TALK ABOUT SCALING UP FPO Fishing trips may be the ultimate office CRAIN’S® getaway PAGE 37 NEW YORK BUSINESS VOL. XXIX, NOS. 32, 33 WWW.CRAINSNEWYORK.COM DOUBLE ISSUE AUGUST 12-25, 2013 PRICE: $3.00 Regulator Small wonders puts city Shoebox-size pensions food outlets (85 MICROSIZE ME: Alon on notice sq. ft., anyone?) Kruvi’s four-foot-wide Simply Sliders draws prove to be midtown lunch crowds outside—because money magnets there’s no room inside. DFS chief Lawsky asks city comptroller BY ADRIANNE PASQUARELLI about middlemen Simply Sliders, a new takeout banned years ago spot popular with the lunch crowds around Grand Central Terminal, is a lot like nearby BY AARON ELSTEIN food joints. It offers a trendy product—small Angus-beef State regulators are worried that burgers, fried chicken sand- pension-fund middlemen at the center wiches and french fries of a scandal that sent former state wrapped in checkered paper. Comptroller Alan Hevesi to prison are Customers have their choice of back in New York City. beverages,ranging from a vari- In a July 29 letter obtained by ety of sodas to lemonade, and Crain’s, officials at the New York State there are plenty of napkins for Department of Financial Services told messy eaters. Yet unlike other the New York City Employee Retire- eateries, Simply Sliders is only ment System to provide a description 85 square feet in size—a four- of its policy concerning placement foot-wide cubby nestled be- agents, the names of people who acted tween a Subway and a Lotto in such a capacity between 2007 and store on East 43rd Street. 2012, and the investment firms that “We’re an innovative hired them. Regulators also want to model,” said Alon Kruvi, who know if any plan trustees have intro- opened Simply Sliders in May See PLACEMENT AGENTS on Page 36 and pays about $3,000 in monthly rent.“We’re not pay- ing for storage—we’re basi- cally a stationary food truck.” Honey, I shrunk the café! SIZE MATTERS Across Manhattan,local food Breaks for Small footprints, big profits: entrepreneurs, eager to open Simply Sliders (pictured) on their own storefronts, are East 43rd Street: 85 square feet, squeezing into tiny, shoebox- $4,500 in projected annual posh pads shaped retail properties less sales per square foot than 200 square feet in size. Meatball Obsession on Sixth Traditionally, such nooks Avenue: 212 square feet, $3,400 in annual sales per cause stir were reserved for jewelry or square foot scarf sellers, or the occasional Screme Gelato Bar on West magazine and newspaper 94th Street: 108 square feet, stand.Food operators,subject $3,000 in annual sales per Real estate industry to stringent rules and regula- square foot tions from the city’s Depart- Bisous Ciao Macarons on under fire for giving ment of Health, usually Bleecker Street:180 square feet, donations to state pols steered clear. $2,500 in annual sales per square foot Yet this new crop of food- ies,hoping to save on rent and BY DANIEL GEIGER appear more creative aesthet- See SMALL WONDERS on Page 35 They are five of the most ambitious residential projects the city has seen in WATCH a related video at years. They are the work of some of CrainsNewYork.com/video buck ennis New York’s top developers, and their condominium apartments are expect- ed to sell for millions—in some cases THE SPORTING NEWS tens of millions—of dollars each. And as of early August, they all P. 3 A-Rod costs Yanks PLUS: Dolan vs. have two other things in common. All Ratner on Long Island. P. 17 Super Bowl five were revealed to be set to receive ELECTRONIC EDITION massive tax breaks from the state of partyers plan AND:Fútbol! Football! Soccer! New York, and subpoenas from Gov. NEWSPAPER See TAX BREAKS on Page 36 EDITOR’S NOTE Waste not FYICRAINSNEWYORK.COM I had to sigh when Crain Com- munications Inc. announced this month it was turning one of my all- Billionaire Bezos pockets time favorite trade papers, Waste & Recycling News, into a smaller The Washington Post online operation for possible sale to n Internet titan ruffled the media outsiders. Waste & Recycling News industry last week. In a surprise move, smartly and even sassily covered Glenn Coleman Amazon CEO Jeff Bezos personally one of the country’s toughest A bagged The Washington Post for $250 million. industries. (Tony Soprano peruses The tech billionaire’s deal comes as newspapers an issue in an early episode.) It also started publishing struggle to shore up advertising revenue. In fact, a few days bloomberg news not long before Crain brought me to New York in before the Post was sold, The New York Times Co. returned The Boston Globe to 1997 to launch InvestmentNews, a