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NEWSPAPER 2 O.XV,NS 6 27 26, NOS. XXVI, VOL. ELECTRONIC EDITION WWW.NEWYORKBUSINESS.COM

CITY’S RECOVERY PEOPLE ON 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, 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, , 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 . 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 . 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 ’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 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 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 ’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

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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 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 , 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. , a Manhattan-based nonprofit ban Future. 

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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 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 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

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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

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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 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 , 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

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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

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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,

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 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

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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 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

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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

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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 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 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: 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 , 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

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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 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 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 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 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 , 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 . 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 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

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25TH ANNIVERSARY ISSUE

companies didn’t generated $1.6 billion in revenue. To Goldman care much about costs. In 2004, Broadway theaters’ seats were filled, go the spoils STATS Goldman Sachs built a 40-story with ticket sales growing 75% over Then n wall street, Goldman office building in Jersey City, the 1987 levels, to 12.3 million. tallest in the Garden State, where it Real estate developers were far Sachs claimed the crown & planned to move its equity sales and bolder than their 1980s Oonce worn by Salomon Now trading operations. Come predecessors. Jerry Speyer had Brothers. Goldman had long relocation time, the traders simply spent the decade positioning dominated the mergers-and- Continued from Page 24 said no; they weren’t going across Tishman Speyer as the city’s acquisitions business, for which commercial neighborhood. Behind the river. Goldman wound up foremost real estate firm by most of the fees it earned were pure istockphoto GALLON OF the scenes, he orchestrated the leaving the building virtually empty acquiring iconic properties such as profit.The last of the major UNLEADED GAS IN NYC approval of a massive mixed-used for years. Rockefeller Center and the security firms to go public—in project at Atlantic Yards in Chrysler Building. In 2006, he bid 1999—it put its new capital in the 1985 $1.20 Brooklyn, anchored by an arena for an eye-popping $5.4 billion for the hands of its traders, whose bets on 2010 $2.95 Crowds at the New Jersey Nets basketball the crossroads East Side apartment complex the market turned out to be far SUBWAY FARE team. called Stuyvesant Town/Peter savvier than those of anyone else. He laid plans for new baseball n times square,Mr. Cooper Village, sure that the Goldman was more profitable 1985 $0.90 stadiums for both the Yankees in Weisbrod’s successor didn’t booming economy would allow than Salomon and paid its people 2010 $2.25 the Bronx and the Mets in Queens. Ineed to worry about him to raise rents at what had been more spectacularly than anyone He viewed the Mets’ stadium as prostitution or muggings or a middle-class enclave. could have imagined two decades handy leverage to tackle the porn shops.Tim Tompkins’ earlier. Adjusted for inflation, rebuilding of the adjacent industrial biggest problem as head of the ‘New Yorkers Salomon’s capital in 1986 was $7 tract called Willets Point, known Times Square Alliance in 2007 billion; Goldman’s capital hit $42 for its auto repair facilities, its was the number of complaints have every billion in 2007. Goldman Chief pollution and its ability to defeat he received that the Crossroads Executive Lloyd Blankfein’s salary anyone with designs on the area, of the World was simply too reason to and bonus in 2007 totaled $68 including the legendary Robert crowded. be happy’ million, more than nine times what Gleaming new office towers had ANNUAL SUBWAY Moses. Some of Mr. Doctoroff ’s —Michael Bloomberg, Salomon’s Mr. Gutfreund made in RIDERSHIP aides also envisioned a rebirth for realized the vision of the Times mayor 1987, after adjusting for inflation. the deteriorated Coney Island Square redevelopment plan, The average compensation for 1985 1.01 billion beach and amusement district in luring a roster of famous someone working on Wall Street 2009 1.58 billion Brooklyn. companies—ranging from media passed $400,000; the $90,000 that TAXI MEDALLION Preventing corporate flight did giants Condé Nast and Reuters to In 2007, Mr. Speyer lured second-year bond salesman 1985 $84,900 not appear anywhere on Mr. financial powerhouses Morgan Morgan Stanley to be his partner Michael Lewis was paid in 1986 2010 $591,000 Doctoroff ’s priority list. He and his Stanley and Nasdaq to accounting in a $1 billion bid for Mr. would have translated into millions. boss, both products of Wall Street, firm Ernst & Young—and adding Doctoroff ’s Hudson Yards, with argued that New York was so 200,000 area jobs. the idea that the securities firm A failure attractive that it could be Crime in the district plunged to would move its headquarters there. successfully positioned as a fewer than 100 violent incidents a He won a fierce five-way to diversify premium location that not year. competition for the site. ew yorkers knew Wall everyone could afford. Tourism was so vibrant that the Mr. Speyer’s triumphs would be Street was the most They had reason to think so. area’s 15,000 hotel rooms, more fleeting, but at the time, they Nimportant part of the Unlike Chase back in 1987, than in all of Philadelphia, seemed breathtaking. See THEN & NOW on Page 28

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25TH ANNIVERSARY ISSUE

calculated that each Wall Street Forgone nation buckled during the Great job produced two additional jobs in opportunities Recession, the downturn that STATS the city and another 1.2 jobs New York experienced was the Then elsewhere, primarily in New York’s he financial crisis and mildest in decades, excluding the NYC BUDGET suburbs. the Great Recession, which small dip in the 1980s. Overall job 1985 $19.2 billion & One in every five dollars in tax Thit New York in 2008, losses totaled 175,000; the damage 2010 $63.5 billion Now revenue collected by the state came plunged the city into its third to the city in percentage terms was NYC EMPLOYEES directly from taxes on securities downturn of the past quarter- about half that suffered by the firms’ profits and the enormous century. Amid fears that a nation. 1985 220,000 Continued from Page 26 salaries of its workers.The figure catastrophe on the order of the 2010 266,700* economy, but they convinced for the city crept past 10%. Great Depression was possible, the The Street’s NYS LOTTERY REVENUE themselves that the economic base Law firms, accounting firms, heyday of the securities industry eternal lure 1985 $700 million had diversified: Tourism was developers and nonprofits focused appeared to be over. 2009 $7.7 billion thriving, the media industry had their attention on Wall Street even n the early stages of the again coalesced in New York, more intently than before. As long as financial crisis, when Wall colleges and universities were Even as the financial crisis IStreet’s very survival was in expanding and bringing in unfolded in 2008, New York Public Wall Street doubt, politicians, policy wonks and thousands of students from the rest Library President Paul LeClerc even businesspeople demanded of the country, and the broader rose at the annual Lions thrives, that the city somehow diversify its education and health care sectors fundraising dinner to thank the six business will economy. had grown so large that they men and women who had served Mr. Bloomberg launched represented the biggest sector when on the steering committee for the gravitate to it, scores of initiatives to do just 18K GOLD ELSA PERETTI measured by number of jobs. event, which raised over $2.5 and the best that, including programs to turn STARFISH BROOCH AT It was all true, except those areas million. laid-off traders and bankers into TIFFANY didn’t make the city rich; Wall “Their contributions paid all the talent will be entrepreneurs, a plan to reinvent 1985 $525 Street did. If the city had costs,’’ he told the several hundred drawn there the media industry, and incubators 2010 $2,200 diversified successfully, Wall Street people dining in the famous for tech and fashion companies. would have accounted for a smaller Reading Room, “so the money all None offered much scale, because AVERAGE DINNER TAB percentage of its income; instead, the rest of you gave went entirely to breadth seemed to be the best AT RESTAURANT IN NYC the sector had grown. the library.” Securities firm was political strategy in an election year 1985 $29.81 For most of the late 1990s and Five of the six had made their on the brink of failure in March and because the city’s declining tax 2010 $41.81 the early years of the new century, money on Wall Street, including 2008 when a government- revenues meant there really wasn’t AVG. B’WAY SHOW TICKET Wall Street had accounted for Donald Marron of Paine Webber orchestrated bailout folded it into much cash available. roughly 5% of the jobs and 20% of and Felix Rohatyn, an investment J.P.Morgan Chase. A little more The Center for an Urban 1985 Cats: $40.90 2010 Wicked: $108.14 the income in the city. In 2007, banker who was also one of the than six months later, a crisis Future, a Manhattan-based think securities industry wages and most important players in saving became a panic. tank, became the foremost local B’WAY SEASON GROSSES bonuses represented a record 28% the city in the 1970s.The dinner failed, and a advocate of a strategy centered on 1985 $190 million of the total—an astounding came only months after The desperate Merrill Lynch sold the “creative economy,’’ with an 2009 $943 million number, given that the sector Blackstone Group’s Stephen itself to Bank of America the emphasis on industries such as *Projected. continued to account for only 5% of Schwarzman (fresh from an IPO of same weekend. AIG received the fashion and furniture design, Visit www.crainsnewyork.com/ the jobs. Its average wage was six the firm) promised to give the first installment of what would be advertising, arts and media. It anniversary for more “Stats and the City” and their sources. times that for the rest of the library $100 million toward a $1 hundreds of billions of dollars in emphasized the role that businesses economy.The state comptroller billion expansion. government money to keep it owned by immigrants could play from going bankrupt.The and pointed to opportunities in strongest securities firms— technology fields. Goldman Sachs and Morgan The potential offered by the Stanley—turned themselves into green economy won support from banks overnight so they could be the Partnership for New York City, more easily protected by the a big business advocate, and the federal government. Wall Street band of stalwarts who had labored seemed to implode. without success to stem the loss of Economists estimated that the manufacturing jobs. city’s financial sector could shrink Meanwhile, unions and liberal by as much as a third.They foresaw politicians—arguing that most city more firms going out of business families had seen their income and regulatory reforms that would stagnate—started the quest for a radically scale back the bonus- “living wage” law that would set a based compensation levels first set higher pay floor for jobs in the at Salomon Brothers in the 1980s. retail and service sectors. Instead, the government All these efforts face a single injected enough capital into the overriding obstacle: As long as country’s banks to stabilize New Wall Street is thriving, business York’s key financial institutions. will gravitate to it. Developers When the Federal Reserve Board will build office towers for drove interest rates for borrowing financial services firms because by such firms down to zero, Wall they will pay the highest rents.The Street interest expenses fell by 80% best talent will be drawn to the and profits tripled to more than sector because of its outsize $60 billion, three times the 2007 bonuses. Accountants and law record. Bonuses were back, too, firms and nonprofits will all seek to estimated by the state comptroller bask in its wealth. at $20 billion for 2009. And that makes it harder for just Changes had occurred, however. about everyone else in New York. The bonus pool was only the Costs keep rising, making it fourth-largest on record, and much exceedingly difficult for other of it was paid in restricted stock, industries to secure space, talent which could neither be spent by the and other resources. recipients nor taxed by the state or Today, New York is moving the city. And Wall Street firms into another economic cycle, as it weren’t hiring, because the profits did in 1985, 1993 and 2003. No weren’t a result of booming one would say that the waters are business, and because they feared calm, and too many ignore the that rising interest rates would fundamental truism about the sharply reduce their earnings in city: Its fortunes remain dependent the future. on Wall Street and Wall Street But make no mistake: While the alone. 

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25TH ANNIVERSARY ISSUE Up and down and all around W

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

 Mikhail  The London  J.C. Penney  Kohlberg  The Consumer  Donald  The World  The Demo-  Web design  Chase Man-  Google.com, a  Pa Gorbachev is InterBank leaves NYC after Kravis & News and Busi- Trump’s real Trade Center is crats lose control firm Razorfish is hattan and play on the math plete named general Offered Rate, 75 years, taking Roberts battles ness Channel estate firm files bombed; six are of the House for formed out of an Chemical Bank term googol, is groun secretary of the or Libor, is 3,200 corporate to acquire RJR launches. It for bankruptcy. killed and more the first time in apartment in merge. registered as a tests Communist Party launched. jobs with it. Nabisco for $25 becomes better-  than 1,000 40 years. Alphabet City,  domain. in the U.S.S.R. billion, in what known as CNBC. Macy’s, injured. and online DoubleClick,  Salomon and  The NYPD crushed by its  The New York the pioneer of  Princess  was then the    newsletter @NY Two Mafia begins hiring biggest leveraged Real estate Following a debt from a 1986 IBM, struggling Rangers win their online advertis- Diana dies in a  failed coup in debuts, promot- bosses are shot emerge as lead- almost 2,000 buyout ever. moguls Harry Iraq occupies LBO, files for as mainframes first Stanley Cup ing the burgeon- ing, is founded. car crash. dead in front of a ers in sales of a officers, ending a and Leona Kuwait. the U.S.S.R., the bankruptcy. give way to desk- since 1940. Soviet Union dis- ing scene known  Candace  midtown steak- new product: dozen years of Helmsley are  tops, announces as Silicon Alley. Cit house, making mortgage-backed police-force cuts. convicted of tax Germany solves by the end a loss of $5 bil- Bushnell’s Sex Trave reunifies. of the year.  and the City is the hit’s organizer, securities.  evasion. Harry is lion for 1992, the Web browser to cre John Gotti, the Rupert Mur- too weak to published.   Time Inc. and  Michael largest ever at the goes “fina leader of the Sprint comes doch and Barry appear in court; time. public in August  mark to NYC, ending Diller debut Mur- Warner Commu- Milken’s Drexel Keith McNally Gambino organ- his wife receives nications merge.  at $28 a share. opens restaurant $155 ized-crime family. AT&T’s long-dis- doch’s Fox Net- the $7 million Burnham Lambert Viacom collapses. It’s the The stock price  Balthazar. make tance monopoly. work in prime fine and four  Financial- emerges victori- jumps 168% in Viagra is legal  Bear Stearns time with a  biggest failure of ous from a battle patented by Pfi-   Designer The Phantom years in prison. information firm one day. NYPD officers soon goes public. show whose ani- of the Opera Bloomberg LP a Wall Street firm  Seinfeld turns with QVC Network zer; it’s approved assault Haitian Perry Ellis dies ever—until 2008.   laws Morgan Stanley mated segments opens on Broad- launches a news into a pop culture and cable-carrier Starbucks NY’s violent- for sale in 1998. immigrant Abner gove soon follows. from AIDS. spawn a 1989 phenom, arguably invades NYC crime rate way. It hasn’t services division.  British tycoon TCI to acquire with drops Annual sales for Louima with a since   Mary-Kate spinoff called closed yet. because of the Paramount Com- a 3,000-square- to its lowest level the erectile- broomstick while Deal. Continental The Simpsons.  Yankees Robert Maxwell November and Ashley agrees to buy the munications. foot store at West since 1972. dysfunction drug he is in custody. Airlines files for  Newark Air- owner George episode in which 87th and Broad- quickly exceed  Th Chapter 11 bank- Olsen are born Daily News from  Student in California. The port’s 855,000- Steinbrenner is Jerry coins the way, its biggest at $1 billion. bring ruptcy protection. square-foot Ter- ordered to step Tribune Co., then Sergey Brin gives twins, now based phrase “master of the time.  charg minal C, long aside as general mysteriously falls my domain.” prospective stu- Publishing  New Coke is in Manhattan, off his yacht and  Micro known as the partner after pay- The Dolan dent Larry Page a scion Steve lead introduced and today are worth drowns. Develop-  A federal act family, which tour of Stanford. Forbes runs for withdrawn. an estimated “ghost terminal” ing a gambler Joel K because of its buck ennis $40,000 to find er Mort Zucker- sets specific goals runs Cablevision, They later co- president, saying $100 million. man acquires the NYC’s construction  With prime embarrassing for Fannie Mae takes control of found Google. he’d establish a schoo delays, finally office real information paper in 1993. and Madison Square flat income tax. buck ennis  White House  opens for busi- estate in Tokyo about outfielder  to support hous- Garden. He spends some Lit  The Giants Salomon ing in low-income/  Hip, haughty intern Monica Wall ness. renting for Dave Winfield. erupts in scandal  $38 million on win the Super underserved areas. and highly lever- MetroCards Lewinsky delivers his quest. lyst H  Donald Trump $93,000 per  Arson at the when a trader is are introduced at a pizza to Presi- Bowl. square foot, Mit-  aged Barneys   Harry Potter get s publishes The Art Happyland caught submitting Quentin Taran- New York subway turnstiles. dent Bill Clinton. The Yankees  subishi Estate false bids to U.S. spends and the Sorcer- Amaz Artist Andy of the Deal. Social Club in tino debuts as a nearly $300 mil-  win the World worth Warhol dies fol- Co. buys 51% of government debt director with Goldman Series, their first er’s Stone is pub-  Madonna’s  the Bronx kills lion to open a Sachs makes lished in the U.S. share lowing routine A riot erupts Rockefeller Cen- 87 people. auctions. The Reservoir Dogs. since 1978. “Like a Virgin” hits  The Mets win in Tompkins ter for $846 mil- investment bank nine-story Madi- more than half a by Scholastic. doub gall-bladder sur-  son Avenue flag-  the ti No. 1. the World Series. gery at New York Square Park lion in cash.  Junk bond is fined $290 mil- Sean “Puff billion dollars in Turner Broad- Daddy” Combs ship. It’s the profit for the year. casting System, $400  Danny Meyer  General Elec- Hospital-Cornell when police try  king Michael lion, CEO John Spike Lee’s Milken pleads founds urban- largest store built Senior partner owner of CNN, week opens Union tric buys NBC Medical Center. to enforce a cur- Do the Right Gutfreund is oust- few for the gen- guilty to securi- ed and Warren lifestyle brand in NYC since the Stephen Fried- merges with Time Square Cafe. from RCA for  The Crazy Thing premieres. Bad Boy Enter- Great Depression. man is replaced Warner. $6.4 billion. trifying East Vil- ties fraud. He is Buffett takes con-  The first Eddie appliance lage spot. fined $600 mil- trol as chairman. tainment. by two co-chiefs: dot-com  Speculator chain (“His lion and sen- The firm is later  Jon Corzine, prices are The New York future governor of domain name, Ivan Boesky tenced to 10 acquired by Stock Exchange Symbolics.com, pleads guilty to insaaane”) col- years in prison. Sandy Weill’s Trav- New Jersey, and lapses when celebrates its Henry Paulson, appears on the insider trading  elers Group. bicentennial. Internet. and agrees to a accounting fraud Subway fares future Treasury $100 million fine. is uncovered. top $1 for the secretary. first time. The markets remain positive for the year—and 28% Wall Street firms pay out more than $10 billion 26 in bonuses.

24 Dec. 5, 1996: Fed February 1995: chief Alan  The Dow closes Greenspan utters 22 WALL STREET’S above 4,000. two big words: “irra- SHARE OF NYC’S TOTAL tional exuberance.” PRIVATE-SECTOR PAY Wall Street 20 has a big year, November Oct. 13, 1989: but jobs leave the city: NY 1995: now employs fewer than The The S&P 500 falls Dow closes  18  STANDARD & 6.1% after the col- 30% of all securities indus- try workers. above POOR’S 500 Oct. 19, 1987: lapse of an LBO 5,000.  STOCK INDEX Black Monday. involving United 16 Big U.S. Airlines ends the (weekly closes)  sink 22% in a sin- era’s M&A boom.  14 gle shocking day.   12  Oct. 27, 1997: The  Dow falls a record 554 10 points amid fears of an asset bubble in Asia. 8  U.S. RECESSIONS JULY 1990 THROUGH MARCH 1991

 PRESIDENTS RONALD REAGAN GEORGE H.W. BUSH BILL CLINTON

 NEW YORK CITY MAYORS ED KOCH DAVID DINKINS RUDY GIULIANI

NEW YORK STATE GOVERNORS MARIO CUOMO GEORGE PATAKI 2/06) Sources: Bureau of Labor Statistics, Crain’s New York Business, Eastern Consolidated, Federal Reserve Board, National Bureau of Economic Research, New York State Comptroller, New York State Department of Labor, Standard & Poor’s, Wikipedia 30 | Crain’s New York Business | June 28, 2010 20100628-NEWS--0030,0031-NAT-CCI-CN_-- 6/23/2010 6:16 PM Page 2

d Wall Street A timeline by Aaron Elstein and Emily Laermer

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

om, a  Pakistan com-  The euro is  AOL and Time  WorldCom col-  The U.S. and  The death toll  The Demo-  Two Bear  The median  Citi’s Vikram  Earthquakes math pletes six under- introduced into Warner announce lapses into bank- the U.K. invade for U.S. soldiers in crats regain con- Stearns hedge sale price for a Pandit says he’ll kill 200,000 is ground nuclear the world market- their merger. Ted ruptcy amid mas- Iraq, eventually Iraq hits 1,000. trol of the House. funds collapse; Manhattan apart- work for $1 a year. Haitians and 500 a tests. place. Turner says the sive accounting capturing Sad-   subprime lender ment peaks at Chileans. deal is “better fraud. Congress dam Hussein. The New York Katie Couric New Century $955,000.  Goldman goes Fed publishes the joins CBS as the  Near-universal than sex.” soon passes the  Financial files for  public. Sarbanes-Oxley NYSE chief study Are Home first female bankruptcy. Gov. Eliot health care cov- n a  Fed Chairman Dick Grasso Prices the Next anchor of the Spitzer admits erage is passed  The U.S. Sen- Act to protect  Alan Greenspan investors. resigns, after “Bubble?” (The evening news. The Black- he’s a high-priced despite populist ate acquits an is nominated for revealing he has conclusion: no.)  Hurricane Kat- stone Group buys prostitute’s Client protests against  Citicorp and impeached Presi- a third term.  tele- a $190 million rina kills more Equity Office in a No. 9. runaway federal Sex dent Bill Clinton.  La Côte than 1,800 and  Travelers merge Months later,  Hijacked com analyst Jack total pay package. $39 billion LBO,  The $1 trillion spending and is to create a bold  renowned journal- Grubman admits Basque, La Cara- displaces hun- then flips most of Bear Stearns American Recov- death panels. Osama bin planes crash velle, Lutèce and collapses in “financial super- Laden ist Bob Wood- into the World to recommending dreds of thou- its buildings. ery and Reinvest- authorizes Le Cirque close. sands more along March.  Goldman is Nally market” valued at a plot to crash ward publishes a Trade Center, the that investors buy  ment Act passes. $155 billion. To book called Mae- AT&T shares so  the Gulf Coast. Rupert Mur-  sued for fraud by rant airplanes into Pentagon and a , doch acquires J.P.Morgan’s  AIG employees the SEC for make the merger the World Trade stro: Greenspan’s field in rural that CEO Sandy banished by Citi’s  The median Jamie Dimon in legal, Congress Fed and the Weill would help The Wall Street in the division allegedly peddling Center. Pennsylvania, Sandy Weill in sale price for a Journal and pub- April joins other that nearly a subprime mort- cers soon changes the American Boom. killing nearly his kids get into 1998, returns to Wall Street CEOs  The 646 area  45 million Manhattan apart-  More than lisher Dow Jones destroyed the gage investment an laws that had 3,000. preschool. A year NY, having sold ment reaches in declaring that bner governed banking code debuts. later, Citi and people in eight 100,000 Queens for $5 billion. company receive designed to fail.  Northeastern Bank One to J.P. $830,000, versus residents and the darkest days death threats. a since the New Enron goes other banks like Morgan Chase.  112 million of the credit crisis  Greece’s debt  CNN’s Lou bankrupt. In the states lose power $399,000 in workers sweat while Deal. Goldman, Merrill After a stint as 2000. blogs are esti- are history.  Federal bank- woes threaten to ody. Dobbs resigns preceding weeks, for over a day. without electricity  to launch Lynch and Mor- Chase’s presi- mated to exist. ing regulators undo European The U.S. virtually every gan Stanley pay a   Federated for nine record-  Lehman brings antitrust Space.com. He MySpace is dent, he becomes hot summer days.  give banks “stress unity—and maybe analyst had rated total of $1.4 bil- launched. CEO in 2006. Department “Queen of Brothers files for tests.”The healthi- even the euro. charges against rejoins CNN in its stock a “buy.” Stores agrees to Mean” Leona bankruptcy on 2001, after the lion to settle  Bear Stearns, est quickly repay Microsoft. The charges of fraud  Martha Stew-  AT&T and buy May Depart- Helmsley dies. Sept. 15 and the lead prosecutor? dot-com bubble  NY Attorney Merrill and Mor- U.S. bailout funds. and other wrong- art is indicted for Eastman Kodak, ment Stores, gan Stanley bet Reserve Fund Joel Klein, now pops.  Hillary General Eliot selling ImClone part of the Dow “breaks the buck”  Ex-GE CEO Jack Spitzer cracks doing. consolidating the big on mortgages, NYC’s public  Rodham Clinton shares following a Jones industrial on a flagship Welch says the cor- Charles Wang down on conflicts  nation’s down- buying originators schools chief. is elected senator A survey of tip that the firm’s average since the town department money-market porate obsession of Computer Asso- from New York, of interest 1,000 Manhat- of subprime  Little-known ciates receives cancer drug failed Great Depression, stores under the loans. But a sud- fund, triggering a with short-term marking the first between Wall tan residents by its FDA testing. are replaced by worldwide finan- profits and share- Wall Street ana- the largest bonus Street analysts Macy’s banner. denly bearish ever: $670 mil- time that a first the New York She is later sen- Verizon and Pfizer. cial panic. AIG price gains was “a  Lady Gaga has lyst Henry Blod- lady wins public and dealmakers. Academy of Medi-  AIG ousts Goldman begins get says retailer lion. The compa- tenced to five  shorting the mort- collapses two dumb idea.” six Top 40 singles ter office.  cine shows that months in prison. Facebook is longtime CEO days later. in 14 months. cer- Amazon.com is ny is later found Credit default founded. gage industry  The number of  ImClone is  swaps begin to 25% reported Maurice “Hank” pub- worth $400 a to have doctored Shares in  Citi chief Greenberg as a near the end of unsold homes in bought by Eli Lilly  BP shares fall results to inflate be used widely. drinking more U.S. share, more than Qualcomm, the alcohol in the Sandy Weill steps probe by NY Attor- the year. the U.S. reaches a for $6.8 billion. nearly 50% in the c. double its price at its stock price. maker of telecom- These derivatives aside. 16-year high in Its cancer drug wake of the worst will help bring months after the ney General Eliot  Patti Smith the time. It hits network equip- Sept. 11 attacks, Spitzer gathers July.Treasury Sec- works, after all. offshore oil spill $400 in three ment, trade at down AIG in ’08.  A year after performs the final and 10% smoked steam. concert at punk retary Henry Paul-  in U.S. history. weeks. $650 each, and  The New York son says the trou- Wall Street More than more. Times won a rec-  rock mecca CBGB. coins a record $61 a PaineWebber 20% of all New A transit work- ble in subprime analyst predicts ord seven Pulit- ers strike, the first The space billion in profits Yorkers working  becomes a John mortgages is they’ll soon fetch zers, it comes The Indone- in 25 years, para- unlikely to spill and pays out $20 on Wall Street out that Jayson sian tsunami kills Varvatos store. billion in bonuses. $1,000. The lose their jobs. lyzes the city just into the broader  stock ends the Blair fabricated 230,000 people before Christmas. economy.  Bernie  U.S. business-  stories. Chief in 14 countries. Former House year 67% short of Apple intro-  Madoff’s Ponzi es and govern-  American Idol editor Howell YouTube is  The Great Majority Leader that target. duces the iPod. scheme unravels. Tom DeLay re- ments spend debuts. Raines resigns. launched. Recession begins more than $100 in December. emerges on Danc- billion to combat A record $34.3 ing With the Stars. the Y2K bug. billion in Wall Street bonuses in 2006 (some March 10, 2000: The Nas- of it disbursed 2,000 daq peaks at 5,069. The in early 2007). tech-stoked index then falls 77% in 30 months. 1,800  1,600   1,400

October 2007:  1,200 Merrill and Citi report huge mortgage-relat-  1,000  ed losses. The Dow   hits its intraday top: 14,980.10. May 6, 2010: 800 the Flash Crash. The Dow plunges October 1998: After Russia defaults on short-term Sept. 17, 2001: The 1,000 points in 600 debts, markets collapse and a $4 billion NYSE reopens after mere moments called Long Term Capital fails. The New York Fed gins nearly a week. The October 2008: The Treasury gets before recover- 400 The up a bailout of LTC, paid for by Wall Street banks. Dow closes below $700 billion to buy subprime loans. ing. The cause rd 554 the previous year’s The NYSE sees its highest-volume day. baffles regulators low for the first time Markets everywhere crash, and U.S. s of an and investors. 200 Asia. in 19 years. stocks end the year down about 40%. 0 MARCH 2001 THROUGH NOVEMBER 2001 DECEMBER 2007 THROUGH ... ?

GEORGE W. BUSH BARACK OBAMA

MICHAEL BLOOMBERG

ELIOT SPITZER

DAVID PATERSON

June 28, 2010 | Crain’s New York Business | 31 CN013784 6/15/10 11:20 AM Page 1

We repeat,

in business.

