20140929-NEWS--0001-NAT-CCI-CN_-- 9/26/2014 6:14 PM Page 1

POT OF GOLD Anticipation is high for state’s budding medical-marijuana biz CRAIN’S® PAGE 5 NEW YORK BUSINESS

VOL. XXX, NO. 39 WWW.CRAINSNEWYORK.COM SEPTEMBER 29-OCTOBER 5, 2014 PRICE: $3.00 Aqueduct Looking Smart racino’s The next big thing in artificial intelligence isn’t called Watson growth

BY MATTHEW FLAMM brain—a “cognitive” platform that firm Gartner calls “the next level up” slows could learn a job, not just search for from IBM’s Watson supercomputer In 1998, an independently wealthy programmed answers. and “a breakthrough innovation” that New York University doctoral student On Sept. 29, IPsoft—now a global signals “the end of outsourcing as we As Genting competes gave up his assistant professorship in company little known outside the know it.” math and founded a company to build for upstate license, it world of IT infrastructure services— The brainchild of IPsoft founder software that could mimic the human unveiled Amelia, which consulting See AMELIA on Page 35 looks to boost its Queens outpost

BY LISA FICKENSCHER

The jackpot at Resorts World Casino is a little leaner these days—though not for gamblers. The 36-month-old racino at Aque- duct Raceway in Queens has enjoyed THE BIG a run of record- GAMBLE breaking revenue and GENTING, double-digit annual CAESARS growth. But during SQUARE OFF the past year, its PAGE 6 growth has slowed, just as its owner, Malaysia-based Genting Americas, is hoping to be ap- proved by the state for a $1.5 billion luxury resort and casino in Tuxedo. Resorts World’s revenue this fiscal See RACINO on Page 36 Mayor’s housing surprise ONWARD, UPWARD: IPsoft founder Chetan Dube hopes his creation, Amelia, will Inclusionary zoning revolutionize business. will drop subsidies, not jack up mandates

BY JOE ANUTA

Mayor Bill de Blasio is not expected to require a massive increase in the per- centage of affordable housing in new

buck ennis developments when he unveils his much-anticipated mandatory inclu- sionary housing proposal. Instead, his 39 administration will attempt to boost 5 PROFESSIONAL SERVICES the number of such units by asking de- velopers to build near current bench- REPORT Tax-shelter crackdown P. 16 marks without subsidies, freeing up LISTS Top law, accounting firms P. 13 those subsidies for other projects. When the policy is rolled out in a NEWSPAPER See HOUSING on Page 36 71486 01068 0 20140929-NEWS--0002-NAT-CCI-CN_-- 9/26/2014 6:08 PM Page 1

OLIGARCH CENTRAL: The new One57 EDITOR’S NOTE residential tower

Walking dread FYICRAINSNEWYORK.COM

Stand on a corner in California and the cars whiz by—until you place Pied-à-terre tax fever gives your foot in the crosswalk. Whoa, dude. Drivers slow to a stop and real estate industry chills beckon you to do your pedestrian he real estate industry last week swam thing. Place that foot in a crosswalk frantically against a tide of support for a tax in New York’s Central Park and, on pieds-à-terre valued at more than $5 well, woe, indeed: You could be Glenn Coleman T million, arguing it would idle the construction of struck dead by a cyclist reportedly luxury towers—and the union jobs that go with approaching 40 miles an hour and them—as well as hurt property values.Their concerns may be well founded, but may not be screaming,“Out of my way! Out of my way!” Clearly, enough to sink the idea. After all, the political risk of taxing the 1,556 co-ops and condos valued at Mayor Bill de Blasio’s Vision Zero traffic-fatality more than $5 million and owned by nonresidents who don’t vote in the city is pretty slim. Since 2008, initiative must do a number on the city’s two-wheel nonresidents have accounted for 30% of purchases in the Manhattan luxury market.That terrors in addition to slowing down the recklessly competition has pushed prices skyward.The tax could raise $665 million, according to the driven cars, taxis and trucks that do 99% of the proposal floated by the Fiscal Policy Institute. Whether it would make foreigners look to another pedestrian-killing on our streets. I often encounter global city to park their cash—and sometimes crash for the night—could depend on the property. gantlets of Tour de Francey-pants when I enter or exit Homes valued at $6 million would see a $5,000 tax increase, but starting at $10 million, property Hudson River Park.The signs in the middle of the owners would pay a $47,000 surcharge and 1.5% levy, going up to $370,000 and 4% for $25 park’s shared cycling and running trail couldn’t be Brad Hoylman clearer: Stop for pedestrians crossing the trail. Perhaps million homes. State Sen. ’s bill, expected to be introduced in Albany this week, offers a wrinkle: City residents with investment properties would also be hit by the tax. Even Mayor you too have been clipped by the sarcastic speed freak Bill de Blasio who yells,“I’m cycling here! I’m cycling here!” as he , who owns a million-dollar rental in Park Slope, may one day have to pony up.That pedals into the distance. Cyclists have been given is, unless the naysayers are right and property values nosedive. —jeremy smerd thousands of miles of city bike lanes. It’s time to learn TERROR ALERT.The city increased sub- dropped to 9.8% in August—the first how to use them. But enforcement isn’t enough. Our way security after Iraqi Prime Minis- time it fell below 10% since Decem- HOORAY! sidewalks, roads and bridges are overcrowded. New ter Haider al-Abadi claimed that in- ber 2008, according to data from the DEREK JETER delivered a game-winning Yorkers need more space. Maybe we should consider telligence led him to believe that ISIS state Labor Department. … SAKS single in his last Yankee Stadium at-bat in HEADS DOWNTOWN. the Bronx Bombers’ 6-5 win over the skyways. An NYU executive fancifully proposed in was targeting subways in the U.S. and Saks Fifth Baltimore Orioles last Thursday. France. U.S. officials (including Gov. Avenue will open an 85,000-square- Crain’s a few years back that the High Line’s success as Andrew Cuomo and Mayor Bill de foot department store in the Brook- a new public realm should be replicated with elevated Blasio) downplayed the concerns and field Place complex, its second Man- walkways along the spine of Manhattan, from Battery said there was no specific threat. … hattan location. The retailer will also HACK ATTACKS. JPMorgan Chase & open its first Off Fifth discount out- Park to 125th Street. While we’re at it, ban bikes on the Co. and other banks stepped up let store in New York in lower Man- Brooklyn Bridge, whose walkway 277 feet above the efforts to block suspicious credit-card hattan. Saks’ parent company, Hud- East River is dangerously crowded, and embrace traffic activity stemming from a Home son’s Bay Co., will consolidate into

guru Sam Schwartz’s proposed tolled bicycle bridge. Depot Inc. data breach of 56 million 400,000 square feet at Brookfield bloomberg news JAIL FRAUD. New Yorkers need to chill out, but it would help if we credit cards. … Rikers Place. In exchange, it will receive $3 Island’s decline in violence was based million in tax credits from New York OY VEY! had a bit more space to chill in.The return on such on data falsified by the state and $9 million THE GROUNDHOG who predicted a long investments could be measured with improved real city’s Department of ‘The from a federal grant. winter this year died from internal injuries estate values, although the lives that skyways and bike Correction, which … TORY BURCH a week after falling from Mayor Bill de NAMES CO-CEO. Blasio’s grasp. The male hog was also a omitted hundreds of alternative … poseur: He was really a she. bridges would save should be dividend enough. inmate fights and Roger Farah, a long- other statistics, The is staying time Ralph Lauren New York Times un- home and executive, was hired THIS WEEK IN CRAIN’S covered.The city may by the fashion brand be slapped with a talking to to help with global IN THE BOROUGHS------3 civil-rights lawsuit, Diana about expansion. Ms. IN THE MARKETS------4 forcing it to make Burch will remain changes. … LIGHT UP feelings’ chairman and co- SMALL BUSINESS ------5 THE BRONX. OnForce —Former Mayor Michael CEO of her name- ap images THE INSIDER ------6 Solar is partnering Bloomberg, on his decision sake company, which with Bronx Commu- to return to work as head of generated more than students enrolled at the City Univer- BUSINESS PEOPLE ------7 nity College to create Bloomberg LP $1 billion in sales last sity of New York this fall, a 40% jump OPINION------8 a technology hub for year. … PUTTING THE from 2000. … THE LION KING SETS ALAIR TOWNSEND------9 emerging companies to create more BRAKES ON BIKES. A week after a RECORD. With $6.2 billion in gross jobs for locals, including 50 positions Connecticut mom was fatally struck ticket sales worldwide, the 17-year- GREG DAVID ------9 in the next six months.The $7 million by a speeding bicyclist in Central old Disney musical took the crown REPORT------11 project,which requires state approval, Park, city Councilman Mark Levine from The Phantom of the Opera for the NEW YORK, NEW YORK REAL ESTATE------21 will be established through the Start- called for a speed-limit reduction for most successful box-office total ever. Denise Lee’s fashion house is Up NY initiative. Meantime, the un- cars and bicycles in parks. … Phantom debuted in 1986. CLASSIFIEDS ------blurring the line between 30 employment rate in the borough A+ ENROLLMENT. A record 274,031 —emily laermer gym and work clothes. P. 37 SOURCE LUNCH------38

CORRECTIONS (SEE PAGE 35) STORIES TO WATCH THIS WEEK VOL.XXX,NO.39,SEPTEMBER 29,2014—Crain’s New York Business (ISSN 8756-789x) is published weekly,except for double issues the weeks of June 23,July 7,July 21,Aug.4,Aug.18 and Dec. 22, by Crain Communications Inc., 685 Third Ave., New York, NY 10017. Periodicals postage paid at New York, N.Y., and additional mailing offices. Postmaster: Send address changes to: Sept. 29: Planning Sept. 30: Memoir Oct. 1: Tours begin Oct. 1: Tenth Crain’s New York Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Commission meets by Girls creator for Ellis Island’s Michelin Guide MI 48207-2912. for subscriber service: Call (877) 824-9379. Fax (313) 446-6777. $3.00 a copy, $99.95 one to discuss Astoria Lena Dunham is south-side hospital New York debuts. year, $179.95 two years. (GST No. 13676-0444-RT) ©Entire contents copyright 2014 by Crain Communications Inc. All rights reserved. Cove, Queens, released. complex. rezoning.

2 | Crain’s New York Business | September 29, 2014 20140929-NEWS--0003-NAT-CCI-CN_-- 9/26/2014 5:32 PM Page 1

IN THE BOROUGHS BROOKLYN Spaceworks makes room for creatives STORY OPENED IN 2011, selling products from cool tech firms BaubleBar and Joor ...... BUT LAST DECEMBER, it changed its decor to more homey bricks for a holiday-themed look. Group uses city funds to help boost number Quick-change artists of affordable studios BY WENDY DAVIS

Frequent store makeovers give retailers buzz, but costs can be high People like Sue Burickson are called struggling artists for a reason. In re- gallery-like retail space featured dise and events around it,” said ucts—your mind is blown.” cent years, the painter and sculptor BY ADRIANNE PASQUARELLI New York-themed books and bags. Rachel Shechtman, Story’s It used to be enough for retailers has bounced from location to loca- In September, it was selling tech founder. Each theme lasts one to to update merchandise with the tion. A studio in Chinatown that In the nearly three years since it items: water-resistant clothing for two months before the 2,000- hot items of the season, but now Ms. Burickson shared with six oth- opened a store in Chelsea,Story has men, a machine that plays fetch square-foot store shuts down for some stores are completely over- ers didn’t have air conditioning. A changed its product mix,theme and with your dog. about a week and the makeover be- hauling their identities on a regular spot in Prospect Heights, Brooklyn, look in a top-to-bottom makeover “Each story has its own voice gins anew. “We change the entire basis. The trend among emerging lacked heat. A studio in East 18 times. During the summer, the and tone, and we curate merchan- store, all the fixtures, the prod- See RETAILERS on Page 32 Harlem she now remembers as the spot where she once got mugged. In May, however, she got lucky. Via a lottery, she won the opportu- nity to rent a 200-square-foot studio on the second floor of an old industrial building in Brooklyn’s Gowanus for a mere $350 a month. Today she is one of two artists renting studios inside the 2,100- square-foot President Avenue headquarters of Spaceworks, a non- profit set up in 2011 by the city’s De- partment of Cultural Affairs to ad- dress New York’s dearth of affordable studio space for visual artists and musicians. “The goal was to create an af- fordable, stable workspace for

courtesy of story,courtesy of innis drew artists,” said Spaceworks’ executive STORY BECAME a mecca for green thumbs on Valentine’s Day ...... THEN, IN SEPTEMBER, it featured high-end fashion and techie items on sparse racks. See SPACE on Page 10

Banks embrace Apple Pay STATS AND THE CITY by Nicholas Wells MIND THE GAP: The MTA last week released its five-year, $32 billion capital plan. It calls for new high-tech subway cars, reconstruction of bus depots and despite risks to revenue other improvements, but only half the plan is actually funded. AMOUNT of the MTA’s long-term iPhones—and the upcoming Apple Alley startups shaking up the $33Boutstanding debt in 2013, up The new payment Watch—to make purchases with a mobile-payment industry are tak- from $14B in 2000 system won’t upend mere swipe of their devices at par- ing a wait-and-see approach. ticipating retailers. “Apple Pay is the kind of innova- INCREASE to the entrenched interests But unlike the music and cell- tive thinking that brings the worlds $1B MTA’s $2.4B phone industries, which Apple of online and offline commerce annual debt obligation if it —at least not yet pushed aside by introducing closer together,” said Kenneth borrows the $15B needed to cutting-edge innovations, New Chenault, chief executive of Amer- cover the budget gap BY THORNTON MCENERY ican Express, in a statement an- nouncing his company’s partner- NUMBER of subway The more than 10 million people But it will cut ship with Apple. “We’re excited to 207stations with exposed wiring who emerged from the chaotic work with Apple to offer card mem- in 2013, or 24% of the city’s total. scrums of Apple stores the first into lucrative bers and merchants a simple and se- That’s up from 8% the year before weekend the iPhone 6 and 6 Plus cure way to make purchases in stores went on sale came out with more fees paid on and on apps.” NUMBER of new buses to be purchased than just a brand-new iPhone.They Trading the swipe of a credit card 406under the plan at a cost of $302 million, are now also in possession of a new credit cards for that of a phone would require increasing the fleet by 9% consumer superpower called Apple consumers to put their faith in the Pay, the latest Apple invention de- idea of a virtual wallet that is ac- INCREASE in average weekday ridership signed to revolutionize a basic func- cessed through something called 61% on the subway between 1992 and 2013 tion of modern life—how we buy “near field communication,” or Sources: Citizens Budget Commission, Metropolitan Transportation things. York’s big banks and credit-card NFC, technology—radio waves Authority, Straphangers Campaign, Bloomberg News Another marriage of proprietary companies—American Express, that allow mobile devices to connect ap images Apple hardware and software, Chase, Citigroup—appear to be and transact like a credit-card ADDICTED TO NUMBERS? GET A DAILY DOSE AT @STATSANDTHECITY Apple Pay allows owners of embracing the change,while Silicon See APPLE on Page 36

September 29, 2014 | Crain’s New York Business | 3 20140929-NEWS--0004-NAT-CCI-CN_-- 9/26/2014 1:19 PM Page 1 IN THE MARKETS by Aaron Elstein

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CRAIN’S® NEW YORK BUSINESS SEPTEMBER 30, 2013

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All rights reserved. Further duplication without ORK.COM/LIST -5*06*278 "  "D1F19'H1B  !  "  " /!! %GVQc AUWWp 9QdQGcIT#Crain's@fqGYYQ8GYGcG New Yo(XUWprk Bus5GQcXQcGYPiness ( S LIST, GO TO WWW.CRAINSNEWY @UieT$gQ hhhI`TYcQqYUIVI`X  + +  + Reprinted`RRUIQaGceYQcUYITGcSQ with permission from permission is prohibited. Visit www.crainsnewyork.com. #NB13035R ANY CRAIN’ TOP 25 ACCOUNTING FIRMS O 7QhE`cV7E FOR THE FULL LIST OF )*, 5-)*,-* "" B'96EBB1      YP ATUcP$gQ hhhScGYeeT`cYe`YI`X + + YP 7QhE`cV7E ed. Further duplication without )7.3 ! 122B1H%%1591B      /  ll rights reserv ATUcP$gQ hhhXGcIfXWWaI`X  + "+ + . © 2013 Crain Communications Inc. A 7QhE`cV7E Crain's New York Business Reprinted with permission from is prohibited. Visit www.crainsnewyork.com. #NB13035 permission 719)0:   &@9'70F%5A'B5   " !  /! !@UieT$gQ hhhXISWGPcQpI`X + + + 7QhE`cV7E ed. Further duplication without  !!! B5'9))71CD@9      " " / ll rights reserv 8GcV$gQ hhhHP`I`X !'90H")4G'BDI8'9 + !+ "+ . © 2013 Crain Communications Inc. A 7QhE`cV7E Crain's New York Business www.crainsnewyork.com. #NB13035 Reprinted with permission from permission is prohibited. Visit -,5+,02* ++ ""  "D1F19'CC   !  " /" @UieT$gQ hhhcVI`I`X #4@8'CF93177 + +  + returns at a fund marketed to Main Street investors. The 7QhE`cV7E" 02+0)6)+ !  &@E37'CF% 45775AC  "    / DeT@e hhhhQUdQcXGqGcdI`X + + + 7QhE`cV7E -**-) ;20+ ! 1F59%1'91   !   /!! For more information contact )UReT$gQ hhh`PaVRI`X + +  !+ 7QhE`cV7E 2,)2* --40)3* - "  @17F%@@A1B8'9  ! "   / ")UReT$gQ hhhIUecUYI``aQcXGYI`X + + + Hard Copies 7QhE`cV7E Plaques & Eprints Alicia Samuel, Reprint Account Executive investigation is worth understanding, whether or not Frames (Digital Reprints) [email protected] • tel 212.210.0750 Pimco did anything wrong, because it centers on a new and

fast-growing business shaking up tively managed mutual funds in that the stodgy world of asset manage- they employ money managers who ment. buy or sell stocks or bonds with an The fund under scrutiny is called eye toward outperforming the mar- the Pimco Total Return ETF, which ket. Goldman Sachs in early Septem- sounds like the Pimco Total Return ber filed to start active ETFs, and Fund and is supposed to. The Total JPMorgan Chase launched its first in Return ETF invests in much the June. Pimco’s Total Return ETF same way as the well-known Total has about $3.6 billion in assets, and Return Fund, which at its peak last already there’s a total of $15 billion year managed nearly $300 billion, invested in active ETFs, but thanks to Mr. Gross’ reputation as McKinsey has forecast that total an especially astute bond investor. will grow to $500 billion by 2020. (In the past year, the fund has suf- Yet there’s a fundamental flaw fered big outflows as Mr. Gross’ with active ETFs: They must dis- MORTIMER M. CAPLIN DOUGLAS D. DRYSDALE standing has taken some hits.) close their holdings every business Before going further, a word day. Mutual funds need do so only about ETFs, also known as every 90 days.That’s a problem be- With Its Two Founders, Caplin & Drysdale Celebrates 50 Years exchange-traded funds. ETFs are cause it means other investors can one of the most useful products Wall regularly see what active ETF Mortimer M. Caplin, former Commissioner of the Internal Revenue Service under Presidents Kennedy Street has cooked up in years,emerg- managers are buying or selling, ing in the 1990s to track broad in- trade ahead of them before the next and Johnson, and Douglas D. Drysdale, a law professor at the University of Virginia School of Law, dexes like the S&P 500 or particular day’s session opens, and drive up launched Caplin & Drysdale 50 years ago this summer. The Firm’s lawyers and staff join with them in asset classes or industry sectors, such the prices that places like Pimco celebrating a half century of excellence, client service, and success. as gold or technology. They tend to have to pay for the securities in their charge lower fees than mutual funds, fund. Frequent disclosure of hold- With offices in Washington and New York, Caplin & Drysdale continues the tradition imparted to which helps explain why ETF in- ings is especially troublesome for vestments have more than doubled ETFs that invest in thinly traded us by our Founding Members of outstanding client service. The Firm advises companies, nonprofit in the past five years,to nearly $2 tril- securities, as Pimco does. organizations, professional service providers, and high-net-worth individuals worldwide on a full lion, according to Reuters. The SEC seems concerned that range of matters relating to tax, tax controversy, bankruptcy, complex litigation, corporate law, Pimco and other mutual-fund Pimco managers overvalued the less- creditors’ rights, employee benefits, exempt organizations, political activity, private client services, companies have responded to this liquid securities in the ETF portfo- competitive pressure by creating lio.That would be an understandable and white collar defense. For more information, please visit us at www.caplindrysdale.com. what are known as active ETFs. temptation, given the challenges of These are ETFs that resemble ac- running an active ETF. Ⅲ

Caplin & Drysdale, Chartered | Founded 1964 | www.caplindrysdale.com SHARE OF INVESTORS who say they still feel the effects One Thomas Circle, NW | Suite 1100 | Washington, DC 20005 600 Lexington Avenue | 21st Floor | New York, NY 10021 of the 2008 recession, according to a survey by Wells Fargo 202.862.5000 212.379.6000 46%and Gallup. About 19% said they grapple with the impact “a lot,” and 27% said a “fair amount.” Only 22% of the 1,011 investors randomly surveyed said “not at all.”

