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Obamacare’s NYC checkup P. 6 | Commercial real estate’s diversity gap P. 10 | Ramen all alone P. 27
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THICKER THAN WATER Throughout the city, family business owners like Andrew Rosenwach and his son Henry have kept their companies thriving across multiple generations— by putting values first PAGE 14 VOL. XXXII, NO. 43 WWW.CRAINSNEWYORK.COM
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OCTOBER 24 - 30, 2016 CRAINSNEW YORK BUSINESS
FROM THE NEWSROOM | MATTHEW FLAMM IN THIS ISSUE
Ties that bind 4 AGENDA 5 IN CASE YOU MISSED IT THE SUBJECT of family businesses might seem like a nat- 6 INSTANT EXPERT ural fit for a Crain Communications publication, especially 7 POLITICS Wall Street in 2016: The family-owned company, which publishes this is exporting paper and more than 50 other titles around the world, is 8 ASKED & ANSWERED more jobs out of the city marking its 100th anniversary this year. 9 FINANCE But family ownership is a timely topic in other ways too. 10 REAL ESTATE Sumner Redstone and his daughter Shari recently went 12 VIEWPOINTS through the kind of epic battle for control of Viacom and CBS that should persuade every family business owner to FEATURES pay close attention to succession plans. Around the same 14 ALL IN THE FAMILY time, the Murdochs showed what a new generation can ac- complish when the brothers James and Lachlan took hold There is a growing of a mushrooming sexual harassment scandal and ushered consciousness that Fox News chief Roger Ailes out the door. “ family businesses Our focus, however, is on family businesses closer to home—from a garment district stalwart and a centu- are different and ries-old tugboat operator to a longtime coffee roaster should be studied in Queens and a 90-year-old boiler maker in the Bronx. separately. They’ve all beaten the odds that, according to one study, P. 14 STEFANIE KASSELAKIS suggest a family-owned company has just a one-in-three 24 GOTHAM GIGS chance of surviving to the second generation. Which brings up another aspect of a sector that accounts for more than 60% of all jobs in the U.S.: Business schools 25 SNAPS have turned their attention to it. “There is a growing consciousness that family 26 FOR THE RECORD businesses are different and should be studied separately,” said Belen Villalonga, 27 PHOTO FINISH who teaches family business management at NYU’s Stern School of Business. CORRECTION Family companies tend to think long-term and often focus on their values as Amazon’s Red Oaks filmed in Nassau County. The opposed to just the bottom line, according to Patricia Angus, director of Colum- location was misstated in an earlier version of bia’s Family Business Program, which recently became its own entity within the the article “Success of New York’s TV industry business school. “Businesses talk about this stuff,” she said. “But there’s a way that has soundstage owners scrambling for space,” published online Oct. 16, 2016. families live it that other businesses can learn from.” Families can also be more protective of employees, who in turn are more loyal. And their businesses tend to be more resilient. But not always. “Sometimes they outperform,” said Daniel Van Der Vliet, executive director of the Smith Family Business Initiative at Cornell, which plans to expand its New York City presence next year. “Other times they make weird decisions.” And they get into fights, and agonize over cashing out or finding new leadership when there’s no clear successor. And like much else, family business has gotten more complicated. “We live in a ON THE COVER hyper economic time,” Van Der Vliet said. “There’s a lot more at stake now.” PHOTO: BUCK ENNIS
DIGITAL DISPATCHES CONFERENCE CALLOUT NOVEMBER 1 Go to CrainsNewYork.com Getting ready for 9 million New Yorkers READ Nearly 2,000 Stuyve- sant Town tenants who Together with private- and lived in the complex > public-sector leaders, including when Tishman Speyer Mayor Bill de Blasio, owned the buildings Crain’s will explore answers to will be getting more the questions facing money from a 2012 settlement for New York City as it approaches rent overcharges. About $442,000 is a population milestone. still unclaimed from the $68.75 million SHERATON NY judgment against Tishman and MetLife, TIMES SQUARE former owners of Stuy Town, which found 8 a.m. to noon that the companies illegally raised rents [email protected] while receiving a tax break that banned such increases.
Vol. XXXII, No. 43, October 24, 2016—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double n Goldman Sachs is running banner and issues the weeks of June 27, July 11, July 25, Aug. 8, Aug. 22 and Dec. 19, by Crain Communications Inc., 685 Third Ave., audio ads on Spotify in the U.S. and U.K. New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send address to recruit more millennials. This year, the changes to: Crain’s New York Business, Circulation Department, 1155 Gratiot Ave., Detroit, MI 48207-2912. For subscriber service: Call (877) 824-9379. Fax (313) 446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. (GST No. 13676- bank also overhauled the way it seeks to 0444-RT) ©Entire contents copyright 2016 by Crain Communications Inc. All rights reserved. hire college graduates to prevent bias and diversify its staff. The bank recently used Snapchat to lure young prospects. BUCK ENNIS
October 24, 2016 | CRAIN’S NEW YORK BUSINESS | 3
P003_CN_20161024.indd 3 10/21/16 8:40 PM WHAT’S NEW October 24, 2016
AGENDAA second chance to get it right in East Harlem—and beyond
n 2003, the city rezoned East Harlem, believing it would spur de- velopment that would create housing and jobs without damaging the character of the neighborhood. But even without an afford- able-housing requirement, little of the hoped-for residential and Iretail construction happened in the years that followed, and the area remains far from reaching its potential. BIG POTENTIAL: Now the city is trying again. But the de Blasio administration’s pro- A rezoning of posed rezoning is about more than just East Harlem. If its plan for the East Harlem could trigger neighborhood is approved, it would be the second such success, follow- development ing one in East New York, Brooklyn, and would pave the way for a slew of 30-story buildings of other such overhauls still on the drawing board. along East Planning a community’s future is no simple task in New York City. 125th Street. Suspicion of developers and government runs high, fear of change bor- ders on paranoia, and idealistic activists inevitably demand more sub- ing, the area will not be able to take advantage of the great opportuni- sidized housing than developers can afford or politicians are willing to ties that lie ahead, notably an extension of the soon-to-debut Second fund. Even though the city’s East Harlem plan hewed closely to the rec- Avenue subway. ommendations of a neighborhood task force that spent a year studying East Harlem’s council member is Melissa Mark-Viverito, who as the matter, at the unveiling of the proposal council speaker understands the rezoning’s last week, one curmudgeonly filmmaker Rezoning in New York City is no easy implications not just for her district but promptly took to social media to defeat it, for the rest of the city. We have no doubt attaching the hashtag #gentrification to his task. Suspicion runs high and fear of that the plan, which is expected to begin posts. change borders on paranoia its formal seven-month public review in the The East New York rezoning was ap- spring, will ultimately win approval. But proved because the local councilman, Ra- how it gets there is important. If the speak- fael Espinal, was brave enough to defy a voluble group that pledged to er and the task force (which she created) can win a broad consensus go door-to-door bad-mouthing him in his district every Saturday for a for such essential elements as tall buildings near mass transit—the East year. The de Blasio administration did throw in goodies, such as a new Harlem plan calls for 30-story structures along East 125th Street—and community center and a new school, and will offer similar enticements the removal of mandates to include parking with new developments, it to East Harlem. If that’s what it takes, so be it. Without the proper zon- will establish that as the paradigm the city needs. — THE EDITORS
BUSINESS ON WALL STREET is down, but it looks like this year’s bonuses will be up. At Goldman Sachs, for example, revenue is down by 15%, but the average employee stands to earn about $350,000, roughly $5,000 more than last year. The reason: Goldman’s expenses have fallen even more than its revenue, as the firm let go of about 2,000 people. As a result, there’s more bonus money available for fewer folks to divvy up.
