20120604-NEWS--0001-NAT-CCI-CN_-- 6/1/2012 7:15 PM Page 1 INSIDE REPORT TOP STORIES THE A TO Z Drink GUIDE TO stink: Big SILICON Soda aims ® ALLEY to fight PAGE 15 Bloomberg ban VOL. XXVIII, NO. 23 WWW.CRAINSNEWYORK.COM JUNE 4-10, 2012 PRICE: $3.00 PAGE 2 Sugar buzz: Readers weigh in on the idea PAGE 10 IT’S ALL RELATED To your health: Late Trio dominates nightclub owner development in bequeathed bar’s profits to hospitals NYC. Here’s “IF THE CITY DOES WELL, WE ALL DO PAGE 3 how they do it WELL,” said Related Cos. CEO Stephen Tax cuts for wage Ross, depicted here BY DANIEL MASSEY with partners Jeff hikes: A political Blau (left, in illustration) and deal takes shape When Jeff Blau started at The Re- Bruce Beal Jr. (right). lated Cos. in 1989, the first task in Albany Chief Executive Stephen Ross THE INSIDER, PAGE 8 gave the 21-year-old was to buy up auto shops in Willets Point, Queens. Related built stores for Kmart,and the retailer wanted one in the area. Nothing came of it, but 23 years later, Related is about to gain control of Willets Point in a high-stakes gamble to salvage the city’s most complicated real estate development project. To understand why Related tri- umphed over three other bidders there is to understand why it has become the leading developer in a city notoriously difficult to build in: Related thrives on that com- plexity.It is better at navigating the BUSINESS LIVES obstacles—from bargaining with unions to compromising with city GOTHAM GIGS officials—and more willing to take NASCAR’s marketing risks than its rivals. It thinks in chief hits the road P. 25 decades, not quarters. See RELATED on Page 23 ● ANNE FISHER Seed money for social harperfred entrepreneurs P. 25 ● MOVERS & SHAKERS Tracey Stewart finds her “moment of Zen” P. 26 Big banks losing M&A biz E-tailer ● GAEL GREENE A dream of a wine bar opens P. 27 becomes Bad PR taking its toll as smaller i-banks SHIFTING FEE-SCAPES grab greater share of corporate mergers M&A fee market share retailer INDEX MAJOR BANKS porations on their mergers and ac- NEW YORK, NEW YORK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _6 BY AARON ELSTEIN quisitions. 2007: 70% Bonobos stores VIEWPOINT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _10 Goldman Sachs,Morgan Stan- For all the public relations debacles ley and a handful of big institutions hope to replicate OPINION _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _11 suffered by the giants of Wall have dominated this field for SMALL BUSINESS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _12 Street, there never was much evi- decades and are especially eager to online success REAL ESTATE DEALS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _13 dence that negative PR was actual- protect it, because M&A advisory 2012: 56% ly hurting their business. work means ultraprofitable fees BY ADRIANNE PASQUARELLI CLASSIFIEDS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _20 Until now, that is. with less risk and regulatory scruti- HOT JOBS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _25 Cracks are starting to show in a ny than trading or other Wall BOUTIQUE BANKS Step off the elevator into the new- 2007: 8% THE WEEK AHEAD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _27 highly lucrative franchise for the Street activities. ly expanded Chelsea headquarters big banks: advising blue-chip cor- Yet there are unmistakable and “guideshop” of e-commerce signs that merger-minded corpo- menswear brand Bonobos Inc. and rate leaders are starting to look for you hit a sea of color—magenta advice from anyone but the too- khakis, turquoise short shorts and big-to-fail banks. These banks’ corn-yellow oxfords. When the take of all the fees generated by 2012:17% company debuted five years ago, merger activity in North America most young men wouldn’t have so far this year has dropped to 56% been caught dead in seven-inch from 70% five years ago, according halibut-print swim trunks. Now NEWSPAPER See BIG BANKS on Page 24 Figures YTD. Source: Sanford C. Bernstein & Co. See E-TAIL on Page 23 20120604-NEWS--0002,0003-NAT-CCI-CN_-- 6/1/2012 6:54 PM Page 1 COMMENTARY Beverage makers sour A good cause on sweetened-drink ban in our backyard will be hit hardest because they will Move could cut into their 85% margins have to shift their focus to less lucra- tive products, like energy drinks and n spring, thoughts turn to nature. So it fig- juices, that cost more to produce. And ures that Central Park: An Anthology BY LISA FICKENSCHER they are fighting back the hardest. (Bloomsbury,$16),featuring writers like Su- After news of the mayor’s plan broke It’s no wonder that the business com- last week, the American Beverage As- san Cheever, David Michaelis, Mark Hel- munity has reacted harshly to Mayor sociation ran an ad in The New York prin, Jonathan Safran Foer and Bill Buford, Michael Bloomberg’s proposal to Times. Among its claims is that sugar- and in part benefiting the Central Park Conservan- banish super-size portions of sugary sweetened beverages make up just 7% drinks: Soda is a cash cow like no of the average person’s daily diet. I newscom cy,which runs Manhattan’s 843-acre masterpiece of other in the food-service industry. SUGAR HIGH: Soda provides fat profit margins. The ad comes on the heels of a sev- landscape architecture, should have just hit stores. “The profit margins are very high en-figure campaign launched in the So, too, that on the night of June 6, the conservancy on beverages,”said Alan Vituli,former city in April that touts the industry’s chairman and chief executive of Car- implements his ban, which will pro- diverse product lines and its efforts to hosts its annual said Doug Blon- rols Restaurant Group Inc., which hibit restaurants and other retailers reduce the calorie count of certain Taste of Summer sky, president of owns more than 500 Burger Kings in from selling sugary drinks containing beverages. party at the park’s the conservancy. the U.S., including New York. more than 16 ounces or more than 25 “Offering such a wide range of low- Bethesda Terrace. “But we’d never That is an understatement. calories per eight ounces, consumers and no-calorie options means on aver- A donation of drilled down to A soda priced at $1.49,for example, will have to change their purchasing age there are now 23% fewer calories $400 ($10,000 to find out which costs a retailer approximately 25 cents. habits—and restaurants will, too. per serving,” an ad from April claims. $20,000 for ta- held the donors.” The remaining $1.24 is pure profit. “Over time, if you make consump- A spokesman for the association, bles) will buy you Now they Beverage manufacturers such as tion more difficult,like the tax on cig- Chris Gindlesperger, said the trade grub from 40 city have,and the pic- Pepsi and Coca-Cola vie for exclusive arettes, ultimately consumption will group will be exploring its legal op- restaurants—in- ture is nowhere contracts with restaurant chains like diminish,” said Mr. Vituli. tions to combat the proposed ban, but cluding ‘21,’ Ar- near as pretty as Burger King and Applebee’s, and of- he did not elaborate. mani Ristorante, MICHAEL the park on a June fer financial incentives. Soda’s shrinking sales Soda may be the biggest target of the Benoit, Circo and GROSS day. On average, “We spend months and months In fact, soda sales have been declin- ban,but sweetened teas are also includ- Le Cirque, Ser- only 17% of park- evaluating the contracts to see which ing for more than a decade, while sales ed. Honest Tea, for example, which is endipity, SD26 side apartments one will give us the most,” said Zane of bottled water and energy drinks have considered one of the healthier brands and Swifty’s— have chipped in Tankel, chief executive of Apple- been increasing, partly in response to because of its low sugar content and or- entrée to a silent auction and to maintain their backyard Metro Inc.,which operates more than public health campaigns aimed at edu- ganic ingredients, would not be able to dancing under the stars.