many builders complain that they fail to cut ex- penses as promised.
MERIT/OPEN SHOP Construction projects that employ both union and nonunion labor. Union members often take merit-shop work because there are not enough union-only jobs to keep them busy year-round.
WORK RULES A set of stipulations dictating what union members can and cannot do on a job. For instance, rules might require a painting crew to track down a union car- penter to hammer a single nail. Developers frequently complain that onerous work rules bog down projects and balloon costs, while unions maintain they are essential to ensure will keep the project exclusively union for its second lawful interference in Related’s business, LaBarbera quality and safety. Work rules are the two phase, Related wants leeway to choose which unions would lose some of the levers of power he uses to sides’ main point of contention. — J.A. it hires in order to weed out the trades it can replace corral trade unions—which have varying goals, de- with cheaper nonunion labor. e developer is using sires and opinions about how to maintain their mar- such open-shop hiring for its 55 Hudson Yards proj- ket share—into a cohesive bargaining group. Related, the trades council has dubbed its campaign ect, a tower that it said is being built with more than Proving such a case, however, is not easy. Related #CountMeIn. LaBarbera said the unions’ success, 90% union labor. will have to show that LaBarbera acted maliciously. not their misconduct, spurred Related’s legal action. But LaBarbera sees open-shop hiring as a way to “It requires proving that the interference involved “ is lawsuit is clearly retaliation for a movement marginalize his group and divide and conquer its dishonesty or some other bad-faith or improper that has built up in this city, called #CountMeIn, constituents, destroying the negotiating power they conduct, as opposed to doing something for a le- where rank-and- le members oppose open-shop have as a uni ed bloc. According to Related’s law- gitimate business advantage,” said Jyotin Hamid, a and nonunion construction because it undermines suit, LaBarbera has punished union leaders for step- partner at Debevoise & Plimpton and the chairman their wages and bene ts,” he said in a statement. ping out of line, banishing from his group’s meetings of the New York City Bar Association’s Labor and Even if LaBarbera prevails in court and secures the executive secretary and treasurer of the New Employment Law Committee. another PLA for Hudson Yards, many observers York District Council of Carpenters. e carpenters’ For organized labor, the stakes could not be think the suit marks a signi cant shi in the con- purported crime: an independent deal with Related higher. e Hudson Yards job has netted its workers struction industry. Related is one of the largest de- to work on the foundation of 50 Hudson Yards, a $3 billion in wages so far. Without another PLA for velopers in the country and has historically worked tower going up at West 33rd Street and 10th Avenue. the second half of the job, union workers might have closely with union labor. e suit also alleges that LaBarbera pressured the to accept lower wages and could lose segments of the “Related has thrown down the gauntlet,” the plumbers union to back out of a prospective con- job to nonunion competition. Regional Plan Association’s Vitullo-Martin said. tract with Related. If a judge deems that to be un- With solidarity crucial to its e ort to take on “Now what happens?” ■
RELATED COS. SIGNS a PLA with 2015 DEVELOPER Michael Stern 2017 LABARBERA’S GROUP 2018 RELATED, led by Chairman Stephen the Building and Construction Trades Council announces he will build a 1,400-foot secures a wage mandate Ross, seeks to choose which union trades it for the rst phase of Hudson Yards, which condo tower on Billionaires’ Row in Affordable New York, the will employ in the second phase of Hudson includes two of ce towers, a mall, apartments, without union labor, challenging successor to 421-a as the Yards, defying LaBarbera’s demand that his a mixed-use tower and a cultural facility. The unions’ hold on skyscraper projects city’s primary program to pro- group’s 15 labor unions negotiate as a bloc. development creates 20,000 union jobs and and unleashing the wrath of mote affordable housing via Related sues the Building Trades and LaBar- pays in excess of $3 billion in wages over ve Building and Construction Trades property-tax breaks on new bera to give it leeway to use a mix of union years, a windfall for construction unions. Council President Gary LaBarbera. construction. and nonunion labor.
