Global Recession Wave Slams NY Ports
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CNYB 04-27-09 A 1 4/24/2009 8:17 PM Page 1 INSIDE Gay TOP STORIES marriage bill pits Best restaurants rights find closure is against fear on their menus ® —Alair Townsend PAGE 2 Page 11 Brooklyn developer places big bet on VOL. XXV, NO. 17 WWW.CRAINSNEWYORK.COM APRIL 27-MAY 3, 2009 PRICE: $3.00 Manhattan project PAGE 3 Scandal The new economic indicators: jeans VOTE FOR BILLWHO? exposes and paper colors PAGE 3 Bloomie leaves a meek Thompson in the dust pension SPECIAL REPORT give him a run for his money. players BY ERIK ENGQUIST Yet it is impossible to find any who believe that Mr. Thompson, the city comptroller, will win. Aside from even as mayor michael bloomberg’s gold-plated the obvious hurdles—the mayor’s huge spending ad- Inside hidden world re-election campaign saturates the airwaves with vantage, solid approval ratings, near-universal name ads an unprecedented seven months before the vote, recognition and 15-point lead in the polls—there is a of the firms that link it is not hard to find experts who think that rela- feeling that the comptroller is too passive to take down funds with investors tively unknown challenger William Thompson can See BLOOMIE on Page 8 BY AARON ELSTEIN placement agents,after decades operating behind closed doors in EDUCATION the public pension fund arena, are G CEO may not be the most experiencing a rough coming out popular job right now,but in the wake of a pay-to-play scan- that’s not holding college dal that has ricocheted from New students back from choosing York to Washington. business majors PAGE 13 The New York State Comp- G Foreign students flood troller’s Office last week said it local universities, despite would ban using these middlemen, high costs PAGE 14 which line up investments for pub- G lic pension plans in exchange for New York’s largest M.B.A. hefty finder’s fees. City Comptrol- programs, ranked by ler William Thompson called for enrollment PAGE 17 New York City pension funds to also stop using them, while Attor- ney General Andrew Cuomo BUSINESS LIVES vowed to investigate further. Citi- GRAB THAT REMOTE group,one of the largest placement agents, quickly announced it Once hard-partying, would stop seeking new business. many New Yorkers For people like Hussein Khali- discover the pleasures fa,a partner at MVision,a firm that of channel surfing and PAGE 33 in the past two years helped home cooking arrange about $70 million worth of investments for New York’s state employee pension plan,the scandal See PENSION PLAYERS on Page 8 INDEX Global recession wave slams NY ports NEIGHBORHOOD JOURNAL _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _5 Plunge in demand harms maritime, allied SHIFTING CARGO REAL ESTATE DEALS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _7 businesses; officials see long-term growth THE INSIDER _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _12 MEETING PLANNERS GUIDE _ _ _ _ _ _ _ _ _ _ _19 has his workload. BY DANIEL MASSEY “Two weeks ago, I worked 24.5 CLASSIFIEDS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _30 hours,”the 43-year-old longshore- SMALL BUSINESS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _32 a year ago, Angelo Mack was av- man says. “Last week, it was eight THE WEEKS AHEAD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _32 eraging 45 hours a week working hours. This week, it’s zero.” CORPORATE LADDER _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _35 on the docks in Bayonne, N.J., and The deepening worldwide re- SeeEXECUTIVE AT DEADLINE MOVES on _ _ _ _ _ _ _Page _ _ _ _ _ _ _ _ _ _ _ _ _ _2 _ _ _ _ _ _ _ _ _ _ _ _35 on Staten Island. But as global de- cession is wreaking havoc at the mand for goods has plummeted,so Port of New York and New Jersey. Cargo traffic sank by 17.4% in the bloomberg news 17 first quarter versus the same peri- 5 od in 2008. In response, major Year-over-year change in number of container units passing through NY area ports container companies are laying off administrative workers for the ELECTRONIC EDITION first time ever,and more and