BY GERALD SCHIFMAN S T
25 WORDS OR LESS A T
INSULAR INDUSTRY? S AS NEW YORK CITY FILM
and TV employment swells, a disproportionate number AND Never put an opening of the jobs—even low-skilled ones—are going to native-born workers Projected 2012-22 growth in
“ T % city arts and entertainment jobs, date on a subway HE CI 24.5 second highest of any industry advertisement. Portion of the city’s —Tim League, CEO of Alamo Draft- T
% workforce made up Y house Cinema, sharing one of the 47 of immigrants lessons he learned while working to open the company’s first New York Portion of arts, entertainment and City theater, a process that took four % media workers who are foreign-born, second lowest of any industry years. The new seven-screen dine-in 25.9 movie house will open in downtown Portion of sound- Brooklyn on Oct. 28. % engineering technicians 13.6 who are immigrants ISTOCK, BUCK ENNIS ADDICTED TO NUMBERS? GET A DAILY DOSE AT @STATSANDTHECITY SOURCE: Center for an Urban Future, New York state Department of Labor
4 | CRAIN’S NEW YORK BUSINESS | October 24, 2016
P004_CN_20161024.indd 4 10/21/16 8:39 PM AGENDA ICYMI CRAINSNEW YORK BUSINESS EDITOR IN CHIEF Rance Crain publisher, vp Jill R. Kaplan assistant to the publisher Devin Arroyo, 212.210.0701 EDITORIAL editor Jeremy Smerd Cuomo signs anti-Airbnb bill, assistant managing editors Erik Engquist, Jeanhee Kim, Robin D. Schatz web editor Amanda Fung but its effects are uncertain art director Carolyn McClain photographer Buck Ennis BILL TO BAN SOME airbnb ads scored Gov. Andrew senior reporters Joe Anuta, Aaron Elstein, Matthew Flamm, Daniel Geiger Cuomo’s signature Friday after a drawn-out battle reporters Rosa Goldensohn, Jonathan LaMantia, Caroline Lewis, pitting the tech giant against hotels, the real estate Addie Morfoot A data reporter Gerald Schifman industry and affordable-housing advocates. web producer Peter D’Amato Airbnb fought hard to win over Cuomo, even running ad- columnist Greg David contributing editors Tom Acitelli, vertisements in Philadelphia taxicabs during the Democratic Theresa Agovino, Erik Ipsen, Brendan O’Connor, Cara S. Trager National Convention this summer urging him to veto the ADVERTISING bill. After he signed, the company immediately said it would www.crainsnewyork.com/advertise advertising director Irene Bar-Am sue the city and state, apparently to limit or prevent enforce- [email protected] or 212.210.0133 ment of the measure. senior account managers But Airbnb also says the new law will not pull the rug out Zita Doktor, Jill Bottomley Kunkes, Rob Pierce, Stuart Smilowitz, Debora Stein from under its business in New York. senior marketing coordinator LeAnn Richardson The bill bans listings for rentals that are already illegal un- sales/events coordinator Ashlee Schuppius der a 2010 law: sublets of fewer than 30 days in Class A mul- 212.210.0282, [email protected] tiple dwellings, which are apartment buildings with three or more units. ONLINE general manager Rosemary Maggiore Many Airbnb listings fall outside of that category, according to the company. “There are so many uses on the 212.210.0237 platform and the scope of the multiple-dwelling law is so narrow that it’s likely that they’re mostly legal,” Airbnb [email protected] CUSTOM CONTENT spokesman Peter Schottenfels said. director of custom content Patty Oppenheimer 212.210.0711 Many hosts stay on the premises and rent out a room or couch, which is legal, he noted. Others sublet row [email protected] houses or other homes not covered by the 2010 law. Some rent for stretches beyond 30 days. multicultural sales manager Giovanni Perla [email protected] What remains to be seen is how enforceable the advertisement ban will be. If listings do not specify short-term senior custom marketing manager Sonia David, [email protected] and that the owner will not be on-site, for example, illegal rentals could continue to evade the government’s grasp. EVENTS But the restriction does introduce a fear factor that did not exist before, as lawbreaking hosts and not just their www.crainsnewyork.com/events director of conferences & events landlords will face fines under the new listings law. — ROSA GOLDENSOHN Courtney Williams, 212.210.0257 [email protected] manager of conferences & events Adrienne Yee AUDIENCE DEVELOPMENT MetLife kicks Snoopy to the curb DATA POINT nies, said the deal would be an all-stock director of audience & content The giant insurer said it will phase out transaction. It would be a reunion for partnership development NEW YORK HAS RECEIVED 1,494 Michael O’Connor, 212.210.0738 the beloved beagle and Peanuts char- the companies, which split in 2005. [email protected] acters from its marketing as it exits the APPLICATIONS FOR THE STATE FILM CRAIN’S 5BOROS U.S. retail market to focus on group City bungled Sandy recovery www.5boros.com PRODUCTION TAX CREDIT SINCE THE coverage. The company’s new tagline is City officials admitted they botched a Irene Bar-Am, 212.210.0133 PROGRAM’S INCEPTION IN 2004. [email protected] “MetLife. Navigating life together.” Superstorm Sandy recovery program REPRINTS THOSE PRODUCTIONS REPRESENT and initially failed to disclose the effort reprint account executive Krista Bora Long Island corruption scandal was a half-billion dollars over budget. 212.210.0750 MORE THAN $22 BILLION IN PRODUCTION The top elected official in Nassau Coun- Mayor Bill de Blasio had promised the production and pre-press director ty, Executive Edward Mangano, and SPENDING STATEWIDE. Build It Back program would rebuild Simone Pryce Oyster Bay Town Supervisor John Ven- homes damaged in the October 2012 media services manager Nicole Spell ditto were indicted for extortion, brib- storm by the end of this year, but ac- SUBSCRIPTION CUSTOMER SERVICE www.crainsnewyork.com/subscribe ery, fraud and obstruction of justice. Cuomo won’t name new Brooklyn DA knowledged that deadline won’t be met. [email protected] Mangano’s wife, Linda, who allegedly Gov. Andrew Cuomo’s decision not to 877-824-9379 (in the U.S. and Canada). got a no-show job, was also charged. appoint a new Brooklyn district attor- $3.00 a copy for the print edition; or $99.95 one year, $179.95 two years, for print The federal case is the latest in a string ney to replace Kenneth Thompson will subscriptions with digital access. of graft scandals in New York politics. allow interim replacement Eric Gonza- to contact the newsroom: www.crainsnewyork.com/staff lez to run the office until elections next 685 Third Ave., New York, NY 10017-4024 Saving J.Crew year. Public Advocate Letitia James had phone: 212-210-0100 fax: 212-210-0799 J.Crew is working with consulting firm been floated as a potential appointee to Entire contents ©copyright 2016 McKinsey & Co. on a business plan to succeed Thompson, who died Oct. 9. Crain Communications Inc. All rights reserved. ©CityBusiness is a registered revive sales. The New York-based retail trademark of MCP Inc., used under license chain might also hire a bank to explore Bike messengers organize agreement. buying back its bonds to give it time to re- The New York Messengers Alliance CRAIN COMMUNICATIONS INC. BOARD OF DIRECTORS vamp. The company has no cash flow and launched, aiming to improve pay, ben- chairman Keith E. Crain more than $2 billion in debt. It may focus efits and working conditions for cou- president Rance Crain on activewear and close some stores. riers delivering for app-based delivery treasurer Mary Kay Crain, Cindi Crain services such as UberRush and Caviar. senior executive vp, William Morrow Circus targeted by city executive vp, director of strategic Bloomberg LP rival makes big hires The group is the first nondriver affiliate operations Chris Crain Money.Net tapped Norman Pearlstine, of the National Taxi Workers Alliance. A City Council bill to ban wild and executive vp, director of corporate operations K.C. Crain a former Bloomberg LP top editor, to An estimated 10,000 messengers work exotic animals from entertainment senior vp, group publisher David Klein help it build news and data terminals to in the city, but it’s unclear how many events may end Ringling Bros. and vp/production, manufacturing David Kamis Barnum & Bailey performances in chief financial officer Bob Recchia compete with Bloomberg’s. Pearlstine are a part of the new group. chief information officer Anthony DiPonio will remain Time Inc. vice chairman. the city. The company said it will founder G.D. Crain Jr. [1885-1973] The startup was founded by another Viacom, CBS to reunite not remove any more animals from chairman Mrs. G.D. Crain Jr. [1911-1996] former Bloomberg executive, Morgan Viacom shareholders expect to finalize its show, asserting that it treats secretary Merrilee Crain [1942-2012] Downey, who hopes companies will a merger with CBS by Thanksgiving. them well. The circus stopped embrace Money.Net’s $1,500 annual National Amusements Inc., which has a using elephants in May.
subscription over Bloomberg’s $21,000. controlling stake in both media compa- BUCK ENNIS, REUTERS
October 24, 2016 | CRAIN’S NEW YORK BUSINESS | 5
P005_CN_20161024.indd 5 10/21/16 7:47 PM AGENDA INSTANT EXPERT HEALTH CARE BY JONATHAN LAMANTIA
Is Obamacare succeeding in New York? [in 5 steps]
THE PLAYERS THE ISSUE Just 7% of New Yorkers buy insur- As New York’s Af- ance independent fordable Care Act 2 of an employer or pub- marketplace opens 1 lic program, such as for its fourth year Nov. 1, Medicare. For several some of its counterparts in New York insurers, the other states have run into individual market is a small slice of their business, while others sell problems, including steep exclusively to individuals. In the city, the dominant players covering increases in premiums and the 115,000 who purchased coverage through the marketplace in the some insurers pulling out, last cycle are local operators that got their starts in government health even leaving some areas programs, particularly Medicaid. MetroPlus, the insurance arm of NYC with just a single option. Health + Hospitals, signed up 22.8% of the market, followed by Health- New York has avoided first (17.6%) and Fidelis Care (15.1%), the state’s Catholic health plan. many of the pitfalls plaguing other Obamacare exchanges, but Oscar (co-founders pictured above), a venture-capital-backed startup, not all of them. New York City residents now have nine carri- signed up 14.9% of individuals on the exchange, and now has about ers to choose from, ranging from national behemoths to local 69,000 New York members. Oscar and Northwell Health’s CareConnect startups. The average premium for an individual seeking insur- lost $92.4 million and $31.8 million, respectively, last year. Mean- ance on the marketplace will rise 16.6% in the upcoming period, while, United Healthcare and Anthem’s Empire BlueCross BlueShield—the though more than half of customers have low-enough incomes largest New York City-area insurers—have been less popular on the to qualify for tax credits that offset the increases. New Yorkers marketplace. United has continued to sell plans to individuals in New who didn’t have insurance in 2016 will pay a penalty of $695 York, despite ending its Affordable Care Act coverage in most of the per adult in their household, or 2.5% of adjusted gross income, 34 states where it sold plans for 2016. On the whole, it appears New next April. The fee will be adjusted for inflation in 2017. Yorkers are benefiting from plenty of competition without much of the disruption that has occurred around the country, where insurers are heading for the exits in many states.