4 | Crain’s New York Business | September 29, 2014 20140929-NEWS--0005-NAT-CCI-CN_-- 9/26/2014 12:56 PM Page 1

SMALL BUSINESS Big bucks seen in medical marijuana NY’s tight restrictions license holders in New York state.” Marimind Cannabis Engineering after seven years unless renewed. Until then, large operations that and CEO of Mindful, a cultivation A spokeswoman for the DOH favor operators that can grow marijuana, process the and dispensing company in Col- said the department is “working ex- plant so it does not have to be orado, where recreational marijuana peditiously to develop the regula- can grow, process smoked, and distribute and sell the use is legal for adults 21 and older. tions, which will be adopted after drug will likely get the licenses. The If New York resembles the 22 the public has had the opportunity and distribute drug companies must also be able to put up other states that have legalized to comment on them and the de- a $2 million bond, a provision meant medical marijuana, there could be a partment has considered [them].” BY IRINA IVANOVA to cut down on half-million patients here, Mr. ‘Massive’ job opportunity

“fly-by-night” HIGHS Peterson said, estimating that 1.5% buck ennis he budding medical- operations, Ms. to 2.5% of the population in Cali- Despite the law’s restrictions and CANNABIZ: The state’s medical-marijuana marijuana industry in Savino said. fornia, for example, is authorized to many unanswered questions, entre- law has many hurdles for pot entrepreneurs. New York state is shap- The Depart- 20 buy the drug for health reasons. preneurs are clamoring to do busi- ing up to favor estab- ment of Health NUMBER OF The number of dispensaries slat- ness in New York.It’s not hard to see lished cannabis busi- will be able to set DISPENSARIES ed to open in New York could not why. Margins for the medical-weed be to have a courier service deliver that will be Tnesses.But with final regulations for the prices of the allowed to open handle that many customers. By business are around 40%, said Mr. marijuana to homebound patients. medical marijuana still to be deter- product with in- in the state comparison, the cities of San Fran- Peterson. Retail dispensaries com- That is similar to what is happening mined, and backers’ hopes that the put from the cisco and Oakland, Calif., have a mand $3,500 to $5,000 in annual in Southern California, where retail industry will quickly expand, small state police: Law combined population of about 1.3 sales per square foot,he said,putting outlets have come under fire from producers may yet find a foothold. enforcement will 40% million and about 40 retail dispen- them in the territory of Apple and communities that don’t want them. One major hurdle is that only ESTIMATED above Tiffany & Co. be counted on to PROFIT saries—double the number that “A courier service is interesting, five licensed growers, and up to 20 tell health offi- MARGINS would be permitted here. “The job opportunity here is since you can’t mail it,” Ms. Savino dispensaries, are permitted in the cials how much of medical- “In Colorado, we see many massive,” said Ms. Sanders. “In my said, citing federal laws. “UPS and legislation passed earlier this year. pot sells for on marijuana [growing operations] that are too [growing operations] alone,we have FedEx can deliver Oxycontin to “I don’t think it’s enough,” said the black market retailers in other small,” said Ms. Sanders. “We must seven advanced degrees—engi- your house and leave it on your front states Democratic state Sen. Diane Savi- so that legal pot select people who have commercial neers, biologists, professional horti- porch, but they can’t deliver medical no—who sponsored the medical- is priced competitively. cannabis-growing experience.” culturalists.” That doesn’t include marijuana. There are opportunities marijuana legislation in the state Ms. Savino was joined by Hanan New York’s Compassionate Care ancillary services, such as plumbers, for a cottage industry there.” Ⅲ Senate—at a Crain’s forum on the Kolko, a partner at law firm Meyer Act was passed this spring, setting accountants and security personnel, business implications of legalizing Suozzi English & Klein; Derek the clock ticking for the 18-month whose services the cash-based mar- To sign up for Crain’s the drug for medical use. “Our goal Peterson,CEO of Terra Tech Corp., window the Health Department has ijuana industry makes ample use of. SMALL BUSINESS newsletter, go to is to get the regulations up and run- a hydroponic plant grower; and to issue regulations and patient iden- If the number of dispensaries www.crainsnewyork.com/smallbiz. ning, and fight the fight to get more Megan Sanders,a general partner at tification cards. The law will sunset stays low, another possibility could

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September 29, 2014 | Crain’s New York Business | 5 20140929-NEWS--0006-NAT-CCI-CN_-- 9/26/2014 6:31 PM Page 1

GENTING is known in CAESARS is big in Las the city for its successful Vegas but would be THE racino in Queens. new to New York. Orange County projects would max- imize tax revenue for the state, but INSIDER have irked rival bidders in the Borscht by Chris Bragg and Andrew J. Hawkins Belt farther north, who say the Genting and Caesars venues would undercut theirs, and Orange County doesn’t need the boost as much. Casino giants square off Christian Goode,senior VP of devel- opment at Genting Americas, said a long a forested stretch of highway an hour northwest Catskills “destination” casino could thrive even with a luxurious venue

of New York City, two gambling giants are in a high- bloomberg news closer to the city.“We’re not building A stakes battle to build a luxurious casino. Odds are only a golf course,” he said.“Some of these one will win—though it’s possible both will crap out. They are among 16 applicants in the Hudson Valley (including bids are offering a two-, three-, four- Nevada-based Caesars wants to build an $880 million vying to build casinos upstate. Up to Orange County and the Catskills). day experience.That’s different from casino in Woodbury, about 53 miles from the city. Malaysian four will be chosen by a siting board By law,New York City cannot get what I’m offering.” as early as October: one in the a casino for at least seven years, so Genting’s Sterling Forest project conglomerate Genting’s would be even closer—44 miles from Southern Tier,one in the region sur- Caesars and Genting would like one promises 4,000 jobs paying an an- the city—and cost a whopping $1.5 billion (see story, Page 1). rounding Albany, and perhaps two as close as legally possible. Their nual average of $75,000 (both tops among bidders), and a staggering $450 million license fee—$380 mil- lion more than is required. Caesars, promising 3,000 jobs, would build closer to Woodbury Commons, a major retail destina- tion for tourists. An internationally recognized brand with locations from Las Vegas to Atlantic City, Caesars has a huge debt but is pur- suing the New York casino via a sub- sidiary it says is financially healthy. Channeling Pataki Rob Astorino’s Oct. 1 speech to the Association for a Better New York will be a crucial moment for the Re- publican gubernatorial candidate. GOP officials compare it to a George Pataki oration to the Citizens Budget Commission weeks before he toppled Gov.Mario Cuomo in 1994. Mr. Astorino is said to be consulting with investment banker and CNBC analyst Larry Kudlow, who advised Christine Todd Whitman at a similar point in her 1994 campaign for New Jersey governor. The Westchester County execu- tive’s aides say he will lay out “his vi- sion for the next four years” with an emphasis on taxes,economic growth and education. He will also speak to the “culture of corruption in Albany” and his plan for ethical reforms.“No lip service, real bold solutions,” a spokeswoman concluded. Lagging in the polls and in fundraising, Mr. Astorino will need to balance his broadsides against Gov. Andrew Cuomo with a persuasive argument for how he can lift his strug- gling campaign. “You go in with the premise that an ABNY speech is

ap images going to change Rob Astorino your campaign,” said Thomas Doherty, a Mercury Public Affairs strategist and former Pataki campaign aide. But with Mr. Cuomo up by as many as 29 points in recent polls, Mr. Doherty said, “I’m not quite sure a speech or even 50 speeches is going to change that.” Corporate donors have given al- most exclusively to Mr. Cuomo, who has more than $25.8 million on hand,compared with Mr.Astorino’s $2.4 million. The challenger ac- cused the Cuomo camp last week of “putting a heavy hand on New York’s business community for money.” But Mr. Doherty said, “Business leaders are business leaders because they’re generally pretty smart peo- ple. These people back a winner.”

6 | Crain’s New York Business | September 29, 2014 20140929-NEWS--0007-NAT-CCI-CN_-- 9/26/2014 12:57 PM Page 1

BUSINESS 35.1 Queens Laundromats per 100K residents, the highest rate in NYC PEOPLE Source: NYC Open Data, U.S. Census

EXECUTIVE MOVES PANE IN THE GLASS: Steven Kraus saw an Sesame Workshop: opportunity in making Jeffrey Dunn,59, energy-efficient joined the windows that would educational meet rigorous nonprofit as landmarking standards. president and chief executive. He was previously president and chief executive at HiT Entertainment. Assurant Inc.: Alan Colberg,53,was promoted to president and CEO at the provider of insurance products and other services. He was previously executive vice president of marketing and business development. FJC: Mark Abrahams, 54, joined the foundation for philanthropic funds as chief financial and investment officer. He was previously senior vice president and chief financial officer at the American Society for the Prevention of Cruelty to Animals. Ruder Finn: Peggy Walsh,45, joined the communications agency as global chief executive. She was previously senior vice president and director of finance and operations at Ketchum. PageScience: Satnam Gandhi,40, joined the ad-targeting firm as chief technology officer. He was previously vice president of engineering at Theorem. New York University School of Professional Studies/Tisch Institute for Sports Management, Media and

buck ennis Business: Arthur R. Miller,80,was named associate dean and director. He GOTHAM GIGS continues as a professor at the NYU School of Law, director of public dialogues for the NYU School of Professional Studies and chairman and founder of NYU Sports and Society. Brooklyn Youth Chorus: Elise Bernhardt, 58, joined the youth Windows of opportunity ensemble as executive director. She was previously president and chief executive at the Foundation for Jewish Culture. 4th-gen family biz gives landmark façades new touch Edwin Gould Services for Children and Families: Keith Little, 57, joined the The replacement windows recently installed at 1 Landmarks,” Mr. Kraus said. ¶ The gamble paid social-services agency as executive ‘Good director. He was previously campus Wall St., the 1920s-era art-deco skyscraper being off.Today, Skyline designs, manufactures and director at the Westchester division of enough is converted to condos, offer a retro look and replaces windows at some of the city’s most the Jewish Board of Family and Children’s Services. energy-saving technology.They also provide beloved historical buildings. ¶ Although Mr. Madison Square not good 2,500 views into the history of a Kraus’ grandfather founded the company in 1921 Garden Co.: David Goodman,53, enough. multigenerational New York City company. ¶ as a tin-smithing and waterproofing operation, it joined the sports, When the Landmarks Preservation Commission has evolved with every generation. ¶ Mr. Kraus’ media and That has began bringing large swaths of the city under its father began taking on more restoration projects, entertainment company as been my purview in the 1980s, Steven Kraus saw an and in the 1970s, when Mr. Kraus came into the president of opportunity to take his family-run business in a firm, the two opened the window business. ¶ Mr. productions and motto’ live entertainment. He was previously new direction.The few new window designs that Kraus’ brother and sister are also at Skyline, and president of live experiences at CBS. were being allowed in historical buildings were now the fourth generation—Mr. Kraus’ son and GQ: Stefanie Rapp, 40, joined the magazine as associate publisher. She often not built using the latest standards in the children of two other executives—has joined. was previously associate publisher at energy and sound insulation. So, Mr. Kraus—the “We are very much a family business,” he said. Wired. third-generation owner of Bronx-based Skyline “Or rather, a business of families.” ¶ Mr. Kraus is Crowe Horwath: Dennis Greenberg,51, was promoted to director of the Windows—poached a deputy director from the instilling in them the lessons he learned from his marketing, development and sales commission and set to work. ¶ “We focused on father: “Good enough is not good enough,” Mr. group at the public accounting and consulting firm. He was previously making windows with modern technology, but Kraus said. “That has been my motto, because it assistant director. with a design that would be approved by was ingrained in me at an early age.” —joe anuta —nazish dholakia

September 29, 2014 | Crain’s New York Business | 7 20140929-NEWS--0008-NAT-CCI-CN_-- 9/26/2014 5:10 PM Page 1 OPINION CRAIN’S NEW YORK BUSINESS

Time to fix property taxes Rance Crain editor in chief publisher, vp Jill R. Kaplan s a mayoral candidate, Bill de Blasio inequitable, this induces empty-nesters to stay put, limiting EDITORIAL editor Glenn Coleman spoke of correcting the inequities in the turnover of houses and driving up their cost to families. managing editor Jeremy Smerd property taxes.The City Council in April Artificially low taxes also keep people who can’t afford to deputy managing editors Valerie Block, Erik Ipsen promised a commission to craft a reform. maintain their properties in place. assistant managing editors Barbara Benson, Erik Engquist In July, Mr. de Blasio’s new finance Buildings with the same value in the same class can have senior news producer Amanda Fung commissioner called it a top priority. wildly different tax bills, too. And private schools, religious contributing editor Elaine Pofeldt columnists Greg David, Steve Hindy, Alair Townsend Talk, talk, talk. How about some action? institutions, hospitals and other big-bucks nonprofits that senior reporters Theresa Agovino, Aaron Elstein, Lisa Fickenscher, Matthew Flamm, Policy wonks and real estate leaders have long called the pay nothing still receive police, fire and other city services. Daniel Geiger, Adrianne Pasquarelli city’s property-tax system outdated, unfair, illogical, opaque Free riders compel everyone else to pay more. reporters Joe Anuta, Chris Bragg, A Andrew J. Hawkins, Irina Ivanova, and utterly baffling. But elected officials never fix it because The system’s terminology further confuses the public. Thornton McEnery reporter/videographer Ken M. Christensen they perceive no political benefit—only a backlash from How can a $650,000 co-op have a $90,000 “market value”? news producer Emily Laermer those who would pay more. Instead we get gimmicks like a How can the combined web reporter/producer Nazish Dholakia art director Steven Krupinski proposed “oligarch tax” on the city’s priciest pieds-à-terre. Lots of talk but market value of every deputy art director Carolyn McClain So the broader injustices of a system designed for a apartment in a building staff photographer Buck Ennis copy desk chief Steve Noveck bygone era keep growing. It was 1981 when the state little action on be less than what a copy editor Thaddeus Rutkowski data editor Suzanne Panara established what each of the city’s four property classes must single one sells for? researchers Malik Singleton, Nicholas Wells outdated, unjust conferences and events editor pay. How has that worked out? Class 1, including one- to Why are the taxes of Jessica Kramer three-family homes, now accounts for close to half of all rules and rates luxurious, market-rate intern Gemma Follari property value but pays only 15% of property taxes. co-ops based on the ADVERTISING advertising director Joanna Harp Meanwhile, residential rentals, co-ops and condos in rents of run-down, sales manager Irene Bar-Am Class 2 represent less than one-quarter of the value but pay rent-regulated units? senior account managers Jill Bottomley Kunkes, Courtney McCombs 36% of the taxes. No wonder the rent is too damned high. The city should use senior account executive Rob Pierce account executive Lauren Black Commercial properties fare even worse, in some years terms that mean what they sound like, not jargon and sales coordinator LeAnn Richardson paying nearly double what their value justifies. Utilities pay complex formulas that undermine taxpayers’ faith in the credit Todd J. Masura (313-446-6097) even more—and pass on the cost to ratepayers. system. Having fewer tax classes would also help. CUSTOM CONTENT, EVENTS AND PRODUCTION director of custom content Trish Henry A $3 million brownstone might pay $9,500 in taxes while a The goal of reform should be a simple, transparent tax director of audience & content partnership development Michael O’Connor $1 million condo next door pays $5,500, not the proportional system based on real-world values. A commission would be a director of conferences & events fraction that common sense would suggest. Besides being start, but it will take courage to finish the job. Courtney Williams events coordinator Adrienne Yee events coordinator & scheduler Alexis Sinclair reprint account executive Alicia Samuel CRAIN’S ONLINE POLL COMMENTS production and pre-press director Simone Pryce ONLINE AND INTERACTIVE SERVICES general manager Rosemary Maggiore Grounding LaGuardia TO SUBSCRIBE: For print and digital subscriptions or customer service, e-mail [email protected] THE OBSOLETE Central Terminal efficiency improved. reduced academic performance or call 877-824-9379 (in the U.S. and Canada) or building at LaGuardia Airport With LGA closed, this and behavioral problems. 313-446-0450 (all other locations). $3.00 a copy for the print edition; or $99.95 one year, $179.95 two has drawn ridicule from busi- valuable 680-acre city-owned Unfortunately, not all New years, for print subscriptions with digital access. ness travelers. Now Gov. An- waterfront parcel could York City schools have a gym- www.crainsnewyork.com/subscribe istockphoto drew Cuomo wants to spend accommodate more than nasium, pool or appropriate TO ADVERTISE: WHAT SHOULD THE CITY DO $3.6 billion to build a new one. 30,000 units of housing space to run quality physical- Contact Joanna Harp at [email protected] ABOUT SPEEDING BIKERS? But this cost is much high- toward the mayor’s goal of education programs for kids. or call 212-210-0278. er if one includes the dimin- 200,000 affordable units. That’s where partnering organi- www.crainsnewyork.com/advertise Ⅲ Ban them from parks. ished value of the properties Mr. Cuomo should insist zations can play a vitally impor- FOR INFORMATION ON OUR EVENTS: that full consideration of clos- Contact Courtney Williams at Ⅲ Enforce the speed limit. of the 150,000 residents who tant role.The YMCA works live under LGA or JFK flight ing LGA be a key part of an [email protected] or 212-210-0257. with the city’s public schools to www.crainsnewyork.com/events Ⅲ Lower the speed limit. In Central Park, paths. LGA’s key advantage, FAA-mandated aviation noise supplement and extend the P.E. it’s 25 miles per hour, too fast for bicycles its proximity to Manhattan, study now underway. curriculum and offer structured TO CONTACT THE NEWSROOM: with bad brakes. would be all but eliminated if —george haikalis recess on-site at schools and in 685 Third Ave., New York, NY 10017-4024 editorial phone: 212-210-0277 Ⅲ Nothing. Car-related deaths far outpace the Metropolitan Transporta- President our Y gyms, pools, fitness cen- fax 212-210-0799 fatalities from bikes. tion Authority built one-seat- Institute for Rational Urban ters and community rooms. Entire contents ©copyright 2014 Crain Communications Inc. ride express rail to JFK. For Mobility We should recognize, how- All rights reserved. ®CityBusiness is a registered trademark Date of poll: Sept. 23 less than $1 billion, the MTA ever, that a lack of exercise for of MCP Inc., used under license agreement. 161 votes could restore the 3.5-mile dis- SEDENTARY our children is a problem that CRAIN COMMUNICATIONS INC. BOARD OF DIRECTORS used LIRR Rockaway Beach no organization, state or city can chairman Keith E. Crain STUDENTS Rance Crain 11% line in Queens, producing a president solve alone. Community-based treasurer Mary Kay Crain world-class rail link to JFK “A syllabus for city schools” challenges demand community- Cindi Crain 7% while speeding travel to (Editorial, Sept. 8) advocates based solutions; when the stakes executive vp, operations William Morrow Aqueduct and the Rockaways. for the city to schedule students are this high, the responsibility executive vp, director of strategic With this high-speed link, to exercise on a daily basis—a is one we all share. It’s through operations Chris Crain 52% a strong case could be made executive vp, director of corporate suggestion we strongly agree these collaborations that we’ll operations K.C. Crain for closing LGA. By handling with. In New York City and be able to help our kids focus senior vp, group publisher David Klein 30% displaced LGA passengers via across the nation, children are rather than fidget. vp/production, manufacturing David Kamis larger aircraft at JFK, takeoff chief financial officer Thomas Stevens not getting enough physical ac- —jack lund chief information officer Anthony DiPonio and landing noise would be tivity.The grave consequences President and CEO drastically reduced and airline founder G.D. Crain Jr. (1885-1973) can include childhood obesity, YMCA of Greater New York chairman Mrs. G.D. Crain Jr. (1911-1996) secretary Merrilee Crain (1942-2012) FOR THIS WEEK’S QUESTIONS: CRAIN’S WELCOMES SUBMISSIONS to its opinion pages. Send letters to [email protected]. Send columns of 475 Go to www.crainsnewyork.com/poll to have your say. words or fewer to [email protected]. Please include the writer’s name, company, address and telephone number.

8 | Crain’s New York Business | September 29, 2014 20140929-NEWS--0009-NAT-CCI-CN_-- 9/26/2014 12:58 PM Page 1

likely to put the brakes on rent in- creases when landlords make capital Anti-landlord agenda improvements. That would certainly reduce incentives for landlords to keep buildings in good condition,and awaits in Albany over time would lead to deterioration. Half of all apartments in the city are not governed by the market.The vividly remember former state Senate Majority Leader other half are more expensive than Joe Bruno grinning broadly at a Crain’s forum years they need to be because people not in ago. The state budget was overdue, tangled in a fight public housing or in a rent-regulated apartment must compete for them. with Assembly Democrats over rent regulation in New The regulatory system keeps York City. Mr. Bruno declared that he lived close people in units that are bigger than enough to Albany to sleep in his own bed at night, so contin- they need because alternative hous- I ing is too expensive. Many people uing the fight was fine by him. occupying such units are not poor. Senate Republicans over the years have supported efforts to They are just lucky. Rent regulation is an inefficient way to help the poor. loosen rent regulation in the city. It requires one group of people— They have approved measures to al- owners—to subsidize others, re- low owners of apartments occupied gardless of income,for the most part. by high-income tenants to return Mr. de Blasio has already pres- them to the free market. sured the Rent Guidelines Board to Mayor Bill de Blasio anticipates freeze rents—his first time unsuc- that Democrats will wrest control of cessfully, although the approved the Senate from a bipartisan coali- hike was only 1%. He will amp up tion this November, and he has his the pressure, probably replacing re- wish list ready. At the top of it is re- calcitrant board members as soon as turning control of rent regulation to he can. With taxes, water and sewer city hands when applicable state charges and wages continuing to laws expire next June. ALAIR TOWNSEND rise, refusing to grant rent increases In the name of keeping rents af- would soon become counterproduc- HOW DO YOU CONNECT WITH fordable, he and his City Council al- tive. Will he be mindful of this fact? lies will likely repeal provisions that by households with incomes exceed- The housing market in the city is THE LEADERS IN YOUR MARKET? allow owners of rent-stabilized units ing $200,000.These provisions have complex, and ending all regulation to remove vacant apartments renting moved tens of thousands of apart- overnight would be disruptive. But for $2,500 or more from the regula- ments out of the regulatory system the current vacancy-decontrol rules Crain’s Business Lists tory system, as well as apartments without undue drama. provide for gradual reform. It would renting for that amount if occupied The mayor and the council are also be a shame to throw them out. make it easy STEP 1

Visit Untaxed billionaires Crain’s tip of dumb tax policy Data Center STEP 2 hen the Fiscal Policy Institute proposed a pied-à-terre tax on the super-luxury apart- ments of nonresidents, the Real Estate Select And Board of New York claimed it would be an Download excessive burden.The proposal “ignores the GREG DAVID Your List potential impact of taxing apartment owners an additional $1 W eigners, they don’t pay any federal in- million to $2 million annually on top of their existing real estate come tax, either. taxes and maintenance costs,’’ it said. Sounds like those owners But the problems with this system STEP 3 go well beyond the Russian billion- of apartments worth more than the on all residential real estate figures, aires.While the top 10% of taxpayers Make FPI’s $5 million threshold are heavi- last week put the number of homes in pay three-quarters of the city income New ly taxed, right? the city worth more than $5 million tax, the chart shows how little they The chart shows the true at 10,000. pay of the property tax. As a result, Connections property-tax burden, according to All this means hardly any super- their overall tax burden is substantial- data I requested from the Indepen- luxury home in the city pays even 1% ly less than the income they represent. through 10/1 dent Budget Office. Since the figures of its market value in property taxes. The losers are primarily renters are before tax abatements, fewer than The national average for all homes is and owners of rental buildings, who All Crain’s lists are researched andd 2,000 homeowners pay more than close to 2%. (The REBNY reference carry a much higher tax burden than verified by our editorial team so youou % $50,000 a year in property taxes. to maintenance charges is a red her- homeowners. Renters, for the most can be assured that you’re gettingg 30OFF Jonathan Miller, the go-to expert ring. They are so high because of the part,are less well off,and,argues a re- the most accurate data possible. All lists are available for downloadd any list purchase amenities and serv- cent lawsuit, are made up dispropor- over $100 WHO PAYS NYC PROPERTY TAXES? ices in such build- tionately of minorities. in an easy-to-use Excel compatiblee format. ings, not because of Raising taxes on nonresidents in No. of % of % of Tax-bill range homes homes tax paid city tax policy.) super-luxury apartments make sense, Now the ration- although the proposed pied-à-terre View all our lists at: $1-$5,000 318,810 65.1% 28.5% ale for the pied-à- assessment is probably the wrong www.crainsnewyork.com/datacenter $5,001-$10,000 113,146 23.1% 26.3% terre tax is that many way. But doing so makes sense only $10,001-$20,000 41,152 8.4% 24.7% of the nonresidents as part of a reform effort—think who own them don’t business-tax streamlining, the com- $20,001-$50,000 14,820 3.0% 16.3% pay New York City mercial rent tax and the unincorpo- $50,001+ 2,037 0.4% 4.2% or even New York rated business levy—that takes a fun- Notes: Property-tax bills for units within co-ops were averaged. Does not state income taxes. damental look at the city’s awful include tax abatements. Source: Independent Budget Office And if they are for- property-tax system.

