20150202-NEWS--0001-NAT-CCI-CN_-- 1/30/2015 7:41 PM Page 1 MIDLIFE CAREER SWITCHERS BREAK THE CRAIN’S® CODE P. 21 NEW YORK BUSINESS VOL. XXXI, NO. 5 WWW.CRAINSNEWYORK.COM FEBRUARY 2-8, 2015 PRICE: $3.00 The house that Ira built Trial begins for mining maven Ira Rennert, accused of looting his company to build the nation’s largest private mansion BY AARON ELSTEIN 164-seat theater, a basketball court, a property-tax bill last year was Mr. Rennert against a trustee repre- gymnasium and a two-lane bowling $756,026.42. ¶ Here’s another inter- senting creditors in a failed mining Lots of billionaires own huge houses alley. Estimated to cover 62,000 esting thing about the place: Mr. outfit known as MagCorp. The in the Hamptons. Ira Rennert’s is in square feet, the colossus is believed to Rennert is accused of looting a com- trustee contends that Mr. Rennert a league of its own. ¶ His estate, be the largest inhabited private resi- pany to help pay for it. ¶ That potent drove MagCorp into bankruptcy by called Fair Field, is said to sport 29 dence in the country. Southampton allegation stands as the centerpiece of having nearly $120 million funneled bedrooms, 39 bathrooms, three din- town records show the abode’s as- a trial beginning Feb. 2 in federal from the ailing company and using ing rooms, three swimming pools, a sessed value is $248,477,200, and its court in Manhattan. The case pits See HOUSE on Page 19 newscom REPORT Developers race to secure HEALTH CARE Community groups to play new role in getting tax break before law expires NYers healthy P. 11 ments that allow developers of rental renewed,but with changes making it With Silver gone, apartments to reduce their real estate less generous to builders. THE LIST taxes on new projects for up to 25 Now developers aren’t waiting for key subsidy’s future years. the Assembly to fill its pow- Largest health care even more unclear The removal from the er vacuum. Instead they are nonprofits P. 13 speakership of Assembly- $1.1B adding their projects to the man Sheldon Silver, a man TAX REVENUE 71,950 properties already BY DANIEL GEIGER forgone by the long seen as a friend of the city in the fiscal receiving the abatement in city’s real estate industry, year ended June its current form. 2014 from 40- 05 The expiration of a key real estate tax has exacerbated developers’ Toby Moskovits, a year-old program 5 break on June 15 has touched off a uncertainty over the tax Brooklyn-based builder, fierce race among developers to break’s future. for instance, is rushing to break ground on residential projects The 40-year-old tax-break pro- start work on two apartment build- across the city before time runs out. gram,which cost the city $1.1 billion ings that she hopes to erect on sites At stake are hundreds of millions in forgone tax revenue in the fiscal purchased last year in Long Island of dollars in so-called 421a abate- year ended in June 2014,will likely be See DEVELOPERS on Page 19 NEWSPAPER 71486 01068 0 20150202-NEWS--0002-NAT-CCI-CN_-- 1/30/2015 6:46 PM Page 1 ASSISTANT M.E.’S NOTE Spin city FYICRAINSNEWYORK.COM I took part in a panel discussion recently on discerning spin from truth when politicians speak. I It’s Brooklyn or bust estimated that 90% of what they for de Blasio DNC bid say is spin. But it’s not just elected officials. Everybody spins. Interest ew York City wants to host the groups, flacks, even holier-than- 2016 Democratic National thou good-government groups Convention, and it’s up Erik Engquist N assail me daily with hundreds of against Philadelphia and Columbus, messages spinning ostensibly true Ohio.The national party committee is information to suit their purposes. I don’t resent the expected to decide the winner this Debbie Wasserman spin; these people are advancing their causes. But it’s week. DNC boss Schultz nycmayorsoffice enough to make my head, well, you know. Last week, was in town on Friday to hear Bill de Blasio the day after the mini-blizzard, I got an email from New York’s closing arguments. She huddled with Mayor and his top aides, and the Committee for Taxi Safety calling Uber’s surge toured the Barclays Center. ¶ Last Thursday, the mayor unveiled a 119-member host committee Kenneth Chenault pricing “a safety concern.” Wait, what? Usually I pick overflowing with boldfaced names, from American Express Chief Executive to Anna Wintour up the spin right away, the way a batter recognizes a Vogue editor .The message? New York has the star power—and wealth—to afford a curveball out of a pitcher’s hand. But this was a blur. good show for the Democrats.The city has already raised $6.5 million, and has commitments for Surge pricing