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TOP STORIES BUSINESS LIVES This NY inventor T-shirt claims tech giants supports stole his idea the troops PAGE 2 ® PAGE 47 Broadway bounces back poststrike as box office bulges VOL. XXIV, NO. 2 WWW.CRAINSNEWYORK.COM JANUARY 14-20, 2008 PRICE: $3.00 PAGE 2 Customers defect as crisis engulfs NewYork anxiety attack FreshDirect PAGE 3 Poll shows sharp NEW YORKERS’ OPINIONS, 2002 AND 2007 Storied Riverdale increase in worries Is New York headed in the Do you trust city government Press is up for sale, since ’02; City Hall right direction? to do what is right? loses big-time ’02 ’07 ’02 ’07 and News Corp. Right direction 50% 46% Just about always 1% 3% has come knocking BY ERIK ENGQUIST Wrong direction 30% 36% Most of the time 34% 22% NEW YORK, NEW YORK, P. 6 Neither 16% 13% Some of the time 52% 65% in the last five years,New York City has rebounded from the Sept. Don’t know 4% 5% Don’t know 13% 9% 11 attack, seen serious crime de- Source: Charney Research cline, added a quarter of a million jobs and attracted about 150,000 ment than they were five years ago, the city are getting worse, up from ernment, and give low ratings to new residents. Yet by many meas- according to a Crain’s New York 30% in 2002. An increasing num- mass transit, public schools and the ures, New Yorkers are more dissat- Business poll. ber call Gotham dirtier and noisier, police. Housing has surpassed the isfied with their city and its govern- Some 36% believe conditions in say they have little faith in city gov- See NEW YORK on Page 9
REPORT REAL ESTATE THE RACE FOR PRESIDENT 2008 G Lower Manhattan tries to reinvent itself PAGE 23 G Little India suffers Readers from success PAGE 36 vote G Jersey City waits for NYC migration PAGE 37 against
AT DEADLINE politics NEW YORK FILMMAKERS WILL High-profile books ACCOUNT FOR 16 OF THE 56 English-language features disappoint without premiering at the Sundance Film Festival, which opens RECORD EFFORT: Bush in the race Indie label owner Thursday.The movies include Mike Muse has a big August, a story about two emotional stake in BY MATTHEW FLAMM brothers working at a Wall Barack Obama’s Street startup the month campaign. president george w. bush may
before Sept. 11, starring Josh buck ennis be remembered as one of the most Hartnett, and Blind Date, with polarizing chief executives in re- Stanley Tucci. Film analysts cent history. But one thing’s for expect heated bidding wars at sure: The book business isn’t the Sundance this year from same without him in the presiden- studios seeking new product in HIP-HOP’S CANDIDATE tial race. the wake of the writers’ strike. The 2008 campaign is shaping stop until he gets sworn in as pres- up to be one of the most exciting in A MERGER OF J.P. MORGAN Apolitical stars, music execs embrace ident.” recent memory. But in stark con- CHASE & CO. AND Obama with public support, contributions Such emotions are nothing new trast to the last election, the pas- Washington Mutual Inc. could on the campaign trail, but the sions the race has inspired are not probably be done without tional roller coaster for the past groundswell of support that the the sort to make people buy books. divesting any branches in the BY SAMANTHA MARSHALL week and a half. The 29-year- senator from Illinois is receiving The last time around, readers New York area, says research old—an energetic volunteer for from members of New York’s hip- roiled by red state, blue state angst firm SNL Financial. Shares of independent label owner and the Barack Obama campaign in hop community is unprecedented. were flocking to titles by Michael See AT DEADLINE on Page 2 hip-hop radio and TV personality New York City—went from giddy Music executives, rap artists, Moore and Al Franken on the left Mike Muse has been on an emo- excitement when his candidate media bosses and fans have be- and Bill O’Reilly and Ann Coulter won the Iowa Democratic caucus- come so politically engaged that on the right.Small left-wing press-
02 es to somber resolve when his man they’re not just talking about the es were ordering large-publisher
5 placed second in the New Hamp- rising politician in nightclubs. print runs. Conservative imprints shire primary last Tuesday. They’re also writing checks, can- were blossoming at the big houses. “We have to work harder now,” vassing voters and publicly sup- Publishers are feeling the dif- ELECTRONIC EDITION says Mr. Muse. “The job doesn’t See OBAMA on Page 8 See POLITICAL BOOKS on Page 8 MORE POLITICS Viewpoint: Feb. 5 showdown in NY Page 12 / Alair Townsend on learning to love the polls Page 13 NEWSPAPER 71486 01068 0 CNYB 01-14-08 A 2,3 1/11/2008 7:35 PM Page 1
AT DEADLINE
Continued from Page 1 getting strong consideration WaMu, the nation’s sixth- from the commission writing a largest financial institution by congestion pricing plan. It deposits, jumped Friday amid would replace that part of the speculation that the Seattle- mayor’s plan that proposed based thrift had held charging a $4 fee for car trips preliminary merger talks with within the zone.The surcharge Chase, the nation’s second- would be paid primarily by largest bank by deposits. Manhattan residents, who Together, the two would have account for 70% of taxi users. about 1,100 branches and 29% of all deposits in the New York THE NUMBER OF NEW area, below the regulatory limit. TECHNOLOGY JOBS BEING Chase would probably close created in Manhattan continued offices because of duplication. to decline in the fourth quarter. The Pace University and FRIENDS OF THE HIGH LINE HAS SkillProof IT job index fell 33% RETAINED EMILY GISKE OF from the previous quarter, lobbying firm Bolton-St. Johns, marking the fourth consecutive who is close to City Council quarter in which job postings in Speaker Christine Quinn, to the area decreased. Problems in represent its interests as a the financial markets caused developer is selected for the 26- tech companies to cut back on acre Hudson Yards site.The hiring, according to the index. defunct rail line runs along part of the site, and the nonprofit ARTS HORIZONS, A NONPROFIT group wants all of it retained as PROVIDING ART CLASSES TO parkland.Three of the five 300 schools in the tristate area, JUDAH KLAUSNER, a Manhattan inventor, development plans keep all of is opening its first permanent says: “I’m not in the the High Line, while two retain Manhattan location. It recently business of interfering only part of it. signed a 10-year lease for 3,300 in anyone’s business square feet at 2785 Frederick model. I just want my A RECORD 46 MILLION Douglass Blvd., between West royalties.” VISITORS FLOCKED TO THE CITY 147th and West 148th streets, in last year, a 6% gain over 2006, Harlem.The Arts Horizons buck ennis the mayor’s office was LeRoy Neiman Center will scheduled to announce Sunday. offer classes for all ages and is Tourists are estimated to have slated to open in May. spent $28 billion. International Construction costs are expected visitors totaled 8.5 million, a to top $400,000. Matthew whopping 20% gain over the Gorman of New Street Realty Staking his claim previous year. Advisors represented building owner Bradhurst Apartments, A PROPOSAL FOR A $1 and Elizabeth Martin of E.L. Inventor says Apple, others are violating his patent SURCHARGE ON TAXI AND Martin Partners negotiated for livery cab rides that begin or end the tenant.The asking rent was in the central business district is $40 a square foot. BY AMANDA FUNG he’s going up against some of the giants in the tech industry, but that’s nothing new for CORRECTION Judah Klausner. René Jones is chief financial officer of M&T Bank. His title was incorrect in the Jan. 7 story “Bad loans start piling up.” Last month, the Manhattan inventor sued Apple Inc. for $360 million in damages and future royalties for infringing on one of his patents. He has similar lawsuits pending against Cablevision Systems, Comcast and eBay’s Skype for another $300 million. THIS WEEK IN CRAIN’S The 55-year-old Manhattan resident claims he invented the concept behind visual voice mail, which lets users see a list of voice messages on a display screen and then select ones they NEW YORK, NEW YORK------6 want to hear.The feature is now being used in a number of products, including Apple’s iPhone. NEIGHBORHOOD Two years ago, Klausner sued Time Warner’s AOL for infringing on the same patent and See MANHATTAN INVENTOR on Page 10 JOURNAL------11
ALAIR TOWNSEND ------13
THE INSIDER------14 WEEK IN REVIEW ------16 Broadway strike shows no 49 SMALL BUSINESS ------18 THE WEEKS AHEAD ------20 Theater business lion each. Wicked sold more than from a business standpoint as a big 51 $1.8 million in tickets,and the three snowstorm,”says Kevin McCollum, REPORT: REAL ESTATE ------23 bounces back as Disney shows all broke house producer of Rent, Avenue Q and the records at their theaters,as crowds of recently shuttered The Drowsy DEALS------42 productions break people converged on box offices try- Chaperone. “We lost profit and dol- CLASSIFIEDS ------44 ing to snag last-minute seats. lars,but it’s not going to have a long- box-office records “We could have sold 250 more term damaging effect.” BUSINESS LIVES------47 tickets every night during the holiday Of course, any loss is painful. BY MIRIAM KREININ SOUCCAR CORPORATE LADDER------49 weeks, there was such demand,” says Broadway grosses for the season are David Schrader, managing director down 5.0% from the same period EXECUTIVE MOVES------50 six weeks since the 19-day stage- of Disney Theatrical Productions. last year, and attendance has sunk BOB LAPE ------51 hand strike shut down Broadway, 4.5%, mainly due to the strike, business on the Great White Way As damaging as a snowstorm which lasted from Nov. 10 through vol. xxiv, no. 2, january 14, 2008—Crain’s New York Business (issn 8756-789x) is published weekly by Crain Communications Inc., 711 Third Ave., New York, NY 10017. Periodicals has bounced back,with many shows even into january—Broadway’s Nov. 29. Before the labor action be- postage paid at New York, N.Y. and additional mailing offices. Postmaster: Send address recovering to set box-office records. slow period—more than half of the gan, grosses were up 5.8% and at- changes to: Crain’s New York Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. for subscriber service: Call (888) 909-9111. Fax (313) 446-6777.$3.00 a Grosses during the typically lu- 30 shows are more than 80% full, tendance was up 5.5%. copy, $59.79 one year, $109.79 two years. (GST No. 13676-0444-RT) ©Entire contents crative Christmas week catapulted convincing many producers that the Producers from major hit Cyrano copyright 2008 by Crain Communications Inc. All rights reserved. to a record $30 million, with 14 strike is having little ongoing impact. de Bergerac, starring Jennifer Garner shows bringing in more than $1 mil- “The strike was as damaging and Kevin Kline, say they won’t see
2 | Crain’s New York Business | January 14, 2008 CNYB 01-14-08 A 2,3 1/11/2008 7:37 PM Page 2
Buyouts on the rocks Fresh 6 dodgy deals struck last year could cost their Wall Street backers dearly Direct’s WITH EASY CREDIT A THING OF THE PAST and the economy slowing, RATINGS comparing the target company’s share price with the price offered dozens of planned corporate mergers that investment bankers by the acquirer.The bigger the spread between the two prices, the cobbled together in happier times are now in jeopardy. worse the odds. crisis “I’ve never seen things come so unhinged,” says Louis Meyer, a Severely limping Back in July, investors rarely worried about deals not getting merger-arbitrage specialist at Manhattan-based brokerage Oscar done. Only one proposed merger had a spread of greater than Gruss & Son Inc., who has bet on corporate takeovers for 15 years. 20%.Today, 19 do, including three with spreads of over 75%. Among the endangered deals are many whose failure could cost Badly wounded “The euphoria has turned into a sense that there’ll never be Online grocer beset Wall Street firms dearly in terms of lost merger advisory fees, another deal ever again,” says Thomas Burnett, director of by labor woes, which are typically 0.35% of the value of the deal upon research at Wall Street Access, a firm that tracks takeovers. Barely breathing completion. And of course, the companies whose transactions are Following are descriptions of half a dozen of the endangered customer revolt at risk—Manhattan companies Sirius and CKX among them— deals—rated by the probability that they will come unglued—and BY LISA FICKENSCHER face a different sort of nightmare. Beyond saving the institutions likely to bear the financial brunt of any failures. Wall Street measures the likelihood that a deal will close by —aaron elstein freshdirect is facing its toughest Alliance Data Corp. Gemstar-TV Guide International Inc./Macrovision Corp. struggle since 2002, when it kicked off its effort to convince New York- Credit card processing G $7.8 billion LBO Publishing/software G $2.8 billion acquisition ers to buy their groceries in a whole INVESTORS ARE WONDERING whether private equity INVESTORS ARE PANNING the proposed new way—on the Internet. giant Blackstone Group will back out of this LBO after deal, saying that the combination of a The high-tech, Long Island cancelling a deal earlier this month to snap up mortgage lender PHH. Since magazine publisher/cable channel operator with a City, Queens-based company won November, the gap between what Manhattan-based Blackstone is offering for manufacturer of antipiracy software makes no sense. that battle handily, with revenues Alliance’s shares and what investors are willing to pay for them has crept up to Gemstar’s stock has fallen 35% and Macrovision’s 25% soaring past $200 million last year. 13%, amid growing concern that a weakening economy will mean fewer credit since the deal was announced last month. J.P. Morgan But suddenly FreshDirect finds it- card transactions for Houston-based Alliance to process. Walking away from and Merrill Lynch, which have promised to help finance self under siege from federal immi- the deal would hurt Blackstone’s reputation, however. Instead, it may lean the deal stand to lose big fees if the deal dies. But gration authorities, labor organiza- tions, politicians and even from its
istockphoto heavily on its bankers at Credit Suisse to finance the buyout. Rupert Murdoch has the most to lose: His News Corp. owns 41% of Gemstar. own customers.At stake are the gro- cer’s reputation and its ambitious CKX Inc. Myers Industries Inc. growth plans, including an initial public offering of its stock. Entertainment G $1.3 billion LBO Automotive parts, rubber and plastics G $1.1 billion buyout In a letter to its customers at the CKX OWNS THE AMERICAN IDOL BRAND, the GOLDMAN SACHS ENJOYS a reputation as the home of Wall beginning of the year, FreshDirect franchise rights for Muhammad Ali and Elvis Street’s smartest bankers, but the firm seems to have decided acknowledged that the crisis, which Presley, and more. But the June 2007 offer to take the that it goofed by offering to acquire Myers, an Ohio-based manufacturer of started just before Christmas when firm private is wildly complex, and many are betting that everything from auto parts to flower pots. Last month, immigration offi- the deal will fail. Manhattan-based CKX is offering Goldman agreed to pay the company $35 million to cials descended on shareholders cash plus stock in another firm that will extend the deal deadline to April from December, and it the company, has 925 develop Ali- and Presley-themed attractions. But the encouraged Myers to seek another merger partner. “hurt our ability to NUMBER of warehouse amount of cash depends on how well the other company Goldman said it wanted more time to “further evaluate serve you in the workers short term.”