Welcome to the new . Re-imagined, With unrivaled access to the world’s most refi ned and re-focused to deliver the insight infl uential leaders and companies. And the you need now. In brief and in depth. trusted perspective you need to succeed.

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25TH ANNIVERSARY ISSUE louisa bertman The mayors, take 4

BY ERIK ENGQUIST The last four chief executives of New York City have all brought distinctive styles to the office and presided over different mayoralties. Very different. But there’s one thing they have in common: They all loved (or love) the job. June 28, 2010 | Crain’s New York Business | 33 20100628-NEWS--0034,0035-NAT-CCI-CN_-- 6/23/2010 8:03 PM Page 1

25TH ANNIVERSARY ISSUE The mayors, take 4

marks. “He was facing a very disarrayed induced demand was real, according to Mr. government and pressing social problems,” Smith. says Sharyn O’Halloran, professor of Because he left office before crime fell political economy at Columbia University. dramatically, Mr. Dinkins fears his “Just to make the city function was a mayoralty will always be characterized by RUDY triumph.” the racial violence that overtook a mixed Brooklyn neighborhood in 1991. He forecasts his obituary: “It will say,‘David N. GIULIANI {IN HIS WORDS} Dinkins. Born July 10, 1927. First black mayor of the City of New York.’ And he way Rudy Giuliani sees it,  ED APPROACH TO GOVERNING “My almost the next paragraph will be about he ran New York City like a management style,” Mr. Koch says, Crown Heights.” business, finding inefficiencies KOCH “was to give every commissioner full On Aug. 19, 1991, a black child, Gavin and ironing them out. Or photos: newscom authority and discretion to move Cato, was struck by the motorcade of a maybe he just took an iron and Jewish leader. Rumors spread that medics Tgave Gotham a much-needed whack in departments ahead. I said: ‘I want you pinionated, garrulous and to be innovative, even if it means had assisted injured Jews and left the boy to the head. personable, Ed Koch occasionally you fail. And if you fail, I die. Blacks rioted and a rabbinical student, Whatever the case, New York was not grabbed Gotham’s reins in Yankel Rosenbaum, was fatally stabbed. “It the same city after Mr. Giuliani, 66, got 1978, when public morale will stand with you.’ It generally turned was a tragedy and never should have done with it. “I took over a city that was had been beaten down by out OK.” happened,” says the former mayor, adding dispirited,” he says, “where 65% of the Ofiscal woes and crime, and gave New York-  ROOKIE JITTERS “When I became with dismay that Gavin Cato’s death often people wanted to live somewhere else, and ers a mayor who was one of them. Still out mayor, I said to myself, ‘Dear God, goes unmentioned. handed over a city that was totally and about, the 85-year-old is often greeted how am I going to do this?’ I decided: Police struggled for three days to restore reversed.” by well-wishers with a variation on his sig- Give it your best, and that’s it. Sleep order. “I was accused of holding back the Although his approval ratings soared nature line. “How’m I doin’, Mayor?” they police and letting the blacks attack the after the Sept. 11 attacks, public opinion of ask. nights. ‘Be not afraid.’ It’s a Catholic Jews,” Mr. Dinkins says. “That wasn’t what Mr. Giuliani was polarized during much of The three-termer, who has an office at hymn; I’m Jewish, but I like it.” happened. I told them, ‘Whatever you’re his eight-year tenure. But the quality of life law firm Bryan Cave, recalls a city “on the  TOUGHEST MOMENTS He attended doing is not working.’They altered their was transformed by a stunning drop in edge of bankruptcy”—rolling $6 billion in the funerals of 39 police officers and behavior and brought the rioting to a halt.” crime. Many cities became safer in the short-term debt from one budget to the was often too emotional to console The mayor regrets not delivering that 1990s; New York’s turnaround was next. The state government, a voice of their widows. “I would break down,” he message sooner. But accusations that he sat breathtaking. “There were 1,900 murders fiscal sanity at the time, gave the city four idle when in fact he was “ducking bricks in the last year of David Dinkins, and years to balance its books. Mr. Koch did it recalls, “and they would comfort me.” and bottles, trying to bring an end to it” are when I left, there were 650,” Mr. Giuliani in three. One visible Koch reform—having still painful, he says. says. Violent offenses dropped to 58,000 two rather than three sanitation workers Black boycotts of three Korean grocers from 153,000. “That’s a different city than per truck—is saving money to this day. exacerbated racial tensions. Mr. Dinkins’ the one I inherited.” Housing, though, was his aides settled two of them, but one in The former mayor, who now runs a programmatic pinnacle. The 1970s Brooklyn persisted for months until the consulting business, credits CompStat, economic slump led to an avalanche of mayor got involved. “One day I walked through which police make heavy use of apartments seized for unpaid taxes, and through the picket line, made a few data trends, and “broken windows” policing, the Reagan administration cut off funding purchases, and that was the end of it,” he or paying attention to small infractions. to fix city buildings. Mr. Koch stepped in recalls. Police began to focus on preventing crime, with a $5.1 billion initiative to build or Those incidents tend to overshadow rather than responding to it. rehabilitate 250,000 units for low- and DAVID Mr. Dinkins’ accomplishments. He Columbia’s Ms. O’Halloran says Mr. middle-income tenants. “The program implemented six-day library service for the Giuliani ran the city like a military was spectacular,” he says. “There was no first time in a quarter-century. He created establishment. “He was commander in corruption in that program.” DINKINS an all-civilian board to review police chief,” she says. “Like him or hate him, he But corruption would mar his final misconduct. He hired a special commis- really paid attention to the quality of life.” term. A scandal at the city’s Parking sioner to probe wrongdoing in schools. Adds Mr. Smith of NYU: “What Violations Bureau erupted, with fellow avid dinkins is 82, a good He kept “beacon schools” open after Giuliani brought to the management of Democrats Donald Manes, the Bronx 15 years removed from Gra- hours as community centers. He extended city government was force—force of borough president, and Stanley Friedman, cie Mansion, and still fight- city benefits to same-sex partners. He character, force of personality. On the the Bronx Democratic leader, at the center. ing to define his legacy. A created new rules in the bidding process things he decided he was going to change, Mr. Friedman was convicted. Mr. Manes sign of progress: With in- that quintupled the percentage of city there was movement.” committed suicide. Dcreasing frequency, experts trace the start contracts awarded to minority- or women- What came to epitomize that was a “They were not part of my of the turnaround in the city’s war on owned businesses. crackdown on squeegee men—about 200 administration,” Mr. Koch notes. crime to the second half of his lone term, “We got a lot done,” says Mr. Dinkins, hustlers who intimidated motorists stuck at Nonetheless, the episode led to his defeat in 1992 and ’93, when crime rates dipped who has been at Columbia University red lights into paying for windshield in the 1989 Democratic primary by David and the city ratcheted up its police force since he left office and is a professor in the cleaning. “It’s taken on almost legendary Dinkins, then the Manhattan borough with funding the mayor wrenched from practice of public affairs. “But I dare say significance now,” Mr. Giuliani says. president. the state. you’re not going to hear too much of that.” “People all over the world know about the Mr. Koch disputes that his experience Mr. Dinkins laments, “From the clips, squeegee men.” proves third terms are destined to the impression given is that on Dec. 31, {IN HIS WORDS} He recalls telling Police Department disappoint. His housing initiative, a 1989, there was no crime at all, and on the lawyers who said no laws were being restaurant smoking ban and public next day, my first day in office, there was a  WHAT HE MISSES “Outside the broken: “What about jaywalking? We’re financing of political campaigns were all homicide rate of 2,000.” country, the mayor of the City of New going to give them so many tickets, accomplished in his final term. NYU’s Mr. Smith agrees: “[Police] eventually they’ll get tired.” Repeated Longtime City Hall watcher Dennis started doing the right things under York is treated like a head of state.” sweeps wiped out the problem, built cops’ Smith, an associate professor at the Robert Dinkins. Given the fact that crime had  WHAT HE DOESN’T “When the phone morale and brought a sense of order. F.Wagner Graduate School of Public been going up year after year, it should rings at 3 or 4 o’clock in the morning, Federally imposed workfare rules led Service at New York University, says Mr. have been a bigger story when crime you know it’s something bad.” Mr. Giuliani to assign welfare recipients to Koch was “very analytically oriented” but started coming down.”  FAVORITE MAYORS community service, which caused many to sometimes misguided. The mayor focused But sometimes ideology trumped “I was always very leave the public dole in order to keep their on maximizing the number of police on analysis. Mr. Smith says the administration fond of John Lindsay. I thought he got a off-the-books jobs.The number of welfare patrol and quickening their response, for poured resources into family intervention to bum rap. I liked Abe Beame. And I like recipients in the city fell to 600,000 from instance. Bad call, the professor says: keep children out of foster care without Mike Bloomberg. I wish he’d gotten his 1.1 million. “We changed the whole nature “Studies had shown average response time data to show it would work.The mayor’s third term in a different way.” of the agency from a welfare office to what and visible patrols didn’t make a staff didn’t believe that people would  ADVICE FOR SUCCESSORS “You are I consider an employment agency,” he says. difference. It didn’t reduce crime, and it become homeless to qualify for better, city- Mr. Giuliani’s methods and didn’t even produce feelings of safety.” funded housing; his homeless services the steward [of the city]. You hold it in undiplomatic style were a shock to the But on balance, Mr. Koch gets high coordinator later admitted that service- trust for those who come after you.” system. “I used to go to poor communities

34 | Crain’s New York Business | June 28, 2010 20100628-NEWS--0034,0035-NAT-CCI-CN_-- 6/23/2010 8:02 PM Page 2

and get booed,” he recalls. “I’d say: ‘I’d rather bringing accountability to the system for plazas. Schools Chancellor Joel Klein give you the work ethic than a welfare the first time. While some parents have reorganized his bureaucracy and will have check. Someday, you’re going to really love objected to his policies, and educators 125 charter schools operating this fall. me for this.’ I was described as arrogant.” complain about filling in boxes for ever- Deputy Mayor Linda Gibbs has pushed to He calls New Yorkers who rejected his expanding data collection, Mr. Bloomberg consolidate senior centers. approach “intellectually arrogant” people points to rising scores and falling dropout Mr. Bloomberg’s legacy will include the who “think of fiscal conservatives as rates. city’s first Office of Sustainability, the Neanderthals.” Advisers sometimes warn that a redevelopment of Coney Island and “I thought I was teaching the city a mayoral proposal will ding his popularity, Willets Point and the first subway different direction,” he says. “I was coming but “he says that it’s not a factor,” insists extension in decades. His smoking ban in into 20 or 30 years of a social democracy MICHAEL top Bloomberg aide Francis Barry.“He’s bars, controversial when it passed in 2002, and was trying to make it a more made a career of proving the conventional is taken for granted now. He has forbidden entrepreneurial operation.” BLOOMBERG wisdom wrong.” trans fats in restaurants and required chain Mr. Smith says no mayor has eateries to post calorie information. Some emphasized evidence-based management bemoan his “nanny state,” but Mr. {IN HIS WORDS} n god we trust,” Mayor Michael like Mr. Bloomberg, and his hiring has Bloomberg points to data showing that  REGRETS Bloomberg is fond of saying. been more merit-based and less political. diabetes prevalence in the city doubled in Not being able to apply “Everyone else, bring data.” “They have an incentive to have nobody in the past decade. CompStat to the school system, which No mayor has brought the data a critical position who isn’t a high Again, the data. Always, the data. was not then under mayoral control. “It like Mr. Bloomberg, who made his performer, because they are sharing in the would have worked brilliantly with the Ibillions selling financial data to Wall Street accountability,” he says. “That’s a {IN HIS WORDS} schools, but the Board of Education traders. Not only did he revamp and ex- wonderful change.” would not accept it,” Mr. Giuliani says. pand the annual accumulation of statistics The mayor remade City Hall in the Mr. Bloomberg, who did not sit for an interview “They voted down any statistical measure known as the Mayor’s Management Re- image of Bloomberg LP,his media with Crain’s, has offered these snippets over the of performance.” He also laments failing port, but he launched Citywide Perfor- company. Borrowing the trading-floor years on governing: mance Reporting, or CPR, giving clearer concept from his days on the Street, he  to privatize public hospitals. and more frequent snapshots of every nook moved managers out of their offices and NO FREE LUNCH “Taxes are not good  NO CREDIT Mr. Giuliani rejects claims and cranny of his administration. into an open area called the bullpen. things, but if you want services, that the turnaround in crime can be “Bloomberg runs New York Inc.,” says “It breeds an openness and informality somebody’s got to pay for them.” traced to the Dinkins administration. “It Ms. O’Halloran. “You can argue over that’s very productive,” Mr. Barry  PANNING PANDERERS “If you look at wasn’t Safe Streets, Safe City. It was whether you like the policies, but he’s been says. “You don’t have to make an people, whether in business or CompStat; it was broken-windows effective.” appointment—you just walk up to When numbers and politics clash, Mr. someone.That goes from the mayor government, who haven’t had any policing; it was acquiring the transit Bloomberg has run into difficulty. He tried on down.” moral compass, who’ve just changed to police and the housing police. I added to sell congestion pricing for those driving Mr. Bloomberg, 68, has pushed the say whatever they thought the popular 7,000 cops beyond what they’d done.” into Manhattan but was blocked by the envelope—rezoning neighborhoods to thing was, in the end they’re losers.”  LOOKING BACK “The thing I miss most state Legislature. His push for a West Side create housing near mass transit,  JOB SATISFACTION “I’ve got the were the crises, because I think I came football stadium was stopped at the goal launching 311, increasing standardized greatest job in the world. There’s no to know how to handle them. Like a line, and his bid for the 2012 Olympics testing and opening charter schools, for other job in government where cause missed the medal stand. example—and drives his commissioners baseball player, you want to come to He is universally praised, though, for to do the same. and effect are so tightly coupled, where bat with the tying run on base. I thought wresting control of public schools from the Transportation chief Janette Sadik- you can make a difference every day in it got the best out of me.” dysfunctional Board of Education, Khan built bike lanes and pedestrian so many different ways.” 

June 28, 2010 | Crain’s New York Business | 35 20100628-NEWS--0036,0037-NAT-CCI-CN_-- 6/23/2010 5:45 PM Page 1

25TH ANNIVERSARY ISSUE GGothamigs Photographs by Buck Ennis

We’ve been telling the story of New York business in HORNS OF PLENTY: pictures as well as words since the start. See dozens more Nightclub impresario Jonathan Segal. favorites online at www.crainsnewyork.com/anniversary.

A FINER DINER: Chef Bobby Flay, back in 2005.

ECONOMIC ENGINE: JetBlue founder David Neeleman.

BALANCED DIETS: Wendy Meyer Sterling, team nutritionist for the New York Jets.

THE MAKEUP OF A JUDGE: When not at his day job in court, Oliver Mbamara entertains people with portrayals of his Nigerian culture.

36 | Crain’s New York Business | June 28, 2010 20100628-NEWS--0036,0037-NAT-CCI-CN_-- 6/23/2010 5:46 PM Page 2

IT’S A WRAP: Cumberland Packing Corp.’s Marvin Eisenstadt, decked out in Sweet ’n Low wrappers.

CIRCULAR THINKING: Bill Wilson of AOL Programming, in 2008.

SPIN DOCTOR: The late Marvin Sylvor of Fabricon Carousel Co., in 1999.

June 28, 2010 | Crain’s New York Business | 37 20100628-NEWS--0038,0039-NAT-CCI-CN_-- 6/23/2010 5:47 PM Page 1

25TH ANNIVERSARY ISSUE GGigsotham

PHAT CHANCE: Russell Simmons, head of Def PLENTY OF VROOM: Jam Records and Phat Serial restaurateur Farm apparel, in 1998. Donatella Arpaia, outside her first restaurant, in 2006.

DOGGED: Victor Solis of T&M Protection Resources, who trains canines to sniff out explosives.

STAGE COACH: NYC-based actor and director Philip Seymour Hoffman, pre-Oscar, in 2004.

RING TONED: Professional boxer Alicia Ashley, at Gleason’s Gym.

38 | Crain’s New York Business | June 28, 2010 20100628-NEWS--0038,0039-NAT-CCI-CN_-- 6/23/2010 5:47 PM Page 2

RAZOR BACKING: Jeff Dachis of interactive marketer Razorfish, flush with a cash infusion from Omnicom, in 1996.

A BOOK CASE: Barnes & Noble Chairman Leonard Riggio, in 1996.

TRAIN OF THOUGHTFUL: Metro-North’s Preston Kirk and his crew help keep cars clean (and safe) at the Highbridge facility in the Bronx.

POSITION PAPERS: STRIKE A POSEN: Superscribe Pete Fashion designer Hamill, the Daily Zac Posen, in News’ newly 2004. appointed editor-in- chief, in 1997.

June 28, 2010 | Crain’s New York Business | 39 20100628-NEWS--0040-NAT-CCI-CN_-- 6/23/2010 5:48 PM Page 1

25TH ANNIVERSARY ISSUE NY state of mind There’s nothing like a New Yorker. Don’t just take our word for it: There’s a library’s worth of research on the unique characteristics of the local species.

BY ELIZABETH MACBRIDE AND JOE WALKER

1. WE’RE NOT NEARLY psychiatrists (5,347), but only the second- the median family income in New York City to them—like higher incidences of TB—but they highest rate of psychiatrists per 100,000 people $55,492, compared with $63,211 for the U.S. are longer-lived than U.S.-born New Yorkers. AS RUDE AS PEOPLE (28.2), after Massachusetts (31.1).  New York City ranked as the world’s fourth- Their death rates from cancer, heart disease, most-expensive city in which to live last year. flu, pneumonia and diabetes are lower. MIGHT THINK WE ARE And the median sale price for a Manhattan  The average New York household spends AS RESIDENTS of the most diverse and densely 4. RICH? YES AND NO apartment was $868,000 in first-quarter less of its money on tobacco than the average populated big city in America, New Yorkers WALK A FEW BLOCKS in any direction: You’ll see 2010, more than five times the U.S. figure. American household: 0.5% of expenditures, often have little choice but to get along, if only how our city teems with rich-or-poor, all-or- compared with 0.7%. And the typical to efficiently navigate past the gawking out-of- nothing economic extremes. household here is 11% more likely to buy food towners blocking our paths. “The city has to be  New York City has more billionaires—60, at 5. OH, WELL. AT LEAST that’s labeled as organic and 22% more likely tolerant,” E.B. White wrote back in 1949; last count—than any other city in the world to have participated in yoga. “otherwise it would explode in a radioactive (Moscow is No. 2, with 50). Yet 18.6% of New WE’RE HEALTHIER cloud of hate and rancor and bigotry.” Yorkers live beneath the federal poverty line, MAYBE IT’S ALL THE WALKING that New York City  There are 8,158.7 people per square mile of compared with 9.6% of Americans. residents do. Or maybe it’s having a mayor who 6. AND, ARGUABLY, land in New York City, versus 79.6 in the U.S.  In many cases, New Yorkers who work make hates smoking and salt and loves posted  36.7% of us were born in another country, significantly more than their counterparts calorie counts and bicycle lanes. BRAINIER compared with 12.5% of U.S. residents. nationwide. An example: The average pay for a  In recent years, the life span of the average IT COULD BE BECAUSE of all that reading going  Our crime rate is third-lowest in the country management job in New York is $62.07 per New Yorker has increased by five months, to on in our subways and commuter trains. (The among cities of 500,000 or more people, hour, versus a U.S. average of $46.22. more than 79 years. That tops the life span of mean travel time for New Yorkers to get to work behind only San Diego and San Jose, Calif.  Unemployment rates that are typically the average American by more than a year. is 39.4 minutes, versus 25.3 nationally.)  An estimated 45.3 million tourists visited higher than the national average drag down  Immigrants bring some health problems with  Of all New Yorkers 25 and older, 32.5% New York City last year; some 8.6 million of have a bachelor’s degree, compared with them were international visitors. 27.4% of Americans.  More patents were issued last year to New 4. Yorkers—1,293—than to denizens of any of the 2. WE’RE WAAAY MORE other largest U.S. cities. (An attaboy to runner- up Houston, with 1,266.) LIBERAL THAN MOST 3.  A New York household is 18% more likely to include heavy newspaper readers than the OTHER AMERICANS average American one. And the typical New THE LAST TIME New York City favored a York household spends 30% more on Republican presidential candidate was 1924, 2. single issues of magazines and 16% when booze was illegal and Calvin Coolidge more on books than the average carried the city’s precincts. We’ve since 5. American counterpart. become the biggest and richest 6.  Members of the typical New York Democratic bastion in the country. household are 10% more likely than  76.8% of New Yorkers voted for those nationwide to have visited a Barack Obama in 2008, versus 52.8% museum in the past year. of Americans. 1.  67.2% of voters here in 2007 were registered Democrats, and data show 7. BUT WE’RE that New Yorkers are 40% more likely to consider themselves “very liberal” than LOOKING FOR the average American.  New Yorkers residing in 10021, the LOVE … country’s top ZIP code for political- 7. … AND WE’LL SPEND MONEY TO GET IT. party donations in the last  Just 40.2% of New Yorkers are presidential election cycle, gave married, versus 50.2% of Americans. But $22.1 million to federal we do spend more per household on campaigns—and just $5.95 dating services ($1.39 a year) than the million of it went to the GOP. average American household (79 cents).  We spend an average of $203.25 per year per household on cosmetics, perfume, and 3. AND bath, skin care and nail products. The U.S. average: $195.52. MORE  We typically spend $2,619 a year on NEUROTIC apparel and services like dry cleaning, compared with $1,893 for those living in the MAYBE WOODY ALLEN should be rest of the country. That represents 4.6% of a added to the city seal, ensconced local household’s total annual expenditures, between the little sailor colonist and versus 3.8% for the average American

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the Lenape native. o household. Lookin’ sharp, New York! h

 p

5.9% of adult New Yorkers, or some k c

o Note: Data are the latest available. Sources: 1. Here is New York,

352,000 people, reported experiencing t s

i Census Bureau, ESRI, NYC & Company; 2. The Almanac of New York

,

anxiety, depression or other emotional s

i City 2008, NYC Board of Elections, National Archives, ESRI, Open n

problems in 2008. n Secrets; 3. NYC Department of Health and Mental Hygiene, The Geog- e

 k raphy of Personality, American Medical Association; 4. Forbes, Census

New York state ranks No. 3 in the U.S. c

u Bureau, Bureau of Labor Statistics, Partnership for New York City and

b

: PricewaterhouseCoopers, Prudential Douglas Elliman/Miller Samuel,

in neuroticism, after (go figure) West Virginia s

o

t National Association of Realtors; 5. NYC Department of Health and

and Rhode Island. o h Mental Hygiene, World Bank, ESRI; 6. Census Bureau, U.S. Patent

 New York state has the highest number of p and Trademark Office, ESRI; 7. Census Bureau, ESRI

40 | Crain’s New York Business | June 28, 2010 CN013774 6/11/10 1:05 PM Page 1

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25TH ANNIVERSARY ISSUE Waking up in city of second chances Resolute New Yorkers bring us back from abyss of crack epidemics, urban decay and Sept. 11

BY CAIT MURPHY n the mid-1980s, Sheena Wright’s block in West Harlem, then as now, was home to dozens of hard-working families. One building, however, was a crack house, attracting the violence and human detritus typical of the trade.The police were ineffectual. ¶ Fed up, the neighbors devised a plan.They would sit on the stoop of the drug den, shooing customers away.The gambit was dangerous, but it worked. ¶ “As much as things were attacking the social fabric at that time,” Ms. Wright says, “there were also forces trying to hold it all together.” ¶ And the crack house? It’s been renovated, she says, and is worth more than $1 million. ¶ Similar stories could be told in every borough of New York, and nearly every neighborhood. Over the past Iquarter-century, the city has seen a “historic turnaround,” says Jonathan Bowles, director of the Center for an Urban Future, “nothing short of a renaissance.” ¶ To a large extent, New York’s revival occurred because the city stopped doing certain stupid things and started doing a few smart ones. And yes, it got lucky: The crack epidemic ebbed; Wall Street boomed.The city even got some timely help from popular culture, in the form of Seinfeld (1989-1998) and Friends (1994-2004).The place the country saw on those shows didn’t look so horrible— though, of course, New Yorkers knew that Monica and Rachel could never have afforded that

two-bedroom in the West Village. $400 million and made these 843 of The Wall Street Journal, Rupert Most of all, New York benefited the most beautiful acres anywhere. Murdoch, was born in Australia; from being full of individuals who Though the city owns the park, it is the head of the Metropolitan refused to let it deteriorate into the smart enough to let the group run it. Museum of Art,Thomas dark urban dystopia that appeared “What the conservancy was about,” Campbell, was born in England, to be in the offing—remember says Mr. Blonsky,“was New Yorkers and his predecessor in France. Time magazine’s 1990 cover story wanting to take back the city.” But the most important “The Rotting of the Big Apple”? The conservancy is a classic immigrants are the huddled masses Famous names like Ford, Ono, example of what Edmund Burke from teeming foreign shores Onassis and Rockefeller helped in called society’s “little platoons.” New celebrated on the Statue of this regard. But more important York is rich in these organizations, Liberty—emphasis on the masses. 37% needle-strewn dumping ground on were the many ordinary residents, which have helped to restore other One of the most important facts Washington Street that was rebuilt volunteers and businesspeople who, iconic places, such as the New York about the city’s immigrants is that in 2002 with a mix of local activism with the help of some enlightened Public Library and Grand Central there are so many of them. Since and city money—Collette Richards long-term government policies, Terminal. Business improvement 1980, the city’s population has risen soaks in the sun. “As opposed to a refused to give up. districts have improved the quality from 7.1 million to an estimated 8.5 decade ago,” the Jamaica-born Together, they gave the city a of life, providing cleaner, safer, million, with immigrants accounting secretary says, “the streets are second chance. New Yorkers prettier streets in dozens of areas. for the majority of the increase. cleaner, the parks are much nicer, grabbed this lifeline and hung on, Such platoons have done much to Take the Bronx.The borough and it’s a whole lot safer.” 24% through recessions and wars and make the city more appealing. But lost its soul in the 1960s and 1970s New, attractive apartment riots and the single worst day in the their work would have been not simply because people were buildings are going up, she notes, city’s history. window dressing had New York moving out, but because no one was which will provide more customers continued to lose population. moving in to replace them, leaving for a commercial district that could A PLATOON SAVES THE PARK neighborhoods damaged and use some help. not long before Ms. Wright’s DENSITY AND DESTINY dangerous. Surveying one blighted This area around Washington neighbors were sweeping the drug new york relies on density. When landscape in the 1980s, an appalled Street and East 163rd is hardly trade off their street, a determined neighborhoods lose people, Boston official murmured: “I have chic.That, however, is not the way group of New Yorkers decided to buildings empty out, commerce seen the beginning of the end of to measure success. Paul Grogan, try to clean the Augean swamp that declines and the streets become civilization.” The New York Times who headed the Local Initiatives had made Central Park the butt of desolate and dangerous.That was a used to run a daily box score of Support Corp. in the 1980s, is co- jokes on late-night television.The familiar dynamic in many areas in buildings burnt the previous night. author of a book on urban trees were sick, the buildings the 1970s and 1980s. That’s changed. From 1990 to regeneration, Comeback Cities.The graffitied; the water was filthy and But the city’s reputation as a 2005, the population of the Bronx Bronx “has not regained its former the Sheep Meadow a dust bowl. place to try again, combined with increased by 153,000 people; over 1980 2008 grandeur, nor is it likely to do so,” Doug Blonsky, director of the looser immigration policies, reversed the same period, 163,000 1.67 3.04 he writes. “It has instead become Central Park Conservancy, notes the trend.Today, almost four out of immigrants moved in. Without million million something more necessary and that the sheer ugliness of the place 10 of the city’s residents—some immigrants, then, the borough’s slow out of out of more lasting. It has become actually proved to be an asset: “It was 37%—were born outside the United death would have continued. Sure, it 7.07 8.3 pleasant and livable.” million million in such bad condition that it was States. Non-native Americans are is still a struggling place, with the total total Government was important, in shocking. It forced people to wake dappled throughout the economy, lowest median income ($35,000) population population that it creatively used federal tax up and say,‘This has gone too far.’ ” from the humblest jobs to the most and the highest poverty rate credits and other incentives to A couple of nonprofits formed elite.The editor of Vanity Fair, (27.6%) of the five boroughs. But it FOREIGN-BORN restore housing, provided better to try to clean it up; they merged Graydon Carter, may be the is not a hopeless one anymore. policing and devoted more in late 1980 to become the quintessential New Yorker, but he At Reverend Lena Irons Unity NEW YORKERS attention to public spaces. But none conservancy, which has since raised was born in Canada; the owner of Park—a former garbage- and Source: Department of City Planning of that would have worked if the