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$300,000, Chance discovered. at may potatoes like small for seem executives 10 that pay dividends on unowned shares. ulatory lings disclosing pay at 150New York–area companies and found at least paymentsthe since at least early the 1990s.Crain’s shares don’t they own. He said these rms appear to have quietly making been 500 pay executives dividends on companiesall on Standard &Poor’s abouttalk it.” and most companies generally don’t is aform of stealth compensation, paperacademic on practice. the “ is in2016co-authored who ty the rst professor at Louisiana State Universi- way.$2.8 million this Kraus, former CEOof money-management pocketed AllianceBernstein, rm more than $1million for shares he didn’t hold tobacco inthe company. Peter year, CEOof the Philip Morris International, André Calantzopoulos, was paid paid $658,000individends from shares inhis he bank didn’t own. at same BY AARON ELSTEIN DIVIDEND PAYMENTS PAY Payments average the on stocks boost these CEO’s yearly pay by more than Chance found that about 10%of “Not many people know about payments,” these said Don Chance, a nance For instance, in2016JPMorgan Chase’s chief executive, Jamie Dimon, was don’t actually own and may never own. and own don’t actually they on stocks payments or dividend more in of dollars of thousands hundreds paid are top executives companies, But at traded some publicly mouth. their opening have song without no ahit recorded singers scene, music the On bat. the swinging it’s without to a get hit hard n baseball, Scott Bok CEO GREENHILL &CO. Calantzopoulos André MORRIS CEO PHILIP
onunvested sharescanincreaseaCEO’s by 25%. annualsalary
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THE THESE PAYMENTS. THEYAREAFORM OF STEALTH COMPENSATION THAT “NOT MANYPEOPLEKNOWABOUT COMPANIES DON’TTALK ABOUT” reviewed the most the reviewed recent reg- BOARDROOM releasing 2017executive-pay information. on payments these divulged coming inthe be will weeks as companies begin Trump tax-reform the signed bill, according to Standard &Poor’s. More details companies have payoutsraised by an average of 14% since President Donald 25%. What’s more, dividends those are quickly becoming more valuable because is deferred, meaning stealth the dividends by can increase annual their salary awarded tens of millions’ worth of compensation, but much of that generous pay shares that don’t vest for years. awards several Sometimes these pay out when Companies regularly compensate top executives by granting restricted them paymentsthese more ago. than adecade Communications Workers to task over of Electric took who General America, forthis along time, and it on,” goes still said Tony Daley, an economist at the are only disclosed inthe ne print of regulatory lings—but companies o enmost companies rarely acknowledge existence. their payments the Generally Cashing inonthe ne print So howSo doexecutives pro t from don’t stocks they own? It works like this: Dividend payments on unowned shares aren’t better known because inpart TABLE paid out individends inagiven year. owned and how much company the granted,been how many are actually restricted shares an executive has years’ worth of data how to see many require through digging several volved. value their can Calculating decline sums to reveal exact the in- “I’ve been ghting companies on ALLIANCEBERNSTEIN Jamie Dimon Peter Kraus CHASE CEO JPMORGAN FORMER CEO
3/8/18 7:04 PM FRINGE BENEFITS certain performance hurdles are met; others are paid SELECT EXECUTIVES at these rms were Philip Morris International is also trying to wean simply if the executive keeps his or her job. But some paid dividends on their unvested stocks in 2016. its CEO o this type of dividends. Under a new plan, companies go ahead and pay executives dividends as only 40% of the restricted shares granted to Calant- if they own the restricted shares, even though they ● ALLIANCEBERNSTEIN zopoulos pay dividends before vesting, down from haven’t vested. ● GREENHILL & CO. 100%, a spokesman said. e representative did add Companies o en defend making these payments ● JOHN WILEY that the dividend-paying unvested shares “incentiv- by arguing they aren’t especially large relative to total ● JPMORGAN CHASE ize executive retention” and “align executive interest pay. But Chance argues that one of the big problems ● MSCI with that of the shareholders.” Like most tobacco with paying dividends on unearned shares is that ● PHILIP MORRIS INTERNATIONAL companies, Philip Morris’ dividends are quite gen- it further weakens the sometimes tenuous link be- erous, with the rm’s $6.5 billion 2017 payout ex- ● SL GREEN tween executive performance and pay. ceeding its pro ts by about $200 million. ● Up until 2013, Bristol-Myers Squibb stated in l- SYSTEMAX AllianceBernstein, which manages more than ings that its dividend-payment program “promotes ● VORNADO REALTY TRUST $550 billion in client assets, continues to pay its CEO greater retention of our executives.” But the drug- ● W.P. CAREY dividends on unvested shares. Kraus le the rm last maker has since changed its policy and no longer year, and the amount paid on the restricted stock pays dividends on unowned shares. In a 2014 ling, granted to his successor, Seth Bernstein, wasn’t dis- the company said its decision “simpli es employee tors vote in favor of a compensation plan. closed but would have been $165,000 based on the communications and administration to further en- “Prohibiting dividend payments on any type of dividends issued a er Bernstein’s tenure began. gage and retain