DRONES Strict Federal Rules Have Grounded These Flying Machines in New York —And the Businesses That Use Them

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GAME OF DRONES Strict federal rules have grounded these flying machines in New York —and the businesses that use them. That’s about to change PAGE 13

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APRILCRAINS 25-MAY 1, 2016

FROM THE NEWSROOM | JEREMY SMERD Third Avenue in 3-D IN THIS ISSUE 4 AGENDA

YOU MAY HAVE NOTICED that the next generation of pay phones 6 IN CASE YOU MISSED IT popping up around town look nothing like pay phones. 7 REAL ESTATE High-tech textile making That’s because they are much more than a place to make free 8 POLITICS gets a boost in Brooklyn calls (yes, free) anywhere in the United States. 9 SMALL BUSINESS The kiosks already dotting Third Avenue are Wi-Fi hot 10 VIEWPOINTS spots that are part of a $300 million network called 11 LinkNYC. Its backers, which include Google’s Sidewalk THE LIST Labs, believe that LinkNYC could usher in the next big FEATURES technological innovation. That’s 12 ANATOMY OF A LAYOFF because powering the network is a 1 gigabit broadband Bandwidth-intensive, 13 GAME OF DRONES connection, which is as much as 100 times faster than the average speed of a home network and far exceeds “graphically rich 19 EXECUTIVE MOVES anything else in New York. environments will 20 GOTHAM GIGS The makers of LinkNYC came to our office a few weeks become just as ago to give Crain’s a sense of the system’s potential. Sitting later in our 10th-floor newsroom overlooking indispensable as a web Third Avenue, I picked up the free Wi-Fi coming from a page is today kiosk on the corner of East 43rd Street a block away. Each kiosk’s Wi-Fi signal extends about one block, which means that I could potentially hop in a cab and ride up Third Avenue and stay P. 20 connected all the while. If I lived near one of these hot spots, I could imagine David Korins dropping my Time Warner subscription and just hitching a free ride thanks to 21 SNAPS the advertising that underwrites the system—and generates revenue for the city. 22 FOR THE RECORD “We don’t want to think of this as an advertising network,” said Colin O’Donnell, chief innovation officer at Intersection, the company that won the 23 PHOTO FINISH

franchise agreement, “but as a service, paid for by advertising, that a lot of people CORRECTIONS use and love.” LOWELL PETERSON is executive director of the Writers Guild How this high-speed system is used is where New York’s innovators come in. of America. The organization’s name was misstated in “New York looks to remedy Hollywood’s diversity problem,” Oculus Rift is creating immersive 3-D experiences. The next step is to go mobile: published April 11. projecting holographic advertising on street corners, transmitting data from police body cameras to city servers that the public can access in real time, powering a network for driverless cars. “Bandwidth-intensive, graphically rich environments will probably become just as indispensable to our way of life as a web page is today,” O’Donnell said. What Sidewalk Labs has started, other entrepreneurs will expand. At our real ON THE COVER estate conference May 2, I’ll have the opportunity to ask Sidewalk Labs CEO Dan PHOTO COMPOSITE: Doctoroff what else the company has in store for this system. “This is something JENNIFER BALLONE the industry is going to figure out,” O’Donnell said. “The internet is going to evolve. Anytime we introduce new bandwidth it gets used up immediately.” DIGITAL DISPATCHES Go to CrainsNewYork.com READ A pair of apartment towers nearing CONFERENCE CALLOUT MAY 11 completion along the FDR Drive will be the ultimate New York luxury fortress: A pool on a CRAIN’S BUSINESS skybridge connects the two buildings, while BREAKFAST FORUM natural-gas-fired generators on the roof con- State Comptroller Thomas DiNapoli nect to a dedicated outlet in each unit that will discuss the will run when the next storm hits. state of the state’s ■ Houston developer Hines won the contest to finances and his manage the coveted 11-building portfolio of latest audits, office properties controlled by downtown’s and will field questions Trinity Church. from journalists. ■ How best to repair the L NEW YORK train’s East River tunnel? > ATHLETIC CLUB Take the fastest path to a cure: 8 a.m. to 9:30 a.m. Shut both tubes for 18 months [email protected] and get the job done. LISTEN to a discussion on the Vol. XXXII, No. 17, April 25, 2016—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double business of drones in New York featuring an issues the weeks of June 27, July 11, July 25, Aug. 8, Aug. 22 and Dec. 19, by Crain Communications Inc., 685 Third Ave., executive who is trying to grow one here. New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send address changes to: Crain’s New York Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. Also: our take on the growing scandal For subscriber service: Call (877) 824-9379. Fax (313) 446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. (GST engulfing the mayor. Music by Kolker. No. 13676-0444-RT) CrainsNewYork.com/podcast

APRIL 25, 2016 | CRAIN’S NEW YORK BUSINESS | 3 20160425-NEWS--0004-NAT-CCI-CN_-- 4/22/2016 7:19 PM Page 1

AGENDAWHAT’S NEW APRIL 25, 2016 On plastic bags, nudge New Yorkers to do the right thing

ome sights in New York City are so commonplace that we take them for granted. Pigeons on sidewalks. Garbage on the curb. Plastic bags everywhere. It doesn’t have to be this way—at least as far as plastic bags are concerned. SBags get stuck in storm drains, sewage plants and recycling equipment, too. They blow into gutters and gardens. The Department of Sanitation spends a good amount of time removing them from trees, as do a few civic-minded New Yorkers who set out with long poles. There’s a better way: Charge shoppers when they get disposable bags ENOUGH! at checkout. It wouldn’t take much. A nickel per bag would go a long Fees are way toward eliminating this hideous feature of our urban landscape. needed to change New A bill pending in the City Council would do just that. Originally it Yorkers’ habits. demanded 10 cents per bag, but some council members thought that would burden poor people, so the bill’s sponsors cut the fee in half. They Critics say it would wreak havoc on household budgets. Councilman also exempted purchases of restaurant meals, prescription drugs, and David Greenfield seems to think it will render families destitute. “The groceries bought with food stamps. plastic bag tax would have disastrous con- That satisfied most of the critics. A nickel per bag would go a long sequences for low-income families,” he The opponents who remain will be declared. “This is a tax that can cost fami- on the wrong side of history. Dozens way toward eliminating this hideous lies as much as $100 a year.” of municipalities have passed meas- feature of our urban landscape First, it’s not a tax—the fees will go to ures to discourage the use of plastic retailers, not the government. Second, it’s shopping bags. The most effective insulting to say a family will so continually ones rely on behavioral economics—that is, fees. Money is what best forget reusable bags that they’ll have to buy 2,000 plastic ones a year. motivates consumers to bring reusable bags when they go to the store. That’s 38 bags a week. Before long, the practice becomes second nature. But Greenfield is right about people using so many plastic bags. The Some folks cry “nanny state.” Well, if we had nannies reminding us city sends 9 billion of them to landfills annually—more than 1,000 for to pick up after ourselves, bags wouldn’t litter every street. Police can- every man, woman and child. So thank you, councilman, for providing not be nannies, and enforcement won’t rid us of the mentality that the an excellent reason to pass this bill. The council should do so world is disposable. A 5-cent fee will. next month. – THE EDITORS

FINE PRINT Senior Wall Street executives wouldn’t be able to pocket their bonuses until four years after they’re granted if rules proposed last week by federal banking regulators are adopted. This could discourage Wall Streeters from taking the sorts of reckless risks that led to the financial crisis, but banker pay might go up in the short term to offset the risk that some of the money might be clawed back.

BY GERALD SCHIFMAN STATS 25 WORDS OR LESS THE ROAD LESS TEXTED THANKS IN PART to the mayor’s Vision Zero safety initiative, New York City drivers have been slapped with far more summonses for cellphone use than the rest of the state’s motorists, [Labor leaders] despite doing a lot less driving. CITY AND THE “ DISTRACTED-DRIVING TICKETS ... have work for NYC Outside NYC the next three 166,872 130,243 generations. All Licensed 103,706 drivers in they have to do 3.6M NYC in 57,226 2015, 42% of the city’s is sit at their population Texting Cellphone desk” Licensed drivers — Gov. Andrew Cuomo, saying all outside NYC in 8M 2015, 72% of state projects will use union labor the out-of-city population

ADDICTED TO NUMBERS? GET A DAILY DOSE AT @STATSANDTHECITY SOURCES Governor’s office, New York State BUCK ENNIS, NEWSCOM Department of Motor Vehicles

4 | CRAIN’S NEW YORK BUSINESS | APRIL 25, 2016 ADVERTISING SUPPLEMENT TO CRAIN’S NEW YORK BUSINESS

Heritage Healthcare Innovation Awards 2016 Honors Health Care Pioneers TRANSLATIONAL MEDICINE