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project can outlast several mayors, COMEBACK KIDS recovered astonishingly fast from the consider the Pathmark at terrorist attacks. Employment Lexington and East 125th Street.  Studio 54 co- returned to national norms in less The Dinkins administration set founder Ian than a year, says Howard Chernick, aside a city-owned parking lot, sited Schrager’s prison a professor at New York University within a sea of vacant lots, for a stint for tax evasion and the editor of Resilient City, supermarket. Not that the grocery didn’t hold him back: about post-Sept. 11 Manhattan. chains were clamoring to get in; it Housing values blipped for about took a lot of persuading, and more three seconds before recovering. It than a few tax breaks, to coax the took only a year for population to get company to give the location a try. back to pre-September 2001 levels. Naturally, vested interests rallied Government subsidies probably to stop the project. Local bodega helped stabilize matters in the owners were worried about the immediate aftermath of the competition, and certain self- disaster, but in a sense, the described community activists He went on to found foundation for recovery had been feared that it would change the established years before Sept. 11. the Morgans Hotel character of the area. (That was, of “One thing that happens in Group, inventing the course, the point, and residents physical disasters,” says Mr. made it clear that they favored less- boutique hotel. Chernick, “is that they can permit expensive, higher-quality food.)  Once considered an acceleration of trends.” In New York, determined the top Internet That’s what happened opposition can gum up the works for analyst, downtown. Beginning in the mid- years, so it was not until the Giuliani Henry 1990s, there was a shift toward administration that the project got Blodget filling buildings with homes to the go-ahead.The store, which was was make lower Manhattan less of a the first major commercial barred weekend ghost town. development in Harlem in 30 years, from the securities After Sept. 11, generous tax opened in 1999, and is now the industry in 2003 for breaks, combined with New chain’s highest-grossing store in Yorkers’ instinct for a real estate misleading investors. sales per square foot. (Profits, alas, deal, kept the momentum going. So are below par.) The main complaint: His second career? developers undertook more projects, The lines are too long. Website entrepreneur. which sold out, which coaxed the “It was all burnt-out buildings introduction of more amenities,  around here,” says store manager Despite several which brought more people.The Everton Rock, who was an assistant bankruptcies among city has upgraded infrastructure, manager when the Pathmark his casino and hotel including a new transit hub and opened. “There was just nothing.” properties, Donald parks.The population of lower Now the adjacent blocks are Manhattan is approaching 55,000, stuffed with commerce. Nothing double what it was on Sept. 11. fancy: Duane Reade, McDonald’s, At least as important was the Dunkin’ Donuts, bodegas, discount decision of many businesses not to stores, banks and a coffee shop or flee for the exits. Making money two with modest pretensions. But it has never seemed quite as patriotic DOING RIGHT BY HARLEM: all makes this part of Harlem as it did on Sept. 17, when the New Sheena Wright’s neighbors in livelier, safer and easier to live in. York Stock Exchange got back to the ’80s chased away crack buyers, standing up to the forces No longer do elderly women have business, and there was joy amid that threatened their area. to take a bus to shop for food. bloomberg news the shoe racks when Century 21 “Pathmark changed the theory Trump found success reopened five months later.

buck ennis of the marketplace,” says Ms. and celebrity with his A typical reaction was that of Wright, executive director of the hit reality-TV show, Melissa Glowski, the last manager people of the Bronx had not taken context. And when civic leaders make Abyssinian Development Corp., a The Apprentice. of the Borders bookstore in the their destiny into their own hands. catastrophic policy and financial Harlem-based agency that helped World Trade Center; she was on “The instigators of the Bronx decisions—as they did on a make it happen. “The idea that you  When a seizure left the subway headed to work when miracle,” Mr. Grogan concludes, numbingly regular basis for far too need middle-income people to the painter Chuck the planes hit. “We were galvanized “were the residents themselves.” long—the damage cuts deep. In support these kinds of stores was Close mostly within ourselves,” she said of plans Ditto in Flushing, Queens, truth, many of New York’s deepest thrown on its head.” paralyzed from the to reopen a downtown store. “There which was losing population and wounds have been self-inflicted. Harvard has even done a case was a determination to carry on.” neck down commerce in the ’60s and ’70s. In OK, so now that we’ve blamed study on the supermarket.The Employees identified a site on 1980, Main Street was emptying, the bums for dragging the city down, success of Pathmark—which has in 1988, he lower Broadway, and in June 2003, and many storefronts were boarded let’s be fair and note that politics added another store in Harlem and learned to they were selling books again. up. Even in 1990, “the downtown has served New York well over the one in the Bronx during the paint again was not that crowded,” recalls Peter past 25 years. Specifically, the city Bloomberg administration—set an with a brush HOME TRUTHS Tu, an immigrant from Taiwan who made some good decisions and then example that led to several other taped to his statistics and experts’ assessments has started a variety of businesses. stuck to them, mayor after mayor. retail developments in Harlem, wrist. He won the tell an important part of the story of “It looked like a small town.” Cleaning up the subways, boroughs beyond Manhattan and National Medal of the city. But in a larger sense, the Now there are more than 800 redeveloping Times Square, even other states. Arts in 2000. recent history of New York is businesses in downtown Flushing, rezoning the West Side, harnessing  written in vignettes: families DOWNTOWN’S ULTIMATE TEST A bitter divorce almost all of them owned by ethnic the private sector to overhaul from ex-wife Kim chatting on stoops in Fort Greene, Chinese or Koreans. From 1994 to abandoned housing: Those were all the thing about success is that Brooklyn, confident that there will Basinger derailed 2004, the number of businesses in Ed Koch initiatives that his it plants the idea that success is be no stray bullets; the gleaming Alec Baldwin New York rose 9.6%, reports the successors embraced and extended. possible, that the second chance ’s acting renovated brownstones of Harlem; Center for an Urban Future; in It was on David Dinkins’ watch just might work out. It fosters old people enjoying the sunshine in Flushing, the figure was 54.6%. Life that crime began to fall; he also shut resilience and builds confidence in Tompkins Square Park; even the isn’t perfect: Residents complain down the tent city in Tompkins the future, even under the most return of beavers to the Bronx that there’s too much traffic and Square Park, the first shot in the difficult circumstances. River, no longer thick with muck. that they’re being priced out by fast- battle to reclaim the city’s public In some ways, downtown New York is many things. It’s a rising property values. But these are spaces. Rudy Giuliani’s innovative Manhattan around the World financial capital, a cultural the right kinds of problems to have. crime strategies and welfare Trade Center site is experiencing phenomenon, a profit center for They are artifacts of success. reforms set templates that Mayor the ultimate second chance.That Disney. But first and foremost, it is Michael Bloomberg has largely 16-block hole in the ground has home to 8.5 million people. And HARD-WON POLITICAL REWARDS followed. Mr. Bloomberg has also suffered not only from terrorism, but career, but a role in the most important achievement of new york has never been short of taken many steps that his also from litigiousness, turf battles sitcom 30 Rock in the past quarter-century is that the hardworking and committed predecessor would have liked, such and simple greed, which have 2006 delivered him city has taken advantage of its residents, regardless of where they as gaining control of the schools. delayed construction far too long. back to fame. second chance: It has restored its were born. But people work in a For an example of how a single Downtown itself, though, —HILARY POTKEWITZ glory by reclaiming its normality. 

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Management was named for him, and he serves as senior associate dean and a member of the faculty. PETER PETERSON is devoting $1 billion of the wealth he amassed in a brilliant corporate career to his eponymous foundation. Its mission is to inform the public about the nation’s long-term fiscal imbalance caused by burgeoning entitlement programs and debt, and the threat it poses to the Hall economy. A former U.S. secretary of commerce, Mr. Peterson was chairman and chief executive of Bell & Howell and Lehman Brothers and co-founder of . of THE Fame BUILDERS arely has being fired led to New York executives whose contributions such spectacular success as it Rhas for MICHAEL BLOOMBERG, in and beyond business changed the city the third-term and 80%-plus owner of media firm Bloomberg LP.Mr. Bloomberg parlayed his $10 million severance from Salomon Brothers into an international financial news and data-analytics giant.The company has more than 11,000 employees, including 5,500 in the city. Its market value exceeds $22 billion, and it has made Mr. Bloomberg one of the richest men in America. An outsize personality in the staid insurance industry, HANK GREENBERG transformed AIG into an international powerhouse—at its peak the 18th-largest company in the world. Building on the company’s origins in China, Mr. Greenberg pushed aggressively into foreign markets during his tenure as chairman and CEO. AIG was charged with accounting irregularities on his watch and required a massive federal bailout after he left the BY ALAIR TOWNSEND company. Mr. Greenberg’s legacy as a master is threatened as the company sells off some of its parts. ONE OF THE PEOPLE I admire most in New York is John Whitehead, who ran Goldman Sachs The late STEVEN J. ROSS parlayed a tiny car rental business into what when the focus was on long-term gain and who, even after his retirement in 1984, lent his became Time Warner. His small considerable weight to a number of relatively unknown civic and charitable organizations. He said conglomerate, Kinney National they needed him more than the glamorous institutions did. ¶ But John’s not on this list because he Services, acquired the flagging Warner Bros.–Seven Arts studio in didn’t meet one of my two principal criteria. In addition to making a contribution beyond business 1969. With Mr. Ross at the helm, alone—which John surely did, and still does today—my Hall of Famers had to have been active in Warner Communications thrived. business during some part of the past 25 years. ¶ I have arranged my selections in six groups, His $14 billion merger with Time Inc. in 1989 created although several fit into more than one, for a grand total of 25 inductees. the largest media and entertainment company of its day. A visionary, Mr. Ross created MTV and Nickelodeon and early versions of interactive television. From two family-owned newspapers in Australia, RUPERT MURDOCH assembled $28 billion of the rescue plan was financier FELIX News Corp., which he chairs, with THE ROHATYN, then a partner at Lazard holdings around the world. He Frères.The city’s immediate cash cemented his media hegemony in STATESMEN needs were met by bonds issued by New York with the 2007 purchase of the new Municipal Assistance The Wall Street Journal, adding that AVID ROCKEFELLER retired as Corp., which also provided the city paper to the New York Post and Fox chairman of Chase with funds for capital projects when News Channel. His tabloid-style DManhattan Bank in 1981, it lacked market access on its own. journalism is credited—or blamed—for the increasingly having helped the bank achieve Mr. Rohatyn served as MAC chair rancorous tone of partisan politics in the country. global reach, but his influence and from 1976 to 1993, and later was HENRY KRAVIS co-founded leveraged-buyout and involvement in the city and key named ambassador to France by President Bill Clinton. private equity firm Kohlberg Kravis Roberts.The firm business institutions remain strong Long before Enron, Countrywide and Lehman, IRA gained notoriety with its 1988 bid to this day. He founded or co- MILLSTEIN was a crusader for reform for RJR Nabisco, and its success has founded the Council of the in corporate governance. As a senior catapulted Mr. Kravis into the ranks Americas, the Bilderberg Group, the partner at law firm Weil Gotshal & of America’s richest men. Mr. Kravis Trilateral Commission, the Business Committee for the Manges, Mr. Millstein has worked served as the founding chairman of Arts and the Partnership for New York City, and has with more than 50 corporate boards the New York City Investment been a generous benefactor to these and scores of other to foster independence from Fund, a nonprofit that provides organizations. management and responsiveness to money and advice to entrepreneurs Many people were instrumental in preventing the shareholders.The Millstein Center who can help diversify and bankruptcy of New York City in the mid-1970s, for Corporate Governance and strengthen our local economy. including then-Gov. Hugh Carey.The architect of much Performance at the Yale School of See HALL OF FAME on Page 46

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furnishings (and homes, as well), paints, crafts, cookware, mid-1970s, when he persuaded many large property food, wine. Her imprimatur signals status and savvy to owners to pay their real estate taxes early, and President millions of American consumers, and bonanzas for those Ronald Reagan’s 1985 proposal to eliminate the who license her name. She plays no active role in the deductibility of state and local income taxes for federal Hall management of Martha Stewart Living Omnimedia tax purposes, which he organized a following her conviction on charges of lying to federal coalition to defeat. investigators about a stock transaction, but the company’s Beginning with one hotel in of fortunes are inextricably linked to 1946, the late BOB TISCH and his late Fame her creativity—and, of course, her brother Larry built their holdings name. into $16 billion Loews Corp. and The New York Yankees had been part ownership of the New York Continued from Page 44 a storied franchise, but the team was Giants football team.To appreciate sagging when a group of investors the scale of the family’s including GEORGE STEINBRENNER contributions to the city, look at the acquired it in 1973 for $10 million. facilities at New York University, the Metropolitan THE Estimates of the Yankees’ market Museum of Art and the Central value now exceed $1.2 billion, Park Zoo that are named after them. TRAILBLAZERS thanks in large measure to the irascible, controversial Mr. Bob started Take the Field and Steinbrenner. He was the first owner to sell his team’s raised $140 million to refurbish the he financial meltdown of cable television rights and the first to take them back athletic fields of the city’s public 2008 didn’t spare American again and launch his own cable TV channel. During his schools. TExpress, but the company ownership, the Yankees have won 11 pennants and seven If Brooklyn were a freestanding rebounded strongly in 2009 under World Series titles. city, it would be the fourth-largest in the leadership of Chairman and the country, with its population of CEO KENNETH CHENAULT.Mr. 2.5 million. For years, ROBERT Chenault is only the third African- THE CATELL, CEO of Brooklyn Union American to head a Fortune 500 Gas (later named KeySpan), exercised special company—and the longest-tenured, GUARDIANS stewardship for the borough. While building the having climbed the corporate company, he inculcated a tradition hierarchy to the top in 2001. He has positioned the fter retiring from a brilliant international of employee volunteerism. He company as a premium provider of financial services, career during which she chaired the Partnership for New integrating its varied service offerings. He is vice Ahelped popularize opera, the York City, the Business Council of chairman of the Business Roundtable and a director of late soprano BEVERLY SILLS assumed New York State and myriad New York University’s Langone leadership of the struggling New institutions in Brooklyn. Medical Center. York City Opera and is widely EUGENE MCGRATH charted the In 1999, CANDACE BEINECKE be- credited with saving the course to lead his company, came the first woman to chair a ma- organization. She chaired the board Consolidated Edison, through jor New York law firm. A skilled of Lincoln Center from 1994 to deregulation of the state’s energy corporate lawyer, Ms. Beinecke 2002 and was a prodigious market. As chairman and CEO of faced business challenges at Hughes fundraiser for the institution, one of the country’s largest utilities, he stressed Hubbard & Reed. Revenues and creating an international summer festival and beginning customer service and reliability. He also was a leader in profits per partner were stagnant, the $1 billion redevelopment of the campus. civic and trade associations of every kind, including and marketing efforts were limited. New York University is an serving as chairman of the Business Ms. Beinecke ignited both revenues and profits per part- economic engine for the city, with Council of New York State and the ner, in part by reminding clients of the full range of the more than 40,000 students and an Union Square Partnership and on firm’s capabilities. Ms. Beinecke is vice chair of the Part- annual budget of about $2.1 billion. the boards of Barnard College nership for New York City and a Former Congressman JOHN and the Wildlife Conservation board member of the Merce Cun- BRADEMAS, who was NYU’s Society. ningham Dance Foundation. president from 1981 to 1992, moved Broadway and the commercial ANDREA JUNG made history as the the university into the first tier of theater were facing dark times when first woman to head Avon Products. private institutions. Mr. Brademas the late GERALD SCHOENFELD and Understanding that the then-116- raised more than $1 billion, enabling partner Bernard Jacobs took control year-old company’s business model NYU to update many of its facilities and establish new of The Shubert Organization.Together they produced or was broken, she changed Avon’s centers, including several abroad. presented some of the greatest hits of the times, product mix to appeal to younger PHILIPPE DE MONTEBELLO led the including A Chorus Line and Dreamgirls. Mr. Schoenfeld women, marketed to them with Metropolitan Museum of Art for was a tireless advocate for the relevant advertising campaigns and pushed into more than 30 years. He doubled its economic benefits of Broadway and international markets (Avon now makes more than 75% size, in part by opening the Petrie worked to clean up the Times of its sales outside the United States). Ms. Jung serves on European Sculpture Court and the Square theater district, which had the boards of Catalyst and New York-Presbyterian Uris Center for Education, adding become an appallingly sordid and Hospital. many new galleries and renovating frightening place. existing ones. He expanded its Much of the credit for the fact collections and enhanced its user that Chase bank is both strong and THE services, to the delight of the museum’s nearly 5 million headquartered in New York City annual visitors. belongs to WALTER SHIPLEY.Mr. BRAND MASTERS Shipley rose to the top of Chemical Bank, then oversaw its acquisition of Texas Commerce he late LIZ CLAIBORNE was THE Bank, its merger with Manufacturers Hanover Trust and the founder, chairman and finally its merger with Chase Manhattan Corp., which Tchief executive of the first HOME TEAM PLAYERS he headed as CEO from 1996 to company run by a woman to achieve 1999. Mr. Shipley used mergers to Fortune 500 status, a feat she t’s no accident that in many communities, the select and retain the best talent, accomplished in only 10 years. Her most active civic leaders are those whose assets ensuring that the combined entity secret? She understood what Icannot easily be moved—assets like real estate, was stronger and more competitive working women wanted to wear and utilities, commercial banks.That is true in New York as than its former parts. offered them high-quality, durable well. Some business leaders stand out as exceptionally As chairman and a founding separates that engaged and unusually astute. partner of real estate company were shown as collections.To her With his brother Jack, the late Tishman Speyer, JERRY SPEYER has customers, the Liz label became LEWIS RUDIN built the family real acquired some of New York’s crown synonymous with fashionable estate company into an empire of jewels, including Rockefeller Center and the Chrysler clothing and accessories at a price apartment and office buildings.The Building, as part of a vast national and international point between luxury and mass family never traded their holdings building portfolio. His civic affiliations—he has chaired retailing. and never got caught in speculative the boards of the Federal Reserve Bank of New York, the MARTHA STEWART remains bubbles. Mr. Rudin was immersed in Museum of Modern Art, Columbia University and the ubiquitous, thanks to her magazines, helping the city through two Partnership for New York City—read like a who’s who of television shows, books, home challenges: the fiscal crisis of the New York and national organizations. 

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Impact of chemotherapy drugs on BREAKING target genes BOUNDARIES IN SCIENCE RESEARCH II

Genomic development of high-vitamin food crops

Evolutionary developmental Top row, l to r: Dr. Jill Bargonetti, Professor of Biological Sciences, Hunter College and CUNY Graduate Center; biology of palm trees Dr. Eleanor Wurtzel, Professor of Biological Sciences, Lehman College and CUNY Graduate Center; Dr. Christine Li, Associate Professor of Biology, City College of New York and CUNY Graduate Center; Bottom row, l to r: Flor Henderson, Assistant Professor of Biology, Hostos Community College; Dr. Ruth Stark, Genes implicated in Distinguished Professor of Chemistry and Director of CUNY Institute for Macro-molecular Assemblies, City College and neurodegenerative CUNY Graduate Center; Dr. Corinne Michels, Distinguished disorders Professor of Biology, Queens College and CUNY Graduate Center.

Molecular structure of Regulation of biopolymers gene expression

reaking boundaries in science at The City University of New York — Whether investigating the most basic or far-reaching genetic and molecular research, or finding ways to provide better nutrition to starving populations, women scientists at all CUNY colleges are conducting pioneering research of world-wide Bimportance. In addition, they are teaching and working with outstanding students in the newest areas of basic and applied science in laboratories and classrooms through CUNY’s “Decade of Science.” The new CUNY Advanced Science Research Center at City College, now being built, with construction and programming planned Matthew Goldstein by Vice Chancellor for Facilities Planning, Management and Construction Iris Chancellor Weinshall and Vice Chancellor for Research Gillian Small, will offer the most advanced scientific research facilities and opportunities for cross-disciplinary collaboration to all CUNY scientists.

For more information about CUNY women in science visit www.cuny.edu/decadeofscience 20100628-NEWS--0048-NAT-CCI-CN_-- 6/23/2010 5:57 PM Page 1

25TH ANNIVERSARY ISSUE

financing to take all of his cash out of the project.The bank, meanwhile, sliced up the loan, blended it with others and sold off pieces to investors in a goulash called commercial mortgage- backed securities. In the end, the major losers in the transactions were the various investors who bought the CMBS deals. COMMERCIAL DEALS FESTER the riverton deal illustrates the risks of repackaging loans and selling them with others: A big- enough loser can drag down the rest of the loans in a security.That risk was compounded during the boom as loan-writing standards for both residential and commercial properties crumbled, and more and more buyers grabbed all the easy money they could. The annual value of CMBS deals in the U.S. ballooned 35%, to $231.3 billion, in the three years ended in 2007, the year that marked the peak of the frenzy. By the third quarter, CMBS deals financed 28% of all real estate transactions. Many of the loans were just as dodgy as Mr. Gluck’s. In May, 8.4% of loans in CMBS deals were in foreclosure or delinquent, up from 0.5% in May 2008.This is widely seen as the beginning of a real estate failure that could hurt the U.S. economy for SELLER’S REMORSE: Lew Ranieri, the first years, just as a 30-year-old financial to package ordinary mortgages into crisis continues to weigh on Japan. securities, can’t believe the havoc his creation wrought: “I can’t help but feel I While regulators have should have done a better job.” concentrated on the bigger meltdown in residential mortgages, the commercial problem has been

buck ennis allowed to fester, with government officials allowing banks to extend $231.3B loans rather than write them down. About $1.5 trillion worth of commercial real estate loans will need to be refinanced in the next five Lew Ranieri and years. Analysts calculate that there will only be enough cash to fund half of that through lenders. But the CMBS market is a shadow of its former self; it shriveled to $2.6 the road to hell billion last year. Clearly, something will have to give. “The market came to rely on How mortgage-backed securities, meant to help CMBS as the vehicle of choice,” says Manus Clancy, a managing homebuyers, morphed into a real estate monster director at Trepp, which tracks real estate debt. “Now we have a vacuum, because nothing is coming BY THERESA AGOVINO to replace it.” The many New York deals that were financed using the CMBS n an unseasonably warm day in February 2009, Laurence Gluck tool range from the Riverton proudly pointed to refurbished playgrounds and an updated security Houses to Harry Macklowe’s system outside the Riverton Houses, a rent-regulated Harlem housing disastrous $7 billion purchase in 2007 of seven office towers, which complex he owned with a partner. Inside a renovated apartment, he he was forced to return a year later. showed off the granite countertops and sleek new appliances.¶ His plan Only California has had more had been to use such improvements to help push up rents to market CMBS-fueled transactions. rates. In fact, according to his projections, more than half of Riverton’s IN THE BEGINNING ... 1,300 units would command market-rate rents by 2011. ¶ But the plan in fact, over the past few decades, a failed miserably. By summer 2008, just 10% of Riverton’s units had reached that goal, and Mr. $2.6B series of New York-based financiers OGluck and his partner announced that they would default on the $225 million mortgage. On the sowed the seeds for the CMBS disaster. Each had his own twist on day of the Riverton tour, Mr. Gluck still thought he could retain the property. No such luck: It ’07 ’09 the product that helped channel was sold at a foreclosure sale last March. ¶ In retrospect, the loan, with its wildly optimistic more cash into what became an assumptions about rent growth, should never have been made. Yet back during the boom, this AMOUNT RAISED orgy of real estate speculation. was how business was done. ¶ “You have to understand that people were just throwing money at VIA COMMERCIAL It didn’t start out that way, back in the late 1970s.The concept of you,” Mr. Gluck said during his Riverton tour. “Who was I to say no?” ¶ There hadn’t seemed to MBS IN THE U.S. securitizing mortgages stemmed be any reason for Mr. Gluck or his primary lender, Deutsche Bank, to worry. He used the Source: Dealogic See LEW RANIERI on Page 50

48 | Crain’s New York Business | June 28, 2010 CN013571 3/23/10 4:24 PM Page 1

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25TH ANNIVERSARY ISSUE

8.4% Raoul’s, a French bistro on Prince Street in SoHo, Mr. Penner had an Lew Ranieri and road to hell idea: Create a mega pool that bundled several large loans. The Continued from Page 48 six years shuttling to Washington Ranieri says. “He was always taking first deal, which closed a year later, from a desire by Brooklyn-born and and getting federal laws changed to it to the next level.” was valued at $410 million. -bred to devise a make selling the securities easier. In Mr. Stone later moved to CS That paved the way for banks to way for more people to buy homes. his meetings with lawyers, First Boston, where he eventually stuff even more loans into each In a testosterone-soaked regulators and elected officials, Mr. became one of the biggest funders security, sending them scurrying to atmosphere closer to that of Ranieri often crossed paths with of Manhattan real estate. He find additional borrowers. In 1996 Animal House than an investment another financial innovator who provided loans for aspiring moguls and 1997, Nomura topped the list bank, he and his young team at all- was trying to get a new product off including Steve Witkoff—a former of companies securitizing powerful bond house Salomon the ground: Michael Milken, the partner of Mr. Gluck’s who now commercial loans, according to Brothers staged hamburger-eating father of the modern junk-bond owns properties such as the research firm Dealogic. contests and other frat-boy stunts market. Woolworth Building—as well as 0.3% The Russian debt crisis of 1998 as they developed one of the most “I think we both know more more established figures like Peter chilled the CMBS market, but it innovative financial instruments ways to get rejected than anybody,” Kalikow, who went on to serve as 2007 2010 recovered quickly. It took another of the 20th century. Mr. Ranieri says. chairman of the Metropolitan may may hit after the terrorist attacks of The idea was to bundle up large It didn’t take long for Salomon Transportation Authority. Sept. 11, 2001, and the deflating of numbers of ordinary residential to find another use for the PROPORTION the dot-com bubble. loans and sell them to investors as concept: financing BUNDLING BIG-TIME OF LOANS However, by 2003, CMBS was bondlike instruments called commercial mortgages for office master marketer Ethan Penner, heating up again, along with the mortgage-backed securities. buildings, apartment houses and however, really put CMBS on the IN CMBS DEALS economy, and more banks were Salomon would make a fortune shopping malls. Salomon’s first map. As head of the CMBS group THAT WERE scrambling for a piece of the selling the bonds, and the banks CMBS deal was a small affair, in at Nomura in the mid-1990s, Mr. action, especially North Carolina- that originated the mortgages which it sold $25 million in Penner identified a fundamental DELINQUENT OR based Wachovia, now part of Wells could quickly sell them, generating mortgages for a now-defunct bank. problem in the market: The owners IN FORECLOSURE Fargo. In 2002, Wachovia But by the mid-1980s, Mr. Ranieri of real estate, the bankers who Source: Trepp dispatched Robert Verrone, the It didn’t take and his team raised nearly $1 financed the projects and the bond New Jersey-bred son of Italian billion through a CMBS buyers who made the purchases immigrants, to bolster its effort in securitizers transaction for Olympia & York, didn’t really know each other. He 28% Manhattan. Eventually, he earned one of the largest developers in the decided to introduce them, Wall the nickname “Large-Loan long to swoop world at the time. Street-style. Verrone”—a moniker he hates— into commercial Mr. Penner staged lavish parties because of the massive sums he was SPREADING INFLUENCE modeled on Mr. Milken’s famed 19% willing to lend. financing for mr. ranieri’s influence manifested predator’s balls, roping in some of offices, malls itself in the commercial market in the era’s biggest names in music, UNDERWRITING’S ON THE WALL other ways, too, as traders from including the Eagles and Stevie mr. verrone had wanted to be a and apartment Salomon’s thriving mortgage desk Nicks. Elton John kicked off the leader in the industry since he complexes dispersed to play prominent roles first party in 1994 with a two-and- joined Bear Stearns in 1990. He elsewhere. a-half-hour concert in Boca Raton, was fired four years later, he says, Among them was Andy Stone, Fla. “Grown men were crying, he for constantly badgering his who landed at the Manhattan was so good,” Mr. Penner says. “It superiors about the bank’s failure to cash for more loans so that more office of Daiwa Securities in 1990 almost made me want to be gay.” become a major force in the Americans could buy homes. and took the market in another new The lavish events more than CMBS market. “I would have fired “This was not about housing as direction. He started buying up paid for themselves. me, too,” he quips. a luxury, but housing as shelter—a loans on mobile homes and “Guys would tell me their wives 2000 2007 Wachovia became the basic need for human civilization,” apartment houses from Resolution said they had to do business with 3Q powerhouse he dreamed of, but says Mr. Ranieri, who now runs Trust Corp. in Washington and me so that they’d keep getting the consequences were enormous. several businesses that invest in real packaging them into securities. invited to the parties,” he recalls. PROPORTION The bank underwrote some of the estate and mortgages. The RTC had been set up by The parties helped stoke OF COMMERCIAL biggest disasters of the real estate He started at Salomon as a part- the government in 1989 to take demand as Mr. Penner set about boom: the $5.4 billion purchase in time mail-room clerk in 1968, over mountains of soured loans expanding the use of the product. REAL ESTATE 2006 of the sprawling Stuyvesant rising to become a vice chairman. from failed savings and loans. Mr. Previously, CMBS deals had DEBT THAT WAS Town/Peter Cooper Village He devoted four years to creating Stone and others purchased those centered around a single large apartment complex, which is in the first residential mortgage- loans for pennies on the dollar, then property or several small loans. But SECURITIZED foreclosure, and the $8 billion Source: February 2010 backed security, which debuted in bundled and sold them to investors one night in 1993, over dinner with Congressional Oversight report purchase in 2007 of the Extended 1978, and spent much of the next at a profit. “Andy was brilliant,” Mr. an executive from Fitch Ratings at on commercial real estate losses Stay Hotels chain, which is now in