September 29, 2014 | Crain’s New York Business | 9 20140929-NEWS--0010-NAT-CCI-CN_-- 9/26/2014 12:59 PM Page 1

IN THE BOROUGHS BROOKLYN Making space for artists Continued from Page 3 hearsal space. Mr. Parkhill suggest- baguette or bread with fennel and director, Paul Parkhill, who joined ed that’s only the beginning of his cumin. the organization in 2012. “For me, group’s efforts in neighborhoods Similarly, Ms. Burickson regu- fundamentally, it’s about making across the city. To achieve those larly patronizes local establishments sure that artists have a place in New goals, it will rely largely on DCA like Dinosaur Bar-B-Que, which York.” funds (an initial $6 million capital opened in Gowanus last year and It is an old irony. Clusters of injection), plus a further allocation where she had lunch recently with a artists add a new dimension to their of $10 million. South Carolina artist who was visit- typically low-rent, struggling ing her studio. In October, Ms. neighborhoods,which then become Number of studios TBD Burickson plans to open her studio high-end hot spots. That has been “The idea is to have a significant to the public for one weekend as part THE ART OF THE the case over the years in the Village, impact in all five boroughs,”he said. of the annual Gowanus Open Stu- MATTER: Artist Sue SoHo and Chelsea, and today in “Whether that means 300 visual dios event. Burickson in her Brooklyn’s Bushwick, as well as in arts studios and 10 rehearsal studios, In addition to city support, $350-a-month work Williams- or whether it means 10 times that,is Spaceworks depends on donations. studio in Brooklyn.

burg, where an open question.” ArtPlace gave $500,000 to the buck ennis Dec.’13 Spaceworks Currently, however, Spaceworks group in 2011 through the Mayor’s OPENING MONTH kicked off has only an outpost in Long Island Fund to Advance New York City; Ms.Burickson reports that she is a centaur made out of plaster, metal, for Spaceworks’ work on a City, Queens, and in Gowanus, the Charles Revson Foundation and sold on her new neighborhood. clay and seashells, which will have Gowanus studios $650,000 which serves as its lab and model. the David Rockefeller Fund also “Gowanus is a hub for new two video screens, one in the head renovation of There,in addition to the two stu- support the organization. ideas,”said the artist.She is current- and the other in the chest. “There’s the top floor dios Spaceworks partitioned from Down the road, Mr. Parkhill ly at work on a six-foot sculpture of a vibrant community there.” Ⅲ $350 the rest of the office, the organiza- MONTHLY RENT for a of the local said, the group aims to sustain itself 200-square-foot branch of the tion rents four co-working spaces more through the rent it charges studio Brooklyn with cubicles that go for $325 a artists. Already, the Long Island is a real plus. “The design will take Public Li- month and come with Internet ac- City space—where Spaceworks FROM back some of the roadway space that brary. When cess, a shared conference room and rents rehearsal studios for between AROUND was unnecessary for cars and give it 218 completed, a kitchen. Tenants include play- $12 and $16 an hour—is nearly self- back to people,” he said. NUMBER OF artists THE CITY vying for two studios that space wright/director Young Jean Lee and supporting, he said. —valentina cordero in Williamsburg will house literary agent Antje Oegel, who two artists’ lives nearby in Brooklyn Heights Community involvement QUEENS studios and and bicycles to work most days. Tom Finkelpearl, commissioner MANHATTAN four rehearsal studios—218 visual Since moving in last year, Ms. of the Department of Cultural Af- New crowd boosts artists applied to participate in the Oegel has, among other things, be- fairs and an ex officio Spaceworks Astor Place lottery for those two spots. come part of the retailing ecosys- board member, said one of the goals fortunes of old bar Also on the horizon is the group’s tem. Early on, she discovered that for the nonprofit involves integrat- changes draw fire The owners of Gottscheer Hall al- most ambitious initiative to date, a one of her favorite greenmarket ing its tenants into the communities Five years after it was proposed and most closed the doors of their renovation of a former school on vendors, restaurant and bakery where they are renting space. at least one year from its completion, Ridgewood bar and restaurant two Governors Island. Spaceworks Runner & Stone, is located a block “We want to make sure there’s the city’s $16 million plan to redesign years ago as business dwindled. But plans to upgrade the building and away. She said she frequently stops not an ‘us against them’ kind of feel- Astor Place and Cooper Square is in 2012, something unexpected create 43 artists’studios,plus one re- there to pick up a buckwheat ing,” Mr. Finkelpearl said. still garnering some objections. The happened. A new group of younger Department of Transportation’s patrons began turning up at the 90- pedestrian-friendly improvement year-old German establishment, plan will create three plazas along the helping to push it back in the black axis of Fourth Avenue. for the first time in years. “Generally speaking, we are sup- “In the old days,there were more I took on energy porting the redesign that creates patrons from Gottschee, but they more public spaces,” said Andrew are dying off,”said Roland Belay,the efficiency in Berman, who heads the Greenwich bar’s secretary. Village Society for Historic Preser- Gottschee was a German- my multifamily vation.“But we have some concerns, speaking region of Europe that was particularly related to preserving once part of the Austro-Hungarian building—and went the historic street patterns.” Empire.(It is now part of Slovenia.) In particular, he noted that parts Many who lived there were dis- from skeptical to of Astor Place and Stuyvesant placed after World War II and came Street, two of the oldest streets in to settle in the German enclave in profitable. the city, will disappear. Ridgewood. A DOT spokesman said that Now the German appeal of the When I first heard about energy efficiency, Astor Place plaza, the only part of bar, with its authentic food and the project to encroach on a street, cheap suds ($5 for a half-liter) is lur- I thought, “How much could changing light has engraved granite bands indicat- ing the 20-something crowd from bulbs really save me?” But after talking to a ing where the curbs of Astor Place next-door Bushwick and as far away Multifamily Performance Partner approved once ran. That nod toward history as Williamsburg. by The New York State Energy Research seems to have pleased even the Bushwick residents Noah Bark- and Development Authority (NYSERDA), preservation society. er, 23, and Nick Alguire, 23, re- “We wanted to make sure that it turned for an imported beer on a re- I discovered that there are lots of ways to will always be clear that it is where cent night after coming to the bar improve systems and cut waste. Now, my Astor Place still is,” Mr. Berman for the first time in July to cheer on building earns an average annual return on said. Germany during the World Cup investment of 22 percent. And all I had to The plan also requires removal of soccer tournament. “The bar was several public artworks, including packed, and it was a festive atmos- do was ask. the mosaic poles adorned by Jim phere,” said Mr. Alguire. “We came Powers, a Vietnam vet known as the back because it’s inexpensive and Learn more and get started. Visit Mosaic Man, who has been deco- the bratwurst and pretzels are tasty.” nyserda.ny.gov/Crains-energy-efficiency rating light poles across the East Mr. Belay describes the ambi- Village for 25 years. His artworks ence as Cheers-like, referring to the will be temporarily relocated to a old sitcom that depicted a friendly storage facility in Queens and repo- bar where everyone knew each oth- sitioned within the plaza upon com- er’s name. pletion of the construction, accord- “The older German patrons still ing to the DOT’s spokesman. here now carry on conversations William Kelley, executive direc- with the new, younger crowd,” said MEPP-OWN-pp-ad-3-v5 tor of Village Alliance Business Im- Mr. Belay.“It’s like a family.” provement District, thinks the plan —kerry murtha

10 | Crain’s New York Business | September 29, 2014 20140929-NEWS--0011-NAT-CCI-CN_-- 9/26/2014 1:00 PM Page 1

PROFESSIONAL SERVICES INSIDE The Lists NY area’s largest law firms and accounting firms PAGES 13, 17 Corporate deserters? Multinationals decamping for friendler tax regimes abroad REPORT could cost New York plenty PAGE 16

ZACHARY CARTER: High price tags for settlements newscom Mayor’s counsel opens the wallet

Pricey wrongful conviction deals could invite litany of frivolous suits

BY ANDREW OSTERLAND

The resolution of the Central Park jogger case in September closed the book on one of the most divisive and racially charged legal cases in the city’s history. True to his word, Mayor Bill de Blasio fulfilled his campaign promise to settle the more than 10-year-old lawsuit against the city filed by five black and Latino men.As teenage boys at the time, they were wrongfully convicted of assaulting and raping a female harry pulver jogger in Central Park in 1989. Their convictions were over- turned in 2002 after DNA evi- dence confirmed another man’s confession to the crime. The settlement was negotiat- Shelter shake-up hits home ed by Zachary Carter, whom Mr. de Blasio appointed as corpora- tion counsel, or head lawyer for Dr. Canale, a former Army sur- HIGH COSTS The Canale case was another vic- the city, last December. Federal crackdown geon, was sentenced to six months in tory for Preet Bharara, the U.S. attor- While few would dispute that and new act make life prison for filing false returns on a UBS ney for the Southern District of New the five young men had suffered Swiss bank account he inherited from York, who has been aggressively pur- an injustice and that settling the tougher for lawyers his father in 2000. By 2010, the ac- $10 0B suing offshore tax offenses. On Aug. case was in the interests of the city, count had swelled to $1.5 million. ESTIMATED AMOUNT 20, Mr. Bharara elicited a guilty plea the $41 million price tag has and accountants Prosecutors said the doctor had evad- secret offshore bank from a Florida man who was hiding raised some eyebrows in the legal ed at least $216,000 and never came accounts cost the Treasury more than $1 million in secret bank community. It amounts to about BY DAVID KOEPPEL forward to disclose the account. each year, according to a accounts in Switzerland and Israel. $1 million for every year the five Mr. Fink, a partner in the New 2008 Senate report A 2008 Senate report found that plaintiffs spent in jail. And it isn’t Criminal tax attorney Robert Fink York law firm of Kostelanetz & Fink, the use of secret offshore accounts to the only high-priced agreement views the conviction and sentencing argued that his client was a war hero evade U.S. taxes costs the Treasury at Mr. Carter has negotiated this of his client Dr. Michael Canale—on who was ordered by an authoritarian least $100 billion annually. year. Other settlements for tax fraud charges in New York state father never to disclose the account 43K The federal crackdown on off- wrongful convictions in 2014 in- NUMBER OF TAXPAYERS federal dourt in 2012—as representa- and to use it solely to care for Dr. with such accounts who shore accounts and the July 1 imple- clude $6.4 million to David tive of everything that’s wrong with Canale’s mother. Mr. Fink believes have cooperated with the mentation of the Foreign Accounts Renta, who spent 23 years in the government crackdown on tax the matter should not have been han- IRS through its voluntary Compliance Taxation Act, or prison, and $10 million to Jabbar shelters and fraud. dled criminally. disclosure program See SHELTER on Page 19 See LAWYER on Page 15

September 29, 2014 | Crain’s New York Business | 11 Iterum

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cbre.com/nyc 20140929-NEWS--0013-NAT-CCI-CN_-- 9/26/2014 1:00 PM Page 1

NEXT WEEK: THE NY Area’s Largest Law Firms The top benefits consultants in the LIST Ranked by number of area lawyers New York area THE SCOOP TRENDS Pay climbs slowly Average NYC lawyer salaries, by years of experience Legal jobs: still a downer % he New York area’s top law firms are increasing their hiring for the first time since 2013 2014 change 2008. Attorney head count at the 25 largest firms ticked up 3.1% since last year, Total employment in NYC legal services, in thousands according to Crain’s research. But they’re also doing a whole lot more work. Part- 10+ years $298,920 $309,319 +3.5% 90 ners are learning to make do with less as price-savvy clients and increased compe- 4-9 years $247,103 $256,620 +3.9% tition become a permanent fixture in the legal-services industry. Overall, legal 78.1 Tservices in the city lost about 1% of jobs in the past year, totaling 78,100 in July, according to 1-3 years $185,239 $189,293 +2.2% data from the state Department of Labor. 80 “We’re up in all categories in terms of time worked, billing and collecting, so we’re busier First-year on an overall basis,” said Michael Schmidtberger, managing partner at Sidley Austin’s New York associate $171,491 $174,311 +1.6% office (No. 10 on Crain’s list). The firm reported gross revenue of $1.6 billion in 2013, up 7% Note: Based on firms of 75 or more lawyers. from the previous year. 70 Source: Robert Half Legal 2005 2014 Mr. Schmidtberger credited increased securitization of commercial mortgage-backed se- Number indicates total employment in July of each year. curities for the uptick, as well as a long-term decision to emphasize the firm’s regulatory capa- Source: NYS Department of Labor bilities.“The new normal in terms of the regulatory state has played well into our strategy that Biggest gainers started before,” he said. New York bar passage rate in 2013 % change in number of area lawyers since 2013 New federal financial regulations also helped boost business at Ropes & Gray (No.22).“Every week, there are huge new regulatory developments our clients have to adjust to,” said Laurel First-time Ropes & Gray FitzPatrick, co-managing partner and co-leader of the firm’s hedge-funds practice. Ms. Fitz- 15.2% Patrick estimates that regulatory work has gone from 15% to 50% of her practice in recent Pass Fail Milbank Tweed Hadley & McCloy years. 76% 24% The portion of associates at the top 25 law firms increased to 66% overall, up from 64% last 11.3% year and a reversal of the downward trend since 2010. But the economic downturn taught Willkie Farr & Gallagher clients to question high-cost work done by inexperienced first-year associates. Firms now rely Overall on cheaper contract and part-time lawyers for much of the back-office work traditionally done 10.6% by first-years. Paul Weiss Rifkind Wharton & Garrison Law firms around the country are echoing these changes,according to the “2014 Law Firms Pass Fail 9.9% in Transition” report from Altman Weil, a national legal consultancy headquartered in 64% 36% Philadelphia. In a survey of 300 firms with more than 50 attorneys, the report found that the Sidley Austin changes wrought by the recession are expected to become permanent fixtures in the legal in- 9.1% dustry.Partners at nearly 60% of law firms report using contract lawyers, and 72% believe that their increased use will continue. —nicholas wells Source: The Bar Examiner Source: Crain’s research

2014 lawyer breakdown, by practice area2

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September 29, 2014 | Crain’s New York Business | 13 20140929-NEWS--0014-NAT-CCI-CN_-- 9/26/2014 1:01 PM Page 1

THE LIST NY Area’s Largest Law Firms

2014 lawyer breakdown, by practice area2

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14 | Crain’s New York Business | September 29, 2014 20140929-NEWS--0015-NAT-CCI-CN_-- 9/26/2014 1:01 PM Page 1

REPORT PROFESSIONAL SERVICES

lice misconduct cases, says that the years. “Zach Carter has a unique City’s top lawyer opens wallet administration needs to address the sensitivity to police misconduct,” causes of litigation and the explo- said Mr. Berger. “That’s why I have sion of such misconduct claims. high hopes for his administration.” Continued from Page 11 Frederick Schwarz Jr., who office this year are “high numbers,” Mr.Carter has indicated he plans Collins, who spent 16 years in served as corporation counsel for but suggested that Messrs. Carter Claims increase to be proactive in addressing litiga- prison. Mr. Collins’ case was set for four years under Mayor Ed Koch, and de Blasio were taking a longer- Although claims against most tion trends and the causes underly- trial in October. met Mr. Carter after he was ap- term view of the interests of the city other city agencies have declined ing them. “If there are recurring So far this year, Mr. Carter’s Law pointed a magistrate judge by Mr. in settling the cases.He also applaud- since 2009, they are up dramatically problems giving rise to litigation, Department has spent $376.4 mil- Koch in 1991. “He cares about fair- ed their decision to drop the appeal against the NYPD. Fiscal year 2013 the Law Department will find out lion on settlements, against $372.7 ness in the judicial process,”said Mr. of Judge Shira Scheindlin’s decision saw 9,502 tort claims filed against the about it and provide feedback to op- million in all of 2013, according to Schwarz, who now serves as chief against the NYPD’s controversial department, compared with fewer erating units,” he said at the Center the city comptroller’s office. This counsel for the Brennan Center for stop-and-frisk program that has an- than 7,000 in 2009, according to the for New York City Law event. “We year’s figure could be up to 25% Justice at the NYU School of Law. gered the black and Hispanic com- ClaimStat database launched by the want to be a risk-management or- higher when all the data are in. “Lawyers don’t have to be nasty and munities.“I think it will improve race city comptroller’s office this summer. ganization for the city.” The Law Department has 730 unpleasant. He’s a very nice guy.” relations,” Mr. Schwarz said. Meanwhile,the cost of settling claims While that approach will apply lawyers, which in those terms would Mr. Schwarz agreed that the set- Joel Berger, a New York City against the NYPD was $137.2 mil- to every agency, the NYPD will be make it No. 2 on Crain’s list of the tlements negotiated by Mr. Carter’s plaintiff lawyer who focuses on po- lion, up 31% over the previous five Mr. Carter’s biggest challenge. Ⅲ city’s biggest law firms (Page 13),and an annual budget of $173 million. “These settlements are on the high end,” said Ross Sandler, a pro- fessor at the New York Law School and director of the Center for New York City Law.“This administration has decided as a matter of policy that these cases merited settlement even at a high price.” The worry is that high-priced set- tlements encourage more litigation and could lead to higher legal costs for It pays to tend the city in the future. “You have to worry about the precedent,” said Michael Cardo- zo, Mr. Carter’s $376M predecessor, AMOUNT New York who served as to your fl ock. City Corporation Counsel Zachary corporation Carter has spent on counsel in the legal settlements Bloomberg ad- this year ministration for 11 years. Mr. Since 2003, employee Cardozo, now a partner in the litiga- tion department of Proskauer,said he out-of-pocket expenses have felt it was appropriate to defend the risen nearly 90 percent1. Central Park case aggressively. “Any good lawyer looks for precedents,and I assume lawyers will point to a case The obvious question then is how well do your like this,” he said. “As a taxpayer, I benefi ts cover your employees? If you don’t like worry about it.” the answer, you may fi nd a better one with Afl ac. Sometimes ‘the outcome stinks’ Mr. Carter, a 64-year-old native Afl ac can help protect your employees with cash New Yorker with a wide range of le- to cover their bills in the event of sickness or injury. gal experience in both the public and 2 private sectors, may have different With a one-day average turnaround for online priorities as the city’s chief lawyer claims, Afl ac helps protect their pocketbooks and than his predecessor. their peace of mind. “We can never be indifferent to the fairness of the outcome of litiga- Employers like you are discovering a few things tion,” Mr. Carter said in a speech at the Center for New York City Law too, like how easy it is to add voluntary coverage in April.“There may be times where from the industry leader3 to your benefi ts at no we have all the law on our side but direct cost. For many employers, Afl ac may even the outcome stinks.” (He declined a be a pre-tax deduction, so when we say it pays request for an interview.) Mr. Carter was appointed U.S. to tend to your fl ock, it just might. attorney for the Eastern District of New York by President Bill Clinton Call your local agent and visit in 1993 and served until 1999, after which he joined the firm of Dorsey & afl ac.com/business Whitney. Notable prosecutions he handled as U.S. attorney included Jordan Belfort (the so-called wolf of Wall Street),the individuals involved in the murder of Yankel Rosenbaum during the Crown Heights riots, and the police officers accused of the as- sault on Abner Louima in 1997. At the time of the Louima- related prosecutions, several of which were ultimately overturned, Mr. Carter investigated the police’s 12013 Employer Health Benefi ts Survey, The Henry J. Kaiser Family Foundation, August 20, 2013, http://kff.org/report-section/2013-summary-of-fi ndings/ Accessed 11/19/2013. 2Afl ac Company handling of misconduct allegations Statistics, October 2013, One day processing turnaround based on business days after required documents are received. Online claims available for Accident, Sickness, Cancer & Wellness claims. 3Eastbridge Consulting Group. U.S. Worksite/Voluntary Sales Report. Carrier Results for 2012. Avon, CT: April 2013. Coverage is underwritten by American Family Life Assurance Company of and recommended that the federal Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York. Worldwide Headquarters | 1932 Wynnton Road | Columbus, GA 31999 Justice Department bring a civil- Z131178 11/13 rights lawsuit against the NYPD. A suit was not launched.

September 29, 2014 | Crain’s New York Business | 15

AFL3030 B2B FLOCK JR.indd 1 1/30/14 11:50 AM 20140929-NEWS--0016-NAT-CCI-CN_-- 9/26/2014 1:02 PM Page 1

REPORT PROFESSIONAL SERVICES

but not on its foreign earnings. In- versions also provide more opportu- Corporate tax moves could hit NY revs nity to shift or “strip” income from the U.S. to other, lower-tax jurisdic- inversion. “In some transactions, year, and although the deal collapsed, of $178 billion, Morgan Stanley on tions. The easiest way is for a new Wave of inversions nothing at all happens except that Pfizer is expected to seek to revive it seven, and JPMorgan Chase and foreign parent to make intra- threatens both U.S. the firm pays less taxes,” said David or pursue another inversion. Citigroup on six each.Skadden Arps company loans to its U.S. subsidiary Rosenbloom, a partner at law firm New York state is home to a large was the most active law firm, advis- and deduct the interest payments and local gov’t coffers McDermott Will & Emery. “In number of other multinational cor- ing on 10 deals worth $146 billion, for U.S. tax purposes. others, there may be some move- porations—52 Fortune 500 compa- followed by Latham & Watkins, “The earnings-stripping piece of ment of management. It depends.” nies in 2013—that might find tax in- which was in on seven deals. inversions has been underestimat- BY ANDREW OSTERLAND The effect of inversions versions attractive. The ed,” said Ms. Clausing. “The rules on state tax revenues,how- state has a relatively high Worldwide system limiting it are less binding on for- The recent spate of corporate tax in- ever, could be significant, 21 7.1% statutory corporate The rationale for inversion is eign companies.” versions, in which companies for- said Kimberly Clausing, NUMBER of U.S. tax rate (the city tacks on straightforward. The U.S. statutory Many in the corporate commu- sake their U.S. incorporation for a an economics professor at corporations that corporate tax rate is 35%. While nity see inversions as a legitimate re- have shifted their another 8.85%), and is domicile in a more tax-friendly Reed College. “The ques- tax residence ranked last in the country by companies can and do make use of sponse to an onerous U.S.tax regime country, has President Barack Oba- tion is whether more com- abroad through the Tax Foundation for loopholes to substantially lower that puts them at a disadvantage ma vowing to close the “unpatriotic panies see this as an ac- acquisitions business tax climate. The their effective tax rates, that rate is against foreign competitors. And tax loophole” that enables them. ceptable means to shift of foreign state rate is scheduled to fall among the highest in the world.The given that Democrats and Republi- Since 2011, 21 U.S. corporations income out of the U.S.” companies to 6.5% in 2016. U.S. is also one of the few countries cans can’t agree on what day it is, let have either completed tax inversions If they do, the erosion “Inversions can cer- to use a worldwide, as opposed to a alone how to reform the tax code,it’s via mergers with typically much of the U.S.corporate tax base and the tainly offer state and federal benefits territorial, system of taxation. That unlikely to change anytime soon. smaller foreign companies or have tax receipts of states like New York to companies based in New York means income earned overseas is “Corporate inversions are like deals pending,according to research that piggyback on the federal tax sys- and New Jersey,” said Paul Dailey, a taxed at the same 35% rate. any other business decision: They from Thomson Reuters. Ten of tem will be more severe than $2 bil- partner with CPA firm Citrin Businesses get credit for foreign can lower a company’s tax bill and those deals have been completed or lion per year. “If the U.S. corporate Cooperman, which has five offices taxes paid, and the taxes on those increase its returns and profits,” said announced so far this year, with 13 tax base gets smaller,it’s going to hurt in the tristate area. “I’ve discussed it foreign earnings aren’t levied until Kyle Pomerleau, an economist with undertaken by health care compa- the states as well,”said Ms.Clausing. with many clients, though none the income is repatriated to the U.S. the Tax Foundation. nies. The tax revenue lost to the To date, no New York state-based have yet done an inversion. It’s ar- American firms are estimated to But is it unpatriotic? Walgreen’s, Treasury is estimated by the Joint companies have undertaken a tax in- guably a company’s fiduciary re- now have more than $1 trillion the country’s largest pharmacy Committee on Taxation at about version,although Forest Laboratories sponsibility to consider the idea.” stashed overseas, and many may chain and owner since 2010 of the $20 billion over the next 10 years. in Manhattan changed its tax domi- On the other hand, advisers such hope that inversions will give them New York area’s Duane Reade The potential impact on local cile to Ireland after it was acquired by as Citrin Cooperman earn fees on access to that money without having stores, decided not to risk a public jobs and on state tax revenues, how- Irish firm Actavis in February.Pfizer, such advice and pay tax on the rev- to pay the repatriation tax. backlash on that front. In August, it ever, is hard to assess. For the most also based in Manhattan, planned an enue. According to Thomson A company that does a tax inver- abandoned plans to do an inversion part, nothing much changes on the inversion as part of its bid for British Reuters,Goldman Sachs has advised sion is still subject to the 35% tax as part of its acquisition of U.K. ground when a company does a tax company AstraZeneca earlier this on nine inversion deals worth a total rate on income earned in the U.S., drugstore chain Alliance Boots. Ⅲ

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The issues of succession are both financial ndand emotional emotional — a volatile mix that makes them easy to put ooff.ff. But denial comes at a cost : Fewer than one-third of family-ownedy-owned businesses survive into their second generationn and mamanyny closely held companies don’t survive the loss off their founder.