getty images employed by does. CEO Robert Sillerman says quick expansion hinges on going private. istockphoto conditions.” The problems FreshDirect began to snowball Clear Channel Communications Inc. Sirius Satellite Radio Inc.-XM Satellite Radio Holdings Inc. in December, when 150 experi- enced workers failed to show up for Radio stations G $27 billion LBO Radio G $13 billion merger their jobs at FreshDirect’s sprawl- MORE THAN A YEAR after it was announced, the buyout of the San NEARLY A YEAR after the nation’s only two satellite radio ing headquarters. The employees Antonio-based firm is proving to be a massive headache for the companies unveiled their “merger of equals,” the deal’s fate left as Immigration and Customs slew of banks that signed on to finance it. The leveraged buyout remains in the hands of federal authorities. Investors are increasingly betting Enforcement agents began investi- may hinge on the ability of backers to sell $1.5 billion worth of that regulators will block the deal on antitrust grounds. gating whether the company was hybrid bonds, which investors have lost all appetite for Without a merger, Manhattan-based Sirius and Washington, employing undocumented immi- since the credit crisis began. To get the huge deal D.C.-based XM would likely add to the $3.5 billion in losses grants. done, its engineers—including Citi and Morgan they’ve each piled up since 2002. A failed deal would At the same time, the United Stanley—may be forced to hold those bonds also cost J.P. Morgan and Morgan Stanley dearly in Food and Commercial Workers and the Teamsters, which had recently
istockphoto themselves and eat big losses. terms of lost fees. lost elections to unionize the com- pany’s 925 warehouse workers, vowed to escalate their campaign. They charge that the company, back its entire investment. Theater Many producers are managing to which employs nearly 2,000 people, executives say that the production find a silver lining in the walkout. intimidated its workers. They also lasting effects went dark on Dec. 30 after running “We got two weeks of national at- vowed to turn public sentiment for a year and a half. Just three tention that America was missing against the grocer as they gear up for weeks before the walkout, Bob something because Broadway wasn’t another vote a year from now. have sold $2.5 million more in Saget, of Full House and America’s on,” Disney’s Mr. Schrader says. Recently, prominent politicians tickets—the difference be- Funniest Home Videos fame, started That may explain why advance have added their voices to the cho- tween breaking even and his run as the musical’s lead. He re- ticket sales for the next two months rus of criticisms. making money. ceived a lot of press attention and for musicals like The Lion King and “I’d like to see FreshDirect suc- “The profits we could was the subject of a big advertising Mary Poppins are 10% ahead of ceed the right way, where their have had during the second- blitz, but by the end of the strike, where they were last year. workers are treated fairly,” says City most-important week of our that momentum was lost. Disney’s decision to move the Councilman Eric Gioia, a Demo- business cycle is money we opening of The Little Mermaid to crat whose district includes Long Is- couldn’t recapture,” says Other factors play role Jan. 10 from Dec. 6 because of the land City.Last month,he went so far Stewart Lane, a producer of mr.mccollum,the show’s produc- work stoppage is also proving to be as to personally deliver paychecks to
getty images Cyrano and Legally Blonde, er, says other factors also played a a pleasant surprise. Instead of get- FreshDirect employees too fright- THE LITTLE MERMAID, a Disney musical, made a referring to the long Thanks- role in the show’s demise. “The ting lost among the crush of other ened to show up at work because of splash by opening on Jan. 10 instead of Dec. 6. giving weekend when the- thing that hurt us more than the openings, its debut stands alone as the immigration audit. aters were forced to close. “I strike was that the number of Eu- a big event in a usually bleak time of Meanwhile, some concerned have nightmares about how ropean tourists increased dramati- year. That show has a $15 million customers, including Diane Keat- a dime in profits from the show’s much we lost that weekend.” cally, and they want to see some- advance and is selling out each ing, who works for a not-for profit limited run,which lasted from Oct. Still, only one show—The thing they know,” he says. “Every week. and lives on the Upper West Side, 12 through Jan. 6, because of the Drowsy Chaperone—has closed, theater was lit and there’s a great are boycotting FreshDirect until the strike. They estimate they could and it shut down long after paying crop of work to choose from.” COMMENTS? [email protected] See FRESHDIRECT on Page 8
January 14, 2008 | Crain’s New York Business | 3 CNYB 01-14-08 A 4 1/11/2008 7:40 PM Page 1
IN THE MARKETS HIGHLIGHTS REEL Dice’s tumble masks -1.8% The job-sites firm’s promise Bloomberg/ Crain’s New York Index
➡ fell 1.8% to “The company has shown strong and engineering jobs and makes up 70% of end the Rides out soft economy growth,” says Wendy Walker, an analyst the total—jumped by 28% in the quarter. week at via focused online ads; at Argus Research. “Unemployment rates in tech and fi- 339. The Dice recently re- nance are much lower S&P 500 British buy leads pack ported third-quarter than the economy at Index fell 2007 earnings of $4.2 large, 2% to 2.3% ver- 0.8%, million, or 7 cents a sus 4.7%,”wrote Yous- closing at BY AMANDA FUNG share,up 33% from the sef Squali, an analyst 1401. same period last year. at Jefferies Group who ecent reports of a weaken- Revenues soared 76%, has a “buy” rating on ing job market have sent to $38.2 million. For Dice, in a recent re- shares of Dice Holdings Inc. the full year, analysts search note. “Argu- rolling downward. Earlier expect the company to ably, recruitment in this month, the Manhattan- post earnings of 23 these two segments RISERS Rbased operator of niche career Web sites cents a share, versus a should not be impact- 5-DAY 1-MONTH 3-MONTH CLOSING hit a 52-week low of $6.95. loss of 11 cents in 2006. ed to the same extent as % CHANGE % CHANGE % CHANGE PRICE Since the company went public in July, Revenues are project- the [overall] economy.” CIT Group +12.1% -5.3% -38.2% $24.66 Dice’s shares have plummeted 30%. But ed to climb 71%, to Dice’s revenues Schering-Plough +8.6% -4.3% -14.0% $27.75 investors should seize this chance and $142.9 million. come mostly from cor- place their bets on the 17-year-old outfit. Much of the dollar porate subscriptions. Merrill Lynch +8.5% -6.9% -27.7% $54.54 Unlike larger rivals Monster World- volume will continue Customers can post Bunge +7.1% +8.5% +24.5% $129.57 wide and CareerBuilder,whose Web sites to flow from eFinan- Market cap $543 million job listings and search Altria +5.8% +2.8% +13.3% $79.26 offer all types of jobs, Dice operates six cial Careers. Dice Forecast 2008 P/E 25.7 Dice’s database of ré- separate sites focusing on different skilled bought the London- Operating margin 20% sumés for a fee of $795 fields, ranging from technology to finan- based job site in 2006 a month or $6,678 an- SINKERS cial services.This specialization has helped as part of an interna- nually. The firm has 5-DAY 1-MONTH 3-MONTH CLOSING the firm weather the slowing economy. tional expansion ef- about 9,000 cus- % CHANGE % CHANGE % CHANGE PRICE Dice has an edge because it produces fort; it now offers online job postings in tomers—including IBM, Time Warner Children’s Place -26.4% -41.0% -25.1% $17.03 more qualified and skilled workers for five languages throughout 14 countries. and J.P.Morgan—listing jobs on its sites. Ann Taylor Stores -15.6% -32.7% -45.5% $19.54 employers and more targeted results for Revenues at eFinancial Careers soared “Dice’s prepaid revenue stream pro- job seekers.And the company is poised to Barnes & Noble -14.4% -19.9% -26.1% $27.89 78% in the third quarter, contributing vides attractive cash-flow characteristics increase its share of the growing online- more than 20% of Dice’s total. and good visibility into future revenue Tiffany -13.5% -21.8% -35.1% $35.78 ad recruiting market, which is projected Despite a slowdown in the U.S. job growth,” says Ms. Walker. Loral Space -13.0% -20.6% -31.3% $28.89 to more than double to $4.5 billion in rev- market,revenues at the company’s flagship enues by 2010. site, Dice.com—which focuses on tech COMMENTS? [email protected]
THIS IS OUR MARKET... STOCKS TO WATCH by Erik Ipsen Jamie Dimon’s luck finally runs out; he faces likely first loss at J.P. Morgan J.P. Morgan Chase has famously avoided the catastrophes that have clobbered rivals such as Citigroup. But that doesn’t mean CEO Jamie Dimon & Co. are immune from rising loan losses, soaring credit card delinquencies and the host of other slowdown-spawned ills. The bank is likely to post its first quarterly loss in nearly two years this week. Its shares are off 15% in the last six months— small potatoes next to Citi’s 44% bath. So far, 2008 has been a year most investors would prefer to forget, but not those who own Colgate-Palmolive. Its shares have gained 2% this year and Admit One, the trusted source for the acquisition and sale of live event tickets for over 20 years… were among a mere handful that hit 52-week highs last week. True, the On the Buy side and Sell side — we offer our clients true market value, secure transactions and dependable service. company is looking a bit pricey with its shares trading at 25 times last year’s Let Admit One connect you and your clients to the events that matter. Call today, our market makers earnings, but the market is paying up for dependability. At month’s end, the are standing ready to BUY or SELL all NFL playoff tickets. company is expected to post a 15% increase in quarterly earnings. By most estimates, Martha Stewart’s fourth quarter will turn out to have been its first profitable three months in nearly a year. Martha, however, is out of fashion on Wall Street. Shares of the company are off Super Bowl Tickets 32% this year and 71% in the last 12 (646) 307-4239 and Packages• CONCERTS months. In December, Martha said it Now Available would cease regular publication of www.admitone.com • email: [email protected] • THEATER home decor magazine Blueprint. The 1412 Broadway, New York, NY SPORTS housing crash could also hurt sales of Martha’s home-goods line. On the Bloomberg Terminal: Type TIXX
4 | Crain’s New York Business | January 14, 2008 Project4 1/8/08 1:06 PM Page 1
Thank You for LEEDing the Way. With the support of the brokerage community, The Durst Organization has successfully completed 40 transactions totaling 521,705 RSF in 2007.
655 THIRD AVENUE 1133 AVENUE OF THE AMERICAS CB Richard Ellis, Inc., Jonathan Fales, Bruce Surry CB Richard Ellis, Inc. GVA Williams, Brian Given, Steven Jaray, Todd Stracci Timothy Dempsey, David Kleinhandler Newmark Knight Frank, E.N. Cutler, Noel Flagg, Ross Kaplan, Jason Pruger Studley, Greg Taubin, Kunihiko “Key” Otomo, Kenneth Ruderman 1155 AVENUE OF THE AMERICAS Winick Real Estate, Jeff Winick NAI James E. Hanson, Inc., Jonathan Stravitz Richard Berzine & Company, Richard Berzine 675 THIRD AVENUE Buchbinder & Warren Realty Group LLP, Gabe Whitman 114 WEST 47TH STREET CB Richard Ellis, Inc., Michael Laginestra, Rocco Laginestra Grubb & Ellis NY, Michael Gottlieb Cushman & Wakefi eld, Inc., James DeLuca, William Fressle, Robert Giglio JDF Realty Inc., Benjamin Kahr Grubb & Ellis NY, Larry Zuckerman J.G. Costabile Realty LLC, Joseph Costabile BANK OF AMERICA TOWER AT ONE BRYANT PARK Newmark Knight Frank, Michael Moorin CB Richard Ellis, Inc. The Staubach Company of NY, Robert Ageloff, James Wenk Ben Friedland, Silvio Petriello, Roshan Shah, Mary Ann Tighe, Gregory Tosko 733 THIRD AVENUE Norman Bobrow & Company, Inc., CB Richard Ellis, Inc., Richard Karson, James Robbins, Harly Stevens David Badner, Norman Bobrow, Zev Bobrow Colliers ABR, Inc., Aron Schreier, Jonathan Schindler Washington Realty Group, Eric Berson Cushman & Wakefi eld, Inc., Louis D’Avanzo, William Fressle Newmark Knight Frank, Erik Harris, Leslie Harwood, Robert Silver
Generations of Builders. Douglas Durst Building for Generations. Jonathan Durst
Karen Akbarzadeh Thomas Bow Eric Engelhardt John Grotto www.durst.org 212.597.1269 212.789.1124 212.789.1123 212.789.1142 CNYB 01-14-08 A 6 1/11/2008 7:16 PM Page 1
NEW YORK,NEW YORK edited by Valerie Block
can absolutely compete,” says Web site ready Jonathan Rubinstein, managing for slam dunk partner of the Greenwich Village coffee bar. “New Yorkers like to high school basketball player support a local brand if they have a Lance Stephenson’s bad behavior— choice.” the star (below) got suspended After a frustrating two-year from Abraham Lincoln High for a search, Mr. Rubinstein found two few days for fighting with a affordable locations through teammate—could be good for broker BCD and jumped on both. Bornready.tv, a new site that will A 336-square-foot spot in debut a series of four-minute shorts Grand Central Terminal to open about the student on Tuesday. in May will be the smallest Joe yet, Bronx paper But Fader Films co-founder but a steady stream of bleary-eyed Rob Stone, a partner in the series, commuters should make the to ink deal says he’s not looking for that kind $7,522 monthly rent pay off. of publicity.The story of the The other location, a 700- n era could soon be Coney Island student who could square-foot former flower shop in ending in the Bronx: be the next Lebron James is the London Terrace apartment compelling on its own. complex in Chelsea, opens in AThe family-owned, The site is already getting March and will run $8,333 a Pulitzer Prize-winning thousands of hits to view a month. Mr. Rubinstein insists five community weekly The promotional clip. Mr. Stone says stores are enough for now.“The Riverdale Press is up for sale. word chain makes me cringe,” he says. “We don’t want to be too big.” Co-publishers and brothers Richard Stein and Bernard Stein were recently Burgers achieve approached by News Corp., enlightenment according to industry fast-food junkies flocked to a sources, and at least two new veggie version of McDonald’s other interested parties. last week, when the first Zen Burger opened in midtown on News Corp. has been on a Lexington Avenue. buying spree, eating up local The eatery, run by the owners of papers in the Bronx, news daily Zen Palate, offers hot dogs, burgers, Brooklyn and Queens and the project could translate into a and chicken and tuna sandwiches film or a TV series. made from vegetables and soy. offering advertisers packages He’s not worried about the More than 800 office workers with the New York Post. Webisodes getting posted on streamed in at lunchtime each day Community papers are YouTube. He says Bornready.tv and up to 500 at dinnertime, will have lots of other content, according to Director of attractive because, unlike from high school basketball news Operations Henry Katz. most dailies, they have not to profiles of the neighborhood. But some die-hard carnivores been hurt by the Internet. Fader Films, along with left without a meal when they Insiders say that the Stein partners Den of Thieves and Born realized that they & Bread, will follow Mr. couldn’t get a brothers, who are in their Stephenson right through college real burger. 60s, want to pursue other and, if all goes well, to the NBA. Even the activities. Richard is an “It’s a great story to watch kitchen help architect, and Bernard, who unfold,” says Mr. Stone. had to adjust to the meatless menu, won the Pulitzer in 1998 for after burning patties that take just editorial writing, teaches Expansion brews three minutes to cook versus the Jay Goldman Asset Management has leased a full floor. journalism. at coffee bar typical 12 minutes for beef. “There was a lot of overcooking initially,” Richard Stein insists that starbucks and Dunkin’ Donuts says Mr. Katz. a sale is not imminent. “I’m have been duking it out for New Zen Burger’s next stop is likely not ruling out that it could York customers for years. Now to be John Street downtown. “We happen,” he says. “People McDonald’s is entering the latte are getting a lot of bankers and fray. Wall Street types,” adds Mr. Katz. have talked to us, and we But such pressures aren’t have listened.” stopping Joe the Art of Coffee Contributors: Lisa Fickenscher, The brothers have run from expanding to five shops. “We Matthew Flamm, Louise Kramer the paper, which was founded in 1950 by their PARENT PERKS parents David and Celia VICTORIA PERICON, aka Savvy Mommy, launches her Stein, since 1980. In 1989, its Savings in the City card this month. For $24.95, par- offices were firebombed in ents get close to 300 discounts, including $50 off a the wake of editorials class at Kidville, $50 off at Heidi Green Photography, a defending Salman Rushdie. $25 pass to a class at Baby Fingers and a free session Paul Amrich Mary Ann Tighe at Little Flower Yoga. Five dollars of each card purchase goes to Bette 212 984 8122 212 984 8128 A News Corp. Midler’s New York Restoration Project, and cards can be returned for [email protected] [email protected] spokeswoman declined to recycling. They go on sale Jan. 22 at www.SavvyMommy.com. Craig Reicher Fernando Urrutia comment. 212 984 8281 212 984 8079 [email protected] [email protected] Project2 1/8/08 1:02 PM Page 1
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TRI-1449 2007 Thank You Ad_Crains.indd 1 1/7/08 12:19:03 PM CNYB 01-14-08 A 8 1/11/2008 7:44 PM Page 1
THE RACE FOR PRESIDENT 2008