BUILDING BLOCKS Nine projects that helped reshape the past quarter-century

JACOB K. JAVITS SAATCHI & SAATCHI WORLDWIDE PLAZA METROTECH CONDÉ NAST HARLEM USA RETAIL TIME WARNER 7 WORLD TRADE THE NEW NEW YORK CONVENTION BUILDING (375 (825 Eighth Ave.), CENTER, 1992 BUILDING (4 Times AND ENTERTAINMENT CENTER, 2003 CENTER, 2006 TIMES BUILDING, CENTER, 1986 Hudson St.), 1987 1989 Forest City Ratner Square), 1999 COMPLEX, 2000 Years of fighting over Constructed on the 2006 A sprawling The 1 million-square- The first Class A office created this downtown The Durst An enterprising what to build on the site of the ruined Ratner and The Times showpiece designed foot home of building to open on Brooklyn alternative Organization project commercial former site of the World Trade Center’s Co. stretch the by I.M. Pei, it opens advertising giant Eighth Avenue. to Manhattan—helped housing mediadom’s development group Tower 7, this Larry western limit of the on the far west side Saatchi & Saatchi Developer William by city and state tax most fashionable that includes end with this two- Silverstein property is midtown business after seven years of kick-starts the Zeckendorf Jr. loses breaks—to house empire signals the basketball great pronged Related the first to rise after district into the tawdry delays—and is transformation of the 1.8 million- back-office jobs for arrival of Times Magic Johnson helps Companies solution, the Sept. 11 attacks stretch of Eighth considered too small lower Manhattan’s square-foot tower in Chase Manhattan Square as a usher in a new Harlem which turned an and among the first in Avenue below 42nd from the get-go to Hudson Square from 1993 owing to a bad Bank and other firms commercial hub renaissance and the eyesore into a retail, the city to market its Street. handle large industrial nub to market and a fringe that might have gone that’s able to attract revitalization of 125th residential and “green building” —THERESA AGOVINO conventions. media hub. location. to New Jersey. name-brand tenants. Street. cultural drawing card. status. AND AMANDA FUNG

50 | Crain’s New York Business | June 28, 2010 20100628-NEWS--0050,0051-NAT-CCI-CN_-- 6/23/2010 5:58 PM Page 2

BoardServeNYC.org

bankruptcy. says Huxley Somerville, a group In the Stuyvesant Town deal, one managing director of structured GIVE BACK. marketing document estimated that finance at Fitch. However, he adds, 15% of the apartments in the largely “We provide opinions, [and] regulated complex could be ratings are not bulletproof.” converted to market-rate rents in DANGER, WILL ROBINSON CONNECT. the first year. Historically, only 6% of units had been converted annually. by late 2006 and 2007,some In the Extended Stay deal, the agencies finally started ringing the borrower put up only 7.5% of the warning bells, criticizing the purchase price, meaning that 92.5% deteriorating lending standards. In of the deal was leveraged.There was April 2007, Fitch wrote that “[the] simply no margin for error. subprime residential mortgage Both transactions highlighted crisis should caution CMBS LEAD. financiers’ increasingly lax investors about the dangers of underwriting standards—the result mixing aggressive underwriting of soaring real estate prices, with reliance on continued price : galloping rents and rising hotel appreciation.” NEW YORK CITY rates.These factors led bankers to The alarm went unheeded. Less make loans based on heroic than a month later,Tishman Speyer GIVE BACK IN A NEW WAY assumptions about borrowers’ and Lehman Brothers agreed to abilities to jack up revenues or reap pay $22 billion for Archstone- huge profits by quickly reselling Smith, owner of about 83,000 Hundreds of nonprofit organizations in NYC, in all five boroughs, are seeking new board their properties. It also persuaded apartment units across the country. them that there was no need to test Lehman was eager to underwrite members – talented and committed individuals eager to share their skills and expertise. the viability of projects and have the massive deal, especially since borrowers put much of their own longtime client Tishman Speyer BoardServeNYC connects nonprofit organizations with individuals who want to skin in the game. had selected rival Wachovia to give back through board service. By the first half of 2007, the underwrite its purchase of the Stuy proportion of interest-only loans— Town acquisition. BoardServeNYC accepts applications from potential board candidates and which don’t require borrowers to Lehman followed through on pay back principal until the the deal despite signs that the NYC nonpofit organzations year round. maturity date—in CMBS deals economy was sinking. It was left had risen to 61%, from 21% in the holding much of the debt, which first half of 2004, Barclays Capital became a significant factor in the Apply today. Visit BoardServeNYC.org to learn more. says. Similarly, 21% of loans were company’s bankruptcy filing in 2008. based on underwriting of future Despite the recent destructive PROUD PARTNER cash-flow growth assumptions legacy of CMBS, some experts say instead of actual performance; no it will rise again—albeit with much such loans were included in deals in tighter standards. GIVE. ADVOCATE. VOLUNTEER. 2004. And in early 2007, cash flow “It is still an efficient way to was less than 1.2 times debt service finance real estate,” says Michael LEAD in 37% of loans—up from 13% of Mazzei, a former Lehman real estate CORPORATE LIVE UNITED such risky loans in 2004. executive who is now managing SPONSOR The combination of such shaky director of real estate structured unitedwaynyc.org standards and falling property finance at Bank of America. values spells disaster when loans Through mid-June of this year, come due. A full 56% of the CMBS there were at least nine CMBS deals written in 2007 involve loans deals worth nearly $6 billion.That’s that are now worth more than the up from the six transactions worth buildings themselves—to the tune $2.6 billion that were completed in of 110% or more of the value of the all of 2009. properties. Last month, while bankers plotted the resurrection of the “BEGGING FOR DEALS” financing tool, Mr. Ranieri started bankers say that such nightmares a business to assist commercial were inconceivable when the property owners who are struggling transactions were financed. “Real to pay their mortgages. He’d already estate had been going up and up for started a fund to help homeowners years,” says Mr. Verrone, who now hang on to their properties. runs his own advisory shop in New “There is so much real estate York. “I had people begging me for debt sitting on banks’ books and in pieces of these deals. I gave them CMBS deals that it isn’t going to what they wanted.” be possible to roll it all over,” says Wachovia was not alone, of Mr. Ranieri. course. When other bankers and He believes that he and his dealmakers saw how many partner in the commercial investors were buying Wachovia’s enterprise—Jon Vaccaro, former aggressively valued loans, they head of Deutsche Bank’s global real began following suit. Otherwise, estate business—will be able to use they’d risk losing out on the big fees their combined expertise to find generated by such deals. new investors for the loans they’ve “Everybody has lousy deals,” helped restructure. says Mr. Verrone. “Everyone has The projects are a sort of blood on their hands.” penance, albeit a profit-making There was hardly any pushback one, for a man who can’t believe from Standard & Poor’s, Moody’s what sort of havoc his creation has and the other rating agencies, whose brought. He says that in 2005, he stamps of approval convinced began warning of coming problems investors that the securities were in the securitization market in safe to buy. speeches to the industry. But he Moody’s and Standard & Poor’s wasn’t forceful enough, he thinks. didn’t make executives available for “I feel I failed in not getting out comment. the message of what was wrong,” Mr. “Yes, it was a frothy time, and Ranieri says. “I can’t help but feel I hindsight makes us very smart,” should have done a better job.”  CN013783 6/11/10 5:16 PM Page 1 20100628-NEWS--0053-NAT-CCI-CN_-- 6/24/2010 5:54 PM Page 1

25TH ANNIVERSARY ISSUE

Jeffrey Bewkes Chief executive TIME WARNER INC. thanks to mr. bewkes, Time Warner is finally looking ahead, rather than back at its ill-fated 2001 People merger with AOL. Since taking the reins in 2008, Mr. Bewkes, 58, has fully spun off Time Warner Cable and AOL. Some analysts wouldn’t mind a hat to trick with Time Inc., but Mr. Bewkes is standing behind the magazine division—so far. Investors seem to like the simplified Time Warner, Watch which posted record profits in its first quarter. Here are 25 of the movers and shakers— —matthew flamm from finance whizzes to foodies, government reformers to fashion gurus—who will help shape New York’s recovery

Andrew Cuomo New York attorney general t’s hard to imagine the scenario in which he does not become governor Iof New York next January. And, César Conde irrespective of recent President history, New York

UNIVISION NETWORKS newscom governors tend to Jamie Dimon HE’S 36 and couldn’t be in a stick around: His Chief executive better place in TV right now, father, Mario, was in J.P. MORGAN CHASE & CO. presiding over the nation’s top office for 12 years. Spanish-language broadcast there’s no doubt he did a better job than any of his and cable networks just when The younger peers steering his bank through the financial crisis.The real they’re receiving record Mr. Cuomo, 54, question is what he’ll do for an encore.The answer appears investments in programming. clearly hopes to to be: take J.P.Morgan’s show on the road. Mr. Dimon, 54, recently reshuffled his top management team with an eye Univision is also poised to get surpass the achieve- newscom more attention from to building the bank overseas.That’s after aggressively advertisers after census ments of his dad, expanding it in the U.S. through its bargain-priced results are released in 2011. who missed out on a acquisitions of Bear Stearns and Washington Mutual. Stricter regulation in the U.S. partly explains the drive —MATTHEW FLAMM Supreme Court to grow abroad. But there also appears to be relatively nomination and aborted little for Mr. Dimon’s bank to do here; it’s already the a presidential campaign undisputed leader in commercial, consumer and invest- launch. If Andrew Cuomo ment banking. Not only is Mr. Dimon considered the best CEO in banking, it’s tough to say who’s second. wins in November and lifts —aaron elstein the Empire State from its economic and political morass, he’ll be in prime Hakeem Jeffries Assemblyman newscom position to move on to 57TH DISTRICT, BROOKLYN Diane von Washington in a larger Furstenberg capacity than his previous stint mr. jeffries joined the state Legislature only three Founder and owner there, as secretary of Housing years ago, but the 39-year-old former corporate DIANE VON FURSTENBERG lawyer has already emerged as one of Albany’s and Urban Development in harder workers and deeper thinkers. SHE’S BEST-KNOWN for creating the Clinton administration. His drive—and his focus on bills the wrap dress, but Ms. von There’s a way to go before championing the downtrodden—leads Furstenberg, 63, lately has many political observers to believe that the presidency beckons. Repub- Mr. Jeffries will soon make the leap from had a bigger role redefining licans will try to blame Mr. Albany to Washington.The congressional New York style. As president district he calls home is represented by of the Council of Fashion Cuomo for causing the housing bubble while at HUD and will Edolphus Towns, who is in his 70s. Designers of America, she led Mr. Jeffries would almost certainly have the push to move Fashion paint him as a longtime to battle the congressman’s son, Assembly- Week uptown to Lincoln Albany insider. But New York man Darryl Towns, as well as City Council- Center. Wise move? We’ll see voters are expected to see Mr. woman Letitia James and Councilman come September. Then Cuomo as the best bet to clean Charles Barron, for the post. But if he were to there’s her day job: running a reach the House, his youth and energy would $200 million clothing empire. up the state Capitol. provide the potential for an influential career. —ADRIANNE PASQUARELLI —erik engquist —erik engquist newscom

June 28, 2010 | Crain’s New York Business | 53 20100628-NEWS--0054,0055-NAT-CCI-CN_-- 6/24/2010 5:57 PM Page 1

25TH ANNIVERSARY ISSUE People toWatch newscom Gary Barnett Janette Fred Wilson President Sadik-Khan Co-founder EXTELL DEVELOPMENT CO. Commissioner UNION SQUARE VENTURES CITY DEPARTMENT Stephen DEEP-POCKETED investors OF TRANSPORTATION MONEY from Mr. Wilson is Goldsmith and plans for 7 million square seen as a stamp of approval Deputy mayor feet of hotel, residential and SHE HAS TURNED swaths of in the local tech scene. The of operations office space in the next Times Square and Herald 48-year-old snaps up stakes buck ennis CITY OF NEW YORK decade make Mr. Barnett, 54, Square into car-free zones in hot social and consumer Neal Kwatra the human equivalent of a and rolled out miles of new media firms like Twitter and IT SEEMS ODD: a former mayor Political director New York stimulus package. bike paths in an effort to sells them later for a bundle. of Indianapolis working for the NEW YORK HOTEL & MOTEL TRADES COUNCIL His 13-acre tract on the make the city more Like all veteran venture mayor of New York. But since Upper West Side is becoming pedestrian-friendly. Blowback capitalists, Mr. Wilson has leaving office, Mr. Goldsmith he has ramped up the Hotel & Motel Trades Council’s a community: Two residential from local communities picked some losers, but he has been more policy wonk political unit in the past two years and championed smart towers are up, two more will doesn’t deter the 50-year-old has built a stellar track than career pol. Mayor Michael endorsements—turning a union that was once known for open by year’s end, another commissioner. Her latest plan record over the past two its checkbook politics into one that many insiders agree is Bloomberg’s new deputy has two should rise in 2011 and is to institute exclusive bus decades, and the longtime now among the most effective political operations in New been asked to overhaul the five more are in the pipeline. and bike lanes along First blogger’s “A VC” remains a way businesses interact with York. He’s emerged as a key strategist within the labor Elsewhere, he’s building a and Second avenues. movement, and city officials have taken note, trying to must-read for New York’s city agencies. Mr. Goldsmith, 34-story tower in the diamond Ms. Sadik-Khan’s steal Mr. Kwatra away to work in the Bloomberg adminis- technorati. His most recent 63, says the quest will require district and a condo project tration. But the 36-year-old has stuck with HTC and handiwork is hardly done. bets, growing phenoms a public sharing of ideas. With near Carnegie Hall that’ll be strengthened its voice in the city’s development process Next up: She’s trying to win Foursquare and Tracked.com, city finances expected to deter- the city’s tallest residential over community groups to might end up proving that his iorate further in 2012, he’ll and the growing local hospitality and gambling industries. —daniel massey building when completed. make Union Square car-free. touch is still golden. need every useful suggestion. —THERESA AGOVINO —JEREMY SMERD —AMANDA FUNG —JEREMY SMERD Michael Dowling Chief executive NORTH SHORE-LONG ISLAND JEWISH HEALTH SYSTEM President, global wealth management BANK OF AMERICA MERRILL LYNCH in the 15 years since he left insurer Empire Blue Cross for n the swaggering world of the hospital business, Mr. stockbrokers, Ms. Krawcheck is Dowling has used mergers and kingpin. As head of wealth affiliations to turn North Shore-Long Island Jewish into Imanagement at Bank of a 15-hospital regional power- America Merrill Lynch, she oversees house. Now, he’s taking on the firm’s 15,000 brokers, long the Manhattan, via an affiliation with Lenox Hill Hospital industry’s most productive sales force, with $1.5 and through an agreement to run an urgent care center on or near the site of just-closed St. Vincent’s Hospital. trillion in clients’ brokerage assets. Colleagues at other institutions are watching to see Merrill is still trying to regain its what Mr. Dowling, 60, plans to do with these new balance after 2008’s shattering partners, and whether he can pull them back onto firmer financial footing—something he’s done repeatedly with near-collapse and shotgun David Chang troubled institutions on Long Island. merger with BofA, but Ms. Chef and owner —gale scott Krawcheck, 45, is busy crafting MOMOFUKU plans to grow business overseas, Tory Burch and there are signs that she’s THIS 32-YEAR-OLD has created Founder stabilizing things a restaurant empire that’s so TORY BURCH remarkable, Time magazine domestically. named him one of the year’s once seen as a mere socialite, Ms. If she succeeds at Burch has created logo-adorned ballerina 100 “most influential people Merrill, Ms. Krawcheck in the world.” His Momofuku flats and other styles that have caught on group employs 400 people at like wildfire since she arrived on the would be well- four Asian fusion eateries plus fashion scene six years ago. Her firm now positioned to boasts annual sales of more than $200 two bakeries called Momo- million through two dozen boutiques and become the first fuku Milk Bar, which seem ripe department stores worldwide. She has a female CEO of a for national expansion. storefront in NoLIta and was one of the major Wall Street Mr. Chang recently left his retail pioneers in the meatpacking district; institution. She has the East Village comfort zone to she’s in the market for a third NYC location. join the big boys in midtown, The 44-year-old, honored as accessories bona fides: Over her opening Má Pêche. He’s wary designer of the year in 2009 by the Council distinguished career, she’s of crashing, but complacency of Fashion Designers of America, is more also had senior manage- is worse. “It’s much harder to than a savvy businesswoman: She started her ment positions at San- maintain success than to own foundation to help women become attain it,” he notes. entrepreneurs. ford Bernstein and Citi. newscom buck ennis —LISA FICKENSCHER —adrianne pasquarelli —aaron elstein buck ennis

54 | Crain’s New York Business | June 28, 2010 20100628-NEWS--0054,0055-NAT-CCI-CN_-- 6/24/2010 5:57 PM Page 2

Richard Parsons Chairman CITIGROUP INC.

twice in his long career, Mr. Parsons has helped rescue a faltering company.The first Jeff Blau time was in the early 1990s, President when he helped turn around THE RELATED COMPANIES

Dime Savings Bank. A newscom decade later, he was handed UNDER his leadership, Related the reins at AOL Time Warner. If he gets another chance, has developed projects that it will mean he’s succeeded at his latest and most sparked the rejuvenation of challenging turnaround project: Citigroup. Union Square and Columbus The 62-year-old has been instrumental in returning the Circle. But the ultimate game- “financial supermarket” to its simpler days as deposit-taker changer lies ahead. Related newscom and lender for customers all over the world. If the downshift was tapped to develop Hudson works as planned, the government ideally will rid itself of Yards, placing Mr. Blau, 42, at Executive vice all its Citi stock—at a nice profit for taxpayers. the helm of an effort that will John Sexton president —aaron elstein create an enormous new President THE TRUMP ORGANIZATION commercial and residential NEW YORK UNIVERSITY George Canellos area in the heart of Manhattan. SHE CLEARLY inherited her Director, New York office —THERESA AGOVINO mr. sexton will be one step closer to transforming New famous father’s marketing York University into a global research institution this fall, SECURITIES AND EXCHANGE gene. The 28-year-old has when NYU unveils its campus in Abu Dhabi—offering the COMMISSION published a book and created first of two degree-granting overseas programs. He is currently eyeing China for a similar program. a jewelry business; her line of when mr. canellos was appointed Additionally, the former chairman of the board for the shoes and handbags is set to head of the SEC’s New York office Federal Reserve Bank of New York has set the wheels in debut next spring. Though in 2009, it had been more than a motion for the most ambitious and contentious local Daddy is hardly near retiring, year since the Bernard Madoff expansion in NYU’s history. Earlier this year, he unveiled the heiress, who recently Ponzi scheme came to light, and the plans to grow its physical space by 6 million square feet by married another real estate office was still under a cloud of shame for failing to detect newscom 2031. Mr. Sexton, 67, is even making attempts to expand scion, Jared Kushner, could it.The team of nearly 400 regulators and lawyers needed a Jay Walder outside of Manhattan: NYU wants a satellite campus in one day rule the family firm— morale boost. Enter Mr. Canellos, 45. During his first four Chairman and CEO downtown Brooklyn and has its sights on Governors Island. or at least more of it. months, his office opened an astounding 188 formal fraud MTA —amanda fung —THERESA AGOVINO investigations. He’s certainly making a name for himself as the new sheriff in town. THE MTA’S FINANCES are in —hilary potkewitz shambles. So is much of its Patricia Harris management. Now comes Mr. First deputy mayor Walder, 51, combining big-city CITY OF NEW YORK Nick Denton transit experience (he ran Founder London’s system) with the t’s no secret that GAWKER MEDIA ruthlessness of a manage- ment consultant (he was a when Michael despite some bad press and Bloomberg flees the McKinsey partner). Mr. Walder a police investigation, the plans to chop hundreds of city for jaunts to his head of the wildly popular jobs and cut dozens of bus I Gawker blogs has no regrets homes in Bermuda or routes and a few subway about paying $5,000 in April lines. Yet he also jump- London, he leaves Ms. for an iPhone prototype and started tunnel excavation for Harris in charge. She is his splashing its innards across his the Second Avenue subway. most trusted aide (and the tech site, Gizmodo.Traffic ex- —HILARY POTKEWITZ highest-ranking woman ever ploded, and Mr. Denton, 43, further advanced his reputa- in New York City tion for pushing the envelope government), and nothing of media business behavior gets done at City Hall while milking the promotion- without her approval. Ms. al opportunities. newscom —matthew flamm Harris, 55, counsels the mayor on decisions as important as who to hire for his re- Sara Horowitz Executive director election campaign, down to FREELANCERS UNION the mundane details, such as where to install works of art the daughter—and grand- Thomas in city buildings. daughter—of union activists, Ms. Campbell Horowitz is taking labor advocacy Her powers just got broad- Director into the digital age with a model that METROPOLITAN MUSEUM er: In March, she was named fits the growing legions of indepen- OF ART chairwoman and chief dent workers. Since founding the Freelancers Union in 1995, she has THE 48-YEAR-OLD textile curator, executive of his $1.75 billion built a nonprofit group with who took over the largest charitable foundation. Since 140,000 members and benefits its board is filled with that include low-cost health museum in the Western Hemisphere 18 months ago, political figures, many insurance and retirement plans. Ms. Horowitz, 47, seems to be mastering the art speculate that rather than lobbied successfully for of management. He deftly focusing on charitable causes, city tax code changes handled a fiscal crisis—without Ms. Harris may someday be that benefit her members closing galleries or reducing hours—and he’s expanding the running Mr. Bloomberg’s and is pushing for legis- lation that will ensure that Met’s digital media efforts and campaign for president. companies pay freelancers. planning new capital projects.

buck ennis —miriam kreinin souccar —matthew flamm —MIRIAM KREININ SOUCCAR

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AOL’S INTERNET- and aggregation models of Google 1990 2002 and Yahoo. AOL doesn’t have ACCESS much time. Its profits still depend SUBSCRIBER on subscription fees from its dial- up Internet access service, a RANKS HAVE declining business that will BEEN FALLING continue to shrink as customers FOR YEARS switch to broadband.The company also is recovering from many 26.7 miserable years as the MILLION misunderstood Time Warner stepchild, a period during which the onetime Internet leader lost its swagger and innovative edge, missing out on chances to go after everything from MySpace to YouTube to Facebook. TRANSFORMING A CULTURE mr. armstrong has now bet the farm on being able to transform AOL’s collection of websites into destinations for millions of loyal users and the blue-chip advertisers who want to reach them. It’s an untested strategy: No major 2004 2010 4.7 MILLION Internet company has built a business almost solely around display advertising, which includes everything from banner and video OH, @#$*! 2002 2010 ads to sponsored content. But the (peak) (1Q) former Google advertising chief contends that AOL can be the first. BUT THE COMPANY “Most content businesses today work the way [they used to],” Mr. STILL GENERATES Armstrong says, referring to the SIGNIFICANT CASH high costs and other inefficiencies of a traditional news operation. But $664 AOL will have a structure, in terms MILLION of work force and technology, which makes use of every advantage the Web can provide. “The future of AOL’s business,” he says, “is in mixing the best of New York media and content with the best of Silicon Valley technology.” On the editorial side, the ECONOMIC ENGINES: NEW MEDIA company that started out as Quantum Computer Services in northern Virginia 25 years ago is benefiting from a new-media economy that favors digital At AOL, finally, businesses, even those with a $125 history as troubled as AOL’s. More MILLION than 500 full- and part-time journalists have joined AOL in the past year, including former New 1Q 10 1Q 10 York Times technology reporter Saul a chance to run ’ ’ Hansell, who runs new content- revenue cash flow generation division Seed.com; Times veteran Melinda That merger? Ancient history. Spun-off brand AND IT REMAINS Henneberger, who edits ; and Cheryl Brown, from must reinvent its biz model and itself—fast THE NO. 5 Condé Nast’s recently shuttered GROUPING OF Gourmet, who edits freshly WEBSITES launched food site Kitchen Daily. BY MATTHEW FLAMM (Total number of unique CONTROLLING ITS OWN CASH eporters’ desks on the airy fifth floor of AOL Inc.’s headquarters on visitors in April) thanks to the spinoff from Time Warner, AOL finally has the East Ninth Street are sleeker and less cluttered than those in traditional GOOGLE SITES unfettered use of its own money to newsrooms. And the engineers in nearby cubicles really are doing rocket 175.7 MILLION build the infrastructure it needs. science—at least the media equivalent—as they work on new systems Though revenues fell 22% to $3.3 for bringing an exploding number of online stories from a growing army YAHOO SITES billion in 2009, the company had free cash flow of $741 million. of contributors to the company’s more than 80 sites. ¶ In the spacious 155.6 MILLION Any turnaround will depend not hallways of the renovated Wanamaker’s department store building, MICROSOFT SITES only on AOL’s becoming a sort of flat-screen monitors display a new, neo-psychedelic logo: an ever- 135.3 MILLION Web-only version of Time Inc., but morphing variation of Aol. And Chief Executive Tim Armstrong works from a corner office also on getting back to its roots as a R FACEBOOK SITES tech giant. “One thing was clear where a wall has been taken down that would have separated him from everyone else. ¶ The when I arrived: A resource priority open design feels mainly symbolic (no one seems likely to walk in on the boss unannounced), 121.8 MILLION shift needed to happen,” Mr. but right now, every bit of symbolism helps. ¶ Ten years after its disastrous merger with Time Armstrong says. “We now have the AOL SITES ability to use 100% of our time, Warner, and six months after it was spun off as a publicly traded company, AOL Inc. is rushing 100.6 MILLION energy and resources focusing on to reinvent a damaged brand and create an online media business that diverges from the search Sources: AOL, ComScore See AOL on Page 58