more longshoremen like Mr. Mack are -15.3% -17.2% -19.5% FEBRUARY MARCH sitting idle. JANUARY NEWSPAPER See GLOBAL RECESSION on Page 9 Source: Port Authority of New York and New Jersey 71486 01068 0 CNYB 04-27-09 A 2,3 4/24/2009 7:56 PM Page 1 IN BRIEF THE RESTAURANT INDUSTRY IS DRAWING A Recession makes a meal GREATER NUMBER OF ENTREPRENEURS THIS year than it did last year, when the economy looked considerably more promising. According to the New York City Department of Health of city’s top restaurants and Mental Hygiene, which issues operating permits to food-related businesses, there were 1,411 new applications in the first four months CAN’T DISH IT OUT: also benefiting from the demise of a major of the year—25% more than the same period in Even fine-dining’s best Chef/owner Upper East Side competitor, La Goulue, Geoffrey Zakarian, 2008. “A 25% increase is amazing and startling, lack patrons, funds to who owes nearly which lost its lease and is closing in June. considering how much business is off,” said Rick $80,000, is “I hope the customers who were going Sampson, chief executive of the New York fight bankruptcy, eviction liquidating to them will come to me,” says Mr. Lesort. Restaurant Association. three-star Town. Many restaurateurs have run out of hope, among them Mr. Zakarian. When four of IN THE CULMINATION OF A YEARLONG STING BY LISA FICKENSCHER his food service vendors filed an involun- OPERATION CONDUCTED BY THE BROOKLYN tary bankruptcy petition against Town,the district attorney’s office, the New York State when diners started staying away last chef/co-owner did not contest it. Mr. Za- Police and the Waterfront Commission, year, restaurateurs quickly began dangling karian, who owes his creditors nearly officials seized $20 million worth of counterfeit deals. They whipped up budget-friendly $80,000,could not be reached for comment. goods—including sneakers sporting the image prix fixe menus and discounted their wine of President Barack Obama—from a lists. Eventually, many revamped their en- Desperate times, desperate measures warehouse in Brooklyn’s Sunset tire menus, cutting prices dramatically. in the past, restaurateurs who were sad- Park last week. Six people were Now some of the city’s biggest and best- dled with debt—or those facing eviction, arrested.The goods seized known restaurant operators are running which Frederick’s Madison narrowly avoid- included knockoffs, ranging out of tricks—and money. ed—would typically have reached out to from faux-Nike sneakers Just this month, two prominent eater- their backers for cash. buck ennis emblazoned with Mr. ies filed for bankruptcy protection. Town, Now even restaurants with the very big- Obama’s face to ersatz a three-star restaurant in the elegant gest of names and the best of reviews are Coach handbags to Diesel Chambers Hotel, filed for Chapter 7, un- turning to banks, and they’re finding it diffi- jeans and Timberland der which it will liquidate. Frederick’s getty images cult to get funds from them as well.The prob- boots. Madison, a swanky crowd-pleaser, is hop- lem,lenders say,is that owners are increasing- ing to buy itself more time with a Chapter ner in law firm Fox Rothschild,says that he ly coming to them for all the wrong reasons. AFTER SIX MONTHS OF DISCUSSIONS, 11 petition,which would give it six months fielded three times as many calls from Faye Fisher, vice president of Advance BUILDING CONTRACTORS AND UNIONS HAVE to catch up on its bills. What’s more, the restaurateurs over the past six months than Restaurant Finance—a California-based reached an agreement to slash labor costs.They acclaimed Lever House restaurant in the he did in the same period a year earlier. lender that works with many food service are expected to present a deal soon which they landmark midtown tower of the same “We have seen a significant uptick in businesses in the New York area—notes that say will lower costs between 15% and 20%. name closed this month; management has the number of [restaurant] bankruptcies 80% of its restaurant loan applicants are re- Developers estimate the actual savings amount offered no explanation.