makes Uber rides more expensive another $13.5 million.The 2004 Republican convention generated about $250 million in when demand is high, such as during bad weather, economic activity. ¶ The city’s argument can be reduced to two planks: It has enough money to Hillary Clinton and basic economics says higher prices reduce give the presidential nominee (most likely ) peace of mind and a mayor who will demand. If Uber offered $5 rides during storms, lots still be in office when the convention takes place. Philadelphia’s mayor is term-limited, and of New Yorkers would e-hail—despite the mayor’s Columbus’ mayor is not running for re-election. ¶ Mr. de Blasio, who will be in office until at wouldn’t mind the national platform to trumpet his anti-inequality pleas to keep off the roads. If Uber demanded $50, least the end of 2017, obviously message more people would stay home or brave the elements . But any fear he would steal the spotlight from the nominee is unfounded, his aides say. Laura Santucci on foot. So I asked the Taxi Safety folks to explain “The nominee is the nominee,” said Chief of Staff . —andrew j. hawkins their logic.The reply: “More Uber drivers are going DIGITAL DOLLARS. News site Business Spade will close 19 Saturday stores, to be out there trying to pick up passengers with the Insider raised $25 million from a which carry its lower-priced casual HOORAY! escalated fees.” Of course, the drivers are already out group of investors that included line, and 12 outposts for its men’s THE HISTORIC there—they just switch to Uber during surge Amazon founder Jeff Bezos, boost- brand, Jack Spade. Jones New York BROOKLYN ing its valuation to $200 million— also announced plans to shutter all of PARAMOUNT pricing. Fewer rides, more money.The real problem THEATRE will nearly seven times last year’s revenue. its 127 outlet stores and discontinue come back to life with surge pricing is it’s too low—capped by state Also last week, tech site Mashable its wholesale business. … A PIECE OF as a music announced it received $17 million in 3 WTC. Accredited investors can buy a venue, hosting Attorney General Eric Schneiderman in his dogged its first show in quest to stop “price gouging.” Price caps are why cabs a funding round led by Time Warner stake in 3 World Trade Center for as more than 50 Investments,and Gawker Media said little as $5,000 through crowdfund- years. are scarce during downpours, and why gas stations it is raising $15 million in a debt ing platform Fundrise.… MORE BICY- had long lines or ran dry for two weeks after round. … S&P TO SETTLE. The Justice CLES. New Citi Bike stations are slat- Superstorm Sandy; suppliers wouldn’t truck in fuel Department and 20 states are close to ed for the Upper West Side and that had to be sold at a loss. We had Soviet bread striking a $1.37 billion settlement Upper East Side in Manhattan; OY VEY! with Standard & Poor’s Ratings Greenpoint and Williamsburg in RENT IS TOO lines right here in New York. No, I’m not calling Mr. Services, resolving allegations that Brooklyn; and Long Island City in DAMN HIGH Schneiderman a socialist.That’s just my spin. the agency inflated grades of mort- Queens.This is part of the bike-share PARTY leader Jimmy McMillan gage bonds before the financial crisis. program’s plans to double in size by tried fighting his It would be the largest such settle- 2017. … CULTURE FIX. Museums and eviction from a ment. … SNOWSTORM SAGA. Even other cultural institutions spent $1.3 rent-stabilized East THIS WEEK IN CRAIN’S Village apartment. though last week’s billion on construc- A judge tossed out snowstorm was sev- tion projects between his suit. IN THE BOROUGHS-------------------------- ‘Terrorism is 3 eral feet shy of expec- 2010 and 2014, cre- ap images IN THE MARKETS----------------------------------4 tations, small busi- not going ating 10,000 jobs,ac- nesses throughout cording to New York THE INSIDER -----------------------------------------------5 the city suffered be- away’ Building Congress Authority of New York and New Jer- —Police Commissioner OPINION-------------------------------------------------------------8 cause of a citywide data. … MAYOR’S sey’s airports last year, an all-time transit shutdown. William Bratton, unveiling DOMAIN. Billdeblasio high. JFK and LaGuardia airports GREG DAVID ------------------------------------------------ 9 Among those sur- the NYPD’s new .nyc was purchased reached record peaks, with 53.2 mil- counterterrorism efforts REAL ESTATE-------------------------------------------10 prised by Gov. An- by a Publishers lion and 26.9 million passengers, re- drew Cuomo’s an- Clearing House dig- spectively.