The Most Thankless CEO Gig in NY
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20121112-NEWS--0001-NAT-CCI-CN_-- 11/9/2012 7:22 PM Page 1 JOE LHOTA FOR MAYOR? GREG DAVID opines on Superstorm Sandy’s unlikely hero CRAIN’S® PAGE 11 NEW YORK BUSINESS VOL. XXVIII, NO. 46 WWW.CRAINSNEWYORK.COM NOVEMBER 12-18, 2012 PRICE: $3.00 Fiscal cliff casts dark shadow over city If the nation goes over, New York would be hit harder than other places BY ANNIE KARNI New York City would fall harder and faster than the rest of the nation if The Congress fails to avoid the fast- approaching fiscal cliff—that combi- nation of federal tax hikes and spend- ing cuts set to take effect Jan. 2. The city has long suffered an imbal- ance in terms of the money its high most earners send Washington in the form of taxes and the funds returned as fed- eral services.New Yorkers get about 79 cents for every dollar sent to the capi- tal. The one-two punch of spending cuts and tax hikes would make that im- thankless See FISCAL CLIFF on Page 24 IN THE SPOTLIGHT: Consolidated Edison Chief Executive THE INSIDER CEO gig Kevin Burke NY Senate in NY shift irks Power. It’s all business relative when Democratic victories zumapress.com zumapress.com / you run trigger concerns of Con Ed Albany dysfunction bryan smith bryan BY ANDREW J. HAWKINS a wall showing how many customers still haven’t had electricity restored AND CHRIS BRAGG BY AARON ELSTEIN since Sandy stormed through. By the middle of last week, the number on the wall read 67,000. “That chart shows how many people are mad,” said For a brief two years, Albany seemed to Kevin Burke, the man charged with keeping New York’s power flowing, the 61-year-old chief executive. work. Shrugging off its reputation for can measure how unpopular he is at any moment with exacting precision. In some ways, the number was impressively small, considering that a dysfunction, Gov. Andrew Cuomo and That’s because on the top floor of Consolidated Edison Inc.’s headquar- whopping 1 million Con Ed customers had lost power nine days earlier. legislative leaders restructured the state’s ters near Union Square, in a room stocked with employees working the But as Mr. Burke glanced at the wall, he was already bracing for another spending practices and passed a proper- phones, scrutinizing maps and pounding at keyboards, there is a chart on See THANKLESS on Page 23 ty-tax cap, new income-tax brackets, an ethics bill, same-sex marriage and other landmark legislation. The disciplined REPORT HEALTH CARE Republican Senate majority was Mr. Cuomo’s close partner. How Obamacare could make insurance But with Democrats gaining an ELECTRONIC EDITION brokers irrelevant Page 13 edge in the Senate with election victo- ries last week, business leaders fear a THE LIST Largest health insurers Page 16 return to the circus-like atmosphere NEWSPAPER See STATE SENATE on Page 6 20121112-NEWS--0002-NAT-CCI-CN_-- 11/9/2012 7:41 PM Page 1 STATS AND THE CITY ELECTION DAY SNAPSHOT In between ravaging coastal storms, New Yorkers queued up all across the city to vote in what had promised to be one of the closest elections in years. FYICRAINSNEWYORK.COM 2.1M NYC residents who voted on Election Day, down 19% from 2008, according to early counts Wall Street faces the sour 1.7M post-election music NYC voters who cast their ballots for President Barack Obama, about 81% all Street firms didn’t have to wait long for a sense of how painful four more years of 91.2% President Barack Obama might be for Portion of Bronx voters who backed Mr. Obama, W them.The morning after the election, investors saw the highest percentage of any borough the handwriting on the wall and dumped shares of Goldman Sachs, Morgan Stanley, Bank of America, 377K JPMorgan Chase and other big banks, pummeling newsbloomberg NYC residents who voted for former Massachusetts Gov. Mitt Romney, about 18% their prices downward by 6% or more on the day—as the Dow dropped a relatively modest 2.4%. The reasons for the hit are myriad. For openers, it looks like banks can say goodbye to their 49.1% hopes for any watering down of the Dodd-Frank financial reform law. Another four years of Portion of Staten Islanders who voted for Mr. Romney, the Obama also means that other reforms that bankers have tried to fend off for years may now highest percentage of any borough come to pass. First and foremost, that means the Volcker Rule, which bans banks from placing risky bets with their own capital. “Obama Victory Seals Volcker Rule,” was the title of a report Sources: Office of the Mayor, NYC Board of Elections istockphoto last week from Tabb Group, a Wall Street research firm. THE GREAT WHITE WAY UPSTAGED In another blow,Treasury Secretary Timothy Geithner, long seen as, if not a friend of Wall