hop author Kevin Liles. reflect badly on Mr. Obama because “He didn’t say anything I don’t it courts so much controversy. Obama is hip-hop’s candidate respect as a father and as an African- “I don’t want to see a lot of rappers American,” says Mr. Liles, who has coming out and supporting him, be- Continued from Page 1 Andre Harrell. Guests had to pay date as part of the series called What’s been following Mr. Obama’s politi- cause that’s going to create a diver- porting Mr. Obama, who has been $2,300 a head. Spike Lee attended In It For Us? cal career for three years.“I don’t ex- sion and frighten people in Kansas,” featured on Black Entertainment last Wednesday’s sold-out fundrais- “A whole lot of people thought we pect to see him wear baggy jeans,but says Chuck Creekmur,co-founder of Television and who appeared on the er at the Grand Hyatt, which raised would never see this happen,” says I feel he is hip-hop because AllHipHop.com. cover of glossy urban magazine Vibe about $700,000. the network executive.“This is a his- he has taken on what people Indeed, hip-hop support in September. torical, emotional moment.” might see as impossible and could become a liability if “This was the first time in the his- Lyrical tribute Of course, Mr. Obama shown us that it is possible.” there are any violent inci- tory of our magazine that we put a some rappers even rhyme can’t take the hip-hop vote dents, says Kevin Wardally, politician on the cover,” says Danyel about the senator, who was for granted. Many hip-hop New voice in politics a senior vice president at Bill Smith, editor of Vibe, who says the given the nickname “B- figures also like Hillary mr. liles, 39, was always a Lynch Associates, which is getty images September edition had triple the Rock” by Vibe. In his song Clinton. Some, like Sean fan of President Bill Clin- Chuck Creekmur consulting on the Clinton usual number of reader responses, “Say Something,” Brooklyn- “Diddy” Combs, are staying ton’s behind the scenes, but campaign. But, more en- and the highest ad sales last year. based hip-hop artist Talib conspicuously silent about Mr. Obama’s pro-change, biparti- gagement on the part of young peo- getty images Contributions from the hip-hop Kweli says:“Speak to the peo- Kevin Liles which candidate they prefer. san message has inspired the music ple could be good for both leading community to Mr. Obama’s cam- ple like Barack Obama/They Mr. Obama hasn’t gone executive to become more vocal candidates, he says. paign are substantial compared with worship like a black Madonna.” out of his way to curry favor among about his political preferences. Take Mark Pitts,president of ur- those for previous political cam- The results in New Hampshire hip-hop vote. If anything, he took a “We tended not to get involved ban music at Sony/BMG’s Zomba paigns, insiders say, and more mon- notwithstanding, Mr. Obama’s per- view in opposition to many in the before because we felt we couldn’t Label Group.The buzz surrounding ey is coming in fast as supporters formance in Iowa has given this community by criticizing rap lyrics make a difference, but this is show- Mr. Obama is making the 37-year- gear up for a tough race. group confidence that an African- in the aftermath of the Don Imus ing us that we can make a differ- old pay attention to this presidential In March, Antonio “L.A.” Reid, American candidate has a real shot scandal. His position raised the ence,” says Mr. Liles, who plans to race although he hasn’t decided chairman of Island Def Jam Group, at the presidency. hackles of hip-hop mogul Russell do more for Mr. Obama over the whether to vote for Mr. Obama or threw a fundraiser at his home on “Barack has the ability to galva- Simmons, who has publicly en- next 10 months than he has for any Mrs. Clinton. “At least now when the Upper East Side, which was at- nize this population unlike any other dorsed Sen. John Edwards. other presidential candidate. the political news comes on, I don’t tended by music world luminaries recent candidate,” says Debra Lee, But Mr. Obama’s tough stance Despite the enthusiasm, some change the channel,” Mr. Pitts says. Kevin Liles, Jay-Z, Beyoncé, Jer- chief executive of BET, which last hasn’t deterred other supporters, in- members of the community worry maine Dupri, Benny Medina and Tuesday ran a special on the candi- cluding music executive and hip- that too much hip-hop support could COMMENTS? [email protected]
by putting out a lot of cynical crap,” SALES TO DATE says Dan Simon, publisher of left- Political books wing indie Seven Stories Press. Steady sellers, not blockbusters, Continued from Page 1 600,000 copies of If Democrats Had have helped Regnery Publishing,the ference now.Last year was a lacklus- Any Brains,They’d Be Republicans by godfather of conservative imprints, ter one for the category,with a num- star author Ann Coulter. Released weather the lull. Publisher Marji ber of major titles falling flat. Some in October, the title has sold a mere Ross says t hat 2007 was one of the houses don’t expect the market to 118,000 copies, according to house’s best years, despite the fact improve any time soon and are put- Nielsen BookScan, which tracks that it had only three New York Times ting out fewer political titles until about 70% of the market. best-sellers, compared with six in after the election. Simon & Schuster’s Fair Game, 2003. Most of all, they’re finding that by Valerie Plame, was another flop. 793,000 269,000 118,000 55,000 She credits its line of Politically readers no longer care to be ha- The book had a first printing of Source: Nielsen BookScan Incorrect Guides and titles that were rangued by one side or the other. 300,000 copies; Nielsen BookScan more philosophical than polemical. “It started with the feeling that reports that 55,000 were sold. Some publishers are still banking you couldn’t stand behind the party “The political book market is has vied with liberal satirist Stephen on big books for 2008. Harper- in power,and the party that wasn’t in No heat driven more by anger than by hope,” Colbert’s I Am America (And So Can Collins made a pricey bet on inves- power couldn’t do anything,” says two much-hyped biographies of says Richard Nash,publisher of Soft You!) for the top spot on the lists. tigative reporter Ron Suskind, au- Carolyn Reidy,chief executive of Si- Sen. Hillary Clinton also failed to Skull, a division of independent “The irreverence makes it suc- thor of The Price of Loyalty, when it mon & Schuster. “What good are generate heat. publisher Counterpoint. cessful,” says Threshold Publisher outbid Simon & Schuster for his the parties, and therefore, what Publishers on the right blame Certain titles still work—but they Louise Burke about Mr.Beck’s book. next book, due out in the summer. good is a book that’s for either one their modest sales on uncertainty tend to be ones that are fun to read. Political publishers also see the Bob Woodward will provide an- of them?” among conservatives over which Threshold Editions, an imprint current period as a good time to nar- other inside look at the Bush admin- Some publishers got a rude awak- path to take forward. Liberal pub- of Simon & Schuster, has had a row their lists. One reason readers istration in June for Simon & ening to the changed atmosphere. lishers can no longer benefit from blockbuster best-seller with An In- turned away from the category, they Schuster. Conservative imprint Crown hatred of the Bush administration, convenient Book, by self-deprecating say, is that it got too crowded. Forum announced a first printing of which is on its way out. conservative Glenn Beck. The title “Publishers ruined [the market] COMMENTS? [email protected]
ICE investigation into the compa- ous,” says Mr. Moore. FreshDirect’s problems snowball ny’s hiring practices will continue Local 805 contends that for the next several months. FreshDirect workers get a starting FreshDirect faces the risk of penal- salary of $7.50 an hour—or $2.50 Continued from Page 3 January is the ties of up to $2,500 per unautho- less than what a Teamsters contract company can demonstrate that it busiest month for rized worker, and even criminal would get them—and they lack af- did not bully its employees, as labor the company, whose charges. fordable health insurance.The com- leaders contend. trucks now make pany disputes the notion of low Others have scaled back their deliveries as far away Unions turn up heat wages, insisting its starting pay is FreshDirect orders because it can as Westchester in the meantime, the unions are just over $9 an hour.That would put now take the labor-strapped com- County and subur- not easing up. Sandy Pope, presi- its wages on par with those of ware- pany more than five days to deliver ban New Jersey. It is dent of Teamsters Local 805, says house workers in the food and retail an order, compared with its typical a month when peo- she will file a complaint against the industries, according to Tuttle Spe- next-day delivery service. ple return to their company with the National Labor cialty Staffing. david neff david FRESHDIRECT can take longer to deliver orders these days. normal schedules Relations Board. She also plans to The company is clearly in a bind. Cutting back and eat more meals enlist public officials to pressure the If it is ultimately forced to salvage its “we have continued to order from at home. Mr. Moore company to sign a so-called neutral- image by offering higher wages and FreshDirect, mostly because we back at full capacity by the end of declined to say how much business ity agreement allowing the union improving health insurance cover- have two small children and we have this month. It is mostly looking for FreshDirect has lost. unfettered access to employees on age, that would drive up costs and hectic jobs,” says Lisa Gitelson, an entry-level workers, says Senior The manpower shortage repre- company property, a concept make it harder for FreshDirect to attorney who lives in Washington Vice President Jim Moore, having sents a painful but temporary set- FreshDirect dismisses out of hand. stay competitive with traditional Heights. “But I’m going to the local promoted workers to replace the back. The prospect of higher labor “The idea that we would pave the grocers. grocery store more now.” ones who left. costs, fines and a sullied reputation way for the $1.5 million payday the FreshDirect says it expects to be But the timing couldn’t be worse. poses more serious questions. The union is looking for is preposter- COMMENTS? [email protected]
8 | Crain’s New York Business | January 14, 2008 CNYB 01-14-08 A 9 1/11/2008 4:35 PM Page 1
NEW YORKERS’ OPINIONS, 2002 AND 2007 Public transportation is ... What is the biggest problem ’02 ’07 facing your community today? ’02 ’07 Excellent 23% 8% Crime/violence/drugs 21% 23% Good 46% 49% Housing/buildings 4% 11% Fair 24% 26% Jobs/poverty/economy 20% 7% We are pleased Poor 7% 13% Traffic/roads/parking 8% 7% to announce Don’t know 1% 4% Overdevelopment 4% 3% Source: Charney Research New York anxiety Richard Bernstein has joined our Continued from Page 1 most. About a quarter of blacks, management team as economy as the second-most-cited Latinos and Asians say it is very dif- concern, trailing only crime. ficult to pay their rent or mortgage, One of the most startling find- compared with just 3% of whites. ings is the poor regard for city gov- On other subjects as well,the poll Vice Chairman ernment. Only 25% of people trust affirms past findings that whites city government most or nearly all of and blacks view the city quite differ- and the time, down from 35%, and only ently.The divergence is most appar- 15% of blacks do. ent in opinions about police protec- Principal “Despite Mayor [Michael] tion. While 64% of whites rate it Bloomberg’s personal popularity, good or excellent, only 32% of trust in city government has contin- blacks do. It is deemed poor by 32% ued to slide,” says Craig Charney, of blacks but just 3% of whites. whose firm, Charney Research, Similarly, 20% of blacks but just conducted the poll, repeating a sur- 6% of whites call public schools vey it conducted in December 2002. poor; 45% of whites call them good “I am surprised.’’ or excellent, but only 25% of blacks Negative opinions about Wash- agree. Public transportation is con- COMMITTED TO YOUR SUCCESS 212.758.0800 ington and Albany may have rubbed sidered good or excellent by 61% of www.colliersabr.com off on City Hall, observers say. whites but just 41% of blacks. Member A spokesman for the mayor says in a statement, “There’s no doubt Crowded mass transit that people are feeling some anxi- for new yorkers on the whole, THE AMERICAS I EUROPE I MIDDLE EAST I AFRICA I ASIA PACIFIC ety—even as the city has cut crime opinions of mass transit have and achieved the lowest murder rate slipped. Only 8% now call it excel- on record, turned around the lent, down from 23% five years ago, schools and increased high school while 13% call it poor, up from 7%. graduation rates, passed the halfway “The poll results show that serv- mark early in the nation’s largest af- ice is, in fact, deteriorating, and it fordable housing program, and proves that the MTA’s continual use launched the most comprehensive of the 1970s as the basis of compar- plan anywhere to tackle climate ison is a joke,” says City Council change—because New York City’s Transportation Committee Chair- economy, like the nation’s, appears man John Liu. to be headed toward a slowdown.” On the positive side, the poll The poll echoes an increasing shows modest improvements in disparity between haves and have- opinions of traffic flow—perhaps nots and whites and minorities in because post-Sept.11 street closures the city. Today, 18% say it is “very were still causing havoc when the difficult” to pay their rent or mort- previous poll was conducted—and gage, up from 8% in 2003. At the personal security. However, 61% same time, 24% now say it is “not still deem it fair or poor. difficult at all,” up from 18%. “In absolute terms, it’s an awful “The result reflects the barbell ef- rating,”Mr.Liu says.“The feedback fect we’re having with income,” says I get from the public is that the traf- Jerilyn Perine, the city’s housing fic is unbearable.” commissioner from 2000 to 2004 Views of the city’s public schools and now executive director of the are more muddled now than in Citizens Housing and Planning 2002, when the Bloomberg admin- Council of New York. “We used to istration took control of the system have a bell curve,with most people in and Chancellor Joel Klein began re- the middle. Now you’re seeing a flat- forming it. Nineteen percent say the tening of that curve and a growing schools are poor, up from 12% five high end and a growing poverty rate.” years ago, and 23% are unsure, up from 13%. Growing housing worries “There have been three reorgan- only 4% of those polled in 2002 izations in the past four years,” sur- cited housing or buildings as the mises Pamela Wheaton, director of biggest problem in their communi- InsideSchools.org, a nonprofit that ties, far behind crime/violence/drugs reviews city schools. “People are re- (21%) and jobs/poverty/economy ally confused.’’ (20%). Crime still tops the list at Eva Moskowitz, a Klein sup- 23%, but housing is now cited by porter and former chairwoman of 11%, compared with 7% for the the City Council Education Com- economy. mittee, adds, “The system that Ms. Perine blames a rise in costs Bloomberg and Klein inherited was as the demand to live in New York a mess, and it’s still largely a mess. I City has outpaced the supply of think that’s what the public is react- housing. “This is the downside of ing to.” prosperity,” she says. Minorities are struggling the COMMENTS? [email protected]
January 14, 2008 | Crain’s New York Business | 9 CNYB 01-14-08 A 10 1/11/2008 1:58 PM Page 1
Manhattan inventor claims patent violated
Continued from Page 2 at law firm Thelen Reid Brown was in his mid-20s. In the late expired, and he no longer collects li- sought $200 million in damages. Raysman & Steiner. 1970s, he struck gold with his cense fees. Both parties settled the dispute for “By signing AOL and Vonage up patent for the idea behind the per- Through his company, Klausner an undisclosed amount, and AOL for licenses, Klausner has gained sonal digital assistants, or PDAs. Technologies Inc., now licenses the technology, which credibility,” says Mr. Rizzi, who is He established licensing agree- the inventor owns it uses for its Internet phone and not involved in the lawsuits. “It ments with about 18 electronic 25 patents in the voice mail service. In October, In- helps in litigation.” manufacturers, including Sharp, United States, Eu- ternet phone provider Vonage set- Casio, Toshiba and even Apple, rope and the Far tled a similar lawsuit brought by Litigation rising which launched the popular New- East. While he Klausner seeking $180 million in mr. rizzi says patent litigation in ton in the early 1990s. works with a team of damages and also agreed to become general has been rising, and it has Mr. Klausner declined to reveal legal, tech and engineer- a licensee. become more difficult to invalidate how much he has earned from the ing experts on each patent,he Klausner’s track record is likely patents.“More than 95%”of the cas- PDA licenses, but notes that he has never created actual soft- to help him in the new lawsuits, ac- es are settled, he adds. made as much as 3% of a company’s ware or hardware. cording to Steven Rizzi,partner and Mr. Klausner has been earning a sales on a product that used the He says he attempted to co-head of patent litigation practice living from his inventions since he technology. The PDA patent has build a device using his visual
buck ennis SimulScribe CEO James Siminoff says firm can’t afford to fight lawsuit
voice mail patent but abandoned it after weighing the return on invest- ment and recognizing that he could 10,800 SF Floors Available on continue to make money from his New York’s most prestigious corner patents. “If the patent is right, then it will 57th and Park be used in many computers and phones,” he says. Mr. Klausner isn’t just targeting big players. He is also suing tiny SimulScribe Inc., a Manhattan- based provider of voice-to-text messages that has annual sales of $2 million. Since SimulScribe was hit by the suit, it has lost at least $100,000 in new business and national distribu- tion opportunities, according to Chief Executive James Siminoff. “Big-box retailers are not going to distribute a product that has a pending patent lawsuit against it,” he says. Close to a settlement although the firm denies patent infringement, it doesn’t have the financial resources to fight the lawsuit in court. Messrs. Siminoff and Klausner say the companies are close to reaching a settlement, but they cannot elaborate for legal reasons. Meanwhile, Cablevision says it “intends to vigorously defend against this lawsuit.” The other de- fendants, including Apple, did not return requests for comment. Despite the recent string of law- suits, Mr. Klausner claims he is not a “patent troll”—a company or per- son who enforces patents against al- leged infringers in an opportunistic and aggressive manner. “I’m not in the business of inter- Contact: David A. Falk at 212-372-2271 [email protected] or Peter T. Shimkin at 212-372-2150 [email protected] fering in anyone’s business model,” says Mr. Klausner, a proud iPhone owner who commends all his defen- www.450park.com dants’ products. “I just want my royalties.”
