THE ‘MANNY’ DIARIES Meet the newest member of the CRAIN’S® NEW YORK BUSINESS family P. 29 VOL. XXX, NO. 21 WWW.CRAINSNEWYORK.COM MAY 26-JUNE 1, 2014 PRICE: $3.00 Car-wash owners hit bumpy ‘Road’ How a powerful BIZ nonprofit uses gov’t funds to help unions Lower-cost locales are luring target employers New York’s blue-chip players BY CHRIS BRAGG with billions of dollars in tax Clouds gathered as Steve Rotlevi drove into his car wash in East New breaks. Can city resist joining York, Brooklyn, on a recent afternoon. His workers waited idly for customers, NY but a chance of rain—nature’s car 1990s-era race to the bottom? wash—kept them away. “Wonderful business,” the native Israeli muttered. BY AARON ELSTEIN These are dark days for Mr. Rotle- vi and his fellow car-wash owners. These are terrific times for Tim Lizura, the New Jersey Their approximately 150 businesses official in charge of persuading companies in New York City across the five boroughs, run almost and other places to come to the Garden State. Earlier this exclusively by immigrant entrepre- neurs, face a City Council bill that month,he landed some truly big fish when Manhattan giants would impose regulations that owners JPMorgan Chase, RBC Capital Markets and Univision say are normally reserved for industries Communications each cut deals to bring a total of 2,000 jobs infiltrated by or- across the Hudson River in return for ganized crime. NJ Their critics’ goal, $2.3M SUPERSIZED bushels of tax breaks. GOV’T FUNDING however, is not just Make the Road New Jersey’s payouts “In just one month, we had a big to further regulate received in 2012. year,” said Mr. Lizura, the president an industry already Unions also pay $1.3B overseen by federal the group to help of the New Jersey Economic and state agencies, organize workers Development Authority, referring to but to unionize the series of corporate tenants landed it—an effort buoyed by heavy pay- with the help of more than $600 ments of taxpayer funds. The nonprofit group that largely million in tax credits and other wrote the bill, Make the Road New incentives ladled out by his agency. York, is closely aligned with organized $698M Such successes are turning heads. labor and has quietly become a force in “New Jersey is really setting the pace FL local politics. It was a major player in the successful push to mandate paid now, offering very rich incentives for sick leave at most city businesses, and pretty much any company that brings now its car-wash legislation is being quality jobs,” said Dan Levine, who moved through the City Council by 2012 2013 Speaker Melissa Mark-Viverito. runs a corporate-relocation firm Make the Road’s millions of dollars called MetroCompare. in government contracts have helped it The war for some of New York City’s best jobs is back on. grow a membership that it then recruits New Jersey as well as Florida, Texas and even Kentucky are for unionization drives. The organiza- tion says car-wash employees have among the states wooing New York employers of all sizes and been victimized by unsavory owners. types with generous tax breaks and other subsidies.See WORD on And Page in42 But its campaign raises questions about See SUBSIDY WARS on Page 26 TX See CAR WASH on Page 28 21 5 HOT STOCK NOW NOT THE LIST Hardly sweet: What happened 150 largest publicly to Crumbs cupcake chain? P. 13 held companies P. 15 NEWSPAPER 71486 01068 0 EDITOR’S NOTE Tech dreck FYICRAINSNEWYORK.COM Folks talked up tech all over town last week. At Internet Week New York, Mayor Bill de Blasio used the Time move signals big word “vibrant” a dozen times in his 28-minute shout-out to Silicon changes downtown Alley last Monday. (Speechwriters: he new magazine capital of Download the WordBook XL app New York was (unofficially) Glenn Coleman for iPad and iPhone.) At a Citizens born last week with the Budget Commission event, Deputy T Time Inc. announcement that will take Mayor Alicia Glen said our latest 16 acres of space spread over six floors ap images tech boom offers City Hall leverage to nix requests by at Brookfield Place, the five-tower office/retail complex in lower Manhattan.That puts it a Fortune 500 companies for special incentives to keep stone’s throw from Condé Nast, the publisher of Vanity Fair, Vogue and other top-shelf titles.That their office jobs in the city. She also took the stage at company primed the pump for the media migration downtown two years ago by signing a lease Internet Week to call the neighborhood nickname for 1 million square feet at 1 World Trade Center, across West Street from Brookfield Place. “Silicon Alley” outdated, suggesting instead the more Condé Nast plans to move there late this year, and Time will follow in 2015. ¶ The arrival of global “Technopolis.”Thud. (Speechwriters: WTF?) Time Inc., the magazine unit of