CRAIN’S® NEW YORK BUSINESS VOL. XXIX, NO. 42 WWW.CRAINSNEWYORK.COM OCTOBER 21-27, 2013 PRICE: $3.00 SANDY: 1 YEAR LATER WHAT IF IT HAPPENED Inside BOARD SCORES TODAY? Co-ops learn that surviving The storm that changed everything hasn’t. One Sandy was the year later, the city has only begun to batten down easy part p. 4 Water met electricity on Oct. 29, 2012, and where it did, the results were disastrous. Hous- DOWNTOWN es in Breezy Point, Queens, burned down. Roosevelt Island nursing-home patients re- REBOUND mained in the cold and dark for days. Transit halted. Cellphone towers died. Gasoline Lower pumps failed. Manhattan Much of that misery can be traced to 8:30 p.m. that night, when 14-foot waves breached a Consolidated Edison substation along the East River, triggering a blinding explosion seen does it again around the world on YouTube. p. 4 The flashes were part of a cascade of failures that knocked out power in the lower half of Manhattan, left 220,000 customers shivering in the dark See WHAT IF on Page 30 newscom 42 5 REPORT THE LIST PHILANTHROPY The big Top foundations: Giving holiday push is on PAGE 15 is up 10% PAGE 17 NEWSPAPER 71486 01068 0 EDITOR’S NOTE ULURP usurped FYICRAINSNEWYORK.COM Our Page 3 story on an all-or- nothing threat by construction Instant replay: Debt-default unions to kill a $500 million-plus drama back after Super Bowl private-sector investment in Staten Island contains an appalling quote f you already miss the Sturm und Drang attributed to City Councilwoman of the debt-default melodrama, you only Debi Rose: “There are items on my Ihave to wait until the football season is Glenn Coleman [wish] list that, if I don’t sort of get over for the show to repeat itself. a green light on, they are deal- That’s because the last-minute deal to breakers.” Really, sorta? The last avoid financial Armageddon struck by time anyone poured more than a half-billion dollars’ Congress last week only lifts the worth of anything into Staten Island may have been government’s debt ceiling until Feb. 7. And 1959, when construction started on the Verrazano- only five days after that, it so happens, is newscom Narrows Bridge. Ms. Rose’s sense of entitlement—“I Super Bowl XLVIII, which of course will be have a wish list of about 25 items,” she told a local played in the Meadowlands. What better way to combat the midwinter blues than watching paper—shows how distorted the official developer- members of Congress and the Obama administration get back to arguing over whether the U.S. shakedown process, known by the acronym ULURP, government should miss a payment on its $12 trillion in obligations? Maybe Las Vegas bookies has become in the City Council during these waning will even take bets on the odds of a deal being struck in time. weeks of the Bloomberg era. A $320 million London However it plays out, here’s one suggestion: Make sure you save some of the booze you bought Eye-like Ferris-wheel project would draw 4 million for the Super Bowl. —aaron elstein visitors a year to a checkered stretch of waterfront that’s an easy walk from the Staten Island Ferry BIWEEKLY DAYS AHEAD? New York peals agreed to review Mayor terminal. A $260 million outlet mall between the two magazine, a weekly, is considering Michael Bloomberg’s attempted ban HOORAY! points would encourage tourists (and locals) to buy dropping its frequency to biweekly. on super-size sugary drinks, which AFTER GETTING The print magazine’s ad pages fell has been rejected by judges twice. SLAMMED by brand-name bargains at 80 new stores, generating 9.2% year-over-year through Oct. The court will not hear the case un- Superstorm Sandy last year, sales-tax revenue for the city.The whole thing would 14, and the growth in digital ad sales til next year, leaving the decision to the Village create more than 1,300 construction jobs—a good has not been enough to offset the de- pursue the appeal in the hands of Mr. Halloween Parade cline. The switch would mark a Bloomberg’s successor. ... RETAIL met its Kickstarter chunk of them union gigs, thanks to the complexity of REIGNS. goal of $50,000 somber occasion for magazine lovers The Related Cos.’ Hudson this year and the Ferris-wheel project and the publicly assisted and New York’s media scene alike.