COMMENTS? [email protected]
10 | Crain’s New York Business | January 14, 2008 CNYB 01-14-08 A 11 1/11/2008 11:45 AM Page 1
NEIGHBORHOOD JOURNAL LOAN LOWDOWN Data are for 2006. Percentage of subprime Saving energy to save Bronx houses loans boroughwide 28% Percentage of subprime would shut its plant there. rette—a planning session—called HPD and Mr. Lopez deny any loans in northwest Bronx 33% Effort to lower bills, The drugmaker wants to sell to a to develop ideas for the triangle’s fu- favoritism.They note that the char- Percentage of subprime loans in private developer. But the immedi- ture. The uninvited groups feared rette included 90 people—includ- University Heights/Fordham stem foreclosures; neighborhoods ate turmoil concerns the fate of an that the city was planning to hand ing elected officials and representa- 47% B’klyn triangle tussle 80,000-square-foot slice of the tri- development rights to two organi- tives of Community Board 1. Number of home loans issued in northwest angle that is in city hands. The De- zations it did invite: United Jewish The distrust stems from tensions Bronx ow many subprime partment of Housing Preservation Organizations of Williamsburg and over housing that have splintered 2,100 mortgage lenders and and Development is pushing to the Ridgewood-Bushwick Senior Williamsburg for years along ethnic Source: University Neighborhood Housing Program politicians does it take build several hundred affordable Citizens Council. Both have ties to and religious lines. Latinos feel Or- to help homeowners apartments there. Assemblyman Vito Lopez, chair- thodox Jews have been getting an An HPD spokesman denies facing foreclosure? In Controversy flared when the man of the Assembly Housing unfair share of affordable housing that,saying,“All affordable units are Hthe northwest Bronx, the answer is agency excluded some local builders Committee and the Brooklyn De- and would claim Broadway Triangle [allocated] strictly through lottery.” zero. of affordable housing from a char- mocratic Party. apartments if the UJO built them. —erik engquist There, a community group is helping homeowners reduce their monthly payments without relying on lawyers, bankers or government bailouts. Instead, Northwest Bronx Community and Clergy Coalition is coming to the aid of embattled homeowners with fluorescent lightbulbs,fiberglass insulation and other basic bits of hardware that can cut monthly energy bills by as much as 25%. “There are some things people can control and some things they can’t,”says Fran Fuselli,weatheriza- tion director for the coalition. “You can’t control your interest rate, but you can control your energy bill.” The Northwest Bronx Commu- nity and Clergy Coalition has been operating its state-funded weather assistance program for nearly three decades, focusing on the one- to four-family houses and apartment buildings that proliferate in the northwest Bronx . Last month, the coalition shift- ed its efforts to focus on homeown- ers who are running the risk of fore- closure because of high-priced mortgages. Executive Director James Mumm notes that it’s a com- bination of monthly payments that typically leads to homeowners fall- ing behind. “People are getting killed on their gas and electric bills,” he says. In the northwest Bronx, nearly a third of the more than 2,100 home loans issued in 2006 fell into the sub- prime category. University Heights and Fordham had the highest per- centage of subprime loans in the city: 47%. But housing in that area, as well as in many other parts of the Bronx, is heavily dominated by rentals. Thus, even though the pro- portions of subprime loans are high, actual foreclosures number only in the hundreds. The coalition is starting to evalu- ate applicants now,hoping to weath- erize 30 to 40 homes by the spring. —hilary potkewitz Planning debate over Brooklyn area a desolate piece of the north Brooklyn industrial landscape known as the Broadway Triangle totals only seven acres and may be years away from redevelopment,but it is gener- ating an ocean of controversy. About 85% of the industrial site—which is bordered by Broad- way and Union and Flushing av- enues—is owned by Pfizer Inc., which announced a year ago that it
January 14, 2008 | Crain’s New York Business | 11 CNYB 01-14-08 A 12 1/10/2008 7:28 PM Page 1
VIEWPOINT New York’s Feb. 5 showdown editor in chief Rance Crain publisher Jill R. Kaplan or decades, New York’s late-spring imperil Mrs. Clinton’s candidacy. EDITORIAL presidential primary was irrelevant because A hard-fought race on the Republican side is less certain. editor Greg David deputy managing editors Valerie Block, it took place long after the Democratic and The polls show Mr. Giuliani with a significant lead over his Erik Ipsen assistant managing editor Republican nominees were decided. With rivals in New York.The GOP has a winner-take-all primary, Robert Hordt the primary moved up to Feb. 5, this year so mounting a challenge here makes sense only if victory is contributing editor–reports Elizabeth MacBride will be different. Winning it will be possible. Of course, if he fails to score a convincing victory in columnist Alair Townsend indispensable to New York Sen. Hillary Florida, Mr. Giuliani could be out of the race by then. In senior reporters Aaron Elstein, Lisa Fickenscher, Matthew Flamm, Clinton and former Mayor Rudy Giuliani. It could also be that case, New York would be a tempting prize for Mr. Samantha Marshall, Anne Michaud, significant for Barack Obama and John McCain, who have McCain or former Massachusetts Gov. Mitt Romney. Miriam Kreinin Souccar F reporters Theresa Agovino, Barbara Benson, registered early victories. Even in November’s general Another equally intriguing question is whether New York Elisabeth Butler Cordova, Erik Engquist, Amanda Fung, Hilary Potkewitz, Gale Scott election, New York could be a pivotal state—a rare will also be a battleground in November. If Mrs. Clinton and restaurant critic Bob Lape occurrence. Mr. Giuliani are the art director Steven Krupinski deputy art directors Carolyn McClain, Who wins here could depend on where the candidates The state could nominees, the answer is Daniel Mednick staff photographer Buck Ennis decide to spend the limited time they have in the coming likely to be “yes,” copy desk chief Wendy Zuckerman weeks. More than half of the delegates to the nominating even prove because the mayor copy editors Michele Arboit, Thaddeus Rutkowski conventions will be chosen in 22 primaries on Super Tuesday. pivotal in the remains a favorite of research editor Denise Southwood associate research editor The candidates must concentrate on the states that can help many moderate Adrianne Pasquarelli them the most. general election Democrats and www.crainsnewyork.com online editor Catherine Tymkiw Fireworks in New York are likely to come from the independents. If a more online reporter Kira Bindrim Democrats.Though Mrs. Clinton has built a strong base in conservative EDITORIAL AND ADVERTISING OFFICES the past seven years—she won re-election in 2006 with 64% Republican is the 711 Third Ave., New York, NY 10017-5806 editorial: 212.210.0277 Fax 212.210.0799 of the vote—Mr. Obama has ties here as well. He went to nominee, the state will advertising: 212.210.0259 Cable craincom nyk Columbia University and has raised millions of dollars in certainly remain true to its Democratic traditions. Fax 212.210.0499 repeated fundraising forays to the Big Apple. Because the All bets are off if Mayor Michael Bloomberg decides to Entire contents ©copyright 2008 Crain Communications Inc. All rights reserved. party will allocate delegates proportional to the vote, it enter the race.The mayor would concentrate his time on big ®CityBusiness is a registered trademark of MCP would make sense for Mr. Obama to spend at least some states like New York, as that’s the only way he could amass Inc., used under license agreement. TO SUBSCRIBE: time in the state. A strong showing here would clearly the 270 electoral votes needed to win. 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 LETTERS TO THE EDITOR advertising director Jeff Adler business development manager Robert N. Grossman senior account manager William E. Squitieri account executives Andrew Carlin, Courtney McCombs, Lisa Pearly, Unaffordable at almost any price Jennifer Siniscalchi western account manager Ellen Mazen (Los Angeles) 323.370.2477 COMMUTING FROM article! How about a many in the creative community POOR LEFT OUT sales manager, classified follow-up on how for generations to come— print & online John Gallagher THE COUNTRY OF DEBATE newsletter product manager the repeal of the because media conglomerates, Catherine Evans Gittens i want to thank 421-b tax abatement represented by the Alliance of this nation’s immigration crisis, sales coordinator, print & online Crain’s for the Jan. 7 program has hurt the Motion Picture and Television brought on in large part by the fail- Lulé Haznedari story “Unaffordable low- to middle- Producers, walked away from the ure of the media to cover it in ac- sales coordinator Anita Perrino credit Pat Grondziak 313.446.6082 NY: tough choices at income buyers in the bargaining table on Dec. 7 and cordance with its own code of eth- marketing director Amy Crossman $150,000.” I can outer boroughs? refuse to return. ics and standards, is far too serious marketing manager Jill H. Bottomley totally relate. It seems michael The future is in their hands. a subject to be presented simply in marketing coordinator Jenny Mashberg circulation manager Andrea Richardson to me that the city roger hagadone boccieri We hope they will reconsider their terms of how New York would fare DR. VATSAL THAKKAR assistant circulation manager couldn’t care less about thinks his Duo Plumbing & decision, return to the table and economically if its 500,000 illegals Rosalie Ford family may have to leave NYC. the middle-income Heating Corp. work toward a fair and respectful suddenly left the country. general manager, interactive working people. I live contract that immediately will put Nowhere in the Jan. 7 story Marc Minardo in Mohegan Lake, and I work in STRIKERS FEEL everyone back to work without “Anti-immigration fervor casts technical producer Danny Porter Manhattan. CITY’S PAIN further hardship. city out” do you address the issue NEW YORK PRODUCTION I rise at 4 a.m. every day and michael winship of the rule of law or the economic production and pre-press director drive into the city with the as president of the Writers pain mass immigration is inflicting Michael Corsi construction workers. Why Guild of America, East, I speak for upon our own working poor: those advertising production manager GIFTED ARE PUSHING Marilyn DeMilta Mohegan Lake? The condo price all our striking members when I SCHOOL CHOICE with little education and few skills was excellent, taxes are low and it’s say that we are very aware of and who always did many of these low- PUBLISHED BY CRAIN COMMUNICATIONS INC. a beautiful community. sympathetic to all those affected the “frenzy” of competition over paying jobs, but for wages that chairman Keith E. Crain economically by our strike (“Local the limited space in New York president Rance Crain I would love to live in once allowed them to support secretary Merrilee Crain Manhattan. All over New York damage mounting in writers’ City’s gifted and talented themselves and their families. treasurer Mary Kay Crain City, you see these beautiful new strike,” Jan. 7). It is a burden to the programs ( Jan. 7) can be viewed as Where are their photos and executive vp, operations William Morrow development properties on the employees of the many companies an endorsement for school choice. stories in your newspaper? Are senior vp, group publisher Gloria Scoby group vp, technology, circulation, rise. Alas, I am completely priced and industries that support New The city should expand such they not also allowed to “search for manufacturing Robert C. Adams out of the city. York City’s film and television programs into other schools and a better life?” vice president/production & clara irizarry business and directly hits the allow parents more choice in Or is this an opportunity now manufacturing David Kamis Memorial Sloan-Kettering Cancer pockets of the 2,500 members who selecting where their children solely reserved for foreigners— chief information officer Paul Dalpiaz corporate circulation director Center are walking the picket line without attend school. especially those here in violation of Patrick Sheposh a paycheck. New York City may actually be our laws? The WGAE wants this strike on to something! dave gorak founder G.D. Crain Jr. (1885-1973) TAX EXEMPTION chairman Mrs. G.D. Crain Jr. (1911-1996) HASN’T HELPED to end right now. But we cannot clifford sondock Executive director achieve this goal—a goal that will President Midwest Coalition to Reduce excellent, straightforward help not only writers now but Land Use Institute Immigration
12 | Crain’s New York Business | January 14, 2008 CNYB 01-14-08 A 13 1/10/2008 7:30 PM Page 1
tence of his response—a little sexist jab. I’ve learned by hearing Mrs. Clinton’s tortured answer to the question about whether she sup- ported Gov. Eliot Spitzer’s plan to give driver’s licenses to illegal aliens, and Mike Huckabee’s awk- ward defense of the fairly small tax increase he oversaw as governor of Arkansas. I’ve also learned from the polls, including those that were so dra- matically off the mark in New Hampshire. Many people are upset about the media coverage and interpretation of those polls. Not I. Polls are an in- tegral part of campaigns today.The media can’t ignore them. The commentators said the polls were foretelling the collapse of the Clinton campaign.They speculated about money problems,disarray and staff changes in the Clinton camp john h.john howard and described Sen. Barack Obama’s romp to the nomination as virtually inevitable. The polls and the commentators were wrong, and that has left many Learning to relax viewers feeling deceived. How could sophisticated analysts have put so much faith in the polls? Why and love the polls didn’t they emphasize that polls can be wrong? Why did they mention the poll results at all? Didn’t they he presidential campaign is like Law & Order: understand that publicizing the re- If you click around enough, you can find it on tel- sults could change voter perceptions and behavior? evision virtually 24/7.But it’s a mixed blessing,even The fact is that candidates, news for the politically obsessed like me. The coverage organizations and others all do itself is becoming part of the debate. polls. Some results are closely held, This campaign has no president or vice president running for but most aren’t. T In the case of New Hampshire,it office. It comes during an unpopular, divisive war. It is engag- appears the candidates believed the polls, too. Whether it was turnout, ing voters, including swers get repeated, new the many independent voters or young people, in a big insights come through something else, the models failed, way. So there are many every time into who and those who trumpeted the polls people like me tuning in these people really are. ended up looking foolish. to watch the drama play I’ve learned by hear- Wall-to-wall coverage of the out. ing Mitt Romney ex- campaign means that news organi- The coverage is at its plain his dramatically zations have a lot of airtime to fill. best and is most valu- shifting views on gay When they have poll results that 100 PARK AVENUE able when it captures rights, abortion and suggest big news, they’ll gum them the candidates directly, stem cell research, to death. And it’s our task to be unfiltered by commen- among other issues. skeptical. WE ARE PLEASED tary or poll data. I’ve ALAIR I’ve learned by hear- The show rolls on … to South TO ANNOUNCE learned a lot about them TOWNSEND ing John Edwards, Carolina and beyond. There will be THE FOLLOWING TRANSACATIONS: during the debates and when asked about Sen. more polls. Take them with a grain interviews. Hillary Clinton’s show of salt, and stay tuned. Even though many of the debate of emotion, use the words “com- GENERAL AMERICAN INVESTORS, INC. questions and the candidates’ an- mander in chief ” in the first sen- COMMENTS? [email protected] Entire 35th fl oor Represented by Alexander M. Chudnoff Cushman & Wakefi eld, Inc.
CRAIN’S ONLINE POLL SUN CAPITAL ADVISORS, INC. Entire 33rd fl oor WHAT SHOULD NEW YORK CITY DO TO FIGHT A PROJECTED Represented by Clyde Reetz $3.1 BILLION BUDGET GAP? CBRE MORE THAN TWO-THIRDS of the 322 respondents IMPALA ASSET MANAGEMENT, LLC Partial 22nd fl oor to a Crain’s poll think the city should cut its fiscal Represented by Anthony Dattoma budget to fend off the wider-than-expected gap Cut the Raise taxes, CBRE budget, 31%. preferably predicted by the Independent Budget Office. which has on the rich, Another 31% say the city should raise taxes, ballooned in to preserve recent years .69% services primarily for wealthy New Yorkers, to narrow that
gap without losing any of the services that are 212.594.2700 paid for out of the city’s coffers. slgreen.com
For this week’s question: Go to www.crainsnewyork.com/poll to have your say. NEW YORK CITY’S LARGEST OWNER OF COMMERCIAL REAL ESTATE
January 14, 2008 | Crain’s New York Business | 13 SLG-1693 100 Park Tombstone Crains 4x7.indd 1 1/3/08 12:55:11 PM CNYB 01-14-08 A 14 1/11/2008 1:18 PM Page 1
down advocates expected, but one says, “The momentum in the state is headed toward smart growth and GARDEN PLOT Will arena move? THE INSIDER sustainability, and that bodes well EVEN AS THE CITY COUNCIL tries for the Sheridan project.” to end an $11 million annual All four proposals would property tax break for Madison by Erik Engquist and Anne Michaud improve truck access to Hunts Point Square Garden ( right), insiders Market. say controversy over the issue is not what’s holding up an New way to discard electronics Charter schools’ agreement to move the arena to incoming class Moynihan Station. Rather, bill requiring manufacturers to take back sources say MSG is not former city council Education convinced that the Moynihan electronic products discarded by consumers is finally Committee Chairwoman Eva project will go forward—given moving through the Moskowitz will open three more hurdles like funding—and A continues to study renovating at its current location. City Council and could pass charter schools in Harlem next by the end of the month. summer.The school she runs now, If MSG remains where it is, that would scuttle much of the office tower Harlem Success Academy, will development planned around Penn Station, where Vornado Realty Trust The proposal has been the become the flagship in a chain that owns a good deal of land. Vornado is one of two developers the state has subject of negotiations for she plans to grow to 40 charter chosen for the Moynihan Station project, along with The Related Companies. months between sponsor Bill de schools. Vornado and Related executives have been floating the idea that to Blasio and Council Speaker Ms. Moskowitz, whose title is replace MSG they could persuade Macy’s to leave its West 32nd Street Christine Quinn now chief executive of Success landmark site for the Farley building. The trial balloon could be an effort to put on one side, and Academies Network, ran for pressure on the Garden. Macy’s officials have been mum. Mayor Michael Bloomberg, Apple Manhattan borough president and other manufacturers on the rather than re-election in 2005 but lost the Democratic other. primary. could catch up quickly. Astoria’s contribution is $400 to a mayoral Apple feared a hodgepodge of Greek community will fete Mr. candidate and $250 to a City local laws would create a logistical Vallone Jan. 15 at El Olivo; George Council candidate. Vallone raising Delis will host. On Jan. 29, Leila The next step will be to add to nightmare, and won the mayor’s the Bruckner funds in Queens Noor and Eleni Delimpaltadaki are the database the names of parties to support. Mr. de Blasio says his bill Expressway, say they’re hosting a wine-tasting event at the grants, economic development is modeled after those passed in closer than ever to replacing it city councilman Peter Vallone Jr. is latter’s Madison Avenue agreements, pension investments nine states, including New Jersey. with 28 acres of affordable housing, planning two big fundraisers this apartment. and more.The project is scheduled A hearing on the bill, which has green space and economic month, neither of which will be for completion by next fall. 47 sponsors, is scheduled for today. development. held early enough for the Jan. 11 But a Spitzer administration cutoff for the next fundraising Limits coming spokesman says a decision is three report. on contributions The lineup On the road years away, and the community’s Mr. Vallone is second in for council seat to removal proposal is one of four being fundraising in a field of potential the campaign finance board considered. Queens borough president has approved the first step in martha taylor, a Democratic advocates for removal of the An impact study was recently candidates, with about $156,000 on implementing lobbyists’ district leader in Queens and Bronx’s 1.25-mile Sheridan begun but won’t be finished until hand, behind fellow Councilman campaign contribution restrictions director of City Comptroller Expressway,CRAINS_1-14_ which merely unidata_brain_ad-outlined.ai parallels early 63.2566.6770.71 lpi2010.That’s 71.57°18.43°0.00°45.00° 1/4/2008 1/4/2008 longer5:08:31 5:08:31 PM PM than tear- John Liu, who has $365,000. But he that were passed last year by the City William Thompson Jr.’s affirmative Process CyanProcess MagentaProcess YellowProcess Black Council. claims unit, is running for the The board has approved a City Council seat being vacated database of everyone who does in 2009 by term-limited James business with the city, with the Gennaro. exception of labor representatives. Michael Simanowitz, another The information will be made Queens district leader and chief of public Feb. 2. staff for Assemblywoman Nettie Individuals doing business with Mayersohn, is also running. Other the city are restricted to lower candidates are certain to emerge. contributions, and their donations Rep. Joseph Crowley, the Queens are not matched with public funds. Democratic chairman, has made no For example, the maximum commitments in the race. PRESIDENTIAL BLOOM-O-METER A weekly look at Mayor Michael Bloomberg’s progression toward the March deadline to run for president.
