Musiclabels' New Leaders
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TOP STORIES The breakdown After slow takeoff, on a big express lanes b’day —Alair finally land in area Townsend airports PAGE 2 fends off ® sales pitches Surging Page 11 numbers of NY kids spur jump VOL. XXIII, NO. 9 WWW.NEWYORKBUSINESS.COM FEBRUARY 26-MARCH 4, 2007 PRICE: $3.00 in learning programs PAGE 2 Cash crunch If Sirius and XM merge, who will get the ax? puts housing PAGE 3 Chelsea hot spot Bombay Talkie plans at risk looks to expand NEW YORK, NEW YORK, P. 6 applications pending for financing Developers may not are Silverstein Properties Inc., Grads at second- gettyimages get bonds to build Rockrose Development Corp., the Gotham Organization Inc. and tier schools are in affordable units as Levine Builders. demand; legal “We are hopeful that the city state’s funds run low and state will come up with a solu- education changing tion to this problem,” says Jon BUSINESS OF LAW, P. 17 BY JULIE SATOW McMillan, director of planning at Rockrose. the state agency that oversees As a result of the shortage in BUSINESS LIVES the financing of affordable hous- tax-exempt bonds, he says, his ing projects is facing a multi- company may need to delay a EXIT STAGE LEFT billion-dollar cash crunch. planned groundbreaking The New York State for a $500 million project Sick and tired Housing Finance Agency $4.3B on 10th Avenue between of low pay and has $4.8 billion worth of SHORTFALL West 37th and West 38th such projects in the pipe- in tax-exempt streets. rejection, some bonds to cover line, but it expects to have projects in A spokesman for Silver- struggling actors only $540 million in tax- HFA’s pipeline stein declined to comment; wireimages buck ennis exempt bonds available to officials at Levine Builders find new respect THE PRODUCERS: Shawn “Jay-Z” Carter, Jermaine Dupri and Bryan Leach (clockwise for living nine from top left) have taken key posts in the past two years; Rick Rubin may be next. award to developers this year. and Gotham Organization could PAGE 27 “This really ties the administra- not be reached by press time. to five tion’s hands,” says HFA President The HFA is scrambling to ad- Priscilla Almodovar, who joined dress the funding shortage by in- the agency in mid-January. stituting tougher criteria for devel- AT DEADLINE MUSIC LABELS’ Among the developers with big See CASH CRUNCH on Page 8 DOUBLEDAY BOOKS HAS AGREED TO PAY close to $2 million for a book by Princeton psychologist Daniel NEW LEADERS Comptroller’s test: Kahneman, who received the Nobel Prize in economics in Majors restore executive balance 2002 although he never studied economics.Tentatively by empowering hip hitmakers meeting the mark titled Thinking about Thinking, Mr. Kahneman’s first book for BY SAMANTHA MARSHALL a general audience will Can rookie DiNapoli examine the interaction of match huge returns behavior and the marketplace long hair, shaggy beards and flip-flops don’t jibe with in the manner of best sellers the image of a top executive at a major music label. Neither for pension fund? like Freakonomics and The do A Bathing Ape hoodies and diamond tooth grilles. But Tipping Point. the corporate offices of Big Music are looking less corporate by the day. Industry insiders say the mini-makeover is a step BY ERIK ENGQUIST LIZ CLAIBORNE INC. IS PULLING in the right direction. THE PLUG ON ITS MEXX retail This month’s appointment of Grammy-winning music new york state Comptroller brand in the United States, Thomas DiNapoli is in a tough sources close to the company producer Jermaine Dupri as president of Island Def Jam’s spot. Having been handed the job say.The clothier operates four new urban division is just the latest example of an emerging this month by legislators who re- domestic Mexx stores, record company trend: putting more hot music makers into jected a trio of experienced finan- including two in New York. positions of real executive power. cial professionals, the former as- See AT DEADLINE on Page 2 See MUSIC LABELS on Page 8 semblyman must maintain the outstanding returns of the state pension fund—or be lampooned as a political hack who flopped as a lindström bekka COMINGNEXT WEEK rookie money manager. The latest trends in continuing Yet Mr.DiNapoli cannot play it difficult to sustain. The $145 bil- education: why online classes have safe.He takes over as sole trustee of lion fund is more aggressively in- ELECTRONIC EDITION not caught on, merits of executives a pension fund that returned 17% vested than ever,and Mr.DiNapoli vs. academic teachers, and more. annually over the last three fiscal will be tempted by a new state law NEWSPAPER years, a performance that will be See COMPTROLLER on Page 9 AT DEADLINE Continued from Page 1 to start in June. The SoHo shop, at 500 Broadway, opened less than two RIDGEWOOD SAVINGS BANK IS years ago, and the midtown store, ACQUIRING City & Suburban at 650 Fifth Ave., opened nearly Financial