areas from bone reconstruction to The New York Academy of Sciences (NYAS) cognitive computing, New York City Physicians, researchers, scientists and public In is home to innovators who are on the health experts don’t always have opportunities cutting edge of translational medicine—an to discuss recent breakthroughs and challenges interdisciplinary area that aims to move research in translating basic science into clinical from the lab to the treatment room effi ciently. applications with each other. To create better The Heritage Provider Network’s fi rst annual communication among them, the NYAS and Heritage Healthcare Innovation Awards 2016 will The Josiah Macy Jr. Foundation—which fosters honor innovative health care leaders—selected innovation in the education and training of health by a panel of leading health care experts—who care professionals—created the Translational have most improved the access to and quality Medicine Initiative, a three-year partnership. The of aff ordable health care in the communities initiative’s Translational Medicine Discussion they serve in the greater New York area. Winners Group off ers a lively intellectual forum for the will be announced at a luncheon event in New cross-disciplinary exchange of ideas. York City on May 16. Meet the 5 fi nalists in the Heritage Research Investigator in Translational “As a nearly 200-year-old organization with Medicine Award category: the National Institutes of Health, into new 20,000 members across 100 countries, the techniques to use MRI scans for these patients, Academy brings together experts from every EpiBone Co-founder to provide their physicians with information science- and technology-related fi eld and gives Nina Tandon conventional diagnostic imaging doesn’t off er. them opportunities to work together, toward More than 900,000 patients common goals,” said Ellis Rubinstein, president undergo bone-related As leader of the hospital’s team of 250 and CEO, The New York Academy of Sciences. surgeries each year. Bone physicians and researchers, Hollis Potter, MD, “For this reason, we are uniquely positioned to reconstruction startup chairman of the Department of Radiology and connect two often disparate realms: scientifi c EpiBone, incorporated Imaging at the Hospital for Special Surgery research and clinical care.” in 2013, is dedicated to collaborates with colleagues in many specialties reducing some of the to optimize the use of magnetic resonance AposTherapy and CEO risks that come with using imaging. David Levy, MD implants from titanium and other materials by Many patients with chronic using proprietary technology to cultivate bone “The success of the Department of Radiology hip, back and knee pain grafts grown from patients’ own stem cells. and Imaging at the Hospital for Special Surgery resign themselves to living is based on translating research innovation into with constant discomfort— Building on its early success in growing facial clinical application,” said Potter. “Our research even after getting physical bones for pigs, the Manhattan biotechnology questions are guided by the specifi c needs of our therapy. AposTherapy aims to change that. It company is planning to embark on human patients and concerns of our clinical colleagues.” off ers special sneaker-like medical devices that, trials in coming years, drawing on funding if worn for about an hour a day, have been shown from high-profi le investors such as PayPal Watson Oncology (IBM/Memorial Sloan to shift the patient’s gait to reduce pressure on co-founder Peter Thiel. Kettering) the joints. As cancer care moves toward more Fulbright scholar and TED fellow Nina Tandon, individualized treatments, many physicians are Insurer Healthfi rst has been covering the the company’s co-founder, is focusing the looking to put those treatments into action for treatment for patients at Montefi ore Medical company’s eff orts on helping patients suff ering patients with life-threatening conditions more Center and Elmhurst Hospital. Under from congenital facial defects or trauma to the quickly. To enable that, Memorial Sloan Kettering the leadership of CEO David Levy, M.D., bones of the head and face. “For any technology and IBM have partnered to “train” IBM’s Watson AposTherapy’s devices are now available that is a good prototype in the lab, it is important computer to interpret cancer patients’ clinical through physical-therapy practices at affi liated for us to explore using science to see how that data and uncover evidence-based treatments institutions in Manhattan, the Bronx, Queens, technology might be able to help people,” said that fi t their unique makeup. Watson is a Long Island and Westchester County. Tandon. “It’s very exciting to be part of that technology platform that uses machine learning journey with this technology. It is a very exciting and natural language processing to draw insights opportunity to be able to actually start helping from giant volumes of data. Heritage Provider Network, Inc. (HPN) is on patients.” the cutting edge of the accountable care “Combining Memorial Sloan Kettering’s model of healthcare delivery: coordinated, Hospital for Special expertise in cancer care and research with the Surgery and Radiology analytical capabilities of IBM Watson has the patient-doctor centric, integrated health Department Chairman potential to transform how doctors choose care systems that represent the future of Hollis Potter, MD treatments for each patient’s cancer,” said health care in the United States. HPN and its Many physicians fi nd it medical oncologist Mark Kris. “Through Watson affi liates operate in California, New York and diffi cult to resolve pain for Oncology, our hope is to share our knowledge Arizona providing high quality, cost eff ective and discomfort suff ered and wisdom to help physicians around the world healthcare to over one million individuals and by some patients after understand the subtleties of each person’s are dedicated to quality, aff ordable health joint replacement. The illness and their cancers to select the best care, and putting patients’ wellness fi rst. Hospital for Special Surgery choice among an expanding number of options www.heritageprovidernetwork.com has done years of research, some funded by for care.” 20160425-NEWS--0006-NAT-CCI-CN_-- 4/22/2016 7:18 PM Page 1

AGENDA ICYMI CRAINS EDITOR IN CHIEF Rance Crain publisher, vp Jill R. Kaplan assistant to the publisher Landlords assail mayor’s bid Alexis Sinclair, 212.210.0701 EDITORIAL editor Jeremy Smerd to cut building emissions assistant managing editors Erik Engquist, Peter S. Green, Jeanhee Kim web editor Amanda Fung AYOR BILL DE BLASIO’S Earth Day announcement copy desk chief Steve Noveck ordering cuts to greenhouse-gas emissions from the art director Carolyn McClain photographer Buck Ennis city’s 1 million buildings got a quick rebuke from senior reporters Joe Anuta, Aaron Elstein, M Matthew Flamm, Daniel Geiger the landlords who will have to pay for it. reporters Rosa Goldensohn, REBNY PRESIDENT Jonathan LaMantia, Caroline Lewis, De Blasio proposed several additions to the city’s energy JOHN BANKS Addie Morfoot data reporter Gerald Schifman code, including small upgrades like better burner controls for web producer Peter D’Amato boilers, covered freezer cases in retail stores and sealed roof vents in elevator shafts, but also sweeping steps columnist Greg David contributing editors Tom Acitelli, that would require large and midsize buildings to come up with plans to cut energy usage by up to 60%. Theresa Agovino, Barbara Benson, Erik Ipsen, Judith Messina, Buildings generate three-quarters of the city’s greenhouse gases. Reducing them will go a long way toward Cara S. Trager ADVERTISING reaching de Blasio’s goal of a drop to 20% of 2005 levels by 2050. “Cities that lead on climate, lead on build- www.crainsnewyork.com/advertise advertising director Irene Bar-Am ings,” the mayor said in a statement. [email protected] or Landlords were having none of it, calling the requirements an unfunded mandate. They want financial 212.210.0133 senior account managers incentives or tax offsets in exchange for going green, ignoring the mayor’s contention that cutting energy use Zita Doktor, Jill Bottomley Kunkes, Rob Pierce, Stuart Smilowitz will save money. “Today’s report reflects a change in the administration’s previously stated approach of set- account managers Jake Musiker senior marketing coordinator ting ambitious targets for voluntary reductions followed by mandates as needed,” landlord groups led by the LeAnn Richardson sales/events coordinator Ashlee Schuppius Real Estate Board of New York said in a joint statement. 212.210.0282 A spokeswoman for the city disagreed, noting the city offers programs to connect owners with technical and [email protected] ONLINE financial resources to make the improvements. She said the policy was “based on over a year of technical general manager Rosemary Maggiore 212.210.0237 analysis by a working group that brought together all stakeholders.” [email protected] CUSTOM CONTENT The statement released by City Hall included support from Council Speaker Melissa Mark-Viverito; Kathryn Wylde, director of custom content whose Partnership for New York City represents the city’s largest businesses; and property managers, who Patty Oppenheimer 212.210.0711 [email protected] stand to benefit from the work required to make buildings compliant. — DANIEL GEIGER EVENTS www.crainsnewyork.com/events director of conferences & events DATA POINT Courtney Williams, 212.210.0257 Officer in shooting receives probation part of an expansion into the tower [email protected] THE STATE DEPARTMENT OF TAXATION manager of conferences & events Former police officer Peter Liang, con- being constructed to the west of the Adrienne Yee victed of manslaughter for accidental- AND FINANCE STOPPED MORE THAN 53rd Street museum, will be named AUDIENCE DEVELOPMENT ly firing his service pistol in a Brooklyn the David Geffen Wing. director of audience & content 239,000 SUSPICIOUS REFUND partnership development stairwell in 2014, killing bystander Michael O’Connor, 212.210.0738 Akai Gurley, was sentenced to 800 CLAIMS THIS YEAR, SAVING NYC ID to help with health records [email protected] hours of community service and five The 830,000 New Yorkers with NYC ID CRAIN’S 5BOROS $400 MILLION—UP 18% FROM LAST www.5boros.com years’ probation. Justice Danny Chung cards will soon be able to use them to Irene Bar-Am, 212.210.0133 also reduced the verdict to criminally YEAR. access health services and their own [email protected] negligent homicide. medical records at public hospitals. SPECIAL PROJECTS manager Alexis Sinclair 212.210.0701 [email protected] Brooklyn voting issues to be investigated Council approves East New York rezoning NYSE boots Aeropostale from exchange REPRINTS State Attorney General Eric The change is expected to create 1,300 The company that was once in every reprint account executive Krista Bora 212.210.0750 Schneiderman and City Comptroller affordable apartments over the next teenager’s closet and traded at $30 will PRODUCTION Scott Stringer are pressing inquiries two years, but critics say the proposed be delisted. It has not traded above $1 production and pre-press director into allegations that tens of thousands affordable housing will be too expen- since September, undercut by rivals Simone Pryce media services manager Nicole Spell of Democratic voters were removed sive for residents in the neighborhood H&M and Forever 21. – PETER S. GREEN SUBSCRIPTION CUSTOMER SERVICE from the rolls at Brooklyn polling sta- and will just increase home prices. www.crainsnewyork.com/subscribe tions. Diane Haslett-Rudiano, the [email protected] Mayor signs Elmo’s law 877-824-9379 (in the U.S. and Canada). Board of Elections’ chief clerk in $3.00 a copy for the print edition; or $99.95 Brooklyn, has been suspended with- Mayor Bill de Blasio signed into law one year, $179.95 two years, for print subscriptions with digital access. out pay pending the outcome of an new restrictions on where costumed to contact the newsroom: internal investigation. characters like Elmo and Spider-Man www.crainsnewyork.com/staff can stand in and around Times Square. 685 Third Ave., New York, NY 10017-4024 Democrat wins key Senate election phone: 212-210-0100 fax: 212-210-0799 Entire contents ©copyright 2016 Democratic Assemblyman Todd New NJ Transit chief bows out Crain Communications Inc. All rights reserved. ®CityBusiness is a registered Kaminsky won the state Senate seat William Crosbie, former chief operat- trademark of MCP Inc., used under license held by former Republican Senate ing officer of Amtrak, withdrew from agreement. leader Dean Skelos, handing the the top post at New Jersey’s troubled CRAIN COMMUNICATIONS INC. Silver may face hard time BOARD OF DIRECTORS Democrats a numerical majority in the transit agency before even starting Prosecutors urged U.S. District chairman Keith E. Crain upper house. The party still has to rein work, citing concerns about moving president Rance Crain in six Democrats who caucus with the his family from Virginia. The agency is Judge Valerie Caproni to make an treasurer Mary Kay Crain, Cindi Crain example of former Assembly executive vp, operations William Morrow Republicans. Alice Cancel, a protégé of resuming its hunt for a new leader. executive vp, director of strategic convicted former Assembly Speaker Speaker Sheldon Silver, who was operations Chris Crain convicted of corruption, and executive vp, director of corporate Sheldon Silver, won Silver’s seat. Walgreens to pay for overcharging operations K.C. Crain The drugstore chain agreed to pay New imprison him for 14 years or more at senior vp, group publisher David Klein State hints on $2B housing money his sentencing May 3. “The vp/production, manufacturing David Kamis York state for using misleading adver- chief financial officer Thomas Stevens State officials said the money would be tising and charging customers higher sentence imposed on Silver should chief information officer Anthony DiPonio spent over five years to help build 50,000 prices at the register than were marked reflect the unprecedented founder G.D. Crain Jr. [1885-1973] affordable housing units and preserve on goods or on shelves. magnitude, duration and scope of chairman Mrs. G.D. Crain Jr. [1911-1996] secretary Merrilee Crain [1942-2012] 50,000 more, as part of a replacement for his abuse of power,” prosecutors construction lost when the 421-a tax Geffen’s $100M gift snags MoMA wing wrote.