At EisnerAmper, we urge you to plan early — likee ten years early. We help you weigh all the likely scenarios anandd arrive aatt the right decisions, both for you and your company.ny. So you’re not just passing the baton, you’re strengthening thehe business.

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16 | Crain’s New York Business | September 29, 2014 20140929-NEWS--0017-NAT-CCI-CN_-- 9/25/2014 7:56 PM Page 1

THE NY Area’s Largest Accounting Firms LIST Ranked by number of area professionals

Good numbers THE SCOOP Total accounting-field employment has reached he rebounding economy means companies have whose revenue increased from $44 million in a new high in 2014 to attract the talent to accommodate specific needs more money to spend on accounting, tax prep, 2012 to $301 million in 2013, thanks in part to 60 Jobs, in thousands and a changing economy. Average salaries in pub- bookkeeping and payroll services, which hit a new its absorption last year of Holtz Rubenstein 50.2 lic accounting are up more than 3% in the past year, employment high of 50,200 in the city in July Reminick. 50 according to consulting firm Robert Half. 2014, according to state data. Barry Garfield, regional managing partner at “The hiring is extremely competitive right now Generational shifts, meanwhile, have businesses relying Baker Tilly, said that New Yorkers’ rising for- 40 between the firms,” said Joel Cooperman, found- T 2005 2014 more heavily on accountants, according to Lou Grassi, man- tunes are trickling into accounting. “More and ing and managing partner of Citrin Cooperman & Co. Grassi & Co. Figures are for July of the given year. aging partner and chief executive of (No. 17 on more people are coming into a greater amount of Source: NYS Department of Labor (No. 10). “There’s a ton of executive search firms Crain’s list).“The early part of the baby boomers are nearing re- wealth, and they’re thinking they need to get that are constantly reaching out to our partners and tirement,”he said,“and are finding out they don’t have the right their house in order,” he said. The median income for a Man- other firms trying to get them interested.” succession-planning needs.” hattan family jumped 8.5%,to $88,247,from 2012 to 2013,ac- The economic uptick raised Citrin’s revenue by 8.2% to Grassi & Co. reported a 2.1% rise in revenue in 2013 over cording to recently released data from the U.S. Census. $132 million and allowed it to expand.It hired 175 profession- 2012 numbers,to $40 million,and a 12.7% increase in area pro- Mr. Garfield credited the firm’s success to focusing on spe- als,the largest proportional increase on this year’s list.The firm fessionals.Those new employees included new hires and about cialized practice areas. “The accountant who’s a generalist— is also extending its footprint, adding a seventh floor to its 30 professionals from a merger with the Hochman Practice that’s a provider of the past,” he said. “You really need to midtown offices—a “concept floor” to facilitate high- Group. demonstrate your expertise and knowledge.” density usage in the 2020s. A merger also paid off for Baker Tilly Virchow Krause (No. 20), With employment booming in the industry,firms are vying —nicholas wells

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September 29, 2014 | Crain’s New York Business | 17 20140929-NEWS--0018-NAT-CCI-CN_-- 9/25/2014 7:56 PM Page 1

THE LIST NY Area’s Largest Accounting Firms

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EVER WONDER WHERE THE PEOPLE WITH ALL THE ANSWERS, GET ALL THE ANSWERS?

The truth is, you don’t need to have all the answers when you know someone who does. At Marcum, our team members put to work their decades of experience to answer your toughest questions quickly and effectively. Need some answers? Ask Marcum. marcumllp.com/crains

18 | Crain’s New York Business | September 29, 2014 P019_CN_20140929.qxp 9/25/2014 8:20 PM Page 1

REPORT PROFESSIONAL SERVICES

lion in back taxes. FACTA, including documentation The government is betting that and compliance. Shelter shake-up hits home FACTA will be another nail in the “The costs are in the tens of mil- coffin of offshore bank secrecy.The lions of dollars to build compliance,” law requires foreign financial insti- said Mr. Howe in discussing the ef- Continued from Page 11 Congress in 2010, have also been a courage taxpayers with offshore ac- tutions and their American clients fect on financial institutions. “The FACTA, has had a significant im- financial boon to many New York counts to come forward, pay a uni- to disclose all foreign accounts or biggest impact is on in-house coun- pact on the New York state tax bar lawyers and accountants who have form tax penalty and avoid prosecu- risk severe penalties. sel in setting up strong compliance and on accounting practices, ac- the expertise to cash in on another tion. The program was modified systems and modifying existing due cording to professionals in the tax revenue source. recently to accommodate taxpayers Overseas outlook diligence.” industry. One partner and authority on in- whose failure to disclose assets is There is a 30% withholding tax Mr. Howe added that there have Those professionals condemned ternational tax issues at a New York characterized as unintentional. penalty on the U.S. income of for- been “systematic alterations of all abusive tax shelters and tax-fraud accounting firm likened FACTA to Since New York is the home to eign banks that refuse to share infor- types of documentation,” including schemes,but insisted that the indict- “the accountant’s employ- many foreign financial in- mation about accounts owned by changes in disclosure agreements, ed individuals and the representa- ment act.” stitutions, private-equity U.S. citizens. Individuals who con- changes in subscription agreements tives who helped design them were Mr. Fink acknowl- $6B funds and hedge funds tinue to hide funds or file false re- and,for banks,systematic changes to only a small pool of “bad apples.” edged that he has more AMOUNT shelter with foreign affiliates, turns face harsh criminal and civil transactional documentation (bank seekers have “A lot of what you see with indict- clients today than he did voluntarily paid much of the private-sector penalties. About 100 nations are statements) and loan agreements. ments has to do with evasion where five years ago because of back to the IRS compliance effort is being supporting the legislation with in- On the accounting side,one pro- there wasn’t necessarily some very “the breaking down of driven in New York City. tergovernmental agreements that fessional said that his firm has de- complicated or sophisticated tax bank secrecy.” And he ex- “Because the aim of promise cross-border cooperation. veloped a more stringent vetting shelter,” said Amy Heller, a partner pects the implementation of the lat- FACTA is really at foreign banking McDermott’s Ms. Heller said process of clients who are making at Manhattan law firm McDermott est effort, via FACTA, to be even institutions and foreign entities, the that her international clients who voluntary disclosures and not just Will & Emery. “Some people just better for his practice. Despite the majority of that practice is New York have no intention of evading taxes “taking it at face value” that a client have accounts through their own business benefits,professionals con- City-centric,” said Daniel Mulcahy, are being negatively affected by has acted in a “non-willful manner.” names or through company struc- demned the law as overreaching, senior counsel at Cadwalader Wick- FACTA and that the law will have He said that clients planning to tures that they just weren’t reporting, confusing and vague. ersham & Taft. “The New York many unintended consequences. open operations overseas will re- and there may have been advisers lawyers will generally get higher vol- Other lawyers say many foreign ceive the same advice as before,“be- who were aiding and abetting.” Helpful law ume, earlier questions and often banks are rejecting American clients cause our structures have always Be that as it may, a source with “I would say FACTA is clearly highly nuanced questions.” because of FACTA. been legitimate in conformity with substantial knowledge of interna- beneficial for practice because there The crackdown on offshore ac- Ms. Heller added that the most the law.” tional tax law said that the prosecu- are so many compliance issues that counts began gaining traction in significant impact on her practice in But even with all the added fed- tion and imprisonment of tax of- we have to stay on top of,that we have 2008 and 2009, when the Depart- the past several years has come from eral scrutiny and new laws,there will fenders was having a profound to make sure our clients are comply- ment of Justice and the IRS struck a the shift in dealing with FACTA still be ways clients and their repre- effect on legal practice in New York. ing with,” said Andrew Rotter, a deal with UBS,Switzerland’s largest compliance issues just as much as sentatives will try to outsmart the Attorneys are giving more conser- partner in the tax department at New bank, ultimately leading to a $780 actual tax planning. Ms. Heller ex- government and the IRS. vative advice to clients,even on legal York-area accounting firm Citrin million settlement.The bank turned plained that the FACTA forms are “People are always looking for offshore tax shelters and structures, Cooperman.“Clearly we need to un- over details on the accounts of about so complicated that financial insti- reasons to reduce their tax burdens, because they don’t want to risk pros- derstand laws to be able to explain to 4,700 clients, according to a Febru- tutions are recommending that for- so that won’t go away,”said the source ecution or federal scrutiny. many of our clients what the issues ary 2014 report by the U.S. Senate eign clients hire lawyers to assist with expertise in international law. “The brandishing of criminal li- are and what they need to do.” Permanent Subcommittee on In- them just to fill them out. “Thoughtful, ingenious structures ability of just giving advice has a very Mr. Rotter said his office has vestigations. The report said that in Mark Howe, a partner at Cad- will always be looked at.But the wide chilling effect,” he said. handled about 150 Offshore Volun- the U.S., more than 43,000 taxpay- walader,said that the biggest change retail selling of shelters that occurred Yet the government crackdown tary Disclosure Initiative cases.The ers joined a voluntary IRS disclosure for tax lawyers in private practice is in the early aughts and late ’90s, I and FACTA, which was passed by IRS established the initiative to en- program and paid more than $6 bil- the technical aspect of dealing with can’t believe that’s coming back.” Ⅲ

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September 29, 2014 | Crain’s New York Business | 19 20140929-NEWS--0020-NAT-CCI-CN_-- 9/25/2014 7:57 PM Page 1

REPORT

The facts and the law are on your side. Nabbing R&D tax credits gets easier

nies still have to come up with doc- IRS streamlines umentation, but only for the three time-consuming prior years, recent enough for paperwork long records to be readily available. Revolution not required dreaded by business It’s especially useful for the many firms in a wide array of industries BY JUDITH MESSINA that never realized they were eligi- ble for the credits. And the R&D Anchin Block & Anchin partner Yair doesn’t have to be revolutionary to Holtzman works with a Long Island qualify.It can include, say,work that industrial-equipment manufacturer goes into developing a way to in- that for 2013 claimed about $150,000 crease the shelf life of baked goods in federal R&D tax credits. The or new packaging that reduces food CPA’s client,which has $60 million in spoilage and lets products retain What about the jury? annual revenue, could have claimed their shape and consistency. more,but the traditional IRS metho- “People think you have to be cur- With hundreds of cases under our belt as consultants to counsel or as expert witnesses, Conway MacKenzie dology required to calculate the cred- ing cancer,that the bar is in the strat- professionals bring the necessary experience and expertise to the courtroom needed to improve our clients’ its—an expensive, cumbersome and osphere,”said Mr.Holtzman.“What opportunities for success. We specialize in a broad range of litigation support services in maers requiring forensic time-consuming process—made the you have to do is genuinely improve accounting, financial analysis, business valuation and economic damages quantification. To learn more about how we company reluctant to do that. the function,performance,reliability support lawyers, law firms and their clients, contact us at or visit ConwayMacKenzie.com. Now,with a recent change in IRS or quality of a product or process.” rules, the company is considering Companies don’t have to be huge LITIGATION TRANSACTION PERFORMANCE TURNAROUND& doing so. In June, the federal agency to take advantage of the ASC. An- SUPPORT SERVICES IMPROVEMENT RESTRUCTURING said it would permit businesses to other of Mr. Holtzman’s clients, a ATLANTA CHICAGO CLEVELAND DALLAS DAYTON DETROIT FRANKFURT HOUSTON LONDON LOS ANGELES NEW YORK use a streamlined procedure—the New York City business with less so-called alternative simplified than $1 million in sales that makes credit methodology, instrumentation for or ASC—to go back pharmaceutical and three years and The change biotech companies, amend previous tax was able to claim returns for research can bring about $10,000 in fed- and development ex- eral R&D tax credits penditures, poten- savings for for 2013. As long as tially reaping thou- they have three years sands more in R&D companies of financial history, tax credits. The even young businesses change in methodol- that have yet to turn a ogy is a bonus for profit can claim the companies large and credits, bank them for small, including many local ones, as long as 20 years and turn them VISION. SOLUTIONS. GROWTH. generating savings they can plow into useful deductions when they back into the business. start making money. FIRM OVERVIEW “It’s a huge deal from a documen- In fact, most small to midsize tation and substantiation viewpoint,” companies, often family-owned, Rosen Seymour Shapss Martin & Company LLP (”RSSM”) is one of the premier middle market accounting firms in the New York Metro Area said Mr. Holtzman, a partner and don’t pocket the credit but use it to headquartered in New York City with an office in Garden City, New York. practice leader of Anchin’s R&D tax- underwrite growth, experts said. In addition to the traditional services of accounting, auditing, tax planning credits group. “It makes the whole “Our typical client is a closely & preparation, RSSM offers consulting services including; transaction and process of quantifying and qualifying held family business,” said Saul financial due diligence, litigation support, forensic accounting, business the credit a lot more manageable.” Brenner, tax partner and head of the valuations, mergers & acquisitions due diligence, retirement planning, estate The ASC method isn’t new. It’s international services advisory planning, fiduciary services, employee & executive benefits, and full service been available since 2007.However, group for Berdon. “Many will use it outsourcing. Our firm has historically been heavily involved in assisting our IRS rules had allowed companies to to expand the business.” clients in obtaining bank financing, as well as raising capital. Through our use it only for the current tax year. Even with the new rules, though, unique experience in this ever changing global environment and contacts in there are some hurdles to clear. Re- this area as well as our in-depth knowledge of the financial marketplace, we ‘Good alternative’ newal of the overall R&D credit, work with our clients and their financial staff in preparing cash flow projec- Any business that wanted to claim which expired at the end of last year, tions and assist in their financial requirement presentations to various finan- Michael Bernstein, CPA previous years’ expenditures had to is stalled on Capitol Hill as legislators cial institutions. Additionally, we offer services on both a national and inter- Managing Partner use the traditional IRS method of go- debate how to pay for it. The House national level through our membership in PrimeGlobal, a worldwide ing back possibly decades and docu- voted in May to make all R&D cred- association of independent accounting firms. menting, among other things, their its permanent and has proposed in- INDUSTRY EXPERTISE increase in R&D. The feds’ rationale creasing the size of the credit avail- Our clients are widely diversified and include; real estate, manufacturing, was to give firms an incentive to step able under the ASC method. construction, wholesalers, food & beverage, importers & distributors, up investments in new products and The Senate wants to renew the apparel, publishing & printing, insurance, broker dealers, solar energy, processes.But going back a decade or credit for only two years and add healthcare, private equity funds, investment banks, secured lenders, tech- more can be an exercise in frustration goodies such as allowing businesses nology, & software companies, hedge funds/investment partnerships, for many companies.Records may be to use the ASC computed credit not-for-profit organizations, retail, service & trade contractors, as well as missing, incomplete and/or undigi- against payroll taxes or their alterna- professionals, including high net worth individuals through our tax practice CONTACT tized.Employees who might have re- and family office practice. tive minimum tax bill.Some are bet- 757 Third Avenue membered what happened years ago ting that the two-year deal is what THE RSSM TEAM New York, NY 10017 are likely to be long gone. eventually will make it through We have created a highly motivated team of trained professionals and “It’s a pretty cumbersome Congress,although probably not be- partners who respond to our clients’requirements. Our approach is unique Ph: 212.303.1800 process to have to go back and com- fore the November elections. and our partners are totally involved with each and every client transaction Fax: 212.755.5600 pute a base-year calculation,” said When and if it does, it will keep from start to finish. RSSM is also utilized as a “reference-room” providing Emmalee MacDonald, a senior the ASC as a boon for businesses. guidance to various companies and institutions on subjects such as how to E: [email protected] manager at EisnerAmper. “The “It’s a game changer,” said Dean monitor specialized assets, specific industry analyses, and accounting W: www.rssmcpa.com and tax issues both domestic and foreign. simplified credit methodology is a Zerbe, a managing director at con- really good alternative.” sultant Alliant Group. “It’s the Using the ASC method, compa- biggest business credit out there.” Ⅲ

20 | Crain’s New York Business | September 29, 2014 20140929-NEWS--0021-NAT-CCI-CN_-- 9/25/2014 7:58 PM Page 1

REAL ESTATE

severance package,” he said. ROARING BACK: Helmsley estate HARRY AND A spokeswoman for the hotel LEONA HELMSLEY A rendering of what said the renovation will take about a the InterContinental sells more holdings New York Barclay’s year. 1920s-style lobby will The 88-year-old property was A huge portfolio of Upper East Side look like after sold this year to Constellation Ho- rental apartments formerly owned renovation. tels Holding Ltd.—an investment by the late “Queen of Mean,”Leona group based in Qatar and Luxem- Helmsley, and her husband, Harry, bourg—which took an 80% stake has been purchased for nearly $500 ap images for $240 million. InterContinental million.The properties were sold by Hotels Group, which had owned the Helmsley estate and a partner. Ms. Schneider, 62, said. the hotel since 1998, retained a 20% Real estate investors Joe Chetrit According to Donna Zavattieri, holding and signed a 30-year man- and Larry Gluck bought the apart- an executive vice president at agement contract with two 10-year- ments, clustered in two large build- Schneider & Schneider,the partners extension rights. ings on East 86th and East 88th invested about $40 million to reno- The renovation has been in the streets, the sellers announced. vate the buildings in recent years. works for many years, but funding it Real estate ownership and man- The deal will net profits for the es- was a challenge for IHG, according agement company Schneider & tate of Leona Helmsley, a charitable to industry experts. Schneider Inc. operated the proper- entity that inherited the Helmsleys’ It is considered one of the city’s ties, at 305-315 E. 86th St. and 160 E. wealth and real estate when she died grande dame properties, located at 88th St., and decided to sell them, ac- in 2007.The estate has liquidated the Grande dame to East 48th Street, on a stretch of Lex- cording to the firm’s president, Lynn Helmsleys’ positions in several real ington Avenue where there is no Schneider. Ms. Schneider, who estate assets in recent years. shortage of hotels, including the founded the company with her father, Called Yorkshire Towers, 305- Waldorf Astoria. Irving, in 2007, handled the sale. 315 E. 86th St. has 707 units and show her Jazz Age A message on the hotel’s website Mr. Schneider bought the build- 30,000 square feet of retail space. informs visitors that the property ings with the Helmsleys in 1964. Lexington Towers,at 160 E.88th St., he InterContinental New York Barclay quietly closed its doors late “has embarked on an extensive When Mr. Schneider died in 2012, has 154 units.The buildings are fully September for a $175 million renovation that started just before renovation to restore its original his daughter took control. Ms. leased and contain a mix of market- the busy fall and holiday season in New York. federal-style elegance. Reimagined Schneider said the sale proceeds rate and rent-stabilized units. In fact, the 685-room property would likely have been sold interiors will reveal the luxurious would provide her firm with funds to Law firm Rosenberg & Estis rep- out while the United Nations General Assembly is in session. residential feel of the original 1926 make acquisitions and expand its resented the sellers in the deal and TThe closure affects 447 employees, who are members of the New York hotel.” real estate management services for helped arrange the transaction, and Hotel & Motel Trades Council and were offered buyouts or the option to The renovation will add 17 its own properties and other proper- CBRE brokers Darcy Stacom, Bill return to the hotel when it reopens, said Josh Gold, director of political and rooms for a total of 702. The prop- ty owners. Shanahan and Paul Leibowitz acted strategic affairs for the council. erty was last renovated in 2001. “We thought it was a good time as advisers to the Helmsley estate. “Those who wish to take the buyout will receive a significantly enhanced —lisa fickenscher to sell and reconfigure ourselves,” —daniel geiger

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INSIDE INNOVATIVE OFFICE SPACE S2 BUILDING THE BEST TEAM FOR YOUR COMMERCIAL VENTURE S4

A Special Advertising Supplement to Crain’s New York Business INNOVATIVE OFFICE SPACE CHAMPIONS ‘ACTIVITY-BASED WORKING’ By Christopher Hosford

Special Advertising Section

ew York companies increasingly are moving retreat to enclosed “phone booths.” compelling feature of Horizon’s office is a massive open Naway from office spaces featuring cubicles and “It completely deconstructs the typical idea of an terrace on the building’s 14th floor, an amenity one perimeter offices, and adopting unconventional layouts, office,” says Richard Socarides, GLG spokesperson. “We would expect in a luxury penthouse apartment. residential-type furniture and wide-open interior spaces. wanted a very modern space which sends a message to These are moves toward what is known as “activity- both our employees and visitors, that this is a place of based working,” creating offices that promote employee innovation, and that something new and big is happening comfort along with enhanced productivity. here,” he says. “The search for office space and There’s another side effect: These changes can decisions about design aren’t all produce office interiors that are simply spectacular to see and work in. quantitative,” says Bradley Zizmor, A prime example is the new office of Gerson an A+I principal. “There are more A DIFFERENT WORK Lehrman Group (GLG), at 60 E. 42nd St. (One Grand basic questions, such as, ‘What does it Central Place, the former Lincoln Building), designed ARRANGEMENT by San Francisco-based Clive Wilkinson Architects. The mean to come to work?’ and ‘Where consultancy moved in June from traditional offices on Another representative office is the headquarters of are you most productive?’ It opens 3rd Avenue in Turtle Bay, and was determined to create ad agency Horizon Media, at 75 Varick St., designed interiors in its new 65,000-square-foot space that worked by architecture firm A+I Design. A first phase was up the reality that humans are more as impressively for visiting clients as for employees. completed in mid-2010, with more phases to come. creative when they work in a variety The lobby, a vast two-story atrium with a skylight, The 150,000-square-foot space, across three floors, of situations and areas.” is dominated by a central staircase and flanked by open features collaboration areas with couches and tables workspaces, couches, easy chairs and cozy, glass-enclosed arranged against tall windows. These are separated from collaboration rooms. the interior work space by wide corridors lined with An open coffee bar is off the atrium, complete with a cushioned benches for ad hoc teamwork. Conference A+I worked closely with office furniture company professional barista who serves employees their favorite rooms and executive offices are set against the central Steelcase Corp. to customize Horizon’s modular coffee concoctions while they work on laptops at the bar core. furniture, cabinets and storage units. or on nearby couches. Employees have no assigned seating Similar to the GLG space, Horizon’s office is “The essence of activity-based working is about and work within a concept known as “hoteling”—that dominated by a grand staircase that cascades in a straight taking your workplace and really making it a destination,” is, their workspace of choice lacks personal items; the line through all three floors. It leads down to The Dunes, says Vanessa Bradley, Steelcase advanced applications things they bring to work are stored in assigned lockers. an open public space with terraced, cushioned seating manager and interior designer. If employees need privacy for personal matters, they can where employees can gather to collaborate or relax. A “Ideally, it can become a hub, a magnet that helps employees want to work there,” she says. “We believe you can drive engagement by creating a variety of spaces for employees to choose from, and then giving them the power to choose.”