the week started badly for Mayor Michael HOT Bloomberg’s presidential prospects.The chattering class was not impressed with his appearance at an Oklahoma conference against partisan gridlock. He committed the worst of sins and made no news. First The New Yorker and then the city’s two major tabloids called him a tease and a double-talker. By the end of the week, a couple of well-placed leaks turned the tide.The Associated Press reported that the mayor is spending on nationwide polling. And bloggers carried the news that Unity08, a national organization for an independent NOT presidential candidate, might fold up and reorganize as Draft Bloomberg 2008. bloomberg news photos
14 | Crain’s New York Business | January 14, 2008 Project10 1/7/08 4:01 PM Page 1
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WEEK IN REVIEW For daily news updates, go to www.crainsnewyork.com
Reconciliation was completed days ECONOMIC SPOTLIGHT before Ms. Bhutto’s assassination on Dec. 27. Claiborne sells brands liz claiborne inc. agreed to sell its C&C California and Laundry women’s clothing brands to Perry Ellis International Inc. for $37 mil- lion as part of a review of its brands that started in July. Claiborne will shutter its Sigrid Olsen line but will retain a fourth brand, Enyce. CBS News, union ap images reach agreement Governor promises change cbs corp. reached a tentative GOV. ELIOT SPITZER (left), in an attempt to regain the popu- contract agreement with Writers Guild of America members in its larity he enjoyed as attorney general, gave a conciliatory news division that includes a 3.5% speech in his second State of the State address. In a wage increase and one-time sign- complete reversal from a year ago, the governor, whose ing bonus.The contract affects 500 CBS workers in New York, Los approval ratings are at a new low, pledged to work with Angeles, Chicago and Washing- legislators rather than butt heads with them. He also called ton.The employees, who had been for a commission to examine a cap on property taxes and working under an expired contract Economy Watch since April 2005, were not for major investment in the public university system. NYC’s unemployment rate fell in November but remained above the U.S. rate. involved in the current strike. Area inflation posted the biggest rise since June, led by higher energy prices. Blender mix-up OCTOBER ’07 NOVEMBER ’07 COMPARISON 31, or until a successor is named. NY area inflation change +0.1% +0.4% +3.9%1 McGraw-Hill former Rolling Stone Executive NYC unemployment rate 5.3% 5.0% 4.7%2 job cuts Ogilvy on the move Editor Joe Levy was named editor in chief of rival music magazine NOVEMBER JOB TOTAL3 12-MONTH CHANGE mcgraw-hill cos. plans to cut ogilvy & mather Worldwide Blender. He succeeds Craig Marks, NYC employment 3,663,800 +23,200 about 600 jobs, or 3% of its Inc. will move its headquarters to who was at the title for nearly four 1-Inflation rate for the latest 12-month period. 2-U.S. unemployment rate. 3-End-month figure, workforce, and take an after-tax 636 11th Ave., becoming one of years. not seasonally adjusted. charge of $27.3 million, or 8 cents the first corporate tenants to take a share, for the fourth quarter of space on Manhattan’s far West Capital for MBIA 2007.The parent of Standard & Side, which is being redeveloped. NYC Hotel Stats Broadway Stats Poor’s said ongoing turmoil in the It has been at Worldwide Plaza, embattled bond insurer MBIA subprime mortgage market has on Eighth Avenue and West 50th Inc. plans to sell $1 billion in bonds The average daily room rate rose in While half a dozen shows drew more reduced demand for credit ratings. Street, for 20 years. and slash its dividend by 63% to November, data from PKF Consult- audience members in the week end- boost capital and hold on to its ing show, but the occupancy rate ed 1/6, every show but Cymbeline threatened AAA credit rating. dipped. The averages for the first 11 lost ground in box-office gross, ac- Condé Nast CNBC gets months were $297.24 and 86.7%, re- cording to figures from The League spectively—above year-earlier levels. of American Theatres and Producers. shake-up with the Times Contractor for condé nast publications cnbc and The New York Times Deutsche Bank ousted Group President Mitchell Co. signed a content-sharing deal Fox, media group executive Amy in an effort to stay competitive lvi services inc. was chosen by Churgin and Lucky magazine with News Corp., which recently contractor Bovis Lend Lease to Publisher Alexandra Golinkin. bought The Wall Street Journal and resume razing the former Louis Cona, publisher of The New launched Fox Business Network. Deutsche Bank building in lower Yorker, was named senior vice Times articles will appear on Manhattan. John Galt Corp. was president of Condé Nast Media CNBC’s site, and CNBC videos dismissed after two firefighters Group; David Carey, Portfolio’s will be posted on the Times site. were killed at the site in August. publishing director, will become No date has been set for restarting publishing director of Wired the demolition. Media. Bear Stearns —from staff reports and names new CEO bloomberg news reports Met director bear stearns cos.’ chief steps down executive, James Cayne, resigned Capital IQ’s Weekly Deals Report after 14 years at the helm, and TRANSACTION SIZE metropolitan President Alan Schwartz was COMPANY/LOCATION (in millions) BUYER/INVESTOR TRANSACTION TYPE Museum of Art named to replace him. Mr. Cayne Director Philippe is the latest Wall Street CEO to OSI Pharmaceuticals Inc. $175.0 Not disclosed GCI Melville, L.I. de Montebello step down amid heavy losses due Merlin Securities $20.0 Sequoia Capital GCI (left) announced his to bad mortgage bets. Manhattan retirement after Compliance Systems Corp. $3.1 Not disclosed GCI three decades Glen Cove, L.I. with the Bhutto book Compliance Systems Corp. $2.5 Not disclosed GCI institution. Mr. bumped up Glen Cove, L.I. Montebello Marsh & McLennan Cos. n/a Trian Fund Management SB M&A almost doubled harpercollins plans to release a A NEW CONTRACTOR Manhattan the museum’s book by former Pakistani Prime has been selected to raze the Deutsche Selected deals announced during the week of Dec. 30 for companies headquartered in metro New size during his Minister Benazir Bhutto on York. n/a Not available. GCI: Growth capital investment represents new money invested in a com- Bank building. pany for a minority stake. SB M&A: Strategic buyer M&A represents a minority or majority tenure. He will Feb. 12, two months ahead of acquisition of existing shares of a company without the participation of a financial buyer. remain with the schedule and six days before bekka lindström bekka getty images Met until Dec. Pakistan’s parliamentary elections. getty images
16 | Crain’s New York Business | January 14, 2008 Project11 12/12/07 2:42 PM Page 1 CNYB 01-14-08 A 18 1/10/2008 1:28 PM Page 1
SMALL BUSINESS Citi and Chase boost SBA lending
Lieberman outright, J.P. Morgan SBA lending. In the fiscal year end- Target a cross section of city businesses, Chase gave her a $350,000 loan par- ed Sept. 30, Chase boosted the including retailers, auto shops, manufacturers tially guaranteed by the U.S. Small number of loans it made under the Business Administration. In No- program by 82%,to 1,868—twice as man was among them. vember, she opened her second many as second-place Bank of FAST TRACK BY STAN LUXENBERG Sales at MarieBelle New York, store, on the Upper East Side. America. Meanwhile, Citibank, af- MOST OF THE RECENT growth in her luxury chocolate purveyor, were ter years of reducing SBA lending, Reversing course Chase’s and Citibank’s SBA ach year, thousands of growing, but the company had only grew its loan numbers by 139%, to lending volumes has come via New York area entre- recently broken into the black. hundreds of other small busi- place fourth. SBA Express loans, which range preneurs with perfectly “To qualify under normal terms, ness owners also got lucky last year “We have made SBA lending a up to $350,000. Banks good companies have I needed to show another year or as the city’s two largest banks—J.P. priority,” says Hugh Donlon, Citi’s participating in the Express their loan applications two of good performance,” she says. Morgan Chase and Citibank— Queens-based managing director of program use their own forms and rejected. Last year, Maribel Lieber- Rather than rejecting Ms. hugely expanded the volume of their U.S. business banking. E criteria. That makes processing much easier, simpler and faster. Express loans can be approved in one to two days. istockphoto
Among other things, Citibank increased its small-business sales force and ramped up the number of sales calls it makes on potential cus- tomers, seeking to establish rela- tionships that include SBA loans. Chase took a similar route, not simply increasing the number of its business bankers but putting an em- phasis squarely on SBA lending. “We have been training our sales force in how to structure SBA loans,” says Thomas Seery, vice president and SBA manager for the New York region. Both banks’ SBA loans have gone to a cross section of New York businesses, including retailers, auto repair shops and manufacturers. New system in an era when all banks rely on computers and credit scores in assay- ing potential borrowers,the two banks have also adjusted their loan software. Typically, high-volume lenders score potential borrowers according to their cash flow,collateral and oth- er factors. In the past, when a busi- ness borrower came up short, the system would automatically reject the loan application. “Now, if a borrower misses the mark by a few points,the system flips over to review whether an SBA guar- antee can make the loan possible,” says Ronald Goldstein,the SBA’s as- sistant district director for economic development in New York. By making more SBA loans, Chase and Citi were able to extend their reach in the market and to cul- tivate relations with companies that could qualify in the future for stan- dard loans—as well as using a host of other banking services. The SBA guarantees cover from 50% to as much as 85% of loan values, increas- ing the attractiveness of those loans by reducing the risk of losses for the banks.In addition,those guaranteed loans typically carry interest rates about half a percentage point higher than those on conventional loans. “You may have a bit of extra delinquency with the SBA loans be- cause the credits are weaker,” says Chase’s Mr. Seery. “But the interest rates are a bit higher on the SBA loans, and the business ends up be- ing about as profitable for the bank as conventional loans are.”
COMMENTS? [email protected]
18 | Crain’s New York Business | January 14, 2008 Project10 1/9/08 3:25 PM Page 1
Silverstein Properties, Inc. and MetroFund, LLC
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For leasing opportunities please contact: Roger A. Silverstein Catherine T. Giliberti Stuart A. Christie Tel. 212.732.9700 Fax 212.732.9708 WWW.SILVERSTEINPROPERTIES.COM CNYB 01-14-08 A 20 1/10/2008 1:40 PM Page 1
THE WEEKS AHEAD
THIS WEEK’S EVENTS [email protected]. Concourse, 2501 Grand Concourse, JANUARY 17 York City’s neighborhoods will recover JANUARY 15 JANUARY 15 Bronx. Free. (718) 960-8697 or Arts & Business Council of New York from the mortgage crisis. 10 a.m. to Association of Real Estate Women Manhattan Chamber of Commerce [email protected]. and American Express hold workshop 12 p.m., Theresa Lang Community and holds seminar to meet the real estate holds networking reception. 6 p.m. to JANUARY 17 on marketing technology. 9 a.m. to Student Center, 55 W. 13th St., second press. 6 p.m. to 8 p.m., First American 8 p.m., Roger Smith Hotel, 501 New York Media Information Exchange 12:30 p.m., 200 Vesey St. Fee: $35 Arts floor. Free. (212) 229-5418. Title Insurance Co., 633 Third Ave. Fee: Lexington Ave. Fee: $15 members, $25 Group holds breakfast on the future of & Business Council members, $55 JANUARY 22 $25 members, $35 nonmembers. nonmembers. (212) 473-7805 or communications. 7:30 a.m. to 10 a.m., nonmembers. (212) 279-5910, ext. 221. Business Development Academy holds (212) 599-6181 or [email protected]. [email protected]. SobelMedia World Headquarters, JANUARY 17 networking reception and program on JANUARY 15 JANUARY 15 4 W. 43rd St., main ballroom. Fee: $30 SalemGlobal Internet Website doing business with Chinese companies. Wall Street Rising holds workshop on Camba Small Business Services holds members, $50 nonmembers. Marketing holds networking breakfast. 6 p.m. to 8 p.m., Merrill Corp., 225 career management. 6:30 p.m. to 8 p.m., workshop on marketing basics. 3 p.m. to (212) 725-2295 8 a.m. to 10 a.m., UBS Conference Varick St. Fee: $25 members, $45 Downtown Information Center, 5:30 p.m., 884 Flatbush Ave., second or [email protected]. Center, 1285 Sixth Ave., 14th floor. Fee: nonmembers. (609) 919-1895, ext. 100, 55 Exchange Place, suite 401. Free. floor, Brooklyn. Free. (718) 282-2500, JANUARY 17 $10. (646) 217-4184 or or [email protected]. (212) 425-4636 or ext. 242, or [email protected]. Networking For Professionals holds [email protected]. JANUARY 23 JANUARY 16 power lunch networking program. 1 New York Chapter of Society for More meetings online at Small Business Development Center p.m. to 3 p.m., Palm Too, 840 Second JANUARY 21-27 Marketing Professional Services holds www.crainsnewyork.com holds workshop on developing a Ave. Fee: $44.90 members, $54.90 JANUARY 22 information session on measuring green. Click on “Events” business idea into a business plan. nonmembers. (212) 227-6556 or Center for New York City Affairs at The 8 a.m. to 10 a.m., Penn Club of New 10 a.m. to 1 p.m., CUNY on the [email protected]. New School holds forum on how New York, 30 W. 44th St. Fee: $65 members, $85 nonmembers. (646) 292-8210 or [email protected]. JANUARY 23 New York Commercial Real Estate Women holds information session on global trends in real estate capital markets. 6 p.m. to 8 p.m., Penn Club of New York, 30 W. 44th St. Fee: $50 members, $85 nonmembers, $30 students. (212) 499-6566 or [email protected]. JANUARY 23 Forty Plus of New York holds seminar for out-of-work executives, managers and business professionals on rejuvenating a career. 2 p.m. to 3:30 p.m., 470 Seventh Ave., suite 306. Free. (212) 947-4230 or [email protected]. 2007 was an outstanding year JANUARY 23 Japan Society holds program on thanks to the following brokers: navigating Japan’s financial services market . 6 p.m. to 9 p.m., 333 E. 47th Robert Ageloff, Staubach Company St., first floor. Free. (212) 832-1155. JANUARY 23
Vincent Carrega, Grubb & Ellis Young Mortgage Bankers Association Gerald Friedman, CB Richard Ellis holds lunch on financing options in this credit market. 12 p.m. to 2 p.m., Union Stuart Gross, Eastern Consolidated League Club, 38 E. 37th St. Fee: $120. (201) 440-8144 or [email protected]. Peter Hauspurg, Eastern Consolidated JANUARY 23 Neil Helman, Grubb & Ellis American Business Media holds networking reception and program on Ivan Hillman, CB Richard Ellis women in business. 6 p.m. to 8 p.m., Jessica Hoppe, Home Work People Prince George Ballroom, 15 E. 27th St. Fee: $95. (212) 661-6360, ext. 3337. Paul Ippolito, Newmark Knight Frank JANUARY 24 Susan Kahaner, CB Richard Ellis Fashion Market holds forum on connecting a fashion business to China.
