20100628-NEWS--0081-NAT-CCI-CN_-- 6/24/20108:19PMPage1
0 71486 01068 5 26
NEWSPAPER 2 O.XV,NS 6 27 26, NOS. XXVI, VOL. ELECTRONIC EDITION WWW.NEWYORKBUSINESS.COM
CITY’S RECOVERY PEOPLE ON WALL STREET YEARS AND BRIGHTER NEW YORKEVENBETTER BIG IDEAS OF HIGHS&LOWS SHAPING THE TO MAKE .12 P. .30 P. .53 P.
5 P. 23 P. reinvention drove NYC’s industry How one Then &Now ® P. 33 P. thejob about love andhate What they weigh in The mayors TH P. 48 P. abyss mortgage and the Lew Ranieri Salomon’s UE2-UY1,21 PRICE:$3.00 2010 11, JUNE 28-JULY CN013806 6/24/10 3:33 PM Page 1 20100628-NEWS--0001-NAT-CCI-CN_-- 6/25/2010 7:21 PM Page 1
INSIDE COMING UP TOP STORIES GREEN Teens face another REPORT jobless summer How the dirtiest PAGE 2 ® small businesses came clean Wall Street ties dog mayor’s man PAGE 2 VOL. XXVI, NOS. 26, 27 WWW.CRAINSNEWYORK.COM JUNE 28-JULY 11, 2010 PRICE: $3.00 Equinox gym chain works out overseas Loft Law expansion plan PAGE 3 threatens Workers having industrial a ball following companies World Cup 12,000 jobs at risk PAGE 3 as Albany protects It may be curtains illegal residents instead for dance troupe NEW YORK, NEW YORK, P. 4 BY AMANDA FUNG Is Law & Order it’s gotten harder and harder for fast-growing, 23-year-old Wonton over? Sam Food Inc. to remain in its Williams- Waterston says burg, Brooklyn, home. As more resi- dents have moved into a loft building maybe not across the street, the manufacturer of Q&A, PAGE 4 fortune cookies and noodles has had complaints from neighbors about de- livery truck noise.Now,a new law could IN BRIEF make things worse. KEEPING THE FAITH: Gov. David Paterson last week THE TOTAL VALUE OF MOODY’S Shardha Young and signed a bill that revived the Loft Law, CORP. SHARES SWELLED BY A Oscar Galinda are which would legalize residential use of half-billion dollars last Friday, sticking with the industrial buildings all across the city as Congress surprised investors Colors restaurant. and protect the rights of tenants who by largely ignoring credit raters live in industrial lofts. While manufac- in its massive financial reform turing spaces in the city’s 13 designated bill. Dropped from the bill was Industrial Business Zones are shielded a controversial proposal that from the new law, three longtime would have granted regulators buck ennis See LOFT LAW on Page 80 the power to decide whether Moody’s or rival Standard & Poor’s could rate a bond. Instead, Congress ordered up a study of the ratings business. Betting THREE SEPARATE CONSORTIA OF MAJOR HOSPITALS ARE TRUE COLORS that oil competing to build a proton- beam-therapy center in New York to treat cancer. North Restaurant started by WTC workers won’t tank Shore-Long Island Jewish Health System is negotiating to will expand even as NYC outlet struggles team up with SUNY Down- General Maritime state Medical Center on a $273 million project at the former BY LISA FICKENSCHER boosts tanker fleet site of Mary Immaculate amid Gulf oil spill Hospital in Queens. Mean- colors restaurant attracted a firestorm of Washington, D.C., and Chicago—are slated to get while, Memorial Sloan- media attention when it first opened four years ago. Colors restaurants as well. Kettering, Beth Israel, NYU And no wonder. It was started by a group of former If Colors’ experience in New York is any indica- BY AARON ELSTEIN Langone, Mount Sinai, workers from the Windows on the World restaurant tion of its future elsewhere, exporting the restaurant Montefiore and New York- as a tribute to their 78 colleagues who died there. will be a tough job. But Colors was never expected the wall street adage says it’s best to Presbyterian hospitals are Most of that glow has worn off by now. The to be just a business. It began as an idea to help keep invest when there’s blood in the streets. pitching a $227 million facility restaurant is struggling to pay its bills, and together a close-knit group of co-workers For Peter Georgiopoulos, that means for West 57th Street in Man- it’s sorting out management problems dat- who suddenly found themselves unem- buying when there’s oil in the water. hattan.The third contender is ing back to its inception. ployed amid the tragedy of losing their clos- As oil continues to gush into the Vassar Brothers Medical But another piece of the Colors experi- $5M est friends. Most of the workers earned a Gulf of Mexico, Mr. Georgiopoulos, AMOUNT See IN BRIEF on Page 2 ment—a worker advocacy group called comfortable living at Windows on the the most successful U.S. shipping en- that ROC-NY Restaurant Opportunities Center of New has won in World, a union shop where servers made as trepreneur to come along in decades, is York—has met with unexpected success. settlements much as $100,000 a year. making what on the surface seems to be NOTE TO READERS And that success is fueling an expansion of In the wake of the terrorist attacks,start- a spectacularly contrarian bet: buying Colors to other cities. ing a social revolution was not top of mind. every tanker he can get his hands on. Our next issue arrives July 12. The most advanced of those plans is in Detroit, But along the way, Colors—with its ideals of egali- Earlier this month, he spent $620 Go to www.crainsnewyork.com where the W.K. Kellogg Foundation is providing tarian management and generous pay—taught im- million to snap up seven tankers for his for daily news and analysis. funding. The restaurant is expected to open this migrant restaurant workers throughout the city to General Maritime Corp., including year. At least three other cities—New Orleans, See COLORS on Page 79 See BETTING on Page 80 20100628-NEWS--0002,0003-NAT-CCI-CN_-- 6/25/2010 7:09 PM Page 1
inquiring at retailers and, on a recent IN BRIEF morning, attending a college and career counseling day hosted by Deloitte, an ac- Continued from Page 1 A jobless summer counting and consulting firm. Center, which hopes to join with New York- “I honestly don’t know what I’ll do if I Presbyterian to open a $201 million proton- don’t find something,” says Mr. Maxwell, beam center in Fishkill, N.Y. Given the size for teenagers, again 16,who fears a repeat of last summer,when and cost of such a facility, New York state he was unable to land a job. “I’m trying to officials will likely approve only one project. save money to help pay for college.” JUST 10 DAYS AFTER NEW YORK CITY’S HEALTH 36% of 16- to 19-year-olds unemployed At a disadvantage DEPARTMENT PASSED NEW RULES REQUIRING mr. maxwell, like thousands of others, restaurants to prominently post letter grades yet another summer spent without learn- has applied to the Summer Youth Employ- rating their cleanliness, state lawmakers are BY CARL GAINES ing basic job skills and earning spending ment Program, a city-run jobs program calling for similar legislation. New York’s Senate money, as young people struggle to find that serves 14- to 24-year-olds. But he passed a bill requiring a grading system for all end-of-school-year celebrations and constructive ways to fill their time. isn’t hopeful. eateries in the state based on the city’s model, joy at the arrival of summer might be Adair Maxwell, a Queens resident, has “I’ve applied to the program two years which will start next month, when restaurants short-lived for young people in the New been looking for summer work to no avail, now and never gotten it,” he says, adding will begin receiving grades of A, B or C. York City area, as they come up against that he feels he’s at a disad- bleak prospects for jobs. vantage because the pro- AFTER NEARLY FIVE YEARS AT THE HELM OF The unemployment rate for 16- to One city-run gram also helps place LUXURY JEWELRY COMPANY DAVID YURMAN, 19-year-olds in the city sits at a stag- young adults who have Chief Executive Paul Blum announced that he is gering 35.9%. This, despite the fact program has more experience. stepping down. Mr. Blum, formerly president of that in May, the overall unemploy- New York State Labor clothier Kenneth Cole, is credited with expand- ment rate fell for the fifth consecu- received Commissioner Colleen ing Yurman’s wholesale and retail reach in the tive month, to 9.6%. Adding to this, Gardner hopes that the United States and overseas and growing its retail young people will soon face the re- 140,000 American Jobs and Clos- revenue to more than $750 million annually. ality that many of the jobs they ing Tax Loopholes Act of previously took for the sum- applications 2010,currently being con- THE STATE LEGISLATURE IS MOVING TO EXTEND mer are now spoken for by sidered in the U.S. Senate, RENT REGULATION BY SEVEN YEARS, AND older, more experienced will brighten the prospects some political insiders say landlords might be workers who have traded for young job seekers.The better off accepting an extension now rather than down during the tough bill includes $1 billion for waiting for November’s elections. If Democrats economy. summer jobs nationally. were to lose their Senate majority, they could still The result may “We think that will translate to $54 pass the extension before the Republicans took cut deeper than million for summer youth employment control of the chamber in January, but if the Dem- in the state and an additional 10,000 ocrats gain seats, they could amend the legislation Summer Youth Employment Program to make it even more favorable to tenants. jobs in the city,” Ms. Gardner says. Prospects equally bleak BY THE NUMBERS this would increase the number of young people the program can serve to Weekly shift of the city’s economy 39,000. But even so, the program has re- ceived more than 140,000 applications. OUCH! May’s record drop in new home sales Xavier Knight,a Queens teen who also after federal tax breaks expired is a painful reminder of the economy’s weakness, but attended the Deloitte seminar, feels his industry is still gaining. summer work prospects are just as bleak— especially because of his age and gender. 5.25M 0.98% $30K See JOBLESS on Page 80 AVERAGE MANHATTAN AMOUNT Mariah LONG RECESS: weekday subway residential Carey reportedly Adair Maxwell ridership in April, vacancy rate in owes a NY vet for wants to land up 3.1% from May, vs. 1.72% the care of her a summer job year earlier year earlier three dogs. so he can save Source: Metropolitan Source: Citi Habitats Transportation money for Authority his college education. LOSING GROUND The value of construction starts in the
New York area continues to be depressed by weakness in buck ennis residential building. Wall Street career dogs new d
vent the city’s economy,”Seth Pinsky,pres- Meanwhile, some entrepreneurs Robert Steel has a ident of the city’s Economic Development lamented a missed opportunity to get a Corp., told Crain’s last year. “It’s all about deputy mayor who understands them. great résumé, but is being creative, about trying to think in Steve Hindy, president of Brooklyn Brew- ways we haven’t thought before,to … tran- ery in Williamsburg, believes that people Source: McGraw-Hill Construction he right man to help sition to an economy that is ever more from the finance world CORRECTIONS strong and diverse than the economy we like Mr. Steel and his emerging firms? had before the downturn.” predecessor, Lehman SOMETHING FOR Details surrounding the security at NYU’s Abu Dhabi campus That effort was expected to be a hall- Brothers veteran Rob- EVERYONE: Deputy were misstated in the June 21 story “NYU’s first Abu Dhabi class BY DANIEL MASSEY Mayor Robert Steel rivals the Ivies.” mark of Mayor Michael Bloomberg’s third ert Lieber, do not says he’s “focused on Yeohlee Teng is one of the designers battling against rezoning the term. And that’s why last Tuesday’s ap- know what the city’s all industries and all garment center. Her name was misstated in the June 14 article weaning new york off of its heavy de- pointment of former Goldman Sachs ex- small businesses need. five boroughs.” “Garment center rezoning shelved.” pendence on Wall Street has long been an ecutive, Wachovia chief and U.S. Treasury “The finance world elusive goal for city officials—the securi- official Robert Steel as deputy mayor of has nothing to do with vol. xxvi, nos. 26, 27, june 28-july 11, 2010—Crain’s New York Busi- ties industry, after all, accounted for a economic development left some politicos the world of the en- ness (issn 8756-789x) is published weekly, except for combined whopping 24% of all income in the city last scratching their heads and many small trepreneur,” he says. issues June 28/July 5, Aug. 30/Sept. 6, and Dec. 20/Dec. 27, by Crain Communications Inc., 711 Third Ave., New York, NY 10017. year.But in the face of the Great Recession, business owners utterly mystified. “Those guys, their Periodicals postage paid at New York, N.Y., and additional mailing the Bloomberg administration redoubled In a Huffington Post blog entry, John lives are about making offices. Postmaster: Send address changes to: Crain’s New York Busi- those efforts, shifting its economic devel- Petro, a senior policy analyst at liberal pub- money. I make beer. I ness, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. for subscriber service: Call (888) 909-9111.Fax opment strategy away from big business lic-policy think tank Drum Major Institute, have friends who bake (313) 446-6777.$3.00 a copy, $59.79 one year, $109.79 two years. and real estate projects and toward pro- asked: “Will the new deputy mayor, with bread. And that’s very (GST No. 13676-0444-RT) ©Entire contents copyright 2010 by Crain Communications Inc. moting entrepreneurship and sectors like such strong ties to the financial industry, be different than making All rights reserved. media, fashion and biotech. willing or able to move New York City away money.”