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The bursting of the tech bubble, also a case of conflicting AOL, finally, runs itself plus a culture clash between the two worldviews.The Internet culture companies that reached civil-war prized innovation and believed that dimensions, smashed any remaining the business model would follow; Continued from Page 56 of AOL Time Warner’s media and dreams of synergy. Nowadays, Time Warner needed to see from the competitive Internet landscape.” communications group. “It’s very AOL Time Warner is best the start how the business would That may seem like an obvious hard for a company, when the remembered for posting a record work. As one former executive strategy for the company with the environment changes around it, to $99 billion write-down in 2002. notes, Google is still struggling to Internet’s fifth-largest audience, reinvent itself.” AOL thereafter settled into its make money from its $1.65 billion but one effect of the merger was role as the problem child—a highly purchase of YouTube. that it took a decade of detours and REINVENTION INC. profitable but declining division Messrs. Miller and Parsons and wrong turns to get to this point. the irony is that AOL was once all that dragged down the parent’s a Time Warner spokesman Many veterans of the original, about reinvention, growing by dint stock price and frustrated any declined to comment. Dulles, Va.-based America Online of engineering smarts and mark- media executive foolish enough to Inc. argue to this day that the years eting genius into the Coca-Cola of take on the job of fixing it.The CHURN ’N’ BURN with Time Warner disrupted the new-media companies.The merger clashes would continue, mr. miller was fired in late 2006 development of the Internet giant. was meant to be another act of contributing to fitful progress and and replaced with , a They also dispute the prevailing reinvention, securing AOL’s future assorted missteps that would bring former top NBC executive with no view that what is widely called the by giving it “a path to broadband” AOL to where it is today. Internet industry experience. He most disastrous merger in U.S. through the Time Warner cable A seasoned digital executive with was considered by Time Warner’s corporate history hurt Time system, says then-Chairman Steve an informal style, Jonathan Miller leadership to be a more hands-on Warner more than AOL. Case, who brokered the $164 became chief executive of AOL at manager than his predecessor and “After the merger, a lot of AOL’s To succeed, billion deal with Time Warner the end of 2002, at what was possibly better-suited for building the ad big free cash flow went to make Chief Executive Gerald Levin. the lowest point in its history.The business that was supposed to make movies and help the cable Armstrong The merger was also supposed division was under investigation by AOL a growth engine again. company,” says Robert Pittman, must to inject digital DNA into the old- the government for pre-merger Mr. Falco took on the thankless who was chief operating officer of line conglomerate and make the accounting irregularities, the tasks of cutting 2,000 jobs and AOL and then of the merged AOL merge Internet brand the home of world- corporate atmosphere was poisoned relocating company headquarters Time Warner before he left the famous media assets. “We had a and profits were plummeting. from Dulles to New York.The company in 2002. “When you stop New York pretty good vision,” Mr. Case says. Mr. Miller rebuilt the move north won him few fans spending against the service, stop media with “Our execution was lacking.” organization over the next few internally, yet it set the stage for the acquisitions and the development Others argue that the vision was years, made mostly small, strategic next phase in AOL’s development: of new products, you lose your way.” Silicon outdated by the time the deal acquisitions and moved the hiring journalists, engineers and That may be, respond veterans Valley closed in 2001. As consumers subscription site to a free model producers while rapidly ramping up of the merger from the other side, began switching to broadband, they with an ad-supported business. the content sites, which he made but they also say that the basic technology had little reason to pay extra for Among his purchases was Jason central to the business strategy. In problems weren’t Time Warner’s AOL, Mr. Logan points out, Calacanis’ Weblogs, which would addition, he built out the fault.They compare AOL’s legacy adding that replacing Time Warner help lay the foundation for AOL’s technology platforms for AOL’s dial-up service to horse-and-buggy Cable’s Road Runner service with current content strategy. advertising business. transportation in the days when the AOL would only have hurt another This time, the corporate spigot automobile came along. subsidiary’s growth prospects. AN AOL-YOUTUBE COMBO opened: Time Warner spent $1.8 “They were in a box,” says Don (Time Warner Cable was for a while, AOL came out of its billion on AOL acquisitions Logan, the now-retired chairman ultimately spun off last year.) funk, posting a 41% spike in ad between 2007 and the spinoff— revenue for 2006. But associates of more than on any other division— Mr. Miller’s say he was blocked by including $850 million for ill-fated headquarters from making major social networking site Bebo. investments and felt unable to By most accounts, the old-media compete with rivals like Yahoo and veteran made a rough transition to Microsoft, which were spending the digital world, which wasn’t heavily on acquisitions and helped by Time Warner’s treatment technology.“There were lots of of Mr. Miller, who had been popular companies we looked at that we were with employees. In addition, told we couldn’t buy,” recalls Ted integrating the newly acquired ad- Leonsis, a former vice chairman of technology systems got off to a AOL who stayed on until 2006. shaky start amid turnover among That year, according to one key personnel. Eisner LLP Salutes person familiar with the situation, Mr. Falco’s efforts to adjust Mr. Miller pitched Time Warner course ran into an imploding ad on making a play for Facebook, market. In the end, though, he proposing the sale of AOL would be undone by the corporate properties like MapQuest to parent’s change of heart. finance it. Time Inc. CEO Ann In February 2008, Microsoft CRAIN’S NEW YORK BUSINESS Moore was also interested. made a bid for Yahoo, inspiring Corporate turned it down. Some fears that if the deal went through, Time Warner insiders dispute the AOL would be too small to survive. for account, a version of which also Time Warner began talks to sell the appears in David Kirkpatrick’s book online division to Yahoo. A Quarter Century of Editorial Integrity The Facebook Effect. A Time Inc. As the talks dragged on, and spokeswoman declined to comment. Yahoo Chief Executive Jerry Yang and Among other companies Mr. refused to bite, morale plummeted. Outstanding Service to the Greater New York Miller wanted to chase—in a field “The focus of the company was on that included MySpace and getting the deal done,” recalls a Business, Cultural, and Not-for-Profit Communities About.com—YouTube topped the former AOL executive. list. He believed that the site would Mr. Falco declined to comment. generate enormous traffic for AOL and become a profitable hub for ENTER THE GOOGLE GUYS Time Warner’s vast video library. in march 2009, Time Warner But Time Warner CEO Richard finally made a move that has met Eisner LLP Parsons and President Jeffrey with wide approval: picking Mr. Bewkes couldn’t be persuaded. Armstrong to lead the new AOL. Accountants and Advisors According to several former The charismatic 39-year-old carries www.eisnerllp.com Global capabilities via independent Offices in New York, New Jersey, Long Island and the Cayman Islands membership in PKF International Time Warner executives, one issue a halo of success from his years with any large acquisition was the building Google into an advertising competition for resources among juggernaut. Investors, analysts and the conglomerate’s divisions, with media players lined up to welcome AOL the least favored. But it was him. He arrived in May 2009 with

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When corporate America collides with changing government and political landscapes, its leaders turn a clear strategy. His team, the better to package which now includes them for advertisers.The to Patricia Lynch Associates for trusted advice fellow Google alums like company also insists that President of Global the game is changing. and optimal results. Advertising Jeff Levick, “Anyone can aggregate began simplifying the audiences,” Mr. Levick systems that distribute says, “but if they’re not PLA’s team of seasoned professionals navigates the content across more than engaged, then they’re 100 different brands, fairly meaningless to terrain for you, advancing your cause and bringing your bringing 20 technology advertisers.” As the Web message to the key decision makers. platforms down to two. grows increasingly Mr. Armstrong also crowded, dumped moribund Bebo, “engagement”—typically taking a huge tax write- measured by return visits off; sold affiliate and length of time spent marketing business Buy.at on a site—is harder to and instant-messaging come by.“We’ll continue division ICQ; acquired to have the largest base of StudioNow, a middleman LOGO A-GO-GO: The new highly engaged look has an ever-changing for freelance video background—somewhat consumers, even if [a site] producers; and speeded like the industry itself. is not always No. 1 or No. Government Affairs • Media Relations up growth of Patch 2,” he adds. Media, a network of local But if traffic isn’t the sites. In addition, he launched most important metric, AOL still Seed.com to provide a systems- has its work cut out for it in holding BRAT 1 Pennsylvania Plaza LE I N E G driven, low-cost way to beef up on to the audience it has. About C Suite 1909 AOL’s content offerings and create 10% to 20% of visitors come New York, NY 10119 an extensive database of articles and through the access site, which had 10 212.742.2680 reviews. Relying on algorithms, the 4.7 million subscribers in the first Y E A R S www.plynchassociates.com division identifies editorial needs and quarter, down 26% from the year- assigns low-paid freelance writers earlier period.To grow, AOL’s and video producers to fill them. media properties have to more than albany buffalo new york city panama city, panama Key to the content strategy is make up for that decline, a job that automating the work-flow process, Mr. Armstrong says the staff is which is why engineers have been “maniacally” focused on. At the almost as much of a hiring priority same time, he has to energize the lately as journalists. “AOL started as company’s culture without a tech company, and then with alienating veterans—and pitch a Time Warner, the focus shifted to unified vision to advertisers. becoming a media company,” says Jeff Reynar, head of technology and QUESTIONS, QUESTIONS a former Google engineering “what is ?”asks Kelly Twohig, manager, who works on systems for a director at media buying agency the content sites. “We’re trying to Starcom. “Are they a portal? Are become best-of-breed in both.” they niche sites? They still have Ultimately, the thinking goes, some work to do around defining big-brand advertisers like General themselves as a brand.” Motors and Nike will see AOL as First-quarter results showed the place to reach quality consumers just how much work. Total revenue who habitually visit quality sites fell 23%, to $664 million, with like tech site Engadget, sports- double-digit drops in ad sales. driven FanHouse, women’s lifestyle AOL cites its ongoing New Opportunities. site Lemondrop, AOL Music and restructuring as a factor in the AOL News. And by producing more results. During the same quarter, New York. than 80% of the content it carries, the average monthly number of AOL says, it can promise marketers domestic unique visitors to AOL Since 1961, NEP has partnered with business a more consistent and controlled Properties, which includes mail owners and their management teams to build environment for their products and instant messaging, fell 6%, to than sites that aggregate content 100 million, according to companies into industry leaders. Today, we’re from all over.The company also ComScore. Domestic traffic at pleased to announce the opening of our says that original stories by known AOL Media—the core content writers draw loyal audiences. division—rose 4%, to 73 million. New York offi ce. The company also must over- AN UNTESTED VIEW come skepticism that it can survive 375 Park Avenue the original-content strategy is at its current size, with 5,000 Suite 1009 untested and expensive. Google employees, on revenue from local makes its billions in profits from paid and brand advertising. “To be New York, New York 10152 search advertising, and Microsoft successful, it’s going to have to be a Partner (despite its investment in MSN) lot smaller than it is,” says David John Thomson, from operating-system sales. Yahoo, Hallerman, a senior analyst at 212.380.9311 which recently acquired its own eMarketer. low-cost media farm, Associated AOL could also end up as part Content, aggregates at least 80% of of something bigger—like its content and has a significant Microsoft.Talks to replace AOL’s search business. Facebook sells its soon-to-expire search deal with colossal audience to advertisers Google have fed speculation about without having to pay for content. an acquisition. Both AOL and Furthermore, critics argue that Microsoft declined to comment. advertisers want “scale”—big Mr. Armstrong says brand audiences in one place—and that advertisers will continue shifting www.nep.com it’s easier to advertise on a giant site dollars to the Web, and AOL’s sites like Yahoo Sports, for instance, are poised to benefit. He also knows rather than place ads across niche that AOL can’t spend another 10 properties. years finding itself. “Every day AOL’s plans include grouping matters here,” he says. “We have to the content sites into 17 networks, run the business twice as fast.” 

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Julie and David Koch’s big 2008 donation to New York State Theater at Lincoln Center: $100 million

echelons—and maybe help their own businesses to boot. “People have multiple motives,” says Francie Ostrower, a professor of public affairs and fine arts at the University of Texas in Austin and author of the book Why the Wealthy Give. “Not least of all is Carnegie Hall, Ailey and Cornell überboosters Joan the opportunity to socialize with and Sandy Weill. Their gifts last year alone: other affluent people who are $26 million also professional colleagues.” IN PLAIN SIGHT patrick m cmullan, istockphoto philanthropy pros say giving to arts groups garners the most attention because their buildings are visible land- Stephen and Christine Schwarzman’s 2008 naming-rights gift to the New York Public Library: marks throughout the city for both residents and tourists. ECONOMIC ENGINES: $100 million “Thousands of New Yorkers NONPROFITS will go by the Koch Theater, “Gifts to cultural organizations attract more—Stephen attention— Schwarzman whereas the number of and I don’t know exactly why it’s true.” people who actually go into a wing of a hospital is relatively small, and passersby don’t see it,” says Reynold Levy, president of It’s a Lincoln Center for the Performing Arts. “Universities are not tourist attractions; hospitals aren’t. The arts are a tourist attraction.” Despite the status of the city’s philanthropy thing most prestigious cultural boards, gaining entrée into those clubs is easier than ever. Once a tight-knit group of scions of old wealth, boards Sure, poverty and cancer are vital causes, like the Met’s or the public library’s TOP 5 NYC DONORS have opened up over the years to but ticket to fame here is still the sexier arts LAST YEAR include people from all walks of life—as long as they have money. “Until the 1980s, these boards BY MIRIAM KREININ SOUCCAR were prestigious, and they were dominated by old families,” says eople who regularly read New York’s daily newspapers are likely to Toni Goodale, a fundraising know that oil and gas billionaire David Koch donated a whopping consultant. “In the ’80s, the organizations started growing so $100 million a few years back to renovate the New York State Theater at fast they didn’t have enough money Lincoln Center. And many have heard that Wall Street financier Stephen to fund themselves, so they had to Schwarzman ponied up $100 million for the New York Public Library, open themselves up. And people started seeing they could be on the which is renaming its Fifth Avenue flagship after him as a thank-you. ¶ 1. Fiona and Stanley Druckenmiller board if they gave enough.” But when New York investment managers Fiona and Stanley Druckenmiller Indeed, in 1972, two-thirds of last year gave $100 million to NYU Langone Medical Center to establish a $705M Met trustees were listed in the neuroscience unit, the donation failed to make headlines. And when the couple, who donate Social Register, according to Ms. 2. Michael Bloomberg Ostrower’s research. By 1982, that Pgenerously to organizations that fight poverty and cancer, turned up as the No. 1 giver of 2009 on $573M number had dropped to 44%, and The Chronicle of Philanthropy’s annual list, many in the city’s nonprofit world wondered, “Who?” ¶ by 1992, it had fallen to just 33%. A source close to the Druckenmillers says the couple is “traditionally very quiet about their 3. George Soros The price tag for these kinds of giving.” Yet there’s another reason why they stay under the philanthropic radar: They don’t give board seats isn’t cheap The Met $150M reportedly expects a one-time to the arts. ¶ “What’s sexier? An oncologist or a ballerina?” says Michael Gross, author of Rogues’ 4. Julian Robertson Jr. starter gift of $10 million (almost Gallery, a tell-all about power struggles behind the scenes at the Metropolitan Museum of Art. like an initiation fee at a club), “In New York, the upper reaches of society still value the ballet.” ¶ Giving to places like the Met $66M which Mr. Koch, a new board or the Museum of Modern Art or the New York City Ballet can mean recognition and press 5. Ronald Stanton member there, recently fulfilled when he pledged that amount to coverage for wealthy donors. And joining the most elite cultural boards, which have the most $50M renovate the outdoor fountains at expensive donor-admission prices, offers contributors a chance to rub shoulders with the upper Source: The Chronicle of Philanthropy the museum. Lincoln Center’s

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board expects an annual gift of $250,000, executives there say, BESTS IN BEQUESTS the U.N. Foundation. But after AOL acquired 2000. Her son’s conviction for looting her estate although there are exceptions. Time Warner, the value of Mr. Turner’s shares could boost the standing of the earlier document, Such amounts mean little to Highs (and lows) in giving plunged 60%. By last year, he reportedly was which leaves $190 million to charity, including $15 billionaires like Mr. Schwarzman, SAY IT WITH FLOWERS A reported $4 million $250 million behind on meeting that billion. million each for the Met and the NY Public Library. self-made chief executive of The endowment from late Reader’s Digest co-founder Blackstone Group, a private equity Lila Acheson Wallace pays for fresh flowers each ROSES’ TURN Frederick and Sandra Rose’s $20 DOG DAZE Leona Helmsley’s partnership that went public in week—forever—in the Great Hall of the million gift in 1995 for the Rose Center for Earth pooch, Trouble, was left a $12 2007. He says he chose the library Metropolitan Museum of Art. and Space increased the size of the American million trust fund when her owner for a substantial gift because it helps provide educational access to lower- Museum of Natural History by 25%—and created died in 2007. A judge later pared income New Yorkers, and because AS THE WORLD TURNERED Media an immediate architectural standout. the amount to $2 million, enough he thinks the nonprofit is mogul Ted Turner announced in to easily cover the $200,000 a “exceptionally well-managed.” 1997 a donation of $1 billion— WILL OR WON’T? Brooke Astor died at 105 with two year it costs to care for the critter. Mr. Schwarzman donates to a third of his wealth—to create contested wills: one from 2002 and one from —CARL GAINES

many causes, such as the Inner- bloomberg news City Scholarship Fund and the Red Cross, and he recently ended his chairmanship of the Kennedy Center, where he often shared his box seats with President Barack Obama. “Gifts to cultural organ- izations attract more attention— and I don’t know exactly why it’s A meeting that true,” he says. “Cultural institutions are mostly privately funded in this country. Relying on private philan- appeases everyone’s thropy to maintain and develop them is just part of our culture.” Still, culture may be losing some requests, even accounting. cachet. It’s not in vogue with the tech billionaires on the West Coast, where Bill Gates famously funds Conveniently located in the heart of Connecticut, halfway such developing-world causes as greater access to fresh water and between New York City and Boston, Mohegan Sun will always vaccinations. Instead of a night at exceed your expectations while diminishing your meeting cost. the opera wearing Oscar de la Renta, it’s a week in Malawi With 100,000 square feet of meeting facilities, a Mohegan Sun sporting khaki safari vests. And younger donors often seem more meeting includes free wireless Internet and 24-hour parking, interested in pursuits like fighting plus premium catering and helpful service to make your event poverty or improving educational opportunities for inner-city kids. a memorable experience. So if big city prices are a problem, “Tech guys and hedge fund guys would rather develop electric cars make Mohegan Sun the solution to your next big meeting. and eradicate malaria, and you can’t criticize them for that,” Mr. Gross says. “There is a new model being created, and it doesn’t bode well for Visit mohegansun.com/meeting-solution for more information traditional cultural philanthropists.” or contact hotel sales at 1.877.204.7100. GIFTS THAT KEEP ON GIVING culture executives don’t seem too worried, and with the number of record gifts they’ve been receiving— even in the Great Recession—it seems they have little reason to be. At Lincoln Center, Mr. Levy’s board has grown by nearly two-thirds in nine years, to 70 members from 43. “We’re the wealthiest country in the world, and we have an enormous number of people who are fortunate and wealthy and have diverse experiences and interests,” Mr. Levy says.“I couldn’t be more pleased with eliminating malaria, but I don’t think it comes at the expense of the arts.” Arts groups are enjoying a renaissance with donors, Mr. Levy says, noting that news of a major donation becomes a sort of gift that keeps on giving. “The arts have attracted significant attention in part because they’ve received a number of mega gifts of historical significance,” he says. “Large, $100 million gifts call attention to the arts as an important area for philanthropy.” 

VIDEO More on the rules of the New York giving game @ www.crainsnewyork.com/ anniversary

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25TH ANNIVERSARY ISSUE COLUMBIA FORDHAM THE NEW A 17-ACRE THE BRONX-BASED SCHOOL MANHATTANVILLE CATHOLIC UNIVERSITY WITH ITS DEGREE- CAMPUS, NORTH OF WILL SPEND $1.3 SEEKING STUDENT THE IVY’S CURRENT BILLION OVER THE POPULATION UP 25% BASE, WILL COST $6 NEXT TWO DECADES IN THE PAST FIVE BILLION, TAKE 30 TO EXPAND ITS YEARS, THE SCHOOL YEARS TO FINISH AND LINCOLN CENTER IS BUILDING A 16- ADD MORE THAN 6 CAMPUS WITH DORMS STORY, $352 MILLION MILLION SQUARE FEET AND NEW FACILITIES ACADEMIC CENTER OF TEACHING, FOR THE LAW SCHOOL AND STUDENT RESEARCH AND AND GRAD SCHOOLS HOUSING FACILITY IN RECREATIONAL OF BUSINESS AND GREENWICH VILLAGE FACILITIES. EDUCATION. THAT’S SLATED FOR COMPLETION BY 2013.

CUNY NYU PROJECTS COSTING ST. JOHN’S ITS 20-YEAR MASTER A TOTAL OF $3.4 BY THE END OF PLAN SKETCHES OUT BILLION ARE IN THE THIS DECADE, THE 6 MILLION NEW WORKS AT CITY QUEENS-BASED SQUARE FEET FOR UNIVERSITY OF NEW UNIVERSITY WILL FACULTY, DORMS YORK’S COLLEGES, HAVE SPENT MORE AND ACADEMIC INCLUDING THAN $200 MILLION PROGRAMS IN $705 MILLION IN ON NEW STUDENT GREENWICH VILLAGE SCIENCE AND HOUSING, AN AND AT SATELLITES RESEARCH FACILITIES ACADEMIC AND NEAR DOWNTOWN AT CITY COLLEGE AND STUDENT CENTER, BROOKLYN AND ON A $600 MILLION CLASSROOMS AND GOVERNORS ISLAND. EXPANSION AT JOHN ATHLETIC FACILITIES. JAY COLLEGE.

ECONOMIC ENGINES: EDUCATION We’re College Town USA

in March from 82,700 in March public school and other Economic Impact 101 of NYC’s ivory powers 2000, says Jonathan Bowles, community goodies. Greenwich director for the local think tank Village activists are hammering Center for an Urban Future. NYU’s push to add millions of BY CARA S. TRAGER The students attend schools Meanwhile, manufacturing jobs square feet to its downtown that are continually upgrading fell 55%, to 80,000. “Higher base. And a $150 million state their facilities and faculties and education’s impact and funding shortfall is delaying a ew york may not have a college- drawing ever more applicants, importance have gone through new science center for City town rep like Boston or Austin or increasingly from out of state. the roof,” Mr. Bowles says. College of New York. Berkeley—but it should. More than Longtime “commuter” school Looks like it’s time to raise It’s all well worth the fight in Queens College opened a 600- that roof. NYU and Columbia the end, Mr. Bowles figures. 110 postsecondary schools thrive bed dorm last fall, with residents University are pursuing Research facilities like the one here, powering the city with a unique who hail from as far as Japan. ambitious expansions of their City College hopes to build can economic engine. ¶ “New York City Grads use their education as campuses—as is just about serve as draws for top-notch is the quintessential college town,” a ticket to employment or every local institution of note students—and as foundations entrepreneurship. NYU, for (see above for some examples). for high-tech activity on par insists John Sexton, president of instance, reports that a large But with big growth come big with development in the Bay New York University. ¶ The city hosts about 600,000 full- and percentage of its graduates challenges, especially when Area and Boston. Npart-time students at undergraduate, graduate, professional remain in the city to work. gown meets town. Columbia “We’re not fully harnessing and religious institutions—more than Los Angeles, Chicago And universities create jobs secured local support for its our universities here,” Mr. Bowles on campus. Employment in planned Manhattanville explains, “until they become and Washington combined. Downtown Brooklyn’s college higher education here swelled campus only after agreeing to major catalysts for startups and population, at nearly 48,000, is larger than Cambridge’s. 20% this past decade, to 99,700 fund affordable housing, a new ongoing technology firms.” 

62 | Crain’s New York Business | June 28, 2010 Project6:fp template.qxd 2/23/10 12:02 PM Page 1

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25TH ANNIVERSARY ISSUE

by Barbara Q&A Benson Berger: NY’s messy health system primarily needs primary care IN HIS LONG CAREER, STEPHEN BERGER has held high positions in the private and public sectors, including a five-year stint as head of the Port Authority of New York and New Jersey. In 2005, Gov. George Pataki appointed him to head the Commission on Health Care Facilities in the 21st Century. In its final report, issued in November 2006, what became known as the Berger commission mandated hospital and health care facility consolidations, closures, conversions and large-scale restructurings to create a more efficient health care system across the state. Today, says Mr. Berger—now the chair of Odyssey Investment Partners—New York still has too many inpatient beds, and much work is still needed.

Q.Q What should be on the state’s agenda at this point? A.A We need to continue to evaluate and shrink acute care, really look at all the components of care as a single network, not as silos of care. What the state should be doing is going step by step to shift Medicaid reimbursement to create more primary care, and to take out additional hospital beds. I’m looking to reallocate those dollars to cover more people at far less cost. We ought to have a long-term program that focuses more on reducing costs and making access better. We have to begin to think of quality of care and delivering services to the VISION THING: customer instead of just taking care of all the providers: the When Dr. Robert hospitals, nursing homes, unions. Grossman took over In addition, we have to educate people on what is good NYU Langone health care. A hospital on the corner is not necessarily health Medical Center, his care. In a city like New York, there should be a balance of goal was to grow in terms of quality and clinics, primary care and tertiary care. capabilities rather than size. Q.Q What are the impediments to taking those next steps—to reduce costs and improve access to care? A.A Politics, unions, hospitals. buck ennis Q.Q How can they be overcome? A.A This is going to sound terrible, but you need a situation of ECONOMIC ENGINES: HEALTH CARE unavoidable crisis and financial disaster to force the political leadership and the players to do some very tough stuff.

Q.Q You talk about more primary care. How can we get it? A.A You change reimbursement to pay reasonably and pay Can hospitals thrive? for quality. You get EMR—an electronic medical record system. And then primary care gets hooked into the acute care system. You make that the primary goal of the state. It’s a 10-year program, but you’ve got to do it. NYU offers an answer Q.Q What are some of the changes we’ll see if we emphasize primary care services over hospitals? A.A In five years, emergency rooms will be less crowded, because people will be going to doctors’ offices more. We Secrets to Langone Center’s success: Be big, will have people cared for at home, because frankly, we can monitor their blood pressure every day from a central station. be wisely managed. Powerful trustees a plus Q.Q What reforms are necessary for Medicaid? A.A One: Restructure reimbursement. It does not make any BY JUDITH MESSINA sense to pay $43,000 for a hip replacement. Two: Reduce the number of excessive procedures. n a glassed-in studio in the vast lobby of NYU Langone Medical Center, a Three: Reform the high cost of medical malpractice premiums, which will stop defensive, expensive medical revolving cast of top physicians hosts Doctor Radio, dispensing medical insights via procedures. Sirius Satellite Radio.The daily show’s growing nationwide audience is evidence of Four: Use EMR and other technology that monitors health the success of NYU’s aggressive campaign to establish itself as the go-to place for data to improve home health care. top-notch care, but it’s far from the only sign. ¶ NYU ranked 17th nationwide in And lastly, we refuse to face the issues of the last 180 days of life. Often the terminally ill are kept alive through U.S. News & World Report’s list of America’s best hospitals last year, after landing a major interventions, and the process of dying is prolonged Leapfrog Award the year before as one of the best institutions for patient safety. unnecessarily. We are not dealing with the needs of the (New York-Presbyterian ranked higher on the list, at No. 6.) ¶ Earlier this year, dying, but the assumptions and needs of the living. It is also wrong morally, and massively expensive.  Standard & Poor’s jumped on the bandwagon, hiking NYU’s long-term bond rating by two Inotches to BBB, citing the medical center’s higher earnings and improved management. Not bad for an institution seen 25 years ago as a second-string player—and one that just a few years ago