Michael Morrin, Newmark Knight Frank 6:45 p.m. to 9 p.m., Waldorf-Astoria, Michael Morris, Newmark Knight Frank 301 Park Ave. Fee: $50. (888) 943-9966. JANUARY 24 Peter Pacific, The Kaufman Organization The European-American Business Howard Poretsky, Colliers ABR Organization holds seminar on why companies should consider Europe for Wayne Sellers, Williamson, Picket, Gross, Inc. green products and services. 8 a.m. to 10 a.m., Princeton Club, 15 W. 44th St., Peter Shakalis, GVA Williams Blair Room. Fee: $35. (212) 972-3035 or Randy Sherman, Murray Hill Properties [email protected]. JANUARY 24 Home Work People Jane Stuart, Seidbet Associates holds workshop on Robert Tunis, GVA Williams establishing and implementing career goals in 2008. 7 p.m. to 9:45 p.m., Wishing you all continued success in the New Year. 45 E. 33rd St., room 209. Fee: $95. (212) 260-2026 or [email protected]. For current availabilities please call JANUARY 25 212.645.7575 Milano The New School for Management and Urban Policy and Center for New York City Affairs hold conference on strengthening the middle class. 5 p.m. to 7 p.m., Theresa Lang Community and Student Center, 55 W. 13th St. Free. (212) 229-5400. Meringoff Properties, Inc. —adrianne pasquarelli 30 West 26th Street, 8th Fl., New York, NY 10010
TO LIST YOUR EVENT
Crain’s lists business meetings online and includes them in the print edition on a space-available basis. Events in New York City with admission fees of less than $300 are considered for the print publication. Listings can be submitted only through the Crain’s Web site. To submit a calendar listing, go to www.crainsnewyork.com and click on “Events.” Sponsors have a choice of several free or paid list- ing options. All business events will be posted online within two business days. Crain’s can neither confirm receipt of listings nor say if or when event listings will appear in the print edition. MER1214_BrokerThanks_CRAINS.indd 1 12/31/07 1:09:59 PM 20 | Crain’s New York Business | January 14, 2008 Project4 1/8/08 1:04 PM Page 1
WESTBROOK PARTNERS is pleased to announce the acquisition of
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REAL ESTATE INSIDE Jackson Heights’ Little India could be falling victim to its success PAGE 36 The expected exodus of businesses to Jersey City hasn’t materialized PAGE 37 CoStar’s largest blocks of space PAGE 38 Assessing downtown prospects Changes keep area humming; tasks remain, and stakes are high owntown is buzzing with activity. Of- fice construction is running at a feverish pace, vacancy rates have fallen, and rents are rising. New stores and restaurants are moving in. At the same time, the pop- Dulation is growing and making new demands on the marketplace. In this section,Crain’s takes a look at lower Manhattan redevelopment—what has been accomplished and the challenges that remain—as the community works on becoming a 24/7 neighborhood that is attractive to workers, residents and visitors alike.
OFFICE SPACE New types of tenants like area’s appeal Page 26 NIGHTLIFE Dinner options galore, but what to do after? Page 26 BUILDING DOWNTOWNUP RESIDENTIAL MARKET Family- friendly shops lacking Page 30 INSIDE 26 HOTELS Industry expands downtown to meet rising demand Page 32 33 TRANSPORTATION City struggles to build vital infrastructure Page 33 Q&A Elizabeth Berger talks about public’s misconceptions Page 34 RETAIL Upscale retailers elbow out basic services Page 35 steven salerno
ICAHN STADIUM was Randall’s Island deal gives built with the help of a $10 million contribution new meaning to pay-to-play from Carl Icahn.
cess to sports fields on Randall’s Is- dall’s Island has enhanced New Money buys access land over the past decade, the York City’s sports and cultural to city-owned school would not have been able to scene with a world-class track- field soccer, baseball, lacrosse and and-field stadium,sports fields and sports fields track teams. summer concert venues.But a $300 “We won the city championship million public-private capital im- BY TINA TRASTER in baseball in 2005,” says Gregory provement plan that includes Hodge, the school’s principal. building 27 new sports fields and frederick douglass academy in “These fields have been a trans- renovating 36 existing ones is fuel- Harlem is a typical inner-city forming opportunity for our stu- ing debate over whether private en- school, built in the 1960s, with no dents.” tities that help fund park projects
gymnasium.Had it not been for ac- In the last decade or so, Ran- See ON RANDALL’S on Page 24 paliswiat thomas
January 14, 2008 | Crain’s New York Business | 23 CNYB 01-14-08 A 24 1/10/2008 6:30 PM Page 1
REPORT REAL ESTATE On Randall’s Island, pay-to-play deals OK
Continued from Page 23 years. Council and the borough president. parks. deserve special treatment when it Last June, a group of East The Randall’s Island agreement was “Randall’s Island should be for comes to public land. Harlem residents filed a lawsuit approved by the city’s six-member everyone,” says Scott Stringer, the Twenty private schools, includ- against the city, claiming that park- Franchise Concession and Review Manhattan borough president. “It ing Dalton and Spence, have land should not be monopolized for Committee. should not be auctioned off to the agreed to pay the city $52.4 million private purposes. The plaintiffs, highest bidder.” for the fields on the island.The city represented by civil rights lawyer Parents’ objections Those favoring the plan point will finance the balance of the $70 Norman Siegel, claim the city failed opponents, including parents of out that it’s not easy to raise $52 mil- million project. In exchange for to properly follow its own guidelines public school children from East lion for the fields. “It’s not like we their contribution, the schools will as part of the Uniform Land Use Harlem and the South Bronx, parks had other individual donors lining get first dibs on playing on 42 of Review Procedure, which requires advocates and members of the City up to pay for fields,” says Parks & the fields between 3 p.m. and 6 major projects to be reviewed by the Council, complain the deal estab- Recreation Commissioner Adrian p.m. on school days for the next 20 local community board, the City lishes a pay-to-play policy in public Benepe. bekka lindström bekka
Located along the East River be- tween Manhattan and Queens, Randall’s Island was farmland until the city bought it in 1835. Over the years, it has housed a variety of mu- nicipal facilities, including a mental hospital, a burial ground for the poor, a sewage treatment plant, and a Police Department harbor unit. The Parks Department took control of the island in the 1930s,and recre- ational facilities were built over the next few decades. The Randall’s Island Sports Foundation, the conservancy that operates much of the 480-acre island on behalf of the city Parks Department, depends on private investment to leverage city funding. In 2005, the city contributed about half of the $45 million cost to build Icahn Stadium on the footprint of the old Municipal Stadium. It has an Olympic-class 400-meter run- ning track, a soccer field, locker rooms and a dance studio. Corpo- rate raider, investor and philan- thropist Carl Icahn contributed $10 million and got his name in lights. Big plans in the next three years, $300 million in capital improvements are planned, including the sports fields, a golf driving range and a 20-court indoor tennis center. The sports foundation has named Sportime to run the concession for the tennis center, and bids are out on the driv- ing range. Improvements to wet- lands sites and waterfront pathways are under way. But with outside partners critical Over $3 billion in sales in 2007. to those plans, nothing is assured. Last year, the Parks Department yanked a contract with Aquatic De- velopment to build a $168 million, 26-acre water park after the compa- ny missed a financing deadline. Richard J.Davis,chairman of the board of the Randall’s Island Sports Foundation, says the reliance on outside investment and concession- aire fees is necessary to support cap- ital improvements and the founda- tion’s $3 million annual operating budget. “Public-private partnership is critical,” he says, “if we want to give New Yorkers a place to play.”
COMMENTS? [email protected]
24 | Crain’s New York Business | January 14, 2008 Project9 1/3/08 12:52 PM Page 1
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REPORT REAL ESTATE
that Mr. Cohen and his ilk are de- luding themselves and that current A new mix of tenants settles in market conditions are about as good as it is going to get. They note that even with the gains in lower Man- hattan, rents there are still 60% be- Nonfinancial firms downtown before it gets really ex- low those in midtown. pensive,” says Mr. Hobbs. OFFICE MARKET MAY TURN DOWN “Our clients are telling us that like downtown vibe; DMD executives aren’t the only midtown is where they want to be, ones who appreciate the growing WHILE THE DOWNTOWN ECONOMY is becoming but they’re being driven downtown demand boosts rents, appeal of the downtown office mar- more diversified, it is still dominated by Wall by the pricing,”says Marisa Manley, midtown has edge ket. In the past three years, about Street. That has raised fears that the president of Commercial Tenant 175 firms have moved into lower continuing fallout from the subprime mortgage Real Estate Representation Ltd. Manhattan, taking 4.2 million crisis could result in layoffs that will derail the BY ANDREW MARKS square feet of space,according to the office market just as it is gathering steam. Waiting for midtown deals Alliance for Downtown New York. Developers are expected to bring 10 million she says that some tenants are pine street, deep in the heart of Communications and media square feet of new Class A office space on line holding off on relocating, in hopes lower Manhattan’s financial district, companies—including American in the next five years. Towers 2, 3, and 4 in the that midtown rents will moderate might seem an unlikely place to find Lawyer publisher ALM and adver- World Trade Center complex and the Freedom Tower are scheduled for over the course of the next year. Diversified Media Design. tising behemoth Omnicom—are completion by 2013, and the topping off of Goldman Sachs’ new “When tenants find they can But that’s where a search for a among those that have hopped on headquarters will open up another 2 million square feet as early as 2009. make acceptable midtown deals, new office led the three-year-old the downtown bandwagon. This is they’ll stop looking downtown,” If Merrill Lynch moves its headquarters away from downtown, as it is marketing firm, which until this creating a whole new feel in the says Ms. Manley, who expects rents contemplating doing, landlords would have even more reason to be month had been located in mid- neighborhood, which before the to start coming down over the next town, near most of the city’s adver- terrorist attacks of Sept. 11, 2001, concerned. six to 18 months. tising industry. had long been defined by a narrow “Merrill’s 2.8 million square feet makes up about 20% of the total roll The majority of Manhattan bro- By relocating downtown, the concentration of financial and in- downtown,” notes Robert Sammons, research director at real estate services kers take the middle ground be- firm is saving 50% surance firms. firm Colliers ABR Inc. “If it moves to midtown south, that’s a significant loss.” tween those two perspectives: in rent compared Other experts insist that the market would be able to withstand such an They’re bullish on downtown, but with what it would Beggars no more economic shock because there is a shortage of commercial space as a they don’t expect rents to catch up to be paying in mid- “it’s just incredible to see what’s result of recent conversions of offices to residential condominiums. those in midtown, the neighbor- town. However, happened down here in the last few “Downtown is positioned nicely to withstand an economic downturn now,” hood’s big brother. BUILDING DOWNTOWNUP Chief Executive years,” says Daniel Blanco, director says David Goldstein, an executive managing director at tenant broker “I don’t think we need to define Rowland Hobbs of leasing at Broad Street Develop- Studley. downtown’s success by whether it
says the move was ment, which owns office buildings buck ennis closes the gap with midtown,” ar- driven mainly by at 55 and 61 Broadway. “It wasn’t gues Mark Jaccom, president of downtown’s other attractions. long ago that we were begging peo- Cushman & Wakefield Inc. pensive markets uptown. GVA Williams’ tenant representa- “We wanted to make a statement ple to move down here. Now we’ve Given the wave of develop- “If transportation and residential tive division. “The Bank of Ameri- about the company’s culture with got a wide range of tenants, from fi- ment under way downtown, some development continue to go as ca building has people lined up our office. Downtown has a great nancial firms to media, and demand industry experts think that rents will expected, in seven to 10 years, around the block willing to pay $200 combination of a cutting-edge feel, has never been stronger.” catch up with those in more ex- downtown’s office market will be per square foot, which you’re never but still with all the amenities of an That demand is on an equal footing going to see downtown. But that’s established office neighborhood,” reflected in rising with midtown,” re- not what the landlords downtown he says. rents, which are now MIDTOWN VERSUS DOWNTOWN marks Sheldon Co- are looking for.” Those amenities include new about equal to those hen, who heads CB They want their per-square-foot Midtown Downtown luxury retailers and restaurants that in nearby midtown Richard Ellis’ down- rent range to be in the $60s, rather are reshaping the look and feel of south. At the end of Vacancy rate 5.8% 6.2% town office, and who than the $30s and $40s, and they lower Manhattan. The opportunity 2007, the average Year-to-year percentage-point change -0.6% -2.1% worked on Omni- want to establish their buildings as to move the 20-employee firm into rent downtown was com’s 184,000- enduring alternatives to midtown in an I.M. Pei-designed office $47.47 a square foot, Average rental rate $76.26 $47.47 square-foot lease at properties, notes Mr. Jaccom. “And building at 88 Pine St. didn’t hurt, versus $30.89 two Year-to-year percent change +29.4% +22.9% 195 Broadway. they’re succeeding,” he says. either. years ago, a 54% in- Data are for all classes of office space, as of fourth-quarter 2007. Source: Cushman & Wakefield Inc. Then there are “We thought we’d better get into crease, according to those who believe COMMENTS? [email protected] Downtown nightlife stops with dinner
however, Mr. Rosabianca—who More eateries, but also lives downtown—has plenty of residents also want choices, including such trendy spots as Ulysses, Adrienne’s Pizza clubs and culture Bar and Financier, as well as stan- dards like Bobby Van’s Steakhouse, which opened a location on Broad BY DIANE HESS Street in 2006. “There didn’t used to be any- it used to be that when Luigi Ros- thing going on down here, but now abianca left his Wall Street office af- every block has a great restaurant or ter 5 p.m., the fi- one opening soon,” Mr. Rosabianca IN THE SHADOWS of a nancial district was says. “At this rate, I’m going to be high-rise office building, historic Stone Street has a ghost town. If he obese.” seen a number of trendy wanted a bite to eat, But most people agree that it will eating spots open he had to head to take more than restaurants if lower recently.
BUILDING busier parts of the Manhattan is to have nightlife rival- DOWNTOWNUP city, like Union ing that in parts of the city with a Square or TriBeCa. 24/7 vibe. That means clubs and
Nowadays, See DOWNTOWN on Page 28 buck ennis
26 | Crain’s New York Business | January 14, 2008 Project2 1/4/08 12:16 PM Page 1
Thank You Brokers We congratulate the following brokerage fi rms for leasing 1,137,567 square feet within our portfolio and earning over $10.7 million in commissions on signing during 2007.