“What we’re really looking to do is rein- from its reliance on the financial sector?” He said if elected newscom
2 | Crain’s New York Business | June 28, 2010 20100628-NEWS--0002,0003-NAT-CCI-CN_-- 6/25/2010 7:08 PM Page 2
WORLD CUP Adding muscle FEVER IF THERE IS ONE thing New Yorkers Equinox Holdings care about, it’s winning. With the looks overseas for World Cup stretching into its third week and with Team USA advancing growth while other to the knockout round, workers across gyms struggle the city, soccer fans or not, are glued to TV screens—with or without BY ADRIANNE PASQUARELLI their employers’ blessing. —HILARY POTKEWITZ planning a trip to china? Better pack newscom workout gear. Equinox Holdings Inc., which operates 20 fitness and yoga centers in New York City, is in expansion mode, and that includes straddling the globe from Canada to Asia. Equinox is bulking up not only with overseas expansion, but also with its do- mestic yoga centers and its own branded apparel, at a time when other gyms are los- ing strength. National health-club mem- bership declined 0.4% to 45.3 million last year compared with 2008, according to the ap images International Health,Racquet and Sports- THE NEW YORK STOCK EXCHANGE broadcast USA club Association. During the recession, games on a handful of screens on the floor of the stock clubs such as Bally Total Fitness and exchange for the first time this year, as trading floors at Crunch filed for bankruptcy and closed Deutsche Bank, Credit Suisse and J.P. Morgan Chase outposts.Additionally,Town Sports Inter- also tuned their TVs to the World Cup. national, which owns New York Sports Clubs, has amassed a debt load of nearly PUMPING IT UP: WHERE WORLD CUP FEVER ranks $320 million, making it difficult to grow. CEO Harvey Spevak has added a clothing th in sapping U.S. worker productivity. It Membership, profits up line, other products. comes in behind college by contrast,membership at Equinox has basketball’s March Madness, the NFL’s increased 7% since 2008 to 150,000, and fantasy football drafts and post-Super Harvey Spevak, chief executive of the 50- Bowl Monday blues, according to staffing unit national chain, says profits doubled 4consultancy Challenger Gray & Christmas. from 2006 to 2009. “In new markets and domestically, we FROG DESIGN, are poised to grow,” says Mr. Spevak. “We an international are also spending a lot of time on a global buck ennis expansion strategy.” product design With memberships costing $145 to American Council on Exercise, noting the property, bringing in foot traffic to com- firm with a 100- $175 a month, Equinox is one of the more chain’s modern equipment, certified train- mercial sites and providing an amenity for person studio in expensive offerings in a city where most ers and squeaky clean interiors. tenants of residential buildings. the West Village, health clubs charge closer to $100 a month Founded in 1991 to fill a void in the fast- is conducting a or less. Its members are typically between growing high-end fitness arena, Equinox Revenues have grown “research the ages of 28 and 48 and make more than got a boost four years ago when it was ac- since its acquisition,Equinox has more project” by $200,000 annually. quired by real estate giant Related Compa- than doubled its revenue, which currently asking the public to submit photos of the craziest “Equinox is a higher-cost facility, but nies for $505 million. In the fitness indus- stands near $400 million, according to in- multitasking soccer fans. They say it’s for a software they create value for that,” says Pete Mc- try, such pairings are common. Health dustry sources.Earlier this year,the fitness client. More than 60 crazies have so far obliged. Call, an exercise physiologist with the clubs can serve as anchors for developers’ See ADDING MUSCLE on Page 79 TOKYO-BASED advertising agency that provides children with access to quality Dentsu has a experiences beyond normal school hours. concurrent foosball Mitchell Moss, a professor of urban tournament running w deputy mayor in its TriBeCa office. policy and planning at New York Univer- sity and an informal adviser to the mayor, Everyone, from the officials were serious about diversifying the he says.“That’s a very simple message, and insists that Mr. Steel’s 13-year tenure at top executives to the economy, they’d make it easier for small I hope Mr. Steel understands it.” Duke is being overlooked and predicts that interns, is businesses to thrive. “The thing I have in During his introductory press confer- his experience in higher education—an participating. istockphoto common with Goldman Sachs is I’d like to ence at City Hall last week,Mr.Steel moved area of increasing importance to the city have my cost of doing business reduced,” swiftly to counter the notion that his Wall economy—will prove invaluable. Street background means he won’t be able “He’s much more than a guy with a THE PERCENTAGE of to boost other areas of the city economy. background in finance,” Mr. Moss says. people in a “It’s very hard to find someone who under- Monster.com poll who y Two-pronged attack stands the federal government, higher ed- said they plan to miss on “i think we’re focused on all industries ucation and finance,and in Mr.Steel,we’ve work because their ll and all five boroughs, but the largest and got a trifecta.” 17%employer bans watching or listening to World Cup most important engine is financial servic- In his new post,Mr.Steel will be able to games at the office. Another 9% said they plan to tune es,” Mr. Steel said. “I don’t think it’s ei- draw on more than just his own experience. in to the games covertly. ther/or; I think the answer is both.” Introducing the deputy mayor last week, The city’s big-business community ap- the mayor went out of his way to single out plauded the Steel appointment, noting he Mr. Pinsky, the EDC chief who will con- CHEERS COULD BE HEARD on brings a combination of public- and private- tinue in that key post. the streets of New York when the sector experience that makes him well-suit- “[Robert] Lieber also came from the fi- Americans beat the Algerians to ed for the job. In addition to his positions nance world, but in many ways he took a go to the second round, but it with Goldman, Wachovia and the Treasury, backseat on innovative new policies to di- was not the highest-rated World he’s chaired the boards of Duke University; versify the economy and let Seth Pinsky run Cup#2 game here. More locals tuned in to the tourney The Aspen Institute, a nonprofit that pro- with them,” says Jonathan Bowles, director back in 2002, when Team USA made it all the way to motes leadership; and The After-School of the Manhattan-based Center for an Ur- the quarterfinals to play Germany. Corporation, a Manhattan-based nonprofit ban Future.
June 28, 2010 | Crain’s New York Business | 3 20100628-NEWS--0004-NAT-CCI-CN_-- 6/25/2010 6:46 PM Page 1
Penguin president a bad sport. concert on July 1 on the Alabama “Susan sees this as a betrayal, rather coast.The one-time press secretary than as a great opportunity [for Ms. to Mayor Rudy Giuliani has also NEW YORK,NEW YORK Stern],” says an industry executive. advised the states to set up a Ms. Stern would head up the trade webcam showing live feeds of the publishing program for the Crown beaches. “They started it before the edited by Valerie Block and Broadway imprints. oil arrived,” she says, but even after Ms. Mavjee has offered to buy the oil came, “they decided to out Ms. Stern’s contract, but talks continue to use the cameras.” have bogged down over Ms. Kennedy’s insistence that the editor Potholes go green Dance New Amsterdam program this year.The organization be prohibited from bringing any has 250 employees and serves authors with her or hiring anyone new york city’s thousands of faces cash crunch 32,000 people a year, from from Penguin. “Molly is employed potholes used to be filled—if they neighborhood kids to professional with Viking, and we take our were filled at all—with a toxic mix ance new amsterdam, the first arts organization to dancers, on an annual budget of contracts very seriously,” says a of asphalt, diesel fuel and kerosene. move to lower Manhattan after Sept. 11,may be $2.9 million. Ms. Peila has Penguin spokeswoman. A Crown Environmental groups had been instituted a one-day-a-week spokesman declined to comment. pressuring the industry to clean up Dforced to close its doors.The 26-year-old dance studio furlough for all staffers for the its act, but it took a small Queens needs to raise $40,000 by the end of July in order to pay its rent, summer and cut her own salary. It Crisis guru company, Cold Mix Manufacturing executives at the nonprofit may not be enough. of College Point, to invent the first say. An urgent e-mail helps Gulf states eco-friendly asphalt. GreenPatch contains no petroleum products campaign to its supporters Publishing bigs a new york public relations maven and produces no noxious fumes, the in April brought in $16,000, battle over exec is on the case in the Gulf. Four company says. but the organization needs Southern states affected by the BP “We were just your average it’s publishing-industry smack- oil spill have tapped Cristyne Nicholas asphalt producers,” says Vice far more. “I don’t think down time, as heavyweight Susan (right), the former President Glenn Shapiro. “Then people understand the crisis Petersen Kennedy, president of chief executive of we put a lot of R&D into we’re in,” says Executive Penguin Group (USA), plays rope- tourism bureau making a product that’s more Director Kate Peila. a-dope with newcomer Maya Mavjee, NYC & Company, environmentally conscious.” president of The Crown Publishing to help them recover The research has paid off. The group’s financial Group. from a tourism Consolidated Edison recently problems started with the recession, as a drop in students Ms. Mavjee thought she’d snag fiasco.The group signed a contract to use resulted in a loss of nearly $30,000 a month in tuition income. talented Molly Stern—currently figured that her GreenPatch exclusively in its Then in May, the organization lost its annual $100,000 editorial director for fiction at experience roadwork, becoming the first Penguin’s The Viking Press—for a shepherding New major utility in the country to grant—money that had come from Mayor Michael Bloomberg’s key spot at the recently restructured York through the do so. And the city regular donations to local arts groups.The mayor ended that Random House division. Ms. aftermath of Sept. buck ennis Department of Transportation Kennedy responded with a classic 11 qualifies her for the job. is testing GreenPatch. choke hold: She’s refusing to let the Ms. Nicholas, dubbed the crisis NEWYORKCITY BOSTON SEATTLE SANFRANCISCO LOSANGELES CHICAGO editor out of her contract, which has guru, will hit up BP for marketing Contributors: Lisa Fickenscher, about eight months to go. funding for the region. In addition, Matthew Flamm, Hilary Potkewitz, Observers are calling the she’s plugging a Jimmy Buffett Miriam Kreinin Souccar
11 West 42nd Street Life after Law & Order board for four or five. I grew up near prehensive energy policy that re- Actor talks about Cape Cod, and I was simply as- duces our dependence on carbon- is pleased to welcome the following ocean conservation, tounded when the codfish disap- based fuels. More specifically, they new tenant peared from the Grand Banks in can press for an end to deepwater and hints that TV series 1996. And then through friends of offshore drilling. TRAIANA, INC. mine, [Oceana board chair] Keith may come back Addis and Ted Danson, I became What’s next for you as an actor? ATLANTA represented by involved with Oceana. I plan to take a deep breath first and William W. Carr of BY CARL GAINES then do a play [Simon Gray’s The
WASHINGTON,D.C. MILAN LONDON PARISFRANKFURT MUNICH SÃOPAULO RIODEJANEIRO BEIJING BANGALORE Do you think the government’s response Old Masters] that is planning to Williamson, Picket, Gross, Inc. ith his 15-year role to the Gulf oil spill has been sufficient? come to New York.And then,in be- as District Attorney Oceana has been predicting for a tween, Law & Order keeps saying Jack McCoy on very long time that this would hap- that it ain’t over yet, so we may be NBC’s Law & Order pen.So the fact that the government surprised. But I’ll be as surprised as atW an end,actor Sam Waterston hasa and the oil company,which bears the you. And beyond that, call my agent for leasing information, please contact: little time on his hands.He’s using it primary responsibility, are scram- if you’ve got a job. Gregory W. Conen to draw atten- bling to think of solutions and Blythe Kinsler tion to ocean patching them together Law & Order employed a lot of conservation means that people have had people in the city. Are you con- through his their heads in the sand.Giv- cerned about its absence? 212.715.0300 MOVERS & SHAKERS work as a en where they started, I I think that’s the worst of member of think that they’re making a it. Law & Order’s arrival Oceana,an ad- very serious effort to deal transformed show busi- Sam vocacy group with it, but it’s where they ness in New York. I’ve Waterston established in started from that needs fixing. been saying for years that the 2001. In ad- Tony people should give vance of the Any advice for people Dick Wolf an nonprofit’s July 10 inaugural who are frustrat- award for his “Splash” fundraiser in the Hamp- ed about the contribution tons, Mr. Waterston talks about the situation? to the theater Gulf oil spill, codfish and life after They can in New York, Law & Order—he even hints that press their with all the the show might go on. representa- people that tives and Law & Order What drew you to Oceana’s cause? the admin- employed I’ve been involved with Oceana for istration to over the five or six years and I’ve been on the have a com- years. bloomberg news 4 | Crain’s New York Business | June 28, 2010 CN013793 6/17/10 2:52 PM Page 1
In honor of Crain's New York Business' 25th Anniversary and commitment to New York City, the Empire State Building will shine blue and white on the evening of June 28th.
