Before Pact, Teachers Gave to Mayor's Group the City Job That Nobody Wanted
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20140721-NEWS--0001-NAT-CCI-CN_-- 7/18/2014 6:35 PM Page 1 REPORT MADE IN NY City chefs are going loco for locavore fare CRAIN’S® P. 13 NEW YORK BUSINESS VOL. XXX, NOS. 29, 30 WWW.CRAINSNEWYORK.COM DOUBLE ISSUE JULY 21-AUGUST 3, 2014 PRICE: $3.00 BY ANDREW J. HAWKINS The city’s taxi industry,after decades of dominance and surging medal- lion values, faces more threats than ever before: a mandate to buy a ve- hicle that owners despise, a requirement to make half the fleet Fare fight! handicapped-accessible, and the introduction of popular green cabs. Now two deep-pocketed Silicon Valley startups, Uber and Lyft, are Yellow used to be the king of causing special consternation. User-friendly Uber has poached drivers and won ridership and revenue. Lyft, meanwhile, wants ordinary New cabs. Not anymore. Green Yorkers to be able to use their cars to ferry people across town. The influx of competition has forced cab and black-car owners to re- taxis, Lyft, Uber, apps. The examine their businesses while leaning heavily on government regula- tors to keep the upstart startups in check. buck ennis, getty images road to riches just hit traffic See TAXIS on Page 26 The city job that nobody wanted Before pact, teachers Care to be the new buildings commissioner? Neither did they gave to mayor’s group Chandler, an assistant vice presi- housing and job-creating construc- BY DANIEL GEIGER dent for facilities at Hunter College, tion underway.” was named commissioner of the In fact, the very complexity of His nonprofit got The AFT’s donation, on April 9, More than six months after he took Department of Buildings. the job and the heavy workload that was the largest of $1.76 million given office—and hours before departing “The stakes of this work are in- goes with it—especially now, as $350K from union as of June 30 to de Blasio-affiliated for a 10-day family vacation in credibly high,”said the newest com- construction activity in the city during contract talks nonprofit Campaign for One New Italy—Mayor Bill de Blasio stepped missioner in a statement, noting ramps up to new heights—is what York since it was founded after the to the microphones in City Hall on that the department’s work extends made the post so difficult to fill. A mayor’s election last November. the afternoon of July 17 to an- from “making sure New Yorkers’ long list of top candidates passed on BY CHRIS BRAGG News of the timing of the teach- nounce he had filled the last major homes and workplaces are safe” to the job,including Robert Benazzi,a ers’ union gift raised questions vacancy in city government. Rick helping “get more affordable- See FILLING on Page 27 Less than a month before Mayor among good-government organi- Bill de Blasio struck a contract deal zations about the ability of outside 30 THE LISTS with the United Federation of interests to advance their agendas 5 Teachers, its parent union, the before the city by supporting a lob- CoStar’s top Manhattan office American Federation of Teachers, bying arm of the mayor. P. 22 leases gave $350,000 to a nonprofit group “It’s an awfully large donation to Real Capital Analytics’ top that is run by de Blasio advisers and make in the final stages of labor ne- property sales P. 25 lobbies on behalf of the mayor’s pri- gotiations,” said Dick Dadey, exec- orities,newly released records show. See UNION on Page 27 NEWSPAPER 71486 01068 0 20140721-NEWS--0002-NAT-CCI-CN_-- 7/18/2014 6:00 PM Page 1 EDITOR’S NOTE Bud wiser FYICRAINSNEWYORK.COM We scheduled our first newsroom meeting on how Crain’s should Paid sick days cover New York state’s newest legal business—medical marijuana—for kick in, with fanfare exactly 4:20 p.m. Good thing, since we needed the extra 10 minutes to ayor Bill de Blasio was get past the workplace awkward- among the 1,400 j.andrew hawkins ness of trying to sound “with it” volunteers citywide who spent the morning of July 16 handing out informational fliers Glenn Coleman M without sounding like one might to commuters.The occasion? Making the public aware that as of July 30 tens of thousands of know way too much about what workers would be able to take sick days accrued since the paid-sick-leave law took effect April 1. remains an illegal drug in these United States.Turn ¶ The mayor, holding forth from a Brooklyn subway platform, told commuters that the law would off that Grateful Dead ringtone on the cellphone bring “a little more economic security when so many are still struggling.” ¶ The legislation, and open with something savvy: “So, what’s up with however, has created plenty of uncertainty for businesses struggling to