GETTING READY for 9 MILLION As the City Approaches a Population Milestone, Top Innovators Share Their Visions for the Future of New York PAGE 19
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CRAINSNEW YORK BUSINESS CRAINSNEW YORK BUSINESS NEW YORK BUSINESS® OCTOBER 31 - NOVEMBER 6, 2016 | PRICE $3.00 GETTING READY FOR 9 MILLION As the city approaches a population milestone, top innovators share their visions for the future of New York PAGE 19 VOL. XXXII, NO. 44 WWW.CRAINSNEWYORK.COM THE HIGH THE FDNY A SPINAL COST OF drops SURGEON DOMESTIC dispatch PAYS IT VIOLENCE system FORWARD P. 8 contractor P. 12 P. 40 NEWSPAPER P001_CN_20161031.indd 1 10/28/16 9:14 PM OCTOBER 31 - NOVEMBER 6, 2016 CRAINSNEW YORK BUSINESS FROM THE NEWSROOM | AARON ELSTEIN | SENIOR REPORTER IN THIS ISSUE What’s Wall Street worth? 4 AGENDA 5 IN CASE YOU MISSED IT TWO YEARS AGO, Mayor Bill de Blasio was tested by Wall 6 ASKED & ANSWERED Street. Bank of New York Mellon was selling its lower Man- 7 HEALTH CARE hattan tower and entertaining an offer to move its head- An East quarters and 850 employees to New Jersey, which was offer- 8 CRIME Village block rocked by ing generous tax breaks. 10 WHO OWNS THE BLOCK an explosion To his credit, the mayor refused to play a game of tax- last year is 12 SAFETY coming back break chicken and BNY Mellon ultimately decided to stay 13 ENTERTAINMENT downtown. But de Blasio is sure to be tested by Wall Street 14 VIEWPOINTS again in the years to come as cost-conscious banks export more jobs across the Hudson, or farther afield to Salt Lake 16 THE LIST City, Jacksonville, Fla., and elsewhere. In the mid-1990s, FEATURES New York has seen this sort of thing before. In the mid- 19 GET READY FOR 9 MILLION 1990s, Wall Street hit a rough patch and banks started Wall Street hit a sending administrative and back-office jobs to Jersey City rough patch and got to cut costs. After New Jersey offered the New York Stock a pile of tax breaks. Exchange a rich package to defect, Mayor Rudy Giuliani and the state agreed to split the cost of building a new It’s fair to ask what $800 million tower above the NYSE’s historic headquar- the city got in return ters. Separately, the New York Mercantile Exchange got nearly $200 million worth of incentives to stay, and Bear P. Stearns—which claimed it never threatened to leave—got $75 million in tax breaks. 6 DANIELLE MOSS LEE It’s fair to ask what the city got in return. Both the NYSE and NYMEX have been acquired and their trading floors all but wiped out by technological advances. Bear 38 CLASSIFIED collapsed in 2008. 40 GOTHAM GIGS Yet it wouldn’t be at all surprising if banks started quietly asking about tax in- 41 SNAPS centives again and moving jobs out if they don’t get them. Already, the city’s share 42 PHOTO FINISH of U.S. securities-industry jobs has declined to less than 19% from better than 30% two decades ago, and industry profits appear poised to decline for the sixth year out of seven, according to a report last week by the New York state Comptroller’s Office. While it would be politically explosive for the Wall Street elite to again be given tax breaks, keep in mind that the securities industry accounts for 21% of all private-sector wages paid in the city. For all the efforts to diversify the local econ- omy by expanding tourism, technology and other sectors, finance remains vital to the city’s fiscal health. De Blasio’s signature issue is income inequality, and he’s railed against subsidies for the Wall Street crowd. Yet he, like his predecessors, loves the tax revenue pro- duced by the likes of JPMorgan and Goldman Sachs. If the big banks threaten to ON THE COVER move more jobs westward, what’s it worth to keep them here? The mayor should ILLUSTRATION: KELLY HUME prepare his answer. DIGITAL DISPATCHES CONFERENCE CALLOUT NOVEMBER 1 Go to CrainsNewYork.com Getting ready for READ The de Blasio administration’s plan 9 million New Yorkers to construct a platform above portions of the Sunnyside rail yards in Queens and Together with private- and top it with a mixed-use complex is be- public-sector leaders including hind schedule. The release of a feasibility Mayor Bill de Blasio, study that would advance the project was Crain’s will explore answers to supposed to be completed this summer but the questions facing may now take as long as a year to finish. New York City as it approaches a population milestone. n Miguel Gamiño Jr., SHERATON NY who previously held TIMES SQUARE the position of chief > information officer 8 a.m. to noon [email protected] of San Francisco, has been named New York