The Empire State Building image® is a registered trademark of ESBC and is used with permission. Project2:fp template.qxd 6/22/10 1:33 PM Page 1
Charting towards a better future
At Banco Popular, we feel a deep sense of commitment to the communities we serve. It is for this reason that we continue working with tenacity to bring forth innovative products and services that offer financial solutions for all your banking needs. We have been instrumental in the development of our communities for over 116 years and, today more than ever, we are dedicated to providing you with the tools to succeed in these challenging times. For us, it is an honor to serve you and, in doing so, to keep charting towards a better future.
Come aboard. To speak to a banker call 1-800-250-6968.
Member FDIC. ©2009 Banco Popular North America. 20100628-NEWS--0007-NAT-CCI-CN_-- 6/25/2010 3:03 PM Page 1
Rance Crain Jill Kaplan Xana Antunes on local news junkies on big-city connections on NY’s story P. 8 P. 8 P. 10
WALL STREET, A LOVE STORY: GREG DAVID ON WHY WE CAN’T QUIT OUR ADDICTION P. 23 HIGH TIME FOR A TIMELINE P. 30 FOUR SCORE KOCH, DINKINS, GIULIANI, BLOOMBERG ON MAYORS AND MANAGERS P. 33 GOTHAM GIGS A BUCK ENNIS PRODUCTION P. 36 IN A NY STATE OF MIND P. 40 GREAT REBOUNDS CENTRAL PARK, THE SOUTH BRONX, DOWNTOWN POST-9/11. NEW YORKERS SHOW THEY HAVE IT P. 42 CRAIN’S HALL OF FAME ALAIR TOWNSEND UNVEILS HER INAUGURAL CLASS P. 44 BIG MR. MORTGAGE HOW A FINANCIAL PIONEER ALMOST DESTROYED THE WORLD P. 48 PEOPLE TO WATCH 25 STANDOUTS SHAPING IDEAS THE RECOVERY P. 53 {PLUS A FEW MODEST SUGGESTIONS} LAST BLOCKS STANDING P. 68 TO MAKE NEW YORK CITY A BETTER PLACE THE KIDS ARE TO LIVE AND WORK P. 12 ALRIGHT MEET YOUR SUCCESSORS P. 71 + BEST. IDEA. EVER. P. 2 0 AMERICA’S TOP 40s P. 74 {HINT: THINK SMASHED WINDOWS} VIDEOS, SLIDE SHOWS AND MORE GOOD STUFF ONLINE AT ECONOMIC ENGINES: AOL AND THE FUTURE OF NEW MEDIA WWW.CRAINSNEWYORK.COM | NONPROFITS | HIGHER ED | HEALTH | SMALL BIZ | P. 56
illustration: jon valk
June 28, 2010 | Crain’s New York Business | 7 20100628-NEWS--0008-NAT-CCI-CN_-- 6/24/2010 5:36 PM Page 1
25TH ANNIVERSARY ISSUE Why our second 25 years editor-in-chief Rance Crain publisher, vp Jill R. Kaplan will be greater than the first EDITORIAL editor Xana Antunes managing editor Glenn Coleman deputy managing editors Valerie Block, WHEN WE STARTED covering local Of course, since we are breaking news all day long, it does raise Erik Ipsen business news in New York 25 years the question of whether our print publication should remain a contributing editor ago, we had no idea our endeavor news-oriented product. Xana has repositioned our weekly paper as Elizabeth MacBride columnists Greg David, Alair Townsend would end up being the epicenter of a news magazine filled with high-impact cover stories, insightful politics editor Erik Engquist such frenzied attention. At the time, analysis and smart storytelling focused on the rich array of pulse editor Barbara Benson local business news—especially characters and drama that make up this city. senior reporters Theresa Agovino, Aaron Elstein, Lisa Fickenscher, involving smaller companies—was an Market trends may be shifting away from print—our company Matthew Flamm, Miriam Kreinin Souccar overlooked area. After all, the dailies now produces more revenue from our websites than from print reporters James Comtois, Amanda Fung, had bigger fish to fry, what with so subscriptions—but, as Xana notes, “for the near future, print is Daniel Massey,Adrianne Pasquarelli, many giant, worldwide corporations where we generate most of our revenue when advertising is Hilary Potkewitz, Jeremy Smerd art director Steven Krupinski residing here. included, and it will always function as the showcase of our brand.” deputy art directors Carolyn McClain, Today, it’s a different story. Yes, Our publication has run some terrific and insightful pieces, Daniel Mednick RANCE CRAIN newspapers have had a hard time such as the counterintuitive “Call that a mild recession?” and our staff photographer Buck Ennis adapting in the digital age, but The recent scoop on Bill T.Jones’ merger with the Dance Theater art assistant Danielle McManus EDITOR-IN-CHIEF copy desk chief Wendy Zuckerman Wall Street Journal’s recent move to Workshop. The latter is a perfect example of how, over the course copy editors David Cohen, Thaddeus Rutkowski aggressively increase its local reporting, of our development, we’ve expanded our definition of what research editor Denise Southwood including business news, underlines business needs to know to include the arts and culture, assistant research editor Maia Blume editorial researcher Selena Shen what a hot ticket local business news is philanthropy and politics. editorial interns Carl Gaines, Emily Laermer, becoming—and we’ve been covering it for 25 years! We’ve had some great people guiding our paper over the years, David Montalvo, Blaire Porter Our editor, Xana Antunes, believes (and I concur) that the including Alair Townsend and Greg David, both of whom contributors Cait Murphy, Gale Scott, Cara S. Trager, Joe Walker Journal’s entry into the local scene “affirms the vitality and continue to write informed and pithy columns for us. Our www.crainsnewyork.com importance of New York City as the nation’s premier commercial publisher, Jill Kaplan, has built a very capable and enthusiastic web editor Brian Tracey marketplace and essential economic engine. It’s served to executive team: Xana, Marc Minardo, Trish Henry and Amy senior producer Elisabeth Butler Cordova reinvigorate coverage across the board, something that can only Crossman. Like Alair before her, Jill is passionate about the city of producer Kira Bindrim benefit New York.” New York and is not shy about publicly advocating on its behalf. EDITORIAL AND ADVERTISING OFFICES Nowhere is this more true than online.The Web and business The conference she put together last year on the future of New 711 Third Ave., New York, NY 10017-5806 news are “a match made in heaven,” writes Ken Doctor in York was one of the best we’ve ever done. editorial: 212.210.0277 Fax 212.210.0799 advertising: 212.210.0259 Newsonomics. “Business is about immediately moving much faster Our job, as we enter our second 25 years of publishing, is to Cable craincom nyk than many other sectors, with coverage measurable in seconds, help you run your business “better, smarter and more efficiently,” Fax 212.210.0499 minutes, hours and days.” in Xana’s words.That means we must continually move higher Entire contents ©copyright 2010 Crain The Internet, in many ways, has been a great boon for us. It’s up the food chain to become more valuable to you and your Communications Inc. All rights reserved. ®CityBusiness is a registered trademark of MCP enabled us to break news on a minute-by-minute basis and enterprises—an assignment we eagerly look forward to Inc., used under license agreement. compete against anybody anywhere. fulfilling. TO SUBSCRIBE: Call 888.909.9111; fax 313.446.6777. $3.00 a copy, $59.79 one year, $109.79 two years. www.crainsnewyork.com
ADVERTISING AND MARKETING advertising director Trish Henry real estate sales manager Cornelius P. Gore The connections that make senior account managers Irene Irvill, Courtney McCombs, William E. Squitieri account executive Anthony Mowad sales manager, classified New York business work print & online John Gallagher sales coordinator, print & online Lulé Haznedari newsletter product manager WHEN I MOVED to New York City phone calls and e-mails from venture capitalists. Using a Crain’s Alexis Sinclair about 20 years ago, I was anxious to list to forge relationships with new clients. We have helped drive credit Todd J. Masura 313.446.6097 marketing director Amy Crossman integrate into the business community. business, grow business and start business in New York. We’ve director, audience development In the upstate town I had come from, helped inspire executive hires and board appointments, donations John LaMarca business was often conducted with of time as well as money to charities and nonprofits, and even new senior audience development manager friends and family. While I don’t friendships. Tarek Cotran believe that the buzzword networking When the idea for Crain’s was brought to New York from the general manager, interactive had the same emphasis back then as Midwest back in 1985, our Marc Minardo web developer, interactive it does today, my community was operation ran in the red for a Chris O’Donnell FPO indeed well-networked: You could For a quarter number of years. But Rance easily make a connection. Crain and his family stuck with NEW YORK PRODUCTION I attended my first Crain’s of a century, the concept because they production and pre-press director Breakfast Forum in the mid-1990s believed that no matter how Michael Corsi JILL KAPLAN Crain’s has advertising production manager and remember feeling like I had just large or inhospitable Gotham Suzanne Fleischman Wies PUBLISHER, VP walked into a high-powered New helped drive might seem, at the end of the York insiders’ event.The energy in business, grow day, it was a community that a PUBLISHED BY CRAIN COMMUNICATIONS INC. the room was palpable, with much news operation like Crain’s chairman Keith E. Crain president Rance Crain chatter about the recent news that business and could help bring together. secretary Merrilee Crain Disney was coming to Times Square, an amazing turn of events We’ve been in business in treasurer Mary Kay Crain at the time. start business this town for 25 years because executive vp, operations William Morrow In a city as huge and daunting to a newcomer as it could be, we’ve stayed true to our mission senior vp, group publisher Gloria Scoby in New York group vp, technology, circulation, going to that forum—and learning so much about an issue vital of serving the New York manufacturing Robert C. Adams to my new hometown—was an intimate and immediate business community honestly, vice president/production & experience. I felt connected to New York, to the business fairly and independently. We’ve manufacturing David Kamis chief information officer Paul Dalpiaz community, to our political leaders. Yep, it was my first Crain’s woven ourselves into the fabric of the place by advocating for our corporate circulation/audience connection. readers and illuminating for them the city’s many opportunities development director Kathy Henry I can’t tell you how many times in my four years as publisher and challenges. It’s truly an honor to serve you. founder G.D. Crain Jr. (1885-1973) here that someone has shared his or her story of a connection Crain’s celebrates the future of New York City in these pages chairman Mrs. G.D. Crain Jr. (1911-1996) made through Crain’s. But I can tell you that the stories never get and thanks you for being a part of our community, now and in the old. Meeting someone at a Crain’s event who ultimately became a years ahead. We look forward to helping you make new and lasting business connection. Being profiled in a Crain’s article and getting connections in the building of your businesses, careers and dreams.