BLOOMBERG, BUCK ENNIS break expired . Three floors of new galleries, created as

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AGENDA REAL ESTATE

to build a massive devel- Trump sued, arguing he Why Vornado’s Steven Roth opment on the old West could have gotten a Side rail yards hit the higher price for his 30% was at Trump’s victory speech ropes and he ceded con- share. Rather than fight, trol to a Hong Kong the Asian group used the The real estate king owns a midtown tower with the presidential contender BY AARON ELSTEIN investor group that built proceeds from the sale to what’s now called buy 1290 Sixth Ave. and ome of the Roth’s firm owns 70%, Roth in 1998 to acquire to Melania Knauss. Riverside South. When a San Francisco office people whom and Trump has 30%. the General Motors In 2007, Roth effec- the Chinese agreed in tower, keeping Trump as Donald Trump Trump lost out to Building for $878 mil- tively rescued Trump 2005 to sell the project their minority partner. called “our Roth in the battle for lion, only to sell the from a most unpleasant for $1.8 billion to private They then sold their 70% Sgreat businessmen of Alexander’s depart- tower five years later. situation. equity firm Carlyle stake to Vornado, and the world” flocked to ment stores in the early And Roth attended The two became part- Group and Extell Trump and Ross became his victory speech last 1990s; Trump outbid Trump’s 2005 wedding ners after Trump’s plan Development Co., partners. Ⅲ week to watch The Donald bask in his overwhelming GOP primary win. Carl Icahn “is here someplace,” said Trump, who thinks the cranky activist investor would make a fine Treasury secretary. He also called out Howard Lorber, chairman of real estate brokerage Kenneth Woods PRESIDENT AND CEO Douglas Elliman, and SYLVIA’S RESTAURANT Vector Group Chairman Bennett LeBow. Trump saved his most effusive praise for “the great Steve Roth,” chairman and CEO of Vornado Realty Trust, the city’s largest commercial landlord, with more than 50 commercial and residential prop- Adding flavor to erties across the city, covering 23.5 million square feet—10 times the community. more New York real estate than Trump. “Steve’s building a big building on Central Park South, it’s a tremendous success,” Trump gushed. “I said, Understanding ‘Steve, congratula- tions on the building.’ He said, ‘Donald, it’s what’s important. nothing compared to what’s happening with you.’ Is that right? My man!” Why was Roth at last Sylvia’s Restaurant is a true Harlem institution. If you’ve ever had their special brand of soul food, you know exactly why. week’s festivities? It may be that he sup- Owner Kenneth Woods also prides himself on treating customers like family. And Kenneth sees that same quality in ports Trump’s poli- M&T Bank. He began his M&T relationship with a personal loan, but quickly became aware of what we could do for his tics, though the pub- licity-averse landlord business and family. The relationship has grown stronger, with Sylvia’s and M&T teaming up as active members of the wouldn’t comment on neighborhood and community at large. To learn how M&T can help your business, visit mtb.com/commercial. that. Or maybe he was there to support a business partner. It’s not widely known, but Trump and Roth are co-owners of a midtown office tower at 1290 Sixth Ave. The 2.1- DEPOSITORY AND LENDING SOLUTIONS | TREASURY MANAGEMENT | MERCHANT SERVICES | COMMERCIAL CARD million-square-foot office building is Vornado’s second Equal Housing Lender. ©2016 M&T Bank. Member FDIC. largest in New York.

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AGENDA POLITICS

Slew of gifts to mayor’s fund came from executives seeking decisions from City Hall

Scrutiny likely as prosecutors probe de Blasio’s Campaign for One New York BY JOE ANUTA AND ROSA GOLDENSOHN

umerous real estate com- agency, approved it in December. A $50,000. At the time, records show, the mayor. panies gave money to commission spokesman said the proj- Kohn was lobbying the City Planning In May 2014, Argent donated Mayor Bill de Blasio’s non- ect met the agency’s mandate. Commission, whose 13 commissioners $10,000 to Campaign for One New profit while pushing for air Other firms were actively negotiat- include seven mayoral appointees. A York, but failed in its attempt to block Nrights, landmark status and other ing with top de Blasio officials around spokesman for the agency said, “The a deal between the administration and decisions from the city, records show. the same time they made donations. City Planning Commission makes SL Green to allow the latter to con- Such gifts are common in city poli- At the end of the Bloomberg adminis- decisions based on merit—period.” struct a skyscraper on Vanderbilt tics but have taken on added signifi- tration, for instance, the developer And a limited-liability company Avenue, across from Grand Central cance because prosecutors are scruti- Park Tower Group won approval to controlled by Frank McCourt, who Terminal. Argent, which owns the ter- nizing the mayor’s fundraising and the build a massive mixed-use project on years ago purchased a $167 million minal, wanted SL Green to have to buy nonprofit run by his close advisers, the Greenpoint, Brooklyn, waterfront. development site on Manhattan’s air rights from it, but the city upzoned Campaign for One New York, accord- But in June 2015, Deputy Mayor for West Side, lobbied the City Planning the development site in exchange for ing to multiple reports. Public benefits Housing and Economic Development Commission throughout 2015. In April, more than $200 million worth of infra- cannot be provided in exchange for structure improvements. campaign donations. The nonprofit raised and spent A way around donation limits more than $4 million before being Under the city’s campaign finance wound down last month. Those dona- program, individuals who have busi- tions, through December 2015, were ness dealings with the city cannot give voluntarily disclosed by the fund, more than $400 to the mayor’s elec- while contributions received this year tion campaign in a four-year election are expected to be released in June. No cycle. Companies are not permitted to charges have been brought. give at all. Attention has been focused on con- But Campaign for One New York tributions from opponents of horse- was a 501(c)(4) nonprofit, a tax desig- drawn carriages, but dozens of other nation that allowed it to raise unlimit- donors had much riding on city deci- ed amounts of money for “social wel- sions around the same time they gave fare” purposes without disclosing its money, according to public records donors. and a list of donations provided by the It was run by Hilltop Solutions, a nonprofit’s public-relations firm, political strategy firm, and was mostly BerlinRosen. used to run advertisements for de In the fall of 2014, for example, a Blasio initiatives and pay political con- team including David Kramer’s devel- sultants and lawyers. The nonprofit opment firm Hudson Cos. and Marvel began shutting down in March, de Architects was selected by the Blasio said, because it had achieved Brooklyn Public Library to redevelop some of its legislative goals, including one of its branches in Brooklyn his universal prekindergarten and Heights. The plan needed approval affordable-housing plans. But the from the City Planning Commission, decision came just three weeks after the City Council and—for all practical good-government group Common purposes—the mayor. SKIN IN THE GAME: David Kramer, Joshua Sapan, Frank McCourt and David Von Spreckelsen Cause New York raised questions about Around the time that process start- (clockwise from top left), among others, shepherded projects as their companies donated. the legality of the donations. Last ed in June 2015, a limited-liability week, in response to questions about company controlled by Hudson Cos. Alicia Glen announced that the city the firm gave $50,000 to Campaign for the probes, the mayor said donors to gave $10,000 to Campaign for One had renegotiated, and that the devel- One New York. his campaign funds “should expect New York, the developer’s second gift oper had agreed to provide more Other donors to the nonprofit were nothing in return.” in two years. On June 5, Marvel affordable housing at the site. associated with projects in Brooklyn “In theory, you’d like to believe Architects, the designer, and De Bridge Park. The park’s board oversees people are making donations because Nardis Engineering, a consulting firm Five-figure contributions real estate projects there and is headed they think someone would be a good for the building, gave a total of Records show that in the lead-up by Glen. Just a month before RAL leader,” he said. $4,000. In December, the City Council to that announcement, Park Tower Development Services was selected by The mayor has repeatedly said that approved the project, whose public Group gave $50,000 to Campaign for Brooklyn Bridge Park to develop a to his knowledge, all fundraising was relations were being handled by One New York weeks before its chief controversial pair of residential done legally, and that he welcomes BerlinRosen. executive, George Klein, met buildings at the park’s Pier 6, it and will cooperate with the investiga- In July 2015, Marvel Architects also with Glen. donated $10,000 to Campaign for tions, which are being conducted by won a bid to design a major upgrade for A number of city lobbyists also One New York. U.S. Attorney Preet Bharara and the Brooklyn Navy Yard, which is donated to the mayor’s nonprofit, And Toll Brothers, the developer of Manhattan District Attorney Cyrus owned by the city. which under the Supreme Court’s a hotel and condos near the foot of the Vance. In April of that same year, AMC Citizens United ruling could accept Brooklyn Bridge that blocked coveted “I think there’s plenty of evidence Networks Chief Executive Joshua unlimited amounts of money even views, gave $50,000 to the fund. that good leaders—all the time—make Sapan gave $5,000 to Campaign for from donors who had given the legal Toll’s David Von Spreckelsen steered decisions based on what they think is One New York, which was created to maximum to the mayor’s own cam- the project. Local activists’ protests right,” de Blasio has said. advance the mayor’s policy agenda. In paign fund. were rejected by the Brooklyn Bridge Bharara subpoenaed documents August, Sapan’s firm announced plans In March 2015, a limited-liability Park board, two members of which from Campaign for One New York to expand an IFC theater location in company controlled by developer bought condos in the development. donors who pushed for the city Greenwich Village, a proposal that Mike Kohn, and associated with a It is unclear what, if any, effect horse-carriage ban. attracted significant community Bedford-Stuyvesant, Brooklyn, devel- donations had on the administration. None of the donors cited responded opposition. The Landmarks opment site he sold for $70 million, But at least one high-profile contribu- to Crain’s requests for comments by Ⅲ BUCK ENNIS, NEWS, BLOOMBERG AP IMAGES Preservation Commission, a mayoral gave Campaign for One New York tor, Argent Ventures, was stymied by press time.