City’s chief Vol. XXXII, No. 44, October 31, 2016—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for technology officer. He double issues the weeks of June 27, July 11, July 25, Aug. 8, Aug. 22 and Dec. 19, by Crain Communications Inc., 685 Third Ave., New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send fills a post that had been address changes to: Crain’s New York Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. For vacant since August, when Minerva Tantoco subscriber service: Call (877) 824-9379. Fax (313) 446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. (GST No. stepped down to join a venture capital firm. 13676-0444-RT) © Entire contents copyright 2016 by Crain Communications Inc. All rights reserved. Tantoco inaugurated the CTO position in late 2014. BUCK ENNIS OCTOBER 31, 2016 | CRAIN’S NEW YORK BUSINESS | 3 P003_CN_20161031.indd 3 10/28/16 8:33 PM WHAT’S NEW OCTOBER 31, 2016 AGENDAShaping New York’s future requires not only vision, but guts ew York City has a plethora of forward-looking people in all of its industries, and the city would be wise to marshal their ideas and their support for shaping the future of the five boroughs. After all, we have a lot to prepare for—specifically, 500,000 Npeople, bringing the population to 9 million in the next two decades. Not everyone accepts this as desirable, or even inevitable: Soldiers of the status quo pop up at every turn. But they are essentially trying to hold back the tide. As long as there is economic opportunity here, people will keep coming. We need them to fit in, not pile in. When Crain’s called on big thinkers in the business community to pitch some projects, they came through with outside-the-box ideas (see page RESIDENTS AND TOURISTS are increasingly crowding the city’s sidewalks, 19). Naysayers would call their plans too ambitious or foolishly optimistic, streets and subways. We need them to fit in, not pile in. but we see them as bold if not prescient. The proposals don’t accept, for example, that the city will need highways like the Brooklyn-Queens Ex- Metropolitan Transportation Authority’s latest plan got the balance of its pressway in the years to come, or that isolated, low-slung neighborhoods funding from a mere promise by the governor, not an actual allocation. like Red Hook can never have subways and high-rises. Big thinkers are not bound by politics and orthodoxy. For many reasons, government struggles to look far ahead. Elected offi- Crain’s is focusing its annual NYC Summit conference this week on cials like projects that produce results—and gearing up for population growth. The key- votes—when they are still in office, not years Politicians have a pathological note address will be given by Mayor Bill later. Politicians also have a pathological de Blasio, which is appropriate because, al- aversion to tolls and other user fees. Consid- aversion to tolls, but big thinkers are though he is known for a focus on income er that Gov. Chris Christie would not raise not bound by politics and orthodoxy inequality, he has long seen development as New Jersey’s gas tax until the state’s trans- beneficial and necessary for the city. Indeed, portation fund was exhausted and a fatal that is not a contradiction: Studies have train crash exposed the consequences of inaction, and that Gov. Andrew shown that tight restrictions on building exacerbate inequality. The mayor Cuomo insists there will be no toll increase to pay for his new, $3.9 bil- understands that single-minded preservation merely bakes in gains for the lion Tappan Zee Bridge. Public agencies, for their part, are hamstrung. In haves and freezes out the have-nots. It is our hope that he can demonstrate the post–Robert Moses era, they answer to mayors and governors, who the courage to match his convictions, and that business and civic leaders can barely muster the courage to fund even a five-year capital plan. The will rally to this cause. — THE EDITORS FINE PRINT Of every dollar paid for a movie ticket, at least 35 cents goes to the film’s owner, explained Cristina Cacioppo, creative manager of the Alamo Drafthouse theater in downtown Brooklyn. For new releases, however, the cut of total box office grosses is typically higher and negotiated by each theater chain. “Percentages vary between theaters, so it’s kind of a secret,” she said. BY GERALD SCHIFMAN S T A T 25 WORDS OR LESS BOUNTIFUL HARVEST S NEW YORK’S ORGANIC-FOOD industry is, well, growing. While the AND state contributes just 3.6% of the nation’s organic food, its production is expanding faster than the country’s as a whole.