ILL-SUITED the Rollback of Consumer Nancial Protections Has Left New Yorkers Like Esther Roman Vulnerable to Shady Debt-Collection Lawsuits PAGE 20
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CRAINSNEW YORK BUSINESS NEW YORK BUSINESS® JULY 23 - AUGUST 5, 2018 | PRICE $3.00, DOUBLE ISSUE ILL-SUITED The rollback of consumer nancial protections has left New Yorkers like Esther Roman vulnerable to shady debt-collection lawsuits PAGE 20 VOL. XXXIV, NOS. 30, 31 WWW.CRAINSNEWYORK.COM OVERDUE THE LIST 12 WAYS ALTERATIONS TOP PROPERTY TO MAKE IN THE SALES AND MONEY GARMENT OFFICE LEASES IN REAL DISTRICT P. 14 ESTATE P. 8 P. 18 NEWSPAPER P001_CN_20180723.indd 1 7/20/18 6:12 PM JULY 23 - AUGUST 5, 2018 CRAINSNEW YORK BUSINESS IN THIS ISSUE 3 EDITORIAL Desegregating public schools 4 IN CASE YOU MISSED IT Good times roll at city’s big banks 5 HEALTH CARE An AI-powered startup looks to cure digital diagnostics P. 6 WHO OWNS THE BLOCK 22 Development is on the rise 22 GOTHAM GIGS in central Harlem Balancing buying local with keeping costs low 7 REAL ESTATE Ofce and retail rents fall 23 FOR THE RECORD in the second quarter Our tally of the week’s buys, busts and breakthroughs 8 VIEWPOINTS A x for a land-use mistake; 26 SNAPS greening the city’s roofs Photos from the city’s biggest fundraisers and charity events 14 THE LIST Priciest Manhattan ofce 27 PHOTO FINISH leases; city’s top property sales A Chelsea tness center eschews steamy workouts 18 MAKING $$$ IN REAL ESTATE Rents are down and retail is CORRECTION rocky, but savvy investors are still turning prots Hudson Meridian Construction Group had 113 full-time and full-time-equivalent employ- 20 UNDUE PROCESS ees as of June 30. This gure was misstated Debt-collection lawsuits are in the list of the New York area’s largest P. 20 making a comeback construction rms, published July 9. Vol. XXXIV, Nos. 30, 31, July 23, 2018—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double issues 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 ofces. 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. BUCK ENNIS CRAIN’S CORPORATE EVENTS & HOLIDAY PARTIES Event planning season is starting. Reach the Crain’s audience! This must-read annual custom section is a targeted opportunity to reach our audience of business leaders and decision makers as they , research venues and services for end-of-year events and holiday celebrations. Close date: 8.23 | Issue date: 9.3 , , . ContactC Irene Bar-Am at [email protected] or 212-210-0133. Reserve your space today! : .. .. .. @ . @ . @ . 2 | CRAIN’S NEW YORK BUSINESS | JULY 23, 2018 P002_CN_20180723.indd 2 7/20/18 6:09 PM JULY 23, 2018 AGENDAAn organic way to desegregate the city’s school system he idea of New York as a melting pot is undercut by an in- convenient fact: City schools are the most segregated in the nation. In a place where people of all backgrounds share sub- way cars and sidewalks, and 64 years aer “separate but equal” Teducation was ruled unconstitutional, how can this be? e segregation of neighborhoods—a result of economic and social forces—is one reason, as young children typically attend schools near their home. And while the city has largely eliminated zones for middle and high schools in recent decades, their admission policies segregate kids in other ways. ey screen applicants using exams, attendance and other metrics that separate chil- dren by household income and race. “School choice” lengthened students’ commute and might have exacerbated the segregation problem too. Families contribute to schools’ homogeneity because they prefer ones that are nearby and serve kids like theirs. Many minority parents want But rapidly redistributing kids through radical policies would be political- resources more than diversity for classrooms, believing their schools get ly and practically dicult, given all the baked-in causes of segregation. If less money than white ones, though the city has released no data on that. white children were assigned to far-o or heavily minority schools, more (High-poverty schools get extra public funding, which probably exceeds of their parents would opt for private school or the suburbs. ey could what parents raise at high-income schools.) be retained (as many are now) by grouping But diversity brings benets that money Let poor areas gentrify and rezone their kids with one another in “gied and can’t buy. As the website Chalkbeat noted, talented” classes, but that would defeat the racially and economically integrated class- wealthy ones to trigger low-cost units. purpose of diversifying schools—and the rooms boost students’ critical thinking and Then restore zone schools academic benets of tracking