8 | Crain’s New York Business | June 28, 2010 CN013781 6/11/10 2:21 PM Page 1
Redeemed rewards for cash to put back into the business.
MY BUSINESS ORDERED ENOUGH BLEU TO GET BACK SOME GREEN. FREE SMALL BUSINESS CHECKING WITH REWARDS. • Earn rewards for everyday banking — just write a check, swipe your debit card, or pay bills online.
• Combine rewards from all your Capital One checking and credit card accounts, both business and personal.
• Choose from cash, travel or merchandise rewards.
To open a FREE Capital One Small Business Checking with Rewards account, visit a branch, call 1-888-755-BANK (2265) or visit capitalonebank.com/businessrewards.
Monthly rewards limits apply. Customer purchases checks. Transaction limitations apply to checking account. Free Online Bill Payment Service is not intended for use by commercial and institutional clients with greater than $10 million in annual sales. Limit one Small Business Rewards Checking account per customer. See www.capitalonebank.com/businessrewards for complete terms and conditions. Offered by Capital One, N.A. ©2010 Capital One. All rights reserved. 20100628-NEWS--0010-NAT-CCI-CN_-- 6/24/2010 5:40 PM Page 1
25TH ANNIVERSARY ISSUE NY’s story, 25 years in the making
FOR 25 YEARS, Crain’s has strength lies in the resilience of its 8.5 million citizens: the competition, innovation, markets and diversity. chronicled New York City’s neighbors who got together to make their streets safe; the In that spirit, we’ve canvassed some of New York’s remarkable transformation entrepreneurs who showed their grit by overcoming the leading lights for their ideas on how we can build an even from a struggling, crime- expense and bureaucratic burden of starting a business here; better, smarter city in which to live and work.The best of ridden, shrinking metropolis the families who looked beyond New York’s darkest day on their ideas—from rethinking how we move millions of into a global capital truly worth Sept. 11, 2001, to turn downtown Manhattan into its people around the city each day to restructuring food the accolades showered upon it: fastest-growing neighborhood; and distribution to redefining government the nation’s biggest city, its the political leaders who managed policy—can be found on Page 12. Call it financial and media center, its to make a series of good policy Our ingredients: the ultimate civic to-do list, if you will. No. 1 tourist destination, the decisions despite a history of talent, Among New York’s many identities, it top home for big-company stumbling through bad ones. remains a city of great thinkers, and as Cara headquarters, and more. And let’s not forget the tens of competition, S.Trager writes on Page 62, that brainpower XANA ANTUNES Fueling this great thousands of immigrants who innovation, more than ever emanates from our world- turnaround story, of course, is settle here every year, replenishing renowned universities.The city’s EDITOR Wall Street, which, as Greg our pool of talent and re- markets and institutions of higher learning are educating David chronicles on Page 23, energizing our neighborhoods, for 600,000 under- and postgraduates; from generated such wealth for the they also share credit for the city’s diversity those ranks will come the future leaders of city, it would have made John success. More than a third of the the city’s nascent digital, green, biotech and Pierpont Morgan blush just to think of it. And that wealth city’s population, and 42% of its tech sectors. On Page 53, we offer up a list drove the city’s economic development, remaking its skyline, work force, are foreign-born. As one of those immigrants (I of some of today’s movers and shakers we’ll be watching in creating jobs, underwriting its nonprofits and great cultural came here as a foreign correspondent in 1993), I can attest coming years, a sampling of the many talented people who’ll institutions, and generating tax revenues that benefited all. to the sheer vitality and endless opportunity that drew me drive the city’s growth. Wall Street’s wealth would have meant little if New York here in the first place and then convinced me to stay. All of this history—the people, the city’s signature weren’t filled with New Yorkers. Alair Townsend’s Hall of Beyond looking back, this 25th anniversary issue of institutions and defining personality traits—is colliding with Fame on Page 44 paints portraits of some of the business Crain’s—so capably steered by Managing Editor Glenn the Great Recession and its aftermath, particularly in the and civic leaders who made such a difference in the city’s Coleman—looks forward to New York’s future as a center of remaking of Wall Street.Together, they raise new questions resurrection.The contributions of David Rockefeller, creative excellence and financial might. Author Richard that will tell the tale of New York City’s future. It’s a classic Beverly Sills, Henry Kravis and their fellow inductees go far Florida gave currency to the notion of the “creative class” as New York story, 25 years in the making. Paging through this beyond their successes in their primary jobs. the principal driver of growth and development of cities in issue or browsing online is a surefire reminder of why Crain’s New York is so much more than its boldfaced names. As an age when physical constraints have ceased to matter, and readers would live and work nowhere else, and why we take Cait Murphy shows in her article on Page 42, the city’s true certainly New York has all the ingredients: talent, such pleasure in covering the stories of New York business. FASTER FORWARD
Accelerate success. Leading businesses around the globe have come to rely on Colliers International to advance their interests in real estate. With a greater sense of drive, coupled to teams of specialists around the world, we’ll help you move swiftly along the right track—to accelerate your success.
www.colliers.com
10 | Crain’s New York Business | June 28, 2010 CN013760 6/4/10 3:34 PM Page 1
There’s no denying that operating a company in today’s For more information, contact: environment is challenging, from managing risk and MIchael Wolff Principal-in-Charge, dealing with increased economic pressure to complying Marketing & Communications with ever-stringent regulatory bodies. 212.891.4065 [email protected]
www.eisnerllp.com At Eisner, we look at challenges as opportunities. Our clients, from start-ups to large, publicly traded companies, benefit from our experience and expertise in accounting, audit, tax, and comprehensive advisory services. We use our business acumen, hard work, and New York street smarts to help our clients find creative solutions as they strive to achieve their goals.
Let our professionals help you tackle technical and compliance matters, so you can focus on taking your business to the next level. 20100628-NEWS--0012,0013-NAT-CCI-CN_-- 6/25/2010 12:41 PM Page 1
25TH ANNIVERSARY ISSUE
ENVISION A NEW HIGH LINE. ONLY HIGHER. MUCH HIGHER Imagine a skyway that runs from 2 the tip of Battery Park to 125th Street, with entrances at the 15th floors of iconic New York City towers—Woolworth, Empire State, Chrysler, Seagram, to name just a few. We could redefine a new public realm 150 feet in the air and turn the real estate market upside-down, literally. BIG —Lori Mazor, associate vice president of planning and design, New York University
CONNECT NYC’S INNER-HARBOR 3 COMMUNITIES IDEAS WITH LIGHT RAIL Using existing rights of way and street beds—and parlaying the Jersey-side success of {PLUS A FEW MODEST SUGGESTIONS} TO HELP MAKE the Hudson-Bergen Light Rail line— this rail line would link dozens of emerging neighborhoods with a NYC BETTER, SMARTER, STRONGER, WEALTHIER mod version of the streetcar. Extend the HBLR into Staten Island, AND MAYBE, JUST MAYBE, A LITTLE FRIENDLIER connect with the railway there, cross the Verrazano Bridge, run THERE ARE A MILLION REASONS to say “no” in this town. But all it takes is one “yes,” and, along the harbor’s edge through well, magic can happen. An island changes hands in 1626. A stock exchange forms under a Brooklyn and Queens, and buttonwood tree. A new subway frees up the surface space for today’s Park Avenue. An old, terminate at Queens Plaza. weedy stretch of elevated downtown track becomes the High Line park. With that enterprising —Dan Kaplan and Mark Strauss, co-heads, urban studio FXFOWLE spirit in mind, we asked bright lights in business, civic and government circles for their ideas for a better New York. Online readers weighed in via polls and comment threads. Not every idea that follows will be an easy sell. But there’s something about each that makes us say,“Yes.”
AS TOLD TO THERESA AGOVINO, ERIK ENGQUIST, LISA FICKENSCHER, MATTHEW FLAMM, AMANDA FUNG, DANIEL MASSEY, ADRIANNE PASQUARELLI, HILARY POTKEWITZ, JEREMY SMERD AND MIRIAM KREININ SOUCCAR
RETHINK GOVERNORS ISLAND It’s an architect’s fantasy: a glorious 172-acre 1 canvas in the heart of New York Harbor. The city takes full control of it in July and plans an 87-acre park. The rest is up for grabs, except for developers of casinos or permanent housing—uses forbidden in the federal deed. But an island with no cars and one-of-a-kind views just a few minutes by ferry from Manhattan or Brooklyn deserves more than the usual RFP process. (A) GO BIG OR GO HOME Such a spectacular setting should share the symbolism and ideals of its neighbors—the Statue of Liberty, Ellis Island—and, like them, celebrate our embrace of the rest of the world. Relocate the United Nations here. Or house a major institution dedicated to solving global issues, such as world hunger. —Paul Katz, president, architecture firm Kohn Pedersen Fox Associates (B) WATER, WATER EVERYWHERE BUT NOT A DROP OF THINK Less land planning, more waterfront focus. This former Coast Guard base’s shoreline offers so many maritime possibilities. Carve out and cart away some of the land mass—part of the island was made from landfill—to create a large harbor on the east side for sailing, fishing, kayaking and more. —Stanton Eckstut, founding principal, Ehrenkrantz Eckstut & Kuhn Architects BUILD A WIND FARM ATOP THE (C) ALL BETS ARE ON Change the law to allow no-slots gambling and FRESH KILLS LANDFILL It’s one of develop a posh resort to attract high rollers who now spend their money 4 NYC’s highest elevations. And a recycling elsewhere. There are no residents to object, and it would generate billions in plant wants to buy every kilowatt produced by the tax revenues that would more than fund the island’s other public aspirations. six wind turbines envisioned for a patch of the now- —Vishaan Chakrabarti, director, real estate development program, Columbia closed 2,200-acre dump. What a great message. University’s Graduate School of Architecture, Planning and Preservation —James Molinaro, Staten Island borough president
{MODEST SUGGESTION} REROUTE THE PARADES Use our many midtown parades as an economic development tool for lower Manhattan instead. Hold them all downtown, once the Fulton Street Transit Center is complete, for a trial period of two years. New Yorkers would see downtown as a celebratory destination. —Mary Ann Tighe, chief executive, NY tristate region, CB Richard Ellis
12 | Crain’s New York Business | June 28, 2010 20100628-NEWS--0012,0013-NAT-CCI-CN_-- 6/25/2010 3:04 PM Page 2
MOVE THE STATE CAPITAL FROM ALBANY TO NEW YORK CITY Albany is a cesspool, in great part because the media capital of the state is far away, in New York City. Infections do better in sunlight, and the bright glare of New York’s media will help 5 flush out the problems in the state government. —Charles E.F. Millard, president, Cardinal Advisors; former president, NYC Economic Development Corp.