www.wmproperties.com www.whpropertiesny.com
METRO CENTER At the Stamford Transportation Center
250 WEST 57TH STREET THE LINCOLN BUILDING EMPIRE STATE BUILDING Between Broadway & Eighth Ave. 60 East 42nd Street 350 Fifth Avenue
Coldwell Banker Bergson Strategies LLC CB Richard Ellis, Inc. Cushman & Wakefi eld, Inc. CB Richard Ellis, Inc. Colliers ABR, Inc. METRO TOWER EFA Realty Inc. Cresa Partners LLC Cushman & Wakefi eld, Inc. At the Stamford Transportation Center Gabriel J. Bullaro & Assoc. Cushman & Wakefi eld, Inc. Newmark Knight Frank Hays Ventures LLC Frederick P. Green & Co Northwest Atlantic Newmark Knight Frank Gotham Realty Real Estate Services Wharton Property Advisors LD Banks RE Staubach Winslow & Company LLC Makeover & Mariani Realty Wayne Mascia Associates UGL Equis Newmark Knight Frank Winoker Realty Company FIRST STAMFORD PLACE RFR Realty Woodlands International LLC At the Stamford Transportation Center George Fabian The Rosemark Group CB Richard Ellis, Inc. 212-246-2247 Williamson, Picket, Gross, Inc. Stephen K. Eynon [email protected] 212-400-3351 Cushman & Wakefi eld, Inc. [email protected] John Sinon Jones Lang LaSalle 212-697-0696 McCarthy Associates [email protected] Newmark Knight Frank
MERRITTVIEW 1350 BROADWAY Merritt Pkwy., Exit 40 A At 35th Street 112 WEST 34TH STREET CB Richard Ellis, Inc. Between Broadway & Seventh Ave. ROADWAY Cushman & Wakefi eld, Inc. 1359 B At 36th Street Adams & Company JDF Realty Benchmark Properties Grubb & Ellis Company Benchmark Properties Bergson Strategies LLC 500 MAMARONECK GVA Williams CB Richard Ellis, Inc. I-95, Exit 18B or Hutchinson River Colliers ABR, Inc. Prime Manhattan Realty PBS Realty Advisors, LLC Pkwy., Exit 23 South Delphi Commercial Vertical Space J One Realty CB Richard Ellis, Inc. Michael Frantz Jonathan Fanuzzi 212-372-2203 Newmark Knight Frank Cushman & Wakefi eld, Inc. 212-372-2084 [email protected] Studley Goldschmidt & Associates [email protected] Tarter Stats Realty Mariner Real Estate Services Newmark Knight Frank Audrey Coe Simon Partners 212-695-3617 [email protected]
1400 BROADWAY At 38th Street 501 7TH AVENUE TEN BANK STREET Adams & Company At 37th Street At the White Plains CB Richard Ellis, Inc. Transportation Center Colliers ABR, Inc. Jones Lang LaSalle 1333 BROADWAY Cushman & Wakefi eld, Inc. Newmark Knight Frank Metro Spire LLC At 35th Street Newmark Knight Frank NYCRS The Hunter Realty Organization, LLC Rakow Commercial Realty Group, Inc. The Wagner Group Michael Frantz Paul J. Walker Matthew Leon 212-372-2203 212-984-7117 212-372-2041 [email protected] [email protected] [email protected] For more information regarding W&M Properties please contact: Jeffrey H. Newman [email protected] Kathleen A. Caracappa [email protected] Kimberly Zaccagnino [email protected] 203-353-5200 We Perform for You
W&H1168_thanks_CrainsV7.indd 1 1/2/08 2:42:20 PM CNYB 01-14-08 A 28 1/10/2008 3:26 PM Page 1
REPORT Downtown nightlife
Continued from Page 26 foot locations, over the next few lounges, art galleries and museums. years.” Planners talk about establishing a Luxury hotels being built in the performing arts center, but even area, including a W on Washington supporters acknowledge that it is Street and Hyatt Andaz on Wall years away—at best. Street, plan to have high-end Candice West, an investment restaurants and lounges. banker who lives in the area, says, Since 2001, the Alliance for “Downtown is still a bit sparse.” Downtown New York has worked Lower Manhattan was on its way to promote cultural activities, in- to becoming more than a work des- cluding Dine Around Downtown, a tination before Sept. 11. Beginning one-day event showcasing restau- in 1995, city and state incentives rants, and the River to River Festi- helped transform the area, bringing val, a free series of live performanc- an infusion of young residents who es throughout the area during the wanted places to eat and hang out summer. with friends. “These folks were the foundation Demand is now for a culinary mecca,” says Valerie more needs to be done.There are Lewis, vice president of marketing plans for a 2,000-seat theater de- signed by Frank Gehry at the World Trade Center site and Signature People moving Theatre is in talks to relocate to the area. into the area Unfortunately, those projects are most likely years away from being want evening completed, and demand exists now. “A sophisticated group of peo- entertainment ple—many of them international— is moving downtown and looking for evening entertainment,” says Brad Ingalls,a senior sales represen- tative for The Setai, a 167-unit con- and communications at the Alliance do development that is going up in for Downtown New York. “Sept. 11 a former office building on Broad turned back the clock on some of Street. that progress, but in many ways, Joseph Smith, an owner of Bob- we’ve surpassed pre-9/11 levels.” by Van’s Steakhouse, says the area is The alliance’s most recent annu- “still two to three years away from al report listed 18 new restaurants becoming a true neighborhood.” and five on the way. And the 2008 Though business has doubled since Your plans are spectacular. Zagat Survey lists 40 restaurants in the location opened 18 months ago, lower Manhattan. it does only about 100 dinners on Saturdays, compared with 300 to Major appetites 500 during the week. (It’s closed on restaurateurs are devouring Sundays.) space, according to real estate bro- “We’re still in the frontier But could your legal strategy kers. Among familiar names, Fresco stages,” Mr. Smith says. by Scotto is opening a spot on Pearl Finding enough suitable space Street early this year. Jason Casano, for restaurants and other businesses use a new blueprint? an owner of Adrienne’s Pizza Bar, that want to open downtown is a whose revenue is up 50% since it problem. opened three years ago, is working Faith Hope Consolo,head of the on two West Street locations—Os- retail division at Prudential Douglas teria Casano and Café Casano. Elliman,says that much of the space “We’re doing six restaurant is antiquated. deals,” says Robert Cohen, execu- “The challenge is making [it] tive vice president of Robert K. Fut- work,” she says.“There are slopes in terman & Associates.“I fully expect the street and [underground] space to see Mr. Chow, Shun Lee and that is unappealing.” Cohen & Perfetto: A personalized approach to real estate law. Nobu-caliber restaurants, many of Itʼs a simple, but profound, premise: Each client represents an important relationship. them in 8,000- to 10,000-square- COMMENTS? [email protected] And every one of those relationships demands our complete attention and dedication. At Cohen & Perfetto, this is the philosophy that drives us. We make the connections that build these relationships, adding depth and value to every partnership we forge, REAL ESTATE AND MORE ON CRAIN’S WEB SITE and every transaction that transpires. Whether your needs involve real estate, govern- ment incentives, banking, zoning, or litigation, itʼs not just a deal to us: Itʼs your deal. developments as they happen. Learn more at www.cohenperfetto.com. Back issues Use the archives to find published Crain’s stories. Subscribe Tuesday e-mail Sign up for Crain’s Use the Real Estate Insider, a weekly e-mail “Subscribe newsletter featuring the latest deals, now” button events and personnel moves in one to get the of the hottest industries. Go to 444 Madison Avenue, 5th Floor weekly print www.crainsnewyork.com/signup. C New York, NY 10022 edition of P COHEN & PERFETTO LLP Tel: 212-488-1300 Fax 212-813-0767 Breaking news E-mail alerts keep Crain’s and digital subscriptions to Attorneys at Law www.cohenperfetto.com you up-to-date on local industry the newspaper. Project7 12/28/07 10:35 AM Page 1
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New York City Stephen M. Ross, Chairman and CEO, Related Union Carpenters and Contractors contributed to the construction of the iconic Time Warner Center, and are building a stronger New York by contributing to New York’s tax base. Last year, Union Contractors paid over $1.5 Billion in New York City and State taxes.
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REPORT REAL ESTATE
what the neighborhood needs most “Our residential survey of down- is more retailers. town found that many of our new Population growing faster Downtown has welcomed a apartment owners are former flood of high-end merchants and renters here,” she notes.“The area is restaurants of late,“but we still need still not getting an influx of families, to see the retail amenities catching but young married couples who than retail, service sector up to the residential,” says the vice moved here a few years ago are now president of The Hakimian Orga- staying when they have children.” nization. “It’ll get there, because key to turning the area into a thriv- the business improvement district even people who can spend $10 mil- Worth a second look More families call ing neighborhood. covering the area from Battery Park lion on an apartment need dry and some older people are giving area home, but lack Downtown Manhattan is be- to City Hall,where much of the res- cleaners and nail salons.” downtown a second look. coming a hot address—and not just idential growth is taking place. Mr. Hakimian’s firm is convert- When Mike and Laura Hart- of basic shopping for all of the office workers whose In the past 10 years, developers ing 75 Wall St. from an office build- stein began looking around lower is a concern firms have emigrated from midtown have converted 14 million square ing used by J.P.Morgan to a mixed- Manhattan three years ago,they had lately.Apartments are less expensive feet of office space into residential use property with 350 condo units no intention of exchanging their than comparable locations uptown, condominiums. Another 40 resi- atop a 250-room Hyatt Andaz hotel. comfortable, amenity-rich neigh- BY ANDREW MARKS and couples are discovering that the dential buildings with 6.300 units Ronald Kremnitzer, co-chair of borhood on the Upper West Side for area can be a good place to start and are either planned or under the real estate group at law the edgy allure of downtown. nowhere else in the city will you raise families. A family-friendly construction. firm Pryor Cashman, agrees “The original idea was to buy an find a scene like the one outside the environment is critical if downtown But even downtown’s 46K that the area needs more apartment as an investment,” says New York Stock Exchange at 3:30 is to become a stable community, most bullish developers and PEOPLE living family-oriented businesses, Mr. Hartstein. “We thought it below p.m., when children spill out of the neighborhood activists say. brokers acknowledge that Chambers including restaurants that would be a great spot for young,sin- three-year-old Claremont Prep ele- certain challenges must be Street in welcome children, to guar- gle types to move into, but not old- mentary school onto Broad Street, Bigger and better met before lower Manhat- Manhattan antee its long-term health. er married couples like us.” mingling with floor from a residential perspective, tan can be proclaimed a true “As the area becomes less But the Hartsteins, who are 65, traders taking ciga- downtown has come back from the 24-hour-a-day, seven-day-a-week hot, it won’t draw as many young are now considering moving. rette breaks and po- 2001 terrorist attacks,and then some. neighborhood. In the short term, people, and as people already here “Every time we’d go back,anoth- licemen in paramil- About 46,000 people now call the says Ms. Berger, the challenge is the get older, they might move else- er restaurant was opening; another itary garb. section of Manhattan below Cham- noise and traffic disruption that where,” he says. apartment building was filling with BUILDING DOWNTOWNUP Seeing busy of- bers Street home; that’s more than comes with living in a virtual con- Ms.Berger—pointing to the pri- people,” says Mr. Hartstein. “We’d fice workers trip- twice the number who lived there struction zone. vate Claremont school and the two walk around and see the neighbor- ping over the wheels before the Twin Towers came down. “It’s loud and dusty and difficult new public schools going up, along hood emerging, and suddenly, we of Bugaboo stroll- “We’re creating a truly unique here right now,but that’s the price of with playgrounds and public gar- started to get excited about living ers might induce grumbles in mid- mixed-use neighborhood here,” says expansion,” says Ms. Berger. dens that are in the works—believes downtown.” town,but not downtown,where res- Elizabeth Berger, president of the Rex Hakimian, like many other that downtown is already approach- idential development is considered Alliance for Downtown New York, developers and brokers, thinks that ing full family-friendly status. COMMENTS? [email protected]
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30 | Crain’s New York Business | January 14, 2008 Project5 1/2/08 12:25 PM Page 1
The market is calling.
And we’re listening– wherever the deals may be. Today’s real estate market is complex and challenging. Deals are being made and we’ve been helping clients successfully execute them – regionally, nationally and globally. As the largest consulting firm in the U.S., dedicated 24/7 to real estate and finance, The Schonbraun McCann Group knows how to maximize opportunities for our clients, every single time.
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REPORT “ Every market Hotels seeking has its room downtown opportunities.” Demand driving expansion; gains in THE room rates may slow REAL ESTATE as capacity increases INSTITUTE BY LAURA KOSS-FEDER
the hotel industry is in a mad rush to expand capacity in New York City, and lower Manhattan is a big part of its plans. Credit is tighter, uncertainty is greater, and preparing for a career in About 3,000 of the 12,000 new real estate or construction management has never been more important. hotel rooms slated to come on line citywide in the next four years are lindström bekka planned for downtown.That would more than double the 2,100 existing Street firms headquartered down- The market has changed, but not Over the last 40 years, the Our faculty consists of leading rooms in the area. town have taken major write-downs for the rst time. The upcoming Real Estate Institute (REI) at industry authorities, drawn But the hotel in- because of the subprime debacle,and industry-wide shakeout, if NYU-SCPS has become one of from one of the world’s most dustry has a pro- the worst may not be over. Credit it occurs, will illustrate the the most respected institutions sophisticated real estate pensity for falling tightening has already slowed the importance of understanding the of higher learning in the real markets. At REI, experts in both in love with a mar- commercial real estate market. cyclical nature of the real estate estate industry. REI o- ers a construction and real estate will ket, building too “We could see some planned BUILDING business. For those with the wide range of exceptional provide you with the insight, DOWNTOWNUP many rooms and projects fall off the radar,” Mr. Fox expertise to meet the challenges, educational opportunities, perspective, and connections then suffering says. “Although even more signifi- the current environment will including graduate and necessary to achieve the highest through a crisis that cant than a recession would be any inevitably result in an entirely certi cate programs, national level of success in these dynamic depletes every play- lessening of financing. That could new set of opportunities. conferences, and over 500 and increasingly complex elds. er’s average daily room rate and affect hotel projects to a greater de- courses, many of which ll New drives occupancy down. gree.” Industry officials say that won’t York State continuing education More from investment requirements. happen this time, at least in lower Manhattan. The area has become the strategy for many of new much more of a destination for busi- planned hotels is to combine them ness and leisure travelers over the with condominiums. Zoning laws DEGREE OFFERINGS: CERTIFICATE PROGRAMS: PROFESSIONAL LICENSING PROGRAMS: • Master of Science in Real Estate • Construction Management • Broker’s License past few years, points out Jeffrey allow developers to construct taller • Master of Science in • Electrical Systems Design • Home Inspection Davis, executive vice president with buildings with more square footage Jones Lang LaSalle Hotels, a divi- by incorporating hotels than if they Construction Management • HVAC Design ...and over 500 industry courses. • Bachelor of Science in Real Estate • Plumbing Design sion of Jones Lang LaSalle. were just building condos alone, (o. ered through the McGhee Division) • AutoCAD The best evidence of the in- points out Nicole LaRusso, vice • Construction and Cost Estimating creased demand is the rising occu- president of planning and econom- pancy rate. In 2007, the average rate ic development for the Alliance for for hotels downtown through the Downtown New York. Graduate Information Session: third quarter was 85%, up from 73% “You get more out of your invest- Tuesday, February 12, 6-8 p.m. in 2003. ment in the land by adding a hotel Marriott Marquis, 4th Floor, 1535 Broadway (between 45th and 46th Sts.) “There is strong demand for ho- component to a condo project on Please call 212-998-7200 to RSVP. tels in lower Manhattan,which have the same site,” Ms. LaRusso says. been steadily gaining in rates and “Since there is both a demand for scps.nyu.edu/x635 1-800-FIND NYU, ext.635 occupancy for the past few years,” new residences and hotels down- says John Fox, senior vice president town, this strategy makes sense.” with PKF Consulting.“I’m not wor- Developer Joseph Moinian’s 58- ried about overbuilding.” story, $500 million project at 123 New York University is an affi rmative action/equal opportunity institution. ©2008 New York University School of Continuing and Professional Studies While lower Manhattan is iden- Washington St. will be split evenly tified more with Wall Street than between condominiums and a 217- tourism, visitors—especially for- room hotel. The W New York City eign travelers—find their way Downtown Hotel and Residences, downtown. Between 2003 and which will have two restaurants, will 2006, visitor counts climbed to 5.5 take up the first 29 floors.The build- million from 4.2 million, according ing will open in mid- to late 2009 to the Alliance for Downtown New and will include one- and two-bed- York. If the area is to play a role in room condos. the mayor’s quest to attract 50 mil- Similarly, Time Equities Inc. is lion visitors by 2015—up from 45.5 building a 63-story tower at 50 West million last year—more hotel rooms St. that will include a 150-room are needed. five-star hotel and 300 condos, says Phillip Gesue, director of acquisi- Worst may not be over tions and development. Construc- however, it would be wise to ex- tion will start this year and will be pect slower gains in room rates in completed by the summer of 2010. lower Manhattan.Mr.Fox points out The developer is currently in discus- that the substantial 10% to 15% an- sions with a “well-known boutique nual room rate increases since 2004 [hotel] brand,” Mr. Gesue notes. will become more like 4% to 5% if the The anticipated room rate will be two dozen hotels that planned for around $500 a night, about 10% to downtown are actually built. 20% lower than a comparable mid- That might not happen if the town property. economy slows down considerably or tips into a recession. Several Wall COMMENTS? [email protected]