8 | CRAIN’S NEW YORK BUSINESS | APRIL 25, 2016 20160425-NEWS--0009-NAT-CCI-CN_-- 4/21/2016 6:28 PM Page 1

AGENDA SMALL BUSINESS

Brooklyn fashion incubator to be part of innovation hub Getting a piece of $75 million in federal funds for high-tech textile-making BY ERICA DAVIES BOB BLAND

nder a technology markets by “This is the next gen- Teaching workers hopes the training cen- “This program at the nationwide helping people produce eration of gadgets,” said the science behind ter will spur growth in intersection of fashion initiative to items like sweaters made Bob Bland, chief execu- wearable technology the city’s manufactur- manufacturing and boost inno- of fabrics that regulate tive of Manufacture New gives American manu- ing industry, which wearable tech is great Uvation, a Brooklyn body temperature, or York. “Functionality will facturers a competitive accounted for only for the military but also fashion design and pro- parachutes with built-in be embedded in the tex- edge over global rivals, 2.2% of private-sector for the general public,” duction incubator will radio transmitters. tiles themselves.” Bland said. She also jobs in 2013. Bland said. Ⅲ build and program a new training facility. In a partnership with MIT and the Fashion Institute of Technology, Manufacture New York will host training and apprenticeship programs at Liberty View Industrial Plaza in Sunset Park. The center will provide skill-based training and at least 30 registered apprenticeship programs in all areas of advanced apparel manufacturing, such as digital textile printing and pattern making. There are also plans for interactive online classes and vir- tual-reality training. “The idea is to bridge the gap between technology and the com- RETENT ON mercialization of products made of functional fabrics,” said Dr. Joyce Brown, FIT’s president. Manufacture New York is part of the Obama administration’s Revolutionary Fibers & Textile Manufacturing Inno vation Institute, which received a $75 million grant from the U.S. Department of Defense this month. The institute funds training facilities across the country that will teach workers to develop and produce commercial and military products to better protect soldiers Offer the right benefits. Keep employees at their best. in combat. At Aflac, we know building your business starts with keeping your best employees. In addition to federal Which is why we help with costs not covered by major medical insurance and pay funding, the city your employees directly. And with One Day Pay,SM we make it a priority to pay claims awarded Manufacture SM New York $3.5 million as fast as possible — in 2015, Aflac paid 1.2 million One Day Pay claims. All so your See what Aflac can do for to build the 160,000- employees and business can stay focused on success. square-foot training your business at aflac.com/retention center. The facility is expected to increase the *Aflac pays policyholders directly, unless otherwise assigned. **One Day PaySM available for most properly documented, individual claims submitted online through Aflac SmartClaim® by 3 p.m. ET. number of highly Aflac SmartClaim® not available on the following: Disability, Life, Vision, Dental, Medicare Supplement, Long-Term Care/Home Health Care, Aflac Plus Rider, Specified Disease Rider and Group skilled workers in the policies. Aflac processes most other claims in about four days. Processing time is based on business days after all required documentation needed to render a decision is received and no further validation and/or research is required. Individual Company Statistic, 2015. Individual coverage is underwritten by American Family Life Assurance Company of Columbus. city. It will also boost In New York, individual coverage is underwritten by American Family Life Assurance Company of New York. Worldwide Headquarters | 1932 Wynnton Road I Columbus, GA 31999. the competitiveness of Z160117 3/16 local businesses in the

BUCK ENNIS fashion and military-

APRIL 25, 2016 | CRAIN’S NEW YORK BUSINESS | 9 20160425-NEWS--0010-NAT-CCI-CN_-- 4/21/2016 6:28 PM Page 1

AGENDA VIEWPOINTS

DOWN ON DE BLASIO investigation, he has changed his Probes and snafus render story numerous times, sometimes Mayor’s approval rating within the same day. On the nurs- Excellent/ Fair/ Not sure Good Poor the mayor vulnerable in 2017 ing home controversy, he has said If hints of trouble damage de Blasio, imagine if charges are brought he was out of the loop and unin- March 2014 39% 57% 5% formed. No one seems to have been May 2015 44% 52% 3% held accountable for that either. Nov. 2015 38% 58% 4% NOW THAT the presi- more than reversing a small increase He clearly doesn’t believe in the April 2016 35% 62% 3% dential campaign has seen in other polls earlier this year. Harry Truman mantra “the buck moved on from New Even more important, he doesn’t stops here,” signaled with a sign on PORTRAIT OF A MAYOR IN TROUBLE York, the spotlight crack the crucial 50% approval mark that well-regarded president’s desk Excellent/ Fair/ Unsure will focus brightly on in the Marist survey from a single in the Oval Office. Good Poor Mayor Bill de Blasio’s demographic group—including Imagine what will happen if the Reg. Voters new biggest problem: African-Americans, his base. (Other probes result in formal corruption 35% 62% 3% corruption investiga- polls have shown somewhat higher charges. Democrats 43% 54% 2% GREG DAVID tions. Start with the scores from blacks, although A good rule of politics is Republicans 13% 87% 1% gifts to top-ranking even those are down from ear- that incumbents with Independents 25% 69% 6% NYPD officers, possible illegal lier in his term.) % approval ratings below 50% Income $50K+ 30% 67% 2% fundraising in the mayor’s various What is already known is are vulnerable. Another good Less than $50K 41% 54% 4% campaign efforts and the inexplicable damaging to the mayor. The 35 guideline for New York poli- MAYOR’S Men 34% 63% 3% success of a developer in persuading most charitable explanation approval rate tics is that the mayoral cam- city officials to allow the conversion of for the nursing home among city paign begins in earnest the Women 36% 61% 3% a Lower East Side nursing home into arrangement is that the voters day after the presidential College Grad 32% 66% 3% luxury condos, creating a financial developer bamboozled city election. So any challenger to No Degree 38% 59% 4% bonanza. officials, increasing the per- de Blasio will have to decide in White 27% 70% 2% Already these stories are taking a ception that the mayor isn’t interest- the next six months whether to take Black 49% 49% 3% toll. ed in or capable of running the gov- on the mayor. Ⅲ The latest WNBC/Wall Street ernment. Latino 36% 61% 3% Journal/Marist poll shows de Blasio’s And de Blasio has made the situ- GREG DAVID blogs regularly at SOURCE NBC4/WSJ/Marist Poll Numbers are rounded and may not add up to 100% approval rating sliding to a new low, ation worse. On the fundraising CrainsNewYork.com.

Slash monthly MetroCard price and watch business take off

New Yorkers with 30-day passes make more use of the city BY ALEX MARSHALL

ity Comptroller Scott additional rides were not only good push more New Stringer and Public for me, they were good for the city. Yorkers to buy a pass. Advocate Letitia James Buses and subways are crowded That would get them are proposing half-price at rush hour. The additional trips I to use the system CMetroCards for the 800,000 city res- took were mostly at midday, at more. idents living below the poverty line. night or on weekends—“off-peak.” On the other hand, It’s a nice idea. But it’s the wrong I made fuller use of a public good, tourists and visiting approach to transit pricing. the trillion-dollar transit system. businesspeople would Instead, we should all have The more people use subways and happily buy the high- lower-cost MetroCards in the form buses, the more businesses they priced single rides. A of cheap monthly passes. It would visit, the more money they spend $5 subway ride or, say, be good for everyone—and for busi- within the five boroughs. a $20 daily pass is min- ness most of all. Studies show even the rich pay imal in the context of Here’s why. attention to pricing. Most people, an entire vacation or Last month, my wife gave me an even if well-off, hesitate to spend business trip. extra monthly MetroCard pass she $2.75 if they don’t have to. That Lower-priced passes would cost Bike arguably many millions of dol- had purchased by accident. I usual- means they use the subway and bus the government money. But then, lars of staff time, and precious street ly pay $2.75 a ride because I don’t go system less, which is not good for so do universal pre-K, a $15-an- and sidewalk space. Yet when it into Manhattan every day. But the city. hour minimum wage and better comes to getting people behind the armed with an unlimited-use pass, I Mayor Bill de Blasio, as well as family leave for city workers, and handlebars, the city has acquiesced was startled by how much more I Stringer and James, should make it other tools in de Blasio’s fight to an annual pass price of $168, per- took subways and buses and how his mission to drop the price of a against inequality. haps the highest in the world. Paris much fuller my life was. monthly MetroCard to a mouth- The MTA collects about $6 billion charges 29 euros, about $33. New I rode the subway two stops to a watering $50. At the same time, a year through fares, about 40% of York’s policy is penny-wise and new restaurant for lunch because I they could support boosting the its $14.5 billion budget. Juggling the pound-foolish. didn’t have to add $5.50 to the price price of a single ride to $4 or $5. mix through lower pass prices and Access to infrastructure should of my meal. I took the bus to a (Gov. Andrew Cuomo, not the higher base fares is workable, if not be priced to maximize service and museum exhibit, and another day to mayor, is effectively in charge of easy. The city contributes to the use, not revenue. This means high- a park. I more often skipped taxis the Metropolitan Transportation MTA’s budget and has appointees er taxes, but more prosperity and and Uber because transit was effec- Authority. But Cuomo, like most on its board, so it has some power better quality of life. Ⅲ tively free. I used the city more governors, doesn’t really care about here. because I had more access to it. New York City transit users. De The strategy of low-cost month- Alex Marshall, a senior fellow at An economist would say I Blasio, Stringer and James do.) ly passes should be applied to a Regional Plan Association, is the behaved differently because while This sort of pricing strategy transportation system the city more author of The Surprising Design of my sunk costs were high—the would optimize the transit system directly controls, the bike-share Market Economies and Beneath the $116.50 my wife paid for the 30-day for its disparate users. The one-two program. Metropolis: The Secret Lives of pass—my marginal costs were zero. punch of a cheap monthly pass and The Bloomberg and de Blasio Cities. The views expressed here are

NEWSCOM An economist would also say my a higher-priced single fare would administrations have put into Citi his own.