64 | Crain’s New York Business | June 28, 2010 buck ennis 20100628-NEWS--0064,0065-NAT-CCI-CN_-- 6/24/20108:13PMPage2 Hill beingthelatestaddition. Manhattan’s Lenox institutions, System’s growing network of15 Health IslandJewish Shore-Long York andNorth Hospitalmerger, the Columbia-Presbyterian andNew Witness their wagonstoexpansion. havehitched Others make money. focusing onkeepingbedsfullto thansimply program—rather enrollees initscare-management 155,000 serving care—fully hasembracedmanaged for one, Montefiore, different approaches. Center.Medical management atSUNYDownstate and ofhealthpolicy chair Berliner, Howard says well,” very done very, centers]have medical academic factis[thecity’s “The trustees. andpowerful have lotsofrich managed—andto big andsmartly istobe as NYUisdemonstrating, trick, fortheuninsured.The caring sky-high costsandheavyburdenof despitethecity’s thrive hospitals can center.” medical integratedacademic class, ourvisionistobeaworld- “Now, says. Grossman I. Executive Robert Chief ofexcellence,” pockets wehadwere “What Center. Medical disastrous mergerwithMountSinai itselffrom a extricating was still ne NYUwasinthe Once, that offbytaking pulled They’ve NYU’s successisproof that the organization.Bestwishesfornext25years. community for25years.GrantThorntonisdelighted tosupport Crain’s NewYork Businesshasbeenavitalforceinthebusiness at [email protected]. Contact JackKatz,ManagingPartner, MetroNewYork, and managedaccountingconsultingfirms. Grant ThorntonreferstoLLP, the U.S.memberfirmofGrantThorntonInternationalLtd,anorganizationindependently owned example, itbuiltanewout- has emphasizedlower-cost ain ugclfclt at facility patient surgical its First Avenue complex. its First Langone MedicalCenter IN RECENTYEARS, NYU OUTPATIENT 052009 2005 11,224 outpatient care.For SURGERIES 28,453 NYU Other bigbuildinginitiativesaround Other as brainagingandprostate cancer. the labtobedsideinsuchfields research bringing from excellence,” “centers interdisciplinary new of neuroscience centerandsixother $100million anew push hasyielded thansize.That rather capabilities and ofquality interms growing heconcentratedon in 2007, upthepieces. time picking spentmuch ofhis until2007, years, whoheadedNYUforsix Glickman, Robert Dr. separate theirjointdebt. butitstilltookuntil2006to 2003, held ontoitsown boardoftrustees. Eacheven departments. clinical operate theirown schoolsand conduct theirown research and Both institutionscontinuedto efficiencies andthebottomline. improving operating significantly or eliminatingoverlaps operations, dashed anyhopeofintegrating soon however, egos, faculty clashing hospital fortheirnetworks. amust-have NYU-Mount Sinai withinsurersleverage andtomake time wastogainnegotiating ideaatthe beyond $2billion.The count to2,165andpushedrevenues that overnight raisedthetotalbed ina1998merger with MountSinai linking aswell, expansionist camp hnD.Grossman tookover Dr. When splitby The twohadmostly and rivalries Interdepartmental profitable patientmixforNYU. magnet nextdoorensures amore buthavingapublic salaries, doctors’ reimbursements don’t cover the sinceinsurance that effort, andlosesmoneyon Bellevue staffs thatNYU It’s true beyond. city aswellmanyfrom the patients, area’s anduninsured Medicaid public institutiondrawsmostofthe famed nextdoor.The Hospital right havingBellevue from aquirk offate: truth betold, A MEDICAL ARMS RACE hasgiven$200million. Depot, thefounderofHome Langone, BoardChairmanKen year. each gave$100millionormore last heeled New trustees Yorkers.Three with Wall andotherwell- Streeters peppered help ofaboardtrustees $800 millioninthree yearswiththe raisingnearly fundraising machines, into schoolhavemorphed medical equipment. ofsurgical up sterilization physicianstospeeding new hiring from streamlining theprocess for teams haverethought everything Management need tostayovernight. timebutdon’tas adayofrecovery patientswhoneedasmuchsurgical addingbedsfor outpatient care, lower-costmidtown emphasize NYU’s Avenue First complexin Making money in a city withso Making moneyinacity thehospitaland Meanwhile, NYU alsobenefits government willrewardquality.” andthe “then peoplewillcomehere, heexplains, readmission rates,” lowest infectionratesandlowest wehavethebestoutcomes, “If out. win will patient-centered strategy insists thatNYU’s high-quality, toreintries inhospitalcosts. become liabilitiesas Washington anomaliescould demanding.Those costs are higherandpatientsmore institutions butwillfeelthepain. reform betterthansmaller will hospitals, other U.S. more procedures perpatient than longer lengthsofstayandperform whichhave York hospitals, City NYUandotherNew standards. and mustperformance meetstricter they standtoloseMedicaremoney insured rules, patientsunderthenew getmore hospitalswill While New York more thananywhere.” armsracein “It’s amedical School. CollegeandMedical Dartmouth aneconomicsprofessor at Skinner, Jonathan says by doingmore stuff,” respond they there’s competition, “When equipment andspecialists. buildings, fund more research, sumsofmoneyto raise ever-bigger NYUanditspeers competition, easy.Tonever keepupwiththe institutionsis many majormedical nane,D.Grossman Dr. Undaunted, hospitalCEOssaytheir Local Then there’s healthcarereform. 8 2010 June 28, | Crain’s New York Business weather  | 65 20100628-NEWS--0066,0067-NAT-CCI-CN_-- 6/24/2010 6:03 PM Page 1

25TH ANNIVERSARY ISSUE

ECONOMIC ENGINES: ENTREPRENEURS Small now, but probably not for long These NY business owners are thriving in some of city’s fastest-growing sectors

BY CARA S. TRAGER FEAR NOT: Larry Dolin’s American Security promises less angst. photos: buck ennis Security blanketed IN 1979, advertising exec Larry Dolin “Once you start on the acquisition trail unsuccessfully made a pitch for the ADT and learn how to integrate the acquired Security account. But his efforts weren’t in business into your own, it becomes easier vain. Mr. Dolin’s ADT marketing plan and and allows you to eliminate duplicated newfound knowledge of the industry both costs, like collection, service and convinced him to start an alarm company monitoring,” says Mr. Davis, whose firm and also helped him score Henry Luce III, facilitates about three dozen roll-ups a scion of the Time Inc. fortune, as his year in the alarm business. business partner. American Security’s portfolio of SCREEN GRAB: “His signature was critical to the acquisitions also includes a fire alarm Seth Besmertnik’s startup,” says Mr. Dolin. installation and service firm that handles firm, Conductor, Mr. Luce died in 2005, but not before “buildings with beds”—nursing homes, improves search results for clients. signing an agreement that gave Mr. Dolin hotels, assisted-living facilities—that are full ownership of the firm, required by law to maintain which now has 60 employees their smoke detectors. and generates $10 million in Everything Not every acquisition annual revenue. Based in changed after has been a winner. In one Hardwired for software Long Island City, Queens, case, Mr. Dolin purchased a American Security Systems 9/11, of course. company whose service CONDUCTOR INC. isn’t a real estate measure the fruits of their SEO efforts. Inc. saw average yearly contracts brought in company, but it’s as driven by the mantra Subscribers pay $35,000 to $210,000 revenue gains of 15% from Especially the $65,000 every month, but “Location, location, location” as any annually.“Paid ads are working well, but 2002 to 2008, thanks to a city the previous owner’s subpar property outfit can be. Since its launch in companies could do more,” says Mr. jittery about terrorism and market for repairs had left customers 2005, the software firm has boosted Besmertnik. “Natural search results are an crime and a slew of security with little protection customers like Marriott and New York untapped opportunity.” and safety products aimed at security against burglaries—and Life repeatedly into the top spots on search Conductor is on track to reach $18 calming New Yorkers where services forced American Security engines like Google, Yahoo and Bing. million in revenue this year, after attracting they live and work. to rebuild the faulty alarms Its search engine optimization, or SEO, $12 million in venture capital between “The World Trade Center at its own expense. software helps a website appear as high as 2007 and 2009. FirstMark Capital, which has made people rethink their safety in the As a result, Mr. Dolin has also grown possible in natural search results (as helped provide early-stage VC funding to world and what they can do to add his firm organically, offering an ever- opposed to high placements Conductor in late 2006, protection,” says Ron Davis, president of expanding menu of services and products via paid ads). “The higher couldn’t be more satisfied. “It Davis Management Group, a Long Grove, that placate New York’s angst-filled the listing, the more clicks it Talk about was an opportunity to align Ill.-based business broker in the security developers, property owners and residents. gets,” says Seth Besmertnik, with a visionary young alarm field. Mr. Davis estimates that the In 1995, American Security responded a Conductor co-founder and growth: The entrepreneur who had gotten country has 50% more security systems in to a request for proposals to install its chief executive. 70-worker great initial traction with place today than a dozen years ago. telephone-entry intercom systems for the Natural search results leading Internet marketers in While agita has played a role in fueling New York City Housing Authority—a account for 92% of all search firm is in its an important market: natural American Security’s growth in New York, relationship that has culminated in service engine click-throughs, says search,” says Amish Janis, a so, too, has Mr. Dolin’s marketing contracts at 1,500 buildings. market researcher comScore. fourth home FirstMark managing director. prowess. Early on, after launching an And three years ago, it introduced the Yet companies clearly are The growth spurt extends ineffective direct-mail campaign, he Video Doorman, a technology that willing to go the paid-ad in four years to the employee roster, too: struck gold with ads on a local classical- enables American Security to remotely route—spending $15 billion The 70-worker firm is looking music station, selling 200 alarm systems give delivery people access to a building’s on paid search engine ads in to fill some 25 positions, after within a year to well-heeled home owners. package room while monitoring, the U.S. alone last year, according to making key hires last year such as a chief Mr. Dolin bought about half a dozen videotaping and verbally directing their Forrester Research—because it provides a financial officer and a senior vice president smaller companies between 1985 and every move. More than two dozen quantifiable return on investment. of worldwide sales. Conductor’s new 2005, providing him with recurring buildings have installed the product, With that kind of payoff in mind, digs—16,000 square feet dotted with revenues from existing service contracts which includes speakers, transmitters and Conductor has devised a subscription- plasma TVs—is its fourth home since and central-station monitoring. American cameras; it carries a $20,000 price tag and based software to help companies not only 2006, and apparently won’t be its last. Security also was able to expand its a monthly fee of about $1 a day per land on top of the heap in free search “My goal now,” Mr. Besmertnik says, “is customer base—critical for a business apartment. engine listings but also improve the to be the biggest indie tech company to heavily reliant on referrals—and achieve “It’s all about taking control of the volume and quality of their traffic and ever come out of New York City.”  economies of scale. lobby,” says Mr. Dolin. 

66 | Crain’s New York Business | June 28, 2010 photos: buck ennis 20100628-NEWS--0066,0067-NAT-CCI-CN_-- 6/24/20106:04PMPage2 Creative coalitions Shriber, whose seven employees whoseseven handle Shriber, Ms. says down,” keepmyprices Ican day, “At theendof $10,000 ayearinrent. move savesher makers.The clothing building thatofferstaxincentivesto inagarmentdistrict 5,000-square-foot loft production facilitiesandofficeintoa consolidatedhershowroom, Shriber Ms. year, Last sluggish real estatemarket. Nayyar observes. Mr. ” America,’ of themarket thatvalues ‘made in “There’s asegment dominated byimports. distinguishes thecompanyinanindustry italso isn’t convenient; merely yetaren’t ontheirpayroll. offices, intheirclients’ exclusively work consultants often technology,information Andin wiper producers. suchaswindshield makers, plants tocomponent spacewithintheir allocate companiesoften instance, for the automotivefield, In SchoolofBusiness. Stern at New York University’s aprofessor Praveen Nayyar, says other industries, is apracticecommonin forPrairie. produces exclusively aslongit bills, its telephoneandutility underherroof andtocover seamstresses, some15 including its entire operation, manufacturerdeal withacontract tohouse a struck Shriber Ms. yearsago, Five plant. itsown thecostsofrunning shouldering without awaytoofferfastdelivery devised retailer wants25pieces.” provide immediateturnaround timeifa “and Ican says, Shriber Ms. control,” givesme quality “That digs. Street Prairie’s goodsare madeinits West 38th Instead, that overseas producers require. of thelongleadtimesormegaorders year-old Prairie New York havenone will founderof16- so forDanielleShriber.The Not abroad. meansmanufacturing usually MAKING IT MAKING Prairie hasalsoprofited from the on-site manufacturing In Prairie’s case, Hosting avendoron-site Her women’s companyhas sportswear in its own space. York’s goods made has Prairie New Danielle Shriber CONTROL: QUALITY as aNew York garmento surprised You’d be manufacturers? from auto designers learn clothing What can I thoughtthatwaskindofboring.” “And shesays. justindifferent colors,” year, ready-to-wear market sixyearslater. women’s beforethe accessories entering sheswitchedinto In1999, category. tiedtothemen’s Shriber keep Ms. andPaul wasn’tSaks Stuart enoughto intoherdesigns. of fabrics workers toturnbolts several hiring scarves, she beganmakingmen’s woolandsilk besidescufflinks, could do “anything else” whethershe Shriber askedMs. distributor, shesays. guide me,” hadmymotherto “I apparel collections. tocreate modernand she hadanepiphany: onMadisonAvenue.There, Store Lauren attheRalph shesoldantiquejewelry a job, waiting tohearfrom mediacompaniesfor Butwhile notready-to-wear. broadcasting, envisionedacareerin hadinitially Shriber Ms. with adegree injournalismandfilm, $2.5 million. expects toreturn revenues of to2008-level Prairie sales plummeted20%lastyear, After Arabia. andSaudi Singapore in Italy, Bloomingdale’s afield, andtoshopsfarther Macy’s and Neiman Marcus, companysellstostores like a dress.The retail from $175foratopto$365 prices fetch Itsofferings 25 and35yearsold. making topublicrelations andsales. from designandpattern everything “Men can buythesamethingevery can “Men But acustomerroster thatincluded alargeJapanese acustomer, When graduate University A Northwestern Prairie’s core between customersrange einr formleatherinto a designer, hours watchinghermother, hadspent Shriber Ms. child, Asa shesays. familial roots, represented areturn toher Rhode Island. manufacturer in jewelry her renderingstoacostume items andthendispatching sketchingthe business, into theaccessories shedove from herparents, funkycufflinks. even Her entry intodesign Her entry a$10,000loan With  Stepping tothe plate “Seize the moment.” He called his company Hecalled themoment.” “Seize and sentimentslike do sports focused” “Stay $15 kidshisartistic local T-shirts withcan- outin2003byselling started hard Metsfan, Ferraro. accordingtoMr. sales slide, outlastyearwitha7% struck 5% ayear, grows whichhistorically goods industry, the$105billionsporting Incontrast, year. Medina thinksrevenue willdoublethis Mr. from $1.2millionin2008. $2 million, to scored a66%increase insaleslastyear, the18-employee business on ballfields, advisesCTG. firm thatoccasionally amarketing andconsulting Solutions, L.I.-basedUnisource Global Ronkonkoma, who alsoisthepresident of Ferraro, Mr. says difficult,” isvery the topechelon where reaching the sport, Association. Goods Manufacturers treasurer oftheSporting theexecutive Ferraro, accordingtoCarl fail, and 60%ofthebusinesses andSpalding— Slugger oldest—like Louisville brands are alsothe of themostsuccessful where many goodsindustry, the sporting products. Athletics’ useCTG Javier Vázquez ofthe Yankees, BeltránoftheMetsand Carlos including players on18professional teams, About200 also tomajorleaguefranchises. andBaseballExpress and Champs Sports chains likeModell’s Goods, Sporting Bronx companysellsto seven-year-old andaccessories.The cleats gloves, bats, amanufacturer ofbaseball Athletics Inc., equipping baseballplayers. field thatcouldkeephiminthegame: heslidintoa So to playprofessionally. hedidn’t realized ultimately havetheskills JorgeMedina, University’s baseballteam, AN INFIELDER r eia aBronx nativeanddie- Medina, Mr. itsgrowing brand-namepresenceWith much mirrors very “It CTG’s are noeasyfeatin homeruns Medinaisthepresident ofCTG Mr. on Fordham the amateurs pros aswell appeals tothe equipment that seller ofsports name makerand A buddingbrand- signed on as partners with small signed onaspartners fourbaseballplayers (In2008, company. 20%ofthe acquiring $7.5 million, ithasinvestedanadditional then, Since forked over $500,000incapital. family, awealthy whoseclient, to anattorney Medina connectedMr. president ofsales, for hisown batfactory. Medinaputting togetheraproposal had Mr. andlateshipments soon inconsistent quality vendor’s Anearly million-dollar payday.” sinceit’s thetoolthat “gives thema bat, new outa players wouldbeamenabletotrying Hebelieved adding batstohislineup. Vegas sixyearsagofueledhisinterest in goodstradeshow inLas tothesporting trip A tocreate toballplayers buzz. the shirts andsent for “Controlling theGame,” CTG, the word but descent, Medina of Latino isMr. only Not provides amarketable ethnicidentity. Verdero also goodsarena, fledged sporting wants tosupport.” community and abrandthattheLatino hasaname “Jorge Ferraro observes, Mr. wonover African-Americans, line FUBU clothing Justasminority-owned Spanish. nhn ooe CTG’s seniorvice Anthony Covone, Beyond CTG driving intothefull- MEET MORE ENTREPRENEURS MORE MEET Athletics. game as president of CTG Jorge Medina stays in the A HIT WITH BALLPLAYERS: @ with great growth prospects growth great with www. verdero 8 2010 June 28, crainsnewyork.com/ anniversary shoes toitsapparel. from thelabel’s everything thatproduce with factories ongoing contracts includes purchase International.The Brands Sport company, wear from Fila’s parent Verdero ofbaseball brand company acquired the the N.Y., in Jamestown, opening itsbatfactory after CTG.) retains a72%stakein Medina Mr. percentages; en tu aro”in patriot” means “true n20,three years In 2007,  | Crain’s New York Business | 67 20100628-NEWS--0068,0069-NAT-CCI-CN_-- 6/24/2010 6:05 PM Page 1

25TH ANNIVERSARY ISSUE

Est. 1943 Est. 2005 Est. 2008 Company name EMERALD INN Company name BIN 71 Company name MAGNOLIA BAKERY Address 205 Columbus Address 235 Columbus Address 200 Columbus Type of business Irish pub Type of business Wine bar Type of business Desserts Last blocks standing

Columbus Avenue Business A solid stretch of Columbus Ave. remains home Improvement District and owner of $275 35 properties on the Columbus to mom-and-pops. Big chains need not apply strip. “Broadway is where the stores are huge.” The small footprints on BY ADRIANNE PASQUARELLI Columbus can work especially well for specialty shops run by dozen years ago, Maya Schaper’s tiny Upper West Side cheese shop merchants like Ms. Schaper, who morphed into the bookstore backdrop for the Meg Ryan and Tom has sold gourmet cheeses and gifts Hanks movie You’ve Got Mail, a flick that spotlighted the lethal fight on Columbus Avenue for more between beloved mom-and-pop shops and the big, bad chain stores than two decades. She recently $138 relocated to her current 220- that were driving them out of business. ¶ In the movie, Ms. Ryan’s square-foot West Side Cheese Co. bookstore succumbs to its nemesis. Ms. Schaper is one of dozens of shop, between West 70th and West Columbus Avenue shop owners who have a happier tale to tell. ¶ 71st streets, after she and a business Because of neighborhood residents’ loyalty, landlords’ support and partner parted ways. specialized products that can’t be found everywhere, small stores along Columbus Avenue ATTENTION MUST BE PAID betweenA West 67th and West 82nd streets have been able to survive even as chains invade many “i have interesting things that other areas of the city. ¶ Although the avenue has its share of chain stores—there are a few ’85 ’10 other people don’t have,” says Ms. Schaper, who, like many of her Starbucks and even a Supercuts on the corridor—it has for the most part remained true to its AVERAGE RETAIL neighbors, refuses to be intimidated roots. In fact, there are even a few blocks on the avenue made up of only independent shops, a by the onslaught of chains popping true anomaly when it comes to Manhattan real estate. ¶ One explanation is the local architecture: RENTS PER up across the city.“I offer personal The mostly older buildings on this stretch of Columbus offer tiny storefronts—500 square feet SQ. FT. attention.” The mom-and-pop brigade here, 1,000 square feet there—that big chains just can’t squeeze into. ¶ “The spaces are too small ON COLUMBUS Sources: Real Estate Board of took over the strip between Central to attract national chains, which must have large spaces,” says Robert Quinlan, chairman of the New York and real estate brokers Park West and Amsterdam Avenue

Est. 2010 Est. 1994 Est. 1970 Company name BOMBOLONI Company name BRIEF ENCOUNTERS Company name GOTHAM FOOD Address 187 Columbus Address 239 Columbus Address 273 Columbus Type of business Desserts Type of business Lingerie Type of business Deli

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THE ORIGINALS Local chains with a NY personality THE CHAINS didn’t start with Starbucks, which made its first New York City foray in 1994, or superstore Kmart, which opened the door to big-box retailers in Manhattan when it leased space here 14 years ago. “You had all of this new frontier,” says Faith Hope Consolo, chairman of retail leasing at Prudential Douglas Elliman, referring to the onslaught of national retailers attempting to woo Big Apple shoppers for the first time. “Seattle took New York with Starbucks. The suburbs took the city with Kmart.” But before these arrivals, Manhattan had its own breed of multistore retailers, including the following. Crazy Eddie The electronics store, which was founded in Est. 1984 Est. 1970 1971 in Brooklyn, was known for its insanely low prices and its Company name MAXILLA & MANDIBLE Company name WEST SIDE PHARMACY insanely high-energy TV commercials. Before the chain’s 1987 Address 451 Columbus Address 255 Columbus Type of business Gift shop Type of business Drugstore collapse due to tax evasion, fraud and money laundering perpetrated by owners Eddie and Sam Antar, it had more than 40 stores in New York, New Jersey, Connecticut and in the 1970s and 1980s, when Ms. DeBiase used to work for strips like West Broadway in SoHo. Pennsylvania. Columbus Avenue underwent a fashion companies but struck out By contrast, in areas such as Madi- Bolton’s Founded in 1963, cultural overhaul. Once a home to on her own in the mid-1990s to son Avenue and some side streets in drug dealers and prostitutes, the open Brief Encounters. National Chelsea, rents have dropped by as it was one of the first off-price avenue began attracting yuppie chain stores have yet to touch her much as 50% since 2007. women’s clothiers in New York residents and cutting-edge tenants, block, between West 70th and “Two years ago, rents weren’t City and at one time had more such as fashion designer Betsey West 71st streets. As far as she’s much more,” says Rafe Evans, a than 20 locations in the tristate Johnson and food store The Silver concerned, her business will stay vice president at real estate area. Competition forced the Palate. local and highly focused forever. brokerage Walker Malloy & Co., chain into bankruptcy in 1992. Among the long-term tenants is “I can be here 100%, so there’s who has lived in the Columbus It is now owned by New Jersey- Gabor Szanto, who owns a hair not a moment when a client does neighborhood for 22 years. “There based A & E Stores Inc., which salon at 222 Columbus Ave. Mr. not get what they need from me,” is a sense of community in the area— owns similar chains like Szanto occupied a smaller space Ms. DeBiase says. “Two stores there’s a strong small-town feel.” Strawberry. when he began his business in changes that.” Some landlords also cherish the Ricky’s Since its 1989 1994—the same time the city She just renewed her lease for idea of unique, original stores that launch as a beauty-and- began to reconstruct the avenue. A another 10 years, and she has no serve local residents and even attract cosmetics store, Ricky’s has massive two-year project replaced plans to expand. tourists. Columbus Avenue landlord evolved into an edgy mini- water pipes, sidewalks, roadways George Beane says he appreciates empire that is the go-to and lighting between West 59th SURPRISINGLY FEW VACANCIES “the flavor of the Upper West Side destination for costumes, and West 110th streets. As a result, the recession may have brought as it has been for a very long time.” quirky gifts and beauty items. more than 20% of businesses on the out the small-town popularity of Big chains certainly can pay a In addition to operating strip were forced to close. Mr. Columbus to an even greater landlord more, he concedes, but “I nearly two dozen permanent Szanto was among the survivors, extent. Most stores on the strip personally prefer not to have mall locations, the family-run store but he remembers the dusty years have survived the latest downturn, stores,” he says. “National tenants sets up a series of temporary with dismay. while vacancies are at all-time don’t necessarily pay as much Halloween shops every fall. “It was a horror, an absolute highs in other parts of the city. attention to the character of the Duane Reade The drug-and- nightmare,” says the Budapest Barbara Adler of the Columbus neighborhood as the mom-and- convenience store, which began native. “That’s when I established Avenue BID says there are only  pop stores.” in 1960 and is famously named myself. Columbus Avenue has two vacancies in her district, which after its first warehouse between always had that allure for new spans the 15 blocks north of West businesses as a place to test out your 67th Street. VIDEO Meet the shopkeepers, Duane and Reade streets downtown, was one of New York’s last concept.” Asking rents on the corridor step inside their stores, hear their independent chains. It was acquired for $1.1 billion earlier this Other Columbus veterans, like have also held steady, at nearly $300 tales of retail survival in NY year by giant Walgreen Co. Now, New Yorkers are left wondering Phyllis DeBiase, who runs a 400- per square foot—a high price @ www.crainsnewyork.com/ how long it will be before the Duane Reade name disappears. square-foot lingerie shop on the during a recession and $100 per anniversary —ADRIANNE PASQUARELLI corner of West 71st Street, agree. square foot more than on trendier

Est. 2001 Est. 1990 Est. 1995 Company name ALICE’S TEA CUP Company name ARTISTE JEWELERS Company name ROSLYN Address 102 W. 73rd St. Address 223 Columbus Address 276 Columbus Type of business Coffee and tea Type of business Jewelry Type of business Hats and jewelry

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25TH ANNIVERSARY ISSUE

photos: buck ennis

giants in the volatile real estate business: A budding financier, The Related Companies, SL Green and formed in the crucible Vornado, respectively. His mother once Coming of a financial panic worked as a model in the garment district. His grandmother grew up on the mean streets of Little Italy. wo years ago, Joe Kleeman When Mr. Kleeman was 8, his family watched along with so many others found greener pastures in northern New attractions Tas investment bank Bear Stearns Jersey. At Christian Brothers Academy, a collapsed, only to be quickly snatched from college-prep school in Lincroft, he played the gutter by J.P.Morgan midfield for an intramural They’ve been around as long as Chase.The only difference was, soccer team but kept his focus Bear Stearns was where Mr. on academics. “I had a lot of late Crain’s has. Here’s where they see Kleeman worked. “He was just nights,” he says. so laid-back about it,” marvels Mr. Kleeman returned to Kate Zimmer, his girlfriend, town to study business at the next 25 years going—for them then and now. “I think I was Fordham University in the more nervous than he was.” Bronx.There, he helped the as well as the city they call home That calm, and the fact that school’s budget committee he’d worked a mere 10 months JOSEPH allocate funds to extracurricular in Bear’s prime brokerage unit, KLEEMAN groups. He studied hard and BY KIRA BINDRIM AND DANIEL MASSEY helped Mr. Kleeman make the Where he sees got good grades, spending his transition to J.P.Morgan, which himself in 25 spare time with friends or at n entire generation has grown to snapped up almost all of Bear’s years “Working in Yankees games with his prime brokerage when it bought hedge funds.” family. He interned with money adulthood since Crain’s New York Business the company.Today, he’s a client manager BlackRock in his Top reason to stay started publishing weekly in 1985. It’s a group service representative with J.P. junior year and was recruited by in NYC It’s the whose members are just now entering the Morgan, where he works with headquarters of Bear in early 2007, well before most productive years of their lives, trying to hedge fund accounts. “I’m finance—and his most of his senior classmates fortunate,” he acknowledges, “to family. had even begun applying for find opportunities in an increasingly complex be one of the few who can say I jobs. Top reason to business world. Here are half a dozen of them: wasn’t negatively impacted.” Now he’s living in a one- leave “Not enough one born in Jamaica, one in California, one in Staten Island-born Mr. access to quiet bedroom apartment in Massachusetts, and the rest in the city: the Bronx, Queens and Staten Kleeman is used to seeing his spaces outdoors.” Bensonhurst, Brooklyn. He family’s fortunes rise and fall in golfs, hangs out with his Island.A What they hold in common is a belief that New York is a town this fast-paced, high-stress city. girlfriend, and sees himself where dreams can come true—and where rents are way, way too high. His father, brother and sister all work for See COMING ATTRACTIONS on Page 72

June 28, 2010 | Crain’s New York Business | 71 20100628-NEWS--0072,0073-NAT-CCI-CN_-- 6/24/2010 6:10 PM Page 1