employees.” unvested equity is de nitely considered a market Stealth dividend payments appear especially pop- Other rms that have quit the practice include best practice,” said Sydney Carlock, a senior com- ular at nancial and real estate investment rms. ey Citigroup, GE and IBM. ese companies o en allow pensation analyst at the advisory rm. have played an important role in how top people are dividends on restricted shares to accrue but don’t pay Nonetheless, some companies continue to nd paid at Greenhill & Co., a Wall Street rm that advis- them out until the stocks vest. If the shares don’t vest that stealth dividend payments are a hard habit to es some of the world’s leading corporations on merg- because performance wasn’t up to snu or the exec- quit. In 2016 JPMorgan began granting Dimon a ers and acquisitions. e rm’s stock price fell 3% in utive didn’t stay in the job, typically those restricted type of restricted stock that doesn’t pay dividends the ve-year period beginning in 2011, a signi cant- stocks are forfeited, along with the dividends. before vesting, but several top executives at the bank ly worse performance than its peers’, but the payout A er years of pressure from shareholders and are still paid dividends on unowned shares. Asset to CEO Scott Bok for his pile of unvested shares rose advocates such as Daley, more than half of S&P management chief Mary Callahan Erdoes received 75%, to $580,000, in 2016. at gravy train has since 500 companies have banned the practice. Institu- $613,000 this way that year, while $580,000 went slowed down: A er the long stretch of disappoint- tional Shareholder Services, a powerful corporate- to Daniel Pinto, head of corporate and investment ing performance, Greenhill slashed its dividend pay- governance advisory rm, last year started taking banking, according to calculations by Crain’s based ments by 89% last year. into account dividend payments on unearned shares on data in the rm’s most recent pay-disclosure e company didn’t respond to a request for when deciding whether to recommend that inves- statement. e rm declined to comment. comment. ■
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Notice of Qualification of APOLLO HD Notice of formation of KH 205 Smith Notice of Formation of VIPVR, LLC Notice of Qualification of BROOKFIELD MANAGEMENT, L.P.Appl. for Auth. filed LLC. Arts of Org filed with Secy of State Arts. of Org. filed with Secy. of State STRATEGIC REAL ESTATE PARTNERS III- with Secy. of State of NY (SSNY) on of NY (SSNY) on 11/10/17. Office loca- of NY (SSNY) on 02/12/18. Office lo- A L.P. Appl. for Auth. filed with Secy. of 02/09/18. Office location: NY County. tion: NY Cnty. SSNY designated agent cation: NY County. Princ. office of State of NY (SSNY) on 02/14/18. Of- LP formed in Delaware (DE) on upon whom process may be served and LLC: Attn: Prajit Gopal, 2373 Broad- fice location: NY County. LP formed in 11/27/17. Duration of LP is Perpetual. shall mail copy of process against LLC way, Apt. #1723, NY, NY 10024. Delaware (DE) on 07/11/17. Princ. of- SSNY designated as agent of LP upon to principal business address: 511 Ca- SSNY designated as agent of LLC fice of LP: Brookfield Place, 250 Vesey whom process against it may be nal St. 6th Fl. NY, NY 10013. Purpose: upon whom process against it may be St., 15th Fl., NY, NY 10281. Duration served. SSNY shall mail process to c/o any lawful act. served. SSNY shall mail process to of LP is Perpetual. SSNY designated as Corporation Service Co. (CSC), 80 the LLC at the addr. of its princ. of- agent of LP upon whom process State St., Albany, NY 12207-2543. Notice of Qualification of FLIGHT CLUB fice. Purpose: Any lawful activity. against it may be served. SSNY shall Name and addr. of each general part- NEW YORK LLC Appl. for Auth. filed mail process to the Partnership at the ner are available from SSNY. DE addr. with Secy. of State of NY (SSNY) on 0 princ. office of the LP. Name and addr. of LP: c/o CSC, 251 Little Falls Dr., Wil- 1/22/18. Office location: NY County. PARKER MARTIN VENTURES LLC filed of each general partner are available mington, DE 19808. Cert. of LP filed LLC formed in Delaware (DE) on 10/ Arts. of Org. with the NY Sect’y of from SSNY. DE addr. of LP: Corporation with The Secy. of State of the State of 05/17. NYS fictitious name: FLIGHT State (SSNY) on 2/5/2018. Office lo- Service Co., 251 Little Falls Dr., Wil- DE, Dept. of State, Div. of Corps., John CLUB NEW YORK (DE) LLC. SSNY des- cated in NY County. SSNY has been mington, DE 19808. Cert. of LP filed G. Townsend Bldg., 401 Federal St., ignated as agent of LLC upon whom designated as agent of the LLC upon with DE Secy. of State, Dept. of State, Ste. 4, Dover, DE 19901. Purpose: process against it may be served. whom process against it may be Div. of Corps., John G. Townsend Bldg., Any lawful activity. SSNY shall mail process to c/o Corpo- served. SSNY shall mail process to: P.O. Box 898, Dover, DE 19903. Pur- ration Service Co. (CSC), 80 State St., 176 E. 71st St. Apt 10B, NY NY pose: Any lawful activity. Albany, NY 12207-2543. DE addr. of 10021. Purpose: any lawful act. NOTICE OF FORMATION of Fortitude Sol- LLC: c/o CSC, 251 Little Falls Dr., Wil- utions, LLC. Articles of Organization of mington, DE 19808. Cert. of Form. ROCKWELL PRESS, LLC, Arts. of Org. Fortitude Solutions, LLC were filed with filed with Secy. of State, John G. Town- Formation of First Tracks Management, filed with the SSNY on 10/27/2017. Secy of State of New York (SSNY) on send Bldg., 401 Federal St., Ste. 4, LLC filed with the Secy. of State of NY Office