REACHING FULLEST POTENTIAL Microsoft Corp.’s new offices at 11 Times Square include 205,000 square feet across six floors. Designed by architecture firm Gensler and newly opened in February, the space has no private offices and no assigned spaces. Microsoft’s “work anywhere” concept extends to tables and chairs near the windows, various long tables, multiple banquettes with smaller tables and private single-user “pods” that block out sight and sound for greater privacy. As at Horizon Media, there is a large, wrap-around open terrace available for employees to work en plein air. “Senior leadership wanted spontaneous collaboration, not planned collaboration,” says Keith J. Milone, Microsoft real estate portfolio manager. “We think it’s an environment that enables workers to reach their fullest potential.” S2 We congratulate our client

on breaking ground for

Trinity Academic Center a $40 million, 80,000-square foot, LEED certified building on Trinity Washington University’s campus that will feature state-of-the-art science and health labs and classrooms

Want more info on our donedeals? Scan the QR Code with your smart phone. Special Advertising Section Assemblingg the rightg team to smooth your officeffi move By Christopher Hosford

The lineup of team members can be long and move specialist, office designer, project manager It’s time to move your inclusive. For example, the team facilitating Gerson and structural engineer. Lehrman Group’s (GLG) June move into its new office Information technology was represented in the office from one build- space at 60 E. 42nd St. included the following: acoustics person of Dennis O’Brien, vice president of IT and consultant, audiovisual consultant, architect, budget office operations. ing to another. Do you analyst, building occupancy permit expediter, food “Of course, you start with a real estate broker service consultant, general contractor, graphic have the right team in designer, lighting consultant, mechanical engineer, place? (continued on page S6) It’s not an idle question. The move of any office, particularly a large one, requires the close cooperation of a whole raft of experts, both in- house and outside the firm. Ensuring that everyone critical to the operation is on board, and that they collaborate fully and effectively, can mean the difference between a successful move that facilitates future productivity gains … and disaster. “You can’t work in a vacuum,” says Francine Smith, an interior designer at Hunt Woods Manor Design Group, in Mount Vernon, N.Y., who specializes in commercial real estate space.

“It’s best if the client can identify subject-matter experts for each department or need. You don’t want to find out too late that IT needs a 10-by-10 room for wiring that wasn’t planned for. And some departments might not even exist yet, depending on how long the company will be in its new space. You want to be flexible and plan for growth.”

S4 ©2014 City National Bank City National WealthManagement y fi “ My City National.” the professionals at are complex, I trust Wealth Management advisornear you. Call (917)tofi 322-5245 City National clients. Visit cnb.com/Tr Island Capital Group Executive Managing Director Bob Lieber nancial needs nancialneeds ustCNB to hearother nd a CNB MEMBERFDIC Special Advertising Section

(in GLG’s case, that was CBRE Group Inc.) who knows Brendan Rafferty, facilities director with 3-D “It’s a fun job to have,” Rafferty says, not even the client and its positioning, where employees and printer manufacturer MakerBot Industries, has stopping to catch his breath. “I’m really enjoying clients are coming from and their ease of travel, and become accustomed to moving office spaces: myself.” more,” O’Brien says. He also cites the value of a project Within the last year, he’s helped the fast-growing management firm (here, Gardiner & Theobald), in Brooklyn-based company open three retail spaces, particular in negotiating the price of materials, among two new offices and several additions to its factory, is published by other myriad duties. in addition to managing kiosks at various Home &UDLQ·VRQWKH0DUNHW “Having the IT person on point at the facility is Depot stores. &UDLQ·V&XVWRP&RQQHFWLRQV6WXGLR important,” O’Brien says, speaking of his own role. “The facilities director can quarterback the )RUPRUHLQIRUPDWLRQSOHDVHFRQWDFW “The real key to combatting snafus is to be on site entire move,” Rafferty says. “Once you find the 7ULVK+HQU\DW  RU constantly,” he says. “That way, I was able to hear the location, you work with the landlord to draw the daily chatter and make decisions ASAP, when needed.” lease, make sure legal reviews it and determine WKHQU\#FUDLQVQHZ\RUNFRP that finance thinks the costs are doable. You make sure the security deposit is taken care of, that the insurance policy is set for the new space and that you GOING BEYOND SPACE have enough work stations and power to support them. I’ll make sure everyone is moved safely and SEARCH quickly, hire a cleaning company and follow up if anything is broken. The role of the broker goes beyond a search for available space; ideally, he or she would understand the different “personalities” of building management and how best to negotiate with them. Brokers can bring some specialized knowledge as well. “Typically, if a client has a question on the financial end, one of our MBAs will look at the profit and loss, cash flow, capital expenses and how the lease will be viewed over 10 or 15 years,” says Joe Cabrera, eastern regional vice chairman at Colliers International. In searching for likely new office locales, Cabrera says his team often does a “commutation analysis,” studying where current employees live.

“If you have 500 people who have always worked in midtown, for example, we’ll do an analysis of who goes into Penn Station versus Grand Central, to narrow down the new location possibilities,” Cabrera says.

“And if that midtown organization wants to move up near Columbus Circle, they better be prepared for employees having to endure an extra half hour to 45 minutes of commuting time, and the resulting loss of productivity.”

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SSNY shall mail process to filed with Secy of State of NY (SSNY) KPL ENTERPRISES LLC, a domestic Incm, Cmdty & Frgn exchng drvtv prdcts; & on 08/11/14. Office location: NY The LLC, c/o Jorge Alejandro Sierra SQL, EXCEL/Visual Basic, Fincad, Blmberg LLC, filed with the SSNY on 6/18/14. Gonzalez, 322 W. 57th St., Apt. 16S, County. SSNY designated as agent Office location: New York County. API. 40 hrs/wk; 9am-5pm; Salary commens VISIT OUR WEBSITE NY, NY 10019. General Purposes. upon whom process may be served SSNY is designated as agent upon w/ exp; MPG Operations LLC, New York, NY. CRAINSNEWYORK.COM and shall mail copy of process against whom process against the LLC may Resumes to Box 30189, 685 Third Ave, LLC to: 95 Delancey Street, New be served. SSNY shall mail process RIDGEFIELD FAMILY PARTNERS LLC, 9th Floor, New York, NY 10017. York, NY 10002. Principal business to The LLC, 141 E. 88th St., Unit 10F, Arts. of Org. filed with the SSNY on address: 95 Delancey Street, NY, NY NY, NY 10128. General Purposes. 07/14/2014. Office loc: NY County. 10019. Purpose: any lawful act. SSNY has been designated as agent upon whom process against the LLC PUBLIC & LEGAL NOTICES 1355 AMSTERDAM REALTY LLC, a Notice of Formation of SNB NYC may be served. SSNY shall mail domestic LLC, filed with the SSNY on process to: Reed Werbitt, 540 Notice of Qual. of Furnex, LLC, Auth. Notice of Formation of Trask Foods, Consulting LLC. Arts. of Org. filed 6/16/14. Office location: New York with NY Dept. of State on 8/8/14. Madison Ave 18A, NY, NY 10022. filed Sec'y of State (SSNY) 6/4/14. LLC. Arts. of Org. filed with NY Dept. County. SSNY is designated as agent Purpose: Any Lawful Purpose. Office loc.: NY County. LLC org. in DE of State on 9/2/14. Office location: Office location: NY County. Sec. of upon whom process against the LLC 4/2/14. SSNY desig. as agent of LLC NY County. Princ. bus. addr.: 411 W. State designated agent of LLC upon may be served. SSNY shall mail process upon whom process against it may be 14th St., 4th Fl., NY, NY 10014. Sec. whom process against it may be The LLC, 1355 Amsterdam Ave., NY, 3Square Project Management LLC. served. SSNY shall mail copy of proc. of State designated agent of LLC served and shall mail process to: c/o NY 10027. General Purposes. Arts. of Org. filed with Secy. of State to 637 Valley Rd., New Canaan, CT upon whom process against it may CT Corporation System, 111 8th of NY (SSNY) on 08/27/14. Off. loc: NY 06840. DE off. addr.: Harvard Bus. be served and shall mail process to: Ave., NY, NY 10011, regd. agent Notice of Formation of SUPERIEUR County. SSNY des. as agent of LLC Services, 16192 Coastal Hwy., Lewes, CT Corporation System, 111 8th upon whom process may be served. CONSULTING, LLC. Arts. of Org. filed upon whom process may be served. DE 19958. Cert. of Form. on file: Ave., NY, NY 10011, regd. agent Purpose: all lawful purposes. with Secy. of State of NY (SSNY) on SSNY shall mail process to c/o SSDE, Townsend Bldg., Dover, DE upon whom process may be served. 09/18/14. Office location: NY County. Robinson Brog, et al., Attn: Neil S. 19901. Purp.: any lawful activities. Purpose: all lawful purposes. GREGORY WAYNE DESIGNS LLC, SSNY designated as agent of LLC Goldstein, 875 Third Ave., 9th Fl., New Arts. of Org. filed with the SSNY on upon whom process against it may be York, NY 10022. Purpose: General. 08/20/2014. Office loc: NY County. served. SSNY shall mail process to Notice of Formation of Buttonwood JERICO LLC. Art. of Org. filed with SSNY has been designated as agent Corporation Service Co., 80 State St., Notice of Qualification of INTEGRATED Holdings LLC. Arts. of Org. filed with the SSNY on 08/14/14. Office: New upon whom process against the LLC Albany, NY 12207, regd. agent upon MACRO ADVISORS, LP. Authority Secy. of State of NY (SSNY) on York County. SSNY designated as may be served. SSNY shall mail whom and at which process may be filed with Secy. of State of NY (SSNY) 07/18/14. Office location: NY agent of the LLC upon whom process process to: 145 E 84th St., 9D, NY, served. Purpose: Any lawful activity. on 08/14/14. Office location: NY County. SSNY designated as agent against it may be served. SSNY shall NY 10028. Purpose: Any Lawful County. LP formed in Cayman Islands of LLC upon whom process against mail copy of process to the LLC, 213 Purpose. NOTICE OF QUALIFICATION of (C.I.) on 07/21/14. Princ. office of LP: it may be served. SSNY shall mail West 35th Street, #400, New York, NY MEDLEY SMA ADVISORS LLC. c/o Integrated Macro Advisors, LLC, process to: c/o Jacqueline Pestana, 10001. Purpose: Any lawful purpose. NOTICE OF FORMATION OF A. M. Authority filed with Secy of State of NY Attn: Howard Kurz, 450 Park Ave., Ste. 33 Irving Pl., NY, NY 10003. RICHARDSON, III, LLC. Articles of (SSNY) on 8/08/14. Office location: 1901, NY, NY 10022. SSNY designated Purpose: any lawful activities. NOTICE OF FORMATION OF GWEE Organization filed with the Secretary of NY County. LLC formed in DE on as agent of LP upon whom process LLC. Articles of Organization filed State of NY (SSNY) on 08/12/2013. 6/27/14. SSNY designated agent upon against it may be served. SSNY shall Notice of Qual. of Malachite Capital with the Secretary of NY (SSNY) on Office location: NEW YORK. SSNY whom process may be served and mail process to the LP at the addr. of GP LLC, Auth. filed Sec'y of State 06/03/2014. Office location: New York has been designated as agent upon shall mail copy of process against LLC its princ. office. Name and addr. of each (SSNY) 10/22/13. Office loc.: NY County. SSNY has been designated whom process against it may be to: CORP SERVICE COMPANY, 80 general partner are available from SSNY. County. LLC org. in DE 8/30/13. SSNY as agent upon whom process against served. The Post Office address to STATE ST, ALBANY, NY 12207. C.I. addr. of LP: c/o Maples and Calder, desig. as agent of LLC upon whom it may be served. The Post Office which the SSNY shall mail a copy of Principal business address: 375 PARK P.O. Box 309, Ugland House, S. Church process against it may be served. address to which the SSNY shall mail any process against the LLC served AVE, 33RD FLR, NY NY 10152. DE St., George Town, Grand Cayman, C.I. SSNY shall mail copy of proc. to Att: a copy of any process against the LLC upon him/her is: 40 Wall Street, 35th address of LLC:2711 CENTERVILLE KY1-1104. Arts. of Org. filed with Jacob Weinig, 3 Columbus Circle, served upon him/her is : 301 East Floor, New York, NY 10005. The RD, STE 400, WILMINGTON, DE Registrar of Exempted Limited NY, NY 10019. DE off. addr.: CSC, 22nd Street, Apt#9M, New York , NY principal business address of the 19808. Certificate of LLC filed with Partnership, Registrar of Companies, 2711 Centerville Rd., Wilmington, DE 10010. The principal business address LLC is: 40 Wall Street, 35th Floor, Secy of State of DE located at: P.O. Box 123, Ground Fl., Government 19808. Cert. of Form. on file: SSDE, of the LLC is: 301 East 22nd Street, New York, NY 10005. Dissolution Division of Corp, John G. Townsend Admin. Bldg., 133 Elgin Ave., George Townsend Bldg., Dover, DE 19901. Apt #9M, New York, NY 10010. Date: (If Applicable). Purpose: any Bldg., 401 Federal St, Ste 4, Dover, Town, Grand Cayman, C.I. KY1-9000. Purp.: any lawful activities. Purpose:any lawful act or activity. lawful act or activity. DE 19901. Purpose: any lawful act. Purpose: Any lawful activity.

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TO PLACE A CLASSIFIED AD, CALL 1-800-444-6007 OR VISIT CRAINSNEWYORK.COM PUBLIC & LEGAL NOTICES NOTICE OF QUALIFICATION of MOF Notice of Qualification of Bluehenge Notice of Qualification of Ocean Light Notice of Qualification of SUMMIT NOTICE OF FORMATION OF Art of III GP LLC. Authority filed with Secy of Capital Secured Debt SBIC, L.P. Productions, LLC. Authority filed with ROCK PRIVATE EQUITY PORTFOLIO II Anesthesia, PLLC. Articles of State of NY (SSNY) on 8/11/14. Office Authority filed with NY Dept. of State Secy. of State of NY (SSNY) on (FOUNDATIONS AND ENDOWMENTS), Organization filed with the Sec. of location: NY County. LLC formed in on 9/5/14. Office location: NY County. 05/27/14. Office location: NY County. L.P. Authority filed with Secy. of State State of NY (SSNY) on Aug. 7, 2014. DE on 3/27/14. SSNY designated Princ. bus. addr.: 152 W. 57th St., 20th LLC formed in Delaware (DE) on of NY (SSNY) on 08/15/14. Office Office location: New York Co. SSNY agent upon whom process may be Fl., NY, NY 10019. LP formed in DE on 05/21/14. SSNY designated as agent location: NY County. LP formed in has been designated as agent upon served and shall mail copy of process 1/29/14. NY Sec. of State designated of LLC upon whom process against Delaware (DE) on 02/27/14. SSNY whom process against it may be against LLC to: CORP SERVICE agent of LP upon whom process it may be served. SSNY shall mail designated as agent of LP upon whom served. The Post Office address to COMPANY, 80 STATE ST, ALBANY, against it may be served and shall process to: c/o Larry Wasserman, process against it may be served. SSNY which the SSNY shall mail a copy of NY 12207. Principal business mail process to: c/o CT Corporation 100 Universal City Pl., Bldg., 5121, shall mail process to Corporation any process against the PLLC served address: 375 PARK AVE, 33RD FLR, System, 111 8th Ave., NY, NY 10011, Universal City, CA 91608. Address Service Co. (CSC), 80 State St., Albany, upon him/her is: Art of Anesthesia, NY NY 10152. DE address of LLC: regd. agent upon whom process may to be maintained in DE: c/o 3500 S. NY 12207-2543. Name and addr. of PLLC, c/o Julia Iwamasa, 752 West 2711 CENTERVILLE RD, STE 400, be served. DE addr. of LP: The Dupont Hwy, Dover, DE 19901. Arts each general partner are available from End Ave 21B, New York, NY 10025. WILMINGTON, DE 19808. Certificate Corporation Trust Co., 1209 Orange St., of Org. filed with the DE Secy. of SSNY. DE addr. of LP: c/o CSC., 2711 The principal business address of the of LLC filed with Secy of State of DE Wilmington, DE 19801. Name/addr. State, John G. Townsend Bldg., 401 Centerville Rd., Ste. 400, Wilmington, PLLC is: 752 West End Ave 21B, located at: Division of Corp, John G. of genl. ptr. available from NY Sec. of Federal St., Ste. 4, Dover, DE 19901. DE 19808. Arts. of Org. filed with New York, NY 10025. Purpose: any Townsend Bldg., 401 Federal St, Ste State. Cert. of LP filed with DE Sec. Purpose: any lawful activities. Secy. of State, Div. of Corps., 401 lawful act or activity. 4, Dover, DE 19901. Purpose: any of State, 401 Federal St., Dover, DE Federal St., Ste. 4, Dover, DE 19901. lawful act. 19901. Purpose: all lawful purposes. Notice of Formation of 3861 Route 22 Purpose: Any lawful activity. Notice of Formation of F4 Service Holdings LLC. Arts. of Org. filed with Group LLC, Art. of Org. filed Secy. of HONY FILMS LLC, a domestic LLC, Notice of Formation of White Crest NY Dept. of State on 8/29/14. Office Notice of Formation of KRETCHMER State of NY (SSNY) on 11/12/2013. filed with the SSNY on 6/10/14. Office Consulting LLC. Arts. of Org. filed location: NY County. Sec. of State SC LLC. Arts. of Org. filed with Secy. Office location: New York County. location: New York County. SSNY is with Secy. of State of NY (SSNY) on designated agent of LLC upon whom of State of NY (SSNY) on 9/10/14. SSNY Designated as agent of LLC designated as agent upon whom 9/4/14. Office location: NY County. process against it may be served Office location: NY County. SSNY upon whom process against it may process against the LLC may be SSNY designated as agent of LLC and shall mail process to: c/o The designated as agent of LLC upon be served. SSNY shall mail copy of served. SSNY shall mail process to upon whom process against it may Community Preservation Corp., 28 whom process against it may be process to: The LLC, 9 Broadway, Northwest Registered Agent, LLC, 90 be served. SSNY shall mail process E. 28th St., 9th Fl., NY, NY 10016, served. SSNY shall mail process to: New York, NY 10004. Purpose: any State St., Ste. 700, Office 40, Albany, to: Davis & Gilbert LLP, 1740 principal business address. Purpose: c/o The Kretchmer Companies LLC, lawful activity. NY 12207. General Purposes. Broadway, NY, NY 10019. Purpose: any lawful activity. 350 Fifth Ave., Ste. 6900, NY, NY any lawful activity. 10118. Purpose: any lawful activity. Notice of Formation of PJ 207 LLC. Notice of Formation of MAZL 138TH Notice of Formation of Yellow Ocean, Arts. of Org. filed with Secy. of State of LLC. Arts of Org filed with Secy of LLC. Arts. of Org. filed with Secy. of MONICA LOPEZ ARCHITECT, LLC, a Notice of Formation of DR. KATHY NY (SSNY) on 09/15/14. Office loca- State of NY (SSNY) on 11/6/13. State of NY (SSNY) on 9/15/08. Office DOOLEY, CHIROPRACTOR, PLLC. tion: NY County. SSNY designated Office location: NY County. SSNY Prof LLC. Arts. of Org. filed with the location: NY County. SSNY designated SSNY on 07/25/2014. Office loc: NY Arts. of Org. filed with SSNY on 8/5/14. as agent of LLC upon whom process designated agent upon whom process as agent of LLC upon whom process Office location: New York County. against it may be served. SSNY shall may be served and shall mail copy of County. SSNY has been designated as against it may be served. SSNY shall agent upon whom process against it SSNY designated as agent of LLC mail process to c/o Rosenberg & process against LLC to principal mail process to: The LLC, 183 whom process against may be served. Estis, P.C., Attn: Michael E. Lefkowitz business address: 251 West 138th may be served. SSNY shall mail process Madison Ave., Ste. 1601, NY, NY to: C/O the PLLC, 42 West 39th St., SSNY shall mail process to: C/O THE Esq., 733 Third Ave., NY, NY 10017. Street, New York, NY 10030. 10016. Purpose: any lawful activity. PLLC, 1410 Broadway, Concourse Lvl, Purpose: Any lawful activity. Purpose: any lawful act. 15th Fl, NY, NY 10018. Profession to be practiced: Architecture. NY, NY 10018. Purpose: to engage Noble Sensors, LLC. Arts. of Org. in the practice of Chiropractic. Name of LLC: Summers BK LLC. Arts. 15 EAST 128TH STREET LLC, Arts. of filed with Secy. of State of NY (SSNY) of Org. filed with NY Dept. of State: on 08/27/14. Off. loc.: NY Co. SSNY Org. filed with the SSNY on 08/07/2014. Notice of formation of F.H. Wadsworth Notice of Formation of Selby Lake Too 5/16/13. Office loc.: NY Co. Sec. of des. as agent of LLC upon whom Office loc: NY County. SSNY has LLC. Arts. Of Org. filed with Secy. Of LLC. Arts. of Org. filed with NY Dept. State designated agent of LLC upon process may be served. SSNY shall been designated as agent upon State of NY (SSNY) on 8/19/14. of State on 7/21/14. Office location: whom process against it may be mail process to c/o Robinson Brog, et whom process against the LLC may Office location: NY County. SSNY NY County. Sec. of State designated served and shall mail process to: c/o al., Attn: Marshall J. Gluck, 875 3rd be served. SSNY shall mail process designated as agent of LLC upon agent of LLC upon whom process Business Filings Inc., 187 Wolf Rd., Ave., 9th Fl., New York, NY 10022. to: 17 E 128th St., NY, NY 10035. whom process against it may be against it may be served and shall Ste. 101, Albany, NY 12205, regd. agt. Purpose: General. Purpose: Any Lawful Purpose. served. SSNY shall mail process to: mail process to: Max R. Shulman, upon whom process may be served. F.H. Wadsworth, 77 W. 85th Street, AZIMUTH MORNINGSIDE LLC, a 610 West End Ave., NY, NY 10024, Purpose: any lawful act. Cephus Partners, LLC. Arts. of Org. Suite 6E, New York, NY 10024. principal business address. Purpose: Purpose: any lawful activity. domestic LLC, filed with the SSNY filed with Secy. of State of NY (SSNY) on 6/20/14. Office location: New York all lawful purposes. 15.5 Partners LLC. Arts. of Org. filed on 07/15/14. Off. loc.: NY Co. SSNY with Secy. of State of NY (SSNY) on PENN EQUITY GROUP LLC, Arts. of County. SSNY is designated as agent des. as agent of LLC upon whom upon whom process against the LLC Notice of formation of CRAVE – KITCHEN 06/26/14. Off. loc.: NY Co. SSNY des. process may be served. SSNY shall Org. filed with the SSNY on 07/23/2014. THERAPY, LLC. Arts. Of Org. filed with as agent of LLC upon whom process Office loc: NY County. SSNY has may be served. SSNY shall mail mail process to Manhattan Laminates, process to Azimuth Development NY Secy. of State (SSNY) on 8/6/2014. may be served. SSNY shall mail Attn: Beth Thornton, 624 W 52nd St., been designated as agent upon whom Office in New York County. SSNY process to 810 7th Ave., 18th Fl., New process against the LLC may be Group LLC, 40 Fulton St., 12th Fl., New York, NY 10019. Purpose: General. NY, NY 10038. General Purposes. designated as agent of LLC upon York, NY 10019. Purpose: General. served. SSNY shall mail process to: whom process against it may be 2254 LLC. Arts. of Org. filed with Secy. 21 E. 4th St., Ste 617, NY, NY 10003. Notice of Formation of CA 40-56 served. SSNY shall mail process to: NEVILLE DANCE THEATRE LLC, a of State of NY (SSNY) on 07/17/14. Reg. Agent: Jaime Kurt Oriol, 21 E. Tenth Holdings LLC. Arts. of Org. 101 Avenue D, Suite 6H, New York, NY domestic LLC, filed with the SSNY Off. loc.: NY Co. SSNY des. as agent 4th St., Ste 617, NY, NY 10003. filed with Secy. of State of NY 10009. Purpose: Any lawful activity. on 8/5/14. Office location: New York of LLC upon whom process may be Purpose: Any Lawful Purpose. (SSNY) on 8/14/14. Office location: County. SSNY is designated as agent served. SSNY shall mail process to NY County. SSNY designated as The Reddy Group LLC. Arts. of Org. upon whom process against the LLC c/o Silver Star Properties Corp., 350 BEE LIQUORS, LLC. Art. of Org. filed agent of LLC upon whom process filed with Secy. of State of NY (SSNY) may be served. SSNY shall mail 5th Ave., Ste 6908, New York, NY with the SSNY on 05/26/05. Latest against it may be served. SSNY shall on 08/27/14. Off. loc: NY County. process Brenda Neville, P.O. Box 1625, 10118. Purpose: General. date to dissolve: 12/31/2104. Office: mail process to: c/o The LLC, 1407 SSNY des. as agent of LLC upon NY, NY 10101. General Purposes. New York County. SSNY designated as Broadway, 41st Fl., NY, NY 10018. whom process may be served. SSNY NOTICE OF FORMATION OF LIMITED agent of the LLC upon whom process Purpose: any lawful activity. NOTICE OF LLP FORMATION, Cert. LIABILITY COMPANY. NAME: against it may be served. SSNY shall shall mail process to c/o Robinson Brog, et al., Attn: Neil S. Goldstein, of Registration filed July 10, 2014, Name: KATESHIN GALLERY LLC. Articles of mail copy of process to the LLC, 225 Notice of Formation of ACMOS on Sirotkin & Varacalli, LLP, Principle Organization were filed with the Avenue B, New York, NY 10009. Chrystie LLC. Arts. of Org. filed with 875 Third Ave., 9th Fl., New York, NY 10022. Purpose: General. Office: 164 E 88th St., #3FE, New York, Secretary of State of New York Purpose: Any lawful purpose. Secy. of State of NY (SSNY) on NY 10128, Profession to be practiced: (SSNY) on 05/23/14. Office location: 8/21/14. Office location: NY County. Attorneys, Process may be served on New York County. SSNY has been SSNY designated as agent of LLC Notice of Formation of RAFFLES 41 West 68, LLC. Art. of Org. filed with Sec. of State of N.Y. as agent." designated as agent of the LLC upon upon whom process against it may be BISTRO LLC. Arts. of Org. filed with the SSNY on 11/17/11. Office: New whom process against it may be served. SSNY shall mail process to: Secy. of State of NY (SSNY) on York County. SSNY designated as Charles K. Goldner, LLC. Arts. of Org. served. SSNY shall mail a copy of c/o Nexus Building Development 09/04/14. Office location: NY County. agent of the LLC upon whom process filed with Secy. of State of NY (SSNY) process to the LLC, c/o Kate Group Inc., 41 Wooster St., Ste. 2, NY, SSNY designated as agent of LLC against it may be served. SSNY shall on 05/26/99. Off. loc.: NY Co. SSNY Junghee Shin, 170 East 80th Street, NY 10012. Purpose: any lawful activity. upon whom process against it may be mail copy of process to the LLC, c/o des. as agent of LLC upon whom New York, New York 10075. Purpose: served. SSNY shall mail process to Trinidad Hidalgo, 80 Central Park West, process may be served. SSNY shall For any lawful purpose. Notice of Formation of BUTTERMILK the LLC, 511 Lexington Ave., NY, NY Apartment 22F, New York, New York WAREHOUSE, LLC. Arts. of Org. 10017. Purpose: Any lawful activity. mail process to 155 West 72nd St., New Notice of Qualification of PRIME 10023. Purpose: Any lawful purpose. filed with Secy. of State of NY York, NY 10023. Purpose: General. MACAYA CAPITAL MANAGEMENT (SSNY) on 08/07/14. Office location: Notice of Qualification of LEE EQUITY LP. Authority filed with Secy. of State Notice of Qualification of MHR NY County. SSNY designated as STRATEGIC PARTNERS FUND NOTICE OF QUALIFICATION of MOF of NY (SSNY) on 09/17/14. Office INSTITUTIONAL PARTNERS IV LP. agent of LLC upon whom process INTERLUXE AIV, L.P. Authority filed III MANAGEMENT LLC.Authority filed location: NY County. LP formed in Authority filed with Secy. of State of NY against it may be served. SSNY shall with Secy. of State of NY (SSNY) on with Secy of State of NY (SSNY) Delaware (DE) on 09/10/14. Princ. (SSNY) on 06/26/14. Office location: NY mail process to Tarter Krinsky & 09/04/14. Office location: NY County. 8/26/14. Office location: NY County. office of LP: 200 E. 72nd St., PHK, County. LP formed in Delaware (DE) on Drogin LLP, Attn: Steven Troup, Esq., LP formed in Delaware (DE) on LLC formed in DE on 3/27/14. SSNY NY, NY 10021. SSNY designated as 12/21/11. Princ. office of LP: 40 W. 57th 1350 Broadway, 11th Fl., NY, NY 08/27/14. Princ. office of LP: 650 designated agent upon whom agent of LP upon whom process St., 24th Fl., NY, NY 10019. SSNY 10018. Purpose: Any lawful activity. Madison Ave., NY, NY 10022. SSNY process may be served and shall against it may be served. SSNY shall designated as agent of LP upon whom designated as agent of LP upon whom mail copy of process against LLC to: mail process to the Partnership at process against it may be served. Notice of Formation of AMG 104 process against it may be served. SSNY CORP SERVICE COMPANY, 80 the princ. office of the LP. Name and SSNY shall mail process to the LP at Quickserve LLC. Arts. of Org. filed shall mail process to the Partnership STATE ST, ALBANY, NY 12207. addr. of each general partner are the addr. of its princ. office. Name and with Secy. of State of NY (SSNY) on at the princ. office of the LP. Name Principal business address: 375 PARK available from SSNY. DE addr. of LP: addr. of each general partner are 8/20/14. Office location: NY County. and addr. of each general partner are AVE, 33RD FLR, NY NY 10152.DE c/o Corporation Service Co., 2711 available from SSNY. DE addr. of LP: SSNY designated as agent of LLC available from SSNY. DE addr. of LP: address of LLC: 2711 CENTERVILLE Centerville Rd., Ste. 400, Wilmington, c/o Corporation Service Co., 2711 upon whom process against it may Corporation Service Co., 2711 RD, STE 400, WILMINGTON, DE DE 19808. Arts. of Org. filed with DE Centerville Rd., Wilmington, DE 19808. be served. SSNY shall mail process Centerville Rd., Ste. 400, Wilmington, 19808. Certificate of LLC filed with Secy. of State, Div. of Corps., John Arts. of Org. filed with Secy. of State to: c/o Atlantis Management Group, DE 19808. Arts. of Org. filed with DE Secy of State of DE located at: G. Townsend Bldg., 401 Federal St. - of DE, Dept. of State, Div. of Corps., 555 So. Columbus Avenue, Ste. 201, Secy. of State, State of DE, Div. of Division of Corp John G. Townsend Ste. 4, Dover, DE 19901. Purpose: John Townsend Bldg., Dover, DE Mt. Vernon, NY 10550. Purpose: any Corps., 401 Federal St., Dover, DE Bldg,401 Federal St, Ste 4, Dover, Any lawful activity. 19901. Purpose: Any lawful activity. lawful activity. 19901. Purpose: Any lawful activity. DE 19901. Purpose: any lawful act.