Corp. and its City & NEVER TOO EARLY: 12 years ago.Though Mexx is Suburban FSB for $119.1 Coach Sean very successful in Europe, million in cash. For Ridgewood, Peckett puts trainees through particularly in France, the the deal will add $670 million in their paces at concept never gained traction assets and 11 branches in Super Soccer Stars. stateside. Brokers are circling the Manhattan, the Bronx and Manhattan properties, but the Westchester. Ridgewood, which company may turn the leases has $3.3 billion in assets, over to another Liz brand. operates 24 branches in Queens, Brooklyn and the Bronx and on THE NUMBER OF NEW YORK Long Island. AREA TECHNOLOGY FIRMS acquired last year rose 17% over NONPARTISAN THINK TANK 2005, according to a study by DEMOS HAS EXPANDED its offices Innovation Advisors, a tech at 220 Fifth Ave.The building, investment bank. Last year, 139 at West 26th Street, has an buck ennis local companies were acquired, asking rent of $108 a square compared to 119 the previous foot.The organization signed a year.The top three deals were 10-year lease for 13,300 square Motorola’s $3.9 billion acquisition feet on the entire fifth floor and of Symbol Technologies, a parts of the eighth and ninth Holtsville, N.Y.-based developer floors. It will be used for Lower education of radio frequency identification administrative offices, program technology; Silver Lake Partners’ space and a conference center. $800 million purchase of IPC Colliers ABR represented the Enrichment centers for under-5 set are booming Systems, a Manhattan-based tenant and landlord Dino & communications firm; and Sons Realty represented itself. NBC Universal’s $619 million BY TOM FREDRICKSON acquisition of iVillage, a THE STATE’S INSURANCE LOBBY Manhattan-based women- IS TAKING EXCEPTION to the state at age 3, Brooke Johannsen has already studied art and has moved on to soccer, gymnastics oriented Web site. hospital-union coalition’s and all-around gym. advertisements over Gov. Eliot QUEENS COLLEGE AND THE Spitzer’s proposed budget cuts. Her mother, Margaret, has enrolled Brooke in three 17-week classes at Kidville NY’s East DEPARTMENT OF VETERANS The ads, put together by the 84th Street location. Affairs are developing an Greater New York Hospital “It’s well worth it,” says Mrs. Johannsen, a stay-at-home mom who’s married to an education program for veterans Association and 1199 SEIU, call returning from Iraq and for a reform agenda that would investment banker and pays $2,085 for her daughter’s courses.The benefit: Brooke gets out of Afghanistan. Vets will be able to force “profit-rich HMOs, the apartment, burns energy and makes playdates with other children on the Upper East Side. take free courses in a variety of insurance and drug companies The large number of affluent young families who have opted for city over suburban life have areas including business, child to pay their fair share.” spurred businesses to offer children—including toddlers—lessons in everything from Chinese care, health care and medical Insurance advocates label them billing, information technology irresponsible. A spokesman for to yoga. and real estate. Graduates will the New York Health Plan Given New York’s surge of young children, the betterment trend is not surprising. be offered job placement Association says, “The attack See CHINESE on Page 8 services.The program, offered ads are a repeat of scare tactics through the college’s continuing that 1199 and GNYHA have education division, is expected used year after year.” ■ THIS WEEK IN CRAIN’S Fast-track airport security NEW YORK, NEW YORK----------6 fingerprints and the information Kennedy International Airport. Prescreened travelers needed for a federal background “Just wait ’til we start advertis- REAL ESTATE DEALS------------------9 now boarding at JFK; check will be issued the Clear ing,” says Steve Brill, Manhattan- identity card, which promises trav- based Verified’s chief executive. ALAIR TOWNSEND ------------------- 11 local firm leads way elers a speedy trip through special Last week, he stepped things up, THE INSIDER------------------------------------12 airport security lanes. taking his kiosks to the Grand Hy- Three years after the concept of att. Law firms are next. Simpson WEEK IN REVIEW -----------------------14 BY HILARY POTKEWITZ such lanes for prescreened travelers Thacher & Bartlett recently agreed NEIGHBORHOOD to host a booth in its lobby. william russell jr. just can’t seem Meanwhile,out at the airline ter- 29 JOURNAL------------------------------------------16 to get it right. A lawyer who travels ‘Some travelers minals, the pace of clearing security REPORT: THE BUSINESS frequently, he spends a lot of time is picking up for prescreened pas- trying to predict just how long he can afford it; the sengers.The city’s first express secu- OF LAW ----------------------------------------------17 will waste inching along in airport rity lanes opened last month at security queues.