loc: NY County. SSNY has been 1/2/18. Office location: NY County. Dover, DE 19901. Purpose: Any law- (SSNY) on 1/10/18. Office loc.: NY designated as agent upon whom proc- SSNY is designated as agent of the ful activity. County. SSNY designated as agent of LLC upon whom process against it may LLC upon whom process against it may ess against the LLC may be served. be served and shall mail a copy of the be served. The address SSNY shall SSNY shall mail process to: The LLC, process to 245 Park Avenue, 18th Notice of Qualification of ElliptiCurve mail process to 750 Third Ave., 33rd 345 Haines Road, Bedford Hills, NY Floor, NY NY 10167. Purpose is: all Capital Management LP Appl. for Auth. Fl., New York, NY 10017. Purpose: 10507. Purpose: Any Lawful Purpose. lawful acts or activities. filed with Secy. of State of NY (SSNY) Any lawful activity. on 01/09/18. Office location: NY Coun- ty. LP formed in Delaware (DE) on 01/ Block Party Films LLC. Art. of Org. filed Notice of formation of limited liability 04/18. Princ. office of LP: 135 E. 57th Notice of Formation of AVALANCHE with the SSNY on 01/16/18. Office: company (LLC). Name: 529, LLC. Arti- St., 8th Fl., NY, NY 10022. Duration of FALLS LLC Arts. of Org. filed with Secy. New York County. SSNY designated as cles of Organization filed with Secretary LP is Perpetual. SSNY designated as of State of NY (SSNY) on 01/30/18. Of- agent of the LLC upon whom process of State of New York (SSNY) on 11/ agent of LP upon whom process fice location: NY County. Princ. office against it may be served. SSNY shall 03/2017. NY office location: New York against it may be served. SSNY shall of LLC: 299 Park Ave., 42nd Fl., NY, NY mail copy of process to the LLC, 140 W County. SSNY has been designated as mail process to Attn: Stephen L. 10171. SSNY designated as agent of 70th St, Apt 3R, New York, NY 10023. agent of the LLC upon whom process Moskowitz, 225 E. 63rd St., Apt. 7C, LLC upon whom process against it may Purpose: Any lawful purpose. against it may be served. The post of- NY, NY 10065. Name and addr. of be served. SSNY shall mail process to fice address to which the SSNY shall each general partner are available from the LLC, Attn: General Counsel at the mail a copy of any process against the SSNY. DE addr. of LP: c/o Corporation princ. office of the LLC. Purpose: Any Broome Street Penthouse, LLC. Arts. of LLC served upon him/her is Cayla Service Co., 251 Little Falls Dr., Wil- lawful activity. Org. filed with the SSNY on 01/11/18. O’Connell, 263 Ninth Avenue 7D New mington, DE 19808. Cert. of LP filed Office: New York County. SSNY designat- York, NY 10001. Purpose/character of with Secy. of State of the State of DE, NOTICE OF FORMATION of Wollman ed as agent of the LLC upon whom proc- LLC: Any Lawful Purpose. Div. of Corps., John G. Townsend Bldg., Consultants LLC. Articles of Organiza- ess against it may be served. SSNY shall Federal & Duke of York Sts., Dover, DE tion filed with the Secretary of State of mail copy of process to the LLC, c/o Jer- 19901. Purpose: Any lawful activity. New York (SSNY) on December ry Feeney, 33 East 33rd Street, 4th 15th,2017. Location: Richmond Coun- Floor, New York, NY 10016, which also Notice of Formation of FP NEW CITY LLC ty. SSNY designated as agent for serv- serves as the registered agent address. Arts. of Org. filed with Secy. of State of Notice of Qualification of G&S INVEST- ice of process on LLC. SSNY shall mail Purpose: Any lawful purpose. NY (SSNY) on 01/31/18. Office location: ORS CONSTRUCTION MANAGEMENT a copy of process to: Andriena Wollman NY County. Princ. office of LLC: 270 LLC Appl. for Auth. filed with Secy. of 55 Ionia Ave, Staten Island, N.Y. Madison Ave., Ste. 1801, NY, NY State of NY (SSNY) on 01/24/18. Of- 10312 Purpose: Any lawful purpose. Notice of formation of Andreas Gomoll 10016. SSNY designated as agent of fice location: NY County. LLC formed in LLC. Arts of Org filed with Secy. of LLC upon whom process against it may Delaware (DE) on 01/19/18. SSNY State of NY (SSNY) on 12/7/17. Office be served. SSNY shall mail process to designated as agent of LLC upon whom Notice of Qualification of SOVEREIGN location NY County. SSNY designated the LLC at the addr. of its princ. office. process against it may be served. VALUE-ADD & INCOME STRATEGY, LLC agent upon whom process may be Purpose: Any lawful activity. SSNY shall mail process to the LLC, Appl. for Auth. filed with Secy. of State served and shall mail copy of process 211 E. 43rd St., 25th Fl., NY, NY of NY (SSNY) on 02/21/18. Office lo- against LLC to principal business ad- 10017. DE addr. of LLC: 251 Little cation: NY County. LLC formed in Dela- dress: 350 E 79th Street, New York, GREY HOUSE NYC LLC, Arts. of Org. Falls Dr., Wilmington, DE 19808. Cert. ware (DE) on 02/01/18. SSNY desig- NY 10075. Purpose: any lawful act. filed with the SSNY on 01/08/2018. of Form. filed with Secy. of State, 401 nated as agent of LLC upon whom Office loc: NY County. SSNY has been Federal St., Dover, DE 19901. Pur- process against it may be served. designated as agent upon whom proc- pose: Any lawful activity. SSNY shall mail process to the LLC, c Arts. of Org. of 74 Beach Road, LLC ess against the LLC may be served. /o Sovereign Partners, LLC, 747 Third filed with SSNY on 1/2/18. Office in SSNY shall mail process to: The LLC, Ave., 37th Fl., NY, NY 10017. DE NOTICE OF FORMATION of JOEL J. BA- NY County. SSNY is LLC’s agent to re- 555 West 59th St., Unit 14C, NY, NY addr. of LLC: 251 Little Falls Dr., Wil- UER, M.D. PLLC. Articles of Organiza- ceive process, will mail to WeWork c/o 10019. Purpose: Any Lawful Purpose. mington, DE 19808. Cert. of Form. tion were filed with the Secretary of Pale Horse Realty, LLC, 85 Broad filed with DE Secy. of State, 401 Fed- State of New York (SSNY) on 1/ Street, New York NY 10004. General eral St., Ste. 4, Dover, DE 19901. 