25TH ANNIVERSARY ISSUE

Correctional Facility.“That opened my eyes,” he says. His biggest motivation to change was his daughter, Kamya, who was Coming attractions just a year old when he went to jail. But turning his life around—now with a criminal record—has been hard. Within weeks of returning to the city in Continued from Page 71 August 2008, Mr. Essor had quit a job his parole officer said was too far continuing to work with hedge funds—or potentially at one. GROWING away and moved into a Brooklyn homeless shelter. It was there that he “I’m in the finance capital of the world, and in the place where I’m from, learned about The Fortune Society, a Manhattan-based nonprofit that and in the place where my family is,” he says, appreciative of his good helps ex-cons re-enter the work force. fortune. “It’s like the whole clichéd Frank Sinatra song: If you can make it Although skeptical, Mr. Essor signed up and took classes on everything here, you can make it anywhere.” PAINS from anger management to interview skills—including how to answer questions about his conviction. “After just the second or third day, he really started to come around,” says Patricia Wysock, a counselor at The Fortune Society.“He was pretty much the The boundless joys of diversity SUDDENLY, you’re model student; it was so evident that he went home and practiced at night.” nisha muni literally hasn’t gotten very far in life: She lives just statistically grouped In April, Mr. Essor was approved for a one-bedroom apartment in East three blocks from the Flushing, Queens, apartment where she grew with 34-year-olds New York and nailed his first job interview. He’s now a manager for a Aup.That’s fine with her, because as she sees it, the whole world lives instead of teenagers. Queens-based building-maintenance company. in her backyard anyway.“I walk to the train every morning, and I hear Welcome to life at 25, A decade deep into his life as a New Yorker, Mr. Essor has mixed Chinese music and people talking Chinese,” she says. “You can walk where you’ll spend feelings about the city. He calls New York the land of opportunity—he around and hear everything but English, which I think is very cool.” much of your second hopes to one day start his own building-management company—but earns A temporary job with the U.S. Census Bureau, quarter-century paying $10 an hour and often struggles to make ends meet. where she focuses on boosting census-participation off your first. He’s enjoying time with his daughter, now 4, frequenting local basketball rates of immigrants in Queens and on Long Island, —DAVID MONTALVO courts and taking her fishing on the lake in Queens’ Kissena Park. He has helped teach her that there’s much even a worries, though, that the city is too dangerous for a young girl. native New Yorker can learn about the city. “Sometimes I feel like New York isn’t a good place to raise your child,” he “I didn’t know, for example, that the Punjabis explains. “No matter how much you teach them in the house, when they go have a huge soccer tournament in Queens, and that $8,612 outside, it’s a different story.” there’s these Indian wrestling matches known as AVERAGE CREDIT kabaddi,” she says. “We have black people from CARD DEBT FOR A ANISHA Honduras who speak Garifuna and cricket leagues Aspiring writer revises her latest chapter MUNI with hundreds of people in them.” GRADUATE Ms. Muni is the second of two children born to or a while, everything was going great for Mary Beth McGee. She Where she sees immigrants from New Delhi. Her father came to STUDENT, UP 10% moved to the city in 2007, shortly after graduating from Suffolk herself in 25 University in Boston with a print journalism degree and in just three years “In New York, the U.S. to earn his master’s degree in architecture. SINCE 2003 F She was born in Flushing six years after her parents months landed a job blogging for a celebrity-gossip website. totally. I don’t ever Source: Nellie Mae intend on leaving.” settled there and attended local public schools At the website, Ms. McGee interviewed Sean Combs about his new straight through Cardozo High School in Bayside, cologne and wrote about Jamie Lynn Spears’ teenage pregnancy in the Top reason to stay all the while reveling in the ethnic diversity of the “voice” of her older sister, Britney. With her career in NYC “It’s home.” city’s most international borough, where an $53,779 on track, she moved last spring from a shared Top reason to estimated 50% of the population was born abroad. apartment to her own place in Park Slope, leave “To study “Most of my family members in India have AVERAGE TOTAL Brooklyn, and sat back to count her blessings. classical dance in never met anyone from Pakistan, but my best EDUCATIONAL “My Boston experience—yeah, it’s a city, but India.” friend here is a Pakistani girl,” she says. living around college kids, everyone’s the same,” she Little wonder, then, that Ms. Muni attended DEBT LOAD FOR A says. “And then you get here, and no one’s the New York University and majored in anthropology and communications. RECENT MBA same; everyone’s a character.” Her first job was with an advertising agency. She toiled on various health GRADUATE But then the recession hit, and in May 2009, Ms. care accounts before ending up doing marketing work for foot care McGee lost her job. “I was like, ‘Great, I’m sitting MARY company Dr. Scholl’s. Soon enough, it was time to move on. Source: U.S. Department of Education on a cardboard box in my brand-new Park Slope BETH She traveled to India last year and studied the classical Indian dance apartment.’ I did Craigslist, Mediabistro, sending MCGEE known as kathak, which she had practiced for years in her Flushing temple. out résumés to all these places, but I got nothing.” After wrapping up her Census work, Ms. Muni plans to return to India to She thought about moving back to her parents’ Where she sees see more dance and then to return to Flushing, where she hopes to teach it. 5 MILLION house in Worcester, Mass., but that was “the last herself in 25 “She’s definitely a person who can play a role in bridging the gap NUMBER OF 25- thing” she wanted to do. She collected years “My plan is to between the generation who grew up here and the generation who grew up unemployment, toyed with the idea of going to stick around and in India,” says Census colleague Harpreet Singh TO 34-YEAR-OLDS journalism school, and put her name in with a make something of the city, to conquer Toor. STILL LIVING AT bunch of temp agencies. it and not let it Ms. Muni says her future is destined to be in “In her heart, she wanted to fight it out here in conquer me.” Queens. “I can’t imagine being anywhere else.” HOME WITH THE New York,” says her cousin Moira Herbst, a journalist in the city. Top reason to stay FOLKS in NYC After five months of struggling to get by on “I can see Source: U.S. Census Bureau the Empire State A turnaround specialist unemployment benefits of $405 a week, she finally Building from my landed a temp job stuffing envelopes and bedroom even of a different kind answering phones at Jazz at Lincoln Center. She though I live in Park RICHARD 10.6% soon got hired as an associate in the development Slope, on the third ESSOR he first sign of trouble in the young life of department, working on corporate giving. floor of a crappy Richard Essor came in 2002, when he UNEMPLOYMENT “I started to realize I liked the work, even though brick building.” Where he sees Tstarted selling marijuana in the halls of RATE AMONG it wasn’t what I thought I’d be doing when I moved Top reason to himself in 25 Richmond Hill High School to pay for things like here,” she says. “It was actually pretty cool.” years “I want to leave “It’s just so sneakers and snack food. 25- TO 29-YEAR- What isn’t so much fun is the cost of everything, expensive.” own my own “I got deep enough where, instead of selling and OLDS IN THE U.S. from her rent to groceries. But as Ms. McGee gains building- then going to class, I’d go home to get more,” says more and more work experience, she’s increasingly management Source: U.S. Bureau of Labor Statistics company.” Mr. Essor, who moved to Queens from the island confident that she will make it here. of Jamaica at age 14. “When I moved here over two and a half years ago, I was not at that Top reason to stay Selling drugs took a toll on his grades and one place,” she says. “My résumé was like: ice cream scooper, hostess at Italian in NYC “It’s the only of the joys in his life, soccer: He was kicked off the $24,169 restaurant and all these little three-month jobs. I don’t feel like I’ve made it place you can team for poor attendance. At 17, he moved out of yet. But I feel like I’m working toward that.” come with zero AVERAGE 401(k) dollars in your his father’s apartment and got a place with a friend. pocket and a year Drug-dealing helped pay the bills, he says. ACCOUNT later have $1 He’dtry a fresh start now and then—joining a Job A world of hurt—and of good—for local lad million.” Corps project upstate to gain construction BALANCE FOR aron charlop-powers loves his hometown. But he also loves Top reason to experience, working at the Boston Market PEOPLE IN THEIR leave “I don’t feel restaurant chain, until his hours were cut—but in 20s helping others, and that’s what has taken him far from his roots in like New York is a December 2006, he was arrested for drug and Athe northwest Bronx in recent years. good place to raise weapons possession. Source: Bankrate.com After graduating from the University of North Carolina at Chapel Hill a child.” Mr. Essor’s sentence was two years. He split in 2007, he traveled to India on a fellowship from American Jewish World his time between Rikers Island and the Ulster Service. He then went to work for the United Nations World Food

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Programme, based in Thailand. WE INVITE YOU TO In a 2008 blog post about a trip to Myanmar, he wrote of the emotional challenges of international aid work: “When we got to a village, we gathered Close Your E-mail information, interviewed people and left. While traveling to the next place, the analysis of the previous one begins, turning people and smiles and households into numbers, tables and statistics, Å ÅÅ Å  AARON sometimes quickly calculating that they are not CHARLOP- poor enough.” POWERS These days, Mr. Charlop-Powers works for the United Nations. “His energy is catalytic,” says Where he sees Taryn Miller-Stevens, director of business himself in 25 development at StartingBloc, which recently years “Kids, a cool awarded Mr. Charlop-Powers a social house, a wife who is still attracted to me, innovation fellowship. “He will never settle for and a job that lets the status quo.” me follow my moral At the Bronx High School of Science, Mr. compass.” Charlop-Powers had a similar sort of reputation, but as a star point guard on the basketball team. Top reason to stay in NYC Public The 6-foot-3-incher hoped to build on that transportation and reputation at Brandeis University in diversity. Massachusetts. After an injury thrust him to the sidelines, he transferred to the University of North Top reason to Carolina. A “major turning point” came during a leave Real estate is “downright summer in Nairobi, between his junior and senior unaffordable.” years, when Mr. Charlop-Powers volunteered for an organization called Carolina for Kibera, which promotes youth development in East Africa’s biggest slum. “You can read about world poverty, but to smell what it’s like to have 800,000 people living in two square miles—which is about the size of Central Park—is eye-opening,” he says. “I wanted to take part in SPEND AN ELEGANT E-FREE EVENING WITH US. international work designed to help people who haven’t gotten a fair shake.” Despite his globetrotting, New York will always be home for Mr. Charlop-Powers—even though he can barely afford the rents. He moved in with friends in Williamsburg, Brooklyn, earlier this year. “As to the details of what my work will be, or what organization I’ll be working for—or with, or running—I don’t know,” he says. “[But] my moral Inc. ©2010 Rare Hospitality Management, compass won’t waver too much.”

Going onward and upward with the arts 155 E 42nd St, The Chrysler Center · 212 953 2000 120 W 51st Street, Time-Life Building · 212 246 0154 s a child in orange, calif., Krysta Rodriguez was easy to pick 120 Broadway, on Nassau at Pine Street · 212 374 1811 · thecapitalgrille.com out in a crowd. She was the one sporting the brightly hued “I  ANew York” sweatshirt. By the age of 6, she’d already been to Broadway and seen Fiddler on the Roof. At 10, she wrote a school report on New York. But it was a 1998 trip here—featuring eight Broadway shows in as many days—that sealed the deal. “That was the trip that made me decide I wanted to pursue theater,” she says. Since then, Ms. Rodriguez has had remarkable success doing just that. While at Los Alamitos High School, she starred opposite Dermot Mulroney in a musical rendition of KRYSTA Gidget, written and directed by none other than RODRIGUEZ Francis Ford Coppola. She moved to New York in 2002 to earn a musical theater degree at New Where she sees York University. Just two years later, she took a herself in 25 years “Eventually moving leave of absence to accept a cameo role in City back to and settling Center’s Encores! performance of the musical down in my home Bye Bye Birdie. state of California.” “When you see her on stage, even in the ensemble, you can’t take your eyes off her,” says Top reason to stay in NYC “Best theater theater producer Ken Davenport. scene in the country.” The credits continued with understudy roles in A Chorus Line, In the Heights and others. She’d Top reason to leave rehearse in the daytime for one show while “Winter.” performing at night in another. In January 2009, she auditioned for the ensemble of The Addams Family; casting directors were so impressed they handed her the role of Wednesday, her first non- understudy part on Broadway. “It’s nice to be able to originate a character,” she says. “Having your say in what key the songs are in, or how a character talks—it’s like the Holy Grail.” Eight years into her New York life, Ms. Rodriguez admits she’s had some rough moments. She’s still no fan of the winters here, and sometimes wishes she didn’t live in a fourth-floor walkup in Chelsea, especially after a full day of dancing. L.A. certainly has its allure. How could it not for an actress? Still, she loves her career here, her boyfriend, her shopping jags for vintage clothes, and her favorite foodie haunts, like midtown’s Japanese noodle shops. “New York definitely did its job,” she says, “but I do see myself going back to California, even in the near future, to try that scene again.  20100628-NEWS--0074-NAT-CCI-CN_-- 6/25/2010 3:05 PM Page 1

25TH ANNIVERSARY ISSUE Top 40 hits It’s been 22 years since Crain’s New York Business dreamed up the idea of presenting a collection of rising stars as 40 Under 40. Not only has the concept been widely copied, but a truly impressive array of individuals have graced our pages since the first class of honorees in 1988, including this constellation of superstars who need little or no introduction these days.

1 MSNBC host Rachel Maddow (Class of ’09) 2 NBC anchorman Brian Williams (MSNBC, NBC, ’98) 3 Designer Elie Tahari (’89) 4 Weil Gotshal partner Marcia Goldstein (’91) 5 Music and fashion mogul Russell Simmons (’92) 6 Advertising guru Donny Deutsch (’89) 7 NY Yankees SVP and General Manager Brian Cashman (GM, ’99) 8 Teach for America founder Wendy S. Kopp (’92) 9 Meetup.com CEO Scott Heiferman (’07) 10 New York Community Trust President Lorie Slutsky (’91) 11 Political strategist Howard Wolfson (’05) 12 Designer Cynthia Rowley (’97) 13 American Express CEO Ken Chenault (EVP, ’88) 14 New York Editor-in-Chief Adam Moss (7 Days, ’89) 15 Sony Pictures CEO Michael Lynton (Penguin Group chairman, ’97) 16 Theater director George C. Wolfe (’94) 17 Avon Products Chairman and CEO Andrea Jung (group president, ’96) 18 Corcoran Group CEO Pamela Liebman (’02) 19 Restaurateur Donatella Arpaia (’04) 20 Designer Isaac Mizrahi (’90) 21 Merrill Lynch exec Sallie Krawcheck (Smith Barney, ’03) 22 Cushman & Wakefield CEO Bruce E. Mosler (Galbreath Riverbank vice chairman, ’94) 29 23 Chef/restaurant owner David Bouley (’91) 24 Author Wes Moore (’09) 25 Author James Stewart (The Wall Street Journal, ’89) 26 FUBU fashions founder Daymond John (’98) 27 Newmark Knight Frank CEO Barry Gosin (EVP, ’89) 28 NetJets CEO David Sokol (energy company president, ’90) 29 Designer Marc Jacobs (Perry Ellis VP, ’89) 30 SL Green Realty CEO Marc Holliday (president, ’03) 31 Designer Kate Spade (’97) 30 32 Actor Philip Seymour Hoffman (’04) 33 Barneys New York Creative Director Simon Doonan (’91) 1 34 Hedge fund titan Paul Tudor Jones (’88) 35 Chef/restaurant owner Bobby Flay (’98) 36 Photographer David LaChapelle (’97) 31 2 37 NBC Universal CEO Jeff Zucker (Today show executive producer, ’92) 38 Tribeca Film Festival co-founder Jane Rosenthal (’91) 39 Jazz genius Wynton Marsalis (’98) 40 Designer Zac Posen (’04) 32 33 Catch up with scores more 40 Under 40 honorees at 3 www.crainsnewyorkbusiness.com/anniversary

14 36 34

15 35 6 16 23 4 5 25

18 24 17 37 8 26 9

38

20 newscom 7 19 / 27 40

10 11 getty images 39 / 21 13 28 bloomberg news 22 /

12 buck ennis

74 | Crain’s New York Business | June 28, 2010 nb26p75-76bc.qxp 6/25/10 3:16 PM Page 75

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PUBLIC & LEGAL NOTICES

Notice of Qualification of Braven Films, Name of For. LLC: LEVEL RADAR Notice of Qualification of FRC Advisors LLC. Authority filed with Secy. of HOLDING, L.L.C. App. for Auth. filed LLC. Authority filed with Secy. of State FORECLOSURE State of NY (SSNY) on 6/16/10. NY Dept. of State: 4/2/2010. Jurisd. of NY (SSNY) on 5/21/10. Office location: Office location: NY County. LLC and date of org.: DE 3/19/10. Cty off. NY County. LLC formed in Delaware formed in Delaware (DE) on 5/6/10. loc.: NY Cty. Sec. of State designated (DE) on 5/20/10. SSNY designated as SSNY designated as agent of LLC as agent of foreign LLC upon whom agent of LLC upon whom process upon whom process against it may process against it may be served. against it may be served. SSNY shall be served. SSNY shall mail process The Sec. of State shall mail copy of mail process to: c/o Katten Muchin to: c/o The LLC, 33 West 19th St., process to: Level Global, L.L.C., 888 Rosenman LLP, 575 Madison Ave., 4th Fl., NY, NY 10011, also the 7th Ave., 27th Fl., NY, NY 10019. NY, NY 10022, Attn: Robert Grundstein. principal office. Address to be main- Addr. of foreign LLC in DE is: 2711 DE address of LLC: c/o United tained in DE: 615 S. DuPont Hwy., Centerville Rd., Ste. 400, Wilmington, Corporate Services, Inc., 874 Walker Dover, DE 19901. Arts of Org. filed DE 19808. Auth. officer in DE where Road, Ste. C, Dover, DE 19904. Arts. with DE Secy. Of State, 401 Federal Cert. of Form. filed: DE Sec. of State, of Org. filed with DE Secy. of State, St., Ste. 4, Dover, DE 19901. Duke & York St., Dover, DE 19901. 401 Federal St., Dover, DE 19901. Purpose: any lawful activities. Purpose: any lawful activity. Purpose: any lawful activity.

Notice of Formation of KP Southampton Name of For. LLC: SPCP GROUP IV, Notice of Formation of Lindsay Smith LLC. Arts. of Org. filed with NY Dept. LLC. App. for Auth. filed NY Dept. of Architect PLLC, a professional serv- of State on 4/9/10. Office location: State: 5/18/10. Jurisd. and date of ice limited liability company (PLLC). NY County. Sec. of State designated org.: DE 7/14/09. Cty off. loc.: NY Arts. of Org. filed with Secy. of State as agent of LLC upon whom process Cty. Sec. of State designated as of NY (SSNY) on 4/29/10. Office against it may be served and shall agent of foreign LLC upon whom location: NY County. SSNY designat- mail process to the principal business process against it may be served. ed as agent of PLLC upon whom addr.: c/o Katz Properties, 247 W. The Sec. of State shall mail copy of process against it may be served. 30th St., 11th Fl., NY, NY 10001. process to: c/o The LLC, Two SSNY shall mail process to: Menaker Purpose: any lawful activity. Greenwich Plaza, Greenwich, CT and Herrmann LLP, 10 E. 40th St., 06830. Addr. of foreign LLC in DE is: NY, NY 10016, Attn: Robert F. NOTICE OF FORMATION of 615 S. DuPont Hwy., Dover, DE Herrmann, Esq. Purpose: practice Blackman’s Block Productions LLC. 19901. Auth. officer in DE where the profession of architecture. Arts of Org filed with the Secy of Cert. of Form. filed: DE Sec. of State, State of New York (SSNY) on Townsend Bldg., Dover, DE 19901. ONE CENTRAL PARK SOUTH 4/12/10. Office location: NY County. Purpose: any lawful activity. CRETERIUM, LLC a domestic SSNY designated as an agent upon Limited Liability Company (LLC) filed whom process may be served and Local Connections Psychotherapy with the Sec of State of NY (SSNY) shall mail a copy of any process to on 9/8/2006. NY office Location: New the principal business address: 555 LCSW, PLLC Date of filing of the Articles of Organization: April 8, York County. SSNY is designated as W 151 St., #63, NY, NY 10031. agent upon whom process against Purpose: any lawful act. 2010. County within which the office is located: New York The Secretary the LLC may be served. SSNY shall of State is designated as agent of mail a copy of any process against NOTICE OF FORMATION of A Book the limited liability company upon the LLC served upon him/her to The Apart LLC. Arts of Org filed with the whom process against it may be LLC, Greener Cohen LLP, 444 Secy of State of New York (SSNY) on served. The street address of the Madison Ave. Ste. 805, NY, NY 4/29/10. Office location: NY County. office: c/o Paul Scherer & Company, 10022. General Purpose SSNY designated as an agent upon 1440 Broadway, New York, NY whom process may be served and 10018. Date of dissolution: NOTICE OF FORMATION OF PRO- shall mail a copy of any process to Perpetual Purpose of Business: FESSIONAL SERVICE LIMITED LIA- the principal business address: 333 Licensed Clinical Social Work BILITY COMPANY. NAME: JONATHAN Notice of Formation of DELAFIELD Notice of Qualification of PCA E. 34 St., #8D, NY NY 10016. KOBLENZER, MD PLLC. Articles of Purpose: any lawful act. ART CONSULTANTS, LLC. Arts. of Advisors, LLLP. Authority filed with Notice of Qualification of MQ Absolute Organization were filed with the Org. filed with Secy. of State of NY Secy. of State of NY (SSNY) on Return Strategies - Asia LLC. Secretary of State of New York (SSNY) on 05/06/10. Office location: 4/29/10. Office location: NY County. Notice of Formation of International Authority filed with NY Dept. of State (SSNY) on 06/04/10. Office location: NY County. Princ. office of LLC: LLC formed in North Carolina (NC) Daycare New York, LLC, filed under on 5/21/10. Office location: NY New York County. SSNY has been 159 W. 53rd St., #19F, NY, NY 10019. on 3/6/08. SSNY designated as the original name Children’s World County. LLC formed in DE on 4/5/10. designated as agent of the PLLC SSNY designated as agent of LLC agent of LLC upon whom process New York, LLC, Art. of Org. filed Sec’y upon whom process against it may upon whom process against it may against it may be served. SSNY shall of State (SSNY) 11/13/09. Office loc.: NY Sec. of State designated as agent of LLC upon whom process be served. SSNY shall mail a copy of be served. SSNY shall mail process mail process to the NC address of NY County. SSNY designated as process to the PLLC, 16 East 79th to the LLC, Attn: Kristin Dunlap at LLC: 5915 Farrington Road, Ste. agent of LLC upon whom process against it may be served and shall mail process to the principal busi- Street, Suite 42, New York, New York the princ. office of the LLC. 202, Chapel Hill, NC 27517. Arts. of against it may be served. SSNY shall 10075. Purpose: For the practice of Purpose: Any lawful activity. Org. filed with NC Secy. of State, mail copy of proc. to c/o Reinhardt ness addr.: 125 W. 55th St., 10th Fl., NY, NY 10019. DE addr. of LLC: c/o the profession of Medicine. P.O. Box 29622, Raleigh, NC 27626. LLP, 44 Wall St., 10th Fl., NY, NY Purpose: any lawful activity. 10005. Purpose: any lawful activities. The Corporation Trust Co., 1209 Notice of Formation of VMV US Orange St., Wilmington, DE 19801. Notice of Formation of Avenue of the STORE 1 LLC. Arts. of Org. filed with Arts. of Org. filed with DE Sec. of Notice of Formation of Pressprich Americas 1707, LLC, a limited liability Secy. of State of NY (SSNY) on Notice of Formation of APPERLATIVE State, P.O. Box 898, Dover, DE company. Art of Org filed with the 05/13/10. Office location: NY County. LLC. Arts. of Org. filed with Secy. of Funding II, LLC, Art. of Org. filed 19903. Purpose: any lawful activity. Sec’y of State (SSNY) 7/9/09. Office Sec of State of New York (SSNY) on Princ. office of LLC: c/o VMV Group, State of NY (SSNY) on 4/28/10. loc.: NY County. SSNY designated 3/2/10. Office located in New York Attn: Cristina Constance V. Rowell, Office location: NY County. SSNY as agent of LLC upon whom Notice of Formation of GTI LLC. Arts. County. SSNY has been designated 16 W. 16th St., NY, NY 10011. SSNY designated as agent of LLC upon process against it may be served. of Org. filed with Secy. of State of NY for service of process. SSNY shall designated as agent of LLC upon whom process against it may be SSNY shall mail copy of proc. to c/o (SSNY) on 05/17/10. Office location: mail copy of any process to the LLC whom process against it may be served. SSNY shall mail process to: Lehman & Eilen, Attn: Leslie Marlow, NY County. SSNY designated as c/o James E. Bishop, 902 Clint Moore served. SSNY shall mail process to 400 W. 55th St., 7H, NY, NY 10019. Esq., 50 Charles Lindbergh Blvd., agent of LLC upon whom process Road, Suite 220, Boca Raton, Florida the LLC at the addr. of its princ. Purpose: any lawful activity. #505, Uniondale, NY 11553. Purp.: against it may be served. SSNY shall 33487. Purpose: any lawful purpose. office. Purpose: Any lawful activity. any lawful activities. mail process to Jason Halpern, 401 West St., Third Fl., NY, NY 10014. Notice of Qualification of 33 CANAL Purpose: Any lawful activity. Notice of Qualification of CANDLE Notice of Qualification of Ascend STREET LLC. Authority filed with Secy. Notice of Qualification of AMERICA-CV FAMILY FOODS, LLC. Authority filed Access LLC. Authority filed with NY of State of NY (SSNY) on 05/13/10. NETWORK, LLC. Authority filed with with Secy. of State of NY (SSNY) on Dept. of State on 6/15/10. Office Office location: NY County. LLC Secy. of State of NY (SSNY) on NOTICE OF FORMATION OF LIMIT- 06/16/10. Office location: NY County. location: NY County. Princ. bus. addr.: formed in Delaware (DE) on 04/26/10. 06/08/10. Office location: NY County. ED LIABILITY COMPANY. NAME: LLC formed in Delaware (DE) on 4 World Financial Ctr., 250 Vesey St., Princ. office of LLC: c/o Naomi LLC formed in Delaware (DE) on OM-AH-HUM REALTY LLC. Articles 10/28/09. Princ. office of LLC: 1307 6th Fl., NY, NY 10080. LLC formed in Blumenthal, Manager, 125 E. 17th 10/14/09. Princ. office of LLC: 13001 of Organization were filed with the Third Ave., NY, NY 10021. SSNY des- DE on 6/2/10. NY Sec. of State des- St., NY, NY 10003. SSNY designated NW 107th Ave., Hialeah Gardens, FL Secretary of State of New York ignated as agent of LLC upon whom ignated as agent of LLC upon whom as agent of LLC upon whom process 33018. SSNY designated as agent of (SSNY) on 03/31/10. The latest date process against it may be served. process against it may be served and against it may be served. SSNY shall LLC upon whom process against it of dissolution is 12/31/2060. Office SSNY shall mail process to the LLC shall mail process to: CT Corporation mail process to the LLC at the addr. may be served. SSNY shall mail location: New York County. SSNY at the princ. office of the LLC. DE System, 111 8th Ave., NY, NY 10011, of its princ. office. DE addr. of LLC: process to the LLC at the princ. has been designated as agent of the addr. of LLC: c/o Allstate Corporate regd. agent upon whom process may c/o Corporation Service Co., 2711 office of the LLC. DE addr. of LLC: LLC upon whom process against it Services Corp., 32 W. Loockerman be served. DE addr. of LLC: The Centerville Rd., Ste. 400, Wilmington, 2711 Centerville Rd., Wilmington, DE may be served. SSNY shall mail a St., Ste. 201, Dover, Cnty. of Kent, Corporation Trust Co., 1209 Orange DE 19808. Arts. of Org. filed with 19808. Arts. of Org. filed with Secy. copy of process to the LLC, c/o DE 19904. Arts. of Org. filed with St., Wilmington, DE 19801. Arts. of Secy. of State - DE, Div. of Corps., of State, Div. of Corps., 401 Federal Eastport, 34 West 33rd Street, 6th Secy. of State of State of DE, Corp. Org. filed with DE Sec. of State, P.O. John G. Townsend Bldg., 401 St., Ste. 4, Dover, DE 19901. Floor, New York, New York 10001. Dept., Townsend Bldg., Dover, DE Box 898, Dover, DE 19903. Purpose: Federal St., Dover, DE 19901. Purpose: Any lawful activity. Purpose: For any lawful purpose. 19901. Purpose: Any lawful activity. any lawful activity. Purpose: Any lawful activity.

