GOTHAM GIGS A FOUNDATION OF JUSTICE Ford exec’s values shaped by horror CRAIN’S® of apartheid P. 7 NEW YORK BUSINESS VOL. XXX, NOS. 27, 28 WWW.CRAINSNEWYORK.COM DOUBLE ISSUE JULY 7-20, 2014 PRICE: $3.00 Farm-to-table 2.0 Tech fuels boom in online grocers who get fresh food to customers faster BY MATTHEW FLAMM Technology has come to the farm-to-table movement, and the market for organic squash blossoms, pastured eggs, artisanal cheese and hor- mone-free ham may never be the same again. The ease with which the grocery supply chain can now be managed through software and mobile devices has driven an explosion of invest- ment in food and grocery e-commerce startups—close to $500 million in the past year. That’s helped spawn growth in the farm-to-table niche—and in its East Coast epicenter, Brooklyn. Competition has grown so intense among local-food delivery firms and entrenched players like FreshDirect that one Brooklyn startup, Farmigo, recently switched its focus from the boroughs to the suburbs. Experts say a historic shift in the formerly sleepy sector is taking place as a result of new technology meeting pent-up demand. “Distribution has always been the biggest problem for the local-food movement,” said Carlotta Mast, senior director of content at New Hope Natural Media, which covers the natural foods industry. The startups bring an Amazon.com-like user experience to the traditional farmers See FARM-TO-TABLE on Page 29 YES, HE DELIVERS: SALES$620B OF GROCERIES $56.9BSALES OF ORGANIC $486MAMOUNT VENTURE Benzi Ronen has nationwide in 2013 and natural foods CAPITALISTS invested in shifted Farmigo’s nationwide in 2013 grocery e-commerce focus to the suburbs, companies in the year though the company is ended March 31 headquartered in Brooklyn. buck ennis REPORT REBUILDING NY Winner-take-all approach could Better, faster, cheaper bridges P. 12 Builders who generate power in tariff tiff P. 12 put next-gen pay phones on hold Rebound stokes demand for these jobs P. 14 placing mangy, graffiti-ridden than a dozen years ago. PLUS: THE LISTS Contract may yield kiosks, change may take a while, The city, which laid out the plan Wi-Fi citywide, but judging from the hornet’s nest the in a request for proposals in May,be- Architecture firms P. 15 city has stirred up. lieves a single winner will yield a uni- Engineering firms P. 17 change rattles some At issue is the decision to CROSSED fied pay-phone network award the installation and with 21st-century booths Construction firms P. 18 operation of 10,000 “public WIRES designed to supply free Wi- BY MATTHEW FLAMM communications struc- FOURTH IN AN Fi and, possibly, cellphone tures” to a single winning OCCASIONAL charging across the five A new era for New York City’s out- bidder.That’s a sharp diver- SERIES boroughs. 27 5 dated pay phones will begin to take gence from the current The RFP has certainly shape in October, when the current arrangement in which 10 companies attracted interest: Representatives 15-year-old franchise expires, mak- hold contracts to manage what’s left from Google, IBM, Samsung and ing way for a new franchisee. But of the city’s pay-phone infrastruc- Cisco were among the crowd in at- while government officials envision ture, which has dwindled to around tendance at an information session sleek,solar-powered Wi-Fi hubs re- 9,000 phones from 35,000 more See PAY PHONES on Page 29 NEWSPAPER 71486 01068 0 MANAGING EDITOR’S NOTE Paving the way FYICRAINSNEWYORK.COM Like much of Brooklyn, Nostrand Avenue in Bed-Stuy is in the midst LIRR strike could derail of a major renovation, a nearly city businesses three-year, $23.5 million face-lift. Living next to it, though, has been looming strike by Long Island Rail awful: Baghdad-level dust storms; Road employees could prove cratered roadbeds; detritus in my Acataclysmic for city businesses. ¶ Jeremy Smerd shoes. But the inconvenience is Three weeks before the potential July 20 paying off. New roads, sidewalks strike, the Metropolitan Transportation and sewers are coming into view. Authority extended a deal to unions that Watching a good cement-pour, the milky mass would increase the authority’s budget by $200 settling into a rebar-filled mold, stops my commute million over the next two years. With the city, in its tracks.The effect is salutary. Walking home on state and federal governments reluctant to newscom concrete firma, I feel human again, a level sidewalk boost funding for the MTA,and the transit leveling my mood. A coffee shop, inspired, put out a agency reluctant to raise fares beyond scheduled increases, it seems unlikely that it can go much bench and flower box. “We’ve been waiting a long higher. ¶ That reality is causing a growing sense of panic for city businesses that have not seen time for this,” the manager said. It seems like New the LIRR go silent since 1994. “The majority of city businesses depend on employees being at Yorkers are always waiting for basic amenities. It’s their desks, in shops, restaurants and hospitality locations,” said Manhattan Chamber of true that billions of dollars are being spent to make Commerce President Nancy Ploeger. ¶ Some transit experts however, see the mutually-assured- up for years of disinvestment (see Page 4 for our destruction dynamic of the negotiations as a sign that an agreement might be reached in time.