TURN OLD INDUSTRIAL PROPERTIES INTO STREET-TREE FARMS Owners of unused industrial properties in the outer boroughs should 6 be offered city incentives (including breaks on property taxes and water bills) to allow street trees to be grown on their land. Urban stresses shorten the lives of the trees shading our sidewalks and streets—10,000 die every year—and trees already adapted to an urban environment would be hardier than those trucked in from the suburbs. —Anne Vaterlaus, landscape designer, MKMLA
MAKE LA GUARDIA AIRPORT BUSINESS-CLASS ONLY Downsize 7 La Guardia into the exclusive airport for business travel on high-volume routes. Road warriors only. No luggage check-in allowed. You print out boarding passes the night before. No planes with middle seats—nothing bigger than those four-abreast Embraer 170s. Send the big planes and the tourist travel to JFK and Newark airports. At the business- class-only La Guardia, you’ll operate hourly flights to the region’s big cities—D.C., Boston, Chicago—from 6 a.m. to 9 p.m. If your meeting ends early, you go home early. Everyone, including pilots, is home in time for Letterman. —Tom Wakeman, road warrior and professor, Stevens Institute of Technology
THE TRUCK STOPS HERE Rid our streets of double-parked 18-wheelers by building truck depots on the city’s outskirts where 8 goods are transferred from big rigs and large-panel trucks to smaller, zero-emission vehicles making local deliveries. Time-of-day pricing could help shift deliveries to off-peak hours. —Chris Ward, executive director, Port Authority of New York and New Jersey
TWO WORDS: BARGE PARKS A ring of green facilities built on barges that plug into the urban land grid could serve as parks or even year-round greenhouses. The barges 9 could also be used as floating concert halls and performance spaces, fairgrounds, sports facilities (swimming pools, tennis courts, ice rinks) rotated on a seasonal basis, as well as corporate or educational conference space. —Donna Goodman, architect; author, The History of the Future
E VENICE-ON-THE-HUDSON Build small ferry stops (like the vaporetto of stops in Venice), place them near existing parking lots for commuters—in ng 10 Jersey City, on Randall’s Island, near La Guardia Airport—and offer no-frills e passenger-only service on a timely, reliable basis year-round. Help pay for the service by - charging drivers a fee to park and ride—and slapping fat tolls on all vehicles that use our city’s bridges. tim webb ent —Richard Olcott, partner, Polshek Partnership Architects ,
{MODEST SUGGESTION} jon valk;jon map , PICK THAT UP! Now that the city is safe, the next frontier is … clean. C’mon, New Yorkers, take pride; this place is a mess! Convene a sanitation task force to devise a marketing strategy and action plan. We don’t have to be Paris here, but there’s got to be a happier medium.
—Karen Brooks Hopkins, president, Brooklyn Academy of Music credits: lightbulb
June 28, 2010 | Crain’s New York Business | 13 20100628-NEWS--0014-NAT-CCI-CN_-- 6/25/2010 12:43 PM Page 1
25TH ANNIVERSARY ISSUE BIG IDEAS 13 Do something about traffic! he second avenue with a G.E.D. ! subway. Moynihan Station. New York City can’t think big; it has to think huge Twhen it comes to transporting 11 millions of people every day. But GET OUT OF JAIL maybe what’s best for us right now WITH A G.E.D. are the relatively low-cost ideas that can pay for themselves, yet
THE INCARCERATED should still transform the movement of buck ennis not be allowed to leave goods and people across the re- prison without a G.E.D. or gion’s roads, rails and rivers. Here weekends, as in many other cities. levels accumulated during the below-market parking rates on similar high school are a few—dreamed up, no doubt, —Peter Riguardi, president, week.They’re also willing to work city-controlled streets.To get credential. Some 25,000 while people were stuck in traffic. real estate firm Jones Lang LaSalle much longer shifts the other four serious, we should charge the same New Yorkers are released New York days to make up the difference. rate for on-street and in-garage from prison each year, too (A) BAN TRUCK DELIVERIES —Nancy Coyne, CEO, parking. Most people will go many of them without the SOUTH OF 96TH STREET (B) SWITCH EMPLOYEES advertising agency Serino Coyne straight to garages, since there is basic tools to participate in ON WEEKDAYS TO FOUR-DAY WORKWEEKS no chance of savings and it’s faster the economy—making double-parked trucks and incentivize companies to move (C) CHARGE GARAGE RATES for them. It will get their cars off recidivism all too likely. delivery vans exponentially add to a four-day workweek, with FOR ON-STREET PARKING the streets sooner, decreasing Obtaining a G.E.D. must be to weekday congestion and alternating days off for employees, one of the bigger components traffic times for businesses and a condition of parole or pollution. No deliveries should be thereby reducing congestion by of urban congestion is people their customers, and generate more release from prison. allowed south of 96th Street one-fifth every weekday.That trolling for free or cheap street revenue for the city. —David Jones, president, between 8 a.m. and 6 p.m. on third day off is the one in which parking.The true market rate—as —Majora Carter, Community Service Society weekdays; instead, they should be employees accomplish the most in reflected by parking garages—is environmental consultant, of New York made in the evening and on their personal lives, reducing stress much higher. We are subsidizing MacArthur Foundation fellow 12 15 TURN THE MASSIVE END RENT-CONTROL IRT BUILDING INCOME SCAMS ON 11TH AVENUE INTO A MUSEUM DON’T BASE THE RENT for a rent- stabilized or -controlled apartment on THIS AWESOMELY SCALED, when someone moved in. Instead, set full-block property on 58th 14 Even better: a bus that thinks it’s a subway car! it at 33% of the tenants’ combined Street is used for the income. The excess money between mundane task of creating our biggest problem here is that it’s hard to get across town. the current regulated rent and the new steam for Con Ed, depriving If you took every 10th cross street and closed it off to all traffic 33%-of-income rent would then be residents and tourists of except buses—say it’s 10th Street, 20th Street, 30th Street, split—half going to the landlord enjoying its grand design. etc.—you could then create mass transit above ground for a (provided the property is maintained to Take a cue from London’s fraction of what a subway would cost. Get quiet buses with five a certain standard) and the other half Tate Museum, which has doors on each side, and run them in both directions. On each to the State of New York Mortgage converted an old power block, in the middle of the street, install platforms the length of Agency to finance the construction of plant into an art museum, the bus. When all 10 doors open up at once, like they can in a new affordable housing. Only tenants and turn the IRT property subway car, everyone would quickly get on and get off.Traffic whose primary residence is New York into a major international lights would be timed to expedite buses on the cross streets and City and who pay both city and state cultural destination. vehicles on the avenues. My rough guess: It could cost as little as income taxes would get the benefit of —Robert Hammond, $30 million to set up 10 streets this way. CROSSTOWN the 33% rent limit. co-founder, High Line park —David Neeleman, former CEO, JetBlue Airways; SOLUTION: Neeleman —Stuart Saft, partner, founder and CEO, Azul Brazilian Airlines law firm Dewey & LeBoeuf
{MODEST SUGGESTION} MAKE WHITE THE NEW BLACK If you were to paint every roof in NYC white, the whole city would be dramatically cooler and save significant energy. There’s a pilot program called NYC Cool Roofs, but it needs to be more robust. Give a tax credit to all building owners who paint their roofs white, and it’ll happen. —Scott Meyer, former CEO, About.com; founder, CEO, Better Advertising
14 | Crain’s New York Business | June 28, 2010 Project1:fp template.qxd 6/22/10 1:31 PM Page 1
USA TO EUROPE FIRST AND BUSINESS CLASS WINE LIST: Seven Sisters “Vivian” Sauvignon Blanc Val do Sosego Albarino Joseph Drouhin Rully Feudi di San Gregorio Falanghina Groom Adelaide Hills Sauvignon Blanc Tedeschi Bianco di Custoza Landmark Overlook Chardonnay Willm Riesling Conde de Valdemar Blanco Fermentado en Barrica Rodney Strong Sonoma County Chardonnay Val di Suga Brunello di Montalcino Sangiovese Davis Bynum Pinot Noir Cyan Prestigio Toro Domaine Duclaux Chateauneuf du Pape Chateau Batailley Grand Cru Classe Fabre Montmayou Malbec Reserve One World Pinotage Santa Rita Medalla Real Cabernet Sauvignon Arrowood Sonoma County Merlot Graham’s Tawny Port Inniskillin Ice Wine Pommery Champagne
Wine selections may vary by fl ight and by cabin. AmericanAirlines, AA.com and We know why you fl y are marks of American Airlines, Inc. oneworld is a mark of the oneworld Alliance, LLC. © 2010 American Airlines, Inc. All rights reserved. 20100628-NEWS--0016-NAT-CCI-CN_-- 6/24/2010 8:21 PM Page 1
25TH ANNIVERSARY ISSUE 19 20 BIG Bulk up the local food chain Make the city senior-friendlier ew york city favors reasonably priced local residents, businesses vendors. Connecticut has a model THE POPULATION OF ADULTS over 65 and public agencies like this, using fresher food that is here is expected to grow nearly 50% IDEAS spend $30 billion a healthier for the children and over the next 25 years, so position year on food. stimulates the local economy. the city as an age-friendly alternative NImagine if just 10% of that money —Nancy Romer, general to retiring in Florida. That was shifted to buying food coordinator, Brooklyn Food Coalition doesn’t just mean more produced within 200 miles of benches (nice start, Manhattan.That’s a lot of lettuce. (B) DRAW MORE FARMERS though) or steeper dis- While greenmarkets are popping TO HUNTS POINT counts citywide. We also 16 up across the city, their prices are it needs a wholesale farmers need to actively con- TOUGHER often higher than those at local market.There’s nearly $1 billion in nect seniors with supermarkets.The wholesale Hunts unmet demand in the city, mostly entrepreneurs and PUNISHMENTS FOR Point Food Distribution Center in because farmers can’t ship their nonprofits that can CORRUPT POLITICIANS the Bronx is the largest food- goods into town. Right now at benefit from their THE BEST WAY to improve our help as mentors, distribution center in the world, Hunts Point, anywhere from seven CALL IT THE business climate is to clean up employing 10,000 people and to 30 farmers show up every day in BETTY WHITE investors and the political environment in the supplying 60% of the city’s fresh a parking lot outside the fish STRATEGY board members. state and city. A handful of food, but the 1960s-era complex “is market.They need a permanent —Gordon corrupt officials have tarnished 17 greatly in need of renovation,” notes home, with coolers, bathrooms Campbell, the reputations of honorable FREE SCHOOLING FOR city Economic Development Corp. and office space; each farmer would president, public servants, eroded the INTERNATIONAL President Seth Pinsky, citing plans hire locals to help unload trucks United Way of NYC