WHAT’S NEXT New York has The Affordable Care Act avoided many YEAH, BUT... hangs in the balance with of the pitfalls It hasn’t all been smooth for New York’s marketplace. Health 5the Nov. 8 Republic Insurance of New York, a co-op plan that burst onto the election. Donald plaguing scene in the first year of the marketplace, imploded in 2015, Trump (right) and 3 other states’ leaving 209,000 members scrambling. The company’s gobs of debt congressional Obamacare are being sorted out in bankruptcy court; hospitals are seeking $200 Republicans million in unpaid claims, and some doctors, vendors and insurance favor repealing exchanges, but brokers say they were never paid. The insurer’s members are also it, and Trump not all of them owed for premiums. The Health Plan Association accused the state could cut off Department of Financial Services of failing to ensure the insurer’s sol- federal funding vency. Health insurance as a whole, including employer-sponsored plans, has that insurers use been less profitable for New York insurers under the Affordable Care Act. A to cover deductibles and out-of- United Hospital Fund report found the industry’s collective net income pocket costs for lower-income fell by 67% in 2014, to $516 million. members. Hillary Clinton aims to amend the law to curb prescrip- tion drug prices. She also wants a government-run plan to compete with private health plans. If con- gressional gridlock maintains the SOME BACKSTORY status quo, New York’s Obamacare New York’s individual insurance market looked radically different before the Affordable Care exchange should remain viable if Act prompted the creation in 2014 of the New York State of Health marketplace, where not robust next year, as even the individuals can shop for plans. The number of buyers statewide in 2013 was just 136,000, insurers now losing money have 4 and the cheapest premium cost more than $1,000 a month. When the state-run marketplace the resources and the inclination and the mandate to be insured kicked in the next year, 441,000 individuals bought coverage and to persevere. In the end, medical seven insurers started selling plans in New York City. Thanks in part to the low-cost Medicaid-style costs will affect premiums most. plans, the average individual monthly premium fell to $431 in 2014, and many customers paid even less because of income-based subsidies. BLOOMBERG, BUCK ENNIS, GETTY
6 | CRAIN’S NEW YORK BUSINESS | October 24, 2016
P006_CN_20161024.indd 6 10/21/16 7:47 PM AGENDA POLITICS
New York CEOs donating generously to GOP, but not to Trump Three of the city’s 20 highest-paid executives gave to Clinton BY GERALD SCHIFMAN AND ROSA GOLDENSOHN
hen it Goldman Sachs CEO chairs the Senate Bank- butions to the presiden- And three top 20 ex- eron Pharmaceuticals— c o m e s Lloyd Blankfein backed ing Committee. tial race. Schwarzman ecs—designer Ralph donated the maximum to feder- Sen. Rob Portman, who Even though New gave $90,990 to Jeb Bush, Lauren, investment $2,700-per-race limit to al cam- is fighting for his seat in York’s business leaders while News Corp.’s Ru- banker Paul Taubman of the Democratic presi- paignW donations, New Ohio, and Alabama Sen. won’t finance Trump, pert Murdoch donated PJT Partners and Leon- dential nominee, Hillary York City’s business Richard Shelby, who they have made contri- $200,000 to John Kasich. ard Schleifer of Regen- Clinton. n leaders have bypassed presidential nominee Donald Trump. But they have given generously to down-ballot Republican candidates, especially in the tight Senate fights Robert Morehardt that could flip the cham- CEO ber blue. TEC-CAST An analysis of 2015- 16 federal political do- nations by the top 20 executives on Crain’s Fortunate 100 list shows that New York’s high- est-paid officers haven’t given a dime to Trump, but have doled out more than $1.3 million to try to keep Congress red. Republicans cur- rently hold 54 U.S. Sen- ate seats to the Demo cratic caucus’ 46, and 34 seats—most of them GOP-held—are up for grabs in this year’s elec- Shaping a tion. The CEO group has given Republicans six bright future. times more funding than it has to Demo- crats. Blackstone’s Ste- phen Schwarzman, the highest-paid pub- lic-company executive in the city, leads the Understanding giving pack. He has doled out $258,400 to what’s important. down-ballot Republi- cans and $533,400 to political action commit- tees devoted to main- taining the Republican majority. Henry Kravis Tec-Cast prides itself on creating complex aircraft investment castings as well as good jobs in New Jersey. And they were of KKR, No. 7 on Crain’s list, gave $334,000 to the looking for a banking partner that could help them continue to grow. At M&T Bank, we took the time to learn the ins and Republican National outs of this specialized business, and are now involved with their expansion plans. Our eagerness to help businesses like Committee. Tec-Cast is why M&T is a leading SBA lender1 in the country and why we’ve been recognized by Greenwich Associates for House Speaker Paul 2 Ryan and House Major excellence in small business banking. To learn how M&T can help your business, visit mtb.com/businessbanking. ity Leader Kevin McCar thy amassed hefty sums through their PACs and campaigns. Other top funding recipients in- clude New Hampshire Sen. Kelly Ayotte, Mis- souri Sen. Roy Blunt LENDING SOLUTIONS | MERCHANT SERVICES | TREASURY MANAGEMENT | DEPOSITORY SERVICES and Pennsylvania Sen. Equal Housing Lender. Pat Toomey, all of whom 1According to statistics released by the U.S. Small Business Administration (SBA) for total approved loans through the SBA’s 7(a) lending program during the federal fiscal year ending 9/30/2015. are locked in tight races 2Based on the 2015 Greenwich Excellence Awards in Small Business Banking. with Democratic chal- ©2016 M&T Bank. Member FDIC. lengers.
October 24, 2016 | CRAIN’S NEW YORK BUSINESS | 7
P007_CN_20161024.indd 7 10/21/16 7:46 PM AGENDA ASKED & ANSWERED ENTERTAINMENT INTERVIEW BY MATTHEW FLAMM
MANICK BHAN RUKKUS
here was a lot of focus in Albany’s last legislative session on some of the bad practices of ticket brokers and resellers—like selling tickets purchased If you as a by bots before ordinary humans can get them. But “customer are TManick Bhan, founder of ticket reseller Rukkus, said that his upset, I have to three-year-old startup not only works with legitimate brokers but make it up to is also a fan-friendly site with cutting-edge tools. He expects transactions on his platform to reach $100 million in 2016—up you and make from $20 million last year—spurred partly by a new feature that sure you love us gives users 360-degree previews from prospective seats.
A report issued by Attorney General Eric Schneiderman showed that the public never even gets a crack at most of the tickets sold for major events. How does Rukkus get its tickets? We have more than 1,000 discrete partners. They could be teams, venues, promoters, corporate sponsors, companies that DOSSIER have barter exchanges with corporate sponsors, and ticket brokers. There are people who have a specialty in NFL inventory, WHO HE IS Founder, chief executive and NBA inventory or Knicks inventory. For a big music festival, a chief technology of cer different group of people owns the inventory. of Rukkus And where does Rukkus come in? SALARY $1 We aggregate all that inventory [from our partners]. Then we gure EMPLOYEES 20 out who actually owns the rest and how we strike a deal with AGE 29 them, so we can add value to them and they can give us better BORN Baltimore prices than you can nd in a fan-to-fan marketplace like StubHub. RESIDES Midtown Why are venues so eager to provide your partners with tickets? EDUCATION B.S. From a cash- ow perspective there’s a mismatch: The fans buy in neuroscience and chemistry from their tickets later, but the capital has to be committed sooner— Duke University an artist will demand money for a performance months in advance. American Express will give [an event organizer] a FORMER LIVES In college, Bhan played lead boatload of money and say, “We’d like an exclusive deal for guitar and ddle and sang AmEx cardholders.” There are thousands of such deals. in two blues-rock bands— Smooch and the Big Hug, Gov. Andrew Cuomo has a bill on his desk that will increase penalties and Stella by Starlight—that for unscrupulous brokers who obtain thousands of tickets through the performed at parties and use of bots. How would that bill affect Rukkus? local venues around the Duke We have no concerns when it comes to the new bill. All of the campus. Later, he got a front-row brokers we work with are federally regulated and state-licensed, view of the concert industry as and we make a point to monitor what comes into our system. an investment banker at Goldman Sachs, where clients included Ticket- master and StubHub owner eBay. Virtual reality hasn’t really caught on for media outlets. Is your VR, panoramic seat-preview feature working for you? SELF-TAUGHT CODER After leaving Goldman Sachs in 2012, Bhan taught We’ve seen customers going nuts for it. Engagement is three himself eight programming languag- times what it was before, and they’re buying more expensive es. His rst piece of coding located and tickets. When they see what it’s like to sit in the very back, they collected all the albums by the Red Hot Chili realize that’s not a seat they want. We’re allowing them to make Peppers—his favorite band—on Spotify. He more intelligent buying decisions. built Rukkus’ systems architecture. BUCK ENNIS You already have VR for 75 venues; how do you get the photos you need? Initially we were ying drones into venues—we own ve or six drones. But also our fans can use software that we programmed into our iPhone app. You’re sitting in a seat no one’s captured for us before. Your phone will buzz. We’ll guide you [to take photos]. Then we’ll give you ve bucks off your next order.
