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CRAINSNEW YORK BUSINESS NEW YORK BUSINESS® JULY 10 - 23, 2017 | PRICE $3.00 DOUBLE ISSUE CLOSING THE DOOR MEET THE THE LIST AHOY VEY! ASSEMBLYWOMAN Largest BROOKLYN ON CABS EXPECTED Construction CRUISE • Hard-hit credit union foreclosing TO TAKE ON Firms TERMINAL on medallions PAGE 14 DE BLASIO P. 11 WOES • Uber’s disruptive reach PAGE 15 P. 8 P. 19 • Hailing a bailout PAGE 16 VOL. XXXIII, NOS. 28, 29 WWW.CRAINSNEWYORK.COM NEWSPAPER P001_CN_20170710.indd 1 7/7/2017 5:59:49 PM JULY 10 - 23, 2017 CRAINSNEW YORK BUSINESS FROM THE NEWSROOM | JEREMY SMERD | EDITOR IN THIS ISSUE United waits for takeoff 4 IN CASE YOU MISSED IT Why a single council member 5 TECHNOLOGY can crush a UNITED AIRLINES CEO OSCAR MUNOZ regrets not listening building project 6 INSTANT EXPERT to his gut back in April, when he got word that authorities had dragged passenger David Dao off a flight in Chicago. 7 TRANSPORTATION The incident made United look ghoulish, and Munoz’s ini- 8 ASKED & ANSWERED tial response, saying Dao was being belligerent, was, admit- 9 REAL ESTATE tedly, foolish. “One of my biggest personality traits is trust- 10 VIEWPOINTS ing my instincts,” he said. “And I didn’t in that instance.” 11 THE LIST Munoz course-corrected and apologized. “It’s never too late to do the right thing,” he said during a FEATURES visit to the Crain’s newsroom two weeks ago. 14 UBER’S IMPACT These days Munoz’s gut tells him that United needs to We’re a little 19 SHIPWRECKED IN BROOKLYN raise its profile in the lucrative New York market. That’s defensive about one reason the airline is looking to hire an executive in “ people moving into New York to lead that charge. But United has some catch- P. 8 ing up to do. Two years ago it pulled its operations out our house without NICOLE of John F. Kennedy International Airport. By selling its having to pay MALLIOTAKIS slots to Delta, the airline cut itself off from the many New Yorkers who refuse to fly out of Newark, where United anything has a hub, or who avoid LaGuardia, where United has some routes. That withdrawal happened a few months before Munoz came aboard as CEO, in September 2015. Had it been up to him, he said, he would not have backed out. Committed to Newark, United now wants to convince New Yorkers that the air- 28 GOTHAM GIGS port is not as hard to get to as they might think and the $2 billion the airline spent 29 SNAPS on terminal upgrades has made it a more pleasant place. 30 FOR THE RECORD Then there are the delays that plague all three area airports. Munoz says recent 31 PHOTO FINISH changes by the feds have made things worse. In October the Federal Aviation Ad- ministration opened Newark’s gates to more airlines that wanted access to the met- CORRECTIONS ro area’s 20 million residents. The FAA’s move cut into United’s dominance at New- Updated 50 Most Powerful Women profiles for Lynda Clarizio, Barbara Desoer and MaryAnne Gilmartin ark and ruffled the airline’s feathers. appear at CrainsNewYork.com. “We built the place,” Munoz said, “and we’re a little defensive about people mov- ing into our house without having to pay anything.” The rush of carriers into Newark has led to cheaper fares for some routes but has coincided with an increase in delays. Federal data shows on-time departures in April dropped to 68% from 81% a year earlier. United blames the delays on the slot changes. A Port Authority aviation manager attributed the holdups to runway repairs at JFK and bad weather. In the past United ceded profitable time slots to avoid delays so fliers at its hub could make their connections. Doing so helped oth- ON THE COVER er carriers. But those days are over. Munoz’s gut is now telling him to fight for his PHOTO: BUCK ENNIS territory. “This is going to get less collaborative as we go forward,” he said. DIGITAL DISPATCHES CONFERENCE CALLOUT SEPTEMBER 19 Go to CrainsNewYork.com CRAIN’S READ Crain’s takes a look BREAKFAST FORUM at New York’s changing Join us for our arts and culture music industry. To read our > forum, which serves to kick off ongoing series, check out the fall season for the CrainsNewYork.com/music. organizations that bring ■ ICYMI We unveiled the New Yorkers—and the world— 50 Most Powerful Women in the highest forms of New York on June 26. To view human expression. the biennial ranking, visit NEW YORK CrainsNewYork.com/powerfulwomen. ATHLETIC CLUB ■ SUBMIT Do you know a whiz kid? 8 to 9:30 a.m. On Nov. 27 our 20 Under 20 list will [email protected] recognize the New York area’s youngest business brains. Let