Broadway’s lights were flickering even before Superstorm Sandy blew Street, at least not an enemy, will almost surely exit soon. And don’t forget that strong consumer them out totally for a few days. advocate Elizabeth Warren, many a banker’s bête noire, will soon be sworn in as a senator from Massachusetts. “We’re going to hold the big guys accountable,” she told supporters on election Weekly Broadway ticket sales, change y-o-y +18.3% night. —aaron elstein +8.8% -7.6% -8.4% +2.7% -3.3% +2.3% -5.4% -35.9% HIPSTER BROOKLYN GETS ITS FIX. posted its strongest ad growth in Service on the vast bulk of the city’s seven years—news strong enough to HOORAY! subway system defied the odds and fuel a 22% explosion in its share price BABY WALRUS MITIK and the other New returned to normal last week in the on Nov.6. Meanwhile, News Corp.’s York Aquarium creatures did not need to wake of Superstorm Sandy,but some results also surprised on the upside, be evacuated. Nearly all survived. of the hippest of the system’s 8.5 mil- with a tripling of net income paced 9/9/12 9/16 9/23 9/30 10/7 10/14 10/21 10/28 11/4 lion daily riders were among the last by growth in its cable business. Source: The Broadway League to feel the love.The L train, the life- Cablevision went the other direc- line between Williamsburg and tion, posting a loss in the quarter. ADDICTED TO NUMBERS? GET A DAILY DOSE AT @STATSANDTHECITY points east to Manhattan,and the G, Worse lies ahead, following the the only line connecting Queens to storm, which knocked out service to northern Brooklyn without looping half the company’s customers. … through Manhattan, were among GAS PAINS. A huge surge in the vol- THIS WEEK IN CRAIN’S the last to rumble ume of price-gouging OY VEY! ELEC- back to life. … complaints in the city A NOR’EASTER THE INSIDER ---------------------------------------------- 1 TION DAY MADNESS. ‘These are not spawned by Sandy, to brought snow and high IN THE BOROUGHS--------------------------- Long Election Day roughly 600, has 3 God-given winds to a city lines, storm-shut- prompted state Attor- still struggling IN THE MARKETS----------------------------------4 tered polling sta- monopolies. ney General Eric to cope with the previous BUSINESS PEOPLE ---------------------------8 tions, broken ballot Schneiderman to scanners and a dearth They will launch an investiga- storm. CORPORATE LADDER -------------------- 9 of affidavit ballots be held tion.Most complaints OPINION --------------------------------------------------------10 made voting labori- have been about gas ous for many last accountable’ prices. On that front, GREG DAVID--------------------------------------------11 week and quickly —Gov. Andrew Cuomo the mayor took action is that the effort has spawned $600 REAL ESTATE DEALS-------------------12 provoked howls of on the power companies of his own late last million in bills, mostly for services outrage from Mayor that some have criticized week. He signed an rendered by the trustee’s own firm.… REPORT: HEALTH CARE ---------- 13 Michael Bloomberg for failing to speedily emergency order set- POP-UP PAPER FOR CAUSE. A publish- THE LIST ---------------------------------------------------------16 and others. The situ- reconnect the powerless ting up an odd-even er of five downtown neighborhood ation was dire in the wake of license-plate system papers has launched a sixth. It’s a CLASSIFIEDS -----------------------------------------18 SMALL BUSINESS enough to spur the Superstorm Sandy for gas purchases. … short-term weekly called NYC Re- Instead of tending trees, NEW YORK, NEW YORK ----------25 City Council to MOPPING UP MADOFF. connects, with an accompanying web- schedule hearings for next month The bankruptcy trustee leading ef- site, designed to help lower Manhat- Urban Arborists’ Bill Logan SOURCE LUNCH--------------------------------26 is tackling the “exhausting about what went wrong. Hint: The forts to recover the ill-gotten gains of tan recover from Sandy. The paper and sad work” of clearing OUT AND ABOUT ------------------------------27 closure of the offices of the Board of imprisoned Ponzi thief Bernie Mad- will be distributed free below 23rd Elections due to storm damage may off says he has now passed the Street. Meanwhile, Gov. Andrew those downed by Sandy. P. 20 SNAPS--------------------------------------------------------------27 have contributed. ... YOU’VE GOT halfway point. He has collected more Cuomo last week estimated the CORRECTIONS & UPDATES EARNINGS. Surprise, surprise! AOL, than half of the $17.3 billion in prin- storm’s cost in the state at a whopping Emma Jupp is president of Liberty Travel in Ramsey, N.J. Her surname was misspelled long ago given up for dead by some, cipal that investors lost.The bad news $33 billion.