12/2018. Office location: New York purpose. Purpose: Any lawful activity Notice of Qualification of PURE County. SSNY has been designated as . GROWTH MCS LLC Appl. for Auth. filed agent of the LLC upon whom process with Secy. of State of NY (SSNY) on against it may be served. SSNY shall Notice of Qualification of INTEGRATED NOTICE OF FORMATION OF James Seo 02/06/18. Office location: NY County. mail a copy of any process to the LLC c ASSETS III LLC Appl. for Auth. filed with Commercial, LLC. Articles of Organiza- LLC formed in Delaware (DE) on /o Levy, Stopol & Camelo, LLP, 1425 Secy. of State of NY (SSNY) on 01/ tion filed with the Secretary of State of 02/15/17. Princ. office of LLC: 680 RXR Plaza, Uniondale, NY 11556-1425. 31/18. Office location: NY County. LLC NY (SSNY) on 12/07/17. Office loca- 5th Ave., 8th Fl., NY, NY 10019. Purpose: For any lawful purpose. formed in Delaware (DE) on 01/29/18. tion: NEW YORK County. SSNY has SSNY designated as agent of LLC SSNY designated as agent of LLC upon been designated as agent upon whom upon whom process against it may be whom process against it may be process against it may be served. The served. SSNY shall mail process to Notice of Formation of ARTEMESIA SPE served. SSNY shall mail process to c/o Post Office address to which the SSNY the LLC at the princ. office of the LLC. LLC Arts. of Org. filed with Secy. of Corporation Service Co. (CSC), 80 shall mail a copy of any process DE addr. of LLC: c/o The Corporation State of NY (SSNY) on 02/15/18. Of- State St., Albany, NY 12207-2543. DE against the LLC served upon him/her Trust Company, Corporation Trust Cen- fice location: NY County. SSNY desig- addr. of LLC: c/o CSC, 251 Little Falls is: Registered Agent Solutions, Inc., 99 ter, 1209 Orange St., Wilmington, DE nated as agent of LLC upon whom proc- Dr., Wilmington, DE 19808. Cert. of Washington Ave., Suite 1008, Albany, 19801. Cert. of Form. filed with Jeffrey ess against it may be served. SSNY Form. filed with DE Secy. of State, John NY 12260. The principal business ad- W. Bullock, Townsend Bldg., 401 Fed- shall mail process to c/o Royalton Capi- G. Townsend Bldg., 401 Federal St. - dress of the LLC is: 30 W 60th Street, eral St., #4, Dover, DE 19901. Pur- tal, LLC, 18 E. 48th St., 19th Fl., NY, Ste. 4, Dover, DE 19901. Purpose: Floor 2, New York, NY 10023. Purpose: pose: Any lawful activity. NY 10017. Purpose: Any lawful activity. Any lawful activity. any lawful act or activity.
22 | CRAIN’S NEW YORK BUSINESS | MARCH 12, 2018
P022-23_CN_20180312.indd 22 3/8/2018 3:04:03 PM TO PLACE A CLASSIFIED AD, CALL 1 212-210-0189 OR EMAIL [email protected]
PUBLIC & LEGAL NOTICES
Notice of Qualification of KISMET LIFE NOTICE OF FORMATION OF Notice of Qualification of CK ROYALTY LLC Appl. for Auth. filed with Secy. of ChampionsEdge, LLC. Articles of Or- AND INVESTMENT MANAGEMENT, LLC State of NY (SSNY) on 02/20/18. Office ganization filed with the Secretary of Appl. for Auth. filed with Secy. of State location: NY County. LLC formed in Dela- State of NY (SSNY) on 2/16/18. Of- of NY (SSNY) on 02/08/18. Office loca- ware (DE) on 10/31/17. Princ. office of fice location: New York County. SSNY tion: NY County. LLC formed in Dela- LLC: 227 W. 77th St., Apt. 5B, NY, NY has been designated as agent upon ware (DE) on 11/13/17. SSNY desig- 10024. SSNY designated as agent of whom process against it may be nated as agent of LLC upon whom proc- LLC upon whom process against it may served. The post office address to ess against it may be served. SSNY be served. SSNY shall mail process to which SSNY shall mail a copy of proc- shall mail process to c/o Corporation the LLC at the princ. office of the LLC. ess against LLC served upon him/her Service Co., 80 State St., Albany, NY DE addr. of LLC: c/o Corporation Service is: 7014 13th Avenue, Suite 202, 12207-2543. DE addr. of LLC: 251 Lit- Co., 251 Little Falls Dr., Wilmington, DE Brooklyn, NY 11228. The principal; tle Falls Dr., Wilmington, DE 19808. 19808. Cert. of Form. filed with Jeffrey business address of the LLC is 411 Cert. of Form. filed with Secy. of State, W. Bullock, Townsend Bldg., Federal St., East 57th Street. Purpose: any lawful 401 Federal St., Dover, DE 19901. Pur- #4, Dover, DE 19901. Purpose: Any law- act or activity. pose: Investment advisor. ful activity Notice of Formation of POETIC Notice of formation of HEALTH POINTE Rothman Orthopaedics of New York, GROUP LLC Arts. of Org. filed with OF NEW YORK, LLC Arts. of Org. filed PLLC. Articles of Org. filed Sec. of Secy. of State of NY (SSNY) on 02/ with the NY Sect’y of State (SSNY) on State (SSNY) on 12/4/17. Office: 29 06/18. Office location: NY County. 1/30/2018. Office located in NY Coun- E. 19th St., 7th Fl., NY, NY 10003, NY SSNY designated as agent of LLC ty. SSNY has been designated as County. SSNY desig. agent of LLC upon whom process against it may agent of the LLC upon whom process upon whom process may be served. be served. SSNY shall mail process against it may be served. SSNY shall SSNY shall mail copy of process to Nix- to c/o Adam Berkowitz, 1330 Ave. mail process to: c/o Independent Living on Peabody LLP, 677 Broadway, Alba- of the Americas, 14th Fl., NY, NY Systems, LLC, 810 7th Ave, NY, NY ny, NY 12207. Purpose: medicine. 10019. Purpose: Any lawful activity. 10019. Purpose: any lawful act.