us know Vol. XXXIII, Nos. 28, 29, July 10, 2017—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for who you think should be included at double issues the weeks of June 26, July 10, July 24, Aug. 7, Aug. 21 and Dec. 18, by Crain Communications Inc., 685 Third CrainsNewYork.com/20nominate. To get to Ave., New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send address know our past honorees, head to changes to: Crain’s New York Business, Circulation Department, 1155 Gratiot Ave., Detroit, MI 48207-2912. For subscriber service: Call 877-824-9379. Fax 313-446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. CrainsNewYork.com/20under20. (GST No. 13676-0444-RT) ©Entire contents copyright 2017 by Crain Communications Inc. All rights reserved. BUCK ENNIS, ISTOCK 2 | CRAIN’S NEW YORK BUSINESS | JULY 10, 2017 P002_CN_20170710.indd 2 7/7/2017 6:00:21 PM WHAT’S NEW JULY 10, 2017 AGENDANo cause for confusion about where the transit buck stops f only the Metropolitan Transportation Authority had a nickel for every finger pointed about the transit system’s problems. Blame is being cast in every direction—at Gov. Andrew Cuomo, Mayor Bill de Blasio, state legislators, MTA executives, Amtrak and others. IIt’s easy to see why. Only 66% of subways complete their routes on time, down from 86% five years ago. Subway cars, some of which date back to the LOOK! A SHINY 1960s, are going only 68% as far before breaking down as they did in Janu- OBJECT! The ary 2012. In May alone, 197 Long Island Rail Road trains were canceled, a governor tries to distract nearly fourfold increase over that same month last year, and 1,590 were de- New Yorkers layed, up from 723. On top of these infuriating inconveniences, there have from his tran- sit failures. been several harrowing incidents, including panicked riders attempting to claw their way out of a stalled F train and an A-train derailment caused by human error. have freed up money for maintenance. He has pledged billions more cap- Let’s get one thing straight: Cuomo controls the MTA, which runs city ital dollars than he’s delivered and brazenly diverted some that were in- subways and buses, the LIRR and Metro-North. True, his appointees cast tended to alleviate delays. He launched a bizarre contest to solicit ideas only six of the MTA board’s 14 votes, but the agency does everything that on speeding delivery of new subway cars, knowing full well that they are he wants and nothing that he doesn’t. His recent comments to the con- ordered from upstate plants in a political quid pro quo to get state Sen- trary were disingenuous and misled the ate support for the MTA capital budget. And public. And his unsuccessful attempt to gain Cuomo appointees cast only six of 14 he neglects to pursue tolling as a transit- two more appointments would not have funding tool that would have the ancillary made one more train run on time. Cuomo board votes, but the MTA does all he benefits of easing traffic congestion and- im is correct that Amtrak did not adequately wants and nothing he doesn’t proving air quality in city neighborhoods. maintain Penn Station’s tracks, leading to (See Mitchell L. Moss’s op-ed on page 10 for emergency repairs that will plague thou- other funding ideas.) sands of LIRR riders all summer. But he harps on it only to distract people Of course it would be preferable if mass transit got all it needed from from his MTA failures, which affect millions of straphangers. designated, untouchable funding streams rather than having to rely on The governor’s other responses to the transit system’s troubles have also state politicians for 42% of its operating budget and a big chunk of capital been unsatisfactory. He settled transit workers’ contracts early in his ten- spending. But until that happens, the politicians must do what is needed ure without work-rule changes long sought by MTA executives that would and be held accountable when they do not. — THE EDITORS FINE PRINT The city is citing an obscure clause in the 1961 building code that would deny office tenants access to the outdoor terraces planned for many in-development towers. The rule says that “all uses must be contained within enclosed buildings.” Furious developers insist that a rogue inspector has been misinterpreting the passage in defiance of logic and precedent. BY GERALD SCHIFMAN STATS THE CITY'S ADMITTEDLY imperfect count of homeless people on the street—composed 25 WORDS OR LESS MAN ON THE STREET almost entirely of adults—shows their numbers have risen.

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