nb03p01.qxp 1/18/2008 8:47 PM Page 1 TOP STORIES Media needs to sober McCain storms up —Valerie New York as Rudy Block falters; Hillary on black- and-white cruising to victory ® reporting PAGE 3 Page 13 Liz sticks to plan despite weakening VOL. XXIV, NO. 3 WWW.CRAINSNEWYORK.COM JANUARY 21-27, 2008 PRICE: $3.00 retail sales PAGE 3 The worst Labor group to ROC restaurateurs lies ahead around the nation NEW YORK, NEW YORK, P. 6 for Wall Second wave spurs Street Flushing growth; tax breaks help More losses certain; offset wage hikes more expensive SMALL BUSINESS, PAGE 19 capital to be needed BUSINESS LIVES BAD TASTE: Giuseppe Tarillo, a BY AARON ELSTEIN CAREER manager at Tuscan Square, blames the last week, Citigroup Inc. and VACATION landlord. Trying out a Merrill Lynch & Co. raised $21 dream job billion between them to fill the instead of craters left by their latest rounds of mind-boggling losses. hitting buck ennis the beach PAGE 27 Both firms paid dearly for those HOSPITALITY transfusions at a time when they can least afford to do so. With the economy weakening, odds are in- creasing that a hapless gaggle of fi- nancial institutions, including The kitchen is closed some of New York’s best-known names, will face further massive He expects to have to shutter minent demise are becoming com- losses. Eateries forced out Tuscan Square, his decade-old mon, and experts predict many That will force them to borrow by soaring rents, eatery in Rockefeller Center,at the more closures this year. Rents in still more at terms that will likely end of the month. The landlord, some neighborhoods have more only get stiffer, dragging down AT DEADLINE declining revenues Tishman Speyer, is raising the than doubled since 2003. Though their earnings for years to come. rent,which is already more than $1 restaurants open in the city nearly “As bad as things are for the EMPIRE STATE DEVELOPMENT BY LISA FICKENSCHER million a year. every day and many spots continue banks,it’s only going to get worse,” IS EXPECTED TO CHOOSE THE “Rents in New York City are to- to thrive, evidence is mounting says Michael Shedlock, an analyst Hong Kong Chamber of prominent chef Pino Luongo, tally unrealistic,” Mr. Luongo says. that the industry is entering a at Sitka Pacific Capital Manage- Commerce to represent New who has opened 11 restaurants in “We could definitely see a reces- rough patch. ment. “The next shoes to drop are York as it seeks to open offices the city over the past 20 years, now sion in the restaurant business.” “There are more closings now commercial real estate and credit in China, sources say.The state faces one of his worst nightmares. Stories like Tuscan Square’s im- See THE KITCHENS on Page 8 See WORST on Page 8 agency, which hopes to create offices in three cities, put in a request for proposals at the end of last year. ESD declined to confirm its decision. Pier 40 development: race against time THE NEW YORK CITY BOARD OF HEALTH IS EXPECTED TO decide on Tuesday whether to Hudson River Park board must pick plan; ratify a controversial proposal structure could crumble in a few years that would require many DIANA TAYLOR, restaurants to prominently building used primarily as a park- chair of the display calorie information on BY THERESA AGOVINO ing garage. Hudson River Park Trust, says that their menu boards. A 2006 But controversy swirls around “doing nothing is proposal was struck down by a time is running out on Pier 40. redevelopment options. Two pro- not an option.” federal judge last September. The 14-acre pier, part of Hud- posals emerged from a formal re- The board will consider a new son River Park and the source of quest issued by the Hudson River rule requiring restaurants with nearly half of its maintenance Park Trust 17 months ago, but nei- 15 or more locations in the budget, is crumbling and could ther has widespread community or country to post calorie face condemnation in the next few political support. The Related See AT DEADLINE on Page 2 years.The site is currently home to Companies wants to build an en- community ball fields and houses a See PIER 40 on Page 8 buck ennis 03 5 VIDEO ON THE WEB ELECTRONIC EDITION REAL ESTATE Top execs discuss rents, Macklowe and Hudson Yards NEWSPAPER Go to www.crainsnewyork.com 71486 01068 0 CNYB 01-21-08 A 2 1/18/2008 8:30 PM Page 1 ASIAN BONANZA: Cleary Gottlieb’s Sang AT DEADLINE Jin Han served as lead partner for Korea Continued from Page 1 LONDON-BASED 1E LTD. Investment Corp.’s huge $2 billion investment in information on their menu EXPECTS TO OPEN ITS Merrill Lynch. boards in New York City by United States headquarters in March 31.The measure would midtown Manhattan this week. affect 10% of restaurants here, 1E has developed power- including