You’ve said that Rukkus is like Amazon. Explain. Amazon owns its own ful llment centers and [like us] does all the work to get the inventory. If you as a customer are upset, I have to make it up to you and make sure you love us. Once customers see how easy it is, they’ll always come back. I
8 | CRAIN’S NEW YORK BUSINESS | OCTOBER 24, 2016
P008_CN_20161024.indd 8 10/21/16 3:02 PM AGENDA FINANCE
City’s share of Wall Street jobs hits record low Budget-minded banks are sending more employees to lower-cost locales BY AARON ELSTEIN
aybe it’s force, the Partnership for Meanwhile, even as months, or 19,000 peo- New York: the bad news In a conference call last time for New York City estimates New York’s big banks ple, while Goldman has in Britain. The ranks week, Goldman finance Ne w York that 700,000 jobs in sec- beef up elsewhere, their eliminated 5% and Mor- of Wall Streeters could chief Harvey Schwartz to build a tors like restaurants and overall head count is fall- gan Stanley 2%. rise as bankers flee Lon- said, “Brexit potentially Mwall around Wall Street. retail depend on finan- ing. Citi has let go of 8% But there may be good don in anticipation of is something that could The city’s share of cial-services dollars. of its staff in the past 12 news on the horizon for the U.K. exiting the EU. drive share to the U.S.” n T:8.125” jobs in the securities in- dustry has hit fresh lows, currently accounting for less than 19% of all U.S. securities industry jobs, according to the lat- est Labor Department data, well below the 30% share the city boasted Health plans two decades ago. The exodus began in the early 1990s when banks and brokerage firms started moving that stand out. administrative and back-office workers to lower-cost locales across the Hudson, often in Competitively priced with the stability you need. return for hefty tax breaks. The city’s Wall It’s time to switch to Oxford. Street middle class was hollowed out, but its tax base wasn’t harmed be- cause the higher-paying jobs mostly stayed put. That could be chang- ing, however, because in recent years, cost-con- scious banks have be- gun moving higher-end
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ISTOCK less than 5% of the work- Client Alts Internal & External Team Project Details Color Dimensions Date: 10-19-2016 9:07 AM Depot #: Cyan, Magenta, Flat: 8.125" x 10" Creative Prod. Mgr: Name: NY Junior Page for Crains Yellow, OBlackctober 24, 2016 Folded:| CRAIN’S NEW YORK BUSINESS | 9 Job Number: UEI160061 Stage: IR Reading Level: Software: CS6 1 File Name: UEI160061_NY_JnrPg-Crains Notes:
P009_CN_20161024.indd 9 10/21/16 3:05 PM AGENDA
Commercial brokerages remain a sea of whiteness A multibillion-dollar sector of the city’s real estate industry is nearly devoid of minorities BY DANIEL GEIGER
avid Burton was at Madi- city’s brokerage industry. Rival com- son Square Garden watch- panies like JLL, Cushman & Wake- ing Axl Rose belt out “Back field, NGKF and others also appear in Black” as the fill-in lead to have few minorities in high-earn- Dsinger for AC/DC when he got an ing or executive positions, although unexpected reminder of what his life they declined to specify the statistical is like as an African-American in the makeup of their workforce. No black city’s commercial real estate business. or Hispanic brokers were involved in “I was with my daughter,” the arranging any of the 25 largest office 52-year-old recalled, “and she turned leases last year, according to data from to me and said, ‘There are no black CoStar. people at this concert.’ “She was having a moment of feel- Uncomfortable questions ing like an outsider, and it made her Real estate development and own- kind of uncomfortable. And what ership firms have a similar track re- struck me was that I hadn’t even no- cord. A list of the city’s 25 largest ticed it because I’m so used to it in my landlords compiled by CoStar has not professional life.” one senior-level African-American or Burton has been a commercial leas- Latino executive. And the Real Estate ing broker for 17 years, most recently Board of New York, the city’s largest at Handler Real Estate Services. Over real estate association and lobbying that time, even as other industries group, doesn’t have a single minor like law, finance and medicine have ity and has only five women on its become more diverse, the bulk of 48-member executive committee—a high-earning, senior-level executives who’s who of power figures that guide in the city’s multibillion-dollar com- the industry’s agenda. mercial real estate business remain “I was almost always the darkest middle-aged, male and, above all, person in the room,” said Chantay Mc- white. And while homogeneousness in Bride-D’Ambrosio, a half-black, half- other sectors such as advertising has Irish former retail leasing executive at recently come under scrutiny by ma- Vornado Realty Trust, one of the city’s jor clients insisting on more diversity, largest commercial landlords. few forces threaten to spur changes in McBride-D’Ambrosio praised Vor- real estate. nado for having what she said was an “It’s like in physics, things keep go- inclusive culture. She was promoted cause minorities don’t have a long not happening.” ing as they have been until there is a several times during her nearly six- legacy in the city’s real estate business, Government, too, has fallen short. force to change it,” said Richard Eaddy, year tenure there. Last year, she struck young aspirants lack the connections While the targeted participation by an African-American broker at Savills out on her own, opening a commercial to help them crack the industry’s no- minority- and women-owned con- Studley. “In law firms and in finance real estate brokerage and consultancy torious insularity. struction businesses was recent- there has been pressure to see change, firm that focuses on Westchester, New Several minority executives said ly increased from 20% to 30% on but it really hasn’t happened in real Jersey and Long Island. the business will change only when state-funded construction jobs, sim- estate. Until something nudges things, The stark statistics prompt uncom- large tenants—whose leases are the ilar benchmarks have not been set they will continue along the same path.” wellspring of cash for land- that would allow minority- and wom- At the city’s major commercial lords and brokerage firms— en-owned firms to invest in public real brokerage firms, only a handful of “You’re asking people to hire demand it. Companies such estate assets that are sold. African-Americans and Hispanics someone new when, if the deal as HP, General Mills and have broken into the lucrative world Verizon have recently asked Where to begin of arranging leases for large office falls through, they’re going to their advertising firms to bet- Eric Yarbro, a broker at the real tenants. Joseph Hudson, a human re- have to answer to the CEO or the ter equip themselves to com- estate services firm Colliers Interna sources executive at the city’s largest municate to a wider audience tional, cited the rebuilding of the commercial real estate services firm, board. It’s not happening” by diversifying their ranks, World Trade Center, which received CBRE, estimated that less than 10% of but similar mandates have billions of federal dollars, and the its 3,500-person New York-area work- been largely absent from real Hudson Yards project, which got tax force are minorities. estate decision-making. breaks worth more than $300 million “We’re not where we want to be,” fortable questions for the industry as “At the Nabiscos and Motorolas and a $2 billion subway extension Hudson, who is based in CBRE’s Dal- lingering racial divides in American and Googles of the world, I don’t see a from the city, as examples where city las office, said. “Like every one of our society have been exposed by a con- big imperative to hire people of color or state officials could have insisted on competitors, we struggle. We look tentious presidential election and vid- when it comes to real estate,” Burton some minority investment. across the industries that we work eos of violent police encounters with said. “You’re talking about multimil- “The primary source of opportu- with and we want to look more like the African-Americans. Minority real lion-dollar transactions and you’re nity starts at the developer level,” Yar- people we’re representing.” estate executives attribute the lack of asking operations people at these bro said. “If the state of New York said Given that the firm has been re- diversity not to overt bias but to a host companies, who have always dealt they were going to tender a portion of garded as one of the more proactive of more subtle and complex factors— with a white real estate counterpart, to something like Hudson Yards to Af- in recruiting minorities, its low per- which is part of the reason diversity take a chance and hire someone new rican-American developers, then the centage of people of color—includ- has been such a difficult issue for the for diversity’s sake when, if the deal business would trickle down to oth- ing Asians and other groups—offers industry. falls through, they’re going to have to er minority professionals like leasing
BUCK ENNIS a bleak picture of diversity in the One common refrain is that be- answer to the CEO or the board. It’s brokers and architects and lawyers. It
10 | CRAIN’S NEW YORK BUSINESS | October 24, 2016
P010_P011_CN_20161024.indd 10 10/21/16 5:13 PM REAL ESTATE
has to start at the top and it has to be gov- of deals—a factor that dissuades many from dustry, then my selection probably wouldn’t ernment-sponsored.” entering the business. have happened,” Banks said, “so I don’t see Managers at several brokerage firms said any implicit bias. What I do think is people ERIC YARBRO, one of the city’s few black that they would like to hire more people of REBNY hire brings hope in the industry are struggling with how to commercial real color but Wall Street and other high-paying Despite years of inertia, some minor move forward.” estate brokers, says industries outcompete real estate companies ity executives see reason for optimism af- Banks said REBNY would begin by col- change “has to start at the top.” for top minority talent. Investment banking ter REBNY installed John Banks, a former lecting better data to more accurately take and similar fields are often more appealing, Con Ed lobbyist who is African-American, stock of where the industry stands on diver- they say, because they offer big salaries and as president of the influential industry as- sity and how best to address it. bonuses. In a commission-based business sociation last year. In a conversation with “There’s no data collected in any uni- like leasing, on the other hand, brokers Crain’s, Banks said the organization plans form way across the industry,” he said. might earn little money for years until they to better address the issue of diversity. “We’re trying to formulate a plan. We’re at n build the relationships to create a pipeline “If there was a biasT:7.625” in the real estate in- the initial stages.” T:9.875”
0SENIOR-LEVEL black or Latino executives among the city’s 25 largest landlords
0MINORITIES on the Real Estate Board of New York’s 48-mem- ber executive committee MAXIMIZING ENERGY EFFICIENCY STARTS WITH GIVING YOUR LIGHTING SYSTEM A TUNE-UP. 0BLACK OR LATINO brokers involved in Outdated technology can have a hidden impact on your bottom line. Con Edison’s Small Business Program can help you the 25 largest use less energy and save money immediately, all without disrupting your business. We also offer incentives of up to 70% office leases of the cost of upgrading to the latest lighting and refrigeration technology. Plus, our experts can even advise you on the last year latest HVAC technologies. Find out more at ManageEnergy.conEd.com/SmallBusiness. Your profit margin will thank you.