32 | Crain’s New York Business | January 14, 2008 CNYB 01-14-08 A 33 1/10/2008 3:36 PM Page 1
REPORT REAL ESTATE High-End Office Opportunity 200,000 SF Sublease City struggles to iron out Harborside Financial Center, Plaza III - Jersey City tangled transportation
Crucial plans to improve mass transit, traffic move slowly, may prove inadequate
BY JUDITH MESSINA •Divisible to 40,000 SF •Private Freight Elevator •Potential 1st, 2nd & 3rd Floors •Cafeterias on 2nd & 3rd Floors the first part of New York City •Term through July 2012 •Immediate Availability to be settled because of its strategic location on New York Harbor, low- •Raised Floors Tenant Incentives: er Manhattan still bears the marks •4,000 SF Data Center •Below Market Sublease of its nearly 400-year history, in- •Back-Up UPS •UEZ Tax Savings cluding a smattering of cobblestone •Exclusive Loading Dock •Skyline Views streets. The quaint area is also the locus Mountain Heights Center Phone: 908-771-0400 of some of the city’s biggest trans- 430 Mountain Avenue, 4th flr. Fax: 908-771-8877 portation challenges,from the flood Murray Hill, NJ 07974 www.staubach.com of cars coming out of the Brooklyn Bat- tery Tunnel, to the circuitous access to the East River BUILDING DOWNTOWNUP Drive, to the maze of subway lines that getty images THE FEIL ORGANIZATION converge near Ful- $4 BILLION BABIES: A new mass-transit station at the World Trade Center is one of three such ton Street. downtown projects that are slated to come on line this year and next. And it’s only going to get worse. Some 350,000 people live and work Is Pleased to Announce the Acquisition of in lower Manhattan. When the Metropolitan Transportation Au- house buses until the Freedom Tow- World Trade Center is completed, thority garage near the Brooklyn er is completed—which isn’t slated that number is expected to rise to Battery Tunnel into a holding pen to happen until 2012. more than 400,000. The Sept. 11 for express buses from the suburbs memorial alone is expected to at- and the boroughs beyond Manhat- Congestion question tract millions of visitors a year. tan. The vehicles currently remain and while Mayor Michael Bloom- The construction of three new parked on the street all day, taking berg’s proposal to impose conges- transit centers and the city’s plans to up a full traffic lane. tion pricing on cars entering Man- expand ferry service and get parked Similarly, to reduce car traffic, hattan below 86th Street on buses off the street promise to elim- the city is building a ferry slip at the weekdays would reduce traffic in inate some of the muddle. Battery Maritime Building. It’s lower Manhattan,it may not survive “As we are trying to convey the looking for ferry operators to oper- the gantlet of councilmembers and message that downtown is a place to ate new routes to midtown and low- legislators who must approve it.The work, live and invest in, having the er Manhattan from the Rockaways city’s Traffic Congestion Mitigation transportation structure in place is Commission is set to make recom- crucial,” says Avi Schick, chairman mendations at the end of this month of the Lower Manhattan Develop- Transit is key to on reducing congestion. ment Corp. The idea of charging city resi- But it remains to be seen whether the area’s image dents outside Manhattan to drive these projects can substantially re- into the borough is increasingly un- Commonwealth duce congestion and make public as a good place popular among constituents, and transit appealing enough that people this is, after all, an election year. will leave their cars home. Many of to work and live “Members of the Assembly will Industrial Complex the changes are years away from com- be looking at the political realities,” pletion, and other key projects that says Walter McCaffrey, a former 324-342 Moore Avenue could improve access to lower Man- city councilman who is head of Keep hattan—such as congestion pricing NYC Congestion Tax Free. Suffolk, VA and a rail link to John F. Kennedy In the meantime, other projects airport—are mired in politics. in Queens and Williamsburg and that some business leaders say are • Nine buildings comprising 692,840 square feet Greenpoint in Brooklyn. crucial to keeping New York com- Coordinating mass transit “We have not fully exploited the petitive—including a Second Av- • 95% leased to help steer the hordes into and use of ferries in lower Manhat- enue subway between the Upper around lower Manhattan, city and tan,”observes Kathryn Wylde,pres- East Side and lower Manhattan, • Located between East Pinner Street and state agencies are constructing $4 ident of the Partnership for New and a rail link to JFK—are in limbo. Finney Avenue billion worth of new transit stations York City, a network of business The MTA has made such projects at Fulton Street, the World Trade leaders that supports both conges- low priorities as it struggles with op- • 20 miles from Portsmouth/Virginia Beach Center site and South Ferry.Bright, tion pricing and expanded use of erating deficits and a mountain of clean, spacious and modern, they ferries. debt. 36,000 Square Feet Currently Available will enable riders to better navigate Unfortunately, the various proj- “The thing that’s of great concern public transportation options—in- ects are running into some bumps. is our competitors,” says Robert Seven Penn Plaza • NewYork, NY 10001 • 212-563-6557 cluding the subway system, New For example, the Fulton Street Yaro, president of the Regional Plan For more information, please contact: Jersey PATH trains and ferries— Transit Center, under construction Association, a nonprofit group pro- Jeffrey Feil, CEO • [email protected] and transfer more easily among since 2005, has been scaled back to moting the tristate area.“Every oth- them. The stations are expected to reduce its cost and has encountered er major world city is moving ahead Nothing Beats 50 Years of Stability. go into service this year and next. delays. The bus garage, for which with transportation projects.” To ease surface traffic conges- the LMDC is still doing a feasibili- tion, LMDC has plans to turn a ty study, probably won’t be ready to COMMENTS? [email protected]
January 14, 2008 | Crain’s New York Business | 33 CNYB 01-14-08 A 34 1/10/2008 3:43 PM Page 1
REPORT REAL ESTATE
future of lower Manhattan with commercial tenant subway lines—and I don’t know Downtown Crain’s assistant managing editor down here, they how many bus lines. We really are Robert Hordt. “get it” the public transportation nexus of immediately.The Manhattan. What we don’t have is advantages Q: What are the challenges facing issue is getting the grand edifice—the Grand Q&A development downtown? them down here. Central Station or the Penn A: One challenge is having Station—to prove it, and that’s not always enough available appropriate office Elizabeth Berger Q: What are those why it’s so exciting that the Fulton s the new president of space, although I think we are misconceptions? Transit Center and a new PATH the Alliance for going to have a lot more. We’ll A: People think station are being built. apparent Downtown New York, have 10 million square feet of Class it’s hard to get to. There’s a sense among the the city’s largest A space once the World Trade Not true. We were outside public that nobody lives business improvement Center is built out. intermodal before here. Well, I’ve lived here for 25
Neighborhood’s BUILDING Adistrict, Elizabeth Berger, 47, Another challenge is the the word was years. We have 46,000 residents, DOWNTOWNUP progress obscured oversees an annual budget of misconceptions that people have coined, with the almost 20,000 more than in 2002. $15 million and a staff of 45. Ms. about the area. I heard a top broker ferries, with the We expect another 10,000 in 2008. by misconceptions Berger spoke recently about the say that once you get a prospective PATH, with 14 And we also have two new schools coming on line.That really is a sign that there’s a residential community that is here to stay. Another misconception: There’s nothing to do. Well, you can shop and you can eat. We have the No. 1 405,000 Square Feet Leased, 75 Transactions in 2007 retail destination in the city, Century 21, and an equally Swig Equities salutes these distinguished brokers international retailer in J&R Music. And now we have high-end and welcomes our new and expanding tenants. retailers. We have many restaurants. On Stone Street, we have the only European-style historic dining experience in New York City.
Q: What do downtown residents complain about? A: The concerns are the same as in other neighborhoods of the city. They are about what is happening at street level—illegal vending, traffic hot spots, a proliferation of street fairs. But because of the intense amount of construction, the chaos is magnified. There 900,000 sf 400,000 sf 324,000 sf 350,000 sf 320,000 sf 400,000 sf doesn’t seem to be any clarity about 90 BROAD STREET 5 HANOVER SQUARE the construction schedule. (New) (New) Safeco Insurance Company of America Moed deArmas & Shannon Architects, P.C. Medina Consultants, P.C. (New) Q: What about businesses? What Carri Lyon / Cushman & Wake, eld Geringer & Dolan, LP (New) Paul Walker / CB Richard Ellis, Inc are they concerned about? Poet’s & Writers, Inc (New) Beth Greenspan / Colliers, ABR, Inc. New York City Economic A: We have to decide what we Jonathan Cope & Suzanne Sunshine / CB Richard Ellis, Inc. Mel S. Harris & Associates, LLC (New) Development Corporation (Expansion) want lower Manhattan to look like. (New) Glotel, Inc. John Thompson / Cushman & Wake, eld, Inc. Knowledge Delivery Systems, Inc. (Expansion) As important as the World Trade Doug Dolgoff / CB Richard Ellis, Inc. (New) The Christophers, Inc. Gregg Slotnick / Swig Equities, LLC Center is, it is only 16 acres in the CGI-AMS (New) Kevin Daly & Robert Lowe / Cushman & Wake, eld, Inc. middle. We are a much larger WB Engineering & Consulting, P.L.L.C (Renewal) Michael Liss / CB Richard Ellis, Inc. Meridian Equity Partners, Inc. (New) district. Bruce Beegle / CB Richard Ellis, Inc. The Urban Assembly, Inc. (New) Patrick Nash / Winslow & Company I think we need to look at Branch Banking & Trust Company (Expansion) Jonathan Cope & Suzanne Sushine / CB Richard Ellis, Inc. NY Business Development Corp (New) Greenwich South, the whole area Soon Hyung Kwak (Renewal & Expansion) Noel Flagg & Ashley Whitney / Newmark Knight Frank New York City Administration for below the trade center site, going Childrens Services (New) New York Service Center for Downing & Peck, P.C. (New) down to the Battery. In many ways, Brian Reiver & Scott Cahaly / The Staubach Company Chinese Fellows, Inc (Renewal) AR Industries, Inc. (New) it is untouched.There are a whole Valiant Insurance Group, Inc. (New) series of potential development Globe Tax Services, Inc. (Renewal & Expansion) Jason Vacker / Newmark Knight Frank Hal Stein / GVA Williams sites there. And then there’s Water Justin Aronson / Trammell Crow Services, Inc Sweet Construction Corporation(New) (Expansion) (New) International Aids Vaccine Initiative, Inc. Street, where we have millions of Carfora Klar Gallo Vitucci Pinter & Cogan, LLP Eric Cagner / GVA Williams square feet of Class A office space, Steve Riker / Colliers ABR, Inc. International Center for 44 WALL STREET but no retail. We need to figure out (Renewal) (Expansion) The Calwell Practice, PLLC Transitional Justice, Inc. BAM Capital, LLC (New) how to animate the east side so that (Renewal) (Expansion) Ecology & Environment, Inc. Mel S. Harris & Associates Mark Gottfried / Williamson, Picket, Gross, Inc. it stays competitive with the west Robert Friedman / First New York Realty Co, Inc. (New) Marulli Lindenbaum et. Al. Joseph Grace & CO. (Expansion) side. Coalition of Voluntary Mental Agencies, Inc. (Renewal) Doug Rabiner & Steve Rotter / Newmark Knight Frank 48 WALL STREET Manfra Tordella & Brookes, Inc. (Renewal) Edge Trade, Inc (Expansion) Q: What impact would a recession (New) Asia Netcom USA, Inc. (Renewal) Perrin Holden & Davenport Quanta US Holdings, Inc. have downtown? Michael Liss / CB Richard Ellis, Inc. Capital (Renewal & Expansion) Michael Goldman, Dan Posy & Nicholas Farmakis / Studley, Inc. A: The studies I’ve seen show 80 BROAD STREET Rampart Insurance Company (New) Huntsman Architectural Group (New) there would have to be layoffs in (New) Johnathan More & John Pavone / CB Richard Ellis, Inc. Data Industries, Ltd. (New) the tens of thousands for there to Hugh O’Neil, Ltd. d/b/a Appleseed, Inc. be any impact on the office vacancy David Burton & Eric Yarbro / CB Richard Ellis, Inc. Dan Ginsberg / The Lawrence Group, LLC 110 WILLIAM STREET rate in lower Manhattan. Some (Expansion) Burchman, Terrio, Gebhardt & Quist, LLC New York City Housing 450 SANSOME STREET estimates are that 7,000 jobs will Jonathan Cope / CB Richard Ellis, Inc. (Expansion) Development Corporation SR Travel Services (New) be lost in the next year or so in the Brune & Richard, LLP (Expansion) (Renewal) The Heffner Agency, Inc. Mark Rosen / Rosen Associates financial sector. My sources tell me Ted Rotante / GVA Williams, Inc. Robert Goodman / Studley, Inc. Maple DeLacey, LLP (New) that would not have a huge effect M & R Strategic Service, Inc. (Expansion) on the vacancy rate. This is Brian Beswick / CB Richard Ellis, Inc. David Lebenstein / Colliers ABR, Inc. Inquiries: Todd E. Korren different from the dot-com bubble Pensco, Inc. (Renewal) Moed deArmas & Shannon Architects, P.C. (Expansion) 212.508.7276 • [email protected] in that there is less shadow space John Giordani / The CAC Group Royal Media Group (New) this time. There has been less (New) Jeff Kilimnick / CB Richard Ellis, Inc. Harowitz & Tigerman, LLP expansion, so there would be less (Renewal) (New) space to off-load. RF Lafferty & Co., Inc. swigequities.com LeMeridien Hotel COMMENTS? [email protected]
34 | Crain’s007305_ThankYou_Ads_v1.indd New York Business 1| January 14, 2008 1/7/08 5:00:00 PM nb02p35.qxp 1/10/2008 5:43 PM Page 1
REPORT REAL ESTATE
Silver Lake Management
has leased
the 32nd floor buck ennis A TOUCH OF CLASS: Hermès is just one of the upscale apparel and accessories firms that have opened downtown locations in the past year. Bangles, BMWs elbow out delis and discount shops THE FEIL ORGANIZATION Is Pleased to Announce 20,000 more than in 2002 and up important business hub, but now the Following Lease Transaction Luxury retailers can from 31,000 in 2003. with all these conversions, you’ve pay rising rents, The newcomers who are being got this real community,” says Beth enticed by those units are exactly the Canavan, an executive vice presi- but residents need type of wealthy consumers targeted dent at Tiffany. grocery stores, too by prestigious retailers. Though status retailers are a sign Median household income in of the area’s vitality, residents also the neighborhood surged to need basic goods and services, some BY WENDY DAVIS $162,700 last year, compared with of which used to be supplied by in- $111,000 in 2004, according to the dependents that can no longer af- in a space downtown on Cort- Alliance for Downtown New York. ford the rents. landt Street that last housed a mes- Ground-floor rents are rising “The mom-and-pop stores—the senger service, Kian Kashani just dramatically as the area attracts little jeweler,the little discount vari- opened a women’s clothing bou- more retail. Sites on Broadway, ety store, the non-national food re- tique specializing in expensive de- Wall Street and Broad Street are tailers, the delis, the nondescript signer labels. leasing for $200 a square foot, up stores—[they] are being replaced,” Mr. Kashani is from about $85 in 2002. says Faith Hope Consolo, head of betting that afflu- Exclusive merchants that have the retail division at Prudential ent residents mov- migrated to the area, which include Douglas Elliman. 164,000 Square Feet Leased to ing downtown will leather goods designer Hermès and BUILDING DOWNTOWNUP want to shop for the men’s clothier Canali,are more than More to come pricey yet casual overall, there are about 1,200 clothes that he is shops and restaurants downtown, The New York selling—without ‘A lot of condos including fixtures like department leaving the neighborhood. store Century 21, on Cortlandt Public Library “There are a lot of condos going are going up, Street, and electronics emporium up, bringing in people who want J&R Music and Computer World, at 31-11 Thomson Avenue luxury,” he says. bringing in on Park Row. Lured by Wall Street’s high- More retail is on the way. Long Island City, NY earning professionals and a growing people who The Fulton Street Transit Cen- number of affluent residents, up- ter, which is slated to be completed • Long-term ground lease for the entire scale retailers, from BMW to want luxury’ late this year or early in 2009,will of- 164,000 square foot building Thomas Pink and Hickey Freeman, fer 20,000 square feet. have opened locations downtown. The eventual build-out of the • Located minutes from Manhattan, the World Trade Center complex will 59th Street Bridge and I-495 Basics, too provide another 490,000 square feet though the stores are welcome of space for retail activity—about Ira Schuman, David J. Goldstein and David M. Carlos of Studley Represented the Tenant. additions, there is a downside to willing to pay the freight required to 60,000 more than the original The Feil Organization Represented Itself. their arrival: Their presence is driv- be in the heart of the world’s finan- WTC. ing up rents and driving out long- cial capital. And unlike that shopping space, Seven Penn Plaza • New York, NY 10001 • 212-563-6557 time independent merchants—a Many of them have set up shop which was largely underground to For more information, please contact: transformation that isn’t seen as a in grand old bank buildings.Tiffany, capture consumers commuting by Jeffrey Feil, CEO • [email protected] good thing by residents,who also de- which moved into the former Trust subway, much of the space that will sire supermarkets and dry cleaners. Co. of America building at 37 Wall come on-line over the next few years Nothing Beats 50 Years of Stability. Thanks to a wave of condomini- this fall,said the recent influx of res- will be at ground level or above. um conversions, about 46,000 peo- idents was the draw. ple now live downtown—almost “That area has always been a very COMMENTS? [email protected]
January 14, 2008 | Crain’s New York Business | 35 CNYB 01-14-08 A 36 1/10/2008 3:38 PM Page 1
REPORT REAL ESTATE Murray Hill Properties LLC Enduring popularity might REAL ESTATE INVESTMENT III LP