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STORY FEATURED a giant art installation made out of drinking Retailers’ rapid makeovers straws in a Home Depot-sponsored Continued from Page 3 pletely shuts down every six months an arrangement, and retailers could iteration this past and established retailers is a re- or so for a redesign. Similarly, be stuck with leftovers. Stores need summer. sponse to fast-fashion chains like cutting-edge designer Alexander to make sure they have a core cus- Zara and H&M, which have been Wang often switches the art instal- tomer who regularly buys, since the gaining market share for their ever- lation at his SoHo shop in an at- different themes might not appeal changing inventories that continu- tempt to generate excitement to everyone. ally keep shoppers revisiting stores among shoppers. Fendi recently for the latest and greatest must- opened a temporary shop on Greene ‘Living advertorial’ haves. Of course, switching a store’s Street that will change its theme “To make a store like this suc- entire presence is not without its every month until December. Even cessful is to cultivate not only the cu- share of risks: Overhauls are costly department stores are introducing rious customer, but a regular roster and often confuse customers. regularly rotating features in an ef- of customers,” said Ms. Scafidi. drew innis drew “H&M, Zara, Forever 21— Even though stores typically / they’re changing products within choose slow times of the week to shut the existing floor set and have been ‘One step further down, the loss of business from the successful,” said Michael Londri- closure, as well as the costs involved gan,dean of academic affairs at LIM toward the with redesigning the space, can be

College. “These other people are high.Some analysts estimate that the courtesy of story trying to be more creative by think- gallery approach price to overhaul a 2,000-square-foot ing of how to build on it and what store in a full-scale makeover could ant.“The whole idea is giving brand opening a New York City store in kind of retail philosophy to use, and to fashion’ be in the hundreds of thousands. partners the opportunity to reach 2018, began a “pop-in” feature in they came up with ‘Change every- Ms. Shechtman declined to consumers in a contextually relevant eight of its flagships last October. thing.’ ” specify the cost of her makeovers, environment in a subject in which The company has erected small but noted that her endeavor is more they have authority.”She noted that boutiques that change themes and High risk than 50% funded by sponsorships. Story was profitable in its first year merchandise every month. More Restaurants regularly change fort to get shoppers in the door. Such revenue, ranging from in business, and last year sales grew than 50 vendors are included in each their menus to feature the season’s “This is one step further toward $75,000 to $300,000 per theme, has by 238% from 2012. shop, and excess merchandise is ei- current produce. Park Avenue, the gallery approach to fashion,” come from companies such as As a plus, the store regularly re- ther marked down and sold in the which recently reopened on Park said Susan Scafidi, founder of the American Express,General Electric ceives tourists from the High Line larger store or returned to the brand. Avenue and East 26th Street, even Fashion Law Institute. and Pepsi. The current technology nearby,and rents are fairly low by re- “We wanted to do something changes its name with the seasons The concept carries a high price theme is sponsored by Intel, which tail standards, between $100 and that was exciting and different and during the course of the year. tag and risk.When a store closes for doesn’t supply products so much as $160 a square foot, since Chelsea is differentiated us from other retail- But now the movement has its transition,it could lose money on a presence. not a shopping destination. ers,” said Olivia Kim, Nordstrom’s trickled into the fashion world. unsold merchandise. Story, for ex- “It’s like a living advertorial that Larger stores are also looking for director of creative projects.“It’s be- Dover Street Market,which opened ample, sells items on consignment, you can shop,” explained Ms. a way to capitalize on rotations. come a place of exploration for our in Murray Hill late last year, com- but not all brands may agree to such Shechtman, a former retail consult- Seattle-based Nordstrom, which is customers.” Ⅲ

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32 | Crain’s New York Business | September 29, 2014 20140929-NEWS--0033-NAT-CCI-CN_-- 9/26/2014 1:03 PM Page 1

FOR THE RECORD

GOODS AND SERVICES of Lee & Associates. The asking rent for $1,253,000. In the same period, he sold ● Department of Education the building’s ground-floor space is $125 175,000 shares at prices ranging from ABOUT THIS SECTION Seeks competitive sealed bids by 4 p.m. per square foot and $40 per square foot $35.04 to $35.10 per share, in a FOR THE RECORD is a weekly listing of information from the public record that on Oct. 15 for labor, materials and for the second through fifth floors. transaction worth $6,139,998. He now can help businesspeople in the New York area find opportunities, potential supervision for the removal, replacement directly holds 83,842 shares. and painting of acoustical ceilings. To ● Arrojo Studio signed a lease for 3,400 new clients and updates on competitors. receive bid documents, send an email to square feet at 11 Broadway in South ● ACI Worldwide Inc. (ACIW) To ask questions or get more information on this section, contact Crain’s [email protected] with Williamsburg, Brooklyn. Nick Arrojo, a Philip G. Heasley, director, president research department at [email protected]. “B2552040: Requirements contract for celebrity hairstylist, will open a salon on and chief executive, exercised options on removing, replacing and painting of the ground floor. The tenant and the 280,021 shares of common stock at acoustical ceilings” in the subject line. To landlord, L+M Development Partners, $7.55 per share between Sept. 3 and make inquiries, send an email to were represented by Diana Boutross of Sept. 9, in a transaction worth NEW IN TOWN Inc. Plumbing & Heating, owed [email protected] or call the Winick Realty Group. Asking rents in $2,114,159. In the same period, he sold $254,654.40; and Mauro Cordova vendor hotline at (718) 935-2300. the area are $175 per square foot. 280,021 shares at prices ranging from Companies that would like to have details Gorayeb & Associates, owed $250,000. $19.56 to $19.67 per share, in a of openings published should submit ● Office of Management and Budget transaction worth $5,484,167. He now descriptions following this format to ● SIGA Technologies Inc. Requests proposals by 3 p.m. on Oct. 7 STOCK TRANSACTIONS directly holds 1,147,270 shares. [email protected], with 660 Madison Ave., Manhattan for capital-project scope development “New in Town” in the subject line. Filed for Chapter 11 bankruptcy services and cost estimating by qualified Following are recent insider transactions at ● Tiffany & Co. (TIF) protection on Sept. 16. The filing cites outside architectural, construction New York’s largest publicly held companies Michael J. Kowalski, chairman and chief ● Brass Owl estimated assets of $100,000,001 to management or engineering firms. filed with the Securities and Exchange executive, sold 54,045 shares of common 36-14 Ditmars Blvd., Queens $500 million and estimated liabilities of To make inquiries, contact Michelle Commission by executives and major stock at $101.01 per share on Sept. 10, The boutique clothing store opened in $100,000,001 to $500 million. The Rolon at (212) 788-5821 or shareholders. Listings are in order of in a transaction worth $5,458,815. He Astoria. It features vintage shoes and creditors with the largest unsecured [email protected]. transaction value.The information was now directly holds 145,245 shares. accessories from brands that include claims are Albemarle Corp., owed obtained from Thomson Reuters. Steve Madden, Dolce Vita and Chinese $2,762,753.35; Cooley, owed ● Automatic Data Processing Inc. (ADP) Laundry, as well as jewelry, candles and $158,902.53; and Bingham REAL ESTATE DEALS ● CBS Corp. (CBS) Michael L. Capone, corporate vice body-care items. McCutchen, owed $54,009.24. Leslie Moonves, president and chief president of product development and Companies that would like to have details executive, exercised options on 562,500 chief information officer, sold 52,979 ● Grandma’s Dim Sum ● WNG Properties of their recent transactions appear in these shares of common stock at prices ranging shares of common stock at $83.53 per 40-24 College Point Blvd., Queens 119 Old South Plank Road, listings should email descriptions following from $13.43 to $28.70 per share between share on Sept. 10, in a transaction worth The Chinese restaurant opened in Newburgh, N.Y. this format to MSingleton@crainsnewyork Sept. 5 and Sept. 8, in a transaction worth $4,425,177. He now directly holds Flushing. The house specialty is Peking Filed for Chapter 7 bankruptcy .com, with “Real estate transaction” in the $13,280,625. In the same period, he sold 42,239 shares. duck. protection on Sept. 8. The filing cites subject line, or enter them online at 562,500 shares at $59.05 per share, in a estimated assets of $100,001 to crainsnewyork.com/submitadeal. Deals are transaction worth $33,214,106. He now ● C.R. Bard Inc. (BCR) ● Red & Gold Crab Shack $500,000 and estimated liabilities of listed in order of square footage. directly holds 1,857,230 shares. John H. Weiland, president and chief 30 St. Marks Place, Manhattan $100,001 to $500,000. The creditors operating officer, exercised options on The crab-boil restaurant opened in the with the largest unsecured claims are COMMERCIAL ● Ralph Lauren (RL) 27,179 shares of common stock at $84.58 East Village. It serves Atlantic red crab, Wash & Glo Inc., owed $250,000; 300 ● Gyro signed an 11-year lease for The Lauren family sold 50,000 shares of per share on Sept. 10, in a transaction Florida golden crab and lobster. Each & Plank, owed $54,370.73; and Wash & 22,300 square feet at 115 Broadway in common stock at prices ranging from worth $2,298,664. On the same day, he order comes with two add-ons, such as Glo Inc., owed $9,329.51. lower Manhattan. The advertising $173.19 to $174.62 per share between sold 27,179 shares at $149.50 per share, corn, potatoes, shrimp or mussels. agency will occupy the entire 14th floor Sept. 11 and Sept. 12, in a transaction in a transaction worth $4,063,261. He of the financial-district building, worth $8,683,900. It now indirectly now directly holds 120,405 shares. GOVERNMENT CONTRACT doubling its space. The tenant was holds 132,970 shares. COMPANY MOVES OPPORTUNITIES represented by I. Keith Ellis of Savills ● Regeneron Pharmaceuticals Inc. (REGN) Studley.The landlord, Richard Cohen ● Prestige Brands Holdings Inc. (PBH) P.Roy Vagelos, chairman, sold 10,328 Companies that would like to have details Following are selected contract of Capital Properties, was represented by Matthew M. Mannelly, president and shares of common stock at prices of recent moves published should submit opportunities recently announced by New Adam Foster, Brad Gerla, Michael chief executive, exercised options on ranging from $350.07 to $351.00 per descriptions following this format to York City agencies.To learn how to sell Rizzo and Sam Spillane of CBRE. The 175,000 shares of common stock at share between Sept. 8 and Sept. 10, in a [email protected], with goods and services to city government, visit asking rent was not disclosed. $7.16 per share between Sept. 4 and transaction worth $3,615,525. He now “Company Moves” in the subject line. www.nyc.gov/selltonyc. For a searchable Sept. 5, in a transaction worth indirectly holds 654,601 shares. Ⅲ database of current procurement notices, ● Hunt Cos. signed a six-year lease for ● Babel Fair visit www.nyc.gov/cityrecord. Listings 20,600 square feet at 230 Park Ave. in 294 Bedford Ave., Brooklyn are alphabetical by category and midtown. The Texas-based real estate The women’s apparel shop opened its department. assets manager will relocate its mortgage DEALS ROUNDUP second New York City location, in division from lower Manhattan to Williamsburg. It offers items from CONSTRUCTION SERVICES occupy the entire 19th floor at the 34- international labels, including Japanese ● Department of Parks and Recreation story tower. The tenant was represented TRANSACTION SIZE denim and Argentine leather. Seeks competitive sealed bids by 10:30 by David Hollander and Chris TARGET/SELLERS (IN MILLIONS) BUYERS/INVESTORS TRANSACTION TYPE a.m. on Oct. 14 for the reconstruction of Mansfield of CBRE. The landlord, Taminco Corp./Apollo $2,773.3 Eastman Chemical Co. SB M&A ● Boxers perimeter sidewalks in Washington Monday Properties, was represented in- Global Management 215 W. 40th St., Manhattan Square Park in Manhattan. Bid house by Jordan Berger, along with (Manhattan), Select The gay sports bar opened its second documents are available at the Blueprint Frank Doyle, Jonathan Fanuzzi, Paul Equity Group Inc. New York City location, in midtown Room, Room 64, Olmsted Center, Glickman, David Kleiner and Matthew (Manhattan) west. Its brunch offers unlimited Flushing Meadows Corona Park, Polhemus of JLL. The asking rent was in Multimedia Games $1,110.7 Global Cash Access SB M&A mimosas, Bloody Marys and Bellinis Queens, for a $25 fee, payable by the mid-$70s per square foot. Holding Co./Renaissance Holdings Inc. Technologies Corp. with the purchase of an entrée. company check or money order to City (Manhattan) of New York, Parks and Recreation. To ● David Feldman Worldwide signed a ● The Kooples make inquiries, contact Michael five-year lease for 6,600 square feet at Annie’s Inc./ $823.0 General Mills Inc. SB M&A 450 Seventh Ave. TimesSquare Capital 401 W. 14th St., Manhattan Shipman at (718) 760-6705 or in midtown. The Management (Manhattan) The French fashion chain opened its [email protected]. court-recording and legal-services firm $483.3 second New York City location, in the will expand from its subleased 4,100- Origen Financial Inc., GoldenTree Asset SB M&A ● substantially all assets/ Management (Manhattan) meatpacking district. It offers soft Department of Transportation square-foot space on the fifth floor at Origen Financial Inc. skinny jeans for women and waxed Seeks competitive sealed bids by 11 a.m. the 46-story Nelson Building to occupy SuperDerivatives Inc. $350.0 Intercontinental SB M&A crew-neck T-shirts for men. on Oct. 6 for the construction of a new an adjacent unit. The tenant was (Manhattan)/Accel Partners, Exchange Inc. dock builder’s crane barge. Bid represented by John Johnson of Savills Pitango Venture Capital documents are available for a $50 Studley.The landlord, the Kaufman Shavit Capital Fund BANKRUPTCIES deposit, payable by certified check or Organization, was represented in-house 650 California St. $309.0 Columbia Property Trust Inc. SB M&A money order to New York City by Barbara Raskob. Asking rents at the Class A office tower The following listings are selected from the Department of Transportation. To make building run in the $50s per square foot. in San Francisco/ most recent available filings by companies inquiries, contact Nicola Rahman at Prudential Real Estate seeking bankruptcy protection in the (212) 839-8167 or the bid window at Investors, Tishman Speyer Southern and Eastern Districts of New (212) 839-9435. RETAIL Properties (Manhattan) York. Information was obtained from U.S. 183 Madison Ave. $185.0 Not disclosed (74.5%) SB M&A Bankruptcy Court records available on ● Housing Authority ● Blink Fitness signed a 15-year lease (Manhattan)/IRSA Public Access to Court Electronic Records. Seeks competitive sealed bids by 11 a.m. for 19,300 square feet at 111 Nassau St. Investments and Representations Inc., Listings are in alphabetical order. on Oct. 6 for closed-circuit television in the financial district. The health-club IRSA International and link-access control systems at chain will occupy part of the ground ● Conelle Construction Corp. various developments citywide. Bid floor and the entire second and third 12 buildings at the Flagler $133.2 Insight Investcorp SB M&A Center, Jacksonville, Fla./ International Inc. (Manhattan), 50 Broadway, Manhattan documents are available at www.nyc.gov floors of the Lara luxury residential Flagler Development Crocker Partners Filed for Chapter 7 bankruptcy protection /html/nycha/html/business/sellingtonyc building, one block south of City Hall Realty on Sept. 11.The filing cites estimated ha.shtml or in person at 90 Church St., Park. The tenant was represented by Ben Selected deals announced for the week ended Sept. 11 involving companies in assets of $500,001 to $1 million and Manhattan, 11th floor, for a $25 fee, Birnbaum, Marc Frankel and Jeff metro New York. SB M&A: Strategic buyer M&A represents a minority or majority estimated liabilities of $1,000,001 to $10 payable by certified check or money Roseman of Newmark Grubb Knight acquisition of existing shares of a company without the participation of a financial million.The creditors with the largest order to NYCHA. To make inquiries, Frank. The landlords, Bernard and buyer. unsecured claims are Great Northern contact Vaughn Banks at (212) 306- Robert Friedman, were represented by source: capitaliq Insurance Co., owed $600,000; Donato 6727 or [email protected]. Henry Goldfarb and Stanley Lindenfeld

September 29, 2014 | Crain’s New York Business | 33 20140929-NEWS--0034-NAT-CCI-CN_-- 9/26/2014 5:07 PM Page 1

BUMPER CROP: Cadillac’s new HQ will include display space.