Time Warner Inc. that will be spun off in June, ends its 55-year At a Crain’s forum on landmarking, preservationists run on Sixth Avenue in midtown—eight blocks north of Condé Nast’s current home at 4 Times wielded a weird argument for keeping midtown east’s Square. The two companies join a host of smaller media players that have recently jumped to the office inventory frozen in 1949: because the dudes at erstwhile financial district, drawn by cheaper rents and some of the snappiest new infrastructure in tech startups dig the character that antiquated spaces the city—from the new Fulton Center to the huge shopping malls planned for the Trade Center offer. Where to begin? You’d need 100 modest tech site and Brookfield Place.The latter is emblematic of downtown’s tectonic shift, as a diverse new startups to replace the 2,000 jobs that financial giants mix of tenants fills millions of square feet in the complex vacated by two financial firms, Merrill JPMorgan Chase and RBC recently chose to create in Lynch and Japan’s Nomura. —erik ipsen New Jersey.That’s two-thirds the size of Google’s New York City operation, gone with a shrug because AIRBNB SETTLEMENT. Airbnb and York’s largest publicly held compa- HOORAY! they apparently aren’t vibrant enough. Math matters, New York state Attorney General nies, plans to focus on oil production Eric Schneiderman have reached an and exploration. … BRONX POL SEN- THREE BABY PEREGRINE FALCONS—a tech boosters. So does mass. If you’re going to wave agreement that will require the TENCED. Eric Stevenson, a former once-endangered species—hatched on a your tech cred with clichés like “ecosystem,” at least apartment-sharing service to hand Bronx assemblyman, was sentenced ledge of 55 Water St. bone up on our annual list of the area’s largest public over rental data, stripped of names to three years in prison for accepting and other personal details, about more than $20,000 in bribes from companies, which begins on Page 15. You’ll find the hosts in New York. Starting next developers of adult day-care centers. globe’s richest and rarest concentration of big buyers month, Airbnb will The Democrat was of tech services and R&D in such mainstay industries also warn new hosts ‘First they said convicted of bribery, as finance, media, retail, consumer marketing, health that a state law pro- fraud and extortion, hibits apartment she faked her and was removed care and more. They are the reason Silicon Alley is rentals for fewer than from office. … NYSE thriving with local startups and the outposts of Silicon 30 days unless a per- concussion, CEO RETIRES. Dun- Valley giants. If enough corporate customers start manent occupant of and now they can Niederauer will istockphoto believing they won’t get a decent return on the invest- the unit is present. … leave the New York CREDIT SUISSE UN- say she is Stock Exchange OY VEY! ment they make to operate in the country’s most SCATHED. The Swiss sooner than antici- A BRONX substitute teacher was fired expensive marketplace, our tech boom turns to bust. bank pleaded guilty auditioning pated because of the after asking fourth-graders to help her to helping U.S. citi- for her part on company’s “rapid choose between two men she was dating. zens evade taxes. It integration” with THIS WEEK IN CRAIN’S will pay $2.6 billion The Walking Intercontinental- in penalties on top of Dead’ Exchange Group, IN THE BOROUGHS-------------------------- 3 the $196 million it which acquired the paid the Securities —Former President Bill NYSE last year. He IN THE MARKETS----------------------------------4 Clinton, reacting to and Exchange Com- Republican strategist Karl will be replaced by THE INSIDER -----------------------------------------------6 mission in February. Rove’s comments on Chief Operating Of- BUSINESS PEOPLE ---------------------------8 Damage to the bank Hillary Clinton’s health ficer Thomas Farley. was limited: Days af- … GOOGLE BUYS DI- OPINION -------------------------------------------------------- 10 ter Credit Suisse ad- VIDE. Search behe- ALAIR TOWNSEND -------------------------11 mitting wrongdoing, Standard & moth Google has acquired Flatiron- Poor’s and Moody’s said they would based startup Divide, which helps ing Cancer Center to fund a new GREG DAVID--------------------------------------------11 maintain the bank’s credit rating. … companies manage their employees’ “precision oncology” program. … THE LIST ---------------------------------------------------------15 HESS RUNS OUT OF GAS. In a deal that mobile devices. The deal will help FOOD AWARDS GO TO CHICAGO. The will combine two of the country’s five Google work on making Android James Beard Foundation will cele- CLASSIFIEDS -----------------------------------------22 largest convenience-store chains, devices friendlier for corporate users.