10 | CRAIN’S NEW YORK BUSINESS | APRIL 25, 2016 20160425-NEWS--0011-NAT-CCI-CN_-- 4/21/2016 6:27 PM Page 1

AGENDA THE LIST NEW YORK AREA’S TOP AIRLINES Ranked by total passengers at major local airports

TOTAL TOTAL TOTAL PASSENGERS, % CHANGE, FLIGHTS, FLIGHTS, % CHANGE, 1 MARCH ’15- MARCH ’15- MARCH ’15- MARCH ’14- MARCH ’15- % PASSENGERS, BY AIRPORT RANK AIRLINE FEB. ’16 FEB. ’16 FEB. ’16 FEB. ’15 FEB. ’16 JFK LAGUARDIA NEWARK

1 United Airlines 29,163,694 +4.1% 302,473 297,216 +1.8% 3% 8% 89%

2 Delta Air Lines 27,833,112 +8.7% 314,791 305,603 +3.0% 54% 40% 7%

3 JetBlue Airways 16,616,616 +7.4% 141,982 135,355 +4.9% 81% 10% 10%

4 American Airlines 12,844,998 +1.6% 127,420 138,849 -8.2% 55% 35% 10% 5 US Airways 5,193,613 +7.0% 65,828 60,857 +8.2% 16% 57% 27% GROUND CREWS 6 Southwest Airlines 4,069,147 +10.5% 33,805 32,592 +3.7% 0% 67% 33% Put together, New York's three major airports employ over 70,000 workers. 7 Spirit Airlines 2,342,895 -0.1% 15,092 15,362 -1.8% 0% 100% 0%

8 Virgin America 1,796,796 +16.4% 14,668 12,471 +17.6% 58% 15% 28% 38,232

9 British Airways 1,670,014 -4.4% 8,469 8,895 -4.8% 84% 0% 16%

10 Air Canada 1,588,054 +7.8% 24,293 23,965 +1.4% 0% 75% 25%

11 Lufthansa 1,094,653 -0.8% 4,106 4,096 +0.2% 52% 0% 48% 20,268 12 Emirates 1,064,387 +31.8% 2,908 2,188 +32.9% 100% 0% 0%

13 Virgin Atlantic 980,413 -0.7% 4,131 4,246 -2.7% 83% 0% 17% 11,977 14 Air France 975,019 +8.6% 3,373 3,284 +2.7% 100% 0% 0%

15 Cathay Pacific 839,818 -1.1% 3,539 3,616 -2.1% 78% 0% 22%

16 El Al Israel Airlines 595,755 +3.8% 1,912 1,917 -0.3% 74% 0% 26% JFK LGA EWR

17 Caribbean Airlines 585,338 -0.3% 4,784 4,852 -1.4% 100% 0% 0%

18 Alitalia 575,237 +2.7% 2,625 2,521 +4.1% 100% 0% 0% AIRPORT ECONOMICS Total economic impact, including both 19 Aeromexico 534,186 +9.6% 4,396 3,813 +15.3% 100% 0% 0% wages and sales, by category 20 Turkish Airlines 527,214 +3.8% 2,114 1,884 +12.2% 100% 0% 0% (in millions)

21 Norwegian Air Shuttle 513,943 +43.7% 1,974 1,375 +43.6% 100% 0% 0% Passenger Operations $30,399 $11,224 $16,510 22 Swiss International Air Lines 504,401 -2.3% 2,870 2,862 +0.3% 72% 0% 28% Visitor 23 SAS 503,912 -2.8% 2,457 2,353 +4.4% 0% 0% 100% Services $17,471 $12,261 $13,169

24 TAM Brazilian Airlines 495,459 +11.6% 2,566 2,050 +25.2% 100% 0% 0% Cargo Impact $8,813 $62 $4,656 25 Aer Lingus 480,501 +8.8% 2,108 1,887 +11.7% 100% 0% 0% Capital 26 Korean Air 460,492 +5.9% 1,456 1,454 +0.1% 100% 0% 0% Spending Impact $478 $558 $155 27 WestJet 440,645 +8.3% 4,938 4,834 +2.2% 10% 90% 0% JFK LGA EWR 28 Etihad Airways 418,544 +12.7% 1,462 1,458 +0.3% 100% 0% 0% 29 KLM Royal Dutch Airlines 403,876 -16.9% 1,413 1,743 -18.9% 100% 0% 0% BY THE NUMBERS 30 Air Berlin 402,362 +2.7% 1,650 1,586 +4.0% 100% 0% 0%

31 Aeroflot Russian Airlines 401,531 +4.8% 1,456 1,452 +0.3% 100% 0% 0%

32 Air China International 397,714 +21.5% 1,426 1,304 +9.4% 93% 0% 7% 33 Porter Airlines 392,142 +2.6% 7,654 7,479 +2.3% 0% 0% 100% 10.9M TOTAL PASSENGERS ACCESSING 34 Air India 390,228 +11.6% 1,463 1,438 +1.7% 49% 0% 51% New York area airports by bus 35 LAN Airlines 381,902 +20.4% 1,664 1,492 +11.5% 100% 0% 0% and rail in 2015, an 8.9% increase compared with 2014 36 Iberia Airlines of Spain 363,508 +6.7% 1,356 1,468 -7.6% 100% 0% 0% and nearly four times 2003's 37 Avianca 325,983 +3.9% 2,354 2,188 +7.6% 100% 0% 0% mark 38 Copa Airlines 308,947 +5.7% 2,336 2,190 +6.7% 100% 0% 0%

39 Alaska Airlines 285,938 +27.0% 1,784 1,413 +26.3% 18% 0% 82%

40 Frontier Airlines 275,272 +42.1% 1,906 1,298 +46.8% 0% 100% 0% 41 All Nippon Airways 257,785 +3.1% 1,462 1,456 +0.4% 100% 0% 0% 8.2M TOTAL NUMBER OF PAID parked 42 Icelandair 253,909 +10.6% 1,538 1,349 +14.0% 69% 0% 31% cars at New York area airports 43 Austrian Airlines 246,208 +9.1% 1,194 984 +21.3% 56% 0% 44% in 2015, a 0.8% drop from the year prior and a 30% drop since 44 China Eastern Airlines 236,908 +13.9% 886 764 +16.0% 100% 0% 0% 2003 45 Asiana Airlines 236,016 +67.6% 728 1,448 -49.7% 100% 0% 0%

46 Japan Airlines 230,482 +2.7% 1,453 1,398 +3.9% 100% 0% 0%

47 Singapore Airlines 209,101 -10.2% 732 728 +0.5% 100% 0% 0% 48 Qatar Airways 208,066 -0.8% 730 668 +9.3% 100% 0% 0% 66.8% 49 EVA Air 204,718 +17.5% 734 770 -4.7% 100% 0% 0% PORTION OF NYC airline passengers earning less than 50 Sun Country Airlines 194,556 +36.0% 1,530 1,218 +25.6% 100% 0% 0% $100K per household This list comprises combined data on arrivals and departures for airlines flying into and out of John F. Kennedy International, LaGuardia and Newark Liberty International airports for the 12 months ended Feb. 28. Regional affiliates are included with their parent airlines. 1-Percentage totals may not equal 100% due to rounding. Source: Port Authority of New York and New Source: Port Authority of New York and

ISTOCK Jersey (panynj.gov/airports), with additional research by Gerald Schifman. New Jersey

APRIL 25, 2016 | CRAIN’S NEW YORK BUSINESS | 11 20160425-NEWS--0012-NAT-CCI-CN_-- 4/22/2016 3:06 PM Page 1

HEALTH CARE | OUTSOURCING WORKERS

ito Gigante’s first inkling that trou- with Cognizant foreshadowed the layoffs. After ble was afoot at EmblemHealth Blackwell became involved, EmblemHealth came about a month ago, when the moved quickly. tech worker was asked to attend a “It all points to this being rushed at the last meeting with employees of minute to get this out,” Gigante said. “They Cognizant,V a Teaneck, N.J., IT services and out- weren’t prepared.” sourcing firm. Employees received the emailed video from “All of a sudden we were given invites to Ignagni and an invite to a 3 p.m. or 3:30 p.m. meetings to transfer knowledge base,” he said. meeting; attendees of the latter meeting were let “They didn’t say why, they didn’t say who— go. EmblemHealth’s chief operating officer, we were just told to start doing it. It was done William Lamoreaux, delivered the news to mid- very covertly.” town employees via teleconference from the Then on April 19, the full picture of what was insurer’s headquarters at 55 Water St., where jobs happening became clear. He was among 250 were also cut. employees issued layoff notices. The news land- Gigante, who lives in Plainview, L.I., has ed in everyone’s email inbox in the form of a worked at EmblemHealth for nine years. While video from EmblemHealth CEO Karen Ignagni. frustrated by how workers were told about the “These decisions will impact our new contract, he is joining Cognizant. HIRED GUN: Former Emblem workforce over the course of the next “I have three sons, two with workers, like Vito Gigante (far right), turned to Sara Blackwell year,” Ignagni said in the video. “Over autism, and I’m not in a position to (second from left), a fierce the next 12 months, we will be mod- 3.1M say I don’t want the job. These are the critic of outsourcing. ernizing and automating. This move to intangibles management doesn’t TOTAL MEMBERS a modernized platform will no longer in GHI and HIP see,” he said. require the level of staffing we now health plans, Ignagni, a former director of the have to maintain the old system.” according to the AFL-CIO’s Department of Employee In an even-keeled tone, Ignagni said company Benefits, thanked staffers for the work the insurer had conducted a thorough they’ve done and pointed to resources ANATOMY evaluation of its options. EmblemHealth’s conclu- to help them find their next jobs. sion: Upgrading technology and automating “We know that this is a very difficult day processes would help reverse huge losses. Gigante, because we’re going to be saying goodbye to close a 47-year-old programmer at the insurer’s mid- friends and colleagues to whom we owe a great OF A town office, would ultimately be “rebadged” and deal,” she said in the video. “I want to assure you hired by the IT firm. we have worked very hard to maintain as many The announcement followed months of jobs as we can and also want to assure you that rumors and speculation about the future of the we, starting with me, are available to answer LAYOFF company. EmblemHealth, which resulted from questions, discuss retraining, or simply to talk.” the 2006 merger of insurers GHI and HIP, had a The next day, Blackwell led about two dozen HOW EMBATTLED HEALTH INSURER combined net loss of $113 million in 2015, a sig- EmblemHealth employees on a protest in front of EMBLEMHEALTH FOUND ITSELF nificant amount, but still less than the com- the insurer’s Ninth Avenue office. She wore a IN THE MIDDLE OFA FIGHT bined $486 million net loss recorded in 2014. crème-colored blazer adorned with a flag pin and Among its 3.1 million members are many New donned oversize sunglasses. A string of pearls hung OVER AMERICAN JOBS York City municipal workers. Last year, Ignagni around her neck. She passed out materials from the left her high-powered job in Washington, D.C., advocacy group Protect U.S. Workers. “Protect BY JONATHAN LAMANTIA as head of America’s Health Insurance Plans, U.S. Workers is dedicated to victims who were dis- the industry’s lobbying group, to lead an placed by foreign workers, advocates who want EmblemHealth turnaround. A key part of that America to protect and care for American workers plan is paying doctors based on the quality, not and for those who fear for the future of the the quantity, of the care they provide. Adding American dream,” read a pamphlet passed out at to the pressure, credit rating firm A.M. Best is the protest. meeting with EmblemHealth this month to review its performance. National movement The company’s modernization involves At an Orlando, Fla., rally earlier this year, bringing in TriZetto, a subsidiary of Cognizant. Blackwell introduced Republican presidential can- “We came to realize that building our own didate Donald Trump, and she is now running as a technology would require hundreds of millions Republican for a vacant seat in the Florida House of of dollars and require time that we didn’t have,” Representatives, the Sarasota Herald-Tribune Ignagni said. reported earlier this month. The way EmblemHealth went about the lay- In an interview, Blackwell said she sets up con- CUTTING LOSSES offs left many former employees angry. They ference calls to answer workers’ questions and have turned to Florida labor attorney Sara reviews their severance agreements for free. She Combined net loss of Blackwell to fight the changes. Blackwell, who pays out-of-pocket for plane tickets to protests, EmblemHealth insurers GHI and HIP has represented workers nationally whose jobs and organized a protest April 22 in Chicago at the have been outsourced, said she became involved headquarters of Abbott Labs. Blackwell said she In millions before the layoffs in an effort to prevent wants to create a nonprofit to further her work and $486 EmblemHealth from signing a contract with the attract private funding. outsourcer. She has fought a string of these bat- “I just do this because when you know what I tles on behalf of employees of companies around know and see what I see and what I hear every day, the country, including life insurers New York all day long, it’s awful,” she said. “I do it because I Life and MassMutual. Blackwell’s work received care and I love this country.” national attention when she represented ex- Meanwhile, EmblemHealth employees are Disney employees who claimed in a lawsuit that being asked to share information about how the Disney, which also used Cognizant, replaced company operates with both its existing workers current workers with foreign H-1B visa holders, and Cognizant staff, which Blackwell alleges rep- $113 The New York Times reported. She uploaded resents training of foreign replacement workers. Ignagni’s video to YouTube with the title “Super The company insists this isn’t so. “It truly is a rich American CEO fires Americans.” knowledge transfer,” an EmblemHealth spokes- Ⅲ JONATHAN LAMANTIA JONATHAN 2014 2015 Looking back, Gigante said, those first meetings woman said. “It’s not training.”