“It story on East New York). Yet it’s never enough. seems to me that both sides are pretty close and should do the deal,” said former MTA Chief Infrastructure for everyone remains a pipe dream. Executive Elliot “Lee” Sander. “If not, there will be significant disruption to the public and But does it have to? Clearly, no. As Crain’s reports in damage to the local economy.” —thornton mcenery our Rebuilding NY section (starting on Page 12), there are ways to cut costs while giving the private SODA BAN CANNED. More than two giant improve the rollout of mobile- sector a reason to invest. And Mayor Bill de Blasio’s years after the city first proposed a app ads. … ATLANTIC YARDS GETS HOORAY! ambition to end road deaths is the most politically ban on large sugary drinks, the state’s FAST-TRACKED. Developer Forest PASSNEGERS AT AIRPORTS in the highest court rejected the city’s plea City Ratner reached a deal with a New York area will get 30 minutes astute approach I’ve seen to framing the issue of to reinstate the ban.The decision was coalition of community groups and of free Wi-Fi starting this fall. infrastructure investment in human terms. Saving seen as a victory for the soft-drink in- the state to complete the construc- lives is more than just lowering the speed limit. You dustry. It was the city’s final appeal. tion of all 2,250 affordable-housing … DIGITAL MEDIA FIRM EXPANDS.Vice units at the Atlantic Yards project by literally must build safe streets, bridges and subways. Media will invest $20 million in a 2025. As part of the pact, the coali- I look forward to discussing the administration’s new 60,000-square-foot headquar- tion agreed not to sue the developer, plans at our July 14 Rebuilding NY Conference, ters space in Williamsburg, Brook- and if Forest City does not meet the where I’ll interview Transportation Commissioner lyn.The company plans to more than construction time line it will have to double its 400-employee staff over pay a penalty of $2,000 per unit. Polly Trottenberg. It will be one of many important five years. If Vice hits its hiring tar- Meanwhile,China-based Greenland OY VEY! discussions that day about building a city that is safe get, the company will receive $6.5 Holding Group completed its deal to THE U.S. and (structurally, psychically) sound. million in state tax incentives. … buy a 70% stake in the Brooklyn proj- SOCCER GOOGLE HEARS THE MUSIC. The ect. … BNY MELLON SPURNS NJ. After TEAM was eliminated search giant has contemplating a from the THIS WEEK IN CRAIN’S bought music- ‘Unacceptable move to Jersey City, World Cup streaming startup Bank of New York when it was defeated by Songza Media to bol- failures ... Mellon will take Belgium, 2-1, IN THE BOROUGHS-------------------------- 4 ster its multimedia have cast a 350,000 square feet in an extra- IN THE MARKETS----------------------------------5 services. Google re- at Brookfield Place time match. portedly paid more shadow over in lower Manhattan THE INSIDER -----------------------------------------------6 than $39 million.Un- for its new headquar- ap images GOTHAM GIGS------------------------------------------7 like competitors Pan- the entire ters. The bank re- dora and Spotify, ceived state subsidies board member of the museum since SMALL BUSINESS ------------------------------ organization’ 9 Songza relies on lis- to remain here, but 2000, will become chair.The arts ac- —An initial report OPINION --------------------------------------------------------10 teners’ moods and did not get a tax break tivist is the first woman to hold that reviewing the conduct of BNP times of day to gener- the Port Authority of from the city. … post in the museum’s 200-year histo- GREG DAVID--------------------------------------------11 ADMITS GUILT. JAMIE DIMON’S HEALTH SCARE. ate playlists. Songza, New York and New Jersey BNP ry. … REPORT-----------------------------------------------------------12 now based in Long Paribas will pay an JPMorgan Chase & Co. CEO re- Island City, Queens, will move into $8.9 billion penalty after admitting to vealed that he has throat cancer. In a THE LISTS ----------------------------------------------------15 Google’s Chelsea headquarters.