Will today’s outcomes-based ap images system leave your organization out in the cold? Cadillac trades in Today’s healthcare industry is undergoing widespread convergence. It’s one in which health plans, providers, and life sciences companies share a focus on increased quality and cost Motown for the optimization. KPMG can help. With our industry experience, insights on the regulatory environment, knowledge of data and analytics and growing portfolio of services, we can help your organization get out in New York groove front of healthcare convergence. Before it’s too late. For more information, please contact Joseph Kuehn at 631-425-6021 or [email protected]. Carmaker hopes to gain marketing mileage kpmginstitutes.com/converge in SoHo by living luxe life of its customers

working on everything from fashion BY MIKE COLIAS to liquor campaigns. © 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member limited liability partnership and the U.S. a Delaware KPMG LLP, © 2014 with KPMG firm of the KPMG network independent member firms affiliated NDPPS 307454 entity. (“KPMG International”), a Swiss International Cooperative “Being able to pull in people with Cadillac chief Johan de Nysschen is different experiences and creative out to forge a new brand culture points of view has worked out real- that’s focused on proving its luxury ly well for us,” Mr. VanDyke said. bona fides to well-heeled cus- Cadillac’s marketers would ben- tomers. efit from being in the same creative He thinks moving to New York circles where its buyer demograph- Join our List for Event Notifications and Email Alerts City from Detroit can help. ic resides, said Gary Stibel, CEO of General Motors Co. said Cadil- New England Consulting Group in lac expects its new headquarters, Boston. And choosing a global city www.CrainsNewYork.com/Newsletters which will include display and event would make a statement about its space,will open in SoHo around the ambitions. second quarter of 2015. “De Nysschen is a disruptive “There are a great number of thinker,” Mr. Stibel said. “I think it benefits to putting at least some of would be a smart, timely move that our marketing people in a world could help Cadillac’s image.” where they can be in regular contact But there are risks, too. with not only premium customers, Bill Lovejoy, a consultant who but be more immersed in the was GM’s vice president of market- lifestyle of people who shop for pre- ing, sales and service for North mium brands,” Mr. de Nysschen America from 2000 to 2002, thinks told Crain’s New York Business sister breaking off the marketing function publication Crain’s Detroit Business. from the rest of Cadillac’s resources The move could help Mr. de in Detroit would be a mistake. Nysschen,who took over the Cadil- lac brand Aug.1 after leaving Infini- Out of touch? ti, in his quest to position Cadillac Mr. Lovejoy said marketing’s in- as a “distinct, separate, premium” put on vehicle details—right down unit apart from GM’s other brands. to the placement of a cup holder or He said it’s undecided whether he climate-control knob—is an under- and his direct reports would be in- rated aspect of its function. He be- cluded in the New York move. lieves it’s more important for mar- Charles Mayer, who has held keters to have face time with the marketing roles at Ferrari- designers and product planners Maserati, Jaguar and Saab, believes based in Detroit. Cadillac would benefit from access “You’ve got to see and touch and Our commitment is your success. to talent at the other luxury brands feel the products that are being de- that have their U.S. headquarters veloped,” he said. “If you just fly in near New York, including BMW for a review and fly out, there’s less and Mercedes-Benz—people who interaction. I think you’d lose a lot.” “would otherwise never consider re- Mr.Mayer was with Jaguar when locating to Detroit.” then-owner Ford Motor Co.moved Rivkin Radler has a proven track record that is more than 60 years strong. We are committed the brand, along with Aston Martin to delivering success for our healthcare clients. By proactively identifying new trends, issues, No experience necessary and Volvo, to Southern California and opportunities and developing effective strategies to address them, we help providers Hudson Rouge, Lincoln’s ad in 2000. He said the distance be- and businesses in the industry remain vibrant in the new healthcare economy. agency and a unit of Detroit-based tween the marketers and the prod- Team Detroit, set up shop in New uct teams that remained in Detroit York in 2011 to support the relaunch hurt the effort. of Lincoln. Lincoln mainly wanted “Other than running up signifi- to tap into New York’s creative talent cant costs of relocating brands and pool, said Matt VanDyke, Lincoln’s people,there was not much impact,” global director. Nearly all of the 50 he said. Ⅲ people initially hired by Hudson DRIVEN TO DELIVER® Rouge had little or no experience in This story originally appeared LONG ISLAND | NEW YORK CITY | NEW JERSEY automotive marketing,but had been on CrainsDetroit.com 926 RXR Plaza, Uniondale NY 11556 Attorney Advertising www.rivkinradler.com 20140929-NEWS--0035-NAT-CCI-CN_-- 9/26/2014 6:05 PM Page 1

Amelia, and over much of the tech- nology industry, is what happens to Amelia could rival IBM’s Watson the people who lose their jobs.News articles in India in advance of the Continued from Page 1 Raised in New Delhi, Paris and in smart machines, IBM’s superstar platform’s launch have been largely Chetan Dube, Amelia can digest an London, Mr. Dube built IPsoft into computer system, Watson. about the threat it poses to the coun- oil-well centrifugal-pump manual a profitable IT services business that “Watson is very impressive, but try’s outsourcing industry. in 31 seconds—and give instruc- manages infrastructure through au- its strength is big-data analytics,” Last year, Gartner forecast the tions for repairs—and do the job of tomated systems, with offices in 10 said Ergun Ekici, vice president of entire managed-services industry a call-center operator,a mortgage or countries and 2,000 employees. emerging technologies at IPsoft. “It would see a 60% drop in costs by insurance agent, even a medical as- About 500 work out of the compa- is not comprehension of what a per- 2017,all from lower head count,ow- sistant, with virtually no human ny’s downtown headquarters over- son means when they talk to you.” ing to new technology. help.Fluent in 21 languages,she un- looking New York Harbor, and An IBM spokesman did not re- derstands implied, not just stated, more than half of them are doing re- spond to requests for comment. But Jobs killer or creator? meanings, and improves her per- search and development supported one expert advised caution when Some IPsoft clients, like Accen- formance by hearing humans deal by two Dube family trusts. comparing the two systems. ture, agree that Amelia will be dis- with questions she can’t yet answer. Mr. Dube declined to describe “[IPsoft is] doing some interest- ruptive,but say it can lead to the cre- Monday’s unveiling begins a the source of his family’s wealth. He ing things, which are different from ation of higher-value jobs. push by IPsoft to show off Amelia to also declined to provide a revenue how Watson does things,” said “In addition to efficiencies,it can

the business world. She is already figure for IPsoft, which is privately Kathleen McKeown, director of the mimic productions enable you to do new things,like ex- involved in pilot efforts in five in- held. In a 2011 article, India’s Eco- Institute for Data Sciences & Engi- pand your services,” said Paul dustries, including institutional nomic Times reported it as $700 mil- neering at Columbia University, ‘The difference Daugherty, Accenture’s chief tech- banking, insurance and oil and gas. lion. who is familiar with both Watson nology officer,giving the example of Experts—and IPsoft—say that IPsoft spent the first 10 years of and Amelia. “It is apples and between sci-fi a manufacturer selling a piece of Amelia and cognitive technology in its work on Amelia studying the hu- oranges.” equipment.“Companies want to sell general mark a turning point in the man brain, and without writing a In addition, though Amelia is and science a service, not a product. Using cog- automation of business processes line of code.The approach centered making her debut, she is not fully nitive technology, they can layer on and the start of a new wave of dis- on “neural emulation” and how the grown. IPsoft continues to work on is time’ services.” ruption. mind maps connections between her reaction to emotions, and there Mr. Dube argues that Amelia “We are at the edge of a tectonic objects,which Mr.Dube sees as fun- are limits to what she can infer from will free professionals from mun- shift,”said Mr.Dube,the company’s damentally different from IBM’s fo- ambiguous statements. dane chores and allow them to focus chief executive. That shift will have cus on emulating the brain’s archi- “Contextual ambiguity—when on innovation.He also thinks robots its most profound effect on the tecture with neurosynaptic chips. the context ends and begins—that and smart machines will soon be global “knowledge worker” sector will be one of the challenging lot more once she’s put to work. central to daily life. and the $9 trillion that McKinsey & Room to grow things,”said Jinho Choi,an assistant In the meantime, analysts and “I’m convinced that in the next Co. estimates it totals in employ- He likens IPsoft’s efforts to peo- professor at Emory University who business leaders are excited about decade we will pass someone in a ment costs. ple learning to fly by understanding worked at IPsoft and continues to Amelia’s potential. “It’s one of the corridor and we won’t be able to tell “Our assessment, and our part- the principles of flight rather than consult on Amelia. first things we’ve seen that’s com- if this is a human or an android,” he ners’assessment,is that a third of that by imitating a bird (hence the prod- Mr. Ekici said the company has mercially available that actually said. “The difference between sci- market segment is immediately ad- uct’s homage to Amelia Earhart). been improving Amelia’s ability to learns,” said Frances Karamouzis, a ence fiction and science is time.” Ⅲ dressable by technology such as The company also insists that handle ambiguity—and she asks Gartner analyst who praised the Amelia,”Mr.Dube said.“That is a $3 Amelia comes closer to human un- questions when something isn’t platform in a report earlier this year. LISTEN to a discussion at CrainsNewYork.com/podcasts trillion market impact at maturity.” derstanding than the biggest name clear. He also expects her to learn a The cloud that hangs over Lincoln Center seeks sponsors

Mr. Bernstein is expected to dis- et, so new revenue streams would be Bid for business cuss Lincoln Center’s more aggres- welcome. It already has more than partnerships is new sive push into finding corporate 40 corporate sponsors, including sponsors at a large advertising con- American Express and Bank of prez’s first big move ference on Monday. Sponsorships America.Mr.Duffin declined to say differ from straight advertising be- how much Lincoln Center derives cause they involve a collaborative ef- from those relationships. BY THERESA AGOVINO fort by both parties to enhance their Experts say Lincoln Center’s NAMING RIGHTS: brands. reputation makes it an excellent po- Lincoln Center believes Lincoln Center for the Performing Lincoln Center’s move comes as tential partner for purveyors of it can unlock more corporate funding by Arts appointed Jed Bernstein its overall corporate philanthropy is high-end goods and services. getting creative. president last spring to take advan- dwindling and big companies’ sup- “It is a first-class brand with

tage of the Madison Avenue veter- port of the arts is eroding.Corporate first-class talent,” said Michael bussellmark an’s marketing prowess. Now one of giving fell nearly 2% in 2013, ac- Kaiser, chairman of the DeVos In- his strategies for promoting Lincoln cording to Giving USA. Mean- stitute of Arts Management and head of the Broadway League, an and their needs. Center is coming into view:expand- while,the share of corporate philan- former head of the Kennedy Center. industry trade group. Under his But he sees a wealth of possibili- ing and deepening corporate spon- thropy dedicated to the arts fell to But, he said, “you can’t throw logos leadership at the league, Continen- ties.For example,Cisco Systems is a sorships,which haven’t been a tradi- 5.3% in 2012 from 8.8% in 2007,ac- everywhere. It can’t be obnoxious.” tal became the official airline of vendor for Lincoln Center—some- tional source of arts funding. cording to CECP, a coalition of Spending on corporate sponsor- Broadway, while Visa became its thing it could promote if it became During the summer, Lincoln chief executives working to improve ships in North America is projected preferred credit card. a corporate sponsor.Mr.Jonas could Center hired SJX Partners, a firm society. to increase 4% this year,to $20.6 bil- Lincoln Center is the steward of also envision a Champagne compa- that finds corporate tie-ups,to help it lion.However,only 4% of that is ex- the Upper West Side campus that ny becoming the official bubbly at redesign and broaden its program. It Luxury brands pected be spent on arts and culture includes 10 other organizations, in- Lincoln Center theaters,and,as part also tapped Repucom to conduct a “We are looking to diversify our organizations, according to IEG, a cluding the Metropolitan Opera of a deal,those who buy a case might study of Lincoln Center’s image and financial base,” said Peter Duffin, sponsorship consulting firm. The and the New York City Ballet. Un- receive tickets to a performance. fan base to make a more compelling senior vice president for brand and majority of sponsorship money, der the new effort, Lincoln Center Bank of America has been a cor- case for corporate sponsorship. And marketing at Lincoln Center. 70%, is spent on sports. will eventually try to market all 11 porate sponsor of Lincoln Center a new senior position was created, “Sponsorship is a real opportunity.” Arts organizations haven’t prior- for a group sponsorship.That could for more than 40 years.Rena DeSis- though not yet filled, to oversee the Lincoln Center must raise about itized seeking sponsorships, said be tricky because sponsors often de- to, who oversees the bank’s interna- effort. half of its $118 million annual budg- Jim Andrews, senior vice president mand exclusivity, which might con- tional arts sponsorships, said Lin- at IEG.“Sports teams have huge or- flict with the deals made by the in- coln Center helps the bank project a ganizations designed to get spon- dividual organizations. positive image. The center is a ma- CORRECTIONS sorships.” jor culture hub, an economic engine Ethan Gerber is the executive director of the Greater New York Taxi Association. This fact was misstated Lincoln Center’s yet-unfilled Potential conflicts and a provider of arts education. in the Sept. 22 “Taxi foes join forces to take on rival Uber.” senior vice president post will foster “It’s something we’ll need to “There is a holistic reason to do it,” The name of the architecture firm designing 510-514 W. 24th St. for developer Michael Stern is Roman such relationships. The person will think about,” said Jeff Jonas, a part- she said. and Williams. This fact was misstated in the Sept. 22 “Condo developers prefer midblock projects.” be the first top executive to be hired ner at SJX, which represents clients Ms. DeSisto said Lincoln Cen- Brian Shimmerlik got part of the $3.1 million he raised from NYU’s Innovation Fund, a seed-stage by Mr.Bernstein,who was not avail- such as the U.S.Open and Cirque du ter contacted the bank about its ex- venture-capital fund. This fact was misstated in the Sept. 22 “Entrepreneurship lab opens at NYU.” able for comment. Soleil. He said SJX has been reach- panded effort, but there has been no Silvia Davi, the chief marketing and communications officer for the Food Bank for New York City, is 39. Mr. Bernstein had a long career ing out to Lincoln Center’s existing meeting yet. “Of course, we’ll listen Her age was misstated in the Sept. 15 Executive Moves. in advertising and spent 11 years as partners to learn more about them to what they have to say,” she said. Ⅲ

September 29, 2014 | Crain’s New York Business | 35 20140929-NEWS--0036-NAT-CCI-CN_-- 9/26/2014 6:18 PM Page 1

erate equity—limited resources that mandatory base.In his Housing New could otherwise be used to build ad- York plan,which seeks to build or pre- Housing ditional affordable projects. serve 200,000 affordable units over 10 Racino’s growth slows But under the new paradigm, a years, the mayor outlined projects Continued from Page 1 developer building on a rezoned lot that would use subsidies to make 50% Continued from Page 1 matter of months, the administra- with high market-rate rents, for ex- to 100% of units affordable. year, which ends March 31, 2015, tion is more likely to hover around a ample,might have to set aside a sim- As for the mandatory program, will increase by “high single digits,” 20% affordability requirement—a ilar percentage of units as affordable, should the administration hover compared with a 14% growth rate in ratio associated with the current In- but won’t get incentives to do so around the 20% mark, New York the previous fiscal year,said Christian clusionary Housing Program— aside from the extra-size allowance. would still have one of the most ag- Goode,senior vice president of devel- rather than increase it to 30% or “Then, if you want the tax ex- gressive requirements in the country. opment for Genting Americas. Last more, as some have suggested. emption, you will have to do more,” Of an estimated 400 mandatory fiscal year, it generated $792 million “Mandatory inclusionary will set Ms. Glen said, though an as-of- inclusionary housing programs na- in revenue, of which $618 million the floor for what a developer has to right subsidy will need to be altered tionwide,“most of them are between went to paying taxes and fees. provide in order to build a building,” on the state level. 10% and 15% [affordable], and they “Double-digit growth is simply said Alicia Glen, deputy mayor for have a buyout provision,”said Rafael not sustainable, but whether we get housing and economic development. City ‘didn’t take advantage’ Cestero, chief executive of the non- [a casino upstate],our efforts are full “So in some markets, that may be How much more is still unclear, profit Community Preservation steam ahead in Queens,” he added. 15%, or it could be 20% or 25%—we and the requirements will be lower Corp., referring to an option that al- “There is more we can do there.” buck ennis haven’t identified a number that will where market-rate units are less valu- lows developers to pay into a fund in- CHRISTIAN GOODE of Genting Americas said be required across all building types.” able. But since the program will no stead of building affordable housing. Hotel eyed for JFK “there’s more we can do” at Resorts World. The logic: When more develop- longer be optional in upzoned areas, In certain cases, those numbers Resorts World has not been as ment potential is unlocked through the administration sees it creating might seem low to housing advocates. successful tapping into the robust broad or spot rezoning, a developer more affordable units than the cur- The Real Affordability for All tourism industry in the Big Apple as said Charles Vickery,an independent will have to provide a minimum num- rent inclusionary program,which has campaign,for example,has called on it would have liked.The vast major- gambling consultant in Oxford, Pa. ber of affordable units to get a shovel generated only about 2,800 units. the city to negotiate for 50% afford- ity of its customers are locals from For the 12-month period ended in the ground.But instead of dramat- “It is unfortunate that the prior ability in areas with high rents. The Brooklyn,Queens and Long Island. in August, the racino’s growth rate ically increasing the 20% mandate for administration didn’t take advan- administration dismissed the To attract more visitors, Mr. Goode dropped to 6.5%. the current optional program,the city tage of the markets they were creat- prospect as not feasible in exchange is considering developing a hotel “They may have wanted higher hopes to create more housing by tack- ing,” Ms. Glen said, noting the for just an upzoning. But the cam- near John F. Kennedy International growth,” Mr. Vickery said, “But it’s ling another side of the equation, and paucity of affordable units built in paign noted that a tax abatement Airport—one that would offer bet- still very impressive, given what’s no longer allowing builders to use Brooklyn areas where luxury devel- was factored into its metrics. ter amenities than the existing happening in the rest of the industry.” subsidies to hit the numbers. opment flourished—though it is Making the mandatory program budget airport properties—and Indeed, Resorts World is still the Developers who opt into the cur- debatable if all that development too strict could have serious conse- help the casino capture internation- highest-grossing casino in New rent program (which requires that at would have occurred had mandato- quences, said Ms. Glen. The rezon- al travelers, who would be shuttled York and the top producer of slot least 20% of units be affordable) re- ry inclusionary zoning been in place. ings must make sense not just in to- directly to Aqueduct. revenue in the country. In fact, ceive a density bonus and are also al- By freeing up the subsidies now day’s favorable real estate climate,but Resorts World has already made among the nine racinos in New York, lowed to tap into other programs and being used in inclusionary housing also during future booms and busts. it easier for tourists in Manhattan to only Resorts World and Batavia get property-tax abatements, tax- projects, after having beefed up its “If we get it wrong, there will be get to Queens by Downs Gaming are exempt bonds and low-income hous- capital budget for housing, the ad- no buildings built—market or af- launching free bus growing. ing tax credits that can be sold to gen- ministration plans to build off the fordable,” Ms. Glen said.  service to the casino. A New Jersey “Resorts World is Last year, it bought a still doing well,” said dozen motorcoaches casino could Gary Greenberg, an Wallet has not become popular, in that now transport ‘hurt Resorts owner of Vernon Apple Pay embraced part because Google is not a retailer about 1,000 people a Downs Casino & that engenders the same level of day from Manhattan Hotel in central trust and loyalty that consumers feel to Queens.It also re- World badly’ New York. “I don’t Continued from Page 3 be much higher if Apple Pay catch- with Apple. cently added 300 slot feel sorry for them machine in the cloud (via credit es on,” said Mr. Stulpin. “And be- Apple Pay could force other machines, for a total because they are tak- cards on file with Apple, of course). cause Apple is using thumbprint se- mobile-payment companies to piv- of 5,300. ing in anywhere By moving those transactions curity on these NFC transactions, ot and find some way to add servic- The stakes are from $14 million to into the ether, Apple is elbowing the security risk is lower, letting es that use Apple as a launching high. Resorts World faces multiple $16 million a week. No other racino banks and credit-card companies banks save on the costs related to point, said Emmanuel Schalit, competitive challenges, including in the state is close to that.” out of lucrative revenue: Every time fraud prevention.” CEO of Dashlane,a Flatiron-based market saturation and an aging cus- a credit card is swiped to pay for If big banks are not the ones run- password-security and mobile- tomer base, as well as the possibility Loss in Yonkers something, retailers pay banks a ning in fear from Apple Pay,who is? wallet startup. “As a consumer and that another company will be select- Vernon Downs’ net wins, or rev- swipe fee, which averages about 2% The answer might be the startups user of Apple products, I’m excited ed by the state to develop a casino in enues, are down about 8% from the of the transaction.Financial analysts that are trying to shake up the about Apple Pay. It is super- nearby Orange County, which beginning of the year,Mr.Greenberg estimate that swipe fees generate mobile-payments space.Square,the ambitious and super-exciting.” would siphon customers away from added, to $3.9 million in August. roughly $40 billion a year for banks San Francisco startup and brain- Queens. Empire City in Yonkers, which at a profit margin that exceeds 400%. child of Twitter co-founder Jack Internet purchases What’s more, there is a strong had previously been the highest- “It’s an enormous revenue gener- Dorsey, has brand-new SoHo of- Mr. Schalit said Apple Pay pre- likelihood that casinos will open in grossing racino in the state, took a ator for banks,” said Chris Stulpin, fices and plans grow to 350 employ- sents two opportunities. First, northern New Jersey—the Mead- big hit when its Queens rival an analyst at Merion Capital ees here.The company creates hard- Apple Pay is,for now,focused on the owlands and Jersey City are consid- opened. Group.“Transactional fees ware and software that physical retail realm, not the Inter- ered prime locations—by 2016, In response, it completed a $50 are something that the big- gives merchants and indi- net e-commerce space. Mr. Schalit when a five-year moratorium on million renovation and expansion, ger, credit-card-issuing AMOUNT$40B IN FEES viduals the power to accept said the vast majority of mobile building casinos outside Atlantic adding slot machines, restaurants, banks do very well with.” banking industry credit-card payments. transactions occur on Web City ends in the Garden State. bars and entertainment. A spokes- Because Apple is taking collects on card Square’s model is a browsers, where password-security The grace period was meant to woman said the casino’s revenue de- swipes, which on fraud-security respon- Apple Pay may swipe-friendly one and software like Dashlane’s is most give besieged gambling resorts in clines are moderating. sibilities, the company will put an end to could take a hit if Apple useful. Second, Apple is taking the Atlantic City a chance to get back on Empire City’s net wins were be able to reduce overall Pay catches on.The compa- rare step of letting developers get a their feet, but that hasn’t happened, down by 2.5%, to $47.7 million, fees for Apple Pay retailers and take ny’s biggest retail partners are Star- peek at the coding language that al- and now New Jersey legislators, from August 2013 to August 2014, a cut off the top.Despite the sharing bucks and Whole Foods. Both have lows programmers to build applica- faced with increasing competition the most recent data available from of fees, Wall Street banks have also signed on to accept Apple Pay. tions on the Apple Pay platform. from New York and other nearby the New York State Gaming Com- largely embraced Apple Pay because Another Silicon Alley startup in “We will take the benefit of states, want to improve their odds. mission.“[Our] projections indicat- they believe making it easier to buy danger of the disruptive waves Apple Pay,” said Mr. Schalit of his “Resorts World’s fate depends on ed a potential revenue loss of one- things will increase revenue from thrown off by Apple Pay is Venmo. security software, which he referred the casino picks in New York, and it third” when Resorts World opened, transactions overall, more than off- The West Village-based subsidiary to as being a potential layer within depends on what happens in New said Ryan Murphy, Empire City’s setting what they will lose in swipe of PayPal allows users to make mo- the Apple Pay user experience. “It Jersey,” said Alan Woinski, presi- vice president of marketing. “Our fees. bile payments to friends in order to actually helps us.” dent of Gaming USA Corp., a pub- largest monthly decline was less share the costs of things like bar Still, even the optimistic Mr. lishing and consulting company. “If than half that amount.” If it catches on tabs, tickets and rent. Apple Pay Schalit has concerns. Nothing is a casino opens in the Meadowlands In the meantime, Mr. Goode re- Already,Apple has alliances with could easily tweak its software to al- stopping Cupertino engineers from or in Jersey City, it will hurt Resorts mains upbeat about Resorts World’s McDonald’s, Starbucks, Macy’s and low iPhone users to share costs just moving in on Dashlane’s online turf. World really badly.” performance. “This facility is more Target for Apple Pay’s launch. An as they do photos. Such a change “That’s not a legitimate concern for Some industry experts believe successful than anyone ever predict- uptick in buying among Apple’s 63 could render Venmo obsolete to its us,” he said. “At least for now.” Ⅲ Resorts World peaked earlier than it ed,” he said. Ⅲ million iPhone users nationwide iPhone user base. had expected. LISTEN to a discussion at LISTEN to a discussion at could be huge for everyone involved. Like Square,Venmo is also avail- “They are probably not perform- CrainsNewYork.com/podcasts “The volume of transactions will able on Android devices. Google CrainsNewYork.com/podcasts ing to the level they had hoped for,”