12 | CRAIN’S NEW YORK BUSINESS | APRIL 25, 2016 20160425-NEWS--0013-NAT-CCI-CN_-- 4/22/2016 3:07 PM Page 1

DRONES | THE BIRTH OF AN INDUSTRY

GROUNDED: Aerobo CEO Brian Streem has leased space in Brooklyn and raised $1 million, but most of his business is outside the city.

WAITING FOR TAKEOFF Commercial drone flying could be a huge NYC industry. If only it were legal BY MATTHEW FLAMM

rooklyn-based startup Aerobo made history last August when it sent a 34-pound drone outfitted with a digital video camera 75 feet above the company’s Industry City headquarters. The 10- minute flight marked the first legal commercial drone operation in New York City. It also turned out to be one of the last. Despite the huge demand for footage that only drones and their cameras can provide—for film and TV, real estate marketing and other Buses—commercial drone flights are almost impossible to conduct legally in New York because of strict rules against flying in dense urban areas and near airports.

BUCK ENNIS CONTINUED ON PAGE 14

APRIL 25, 2016 | CRAIN’S NEW YORK BUSINESS | 13 20160425-NEWS--0014-NAT-CCI-CN_-- 4/22/2016 3:08 PM Page 1

DRONES | THE BIRTH OF AN INDUSTRY

That has frustrated the many entrepreneurs in Jeff Brinks, and they hired engineers to build drone must keep 500 feet away from buildings, the city champing at the bit to get their drone their own. people or vehicles that are not part of the oper- businesses off the ground here. Backed by nearly $1 million in angel funding, ation, and cannot fly above any people or build- “There have been so many TV shows that want Aerobo runs a national operation from head- ings that have not provided permission. to film in New York that we’ve just had to say no quarters that have the feel of a DIY workspace. Aerobo was able to fly above Industry City to,” said Aerobo co-founder and Chief Executive Two 3-D printers in a side office crowded with only because the location was not in Class B air- Brian Streem, adding that he keeps a ledger of the worktables help produce quadcopters (which space and the company had the permission of work the company has lost owing to regulations. have four arms and, sometimes, eight rotors) everyone concerned. He uses it to show investors how much potential that Streem boasts beat anything that can be there is for aerial shoots in the city. bought off the shelf. Rooms with a view Drones are a hot topic right now only partly Currently, bird’s-eye views in New York are Not all operators have been so careful. Insiders because they bring to mind the controversies filmed from cranes and helicopters. But a day’s talk about a Wild West period among commercial over remote-controlled warfare. There are also worth of drone-enabled aerial cinematography drone companies when the rules were either the quadcopters that fly too close to airplanes, is a bargain—running from $4,000 to $10,000, unclear or ignored. That ended abruptly in airports and helicopters more than 100 times a or less than half the price of using a helicopter October, when the FAA levied a $1.9 million fine month. or renting a crane. And though a drone lugging against 20-year-old aerial photography firm But perhaps the most pressing aspect of all a professional-grade camera can spend only SkyPan International. The FAA alleged that the for entrepreneurs and investors is the opportu- about 13 minutes in the air without a change of Chicago-based company had conducted 43 nity for a wide range of commercial uses for batteries, it can go where a helicopter or crane flights in New York’s Class B airspace without small unmanned aerial vehicles, or UAVs, can’t fit. It can also fly close to the ground or receiving air-traffic-control clearances. which are drones weighing less than 55 pounds. 400 feet in the air (the upper limit under FAA SkyPan insists on its website that it never That market could explode if the Federal rules), and requires no setup, unlike shoots that penetrated “navigable U.S. airspace as defined Aviation Administration lights the fuse. use a crane, dolly or jib. by the FAA.” In an interview, owner Mark Segal The federal agency is in the midst of finaliz- “Drones set a camera free,” said Randy Scott said that all flights were conducted over private ing rules for commercial drone operations that Slavin, owner of Manhattan-based commercial property, that he used manned helicopters could make the remote-piloted, increasingly operator Yeah Drones and founder of the two- above 400 feet, and that the FAA always knew sophisticated flying machines a routine part of year-old New York City Drone Film Festival. what he was doing. business. But those rules also have to guarantee “They can navigate in a manner that’s as poetic Since pleading his case before the agency in the safety of the world’s busiest December, he has been waiting airspace while reassuring a pub- for a response. The FAA declined lic worried about the threats to comment. drones pose to privacy and the SkyPan has grounded its possibility that they could be New York operations, but the used in terrorist attacks. extent of its business over the The opportunities and con- years gives an idea of the enor- cerns may be nowhere more in mous market for drone services evidence than in New York. in the real estate industry. Aerial cinematographers want a “Much of our work gets used place in the city’s $9 billion TV [by designers] to decide how and movie production business. they’re going to lay out the The real estate industry, which “THERE HAVE BEEN SO MANY building based on the view cor- has a long history of using drone TV SHOWS THATWANTTO FILM ridor as you go up,” Segal said. photography from the develop- His New York projects go back ment to the marketing stages, IN NEWYORK THATWE’VE HAD to Riverside South in 1996, for would be another major sector. which he used a noisy, gasoline- There are also new uses such as TO SAY NO TO” powered single-rotor drone. bridge and building inspections More recently, he has taken and emergency services. high-definition, 360-degree pho- The Association for Unmanned Vehicle as the operator has the ability to be.” tos—still with a single-rotor drone, which he says Systems International, in a 2013 report, forecast The difficulties of working in New York have is safer and more stable than quadcopters—along the economic impact of commercial activity in partly to do with the strictness of the rules that the High Line, in Hudson Yards, for the planned the U.S. at $13.6 billion within the first three govern drone use in crowded areas, but also Nordstrom Tower near Central Park, for the years of the FAA setting its new rules. The trade with how they’re interpreted. Citing FAA regu- MoMA tower going up on West 53rd Street and for group estimated New York state’s cut at more lations and public-safety concerns, the Mayor’s 7 Bryant Park. than $400 million. Office of Media and Entertainment, which “That building [7 Bryant Park] was literally As new regulations hover in limbo, some oversees film shoots on public property, has shaped by the views we supplied,” Segal said, New York drone startups have become outlaw ruled out issuing permits for drones. referring to the concave corner of the 30-story operations, ignoring existing regulations that By contrast, the agency’s counterpart in Los office tower that looks toward the park. they see as outdated. And some, like Aerobo, Angeles, FilmL.A., has given out 111 permits for Companies pay SkyPan up to $30,000 for a the city’s biggest commercial drone operator, UAV-filming since the FAA regularly began suite of photographic, video and 3-D imaging are growing by working anywhere but here. allowing commercial operations in late-2014. services. In addition to helping designers, the “We’ve been in New Orleans, in Florida, in In a show of the confusion that typically sur- photos are used in obtaining financing and, North Carolina, South Carolina, New Mexico, rounds commercial drone regulation, the ultimately, with sales and marketing. Texas, Chicago and upstate New York,” Streem Mayor’s Office of Media and Entertainment “There’s a whole New York landscape in the said. “Our business is all over the country.” referred questions about city policy to the sky that’s its own form of real estate,” said Office of Emergency Management—which said David Williams, an architect turned owner of a Cameras in flight that it had no position on drones. branding and marketing firm, who has worked Streem, a 28-year-old New York University Another problem is the city’s proximity to with Segal for more than a decade. “Pricing film school graduate, has always loved the sci- airports. Much of New York City falls within [depends] on what you see from your window.” ence as well as the art of filmmaking and has Class B airspace, which is the area within five tried to combine both in the commercials he shot nautical miles of an airport. Any drone flight Technology and the law after college. Once a YouTube video showed him would require obtaining air-traffic-control Tasked with “integrating” unmanned aerial what a drone was capable of filming, he looked clearance—which an FAA spokesman said has vehicles into the national airspace as part of the around for automated flying machines powerful never been granted in New York’s airspace. A FAA Modernization and Reform Act of 2012, the enough to carry a cinema-grade camera. Not “handful” have been cleared elsewhere. agency issued draft rules in February 2015— finding any, he launched Aerobo in 2013 (the Other rules in the FAA framework for small then missed its September deadline for finaliz-