CRAIN’S EXECUTIVE MOVES
MARCH 12, 2018 | CRAIN’S NEW YORK BUSINESS | 23
P022-23_CN_20180312.indd 23 3/8/2018 5:34:58 PM GOTHAM GIGS
LIKE THE CRYPTEX he is holding, Watson knows the secrets of BY LANCE PIERCE Grand Central Terminal. And he shares them with clients.
Clever with a clue How a writer grew a scavenger hunt for friends into a 30-city business
n occasional stand-up comedian and a writer Now with seven full-time employees and 100 freelance and editor for magazines including Entertain- hunt hosts, Watson Adventures has drawn half a mil- BRET WATSON ment Weekly in the 1990s, Bret Watson would lion participants in 30 cities. e rm o ers 600 unique regularly spend free time visiting the Metro- hunts, including Harry Potter–, murder mystery– and AGE 58 Apolitan Museum of Art, looking for amusing details and bachelorette-themed expeditions. Clients include Apple, BORN Bristol, Pa. juxtapositions in the exhibits. Google and JPMorgan, and nearly 90% of revenue comes RESIDES Mount Kisco, N.Y. “I’m fascinated by the many ways in which artists have from corporations seeking team-building activities. e re- EDUCATION Bachelor’s in English, depicted our world,” he said. On one visit, maining sales come from public hunts. Princeton University Watson observed that a gure rendered in a I’m that guy Humor has always come naturally to SMART CUSTOMER For his 40th stained-glass window, St. Roch (pronounced “ Watson. “I’m that guy who memorized birthday, Jeff Bezos commissioned a “rock”), bore an uncanny resemblance to who memorized Monty Python routines,” he said. As a hunt at The Met. The Amazon CEO’s Mick Jagger. During another trip, he noticed Monty Python teenager he created a quarterly comedy team nailed all 50 questions in two hours, a Watson Adventures record. the sculpture Ugolino and His Sons, which routines magazine with original jokes and trivia. At depicts a 13th-century count imprisoned ” its height, it had 50 subscribers. FAVORITE CLUE “Whom does van Gogh nd a-peeling at the back of and starving with his children. e piece, “I’ve always liked writing material that his mind?” Answer: The Potato Peel- Watson realized, “is only 10 paces from the museum café.” makes people laugh or surprises them,” he said. In college er, the artist’s study of a woman that Wanting to share these observations with a group of he was editor-in-chief of Princeton’s humor magazine. appears on the reverse side of his friends, Watson wrote a 50-clue scavenger hunt to take On weekends Watson digs into books about cities or his- Self-Portrait With a Straw Hat. place at e Met. “Find the guy who is most disturbed by tory and wanders through neighborhoods with his camera. RATE CARD Private hunts start the sounds coming from the restaurant,” read one clue, re- He is always on the lookout for wordplay and whimsy. A fa- at $750 for a group of 15. A public hunt costs $17.50 to $24 per per- ferring to Ugolino. e outing, in the mid-1990s, was a vorite sign in Greenwich Village reads, “On this site in 1897, son, plus any venue admission costs. success. At a participant’s request, Watson created a sec- nothing happened.” He sometimes tags along with his cus- BOOM Watson Adventures organiz- ond one, and it drew 100 hunters, among them a bank- tomers. “I love to eavesdrop when someone solves a clue,” es roughly 2,000 scavenger hunts er, whose rm then commissioned its own event. In 1999 he said. “ ere’s a snap that you hear, and it’s very similar to annually.
BUCK ENNIS Watson Adventures was born. the punchline of a joke.” — DIANE HESS
24 | CRAIN’S NEW YORK BUSINESS | MARCH 12, 2018
P024_CN_20180312.indd 24 3/9/18 5:10 PM SNAPS
Opening hearts for the homeless e Bowery Mission exceeded its fundraising goal for its 19th annual Valentine Gala Feb. 14, raising $1.2 million. Tony Award–winning actress and singer Lena Hall performed, and Lucas Hunt, president of Hunt Auctioneers, led the live auction. e nonpro t shelter and service organization recognized Bryan Cho, executive vice president at e Related Cos., for his e orts to employ formerly homeless graduates of the mission.
Richie Horowitz Bryan Cho, recipient of the 2018 , principal at Cooper-Horowitz and 2006 Valentine Kayla Brown Valentine Gala honor, with David Gala honoree; , development o cer at e Bowery James Macklin P. Jones, president and CEO of Mission; and , director of outreach at the mission and e Bowery Mission. 2017 Valentine Gala honoree, at the event at e Plaza Hotel.
Celebrating the Year of the Dog Real estate riders Guests were treated Citi Habitats’ Morgan Van to a lion dance and an Riper-Rose, marketing manager, acrobatic show at the and Emily Sangervasi, senior China Institute’s annual project manager, were among Chinese New Year gala. more than 90 real estate profes- Institute trustees Robert sionals who participated in the Nederlander, president Cycle for Survival indoor-biking and CEO of Nederlander fundraiser at Equinox Rockefeller Worldwide Entertain- Center Feb. 9. e event bene- ment, and philanthropist ted research at Memorial Sloan Sophia Sheng helped Kettering Cancer Center. raise more than $100,000 for the institute’s educa- tional programs.