public’s trust in government for an upgrade that some experts say and set up and make deliveries. newscom and made it GRAD STUDENTS could cost as much as $500 million. — Karen Karp, food consultant even harder IN RETURN for full-scholarship A few policy shifts and public (D) EXPAND RED HOOK’S to rebuild opportunities—supported by (C) KEEP UPSTATE NY’S investments, however, could help WORKING FARMS WORKING FAMED FOOD STANDS our econ- private groups, including the make fruits, vegetables, dairy and TO OTHER CITY PARKS omy. As a business community— other products from the city’s farmland two or three hours deterrent, international graduate “foodshed,” as that 200-mile radius from New York City is fast in brooklyn’s Red Hook let’s make students in the fields of public is called, more plentiful for buyers. disappearing to development. If the neighborhood, the city has turned the violation service, the arts, business and city is serious about getting local open space into opportunity for of their oath technology would agree to (A) STOKE LOCAL DEMAND, food, then it should do more to immigrant entrepreneurs who have of office on work for at least five years in STARTING WITH SCHOOLKIDS preserve farmland by supporting set up authentic Mesoamerican issues of New York state and would be city schools, which serve 860,000 land trusts. We got $230,000 from food stands that now surround local integrity a guaranteed jobs in their meals a day, purchase from the the Orange County Land Trust ball fields and parks. Let’s expand istockphoto felony respective fields. As part of this cheapest out-of-state suppliers because I wanted to make sure that this to all of the city parks, opening rather than a misdemeanor program, the city and state because the budget is $1 per student our property remains a farm even up the permit process and giving and double the mandatory would facilitate the issuance of per meal. Most of it starts out after I’m gone. New York City hundreds if not thousands of punishment for a public official the applicable F-1 student and frozen and tastes crummy. Apples protects the land around its upstate brand-new New Yorkers a chance who commits an illegal act. work visas. There would be no come from Michigan and lettuce watershed; why not the farms that to earn money—and all New —Howard Rubenstein, better investment for our work from California because they’re are part of its foodshed? Yorkers an opportunity to eat well. chairman, force of the future. cheaper. We could have a food- —Keith “Garlic Guy” Stewart, —Chung-Wha Hong, public relations firm —Rob Speyer, co-CEO, real processing center in the city that Orange County farmer and vendor, executive director, Rubenstein Associates estate firm Tishman Speyer prepares food for all the schools and Union Square Greenmarket New York Immigration Coalition
TOMORROW’S INFRASTRUCTURE TODAY 18 MORE BROADBAND FOR EVERYONE THE INFRASTRUCTURE of tomorrow’s New York will be built around broadband. Seoul, South Korea, rose from the Asian financial crisis of the 1990s as the most wired city in Asia. The result was an unmatched boom of digital creativity; today, South Korea and its industries are weathering the global recession better than most. Here in New York, it will take a public-private coalition involving new entrants NEARLY $1 BILLION IN UNMET DEMAND: as well as incumbents—from Google and Cisco to AT&T, Cablevision, Consultant Karen Karp says Hunts Point could Time Warner and Verizon—to improve our broadband infrastructure. use a wholesale farmers market.
—Eric Hippeau, CEO, Huffington Post buck ennis
{MODEST SUGGESTION} TEACH SALES CLERKS TO BE COURTEOUS Retail employees and managers would benefit greatly from etiquette lessons, so that every person who visits comes away thinking that New York is an accommodating city and that shopping here is a fun and friendly activity, not at all intimidating.
catherine gibbons catherine —Stacey Pecor, owner, retailer Olive & Bette’s
16 | Crain’s New York Business | June 28, 2010
20100628-NEWS--0018-NAT-CCI-CN_-- 6/24/2010 8:24 PM Page 1
25TH ANNIVERSARY ISSUE BIG 22 Crank up the startup machinery
given new york’s academic and adult education) to offer hands-on FRAMING HIS medical might and its burgeoning help from experts in everything ARGUMENT: IDEAS RICHARD BUERY tech scene (much of it supporting from the music business to the the financial industry or powering service sector. Some startups will Web 2.0 startups), the city is succeed, many will fail, but all will bursting with innovative ideas. So sow the seeds for the next era of why does New York lag Silicon prosperity in New York. Valley and Boston in tech transfers —Richard Florida, director, and startups? We can help ease Martin Prosperity Institute some of the burdens related to the at the University of Toronto; cost of doing business here. But the author, The Great Reset city and its tech buck ennis community also (B) OFFER INNOVATORS can do a better A PLACE TO TINKER job of connecting if you are an innovator, 24 like-minded particularly in biotech, you SWARM A SINGLE software souls, must create what’s called a IMPOVERISHED CITY suggests Google “proof of concept” before a NEIGHBORHOOD. THE engineer Craig venture investor will write a ST Nevill-Manning, check. What’s likely stop- LISTEN. LEARN. REPEAT NEW WALL who founded the ping you? Typically, about AS AN EXPERIMENT, let’s search giant’s istockphoto $250,000 in bridge funding combine in one census tract all New York City MORE OF THESE, PLEASE and six months in a place of the disconnected and office. “Job-seek- where you can tinker, create competing federal, state and ing tech workers need to think Sili- a prototype, see how the technology city social-service funding con ‘Alley’ as often as ‘Valley,’ ” he really works. We need a proof-of- streams for children and youth. 21 Instead of doling out the money explains, “and they need to arrive at concept fund and more tinkering a tight-knit tech community where space for promising startups. piecemeal to a dozen agencies Rebrand Wall Street competitors and partners alike are —Orin Herskowitz, vice president running a dozen programs, give he street’s fall from grace during the rooting for the others’ success.” of intellectual property and technology all of those funds in a single financial crisis has tarnished New York’s transfer, Columbia University “block grant” to one community- brand and stoked a Washington backlash (A) OPEN AN INCUBATOR based organization with deep that could slam the brakes on New York’s IN EVERY CITY SCHOOL (C) TARGET OUR TAX BREAKS neighborhood roots. Then, economic growth. No other industry can entrepreneurship is a skill that offer meaningful breaks on tax- relieve that organization of most Treplace the high volume of good jobs, tax revenues, can be taught, so turn New York’s es like unemployment insurance to of the rules and paperwork for economic activity, philanthropy and global reach that public schools into neighborhood smaller, younger businesses that administering those programs. the financial sector, anchored by dozens of powerhouse hubs for developing the latent meet specific growth standards and Empower it to reach out to institutions, contributes to our city. We should launch talents of ambitious New Yorkers are most likely to create jobs. families, partner with local an “Invest in America” campaign to win back public from the Bronx to Far Rockaway. —Josh Lerner, schools and other neighborhood support for our hometown industry by demonstrating Open startup incubators in every investment banking professor, institutions, learn what that the “new Wall Street” is not just about profits for city school (from elementary to Harvard Business School individual children and families the few, but about progress for our entire society. need, and develop Opportunities include: comprehensive support programs that are driven by the (A) FUEL THE GREEN ECONOMY The Gulf oil spill communities’ needs and has brought home the need to reduce America’s energy 23 resources, not the government consumption and accelerate conversion to renewable agencies’ operations. energy. Working with our global real estate sector, Wall SHIFT ALL OF NY’S 1.2 MILLION STATE AND MUNICIPAL —Richard Buery, CEO, Street can put in place the green-financing programs EMPLOYEES INTO CHEAPER 401(K)-STYLE PENSION PLANS Children’s Aid Society needed to deploy new technology and retrofit the it’s inevitable, because the current public-pension model is unsustainable. country’s built environment. Traditional defined-benefit plans for government workers come with huge fluctuations in required taxpayer contributions based on market conditions. (B) BE AN ANGEL, WON’T YOU? Individual Wall When times are bad, the city or state Streeters have long been investors in seed-stage ventures, must contribute more but mostly among “friends and family.” Research money—a total of $1.7 25 universities could form partnerships with the financial billion in fiscal year industry so that bankers become angel investors and 2011 alone. When CAP STATE SPENDING mentors for the emerging businesses that will provide times are good, the AND PROPERTY TAXES the jobs of the future. Legislature returns to NEW YORK CITY can’t compete the business of unless we recognize the obstacle (C) MAKE NYC FINTECH CENTRAL The growth of sweetening the pot. But that everyone else sees: a state global businesses and new regulatory regimes has created with a 401(k)-style tax and regulatory framework unprecedented demand for financial technology. New pension, taxpayers have a that says, “Don’t even think of York has the world’s greatest concentration of talent in predictable annual obligation bringing your business here.”
finance, software engineering and IT,which can istockphoto for funding public employees’ pensions. It Let’s start fixing it by combine resources to quickly establish this as the world’s would be easiest to implement for future workers, implementing a state spending leading FinTech industry cluster. although a 401(k) approach could also include incentives for existing cap and a property tax cap. — Kathryn Wylde, president and CEO, Partnership for workers to transfer over, just as has been done in the private sector. —Kenneth Adams, president, New York City; director, Federal Reserve Bank of New York —Carol Kellermann, president, Citizens Budget Commission Business Council of NY State
{MODEST SUGGESTION} DUMP THOSE PLASTIC NEWS BOXES Most all of the material in there is promotions, not news. We have enough newsstands to provide adequate outlets for the news; we really don’t need those unsightly boxes cluttering our city sidewalks. istockphoto —Barbara Randall, executive director, Fashion Center BID newscom
18 | Crain’s New York Business | June 28, 2010 WE MADE SURE THIS DIDN’T. THIS WE MADE SURE A LOT OF THINGS CAN HAPPEN IN A MAJOR STORM. IN A MAJOR HAPPEN CAN THINGS OF A LOT COMMERCIAL AUTO COMMERCIAL WORKERS COMPENSATION WORKERS LIABILITY PROPERTY PROPERTY When our customer’s frozen seafood warehouse was hit by a major storm, it sustained significant it sustained a major storm, hit by was warehouse seafood frozen When our customer’s but the restaurants that depend Jeopardizing not only the inventory, roof damage and lost power. impact, our claims experts wereon it. So while other companies assessing the storm’s still were preserve to trucks plus fuel, the fish. already arranging repairs and securing for refrigerated claims in a timely fashion, your or paying informed, you keeping responding quickly, it’s Whether our and after That’s business before adversity committed your strikes. protect helping you to we’re libertymutualgroup.com/property. or visit or agent broker contact your more information, For policy.