COURTESY OF AEROBO name then was AeroCine) with NYU classmate drones also make it hard to work in New York. A ing them. The target date now is June. And the

14 | CRAIN’S NEW YORK BUSINESS | APRIL 25, 2016 20160425-NEWS--0015-NAT-CCI-CN_-- 4/22/2016 3:14 PM Page 1

HITTING TURBULENCE: Alon Sicherman’s quest for permission to fly his drone regulatory landscape still may not be settled, led him on a wild-goose according to Arthur Holland Michel, co-direc- chase. tor of the Center for the Study of the Drone at Bard College. He pointed out that rapidly evolving technology is requiring a nimble approach on the part of the FAA. In addition, two FAA reauthorization bills going through Congress address issues of privacy and recklessness and encourage development of technology, like sense-and-avoid systems, that will make the devices safer. Other bills, at the state and city levels, are focused on the same concerns. “Those bills are going to create new pressures on [commercial operators],” Holland Michel said. “And when you have all these factors simultaneously in motion, it’s very hard to make predictions for what the next six months will look like.” So far, at least, the outlook is improving for commercial operators in New York. The draft rules, for instance, have dropped the requirement for a 500-foot perimeter of clearance on all sides of an operation. Flights over people who are not part of the operation are still banned, but the FAA is con- sidering allowing them as long as the drone poses no danger. Manufacturers would be an aerial shoot in the city. His quest for permis- over a ranch just north of Los Angeles. responsible for determining the impact the sion took him on a wild-goose chase across city The Chicago shoot required gaining drones would have in a collision with agencies and departments, with each pushing approvals from 25 neighbors. “I don’t really bystanders. him on to another one. want to be knocking door-to-door, but that’s Advocates familiar with the FAA’s approach what we have to do right now,” said Chief say its restrictions in Class B airspace could also Shoestring operators Marketing Officer Jon Ollwerther. change. “As the benefits of drones begin to be Fearful of running afoul of the FAA, and With the recent debut of its Aerobo Mini—a understood, and the FAA becomes more com- working for a major New York-based news so-called micro drone weighing less than 4.4 fortable with commercial operations, you might organization, Sicherman, 24, finally concluded pounds—the company is hoping to soon be able see another round of rule-making,” said he would be in the clear by launching from a to conduct flights over bystanders without Brendan Schulman, formerly a leading New private dock on City Island and keeping the needing permission. That could make Aerobo York attorney on these issues and now vice drone over water, far from public property or competitive in another sector with great poten- president of policy and legal affairs at the giant dwellings. tial: local newscasts, many of which can no Chinese drone maker DJI. He recently sat on the The dock was six miles from LaGuardia longer afford their own helicopters. FAA committee charged with making recom- Airport, just out of reach of Class B airspace. “It “There are 210 TV markets across the coun- mendations concerning flights over people. was literally nuzzling the area where you can’t try, and each one represents an opportunity for “A plane doesn’t fly down an alley [in Class B fly,” he said. us,” Ollwerther said. airspace], but a drone can,” Schulman added. Sicherman, a Columbia philosophy and visu- “There needs to be a different approach to the al arts graduate who runs L-Vision out of the Aerial drones gone underground different types of applications and risks.” guest room in his father’s Upper West Side New York is certainly a good place for any Local officials, for whom flights over crowd- apartment, became famous within drone circles operator willing to risk violating FAA rules. ed city streets conjure up terrorist concerns, last year for the novel way in which he obtained Those companies have gotten harder to find may be the hardest to convince. “There are the pilot’s license he needed to conduct his own ever since the wake-up call of the SkyPan fine. clearly some positive uses for drones, but for flights. After getting his “333 Exemption”—the “The demand is there in abundance,” said the public to be satisfied that they are safe we permit for a commercial operator under FAA the owner of an aerial photography startup that need some rules in place, and they’d better be rules—last May, he spent August in upstate New works regularly with architects and real estate enforceable,” said Daniel Garodnick, a City York becoming certified as a hot-air balloon developers. “We are enjoying close to zero Council member who has introduced legislation pilot. That satisfied the FAA requirement. competition right now.” that would give the Department of Transportation Sicherman and his partner, Micah Dickbauer, The owner said his firm provides clients with oversight of commercial operators. “Ideally, the started out with a DJI Phantom 2 drone ($2,500, aerial views and 3-D mapping and imaging. It federal government would make rules that including accessories), and recently added a also shoots music videos and television com- ensure the protection of dense urban environ- Freefly Alta ($30,000 with all necessary gear). A mercials—in New York and elsewhere. ments like New York City’s. In the absence of heavier drone, it can carry bigger cameras for The fear in the industry is that one accident that, we will move to strengthen those rules high-end cinematography. L-Vision is building in New York involving scofflaw drones will turn ourselves.” a business by shooting news pieces for Vice, the public against commercial operations. (So Right now, City Council members are choos- music videos and real estate marketing pack- far, all of the well-publicized incidents have ing between waiting for the FAA to issue its ages, almost all outside of New York. involved recreational users.) But the owner rules and pushing ahead on their own. There is “You do what you can to be as legal as possi- insisted his operations are safe. He said his firm some question about the kinds of rules the city ble,” Sicherman said. uses only licensed pilots, shoots at hours of the will be able to enforce, however, since the FAA For all the difficulties of working in New York, day when the fewest people are around, and, has made clear that flight regulations fall under there are advantages. Aerobo has developed when flying near a heliport, provides advance its jurisdiction. business with pretty much all of the broadcast notice of the drone’s presence. City regulations might at least clear up some and cable news organizations, and raised its pro- He acknowleged that he’s still violating FAA of the confusion that has created obstacles for file in the film and TV production community. regulations. But he likened his business to that of entrepreneurs, particularly those not large Recently, in the course of a single day, a compa- marijuana growers in California and said he was enough to have a national operation like ny drone was providing a live feed of a spring getting a head start on a turning tide. Aerobo’s. snowstorm along the Massachusetts coastline for “This whole thing is based on the idea that “At every turn, something new pops up,” NBC News; another was flying over an aban- within a short amount of time it will be a com- said Alon Sicherman, founder of the Manhattan- doned warehouse in Chicago for a network series pletely legitimate business,” he said. “We want Ⅲ BUCK ENNIS based startup L-Vision, who recently conducted pilot, and a third was shooting a car commercial to be ready for when that time comes.”

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18 | CRAIN’S NEW YORK BUSINESS | APRIL 25, 2016 To place your listing, contact Joanne Barbieri • 212-210-0189

ENGINEERING HUMAN RESOURCES PROFESSIONAL SERVICES Warburg Realty CH2M Mercer Talent Inc. Clelia Peters, 37, Thomas Klin, 47, has Jeff Chernosky, 35, Michael Henderson, was promoted to been promoted to has been promoted 45, joined Talent Inc. President. She previously held the CH2M’s New York to Partner in as Chief Technolo- Account Manager gy Officer. He was position of Director Mercer’s M&A and Senior Vice Pres- formerly Senior of Strategy, Brand Transaction Services ident. A transpor- Director, Technology and Innovation. tation planner and group in the New at Thomson Reuters. The President of Warburg Realty 12-year veteran of York office. Jeff has Responsible for Talent Inc.’s tech- is responsible for the development CH2M, Tom is focused on continu- 14 years of experience working on nology strategy and recruitment of Warburg’s overall and business ing the global engineering leader’s M&A transactions focusing on pro- efforts, Mr. Henderson is based development strategies and for growth in the region. Tom will con- viding human capital and employee in the company’s New York City maintaining a focus on innovation tinue to steward important client headquarters. He will lead the tech- benefits diligence and post-closing and revenue growth. service including with the City of nology strategy for the company, implementation services to both New York, Port Authority of New where his team will develop resume York & New Jersey, Metropolitan private equity and corporate clients. and career-service solutions for job TECHNOLOGY Transportation Authority, Amtrak, He has developed his experience seekers, as well as its internal oper- Dashlane various federal agencies, as well as consulting for multinational clients ational, workflow, and automation David Lapter, 42, private sector clients. CH2M is pro- on a wide variety of M&A topics, systems. joined Dashlane viding its engineering and project including integration/divestiture management expertise in resiliency, as CFO. 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GOTHAM GIGS

WORKING HIS MAGIC: David Korins with a miniature version of the Hamilton stage set he designed.

Setting the scene, subtly DAVID KORINS A Broadway set designer puts Alexander Hamilton in historical context

BORN Attleboro, Mass. avid Korins grew up wanting to play pro- tions of the Founding Fathers. “We are telling the 39 fessional basketball. But when he peaked at story of the people who created the framework that AGE 6 foot 2 in college he decided to give sports our country’s laws are made from. The set is meant to EDUCATION University of a rest and took an art class, Beginning be a scaffolding from which the country is built.” Massachusetts at Amherst—he DTechniques in Design. The 39-year-old set designer is now hard at work majored in theatrical design. That eventually led to an internship at the with Hamilton’s creator, Lin-Manuel Miranda, and HAMILTON CAMPAIGN Korins Williamstown Theater Festival, where he would producers to take the hit musical on the road. was so keen to work on the musical work for a dozen summers. Chicago will be the first stop for an open-ended run that he produced sketches and Korins has become one of Broadway’s in September, with a separate national quoted Hamilton lyrics to the most sought-after scenic and production “I believe that a tour come January. To the naked eye, show’s director, Thomas Kail. “I told designers. Before he created the sets for fair amount of Hamilton’s stage design will look exact- him, ‘I’m not going to throw away the Pulitzer Prize-winning Hamilton, the show’s ly the same in Los Angeles or Houston. my shot.’ I felt that taken with the Korins helped put Motown, Annie, Bring It But Korins explains it will change in material.” On, Chinglish and Godspell in context. success is about each city to adapt to the different sizes THE ONE THAT I WANT Korins In 2004 he founded David Korins designers using and shapes of the theaters’ stages. was initially on the fence about Design, which now employs 10 in restraint Wherever a Korins production is, working on Grease Live!—Fox’s northern Chelsea. As principal design- ” however, it will have the designer’s three-hour production, which gar- er, Korins has imagined environments signature subtlety and spareness. “I nered the best ratings for a TV for multiple media including film (Winter Passing), believe that a fair amount of the show’s success is musical since NBC’s Sound of television (Grease Live!), commercials (Target) and about designers using restraint.” Music Live in December 2013. live concerts for the likes of Kanye West and Sia. “There are these big, huge shows that people think “Paramount and Fox paid me for “I wouldn’t be as good or successful in any one must have good scenery because there is so much of one month to have an ideation medium without working in the others,” Korins said. it,” Korins said. “But Hamilton is a representation of a phase. Having time to think about For Hamilton’s turntable stage nestled in old brick successful design that people don’t pay much atten- the project was instrumental.” — ADDIE MORFOOT BUCK ENNIS and wooden scaffolding, Korins evoked the aspira- tion to. That’s a good thing.”