… Yards received a 20-year, 40% prop- will take place on installation of a platform over rail yards to support the AHRENDTS HEADS TO APPLE. Burber- erty tax break from the Industrial Oct. 31. ry CEO Angela Ahrendts, named a Development Agency for a retail outlet mall—and 1,000 permanent jobs tied to the Crain’s 40 Under 40 in 2000, will mall and office spire that could result outlet shops. But no, say the job snobs: Retail wages leave the British fashion house to be- in $328 million in savings for the de- OY VEY! aren’t good enough for the public good, and nonunion come senior vice president of retail veloper. Meanwhile, Howard THE PLAZA HOTEL and online stores at Apple. In the Hughes Corp. began construction at is suing the city construction work for Staten Island residents is and Citibank, newly created position,she will over- Pier 17 in lower Manhattan,where it calling the Citi somehow worse than featherbeds for hundreds of see the expansion and operation of will turn the existing retail site into a Bike station hardhats who live in New Jersey. Problem is, the Apple’s stores and re- glass, multilevel located in front of the building an outlet mall’s backers can’t find financing with an all- port directly to CEO ‘Running up shopping center at “eyesore” that union mandate. Poof. No deal. I hope for her Tim Cook. … JUDGE South Street Sea- causes congestion EXTENDS LICH’S LIFE- to somebody’s port. … JPM’S EARN- at the hotel’s constituents’ sake that Ms. Rose doesn’t end up LINE. Brooklyn INGS DISAPPOINT. main entrance. becoming the latest New York pol who never misses Supreme Court Jus- property or Banks reported an opportunity to miss an opportunity. tice Johnny Lee third-quarter earn- Baynes issued two public ings, with JPMorgan IST APPEARS IN COURT. Alleged al- orders Tuesday that property and posting its first loss Qaeda operative Abu Anas al-Liby THIS WEEK IN CRAIN’S will keep Long Island under CEO Jamie pleaded not guilty in federal court in College Hospital defacing it is Dimon. The nation’s New York on Tuesday to charges re- open—at least for not my largest bank reported lated to the 1998 bombings of U.S. IN THE BOROUGHS-------------------------- 3 now. Judge Baynes a $400 million loss as embassies in Kenya and Tanzania IN THE MARKETS----------------------------------6 ruled that the state’s definition it faces $7.2 billion in that killed more than 200 people.He law on hospital clo- legal costs.The news is being held without bail, following THE INSIDER ----------------------------------------------- 8 sures violates the of art’ overshadowed re- his capture in front of his home in —Mayor Michael SMALL BUSINESS ------------------------------9 state constitution sults from Goldman Tripoli, Libya, on Oct. 5. … SOHO and that SUNY Bloomberg on Banksy’s Sachs and Bank of BID TO BE BORN. A SoHo Business OPINION -------------------------------------------------------- 12 Downstate, LICH’s graffiti, which has America, which an- Improvement District, which will appeared on city walls GREG DAVID-------------------------------------------- 13 owner, cannot act on this month nounced profits of stretch along Broadway from Hous- the closure plan it $1.4 billion and $2.5 ton to Canal streets, is waiting for REAL ESTATE DEALS-------------------14 submitted to state health officials. A billion,respectively,beating analysts’ Mayor Michael Bloomberg’s nod of REPORT: PHILANTHROPY-----15 SUNY spokesman said it intends to expectations. Citigroup reported a approval after the City Council vot- appeal both orders. … TOP COURT TO $3.2 billion profit that missed ana- ed to support its establishment. CLASSIFIEDS -----------------------------------------25 GOTHAM GIGS HEAR SODA BAN. The Court of Ap- lysts’ estimates. … AL-QAEDA TERROR- —nazish dholakia NEW YORK, NEW YORK ---------- The Queen Lear of the 33 Public Theater. P. 10 SOURCE LUNCH--------------------------------34 vol. xxix, no. 42, october 21, 2013—Crain’s New York Business (issn 8756-789x) is published STORIES TO WATCH THIS WEEK weekly, except for double issues the weeks of July Fourth, July 29, Aug. 12, Labor Day and Christmas, by Crain Communications Inc., 711 Third Ave., New York, NY 10017. Periodicals postage paid at New York, N.Y., and additional mailing offices. Postmaster: Send address Oct. 22: Mayoral Oct. 22: Coach Oct. 24: Madison Oct. 27: Betrayal, changes to: Crain’s New York Business, Circulation Department, 1155 Gratiot Avenue, Detroit, candidates Bill de reports quarterly Square Garden Co. with Daniel Craig MI 48207-2912. for subscriber service: Call (877) 824-9379. Fax (313) 446-6777.$3.00 a copy, $99.95 one Blasio and Joseph earnings. unveils its $1B and Rachel Weisz, year, $179.95 two years. (GST No. 13676-0444-RT) ©Entire contents copyright 2013 by Crain Communications Inc. All rights reserved. Lhota spar in their renovation of MSG. opens at the second debate. Barrymore. 2 | Crain’s New York Business | October 21, 2013 IN THE BOROUGHS STATEN Navy Yard ISLAND tenant to Waterfront go upstate wheel, mall B&H Foto has plans to shift 300 jobs from project up its warehouse ops in in the air Brooklyn biz park Councilwoman, BY JESSICA GLAZER One of the largest employers in the unions pressing retail Brooklyn Navy Yard, B&H Foto and Electronics Corp., appears like- developer on jobs APPROVAL NEEDED: Without City Council ly to leave the city when its lease ex- action, $580 million pires in 2017, heading upstate to BY THORNTON MCENERY in projects would be build an expanded facility for the rendered moot.