John Felicetti, market- ing and public relations director for Corcoran Sun- shine Marketing Group; Helen Howe, salesperson at e Corcoran Group; and Ashley Enthoven, senior marketing manag- er at Corcoran Sunshine Marketing Group, at the bene t, which raised $105,705.
Beibei Li, director and North America China desk head at Citigroup; writer Willow Weilan Hai; and independent curator Marla Prather at the Feb. 13 event at e Pierre hotel.
ALBERT CHEUNG PHOTOGRAPHY, CYCLE FOR SURVIVAL, CHINA INSTITUTE CYCLE FOR SURVIVAL, ALBERT CHEUNG PHOTOGRAPHY, SEE MORE OF THIS WEEK’S SNAPS AT CRAINSNEWYORK.COM/SNAPS. GET YOUR GALA IN SNAPS. EMAIL [email protected].
MARCH 12, 2018 | CRAIN’S NEW YORK BUSINESS | 25
P025_CN_20180312.indd 25 3/9/18 5:28 PM FOR THE RECORD*
NEW IN TOWN MOVES AND EXPANSIONS Village–based restaurant assets and liabilities of $0 share Feb. 27 and Feb. occupy the second to 11th serves new items such as a to $50,000. ere were no 28 in transactions worth oors. e asking rent was ■ Casper ■ Bake Culture veggie double-double club, creditors with unsecured $1,619,339. He now holds not disclosed. Cushman & 627 Broadway 48 Bowery made with several kinds of claims. 213,039 shares. Wake eld represented the e online mattress seller ree Taiwanese former boy vegetables in a special sauce. landlord, 17-18 Manage- opened its rst retail store, band members opened a ■ JTJ Design Studio ■ Blackstone Group ment Co. CBRE brokered in NoHo. Shoppers can second city bakery, in Chi- ■ The Wing d/b/a Vertical Space (BX-N) for the tenant. touch and try the mat- natown. e chain, which 1 Main St., Brooklyn 37-18 Northern Blvd., Chief Legal Ocer John tresses, pillows and other specializes in pineapple e women-only co- Suite LL015, Queens Finley sold 22,000 shares of ■ Campari America agreed sleep-related products be- cakes and egg tarts, also has working space opened its e interior design rm common stock for $34.15 to take 64,658 square feet at fore purchasing them. locations in China, Taiwan third location, in Dumbo. led for Chapter 11 bank- per share Feb. 23 in a trans- 1114 Sixth Ave. e spirits and Brunei. Membership starts at $215 ruptcy protection Feb. 27. action worth $751,300. He company behind brands in- ■ Hesperios for monthly access to meet- e ling cites estimated as- now holds 215,007 shares. cluding Skyy vodka plans to 23 Cleveland Place ■ Bar Freud ing rooms, a yoga studio, a sets of $50,001 to $100,000 move its headquarters from Named a er the Greek 50 LaGuardia Place café, a podcast room, show- and liabilities of $500,001 San Francisco in the fall. word for “evening star,” Two-year-old Austrian er rooms, a photo booth, a to $1 million. ere were REAL ESTATE Landlords Brook eld Prop- this knitwear e-tailer and restaurant Freud has been library and a bar. no creditors with unsecured erty Partners and e Swig literary journal publisher revamped into a brasserie. claims. RETAIL Co. were represented by opened its rst-ever shop, Michelin-starred chef Edu- ■ T.J.Maxx extended its CBRE. Colliers Internation- in SoHo. ard Frauneder remains at BANKRUPTCIES lease and added 19,000 al handled the transaction the helm of the Greenwich STOCK EXCHANGES square feet at 250 W. 57th for the tenant. e asking ■ Mama Fina’s House Village spot. ■ Firestar Diamond Inc. St. e discount retailer rent for the 10-year deal was of Filipino Sisig 592 Fifth Ave., third oor ■ Apollo Global now occupies 47,000 square not disclosed. 167 Ave. A ■ Brooklyn Kura e diamond dealer led Management (APO-N) feet. e asking rent for the e New Jersey–based 220 36th St., Brooklyn for Chapter 11 bankrupt- Senior Managing Director 12-year deal was $40 per ■ Cornell University’s In- Filipino restaurant known Industry City is the home of cy protection Feb. 26. Joshua Harris sold 62,058 square foot. Cushman & dustrial and Labor Relations for sisig, a fried, chopped the rst sake brewery in the e ling cites estimated shares of common stock at Wake eld handled the deal School signed a 10-year pork dish, expanded into ve boroughs. It specializes assets and liabilities of prices ranging from $34.26 for the landlord, Empire deal for 38,872 square feet the East Village, where in junmai sake, made of $50,000,001 to $100 million. to $34.51 per share from State Realty Trust. Ripco at 570 Lexington Ave. e it o ers variations of the rice from California and ere were no creditors Feb. 23 to Feb. 26. e Real Estate brokered for the school plans to move from traditional recipe. Arkansas. with unsecured claims. transactions were worth tenant. 