© 2010 Liberty Mutual Group. Project5:fp template.qxd 4/16/10 4:07 PM Page 1 Page PM 4:07 4/16/10 template.qxd Project5:fp 20100628-NEWS--0020-NAT-CCI-CN_-- 6/24/2010 7:18 PM Page 1
25TH ANNIVERSARY ISSUE BEST. IDEA. EVER.
threatening quality of life. Many initiatives were controversial, but largely, they created a much better city. GLASS ACT: William Bratton Q:Q Should officers stop and frisk? says the “NYPD A:A It’s a critical part of policing. But you employed sound have to do it constitutionally, business practices, like analyzing compassionately and consistently—in timely, accurate Harlem or midtown. You also have to intelligence.” look at who is committing the crime and where they’re committing it. This is subject to continuing debate, but this year, there will be about 400 murders in the city versus 2,200 in 1990. The majority of the 2,200 victims in 1990 would have been black or brown—that’s 1,600 fewer black or brown victims this year. It’s also about 1,200 to 1,400 fewer black or brown young men imprisoned for 25 years for murder.
Q:Q Should officers detain anyone suspected of being here illegally? A:A Arizona? No. For hundreds of years, we used police against the African- American community. Now we’re proposing to use them against the Latino community—the fastest-growing population in the country. It’s crazy. One of the great things about American policing is how much we’ve grown. Prior to the 1960s, we were Neanderthals for all practical purposes; now we’re one of the most progressive and enlightened professions in America.
Q:Q Harvard teaches a course on your
buck ennis management of the NYPD. What do students learn there? Q:Q How did Mr. Giuliani come to “The single A:A That the NYPD employed sound embrace the broken-window theory? business practices, like analyzing A:A We showed how it worked in the most timely, accurate intelligence. We were a subway system. You had an infinitesimal important lot like Walmart, one of the most Q&A by Daniel Massey chance of becoming a crime victim; successful corporations in America there were 3 million daily riders and 70 factor was because it has learned to be more crimes a day. But riders were assaulted predictive: It CompStats every Saturday Many thought crime here couldn’t be tamed. by everything they saw in the system, our belief morning, asking why things are selling the so-called broken windows. Within that the down south, but not up north. It turns Then Bill Bratton took command of the NYPD 22 months of my hire as chief of the out the South may be expecting a transit police, crime in the subway was city could hurricane, so it’ll ship more plywood THE BROKEN-WINDOW SCHOOL of Q:Q How did you turn things around? dramatically reduced. It got Giuliani’s be better there for people boarding up their policing holds that a crackdown on A:A The single most important factor attention. He embraced the idea that homes. seemingly minor quality-of-life offenses was our belief that the city could be the city could be made safe, but he and safer. cuts more serious crime. Pair it with better and safer. That we’re going to wasn’t sure how to implement it. That’s Q:Q Los Angeles crime fell to new lows CompStat, a data-driven strategy of fight for every block, for every why I was hired and surrounded myself That we’re under your watch. Did L.A. prove your analyzing criminal activity and neighborhood, and we will win. It began with people who could do it. going to New York experience wasn’t a fluke? immediately responding to trends, and under David Dinkins, who won the tax A:A I used the same ideas in L.A. that I that explains the precipitous drop in increase to hire 7,000 additional police Q:Q Was it all about broken windows? fight for used here, but with fewer resources— New York City’s crime rate during the officers. For many reasons, the Dinkins A:A We also had political will, creative every block which is actually more satisfying 1990s, says former Police administration couldn’t accomplish police leadership, sufficient resources because it shows that it wasn’t just Commissioner William Bratton, what Rudy Giuliani eventually did. He and an accountability mechanism that ... and we about more cops; it was about the regarded as the principal architect used the resources secured by the let us quickly change direction if some- will win.” ideas and the community outreach. L.A. of New York’s war on crime. Also key Dinkins administration but had different thing was ineffective or needed expan- validated much of what I espouse: to making Gotham safer—and setting ideas about how to make the city safe. sion. Because of the Dinkins buildup, —William Bratton community policing; the broken-window the stage for its revitalization—was the we could put police everywhere and use theory; using cops to improve, not then-uncommon notion that crime Q:Q If crime started dropping under them to target crime and quality-of-life worsen, race relations. could, in fact, be tamed. Mr. Bratton, Mr. Dinkins, how come Mr. Giuliani offenses. CompStat, with its numbers who had run New York’s transit police gets the credit? focus, helped us see what was working. Q:Q You have a three-year contract and Boston’s police force before A:A The crime rate would not have with Altegrity, and we’ll elect a new commanding the New York Police dropped as dramatically without Q:Q Your tactics sparked controversy. mayor in 2013. Is an encore possible? Department for three years, cut short Giuliani’s approach. Dinkins made the A:A The Dinkins administration didn’t A:A Altegrity allows me to make a very his stint after a fallout with Mayor Rudy hires, but didn’t effectively use the recognize—and probably consciously good living and also have an impact in Giuliani. The 62-year-old retired as Los officers: They weren’t focused on crime, chose not to address—many quality-of- the larger policing world. Despite being Angeles’ police commissioner last but on community relations. His admin- life issues. They didn’t trust the police 62, I still consider myself a reasonably August after seven years there and istration hoped this would reduce department to do it efficiently and young man. As long as I can work, I’ll returned to New York as the newly crime. But it doesn’t work like that. without antagonizing minorities. But work. So, yes, a return to the public appointed chairman of security Under Giuliani, the NYPD focused its they were wrong. Everybody—white, sector is a possibility. I never close any company Altegrity Risk International. whole being on going after crime. black, yellow, brown—wants a non- doors.
20 | Crain’s New York Business | June 28, 2010 CN013800 6/18/10 5:25 PM Page 1
You can fit 24 hours into 12.
Imagine what you’ll do when you can send files while you talk.
Get Simultaneous Voice and Data for Small Business $ 99* and take your productivity to new heights. 99 BlackBerry® Bold™ 9700 Now there’s nothing you can’t do. Edit contracts while you talk to clients. smartphone. Ready for Simultaneous Send files while you’re on a conference call. Multitask while you Voice and Data on the multitask. All without ever hanging up. See what’s possible by visiting nation’s fastest 3G network. * After mail-in rebate. Pay $199.99 and after your local AT&T store or att.com/simultaneous. And amaze mail-in rebate receive $100 AT&T Promotion Card. Requires new 2-year service agreement yourself with what you can do on the nation’s fastest 3G network. on eligible voice and data plan.
1-800-423-2965 ATT.COM/SIMULTANEOUS VISIT A STORE
3G not available in all areas. BlackBerry® Bold™ 9700 Offer: Offer valid only for new Corporate Responsibility Users (CRU). Subject to credit approval. Price before AT&T Promotion Card and 2-year contract is $199.99. Allow 60 days for debit card fulfillment. Card may be used only in the U.S. May be used to pay wireless bill. Is valid for 120 days after issuance date but is not redeemable for cash and cannot be used for cash withdrawal at ATMs or automated gasoline pumps. See terms at store or at att.com/ wirelessrebate. Card request must be postmarked by 9/10/10 and you must be a customer for 30 consecutive days to receive card. While supplies last. Offer ends 7/31/10. CRU Data Plan Requirement: Smartphones require a DataPro (2GB) plan. If you exceed your initial data allowance, you will automatically be charged an additional $10 for each additional 1GB provided. All data allowances, including overages, must be used in the billing period in which the allowance is provided or they will be forfeited. A DataPro Enterprise Plan is required for Corporate email, Intranet sites and business applications. For more details on Data Plans, go to att.com/dataplans. Phone Return Policy/Early Termination Fee: No Early Termination Fee (ETF) if service cancelled within 30 days of purchase, but up to $35 Restocking Fee may apply for returned devices; Thereafter, up to $325. Independent agents may impose additional equipment-related charges. Sales tax calculated on un-activated price of handset. Early Termination Fee subject to change. Coverage not available in all areas. See map at www.wireless.att.com or visit store for details. © 2010 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other AT&T marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. BlackBerry,® RIM,® Research In Motion,® SureType,® SurePress™ and related trademarks, names and logos are the property of Research In Motion Limited and are registered and/or used in the U.S. and countries around the world. CN013754 6/4/10 3:33 PM Page 1
COMPREHENSIVE COMMAND COMPLEX COMPOSED COACH COGNIZANT COLLABORATIVE CONTEMPORARY CONFIDENCE COUNSEL COZEN COURAGE CELEBRATES O’CONNOR COLLEAGUE COMMUNICATOR CONCERNED John McDonough, Trial Lawyer
In uncertain times, trust in uncommon experience.
In today’s challenging times, what can you trust? Experience and a record of success. Qualities that forge our reputation as trusted counsel and keep our clients turning to us.
At Cozen O’Connor, we earn your trust.
For worldwide offices, visit us at cozen.com.
Abby M. Wenzel, Office Managing Partner 277 Park Avenue New York, New York 10177 212.883.4997 | [email protected]
Geoffrey D. Ferrer, Office Managing Partner 16th Floor, 45 Broadway New York, New York 10006 212.908.1201 | [email protected]
550 Lawyers | 24 Offices
The confidence to proceed.