paper for financial its local roots by selling the paper to John Henry, owner of the Boston Red Sox, for $70 million. advisers. I never left my new home, although I did In the golden days of 1993, the Times Co. paid $1.1 billion for the Beantown paper. eventually leave InvestmentNews, which became one Speculation that The New York Times would also hit the auction block immediately swirled, of the company’s most profitable startups ever, a fact but Times Publisher Arthur Sulzberger Jr. insisted that his family-controlled paper is not for that I occasionally accept way too much credit for sale. The Graham family owned or controlled the Post for 80 years, and its sale will make the when Crain executives gather. I poached an up-and- Times the last major newspaper to remain in its patriarch’s hands. coming reporter from WRN in the early days of In its most recent quarterly earnings, the Times reported a profit of $20.1 million, compared InvestmentNews, and the sibling rivalry continued as with a year-earlier loss of $87.6 million, on stronger circulation revenue and lower operating the two young Crain brands competed in journalism costs. But ad revenue fell for an 11th straight quarter, even as digital subscriptions jumped by contests and the like. WRN was never as profitable as 35%, to nearly 700,000. InvestmentNews proved to be, but it was a fruitful investment in other ways, not least of all the WRN HILTON CHECKS OUT IPO. Hilton stock.The six-year-old Adap.tv pro- staffers who now will be working elsewhere in the Worldwide’s owner, private-equity vides online video advertising tech- HOORAY! company. If there’s anything I’ve learned about the giant Blackstone Group, reportedly nology used by a number of large MTA COPS hired four banks—Deutsche Bank, brands and ad agencies. On the con- helped mysteries of investing during my years as a financial deliver a Goldman Sachs, Bank of America tent side, AOL is said to be consid- baby boy in journalist, it is this: Being a little more right in your Merrill Lynch and Morgan Stan- ering shuttering or unloading 400 of Penn Station choices and not too wrong can really add up over ley—to prepare for taking the hotel its 900 Patch websites. … FABULOUS after a 32- FAB TAKES FALL. year-old went time. Each week, my colleagues at InvestmentNews chain public. Blackstone bought Former Goldman into labor cover some of the savviest people in the financial- Hilton six years ago for $26 billion in Sachs trader Fabrice Tourre was while waiting a record takeover of a hotel company. found liable on six of seven fraud for the LIRR. advice world, so I’m happy to report that select Crain’s Blackstone is also exploring a sale or claims. The ruling marked a victory New York Business readers next month will begin IPO of its La Quinta motel chain.… for the Securities and Exchange receiving a new email every Saturday called Crain’s FIFTH AVENUE RENTS ROCKET. Rent Commission, which charged the 34- OY VEY! Wealth. It offers links to InvestmentNews’ latest for retail space on Fifth Avenue hit year-old with misleading clients in a A DEAD an all-time high of $3,050 per square failed $1 billion investment deal.Mr. SHARK was stories containing investing intelligence, wealth- foot, according to CBRE Group. Tourre faces unspecified money found on a Queens-bound management wisdom and tax-planning strategies. I The price for space along the posh penalties and a possible ban from the N train. One suspect many Crain’s New York readers will find shopping strip, between West 49th industry. … AN AD BEHEMOTH rider gave the and West 59th streets,rose 22% from EMERGES. Two advertising giants shark a Metro- Crain’s Wealth a reliable dividend from one of Crain Card, a can of a year earlier. Retail- agreed to tie the knot Red Bull and a Communications’ greatest investments. ers like Ralph Lauren ‘This is and become the cigarette for a still seem willing to largest agency in the photo shoot. open their wallets. … shocking and world. The com- THIS WEEK IN CRAIN’S E-TAKEOUT FOR ALL. unprecedented’ bined Omnicom Seamless and Grub- Group and Publicis The grocer will occupy the ground Hub plan to tem- —Randy Mastro, an Groupe will claim a floor in the first office tower slated to IN THE BOROUGHS-------------------------- 3 attorney representing porarily void their ex- stock-market value rise at Hudson Yards, at the corner of IN THE MARKETS----------------------------------4 trade group Friends of clusive relationships Javits, which was of $35.1 billion and West 30th Street and 10th Avenue. It THE INSIDER -----------------------------------------------6 with restaurants now blindsided when Gov.