fast-food restaurants management software that shuts such as McDonald’s and Burger down computers, individually or King. collectively, to help companies For more information, go to save on their utility expenses. It www.crainsnewyork.com. expects to reach $40 million in revenues this year, up 66% over NEW YORK’S FILM PRODUCTION 2007 levels. Half of 1E’s sales INDUSTRY IS HOPEFUL THAT come from U.S. clients. last week’s tentative deal between the Directors Guild of RETAIL REAL ESTATE FIRM America and the Alliance of SINVIN REALTY INTENDS TO Motion Picture and Television start representing selected retail Producers will pave the way for tenants in their national an end to the three-month-long expansion endeavors this year as writers’ strike. Many production part of the new management’s workers and businesses have strategy. Bruce Sinder, a founder been hit hard by the strike, but if of Sinvin, recently retired after it ends soon, the city’s growing more than 30 years in the number of soundstages may business. Michael Glanzberg, emerge unscathed. Kaufman the brokerage’s general counsel, Astoria Studios has been has been promoted to principal booked for the remake of the and will serve alongside feature film The Taking of Christopher Owles. Sinvin will Pelham 1 2 3.Television shows also continue to concentrate on buck ennis that stopped production at retail in downtown Manhattan. Silvercup Studios as well as at the Studios at Chelsea Piers MERRILL LYNCH & CO. FACES were contractually obligated to AS MUCH AS $30 BILLION IN continue to pay rent during the additional write-downs of Law firms’ Seoul food shutdown. mortgage-related assets, Sanford C. Bernstein & Co. TOM CHIUSANO, THE CBS analyst Brad Hintz wrote in a Pending reg changes whet appetite for Korean speakers RADIO EXECUTIVE WHO report last week.The nation’s weathered the departure of largest brokerage firm has tried Howard Stern and the to hedge against potential losses BY HILARY POTKEWITZ disaster of Free FM, is stepping by entering into contracts with down as general manager of parties, such as bond insurers, u.s. law firms are barred from establishing offices in South Korea, but that hasn’t stopped big WXRK-FM after 23 years. He that are themselves in danger of firms, including Simpson Thacher & Bartlett and Cleary Gottlieb Steen & Hamilton, from will become a consultant to the collapse. Should these capitalizing on the burgeoning Korean market by setting up bustling practice groups offshore. station. Some observers believe counterparties prove unable to Now other New York firms are rushing to follow suit. Firms are recruiting lawyers with that Mr. Chiusano can now be meet their obligations, Mr. considered one more casualty of Hintz says, there is serious risk Korean-language skills and shipping them off to Hong Kong or Tokyo, which allows them to Mr. Stern’s defection at the end that Merrill would be on the easily commute to Seoul when needed. of 2005. hook for even more write- While legal markets throughout much of Asia have been booming in recent years, the surge For more information, go to downs on top of the nearly www.crainsnewyork.com. $25 billion it has taken. in Korea is new. “We’ve had more and more calls from firms requiring Korean-speaking attorneys,” See NEW YORK LAW FIRMS on Page 9 THIS WEEK IN CRAIN’S 29 NEW YORK, NEW YORK----------6 VALERIE BLOCK ---------------------------13 Trophy hits the block THE INSIDER------------------------------------14 Experts say the spike in real es- property.” REAL ESTATE DEALS-------------- 15 Macklowe could try tate prices and improvements that Though most industry profes- WEEK IN REVIEW -----------------------16 to find an investor the owner made, such as adding the sionals agree that the building is ex- Apple store, should help Mr. Mack- ceptional, Steven Spinola, president NEIGHBORHOOD in GM Building lowe command a high price. of the Real Estate Board of New That the GM Building is fully York, says a speedy sale “may put JOURNAL------------------------------------------18 BY THERESA AGOVINO leased and commands some of Man- pressure on the price.” REPORT: hattan’s highest rents—ranging Of course, Mr. Macklowe might even though Harry Macklowe is from $150 to $200 a square foot— decide not to sell. Mary Ann Tighe, SMALL BUSINESS----------------19 trying to unload the General Mo- should also help spark interest. chief executive, tristate region, at tors Building under pressure, ex- Real estate experts say the pur- CB Richard Ellis, thinks the most CLASSIFIEDS ----------------------------------24 perts say the trophy property is like- chase price could top the roughly likely scenario is that he will bring in THE WEEKS AHEAD ----------------26 ly to fetch a record amount.