June 28, 2010 | Crain’s New York Business | 77 nb26p77-78cl.qxp 6/25/10 3:22 PM Page 78

PUBLIC & LEGAL NOTICES

Notice of Formation of ICER of 236 NOTICE OF QUALIFICATION OF Notice of Formation of WELLBUILT Notice of Qualification of Chilton Notice of Qualification of 54-56 IRVING W. 139th Street, LLC. Articles of Peninsula Life Solutions LLC. IPD LLC. Arts. of Org. filed with Secy. Pan-Asia Access LLC. Authority filed PLACE LLC. Authority filed with Secy. Organization filed with Secy. of State Application for Authority filed with the of State of NY (SSNY) on 06/02/10. with NY Dept. of State on 6/3/10. of State of NY (SSNY) on 05/13/10. of NY (SSNY) on 02/10/10. Office Secretary of State of New York (SSNY) Office location: NY County. Princ. Office location: NY County. Princ. bus. Office location: NY County. LLC location: NY County. SSNY designat- on 9/14/2009. NY Office Location: office of LLC: 61 Irving Pl., Apt. 5C, addr.: 4 World Financial Ctr., 250 formed in Delaware (DE) on 04/26/10. ed as agent of LLC upon whom New York County. LLC formed in NY, NY 10003. SSNY designated as Vesey St., 6th Fl., NY, NY 10080. LLC Princ. office of LLC: c/o Naomi process against it may be served. Delaware on 3/26/2009. SSNY has agent of LLC upon whom process formed in DE on 5/25/10. NY Sec. of Blumenthal, Manager, 125 E. 17th SSNY shall mail process to the LLC been designated as agent of LLC against it may be served. SSNY shall State designated agent of LLC upon St., NY, NY 10003. SSNY designated c/o Icer Brands, LLC, 1385 Broadway upon process against it may be mail process to Attn: Mitchell Kidd at whom process against it may be as agent of LLC upon whom process - 16th Fl., New York, NY 10018. served. The P.O. address to which the princ. office of the LLC. Purpose: served and shall mail process to: CT against it may be served. SSNY shall Purpose: any lawful act or activity. the SSNY shall mail a copy of any Any lawful activity. Corporation System, 111 8th Ave., NY, mail process to the LLC at the addr. process against the LLC. Served upon NY 10011, regd. agent upon whom of its princ. office. DE addr. of LLC: Notice of Formation of Deer Stags him/her is C/O the LLC. Corporation Name: A&J REAL PROPERTIES LLC process may be served. DE addr. of c/o Corporation Service Co., 2711 LLC. Arts. of Org. filed with Secy. of Service Company, 80 State Street, Art. Of Org. Filed Sec. of State of LLC: The Corporation Trust Co., 1209 Centerville Rd., Ste. 400, Wilmington, State of NY (SSNY) on 5/7/10. Albany, NY 12207. The Principal NY 03/31/2010. Off. Loc.: NY Co. Orange St., Wilmington, DE 19801. DE 19808. Arts. of Org. filed with Office location: NY Co. SSNY desig- Business Address of the LLC is: SSNY designated as agent upon Arts. of Org. filed with DE Sec. of Secy. of State - DE, Div. of Corps., nated as agent of LLC upon whom 1010 Wisconsin Ave., N.W., #620, whom process against it may be State, P.O. Box 898, Dover, DE John G. Townsend Bldg., 401 process against it may be served. Washington, DC 20007. Dissolution served. SSNY to mail copy of 19903. Purpose: any lawful activity. Federal St., Dover, DE 19901. SSNY shall mail process to: Hartman date: N/A. Purpose of LLC: To process to THE LLC, c/o Paras Purpose: Any lawful activity. engage in any lawful act or activity. & Craven LLP, c/o Neal Dorman, 488 Diamond Corp., 592 Fifth Avenue, Notice of Qualification of PANDEMIC Madison Ave., NY, NY 10022. 3rd Floor, New York, NY 10036. MEDIA, LLC. Authority filed with Secy. Notice of Formation of Excelolife LLC. Purpose: any lawful activities. Notice of Formation of MENS REA Purpose: Any lawful act or activity. of State of NY (SSNY) on 05/18/10. Arts. of Org. filed with Secy. of State LLC. Arts. of Org. filed with Secy. of Office location: NY County. LLC of NY (SSNY) on 3/16/10. Office State of NY (SSNY) on 05/11/10. formed in Delaware (DE) on 05/15/09. Location: NY Co. SSNY designated Notice of Formation of LLC. Bend Notice of Formation of CROCO LLC. as agent of LLC upon whom process Oil, LLC (LLC) filed Arts. of Org. with Office location: NY County. Princ. Articles of Organization filed with Secy. Princ. office of LLC: 240 Centre St., office of LLC: 40 Riverside Dr., Unit NY, NY 10013. SSNY designated as against it may be served. SSNY shall Secy. of State of NY (SSNY) on of State of NY (SSNY) on 03/26/10. mail process to: the LLC, 2110 First 4/21/2010. Office location: New York 4, NY, NY 10023. SSNY designated Office location: NY Co. SSNY desig- agent of LLC upon whom process as agent of LLC upon whom against it may be served. SSNY shall Avenue New York, NY 10029. County. SSNY designated as agent nated as agent of LLC upon whom Purpose: Any lawful Activity. of the LLC upon whom process may process against it may be served. process against it may be served. mail process to c/o Corporation be served and SSNY shall mail SSNY shall mail process to the LLC SSNY shall mail process to the LLC Service Co., 80 State St., Albany, NY process to c/o Gerald F. Stack, Esq., at the addr. of its princ. office. c/o Robinson Brog Leinwand Greene 12207-2543. DE addr. of LLC: 160 NOTICE OF FORMATION of VELVET- Hiscock & Barclay, LLP, One Park Purpose: Any lawful activity. Genovese & Gluck, PC, Attn: Leonard Greentree Dr., Ste. 101, Dover, DE THOMAS, LLC. Arts of Org filed with Place, 300 South State Street, B. Nathanson, Esq., 875 Third Ave, 19904. Arts. of Org. filed with Secy. the Secy of State of New York (SSNY) of State, Div. of Corps., 401 Federal Syracuse, NY 13202-2078. Purpose: Notice of Formation of ICER Real 9th Fl., New York, NY 10022. on 3/17/10. Office location: NY St., Ste. 4, Dover, DE 19901. any business permitted under law. Estate Services, LLC. Articles of Purpose: any lawful act or activity. County. SSNY has been designated Purpose: Any lawful activity. Organization filed with Secy. of State as an agent upon whom process may of NY (SSNY) on 02/10/10. Office be served and shall mail a copy of Notice of formation of Gordon NOTICE OF FORMATION of David C. any process to the principal business Strategy Group LLC. Art. Of Org. filed location: NY County. SSNY designated Prince LLC. Arts of Org filed with the BOOST FUNDING LLC a domestic as agent of LLC upon whom process Limited Liability Company (LLC), filed address: 314 W 117 St., 6G, NY, NY with Secy. of State of NY (SSNY) on Secy of State of NY (SSNY) on 10026. Purpose: any lawful act. 5/20/10. Office Location: New York against it may be served. SSNY shall 05/04/10. Office location: NY County. with the Sec of State of NY on County. SSNY designated as agent mail process to the LLC c/o Icer SSNY designated as agent upon whom 1/6/09 currently known as BOOST of the LLC upon whom process Brands, LLC, 1385 Broadway - 16th process may be served and shall mail PAYMENT SOLUTIONS LLC. NY Name of LLC: Diana Rabin Accounting against it may be served. SSNY shall Fl., New York, NY 10018. Purpose: a copy of any process against the Office location: New York County. LLC. Arts. of Org. filed with NY Dept. mail a copy of any process to: c/o any lawful act or activity. LLC to its principal business address: SSNY is designated as agent upon of State: 5/27/10. Office loc.: NY Co. the LLC, 14 Horatio Street, Apt. 17D, 320 East 57th St. #4F, NY NY 10022. whom process against the LLC may Sec. of State designated agent of New York, NY 10014, attn: Tracey Purpose: to engage in any lawful act. be served. SSNY shall mail a copy LLC upon whom process against it Notice of Formation of 70-74 East End of any process against the LLC may be served and shall mail Gordon. Purpose: To engage in any Avenue LLC. Arts. of Org. filed with lawful act or activity. served upon him/her to The LLC, process to: c/o Diana Rabin, 16 W. Secy. of State of NY (SSNY) on 5/14/10. Notice of Formation of FOURTH FLOOR 527 Madison Ave., 16th Fl., NY, NY 23rd St., 4th Fl., NY, NY 10010, regd. Office location: NY Co. SSNY desig- OFFICE ASSOCIATES, LLC. Arts. of 10022. General Purposes. agt. upon whom process may be Notice of Formation of 166 Suffolk nated as agent of LLC upon whom Org. filed with Secy. of State of NY served. Purpose: any lawful act. Street LLC. Arts. of Org. filed with process against it may be served. SSNY (SSNY) on 06/01/10. Office location: NY Dept. of State on 5/27/10. Office shall mail process to: The Brearley NY County. SSNY designated as Name of For. LLC: SuttonBrook location: NY County. Princ. bus. addr.: School, 610 E. 83rd St., NY, NY 10028. agent of LLC upon whom process Eureka Fund GP LLC. App. for Auth. Notice of Qualification of AG-Metropolitan 825 3rd Ave., 37th Fl., NY, NY 10022. Purpose: any lawful activities. against it may be served. SSNY shall filed NY Dept. of State: 4/21/2010. 711 Fee Purchaser, L.L.C. Authority Sec. of State designated as agent of mail process to c/o Arnold M. Phillips, Jurisd. and date of org.: DE 4/19/10. filed with NY Dept. of State on 5/5/10. LLC upon whom process against it Cty off. loc.: NY Cty. Princ. bus. loc.: Office location: NY County. Princ. Manhattan Dental Health PLLC. 654 Madison Ave., 6th Fl., NY, NY may be served and shall mail process 598 Madison Ave., 6th Fl., NY, NY bus. addr.: 245 Park Ave., 26th Fl., Notice of the formation of the above 10065. Purpose: Any lawful activity. to: c/o CT Corporation System, 111 10022. Sec. of State designated as NY, NY 10167. LLC formed in DE on named Professional Limited Liability 8th Ave., NY, NY 10011, regd. agent agent of foreign LLC upon whom 5/4/10. NY Sec. of State designated Company (“PLLC”) Articles of upon whom process may be served. NOTICE OF FORMATION of Type One process against it may be served. as agent of LLC upon whom process Organization filed with the Department Purpose: any lawful activity. Records LLC. Arts of Org filed with The Sec. of State shall mail copy of against it may be served and shall of State of NY on 3/5/2010. Office the Secy of State of New York (SSNY) process to: 598 Madison Ave., 6th mail process to: c/o CT Corporation Location: County of New York. The on 4/1/10. Office location: NY County. Fl., NY, NY 10022. Addr. of foreign System, 111 8th Ave., NY, NY 10011, Notice of Formation of NYC DENTAL street address is: 29 W. 57th St., Ste. SSNY designated as an agent upon LLC in DE is: Corp. Service regd. agent upon whom process may HOLDINGS, LLC. Arts. of Org. filed 1200, NY, NY 10019. The Secretary of whom process may be served and Company, 2711 Centerville Rd., Ste. be served. DE addr. of LLC: The with Secy. of State of NY (SSNY) on State of NY (“SSNY”) has been desig- shall mail a copy of any process to 400, Wilmington, DE 19808. Auth. Corporation Trust Co., 1209 Orange 05/11/10. Office location: NY County. nated as agent of the PLLC upon 16192 Coastal Hwy, Lewes, DE officer in DE where Cert. of Form. St., Wilmington, DE 19801. Arts. of SSNY designated as agent of LLC whom process against it may be served. 19958. Principal business address: filed: DE Sec. of State, Townsend Org. filed with DE Sec. of State, 401 upon whom process against it may SSNY shall mail a copy of any such 175 W. 79 St., #8B, NY, NY 10024. Bldg., Dover, DE 19901. Purpose: Federal St., Dover, DE 19901. be served. SSNY shall mail process process served to: The LLC, 29 W. 57th Purpose: any lawful act. any lawful activity. Purpose: any lawful activity. to Corporation Service Co., 80 State St., Ste. 1200, NY, NY 10019. Purpose: St., Albany, NY 12207-2543. To practice the profession of Dentistry. Purpose: Any lawful activity. Notice of Qualification of Ivanka Notice of Qualification of CME Group Trump Marks II LLC. Authority filed WANT TO GET YOUR Index Holdings LLC. Authority filed with Secy. of State of NY (SSNY) on with NY Dept. of State on 5/13/10. 11/10/2009. Office location: New COMPANY IN FRONT OF Office location: NY County. Princ. York County. LLC formed in bus. addr.: 20 S. Wacker Dr., Delaware (DE) on 11/04/2009. SSNY Chicago, IL 60606. LLC formed in DE designated as agent of LLC upon 250,000 INFLUENTIAL on 1/29/10. NY Sec. of State desig- whom process against it may be nated as agent of LLC upon whom served. SSNY shall mail process to: BUSINESS PROFESSIONALS? process against it may be served c/o National Register Agents, Inc., and shall mail process to: c/o CT 875 Avenue of the Americas, Ste. Corporation System, 111 8th Ave., 501, New York, NY 10001. Address Contact John Gallagher NY, NY 10011, regd. agent upon required to be maintained in home whom process may be served. DE jurisdiction: 160 Greentree Drive, Ste at 212-210-0189 addr. of LLC: 1209 Orange St., 101, Dover, DE 19904. Arts. of Org. Wilmington, DE 19801. Arts. of Org. filed with Secretary of State of for classified filed with DE Sec. of State, 401 Delaware Jeffrey W. Bukkock, 401 Federal St., Dover, DE 19901. Federal Street, Dover, DE 19901. advertising opportunities. Purpose: any lawful activity. Purpose: any lawful activities.

78 | Crain’s New York Business | June 28, 2010 20100628-NEWS--0079-NAT-CCI-CN_-- 6/25/2010 6:47 PM Page 1

for work they did to launch Colors mum wage plus their tips. before it opened. A federal judge The decline in business and pay Colors restaurant will expand ruled last year in ROC NY’s favor, forced some of the workers, like line but the complaint set the stage for cook Oscar Galinda, to find supple- Continued from Page 1 have proved to be a well-organized, Italian investor, Ivan Lusetti, who the co-op’s future problems. mentary jobs. He stays with Colors demand higher pay, benefits and politically savvy and intelligent or- founded a food co-op in Bologna in “What didn’t work was having a out of a sense of loyalty, he says, and more respect from their employers. ganization.” the 1970s,to give the first $500,000. board and having so many people a hope that one day he will be able to “We created a movement that ROC groups are now in six oth- Seventeen small banks came up make decisions,” says Shardha reap the rewards of being a co-own- brings people together—from dish- er cities, including Los Angeles, with another $1.2 million, and var- er of a thriving restaurant. washers to managers,” says Fekkak Chicago and New Orleans. A ious charities provided the remain- Mamdouh, a co-founder of ROC health insurance plan, costing $22 a ing $500,000 to open Colors. ‘This was a Staying afloat NY and Colors and a former server week for ROC members, is also in “It used to be crowded in the be- in many ways, Colors’ struggles are at Windows on the World.“And it’s the works. ginning,” says Mr. Mamdouh. noble thing. no different from those of any other here to stay.” For all its success advocating for The stretch of Lafayette Street restaurant dealing with financial ROC NY has made its mark in restaurant employees, however, where the restaurant is located at- We created problems—except for its connec- the city by targeting high-profile ROC’s experience as a restaurant tracts little foot traffic—a poor spot, tion to ROC NY, which has essen- restaurateurs, including Daniel owner and operator has been mixed. in hindsight, to open such a place. a lot of jobs’ tially kept it afloat. Boulud and Alan Stillman. The The idea behind Colors was to cre- Today,Colors is more a symbol of its ROC NY runs a free training group has won nine campaigns in ate a role model, a sort of utopia for idealism than a functioning example program at the restaurant to provide all, securing $5 million in settle- the restaurant industry.It was estab- of it. additional job experience mainly for ments from restaurants accused of lished as a worker-owned coopera- The restaurant was forced to immigrant restaurant workers, and sexual harassment, wage and hour tive that would pay higher-than-av- close for dinner for nearly six Young, director of events at Colors, it pays Colors a fee to use its space. violations, and discrimination. erage wages, be governed by months, until the end of March, who has worked at the restaurant Right now, the fee is a lifeline, Restaurateurs cringe at the committee and serve as an example though it continued to book private since it opened. “The board is dis- covering 50% of the restaurant’s ex- prospect of a ROC campaign, for an industry with a long history of parties during the hiatus. The staff solved, at least for now.” penses, says General Manager which often includes noisy and pro- labor violations and abuse. has shrunk to 12,including just one, As Colors’ economic fortunes Loretta Peng, who is also spear- longed protests outside the eatery. a kitchen worker, who was em- declined, so too did the generous heading ROC’s Colors expansion. Settling is often the less expensive Struggles on every front ployed at Windows on the World. pay. Previously, all employees, in- Mr. Mamdouh insists that even for restaurateurs mindful of reality hurt. Nearly everything The employee ownership structure cluding servers who earn tips, were if the New York Colors doesn’t sur- their brand’s image and the cost of a about the restaurant has been a no longer exists because most of the paid a minimum of $13.50 an hour. vive as a restaurant, it will have ac- long court fight. struggle, from raising the funds to workers dispersed to find better- Now,the base for non-tipped work- complished more than he imagined “ROC has had a very significant open it to attracting customers. paying jobs. ers is $11.80 per hour—still several it could.“If nothing else,Colors will impact on the industry,”says restau- “We thought the money would It didn’t help, either, that seven dollars more than the average remain a training facility,” he says. rant attorney Carolyn Richmond, a come easy, but it was so hard,” con- former ROC NY members sued the kitchen worker’s pay in the city— “This was a noble thing.We created partner at Fox Rothschild. “They cedes Mr. Mamdouh. It took an organization for breach of contract while servers are paid the mini- a lot of jobs.” 

Equinox’s new apparel line, in- with skin-care purveyor Kiehl’s on Equinox opened a second, 20,000- Adding muscle troduced earlier this year, carries bath and shower products. Sales for square-foot outpost on the Upper price tags ranging from $55 to $350. the venture, which began last fall, West Side this past December. The It is also expected to be a big source are on track to exceed Kiehl’s USA centers are expected to grow beyond Continued from Page 3 members complain of contract dis- of revenue. The chain plans to dou- President Chris Salgardo’s initial New York into the rest of the coun- chain completed a debt refinancing putes—a dirty little secret in the ble the line next year and eventually expectations of $1 million for the try, according to Mr. Spevak. of $425 million through Morgan gym industry. When a contract ex- branch out from its own shops to first year. “It was a smart move,” says Mr. Stanley and Citadel, and it emerged pires, customers must give 45 days’ more upscale retailers on par with After teaming up with Hong McCall.“Yoga has become popular, with private equity firm Leonard notice of their intention to quit or Barneys New York. Along with its Kong-based Pure Yoga two years with long-term standing and a place Green & Partners as another in- face continued credit-card charges. own apparel,Equinox has partnered ago on an Upper East Side location, in fitness.”  vestor. Those who have been laid off are not “It was done at a time when most exempt. people didn’t think this industry would be able to get financing,” says Full speed ahead Rick Caro, who runs Management the recession is not stopping Mr. Vision,a consulting firm focused on Spevak from forging ahead to ce- May 2010: the club industry. ment the chain’s hold on the global The world’s most Yet it hasn’t all been smooth market. One of the prime spots he’s environmentally advanced swimming. Revenue increased just eyeing is an urban area similar to skyscraper is formally 5% from 2008 to 2009, compared New York: London. He’s also look- with a 20% revenue jump the prior ing at China, the Middle East and awarded LEED Platinum–– year,and the club slowed the growth Canada, and expects to have as Core and Shell. of its new locations during the many as four outposts overseas by downturn.It launched only five new the end of 2011. In five years, there clubs in 2009, compared with six in could be 40 locations outside of the 2008, and just three are planned for United States, typically measuring this year. between 30,000 and 40,000 square In addition, some former club feet. TM Walmart in limbo Bank of America Tower ization as a reason to keep fighting. at One Bryant Park Retailer’s anti-union “This is New York; this is not stance remains issue Chicago,” says Stuart Appelbaum, A limited number of president of the Retail, Wholesale LEED-certifi ed pre-builts are now available. and Department Store Union. BY DANIEL MASSEY “They’ve got a long way to go before they would be welcome here.” new york labor leaders cast aside Walmart would not confirm the notions last week that Walmart was pact with labor groups;a spokesman closer to gaining a foothold in New would only say that the company had York City, following a deal in Chica- a deal “with the residents of Chicago.” go that muted opposition by promis- News of the agreement came a ing to pay workers at least $9.15 to day after union leaders and politi- $9.35 an hour after a year on the job. cians rallied at New York’s City Hall Even if Walmart were to promise in opposition to Walmart’s plans to comparable wages in New York— open its first local store.The rally was around $12.80 to $13.10 an hour— organized following an April 26 re- union officials here cite the retailer’s port in Crain’s that Walmart is eye- long-standing opposition to union- ing a pre-zoned site in Brooklyn. 

June 28, 2010 | Crain’s New York Business | 79 20100628-NEWS--0080-NAT-CCI-CN_-- 6/25/2010 6:48 PM Page 1

Loft Law menaces manufacturers

Continued from Page 1 Network,the three areas account for however, that the vast bulk of the zones—North Brooklyn, Green- nearly 14% of the city’s total manu- city’s manufacturing areas—and point-Williamsburg and Maspeth, facturing jobs. manufacturers—will be unaffected Queens—are not. “We understand the demand for by the law. Meanwhile, residents in Sources say that local officials housing, but it amazes me that the industrial buildings, many of them were lobbying Albany late last week state could do this in this economic working artists, will get safer places to replace Maspeth with a different climate,” says Sarah Crean, deputy to live as the city enforces stricter SHIPSHAPE: Peter Queens IBZ, most likely Long Is- director of the New York Industrial residential building codes. Under Georgiopoulos has been land City. But for now, in the wake Retention Network. “It sends a the law, the city can fine building able to cash in before. of the bill’s signing, businesses in message that it’s OK to convert owners $17,500 for a violation, those three neighborhoods are fear- buildings illegally and puts manu- compared with a mere $1,000 previ- ing a wave of residential conversions facturers against a wall.” ously. that could drive them out of their “The law will not cause further premises by pushing up rents and Rich incentives erosion of industrial space,” insists depriving them of expansion space. for landlords, the incentives to Chuck DeLaney, a longtime loft Additionally,since the law will allow go residential can be huge. Brokers dweller who co-founded the advo- current residents in those neighbor- say owners can charge residents at cacy group Lower Manhattan Loft Betting oil won’t tank hoods to remain, so too will the ex- least three times more than they Tenants and represents tenants on isting conflicts with manufacturers. would charge an industrial compa- the Loft Board, which regulates “I feel somewhat betrayed by the ny, which would pay $10 to $12 per conversion of lofts. Continued from Page 1 deal-master’s touch has eluded him state, which came in with a heavy square foot. It’s not residential tenants that five of what the shipping set under- in his latest bidding for oil tankers. hand without worrying about the force businesses out of a neighbor- statedly calls “very large crude carri- Amid a general slump in shipping consequences,” says Tod Greenfield hood, Mr. DeLaney says: “The rea- ers”—the kind that can hold 2 mil- stocks,General Maritime shares have of Martin Greenfield Clothiers in ‘Our delivery sons why businesses leave the city is lion barrels. been especially dismal, falling about east Williamsburg. “This law will because of infrastructure cost and The move comes as oil drillers 75% in the past two years to $6.50 change neighborhoods and make trucks start at 6 city rezonings.” and shippers face tougher regula- apiece. Nervous bankers would only them undesirable for businesses.” tions and higher costs. Adding to lend the company enough money to Proponents of the new law insist in the morning, 300 loft buildings the risks, Mr. Georgiopoulos’ deal cover 60% of the cost of its new that it will protect residents in in- there is no official count on expands the size of General Mar- tankers, forcing Mr. Georgiopoulos dustrial buildings from unsafe con- and residents how many tenants will benefit from itime’s fleet by more than 50% just to raise most of the balance by selling ditions by requiring their landlords the law, but Mr. DeLaney estimates when a flood of new tankers is ex- $196 million worth of stock last week, to officially convert those units for complain’ that there are roughly 300 loft build- pected to hit the market. New sup- which diluted existing shareholders’ residential use and upgrade fire and ings across the city that will be legal- ply could cause shipping prices to stakes by nearly 50%. safety standards. ized under the new law. crash and swamp the heavily indebt- Getting that painful deal done For manufacturers located near ed company. apparently took all of Mr. Geor- Nine months to act one of those properties,however,the giopoulos’dealmaking skills,as he re- the loft law will affect buildings prospect of more residents is daunt- He’s an optimist minded investors of the many good that have at least three residential In Williamsburg,where Wonton ing. Mr. Greenfield of Martin unsurprisingly, Mr. Georgiopou- times they shared in more prosperous tenants who have lived there for 12 Food is based in a 100,000-square- Greenfield Clothiers is a case in los doesn’t see things in such a days.“Look,we started with $80 mil- consecutive months from 2008 to foot building it bought in 1989, point. To accommodate residents gloomy light. The plainspoken lion,we gave you $1.4 billion,”he says 2009. Landlords will have nine space has been getting harder to find living near his Williamsburg plant, Bronx native—who once dismissed he told investors. “Give us another months from when the law takes ef- for years. Unable five years ago to he waits till later to switch on the in- an English speechwriter for season- $200 million back.” fect in the coming weeks to apply for expand anywhere near its home dustrial vacuum he uses to dry ing his speeches with such posh Even with the money, General the proper conversion. At the same base,where it employs 300,Wonton clothes. words as whilst—insists that now is Maritime has little margin for error. time, their tenants for the first time Food instead leased 200,000 square Wonton Food has run into simi- the time to strike. He argues that It carries $1 billion in debt and only will have the right to rent stabiliza- feet for vegetable-processing plants lar hassles. ships are attractively priced after $15.9 million of unrestricted cash, tion. in Queens and on Long Island. “Our delivery trucks start at 6 in their values fell by half last year, and and it has pledged just about all of its While that is good news for res- “My concern is keeping those the morning, and residents com- he sees evidence of economic recov- assets as collateral, according to idents, advocates for the city’s man- jobs in our community,” says Leah plain about the noise all the time,” ery taking hold. Standard & Poor’s. ufacturers argue that the law will put Archibald, executive director of the says Weilik Chan, the company’s “I’m feeling confident,” he pro- pressure on at least 830 companies East Williamsburg Valley Industri- human resources manager, adding claimed at an industry conference Changing world with 11,700 employees in the three al Development Corp. “We are los- that the problems started a couple of last week. “I’m feeling things are that financial burden could be Industrial Business Zones where ing jobs to parts of Long Island, years ago when one landlord started getting better here in the States. manageable in ordinary times, but the Loft Law applies. According to New Jersey and Connecticut.” illegally renting to residents. “They And I think we’ll all be dead before the Gulf disaster may be a game- the New York Industrial Retention Tenant advocates point out, even throw eggs at us.”  there’s a collapse in China.” changer once an angry Congress The 49-year-old former Wall and embarrassed regulators finish Street banker has shown a spectac- with the oil business. ular sense of timing in the past. “Our world is changing,” A jobless summer for teens When oil prices were hovering at Morten Arntzen, CEO of Manhat- $10 a barrel back in 1997, and the tan-based Overseas Shipholding shipping business had tanked, Mr. Group, warned at a conference last Continued from Page 2 experts say.“Summer jobs help them Knight, but getting back on her feet Georgiopoulos started General week. “We will get unlimited liabil- “It’s kind of hard because people get their foot on the first rung of the hasn’t been any easier. Maritime and turned it into the ity as an industry, and I’m not sure assume that girls are more responsi- employment ladder,” says Diana fourth-largest publicly traded ship- anyone knows what that means yet ble than guys,” Mr. Knight, 16, says. Furchtgott-Roth, director of the Back to school ping company, with $67 million in except we all know that it’s going to “Also, older people have more expe- center for employment policy at the “every day is hard, because you operating income last year on $350 cost us all more.” rience, so employers would rather Hudson Institute, a Washington, run out of places to look,” says Ms. million in revenue. The other issue lies in the flood of hire them.” D.C.-based think tank. Sullivan, who has been living at He built the company by stocking new ships about to hit the waves. John Challenger, chief executive Ms. Gardner and others agree, Covenant House, a shelter for up on ships at depressed prices and Shipyards are scheduled to complete of Challenger Gray & Christmas, pointing out social advantages for homeless teens. “My background is selling many of them near the top of construction of enough new huge an outplacement consulting firm, young people who spend their sum- mostly clerical,but I’ve been looking the market in 2005 and 2006. In less tankers to increase the size of the says that proactive approaches, such mers working. “The stats show that for anything—you can’t really pick than a decade, he had translated the world’s fleet by nearly 30% next year. as going directly to shops and speak- young people who have jobs are less and choose.” $80 million in capital he used to start Whether the new capacity will be ing with managers, are all-impor- likely to get involved with gangs, Though she continues to look, his enterprise into $1.4 billion in div- delayed or even canceled is a topic of tant steps for teen job seekers. substance abuse and pregnancy,”she she’s already planning for the future idends and share buybacks. huge debate within the industry. says. “This is the No. 1 predictor of by doing what many older unem- “He’s got a great sense of the Their arrival could trigger a Hitting the malls success later on.” ployed workers chose to do at the deal,” says Peter Shaerf, a General “2009-type depression” in shipping “they have to get out and meet Ms. Gardner adds that many height of the recession: heading Maritime board member and man- rates, Sterne Agee & Leach analyst the managers of these retail stores teens spend the money earned over back to school. She plans to study aging director of investment bank Salvatore Vitale warned in a recent and tell them that they can be count- the summer rather than saving it— criminal justice at Bronx Commu- AMA Capital Partners. client report. Rates on the very ed on,” Mr. Challenger says. “It’s which can help the local economy. nity College in the fall,following ex- Mr. Georgiopoulos declined to largest oil tankers last year collapsed great experience on how to look for Danique Sullivan, 21, had been pert advice about remaining flexible be interviewed for this article— to as little as $20,000 a day from a job, and that’s career experience in working for a life insurance compa- and, most of all, upbeat. begging off, he says, because his their high of $145,000 in 2008. itself.” ny in a clerical role before she was “Sometimes I don’t even know bankers at Goldman Sachs didn’t “If the 2011 official supply pic- Teens without summer jobs are laid off earlier this year. She may be where to start,” Ms. Sullivan says, want him to talk to the press. But ture becomes reality,”Mr.Vitale ad- historically left at a disadvantage, older than Messrs. Maxwell and “but I still stay positive.”  some investors seem to fear that this vises, “run for the hills.” 

80 | Crain’s New York Business | June 28, 2010 CN013787 6/17/10 11:01 AM Page 1

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