October 24, 2016 | CRAIN’S NEW YORK BUSINESS | 11
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HUDSON RIVER PARK TRUST 12 |
CRAIN’S NEWYORKBUSINESS E and improve the West Side Project wouldsave Pier40 and losersincity’s financialsector Investors getwise,creating winners St. John’s Terminal wouldyield$100millionforrepairs development Passive investingliftsBlackRock, squeezes Wall Streetandhedgefunds S nizations such as Downtown United programs by run youth-sports orga but most participate instructured otherswhile hang with friends, their other Some sports. join pickup games pendent report estimates that repair erates with eachpassing day. An inde from severe deterioration, accel which pilings that support Pier 40are suffering The closed. majoritybeen the of steel field and surroundingparking lot have threatened that of sections its rooftop is in dire of need repair. It is already so and key to the its growth. But pier the of it—and DUSC’s has been home field open spaceinacity with far little too River Park has provided invaluable potential players as both and people. love for game the and realizefull their childrenwhich can develop alifelong diversitythe of New York City, and in i portive environment. mission Our ities inapositive,and sup respectful t ly known, is anonprofitthat educates, Comptroller Thomas DiNapolicame management now $5trillion. exceed reported last week that its assetsunder track market and benchmarks, sector business is exchange-traded funds that primary funds. BlackRock, whose $250 bi lion into draining index funds while Aug. 31,Americans poured $1.3tril are In startling. three the years ended Journal Street inacomprehensiveas detailed Wall Wall Street’s belt another notch. GREG DAVID s ra o AGENDA ccer Club. DUSC, as it is common to foster a community that reflects ins and inspires players of abil all F Not coincidentally, New York state The numbers passiveon investing, o r decades, Pierr decades, 40inHudson llion from actively managed Pier 40to play and soccer and backgrounds come to young people of ages all year,very thousands of piece earlier month, this in er individuals or big of stripes—wheth all that are they smart a lic pension plans—are AMERICAN they arethey tightening market. In doing so, enough to beat the b s andoning idea the titutions like pub-
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wa ment of Financial criticism Services’ suit. DiNapoli’s response to Depart the funds and New York City’s is following largest pension has fund exited hedge marketthe for years. several California’s aswhich agroup have to failed match thatbelief can beat market, they the but existencewhose is predicated on the agency for investing inhedge funds, under firefrom a state government inate stock and bond news trading,the Park Trust’s ability to provide important entirethe park—and Hudson the River for Hudson River Park. The health of revenuepier a crucial is also generator n nizations that rely upon pier the because fate the be ofyouth-sports the all orga w cut itscally programming, and its future DUSCclosed, may forced be to drasti- consistently beat market. the individuals and professionals cannot Game after bonds. My favorite on book Wall Street stocks broad and index very funds for o dividual stock inmy life, investing trend.the Ihave never bought an in but not same the as getting out of them. hedge funds for ayear, is which good $100 million. ing pilings the cost approximately will n o e o ly through S&P500index funds for s t uld be in jeopardy. be uld This would likely As passive investing comes to dom I should admit that Iagree with I f n quivalent spaceis available. The Liar’s Poker hat he hasn’t put any money into , which makesthat case the both othing is done and Pier 40is is Winning is Loser’s the deteriorating piles. 40’s fieldssiton PAYPLAY: TO - - - - BY ANDY SCRUTON BY ANDY
f im Rock’s as perhaps ascendancy most the y havety aware been of problem the for new. Thetrust theandwider communi largely on Pier asuccessful 40. for community—depends the services missions decline. will cause fees are much so lower and com- ment won’t as lucrative be either, be t trading is no more,prietary of avictim making money on commissions. Pro on what stocks and bonds to buy and m to on makeey bets markets; and asset ing own their (usually borrowed) mon tions; proprietary is trading,which us bonds; arranging mergers and acquisi stocksbusinesses: and underwriting story. Once,could count they on four byfunds, led Vanguard). elsewhere (as are prospering the index funds that sufferthe will most are based Many of actively the managed mutual is of because popularity the of ETFs. Side Highway, into resi amixed-use - S ture development the of pier: the of the native long-term the that secure - will fu and explored,posed without success. A number of solutions have pro been prehensive study on state the of Wall o h Pier Pier e t. J r New York won’t bad. Black all be a e Volcker Rule. Now, assetmanage- ars, but it has to not easy solve. been p The threatThe of deteriorationpile is not DiN firmsThe securities big are another N nagement, giving clients their ideas ohn’s Terminal site, across West the ortant financial institution here o w, finally,there viableis a alter a poli will issue will hispoli annual com ------taking atoll.taking move ifthe to see to index investing is or profitability, be interestingand will it hasn’t returned fully to its pre-2008 size S U chairman of the board of Downtown Andy Scruton the is president and forward. move project—and repair the of Pier 40—to overstated. be er children of backgrounds, all cannot concrete jungle, and that brings togeth far turn to as an from escape our city’s day,every that visitors from near and that thousands of on families depend of an immediate investment inaplace of its footprint. actual The importance s tiny, but rarely is there aproject with subject the of muchdeservedly scru clear. be will year from Pierevery choice 40,their thousandsthe of families benefit who p vote will cil to approve or stop this ensure its viability for years to come. pilemost repairs needed at Pier 40and Thi pairing Pier 40’s infrastructure. critical $100 million for explicit the of use re The redevelopment comesalong with dential, commercial and retail space. CrainsNewYork.com. GREG DAVID at blogsregularly o m t r KEY NUMBERS n past threeyears AVERAGEFEE ANNUAL 0.77 PORTION 11.2 INFLOW $1.3 trillion over thepastfiveyears theS&P500 funds thatoutperformed index funds 0.1%for managed fundsversus reet next inthe few weeks. The Street oject. Ifoject. council members consider ited Soccer Club. Th L In coming the weeks, City the Coun s f a anybeyond benefits the confines rge-scale projects like are this unding will coverunding will nearly of all the e Ci topassiveinvestments inthe ty Council should Council ty allow this of actively managed mutual of activelymanagedmutual n % %
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- - - -
10/21/16 3:06 PM
BUCK ENNIS VIEWPOINTS
stay in the neighbor- New Yorkers, given the A ‘Central’ component to hood they call home. nearly $9 billion the That’s a large part of industry contributes to the Bronx’s transformation why so many commu- our economy. Developer disputes story’s premise; city offers film and TV venues nity members, civic The article noted leaders and elected that we’ve had a record- officials embraced our breaking number of IT WAS BAFFLING TO see the firms (phase 1 alone could two 25-story market-rate project. As the South productions—336 films Crain’s story “Latest hous- exceed $100 million) and apartment towers nearby Bronx undergoes a rap- last year and 52 episod- ing deal only partly fulfills committing to a perma- on the Harlem River. id transformation, La ic television series last mayor’s vision” (Sept. 12) nent building staff fully Amid that shifting Central will help stem season, up from 242 argue that our La Central from the South Bronx. landscape, La Central the tide. and 46, respectively, project, which will bring The project will generate will include a new AARON KOFFMAN the year before. If this cured the Staten Island nearly 1,000 units of 2,100 jobs for the area. 50,000-square-foot Principal growth trajectory is to Criminal Courthouse affordable housing to the All the while, the YMCA, apartments for The Hudson Cos. continue, we know that for a feature film that South Bronx, won’t fur- South Bronx is poised for middle-, low- and very- more soundstages will needed additional ther economic integration change. Real estate spec- low-income families along SPACE AVAILABLE be needed. space. in New York City. ulators in Melrose, Mott with homeless households, As your Oct. 17 cover Recognizing this, Through efforts like In addition to the res- Haven and Port Morris and other important story “Show starters” real estate as it relates to these, our agency is idential plan are critical are luring students, artists community amenities. All recognized, we now the creative industries working hard to ensure economic contributions and new families to the those units will remain have more television was recently added to that the exponential voluntarily offered by the neighborhood by brand- affordable for decades. and film productions our portfolio, and the growth of television development team—in- ing it as a cheaper but still In a changing city, it shooting in New York de Blasio administra- and film production in cluding a commitment market-rate alternative to is visionary projects like City than at any time tion is actively looking New York will continue to hiring 35% of the Manhattan. And in addi- La Central that can help in our history. That at city-owned prop- into the next decade. construction workforce tion to a Holiday Inn ris- a neighborhood embrace is great news not just erties that might be JULIE MENIN from the Bronx, contract- ing in the same commu- growth while also ensur- for the 130,000 New suitable to support the Commissioner ing a minimum of 30% nity as our project, plans ing that current residents Yorkers who work in industry. For example, Mayor’s Office of Media and of all work to M/WBE were filed last year for have an opportunity to the industry but for all this summer we se- Entertainment
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October 24, 2016 | CRAIN’S NEW YORK BUSINESS | 13
P012_P013_CN_20161024.indd 13 10/21/16 3:07 PM RELATIVE SUCCESS| FAMILY BIZ ALL IN THE FAMILY From tugboats to coffee to boilers, family businesses help keep New York running. But the new generation knows that business as usual is not the way forward BY MATTHEW FLAMM
rian McAllister, the fourth-generation leader of McAllister Towing & Transpor- tation, is a graduate of the SUNY Mar- itime College at Fort Schuyler, licensed pilot, captain, engineer and veteran Bof labor battles reminiscent of On the Waterfront. His sons worked summers on tugboats and ferries and went to liberal arts colleges. Eldest son Buckley became a maritime lawyer in Los Angeles, and his
ERIC, BUCKLEY AND BRIAN MCALLISTER have helmed the family tugboat business into its third century. OGRAHY BY BUCK ENNIS T PHO
14 | CRAIN’S NEW YORK BUSINESS | October 24, 2016