36 | Crain’s New York Business | September 29, 2014 20140929-NEWS--0037-NAT-CCI-CN_-- 9/26/2014 1:04 PM Page 1

HELLUVA TOWN INSIDE Source Lunch A career of prison- system reform PAGE 38 Out and About Punk lives on at CBGB fest PAGE 39 Strike a match Apartment hunters tired of Craigslist have a new option: MatchPad.com. The site pairs those looking for a room with those who have a space to share, based on three factors: location, budget and lifestyle. The service is free for consumers. Real estate agents can list their properties for varying monthly fees. Anne Kavanagh, CEO and one DENISE LEE started of three co-founders, came up with her Alala label to the idea after her own struggles introduce more with finding an apartment and the fashion into her own right roommates. At the time, she workout clothes. thought, “There must be an easier way to do this.” MatchPad officially launched Sept. 17, having drawn more than 1,000 users in 10 weeks of beta testing. The founders spent $100,000 prior to launch and will plunk down $100,000 more on a marketing campaign. The 15-person company uses its own data and algorithms to determine the best matchups of verified users.The average subscriber is age 18 to 32, with an average income of $50,000 to $69,000.They get to message each other privately before meeting. MatchPad also hosts a weekly meet-up on Monday nights to “take the online community offline,” Ms. Kavanagh said. The company plans to launch an app Dec. 1. It hopes to expand to San Francisco in January and eventually other markets. Parlez-vous... A historic private mansion has opened its doors to the public for the first time with a new reading room and bookstore courtesy of the French Embassy. Albertine is the brainchild of Antonin Baudry, the cultural counselor of the French Embassy in the U.S. The store contains 14,000 books in French and in translation. The 1,600-square-foot shop in the Payne Whitney mansion— From workout to work home to the Cultural Services of From workout to work the French Embassy—will act as a library in many Lines between office and gym clothes blur regards, encouraging visitors to stay for hours at a time in the as consumers seek more comfort and style Wi-Fi-free reading buck ennis room. Complimentary BY ADRIANNE PASQUARELLI PLAY TIME coffee will be served. “This is not a commercial enterprise,” Mr. Baudry explained. nside Under Armour’s New York flagship in SoHo, visitors can find best-selling sports The bookstore cost $5.3 bras made with special wicking fabric, as well as insulated water bottles and football million, which included contribu- cleats. But downstairs, they can also find a small selection of khaki pants, sweaters and tions from various donors. 7% INCREASE Albertine, which opened Sept. Henley shirts appropriate for wearing to work or out with friends.The duds are part of in U.S. 27, is marking its debut with a the Baltimore-based company’s new 35th & O men’s lifestyle collection and represent activewear sales for weeklong free festival from Oct. the brand’s push out of the gym and into the office. ¶ “This is not workout gear,” said the 12 months ended 14 to 19 with prominent French June 2014 and American thinkers and artists, Camilo Lyon, a retail analyst at Canaccord Genuity.“It’s stuff you can wear to a including Nobel Prize-winning economist Joseph Stiglitz, Mad meeting, but it’s made of materials that have a cross-functional appeal.” ¶ Keen on Men creator Matthew Weiner and living healthy and wearing the required workout gear, or at least appearing to, shoppers are graphic-novelist Marjane Satrapi. ramping up their purchases of leggings, hooded jackets and sweatpants. Many of the sporty looks “The space here is more than a Iprovide a trendy update to the traditional denim uniform of more-creative industries like 1% bookshop,” Mr. Baudry said. “It’s GAIN in overall apparel part of the public mission to technology, advertising and fashion. And it’s more bang for your buck when consumers can wear sales during the same provide French culture in books, events, culture and conversation.” such versatile styles for everyday activities as well as the office. ¶ U.S. activewear sales were $33.7 period —jessica kramer billion for the 12 months ended in June, a 7% rise over the year-earlier See SPORTY on Page 38 Source: NPD Group Inc.

September 29, 2014 | Crain’s New York Business | 37 20140929-NEWS--0038-NAT-CCI-CN_-- 9/26/2014 12:53 PM Page 1 SOURCE Sporty looks LUNCH: Interview by Ken Christensen LIZ GAYNES Continued from Page 37 pers have embraced the “fakeout”— period, according to market research wearing workout gear but never go- firm NPD Group Inc. By compari- ing to the gym. son, overall apparel sales were up just The hefty price tags are encour- 1%, to $206.3 billion. Activewear aging a variety of retail players to get Bringing people from ‘inside’ now represents 16% of apparel sales, into the game, too. Department versus 15% last year. stores are dedicating more space to To take advantage of consumers’ the new everyday styles from athlet- appetite for the versatile attire,sports- ic companies. Macy’s recently re- back to jobs, life in society wear giants such as Under Armour, designed the fourth floor of its Her- Lululemon and Sports Authority ald Square flagship to showcase have begun selling work-friendly more men’s activewear. iz Gaynes stepped into developer. Are those prisons being put When do job placement programs work? items,stealing market share from their According to a spokeswoman,the the Bronx headquar- to good use? When you’re in prison, the best more fashionable competitors, like chain has expanded some of its ac- ters of the Osborne As- It’s a crime they closed those two way to get by is not necessarily J.Crew and Tory Burch.Not to be out- tivewear brands to more stores this sociation three decades prisons. Half the people in state looking people in the eye, taking done, the apparel brands are eyeing fall. “The ‘athleisure’ trend of sport ago to find one full- prisons are from in and around New initiative, all the things that make their own piece of the activewear mar- and sophistication continues to be Ltime employee and a part-time York City.To reduce recidivism,one you successful in your job. People ket by launching their own lines. important, where active-inspired bookkeeper. Today, the 67-year- of the most important things is to learn to stretch out the work. So pieces are mixed with polished ap- old executive director of the prison- keep people as close as possible to these programs work when they ACTIVE FASHION parel or accessory pieces,” she said. reform nonprofit,founded in 1933, their families during focus on soft skills as well as In July, Bloomingdale’s East 59th leads nearly 300 employees across incarceration so they WHERE hard skills. Also, studies Street window display featured the the state,while 8,000 previously in- can maintain rela- THEY show that people tend to wares of Alala, a local brand that carcerated people use her vocation, tionships. I urged the move into the legitimate launched in February. Denise Lee, treatment and education programs state to keep Fulton DINED economy more often if their who formerly worked with companies each year. She recently won a $6 open, but said,“If you ROBERTO’S family appreciates the fact such as Poppin and C. Wonder, start- million grant from the state to close it, please give it 603 Crescent that they’re trying to do ed Alala to introduce more fashion transform the former Fulton Cor- to me.” I think we can Ave., Bronx right, even though they’re (718) 733-9503 ATHLETIC into her own workout clothes.The la- rectional Facility in the Bronx into produce more return robertos.roberto bringing in less money than bel, which is manufactured in New an economic hub for prisoners re- to the state than if the they have before. I think PLUS: Theory 089.com York and Toronto, features items like entering society.The funds are part state sold the build- that’s been a missing piece in recently AMBIENCE: a neoprene draped jacket and a nylon of a state initiative to replace jobs ing. I also thought a Arched white a lot of programs: how you debuted a line jersey dress that sell for $60 to $210. lost by the closures of prisons. community that had ceilings, exposed- bring the family in as a of activewear, “[Stores] that are not traditional tolerated a prison for brick walls. strong supporter. Theory+. Is the Bronx project a big undertaking Natural light is activewear retailers are really looking 35 years wouldn’t scarce on sunny to us to dip their toe into the space,” for your organization? have such a negative days. Can you partner with businesses? said Ms. Lee, noting that Alala now It’s a game changer for us because response to a re-entry WHAT THEY ATE: sells at 40 shops, including a Septem- the concept is new.The building will center. That equation Ⅲ Insalata mista We have an easier time get- ber launch at Urban Outfitter’s Free house multiple organizations work- may be different in Ⅲ Penne with ting people jobs with busi- People chain. She said a lot of the ing together and offering comple- Chelsea. peas ness than with government. popularity comes from the comfort of mentary services. The borough Ⅲ Tubbetini with Small employers are usually wearing athletic clothing. “This president would like it to be a one- How will you use the seafood more receptive. We’ve been woman is busy doing everything— stop shop so people can come home state grant and PRICE: fortunate with developing she needs something that could carry and get what they need. But that $657,000 from Bronx $68, including tip good relationships with her through the day,” she said. doesn’t mean only one organization Borough President unions. Food-service indus- should try to do everything,which is Ruben Diaz Jr.? tries have been very good. Fashion houses move in how we and many other organiza- Fulton wasn’t built as a prison, so it And some sporting-goods veter- tions have operated in the past. has the potential to be restored How have you grown the organization in ans,such as Free Country,which was without a huge amount of renova- your three decades with it? founded in 1990 is headquartered What will be offered? tion. The money will allow us to We grew in part out of my arro- KA-CHING: near Bryant Park,are seeing growing It’s most likely going to fall within retrofit most of the building,I hope. gance.When we began,a lot of serv- Vince is selling a interest in the fresh styles. Ira job training, job placement and so- ices—like treatment programs dur- cashmere Schwartz,Free Country’s chief exec- cial enterprise. Osborne wants the How will you fund operations? ing the crack epidemic and hoodie for utive, said the company is making a kitchen for catering and food- We plan to rent space to the other HIV-related services—weren’t pro- $395. big push to market its wicking tops related businesses. We probably organizations below market rate. vided, and we thought, “How hard and pants for everyday life. would use three of the floors [out of We’ll be able to furnish it, put can this be?” We created our own “We’re not thinking about the guy seven] for transitional housing. broadband in the entire building, programs. As the growth of the or girl having to wear it at the gym offer free wireless, have one recep- prison system reverses, I’m perfect- only; our effort is truly lifestyle,” he Brooklyn-based Broadway Stages is tion area and security.Our goal is to ly willing for us to get small and dis- said. “You can go for a five-mile run expected to turn the Arthur Kill have no debt after the renovations appear. I could go out of business. in this product, but hopefully you’ll Correctional Facility on Staten Island to keep operating costs affordable. enjoy the fit and the way it comple- into a film studio. The state plans to Operating costs are projected to be How would you pass the time? ments your figure enough that you’ll sell Bayview in Chelsea to a real-estate $1.5 million to $3 million a year. I’d make beads. Ⅲ wear it to take your kid to school or to Canada’s Lululemon now has sev- go out Friday night.” en Manhattan outposts, and another Far from sitting on the sidelines, PLAY/LIST People, places and things that make Liz Gaynes tick two—including a men’s store—are fashion houses have begun incorpo- on the way. Meanwhile, Sports Au- rating more athletic looks into their suffers. It’s for her “dedication to FAMILY VALUES: Her became an event thority recently introduced a line of own collections. During the summer, completely the well-being of grandparents, Jews planner after having yogawear,Bloom,which offers cardi- New York-based Theory debuted impermanent.” children with who fled Eastern a daughter. gans and zip-ups that can be worn for Theory+, a line of performance wear incarcerated Europe, instilled in work and play. designed to double for the gym and FLOWER CHILD: She parents.” her a passion for Prices for such outfits are giving everyday life. J.Crew is now selling used to live in the justice. “They were wallets a workout. Lululemon’s yoga jogger pants for $98, while cutting- Rainbow House BRONX KID: She grew sewing-machine pants can run as much as $108,while edge label Rag & Bone offers a leather commune in up a block from the operators in a polo shirt from Under Armour can version for more than $600. Tory be $100. Many consumers pair Burch and Vince have also introduced Syracuse. “I’m a Bronx Zoo. It remains sweatshops [here], sporty items with more tailored more activewear into their lineups. child of the ’60s.” her favorite spot in organizing for looks, like a blazer and oxford shirt “If you’re a fashion house that the borough. unions.” with leggings and heels. hasn’t embraced this, then to some CHANGE AGENT: “We’re not talking a $40 sweat- degree you’re missing out,” said BEADWORK: The great President Barack LIKE MOTHER: Her pant here,” said Tom Julian, director Canaccord’s Mr. Lyon. Ⅲ thing about it is “if I Obama last year daughter worked with REREADING: Tom of strategic business development at don’t do it well, I can recognized Ms. the prison population Robbins’ Jitterbug trend tracking firm the Doneger LISTEN to a discussion at unstring it and start Gaynes as a and gangs until four Perfume and Skinny CrainsNewYork.com/podcasts Group. He noted that many shop- istockphotos again. Nobody Champion of Change years ago, when she Legs and All.

38 | Crain’s New York Business | September 29, 2014 20140929-NEWS--0039-NAT-CCI-CN_-- 9/26/2014 12:55 PM Page 1

OUT AND SNAPS Stars raise millions for the arts ABOUT by Jessica Kramer

CULTURE CAREER BUILDER FIX TUESDAY, OCTOBER 7, MONDAY, AND WEDNESDAY, OCTOBER 8 OCTOBER 6 The U.S. Department of Commerce and the Famous New York District Export Council present storytelling DISCOVER GLOBAL MARKETS: GREATER CHINA

series THE MOTH jason falchook BUSINESS FORUM. The two-day conference brings its StorySlam to Brooklyn for offers contacts and insights on how to access a night of competitions. They are export opportunities in China. There will open to anyone who has a story to also be one-on-one sessions available for tell based on the evening’s theme. individual meetings with U.S. Commercial Peter Aguero hosts the open-mike Service diplomats. The event takes place at

show, which is similar to a poetry varying times at the New York Athletic Club, rosalie o’connor

slam. The event takes place on Oct. 180 Central Park South. Tickets are $449 JORDAN ROTH, DARYL ROTH and CYNDI LAUPER at Rosie’s julie skarratt 6 at 8 p.m. at the Bell House, 149 and can be purchased at export.gov/newyork/ Theater Kids’ 11th Annual Gala. The Sept. 22 event raised CINDY CHAO, JENNY AND TREY LAIRD and SARAH JESSICA PARKER at the Seventh St. Tickets are $8. For more discover. almost $1 million for the New York City arts-education New York City Ballet’s Third Annual Fall Fashion Gala. The Sept. 23 fete brought information, visit thebellhouseny.com. organization. in $2.3 million for the dance company. WEDNESDAY, OCTOBER 8 SUNDAY, OCTOBER 12 Crain’s presents a BUSINESS BREAKFAST The self-described Jewel of Bay FORUM WITH MITCHELL J. SILVER, city parks Ridge is a hidden gem among the commissioner. Mr. Silver will discuss his city’s botanical gardens. Narrows plans to create a 21st-century parks system Botanical Garden hosts its annual and how best to work with conservancies and HARVEST FESTIVAL replete with a partner groups to bring best practices to all pumpkin patch, crafters and, most parks. He will also address the outlook for important, a canine costume contest. funding and manpower and reimagining the The free event takes place from parks’ capital process. The forum takes place noon to 5 p.m. at the Narrows from 8 a.m. to 9:30 a.m. at the Yale Club of Botanical Garden, 7200-7398 Shore New York City, 50 Vanderbilt Ave. Tickets Road, Brooklyn. For more are $100 and can be purchased at information, visit narrowsbg.org. crainsnewyork.com/events-calendar.

DON’T MISS ‘WHIP IT’ roccofrank photography LUCY LOPEZ, ERIC ADAMS, JONATHAN BRAM, HECTOR BATISTA

SUNDAY, OCTOBER 12 opera julie skarratt/metropolitan and JON MAY at the 10th annual Big Brothers Big Sisters of New CBGB as a venue may be dead, but punk DAVID FRYE, JESSICA PHILLIPS, PETER GELB and ISABEL LEONARD at York City’s RBC Race for the Kids, part of Nickelodeon’s Worldwide rock lives on in its THIRD ANNUAL CBGB the Metropolitan Opera’s Opening Night Gala. The Sept. 22 event raised Day of Play. The Sept. 20 benefit generated more than $1.1 million FESTIVAL. This year, the celebrations $5.5 million. for BBBS’ youth-mentoring programs. return to Times Square in a culmination of the four-day fest, with a free concert featuring a diverse lineup that includes See more of this week’s Snaps online at CrainsNewYork.com/galleries. retro acts such as Devo (pictured) and Jane’s Addiction, as well as more recent maria mothersbaugh bands like We Are Scientists and Surfer Blood. The event takes place from the late morning through the early evening. For updated information, visit cbgbfest.com.

OPENING FUNDRAISERS FRIDAY, OCTOBER 10, THROUGH MONDAY, OCTOBER 6 WEDNESDAY, JANUARY 7 The Cherry Lane Theatre celebrates nine decades The German artists’ group Zero of groundbreaking theater at its 90TH has its experimental work on ANNIVERSARY GALA. Academy Award-winning display at ZERO: COUNTDOWN TO actress and Cherry Lane alum Estelle Parsons will TOMORRROW, 1950s-60s at the be presented with a Visionary Award. The party Guggenheim. More than 40 starts at 6 p.m. at the Cherry Lane, 38 Commerce artists from 10 St. Tickets are $200 and $300 (for performance countries are only) and go up to $500 (which includes a featured, with cocktail reception, mingling with artists and paintings, seating for the 90th-anniversary performance) sculptures, and can be purchased at cherrylanetheatre works on .org/90th-anniversary. paper, installations WEDNESDAY, OCTOBER 8 and archival Girls star Lena Dunham and film director Spike materials on Jonze host the 2014 LOWLINE ANTI-GALA to raise display.The funds for the projected Lowline, “the world’s first Guggenheim, underground park.” The event offers cocktails,

heinz mack a work of art dinner, an after-party and a live performance by itself, is located at 1071 Fifth the Bleachers. The party starts at 7 p.m. at the Ave. Times vary; adult tickets Skylight Modern, 537 W. 27th St., Manhattan. are $22 and can be purchased at Tickets are $1,500 and can be purchased at guggenheim.org. thelowlineantigala.splashthat.com. MARK YOUR CALENDAR…

THURSDAY, NOVEMBER 6, THROUGH SATURDAY, NOVEMBER 8 THE ANDY WARHOL MUSEUM handpicked 15 never- before-seen 1960s films from the pop artist for

EXPOSED: SONGS FOR UNSEEN WARHOL FILMS. museum warhol the andy The digitally restored selections feature Warhol and his famous friends. Five musicians influenced by the Velvet Underground, including Television’s Tom Verlaine, perform live along with the films. The screenings take place at 7:30 p.m. at the BAM Howard Gilman Opera House, 30 Lafayette Ave, Brooklyn. Tickets are $25 to $65 and can be purchased at bam.org.

September 29, 2014 | Crain’s New York Business | 39 The 2015 Sprinter Your dream fits in a Sprinter.

Starting At: Businesses of all kinds can lower costs and improve productivity with the 2015 Mercedes-Benz * Sprinter. The Sprinter’s standard turbo diesel engine delivers up to 18%1 greater fuel efficiency $39,995 while newly extended 20,000-mile service intervals2 can help lower your total cost of ownership. And, to protect your business, new standard Crosswind Assist3 can keep your vehicle on course 2500 Passenger 144", Low Roof, 4-Cylinder in strong winds. Accelerate your business with the commercial vehicle Edmunds calls, “The best full-size van for cargo and passenger purposes.” To learn more, visit mbsprinterusa.com.

© 2014 Mercedes-Benz USA, LLC *Excludes all options, taxes, title, registration, transportation charge and dealer prep fee.Options shown. Not all options are available in the U.S. 1. Fuel savings estimate of up to 18% according to FTP75 testing of engine OM651 (4-Cylinder) versus MY13 OM642 (V6). Individual mileage will vary, based on factors including vehicle load, driving style, road conditions and fuel quality. 2. Driver is responsible for monitoring fluid levels and tire pressure between service visits. 3. Crosswind Assist engages automatically when sensing dangerous wind gusts at highway speeds exceeding 50 mph. Performance is limited by wind severity and available traction, which snow, ice and other conditions can affect. Always drive carefully, consistent with conditions.

1P_MB_Airport_Crains NY_11.125x14.875in_2015.indd 1 9/22/14 11:43 AM