figure out how to mesh the the kids and the Mary Jane these days?” Cold, mortified law with practical considerations. “It’s been a little bit crazy, to say the least,” said Carolyn stares. “Heh. Guess it’s been a looong time since college.” Richmond, an attorney who represents hospitality businesses. “As we predicted, there’s been a lot of It turns out, after riffing ’round the room, there are confusion.” ¶ The legislation mandates that all business with five or more employees provide at least more than 2,300 street terms for various drugs or five days of leave for each worker annually. Businesses with fewer than five workers must grant five drug activity, according to the White House Office unpaid days. ¶ But the Department of Consumer Affairs has yet to issue final regulations explaining of National Drug Control Policy. We scanned some the nuances of the law, leaving business owners to interpret it for themselves. For instance, the law marijuana entries before settling on a new favorite: is vague on how much notice employees must give to take a sick day.Workers can take time off in “goblet of jam,” which etymologically sounds like a four-hour increments, making shift-swapping difficult. ¶ Though employers must comply with Harry Potter-esque stoner’s silly stumble over the the law, businesses with between five and 19 employees will have a grace period until September old-school “ganja,” but of course I wouldn’t know before the department can issue fines for violations. —chris bragg about these things.Then we got to work. We soon LIRR STRIKE AVOIDED. After weeks of group agreed to pay $7 billion in fed- realized that New York’s recent legalization of on-and-off negotiations,the Metro- eral and state fines and consumer re- HOORAY! medical marijuana sparked so many regulatory and politan Transportation Authority lief to resolve allegations that it AFTER CAPTURING 1.5 million viewers financial questions—and potential opportunities for and the unions representing Long knowingly sold shoddy mortgages to on YouTube this past year, Brooklyn boy Island Rail Road workers reached an investors in 2006 and 2007. The band Unlocking the Truth scored a $1.8 million Sony record deal. the entrepreneurially minded—that Crain’s had to agreement over labor contracts, bank admitted it ignored warnings convene a gathering. And so: “The Business of Pot: averting a strike that would have af- that some of the loans had under- The Stakes Are High,” to be held Sept. 23 from 8:30 fected 300,000 daily commuters. writing defects. Meanwhile, Bank of The contract calls for a 17% raise America said it will pay American a.m. to 10 a.m. at John Jay College of Criminal over six and a half International Group Justice. Crain’s Senior Reporter Aaron Elstein will years, a compromise ‘You want to $650 million to settle lead a distinguished panel through the new law’s for both sides. The legal disputes over implications for business and New York’s economy. deal took place after bring us back defective mortgage- Gov. Andrew Cuo- backed securities. … OY VEY! John Jay President Jeremy Travis and hydroponics mo intervened in ne- to the ’80s. The TECH RIVALS UNITE. entrepreneur Derek Peterson of publicly traded MUR- GOOGLE STREET VIEWS unearthed more gotiations. … bad days of the Apple and IBM have than 1,000 gas leaks on Staten Island. Terra Tech are the first panelists to confirm their DOCH PURSUES TIME teamed up to create participation, with more to follow. Join us for an WARNER. Media squeegee men, business apps and mogul Rupert Mur- sell Apple’s iOS enlightening look at a budding New York industry. doch will not be the rampant products to corpo- Tickets are $80 each. Call (212) 210-0739 to order. spurned. Analysts crime and leg rate customers. The said Mr. Murdoch’s companies hope 21st Century Fox warmers’ IBM’s data and ana- THIS WEEK IN CRAIN’S will increase its $80 —Political satirist Stephen lytics experience will billion offer to buy Colbert, to Mayor complement Apple’s Bill de Blasio during his IN THE BOROUGHS-------------------------- 3 Time Warner to $91 design expertise.The billion. Mr. Mur- appearance on The first group of apps of eBay’s website. Eventually, Sothe- IN THE MARKETS----------------------------------4 doch is particularly Colbert Report will be released in the by’s will hold online-only auctions. THE INSIDER -----------------------------------------------6 keen on getting his fall in conjunction The partnership will help Sotheby’s hands on HBO, with Apple’s new expose its artwork to eBay’s 145 mil- OPINION --------------------------------------------------------10 which he values at $20 billion. … mobile operating system, iOS8. … lion customers.Terms of the partner- FORBES IS SOLD.