P014_P015_P016_P017_P018_P019_CN_20161024.indd 14 10/21/16 4:58 PM “LUCKILY, OUR COMPANY HAS A LOT STAYING AHEAD WITH AGE-OLD DESIGN OF EMPLOYEES AND O ONE KNOWS how many water towers dot the city’s rooftops—anywhere between 12,000 PARTNERS WHO and 17,000—but one calculation is certain: The vast majority of them are either built or main- UNDERSTAND THE VALUE Ntained by Rosenwach Tank, now one of six companies within the Rosenwach Group. Rosenwach Tank was founded in 1896 by Polish immigrant Harris Rosenwach, who bought his em- OF LOYALTY” ployer’s barrel-making business for $55. Decades of innovation have kept the company at the top of its eld. Now Harris’ great-grandson Andrew, 63, and his son, Henry, 27, must ensure that a product whose brother, Eric, worked at GE Capital before becoming design and materials are basically unchanged from the 19th century remains relevant in the 21st. an investment banker at a Connecticut rm. While Water towers grew up with the city. As buildings soared higher than six stories, pressure from the neither is licensed to steer a tug, they did help rescue water mains couldn’t keep pace. Today’s tanks supply sprinkler systems with 750 gallons of water per a family legacy that dates back to 1864. minute for 30 minutes, as mandated by re-protection laws, and provide drinking and washing water. “ e founder of this company knew how to do Wood remains the material of choice. A 10,000-gallon yellow cedar tank is a quarter of the cost of everything you possibly could on a sailboat,” said a comparable steel container, and the three-inch-thick planks prevent the water from freezing in the winter. Plus, a wood tank can be dismantled and replaced with a new one in less than a day, while Buckley, referring to his great-great-grandfather replacing a steel one can take two months. The “10-hour tank” was the game-changing invention of An- James McAllister. “Di erent skills are needed today.” drew’s father, Wallace. “He had 15 or 20 competitors when he reduced the time to 10 hours,” Andrew Family-owned businesses are in many ways the said in Wallace’s New York Times obituary in 1999. “Pretty soon he had almost none,” bedrock of the U.S. economy, responsible for more More innovations followed under Andrew: brown DynaGrip tank covers that have more than halved than 60% of all jobs. But they are also fragile: One the frequency of tank repairs and extended the life span of a tank (most last about 30 years); stain- study suggests that only 30% make it to the second less steel doors; and the Abacus™ ultrasound sensor system—“We’re the only rm in the industry that generation, and just 13% survive into the third. went into microprocessor controls,” Andrew boasted—which replaced the old-fashioned oats that On the ip side, family ties can make businesses monitored the amount and temperature of the water. The company was recently awarded a patent for remarkably resilient, engendering a sense of history a two-compartment wood tank and is patenting a bracketing system that enables workers to attach and personal devotion that o en proves more dura- safety lines to the tanks, a crucial consideration when clambering around an icy roof in a winter gale. ble—especially in times of crisis—than a strict focus Currently, the rm is shifting its manufacturing from Long Island City to Somerset, N.J., with space on the bottom line. for a state-of-the-art training school for workers. “There’s no unionized school that gives people an “One of the things I have come to appreciate is understanding of this craft,” said Andrew. “Making sure workers are well-trained and safe, that’s part that sometimes we make signi cant decisions based of succession.” (The company will maintain its of ces and staging operations in Queens.) on sentiment rather than economics,” said Buckley, Another key element of succession: Henry, who spent his summers throughout high school and col- who was named president in 2012 when his father lege on a truck, delivering materials, removing debris, doing what he calls the “boots and jeans” side became chairman and chief executive. “Luckily, our of the job. “That’s how you learn what the job entails,” he said. company has a lot of employees and partners who Like his dad, Henry intends to get his M.B.A. from NYU Stern, as well as obtain a full spectrum of understand the value of loyalty.” city professional certi cations and licenses—real estate broker’s license, master plumber and re Experts point to succession as a key obstacle to suppression contractor, among others. “It’s all an asset to the customer,” he explained. “We need to be multigenerational longevity. Leaders may not want able to say that we can do everything.” to give up control, or may have no family member As he serves his apprenticeship, Henry is often awed by the responsibilities inherent in taking over who wants it. According to PwC’s 2014 Family Busi- a rm that has such an impact on New Yorkers’ lives. “My dad expects a lot of me, but he knows ness Survey, while two-thirds of family-run compa- what I’m going through because he did it himself,” he said. “As long as I have my father to teach me, nies have a succession plan, only one-quarter have a I think I’ll be OK.” — CATHERINE FREDMAN plan that is “robust and documented.” In addition, companies might want to hire the best candidate, regardless of family connections, but bringing in outside talent o en proves problematic. “ ere is a small cottage industry of academic articles focused on how di cult it is for somebody from the outside to take a top leadership position at a family-owned company,” said David Cadden, pro- fessor emeritus of entrepreneurship and strategy at Quinnipiac University. “Family businesses are quite o en driven by values that may be unique to the family, and the question is, will this new CEO adopt the values of the rm?” Rough waters It was precisely that type of con ict, coupled with a mix of sentiment and practicality, that brought the McAllister brothers back to New York to help sta- bilize the family company during a dispute with an outside shareholder. In the early 1970s, Brian McAllister and other family members bought out the previous generation with the aid of a nancier named William Kallop. Twenty years later, Kallop and McAllister were locked in a bitter struggle over Kallop’s claim that he controlled a single extra share. A Delaware court agreed with the captain that ERIC, BUCKLEY AND BRIAN they were in fact equal owners, and a court-appoint- MCALLISTER have helmed the ed custodian ordered them to either divide the busi- family tugboat business into its ROSENWACH GROUP third century. ness or see it put up for auction. FOUNDED 1896 e brothers were quickly called upon to help GENERATIONS 5 and were tasked with guring out just how much EMPLOYEES 125 the various assets were worth. It didn’t matter that ACTIVE FAMILY MEMBERS 2 at the company’s Battery Place o ces there weren’t HENRY AND ANDREW even desks where they could sit. ROSENWACH both came of “My dad needed to get a team together or he’d age working for the family. lose the business,” said Buckley, 48, who stepped CONTINUED ON PAGE 16
OCTOBER 24, 2016 | CRAIN’S NEW YORK BUSINESS | 15
P014_P015_P016_P017_P018_P019_CN_20161024.indd 15 10/21/16 4:58 PM RELATIVE SUCCESS| FAMILY BIZ FACTS STEPPING IN AFTER TRAGEDY in as general counsel, while Eric, 47, became treasurer. HEN SISTERS DOMINIQUE MONDELLA and Dana Mondella Bentz, owners of Dell’s Mar- At the 11th hour, aschino Cherries, walk into their bustling, state of the art factory in Brooklyn, it hardly seems the warring parties haunted by tragedy. 30%OF FAMILY-OWNED W agreed to a split: Kallop But dark memories still linger at the Red Hook facility. Their father, Arthur Mondella, last year com- got the oil exploration FIRMS survive into the mitted suicide there during an industrial pollution investigation that exposed a hidden marijuana-grow- and support business- second generation, ing operation in the factory basement. Now, his daughters—who were wholly unaware of their father’s es the company had one study found illicit enterprise—are determined to preserve the family’s 68-year old business. launched in the 1970s, Dell’s comeback began just two days after the tragedy, when the factory’s 25 employees resumed and the McAllisters re- marinating and bottling cherries at a pace of 200,000 pounds a week. Dominique, 30, now vice tained the tugboat and president of sales and marketing, had been working for her father for a dec ade, but Dana, 28, left her ferry operations. nance operations position at PwC to step in as president and CEO. Dominique’s experience helped Father and sons sustain operations during the chaos, which helped prevent employees—some of whom she had 3%SURVIVE BEYOND now had to gure out hired—from leaving, she said. Dana’s business chops were essential to keeping revenues on track, and the third how to grow a business she now projects sales of $15 million to $18 million this year, not far below the $20 million in annual that had been battered revenue Arthur shared with Crain’s a month before his death. by market changes, labor violence, layo s and ne- But an even bigger boost came from Arthur’s commitment ve years earlier to a $7 million equip- ment upgrade to automate the process for receiving, marinating and bottling the cherries. “My father glect. “We had no money and no earnings,” said Bri- used to tell me, ‘Dana, by the time you set foot in this place it’ll run itself,’ ” Dana said. “And it really an, who will turn 84 in December. does—24 hours a day, seven days a week, we’re processing.” First, they modernized and expanded the com- But even as production continued, Dell’s ownership structure was in total disarray. Arthur died pany’s ferry service between Bridgeport, Conn., and without leaving a will. “There was no named executor and no temporary duciary was appointed,” said Port Je erson, L.I., which provided cash for new Richard Luthmann, the sisters’ attorney. “There was real prospect for an estate battle.” With no one boats, then began acquiring other tugboat compa- empowered to pay its debts, Dell’s nearly defaulted on a Citizens Bank loan, until a court authorized nies. Operations now span a dozen ports, from Port- the negotiation of new terms. Dana was eventually named the executor. She and her sister own the land, Maine, to San Juan, Puerto Rico. Employee head majority of the company, the rest belongs to their aunt and younger half-sister. count has grown to 700 and revenue this year will be Like the workers, many long-time customers, including Darden Restaurants, owner of Olive Garden, north of $160 million, up from $60 million in 1998. TGI Fridays, Steak ’n Shake, and Chick- l-A, remained loyal to Dell’s, but Dominique has spent much of But the sons, who are joined in the enterprise the past year acquiring new business. by three h-generation cousins, admit that they They are also looking to expand, and have hired Source One Marketing, a Dallas-based sales group, bounced from one crisis to another before the busi- to help them place consumer-size bottles on supermarket shelves. Another goal is crafting an all- ness stabilized in recent years. “Our work has been natural cherry made without high-fructose corn syrup and arti cial dyes. It is in the research and de- a great success for the family, and especially for me velopment stage now, and they hope to market it within the next two years. Dell’s also recently applied personally,” said Eric, who became chief nancial of- for certi cation as a woman-owned business, a potential advantage when dealing with customers cer in 2008. “It would be hard for me to say that I committed to diversifying their suppliers. le something that I wish I could go back to.” The sisters say they make a great team, and their synergy is on open display. “With her 10 years at the factory and my corporate experience ...,” Dana began, “we complement each other,” Dominique Home calling said in unison with her sister. — CARA EISENPRESS Not too long ago, Stefanie Kasselakis found her- self in a situation that was similar in at least one way to the McAllister brothers’: She had to decide DELL’S