are dubious. tolerance and yield academic gains for dis- Ideally, neighborhoods would be diverse advantaged children. Moreover, research and children would attend local schools re- generally shows that high performers are not hindered when grouped with ecting that mix rather than piling on rush-hour trains and buses. at underprivileged peers. A critical mass of motivated learners lis the whole loy goal can be achieved organically by restoring zone schools, letting student body, so the aim must be for every school to have one. gentrication continue in minority areas and upzoning wealthy ones, Several school districts have integration eorts underway, and new triggering the city’s mandate for residential projects to include aordable Chancellor Richard Carranza wants systemwide reform done yesterday. units. It would take a few years but would be worth the wait. — THE EDITORS FINE PRINT: Union-owned Amalgamated Bank led last week to go public, six years after U.S. Commerce Secretary Wilbur Ross invested $50 million to help save it from collapse. If the bank’s shares trade at values similar to those of other small banks, the stake held by WL Ross & Co. would be worth $100 million. BY GERALD SCHIFMAN STATS 25 WORDS OR LESS LENDING RUN AMOK? ONLINE LENDING IS surging in New York, as are claims by state regulators that customers are being gouged. AND THE CIT The upgrade ... % Increase in New York online-lending “recognizes the 79 customers from 2015 to 2017 Total of online loans provided ballpark’s proven by 35 companies to New $3B York customers last year, up Y resiliency through 42% from 2015 periods of variable % Portion of that amount that went to team and economic 83 individuals; businesses borrowed the rest performance” Average median annual percent- APR one online lender charged, % age rate for all individuals on — Moody’s, on why it raised Citi Field’s % 35 percentage points higher than online loans, versus 19.6% for credit rating last week despite another 14.8 62.3 the criminal usury rate limit those deemed “unbanked” or “underbanked” lost season for the New York Mets SOURCE: State Department of Financial Services ISTOCK JULY 23, 2018 | CRAIN’S NEW YORK BUSINESS | 3 P003_CN_20180723.indd 3 7/20/18 5:19 PM IN CASE YOU MISSED IT CRAINSNEW YORK BUSINESS president K.C. Crain senior executive vice president Chris Crain group publisher Mary Kramer EDITORIAL Wall Street’s ups and downs, managing editor Brendan O’Connor MAKING SOME assistant managing editors Erik Engquist, and a chance for NY bankers MONEY: Morgan Jeanhee Kim, Robin D. Schatz Stanley CEO copy desk chief Telisha Bryan LOT HAS CHANGED James Gorman is on art director Carolyn McClain at Morgan Stanley since a roll. photographer Buck Ennis Gorman became chief executive in 2010. e invest- digital editor Gabriella Iannetta ment-banking powerhouse has become a leading senior reporters Joe Anuta, Aaron Elstein, A Matthew Flamm, Daniel Geiger wealth manager, and investors have pushed its market value reporters Will Bredderman, past that of rival Goldman Sachs. “We’ve just had two con- Jonathan LaMantia data reporter Gerald Schifman secutive $10 billion revenue quarters,” Gorman said during a digital fellow Lizeth Beltran conference call last week. “We hadn’t had one in the previous columnist Greg David 320 quarters.” contributors Tom Acitelli, Cara Eisenpress, Cheryl S. Grant, Yoona Ha, Chris Kobiella, Asked what he plans to do next, the CEO replied: “What Miriam Kreinin Souccar about make some money?” to contact the newsroom: www.crainsnewyork.com/staff ese are halcyon days for the Wall Street crowd. e ro- 212.210.0100 bust economy has dealmakers and traders working around-the-clock. Federal examiners brought in aer the - 685 Third Ave., New York, NY 10017-4024 nancial crisis to literally watch over Wall Streeters’ shoulders have vanished. ADVERTISING But it’s not all wine and roses. Commercial banking revenue at JPMorgan Chase fell slightly last quarter, per- www.crainsnewyork.com/advertise advertising director Irene Bar-Am, haps a sign of slowing demand among business borrowers. President Donald Trump and others worry that the Fed- 212.210.0133, [email protected] eral Reserve will curb growth with more interest-rate increases. senior account managers Lauren Black, Zita Doktor, Rob Pierce, Although Wall Street rms are hiring lots of people, they aren’t taking on many here. In the past 12 months New Stuart Smilowitz York has gained 3,700 nancial jobs, according to state Department of Labor gures, while preliminary federal integrated marketing manager Jonathan Yan, 212.210.0290, [email protected] data show 23,000 were added nationally in the securities industry.