16 E. 34th St. e asking $2,131,942. He now holds rent was not disclosed. e ■ The Popup Florist ■ Quality Eats ■ Jomen Electrical 155,381 shares. ■ NoHo Hospitality Group landlord, Feil Organization, 63 E. Seventh St. 3 E. 28th St. Contracting Corp. inked a deal for 11,000 represented itself. Cushman Fashion designer turned e no-frills steakhouse, 52-10 35th St., Queens ■ Shake Shack (SHAK-N) square feet at 80 South & Wake eld brokered for orist Kelsie Hayes opened which sells steaks for less e electrical contractor Board member Je rey Flug St. e restaurant group, the tenant. a brick-and-mortar shop in than $30, debuted its third led for Chapter 11 bank- sold 41,376 shares of com- owned by Andrew Carmel- Flatbush that will be perma- location, in NoMad. e ruptcy protection Feb. 27. mon stock at prices ranging lini, Josh Pikard and Luke ■ StepStone Group inked nent, despite its name. latest outpost of the West e ling cites estimated from $39.12 to $39.24 per Ostrom, plans to open a a deal for 29,030 square still-unnamed eatery on the feet at 450 Lexington Ave. rst oor and the mez- e nancial-services rm zanine. RKF represented plans to occupy the entire both the landlord, Howard 31st oor of the 39-story Hughes Corp., and the building. e asking rent tenant. e asking rent was for the 11-year lease ranged not disclosed. from $115 to $130 per square foot. e landlord, ■ Chloe and Isabel agreed RXR Realty, was represent- to take 6,517 square feet at ed in-house. Savills Studley 40 Exchange Place. e brokered for the tenant. jewelry company plans to use the space as an oce ■ Everest Reinsurance and showroom. Colliers In- extended its 22,464-square- ternational represented the foot lease and signed on tenant. e landlords, GFP for an additional 11,232 Real Estate and Northwind square feet at 461 Fifth Group, had an in-house Ave. e property and team from GFP handle the casualty reinsurance rm deal. e asking rent for the will take up 57,968 square ve-year lease was $50 per feet of the 28-story building square foot. until 2028. e asking rent ranged from $90 to $100 COMMERCIAL per square foot. CBRE ■ WeWork signed a lease represented the tenant. e for 167,000 square feet at 18 landlord, SL Green Realty W. 18th St. e co- working Corp., was represented space provider plans to in-house. ■
GET YOUR NEWS ON THE RECORD * To submit company openings, moves or real estate deals, or to receive further information, email FTR@ CrainsNewYork.com. For the Record is a listing to help businesspeople in New ABOUTYork nd opportunities,THIS SECTION potential new clients and updates on customers. Bankruptcy lings from the eastern and southern districts of New York are listed alphabetically. Stock transactions are insider transactions at New York companies obtained from Thomson Reuters and listed by size. Real estate listings are in order of square footage.
26 | CRAIN’S NEW YORK BUSINESS | MARCH 12, 2018
P026_CN_20180312.indd 26 3/8/2018 6:49:36 PM PHOTO FINISH
Piped up t Coogan’s pub in Washington Heights, Jerry Dixon is gearing up for St. Patrick’s Day. His uniform features the familiar kilt and high Asocks and includes spats, knives, a feather bonnet and a horsehair sporran that serves as a purse. (Kilts don’t have pockets.) A Verizon technician by trade, Dixon started piping in his 30s, and despite decades of practice, he is still challenged by his instrument. “It’s so demanding,” he said. “I’ll play for an hour straight and it’ll keep me in shape physically and mentally.” at would seem to make March a partic- ularly exhausting month. e local parade season kicked o in the Rockaways March 3 and won’t wrap up until Bay Ridge goes green on March 25. Dixon will shu e between events, sometimes leading a pipe band and other times doing solo work. During the o -season, Dixon plays private dinners, weddings and graduations, charging $200 to $400 per gig. Occasionally he makes TV appearances, and Bono once hired him to play for Lou Reed’s birthday. Busy though he is, Dixon would love to nd even more work. “I play every day, practicing in the parks and open spaces around the city,” he said. “But I wouldn’t mind business being busier.” — GERALD SCHIFMAN BUCK ENNIS
MARCH 12, 2018 | CRAIN’S NEW YORK BUSINESS | 27
P027_CN_20180312.indd 27 3/9/18 6:53 PM An Advertising Supplement to Crain’s New York Business
2018 HERITAGE HEALTHCARE INNOVATION AWARDS Deadline March 23 Time is running out to nominate an exceptional leader, pioneer or trailbazer
PRESENTED BY in New York healthcare Dr. Richard Merkin President and CEO Heritage Provider Network Finalists will be awarded in the following categories:
HERITAGE HERITAGE HERITAGE INNOVATION IN HEALTHCARE INNOVATORS IN HEALTHCARE LEADERSHIP HEALTHCARE DELIVERY HERITAGE AWARD AWARD AWARD RESEARCH HERITAGE INVESTIGATORS HEALTHCARE IN TRANSLATIONAL ORGANIZATIONAL LEADERSHIP MEDICINE AWARD AWARD
HELP US RECOGNIZE THE BEST of today’s healthcare clinicians, administrators and researchers in New York who are making measurable improvements in health status, improving access to healthcare, positively impacting patient quality of care and demonstrating long term affordability. Nominate a colleague, a peer or yourself.
Finalists will be honored at a luncheon in NYC on May 21
Mark Wagar, President, Heritage Medical Systems, Master of Ceremonies
For more information, visit crainsnewyork.com/heritage
Awards open to applicants working in all five boroughs of New York City as well as Nassau, Suffolk, Westchester and Rockand counties.
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