MARASCHINO CHERRIES between the life she had created for herself and one FOUNDED 1948 that seemed chosen for her by her family. GENERATIONS 4 e great-granddaughter of John Vassilaros, EMPLOYEES 25 who founded Vassilaros Co ee in 1918 and turned ACTIVE FAMILY MEMBERS 2 it into a mainstay supplier to Greek diners, Kasse- DOMINIQUE MONDELLA lakis had grown up playing inside the company’s AND DANA MONDELLA 25,000-square-foot plant in Flushing, Queens. A er BENTZ are focused on the college, she went on to a high-pro le career as a se- future. curities lawyer and investment banker. But in July 2015, her uncle John Vassilaros, who had been chief executive since the 1980s, passed away. Kasselakis, 45, a passionate believer in the business— as well as the oldest member of her generation, and the one with the most practical experience—stepped in as the fourth CEO of Vassilaros Co ee. “People who knew me in my corporate capaci- ty had trouble understanding my choice,” she said, sitting amid sacks of beans as her 5-year-old son played nearby. “People who knew me personally knew there was no other choice to be made.” Unlike the McAllisters, Kasselakis was stepping into a stable, thriving business, one that supplied ground and whole-bean co ee—and the equipment for brewing it—to diners, high-end restaurants, ba- gel shops and co ee stands across the city. But she, too, had to be mindful of family history and the re- lationships with employees and customers that had been built over decades. “People I grew up with are customers,” she said. “It is important to me to have a steady hand and move forward step by step and build on what we have.” So far, her biggest steps have been to streamline operations, administration and delivery logistics, improve communications— including giving every employee an iPhone—and make new use of data. “We’re using technology in ways we didn’t be- CONTINUED ON PAGE 18
16 | CRAIN’S NEW YORK BUSINESS | OCTOBER 24, 2016
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IYA SHOJI, on West 18th Street, is known as the best —and only— authentic Japanese carpentry shop in New York City. Woodworks by Mits proprietor, Hisao Hanafusa, have been featured in the Boston Mu- seum of Fine Arts and his paintings have been shown at the Guggenheim. His shoji—Japanese screens—futons, chests and tables are made without using power drills or metal screws, and are handcrafted with wood from 200-year- old trees that has been set to dry for 30 years. But years of increasing costs and declining sales have hurt business. The prices range from $1,800 for shoji to $50,000 for custom dining tables—no two of which are alike. But current orders are coming in at between ve and 10 a month, half of what they were in the 1990s. Eighteen years ago, Hanafu- MIYA SHOJI sa’s son Zui, 46, decided to leave his job as art director at Kaplan to join the FOUNDED 1951* family trade. “My rst goal was to understand my father,” Zui said. “My second GENERATIONS 2 goal was to polish up the business. If we don’t evolve, it will die.” EMPLOYEES 6 One of the obstacles to that evolution stemmed from Hisao’s mindset as ACTIVE FAMILY MEMBERS 2 an artist . He does not think like a businessman and refuses to advertise or ZUI AND HISAO promote his brand through design magazines. “Their craft is unique,” said Ste- HANAFUSA, son and phen Globus, a venture capitalist who also owns the NYC Washitsu Japanese father build for growth Tea House, which is out tted with many Miya Shoji wares. “But they need to *Hisao bought the business in 1970. promote their talents more.” As his father approaches 80, Zui is hoping to do just that. He is taking over experience and share them on social media, and the buzz from the coffee much of their 700-square-foot showroom and turning it into a high-end coffee shop will lead to buzz about the Miya Shoji brand and spark more sales. and matcha tea bar. In keeping with his father’s beliefs, Zui isn’t going to advertise, or even hang Zui has been working on the concept for three years, with much of that up a sign. Instead, he’ll place a tasteful neon cup of coffee in the window. time spent selling his father on its merits. “I’m being pushed into a back “We want to give people a small, inexpensive transport to Japan,” Zui said. corner of my own showroom,” Hisao lamented. Zui used his own money for “You don’t get this experience at any other showroom.” startup costs, convinced that as patrons sit sipping their artisanal coffees— Meanwhile, it seems that even Hisao has warmed up to his son’s plan. supplied by Brooklyn celebrity roaster Supercrown—they will be intrigued by “The coffee bar will be our day money,” he said. “With the tables, we don’t the furniture and how it is made. If all goes well, they’ll take photos of their know when an order will come in.” — MIRIAM KREININ SOUCCAR
OCTOBER 24, 2016 | CRAIN’S NEW YORK BUSINESS | 17
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CHANGING STYLE fore,” she said. “We have tremendous information about the restaurants we serve. I’m able to cull that information and gure out ways to help them im- HEN JENNIFER BUSCH’S forebears were running I. Buss & Allan Uniform, their products were typically drab affairs with little to distinguish one from another. prove their sales.” Not anymore. With Busch at the helm of the 124-year-old family design and manufactur- Kasselakis declined to provide revenue gures, W but did say that the company, which has 40 employ- ing rm, the uniforms the company crafts have become true fashion statements, bringing style and panache to businesses, hotels, concert halls and luxury apartment buildings that want a chic and ees, serves 5 million cups of co ee a week in a mar- modern look. ket that continues to grow. “I came in and said, ‘Why aren’t we creating?’ ” said Busch, who became CEO in 2011. “Why shouldn’t uniforms be part of a building’s brand?” Filling big shoes That approach in what used to be a fairly staid industry has helped triple the company’s revenues Tyren Eastmond also treads carefully between over the past ve years—to just under $10 million, Busch said—and earn it the loyalty of building innovation and tradition. Named chief operating of- owners and managers around the city who have bought into her belief that stylish uniforms can set cer a year ago of boiler and tank manufacturer Eas- them apart from the crowd. co, he is the fourth generation of Eastmonds to work Among I. Buss & Allan’s clients are city landmarks like the Empire State Building, where doormen for the company that his great-grandfather founded. wear burgundy uniforms custom-dyed to match the marble in the elevators . The company also serves It is headquartered across 150,000 square feet in the numerous big-name developers, including the Manocherian Brothers, Jack Resnick & Sons Inc. and Hunts Point section of the Bronx. Sheldon H. Solow. Busch recently designed and manufactured uniforms for several Durst Organization Tyren, too, grew up inside the company, where projects, including the new, pyramid-like Via at West 57th Street and 11th Avenue, where doormen he has worked part-time since high school and full- and concierges sport herringbone trim on their vests—a nod to the building’s rakish design. time since graduating from college in 2001. As heir “Because the luxury market has exploded, what de nes a building, what differentiates it from the apparent, he has made the company more e cient, rest of the crowd, is important,” said Dan Mogolesko, Durst’s vice president of residential leasing and partly by investing in new trucks and equipment, operations. “An emphasis on service culture, having great product and also great details, [uniforms] which led to big reductions in maintenance costs. being one of them, is part of that.” But his grandfather Leon Eastmond continues to I. Buss & Allan, founded in 1892 by Busch’s great-grandfather, traditionally sold mostly to residen- oversee Easco as CEO. tial buildings and government entities, such as re and police departments and the military. Busch, “ ere are ideas I have that I would like to see who joined the business in 1997, at rst never saw herself running the company. “But then I thought, implemented,” Tyren, 33, said. He cited exploring maybe I could change it,” she said. the residential market with smaller heating systems And she has. Busch launched the commercial division, supplying big of ce buildings, and expanded and updating equipment and technology. “But right sales to more service businesses, such as restaurants, exterminators, and elevator and security compa- now, I focus on what my grandfather has in mind.” nies. In the works is a potential deal with a cosmetics rm to out t the salespeople at its retail count- It’s not surprising that Leon, who recently turned ers. Busch is also readying a non-uniform fashion line that includes ties, dresses, skirts and jumpsuits 90, has been slow to hand over control: He built one that she plans to launch online. Customers can also now buy or rent uniforms, with rental contracts of the largest black-owned boiler manufacturers in that cover cleaning and maintenance. the country out of the welding and repair company But despite the rapid growth and innovation, and even as many big manufacturing companies his father founded in 1926. And forging a minori- have moved operations overseas, I. Buss & Allan remains a hometown business, crafting most of its ty-owned business in the 1950s and ’60s was no sim- uniforms in its garment district factory two blocks from company headquarters on West 36th Street. ple matter. “I want to manufacture domestically because I like the quality,” Busch said, “and I have control.” “Because of my name, [customers] thought I — JUDY MESSINA was white,” Leon recalled of his early days running the boiler-repair operation. “I would go to jobs as a I. BUSS & ALLAN workman and say, ‘ e boss sent me to take a look.’ UNIFORM And then later I’d call them up and say, ‘Our work- FOUNDED 1892 man found this wrong with the boiler.’ And they GENERATIONS 4 didn’t know.” EMPLOYEES 20 In the late 1960s, Leon partnered with New Jer- ACTIVE FAMILY MEMBERS 1 sey-based Federal Boilers. “ ey introduced me to JENNIFER BUSCH brought all the contractors,” he said. “Working with them style and innovation to a broke it open.” He went on to buy Federal in 1988 uniform business. to expand the manufacturing operation. Easco now makes around 300 boilers a year, and counts Yankee Stadium, 1 World Trade Center, Harvard University and the National Geographic Museum in Washing- ton, D.C., among its customers. But the company has been through some hard times. Revenue dropped to $12 million during the recession, from $20 million in 2006, and last year a loan came due that forced it into Chapter 11. Easco emerged from bankruptcy at the end of June and is on track to generate revenue of $16 million this year. And Leon has no intention of slowing down. He plans to introduce a new class of energy-e cient boilers in 2017 and to expand training opportunities in the surrounding Bronx community to develop skilled workers. Most of the company’s 100 employ- ees are local residents. “It’s a big pair of shoes to ll, that’s for sure,” Ty- ren said. Living up to the past But the chance to ll big shoes is one of the great opportunities in inheriting a role at a family compa- ny. at’s partly why Kasselakis was willing to leave her old job at a multinational rm, where she had worked her way up to general counsel and president of the investment-banking division. “ e chance to step into a hundred-year-old com- pany that impacts millions of people and steer it into the future—that’s a great business project,” she said.