®
© 2010 Cozen O’Connor 20100628-NEWS--0023,0024,0026,0028-NAT-CCI-CN_-- 6/24/2010 7:21 PM Page 1
25TH ANNIVERSARY ISSUE
rents and sold it in 1986 for $301 million, a record price. Suddenly, STATS they were in the spotlight. Confident that their success AND THE could be repeated, they began assembling land for three major CITY office buildings with a total of more A LOT CAN CHANGE IN than 2 million square feet of space. 25 YEARS. Consider Other builders were quick to follow the buying power of a suit and seize on new federal tax dollar: You’d need a Then breaks that encouraged speculative little over $2 today to construction, although few buy what $1 got you in matched the Solomons’ ambition. Seymour Durst, Fisher Brothers, 1985. Locally, the Tishman Speyer Properties, Bruce changes have been Eichner and Larry Silverstein all just as dramatic. Data joined the spree, dotting midtown are the latest available. & with modern office towers. The Solomons and their rivals added almost 7 million square feet Now of space to the market, and their projects helped swell the ranks of Whether in a real estate boom or fiscal bust, construction workers to 118,000 by istockphoto NYC POPULATION 1987, from 77,000 at the start of NYC revolves around Wall Street’s siren song the decade. 1985 7.3 million The prospect of filling all that 2010 8.5 million* space left them unfazed.They saw NYC EMPLOYMENT the chance to attract investment 1985 3.5 million bankers and traders who were 2009 3.7 million outgrowing their offices downtown, plus the lawyers and accountants NYC UNEMPLOYMENT who were rushing to meet the May 1985 8.2% demand generated by the financial May 2010 9.4% sector’s merger deals, underwriting AREA INFLATION RATE and investment activities. May 1985 3.8% May 2010 2.2% Wisdom of Salomon AVERAGE PAY IN NYC ack in 1977, Wall Street’s 1985 $24,887 ranks had been winnowed 2008 $80,260 Bto 70,000, a decline of 30% during the decade.Those jobs accounted for only 5% of all the wages in the city. And then BY GREG DAVID Salomon Brothers opened the door into a new era for the securities industry. istockphoto Crain’s New York Business began publishing in 1985, the year that Mayor Ed Koch 12-MONTH TRAILING It was the first significant P/E RATIO OF S&P 500 declared the city’s fiscal crisis over and BusinessWeek magazine anointed Salomon Brothers member of that clubby world of 4Q 1985 11.0 “The King of Wall Street.” ¶ New York was about to be reborn as a capital of commerce.The private partnerships to become 4Q 2009 21.9 city would be rich again—and, two decades later, so rich that it could emerge from the Great public, giving it both financial muscle and new aspirations about AVERAGE 1-BR CO-OP/ Recession and the global financial crisis having suffered less damage than the rest of the CONDO IN MANHATTAN how much money it could make. A country. ¶ The rebirth of New York played out on the trading floors of Wall Street and inside power struggle that ousted members 1985 $249,452 City Hall, in a remade Times Square, and through the resurgence of both economic and real of the founding family in favor of 2009 $711,736 estate development. Understanding how New York’s upward trajectory was ignited and John Gutfreund ushered in a bawdy AVERAGE 30-YEAR sustained, and the differences between the city’s economic peak in 1987 and the latest in 2007, and profane culture that gave FIXED RATE FOR NY Salomon a razor-sharp edge. It AREA CO-OP MORTGAGE depends on all of these factors. ¶ Still, Wall Street stands apart, not only as the engine of the thrived because its historic strength May 1985 13.28% city’s rebirth and the dominant figure on the New York business landscape, but as the singular in the bond market allowed it to May 2010 5.13% ingredient that the city can no longer live without, for better and for worse. exploit the actions of the Paul Volcker-led Federal Reserve Board, AVERAGE ASKING RENT FOR COMMERCIAL REAL which first broke inflation with high ESTATE IN MANHATTAN interest rates and then let those Smoother sailing matched the growth in spending, who arrived in New York as a rates fall, fueling an unprecedented 1985 $31.30 per sq. ft. while the income tax generated young couple with degrees in boom in the fixed-income markets. 2010 $55.38 per sq. ft. e sail in calmer waters,’’ more than twice as much revenue as architecture but little interest in Salomon’s revenues soared by Ed Koch proclaimed in it did at the start of the decade. sticking to design. 19% in 1986 alone, to $6.8 billion. W1987, 10 years after he More than 400,000 jobs had David began working as a Those riches were turned over to its was elected mayor at the nadir of been regained since 1977, with developer in the 1970s, buying executives, traders and investment both the city’s fiscal crisis and the growth of about 50,000 a year in and renovating modest office bankers. Mr. Gutfreund—both economic free fall. He had spent the the mid-1980s. At that pace, it was buildings and residential properties. envied and scorned for his decade slowly, painfully stabilizing possible that the city would soon His wife joined him in the business industry-leading $3.1 million the city’s finances and rebuilding its approach the 1969 peak of 3.8 in the early 1980s.Their first paycheck—became a fixture on the citizens’ confidence. By 1987, he million. City Hall’s hiring had project together was a 600,000- society pages. A young cynic named was prepared to jettison his helped, of course, but most of the square-foot, 44-story office Michael Lewis, who later conservative fiscal straitjacket. fuel for the economic expansion building on East 49th Street immortalized the era in his classic That January, Mr. Koch was supplied by real estate between Fifth and Madison tale Liar’s Poker, took home unveiled a $22.5 billion budget, developers and Wall Street. avenues. Others had shunned the $90,000 for what he was told was 67% more than he had spent seven site, believing that big office the best performance ever by a NIGHTLY ROOM RATE years earlier. Much of the money Designs on buildings were not successful on second-year bond salesman. FOR OMNI NEW YORK was being used to rebuild the city’s narrow side streets. Rivals stole Salomon’s talent and own work force, which now development The Solomons proved the copied its strategy, and more firms 1985 Park Central: $149 2010 Berkshire Pl.: $359 numbered 234,000, some 40,000 ew people typified the conventional wisdom wrong. With thrived.The securities industry in more than in 1980. Gains in go-go 1980s more than the city growing again, they leased the city more than doubled in size property tax collections had FDavid and Jean Solomon, what was known as Tower 49 at top See THEN & NOW on Page 24 June 28, 2010 | Crain’s New York Business | 23 20100628-NEWS--0023,0024,0026,0028-NAT-CCI-CN_-- 6/24/2010 7:21 PM Page 2
25TH ANNIVERSARY ISSUE STATS Then &Now
Continued from Page 23 in the decade to 160,000.The pay its people received increased sixfold, accounting for almost 13% MURDERS IN NYC of all the wages in the city. 1985 1,384 New York was prosperous, but 2009 471 not unchallenged. OVERWEIGHT/OBESE NYS RESIDENTS Corporate flight 1985 21.3% or fight 2008 60.0% itting in the office adjacent to Mr. Koch’s, Alair STownsend did not see the SIGNS OF THE TIMES: Carl city sailing through calm waters. A Weisbrod was charged with native of upstate Elmira, she’d remaking Times Square, come to New York from where only recently barricades Washington in 1981 to oversee had been used to separate prostitutes from theatergoers. the city’s budget, and five years NYC HIGH SCHOOLERS
later was put in charge of ap images WHO GRADUATED IN economic development. She had FOUR YEARS one overriding mission: Stop costly alternative for relocating others trumpeted. A native New decades, with two steep recessions 1985 41.0% corporate flight.The high cost Manhattan jobs and, with tax Yorker educated at Cornell, Mr. and two expansive economic 2009 68.1% of doing business in New York breaks from the city and the state, Weisbrod was in charge of the recoveries, each one more robust COLUMBIA UNIVERSITY was a burden that many firms would counter the cheaper rents Times Square Redevelopment than the last.The year 2007 would TUITION AND FEES refused to bear any longer, no and money-saving incentives Project. His job was to lead a show just how wealthy New York 1985-86 $10,430 matter how much the economy available across the Hudson. revitalization of the area by had become. 2009-10 $41,316 improved. For a while, the cause looked rebuilding it with office towers, “New Yorkers have every reason Nine major companies had hopeless, but a September Wall hotels and retail developments. In to be happy,’’ Mr. Bloomberg said COLUMBIA UNDERGRAD either abandoned New York Street Journal story reporting that 1987, his efforts appeared to be at a at City Hall. ENROLLMENT entirely in recent years or moved Chase had decided to move to standstill. The budget adopted several 1985-86 3,091 major parts of their operations Jersey mobilized political and Mr. Weisbrod had been months later topped $60 billion, 2009-10 5,809 elsewhere, according to a list civic leaders.The mayor lobbied immersed in the Times Square three times what Mr. Koch had published in The New York Times. Chase officials furiously, and the problem since the late 1970s, in spent in the mid-1980s and a 50% “My job was to figure out which city scrounged up every dollar it jobs ranging from law enforcement increase over the financial plan that jobs could be saved,’’ Ms.Townsend could for an incentive plan to to economic development. If Times Mr. Bloomberg had inherited from recalls, “and to throw myself in narrow New Jersey’s cost Square was a window on the soul of Rudy Giuliani when he was elected front of them.’’ advantage. the city, as he liked to say, New in 2001. More than 280,000 She couldn’t stop two of the York remained mired in decadence. workers called him their boss—the most important companies in the ‘My job was to Only a few years earlier, the cops highest total in decades. country from departing. Early in set up barricades on Eighth Avenue 1987, Mobil announced that it figure out to separate the prostitutes from the A man, a plan: COMPENSATION FOR would leave for the Washington theatergoers. Surveys of Times FIRST-YEAR ASSOCIATE area. J.C. Penney said a small town which jobs Square showed that 90% of the the Olympics AT LEADING WALL ST. INVESTMENT BANK outside Dallas named Plano would could be saved, people traveling through the area earby, in the Wall Street- be a better home for a mass retailer. were male, a sign of a dangerous style, open-plan bullpen 1985 $42,000, plus and to throw Crain’s New York Business saw the neighborhood; many of them were Nthat the mayor had $6,000 bonus after six implications in stark terms: “Mobil myself in front headed to its 22 pornographic brought to City Hall, Mr. months Corp. and J.C. Penney Co. are outlets. More than 200 police Bloomberg’s deputy mayor for 2009 $96,000, plus fleeing New York, possibly of them’ officers were assigned to two blocks economic development was busy $80,000+ signing and precipitating a crisis in Manhattan in the heart of 42nd Street, yet remaking the city. guaranteed bonuses —Alair Townsend, real estate,’’ was the first paragraph deputy mayor to Ed Koch crime was rampant.The two Daniel Doctoroff, a of its story. subway stations there ranked No. 1 Midwesterner who had made a For much of that year and into and No. 2 for crime. name for himself on Wall Street 1988, Ms.Townsend worked In early November, Chase While office construction and in the private equity business, behind the scenes as Chase announced that it would stay, boomed just a few blocks away, the had joined the administration
istockphoto Manhattan Bank considered promising to put 5,000 workers at ambitious Times Square plan was primarily to continue his crusade to NY TIMES CIRCULATION relocating 5,000 employees to New MetroTech in return for $235 paralyzed by lawsuits from bring the 2012 Olympic Games to March 1985 1,013,211 Jersey. As significant as the million in tax breaks and energy landlords unwilling to give up their New York, since his plan would March 2010 951,063 economic impact might be, the subsidies.The Chase jobs fast-food outlets, hole-in-the-wall require development in every LIST PRICE OF A psychological damage would be far allowed for the development of stores and sex shops. borough. MOBILE PHONE worse.This was the Rockefeller MetroTech, the crucial project that The Olympic effort failed 1985 Motorola DynaTAC Bank. David Rockefeller, the man jump-started Brooklyn’s own Bloomberg when London won the games in 8000X handheld: $1,500 who had done as much as anyone to revival. But, tiring of chasing 2005, but Mr. Doctoroff 2010 Motorola Droid: save the city during its fiscal crisis, companies like Chase, Ms. gives a bump recovered from his bitter defeat, $600 remained an influential figure here. Townsend resigned at the end of wenty years later, helped by a solo bicycle ride If Chase was willing to leave, who the year to become publisher of Michael Bloomberg, the through the Andes in Chile and would stay? Crain’s New York Business, leaving Tbusinessman’s mayor, Argentina, and picked up the task Ms.Townsend’s best hope for what seemed to be never-ending provided a startling statistic that of remaking the city. keeping Chase’s jobs in the city was corporate-relocation battles to her illustrated how strong the local Even without the Olympics as a to make a reality of an idea successor. economy had become: Tax revenues rationale, he made remarkable percolating across the East River in for the fiscal year ending in June progress. At the end of 2006, he downtown Brooklyn, where she, A broken window 2007 would be $2 billion more than conceived of a way for the city to the borough president, the chief he had predicted just two months finance a subway-line extension executive of Brooklyn Union Gas hree miles uptown from earlier, and he would end the year to Hudson Yards on the West and developer Bruce Ratner had the deputy mayor’s office, with a unexpected $4 billion Side, where he envisioned a conceived of a new office park. If TCarl Weisbrod looked in surplus to use in the next year. multibillion-dollar residential and built, MetroTech would offer a less vain for the improving city that It had been a tumultuous two See THEN & NOW on Page 26
24 | Crain’s New York Business | June 28, 2010 CN013764 6/10/10 4:49 PM Page 1
ALL THE PRODUCTS YOU NEED WITH THE ONE-ON-ONE SERVICE YOU DESERVE.
Deposit & Cash Payroll Funding Management Services Equipment Financing Working Capital Lines Commercial and Residential Accounts Receivable and Mortgages Inventory Financing Trusts Factoring Custodial Accounts International Trade Financing
Call the Sterling Switch Team today at 212-757-1100. Or visit Sterling4Biz.com