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SNAPS

Eight over 80 raise $1.2 million Eight New Yorkers over the age of 80 were honored at a benefit gala for the New Jewish Home, which provides a wide variety of services for the elderly, including housing. Among those recognized were gossip columnist Liz Smith and the puppeteer behind Sesame Street characters Big Bird and Oscar the Grouch, Caroll Spinney.

Singer and honoree Harry Belafonte and Honorees Joy Henshel, a trustee of the New Jewish Home his wife, Pamela Frank, at the New Jewish and Surprise Lake Camp, and Sesame Street’s Caroll Home benefit gala, held at the Mandarin Spinney (holding one of his alter egos, Oscar the Grouch) Oriental New York on April 11. at the New Jewish Home gala.

$1 million for justice Mission Society meets its mission

Former New York Gov. David Paterson and Stifel Financial Corp. Assistant Vice President Mary Galda at the April 13 benefit for the New York City Mission Society, which provides social services to Willkie Farr & Gallagher Partner Michael S. Schachter, New York City Bar the needy. Association President Debra L. Raskin, and CBS Corp. Senior Vice President and Chief Legal Officer Lawrence Tu at an April 13 benefit for the City Bar Justice Center, which provides legal services to New Yorkers who can’t afford them, that raised $1 million.

City Bar Fund Chair Jane C. Sherburne, Willkie Farr & Gallagher Chairman Steven J. Gartner and City Bar Justice Center Executive Director Lynn M. Kelly at the Justice Center benefit, which was held at the New York City Bar Zack O’Farrill; his mother, Alison O’Farrill; his father, Grammy winner Arturo Association building on O’Farrill; and brother Adam O’Farrill at the Mission Society benefit, which West 44th Street. raised $450,000 and honored Arturo. A. HOYER, PATRICK MCMULLAN, RICK KOPSTEIN

SEE MORE OF THIS WEEK’S SNAPS ONLINE AT CRAINSNEWYORK.COM/SNAPS GET YOUR GALA IN SNAPS. EMAIL THERESA AGOVINO, [email protected]

APRIL 25, 2016 | CRAIN’S NEW YORK BUSINESS | 21 20160425-NEWS--0022-NAT-CCI-CN_-- 4/22/2016 2:09 PM Page 1

FOR THE RECORD*

NEW IN TOWN Chisai Sushi Bar with local Bronx tech BANKRUPTCIES style blog will move its ant was represented by 569 Lincoln Pl., Brooklyn company StartUp Box to Boston office to the entire JLL’s David Berke and Antico Noè The Crown Heights open its eighth location in 1490 Bedford Ave. third floor in the 11-story Robert Gibson. The land- 220 E. 53rd St. restaurant boasts locally the South Bronx. Menu 123 Church Ave., Brooklyn building between Fifth lord, 69-73 Greene Street The 70-year-old sourced sustainable fish. items include homemade Filed for Chapter 11 bank- Avenue and Broadway. Owner, was represented Florentine eatery opened berry or chocolate pop- ruptcy on April 11. The fil- The tenant was represent- by Sinvin Real Estate’s its first U.S. location in Lilia tarts, espresso and lattes. ing cites estimated assets ed by ABS Partners Real Christopher Owles and midtown east. The menu 567 Union Ave., Brooklyn and liabilities of Estate’s Jeff Sharon. The Sarah Shannon. boasts panini and salads. Owner and chef Missy Blue Dog Kitchen $1,000,001 to $10 million. landlord, Kaufman Robbins, who earned a 37 W. 43rd St. The creditors with the Organization, was repre- Maxx signed a three-year Dirty Precious Michelin star at A Voce on The breakfast and lunch largest unsecured claims sented in-house by lease for 3,700 square feet 317 Third Ave., Brooklyn Columbus Circle, crafted restaurant secured a fifth are Rachel Siony and Michael Heaner and Elliot at 41 Gardner Ave. in The women-owned cock- the modern Italian menu location in midtown west David Bardi, owed Warren. The asking rent Williamsburg. The apart- tail bar opened in at this Williamsburg near Bryant Park. It is $310,000; New York City was $65 per square foot. ment furnishings retailer Gowanus. Specialty restaurant. expected to open in two Department of Finance, plans to use the entire cocktails include months. owed $19,000; and RETAIL ground-level warehouse Unchained Melody, Environmental Control, Burton Snowboards and showroom space on made with bourbon, COMPANY MOVES Chick-fil-A owed $3,000. signed a 10-year lease for Ingraham Street for selling orange blossom, honey 1180 Sixth Ave. 6,400 square feet at 69 its tiles, fixtures and lux- and lemon. The menu Agern The fast-food chain Greene St. in SoHo. The ury items. The tenant was offers a small selection of 89 E. 42nd St. opened a second store in REAL ESTATE DEALS equipment and outerwear represented by Kalmon snack foods. Danish culinary entrepre- midtown west. The new maker/retailer will occupy Dolgin Affiliates’ Vincent neur Claus Meyer opened a outpost is focused on COMMERCIAL 3,000 square feet on the Lopez and Jacques Wadler. Frankel’s Delicatessen & Nordic restaurant within faster takeout, with iPad Barstool Sports signed a ground floor and 3,400 The landlord, Levy Realty, Appetizing Grand Central Terminal. ordering available in addi- five-year lease for 5,909 square feet on the lower was represented in-house. 631 Manhattan Ave., Meat and seafood entrees tion to registers. square feet at 13-15 West level between Spring and The asking rent was $19.20 Brooklyn are available a la carte or 27th St. The sports life- Broome streets. The ten- per square foot. Brothers Zach and Alex on tasting menus for $120 Fresh Kills Frankel opened a or $145. 161 Grand St., Brooklyn ABOUT THIS SECTION Greenpoint shop that The owners of Long Island For the Record is a weekly listing of information from the public record that can help * offers classic Jewish deli Birch Coffee City bar Dutch Kills businesspeople in the New York area find opportunities, potential new clients and updates items such as hand-rolled 866 Hunts Point Ave., Bronx opened a cocktail bar in on customers. To ask questions or get more information on this section, contact Crain’s bagels, smoked fish, latkes The New York City-based Williamsburg with $6 research department or [email protected]. and hot brisket. coffee shop partnered beers and $9 cocktails.

Photo Credit: Buck Ennis, Crain’s New York Business Monday, May 2, 2016 REAL ESTATE CONFERENCE Sheraton Times Square 8:00 a.m. – 8:30 a.m. Registration and Networking Breakfast BUILDING SOLUTIONS 8:30 a.m. – 12:00 p.m. Program Crain’s will bring New York’s most impressive players in real estate and government Cost to Attend: to explore the hottest issues impacting the city’s most important industry. $300 for individual ticket(s) $3,000 for table(s) of 10 PLENARY: The Birth of a PANEL DISCUSSION: The future of the 421-a tax break – You must be pre-registered to attend this event. Neighborhood and rental housing in New York No refunds permitted. and Beyond For more event information: Ashlee Schuppius 212-210-0739 JOHN BANKS VICKI BEEN HUGH KELLY GARY LABARBERA RON MOELIS [email protected] President Commissioner Ph.D., CRE, President Co-founder Real Estate Board NYC Department Clinical Professor Building & L+M Development For sponsorship opportunities: of New York of Housing of Real Estate, NYU Construction Partners Irene Bar-Am Preservation Schack Institute of Trades Council of DANIEL L. DOCTOROFF STEPHEN ROSS & Development Real Estate, Principal, Greater New York 212-210-0133 Chief Executive Ofﬁ cer Chairman & Founder Hugh F. Kelly Real [email protected] Sidewalk Labs Related Companies Estate Economics PANEL DISCUSSION: Taking the measure of Penn Station and the Cuomo administration’s plans for it REGISTER TODAY »crainsnewyork.com/events-realestate2016 «

Gold Sponsor:

ANTHONY COSCIA GINA POLLARA CHRIS WARD U.S. SENATOR Chairman of National President Senior Vice President & CHARLES E. SCHUMER Railroad Passenger The Municipal Art Chief Executive Corporation, Amtrak Society of New York Metro New York, AECOM

22 | CRAIN’S NEW YORK BUSINESS | APRIL 25, 2016 20160425-NEWS--0023-NAT-CCI-CN_-- 4/22/2016 2:09 PM Page 1

PHOTO FINISH

Splash! n a recent Wednesday evening, pedes- trians paused on FifthO Avenue to snap photos of a swimming hole that defied gravity. The Rockefeller Plaza art installation by the duo Elmgreen & Dragset, titled Van Gogh’s Ear, takes a page from Marcel Duchamp, Jeff Koons and other artists who’ve transformed everyday objects into art. Rock Center owner Tishman Speyer installed the pool (on display until June 3) with the help of the Public Art Fund, a nonprofit that exhibits art outside museums and galleries. Founded in 1977, the organization now underwrites the installation of about six public pieces a year. The biggest costs are fabrication and maintenance, which accounted for $2.2 million—44% of its budget in fiscal year 2013—with $550,000 going to hoisting and scaffolding company Safway Atlantic, according to the fund’s tax returns. Maintenance, however, can help only so much. The works must to some degree surrender to the elements. “Even the classic materials like bronze will weather,” said Public Art Fund president Nicholas Baume. “Some artists think that’s very beautiful.” — PETER D’AMATO PETER D’AMATO

APRIL 25, 2016 | CRAIN’S NEW YORK BUSINESS | 23 B:11.125” T:10.875” S:10.25”

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