18 | CRAIN’S NEW YORK BUSINESS | OCTOBER 24, 2016
P014_P015_P016_P017_P018_P019_CN_20161024.indd 18 10/21/16 5:02 PM “THE CHANCE TO STEP INTO A HUNDRED-YEAR- OLD COMPANY AND STEER IT INTO THE FUTURE—THAT’S A GREAT BUSINESS PROJECT”
Tyren spoke of the thrill of driving past Yankee Stadium every morning on his way to work and thinking how he got to sign the last beam that went into the building. At a celebration of Easco’s 90th an- niversary in August that was attended by dignitaries including Rep. Charles Rangel, he was proud to have his two oldest daughters with him. “It’s something I have to pass on to them,” he said. Of course, navigating management transitions is complicated, even when the senior family figure has ceded control. “There are a lot of multigenerational employ- ees who still look to Brian,” Eric McAllister said of his father, who still comes to work every day. “He’s probably built more than 100 boats, and most of them were huge economic home runs for the com- pany. So it’s a tough act to follow, especially when you’re a lawyer and a banker.” What’s still uncertain are the prospects for the next generation of McAllisters. Eric has a son in middle school and a daughter in high school. They’re interested in what he does, but it’s too early to guess what they’ll want to do in their careers. LEON EASTMOND, 90, AND Buckley’s son is studying art in college, and his GRANDSON TYREN, 33, work daughter is in high school and considering premed. side by side at Easco’s Hunts Point headquarters. Both have worked summer jobs at McAllister Towing and have secured merchant mariner papers. “They are proud of the family business,” Buckley said. “I think the outlook is good for us to keep the flag flying.” n
October 24, 2016 | CRAIN’S NEW YORK BUSINESS | 19
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Purpose: all lawful purposes. whom process against it may be served lawful purpose. and shall mail process to: CT Corpora- Notice of Qual. of AFIAA 125 West 25th tion System, 111 8th Ave., NY, NY Notice of Qualification of Lexington Co- Street, LLC, Auth. filed Sec’y of State NOTICE OF FORMATION OF NEOSHO 10011, regd. agent upon whom proc- (SSNY) 8/26/16. Off. loc: NY Co. LLC HOLDING LLC. Application for Authority Investment Partners Energy, L.P. Author- ess may be served. DE addr. of LLC: ity filed with NY Dept. of State on org. in DE 8/23/16. SSNY desig. as filed with the Secretary of State of 1209 Orange St., Wilmington, DE agent of LLC upon whom proc. against New York (SSNY) on 9/20/2016. Of- 10/4/16. Office location: NY County. 19801. Cert. of Form. filed with DE Princ. bus. addr.: 660 Madison Ave., it may be served. SSNY shall mail copy fice location: NEW YORK County. LLC Sec. of State, 401 Federal St., Dover, of proc. to NRAI, 111 Eighth Ave., NY, formed in MISSOURI on 8/23/2016. 23rd Fl., NY, NY 10065. LP formed in DE 19901. Purpose: all lawful purpos- DE on 7/27/16. NY Sec. of State des- NY 10011, the Reg. Agt. upon whom SSNY has been designated as an es. proc. may be served. DE off. addr.: 160 agent upon whom process against it ignated agent of LP upon whom proc- ess against it may be served and shall Greentree Dr., Ste. 101, Dover, DE may be served. The Post Office ad- 19904. Cert. of Form. on file: SSDE, dress to which the SSNY shall mail a Notice of Formation of CHALKIN’ SO- mail process to: c/o CT Corporation CIAL, LLC Arts. of Org. filed with Secy. System, 111 8th Ave., NY, NY 10011, Townsend Bldg., Dover, DE 19901. copy of any process against the LLC Purp: any lawful activities. served upon him/her is: DAVID SIMS, of State of NY (SSNY) on 07/20/16. Of- regd. agent upon whom process may be served. DE addr. of LP: c/o The Cor- 202 S. WOOD ST., NEOSHO, MO fice location: NY County. SSNY desig- Notice of Formation of VertiPark, LLC. poration Trust Co., 1209 Orange St., 64850. The principal business ad- nated as agent of LLC upon whom proc- Arts. of Org. filed with Secy. of State of Wilmington, DE 19801. Name/addr. of dress of the LLC is: 56 LEONARD ST., ess against it may be served. SSNY NY (SSNY) on 8/26/16. Office loca- genl. ptr. available from NY Sec. of UNIT 17AW, NEW YORK, NY 10013- shall mail process to David tion: NY County. SSNY designated as State. Cert. of LP filed with DE Sec. of 3290 MISSOURI address of LLC is: Schoonmaker, 428 Broadway, 4th Fl., agent of LLC upon whom process State, 401 Federal St., Dover, DE 11417 OAK RD., NEOSHO, MO 64850 NY, CA 10013. Purpose: Any lawful ac- against it may be served. SSNY shall 19901. Purpose: all lawful purposes. Certificate of LLC filed with Secretary tivity. mail process to: 415 W. 45th St., NY, of State of MISSOURI located at: 600 NY 10036. Purpose: any lawful activity. W. MAIN ST., RM. 322, JEFFERSON Notice of Qualification of Montrose Notice of Qualification of SAGEWIND CITY, MO 65102. Consulting LLC. Authority filed with NY CAPITAL LLCAppl. for Auth. filed with Notice of Qualification of Dept. of State on 8/19/16. Office lo- Secy. of State of NY (SSNY) on ASSUREDPARTNERS OF TEXAS, LLC Name of Foreign LLC: ExecBrands LLC. cation: NY County. Princ. bus. addr.: 09/07/16. Office location: NY County. Appl. for Auth. filed with Secy. of State Authority filed with NY Dept. of State: 155 E. 79th St., #9, NY, NY 10075. LLC formed in Delaware (DE) on of NY (SSNY) on 09/30/16. Office loca- 8/12/16. NYS fict. name: Elite Image LLC formed in DE on 7/18/16. NY 09/02/16. SSNY designated as agent tion: NY County. LLC formed in Texas Management LLC. Office loc.: NY Co. Sec. of State designated agent of LLC of LLC upon whom process against it (TX) on 02/16/16. SSNY designated LLC formed in DE: 8/1/16. NY Sec. of upon whom process against it may be may be served. SSNY shall mail proc- as agent of LLC upon whom process State designated agent of LLC upon served and shall mail process to: CT ess to Attn: Steven M. Lefkowitz, 667 against it may be served. SSNY shall whom process against it may be served Corporation System, 111 8th Ave., Madison Ave., Fifth Fl., NY, NY 10065. mail process to c/o Corporation Serv- and shall mail process to: c/o Busi- NY, NY 10011, regd. agent upon DE addr. of LLC: Corporation Service ice Co., 80 State St., Albany, NY ness Filings Inc., 187 Wolf Rd., Ste. whom process may be served. DE Co., 2711 Centerville Rd., Ste. 400, 12207-2543. TX addr. of LLC: 211 E. 101, Albany, NY 12205. DE addr. of addr. of LLC: 1209 Orange St., Wil- Wilmington, DE 19808. Cert. of Form. 7th St., Ste. 620, Austin, TX 78701. LLC: 108 W. 13th St., Wilmington, DE mington, DE 19801. Cert. of Form. filed with Secy. of State, Div. of Corps., Cert. of Form. filed with TX Secy. of 19801. Cert. of Form. filed with DE filed with DE Sec. of State, 401 Feder- John G. Townsend Bldg., 401 Federal State, Carlos H. Cascos, James E. Rud- Sec. of State, 401 Federal St., Dover, al St., Dover, DE 19901. Purpose: all St. - Ste. 4, Dover, DE 19901. Pur- der Bldg., 1019 Brazos, Austin, TX DE 19901. Purpose: any lawful act. lawful purposes. pose: Any lawful activity. 78701. Purpose: Any lawful activity.
22 | CRAIN’S NEW YORK BUSINESS | OCTOBER 24, 2016 TO PLACE A CLASSIFIED AD, CALL 1 800 444 6007 OR VISIT CRAINSNEWYORK.COM
PUBLIC & LEGAL NOTICES
Notice of Qualification of NOBLE CAPI- Notice of Qualification of Notice of Qualification of JWL ACQUISI- Notice of Qualification of Lexington Co- TAL ADVISORS, LP KAMEHAMEHA SCHOOLS OPPORTUNI- TION PARTNERS I, L.P. Investment Partners IV-C, L.P. Authority Appl. for Auth. filed with Secy. of State TIES FUND LP Appl. for Auth. filed with Secy. of State filed with NY Dept. of State on of NY (SSNY) on 09/01/16. Office loca- Appl. for Auth. filed with Secy. of State of NY (SSNY) on 08/12/16. Office loca- 10/4/16. Office location: NY County. tion: NY County. LP formed in Delaware of NY (SSNY) on 09/30/16. Office loca- tion: NY County. LP formed in Delaware Princ. bus. addr.: 660 Madison Ave., (DE) on 06/22/16. Princ. office of LP: tion: NY County. LP formed in Delaware (DE) on 08/10/16. Princ. office of LP: 23rd Fl., NY, NY 10065. LP formed in c/o Noble Capital Advisors, LLC, 1330 (DE) on 09/06/16. Princ. office of LP: 650 Fifth Ave., NY, NY 10019. SSNY DE on 7/27/16. NY Sec. of State des- Ave. of the Americas, 7th Fl., NY, NY 950 Third Ave., NY, NY 10022. SSNY designated as agent of LP upon whom ignated agent of LP upon whom proc- 10104. SSNY designated as agent of designated as agent of LP upon whom process against it may be served. ess against it may be served and shall LP upon whom process against it may process against it may be served. SSNY shall mail process to the LP at mail process to: c/o CT Corporation be served. SSNY shall mail process to SSNY shall mail process to Attn: Gener- the addr. of its princ. office. Name and System, 111 8th Ave., NY, NY 10011, the Partnership, Attn: George Noble at al Counsel at the princ. office of the LP. addr. of each general partner are availa- regd. agent upon whom process may the princ. office of the LP. Name and Name and addr. of each general part- ble from SSNY. DE addr. of LP: c/o Cor- be served. DE addr. of LP: c/o The Cor- addr. of each general partner are availa- ner are available from SSNY. DE addr. poration Service Co., 2711 Centerville poration Trust Co., 1209 Orange St., ble from SSNY. DE addr. of LP: 1209 of LP: c/o Corporation Service Co., Rd., Ste. 400, Wilmington, DE 19808. Wilmington, DE 19801. Name/addr. of Orange St., Wilmington, DE 19801. 2711 Centerville Rd., Ste. 400, Wil- Cert. of LP filed with Jeffrey W. Bullock, genl. ptr. available from NY Sec. of Cert. of LP filed with Secy. of State, mington, DE 19808. Cert. of LP filed Secy. of State, Div. of Corps., 401 Fed- State. Cert. of LP filed with DE Sec. of Div. of Corps., John G. Townsend Bldg., with Secy. of State, State of DE, Dept. eral Dr., Ste. 4, Dover, DE 19901. Pur- State, 401 Federal St., Dover, DE 401 Federal St. - Ste. 4, Dover, DE of State, Townsend Bldg., Dover, DE pose: Any lawful activity. 19901. Purpose: all lawful purposes. 19901. Purpose: Any lawful activity. 19901. Purpose: Any lawful activity. Notice of Qualification of USF Holland Notice of Application for Authority of Pri- LANDMARK REGAL LLC, Arts. of Org. Notice of Qualification of Penn ADW, LLC. Authority filed with NY Dept. of vate Luxury Collection New York LLC filed with the SSNY on 07/28/2016. LLC. Authority filed with NY Dept. of State on 9/22/16. Office location: NY filed with the Secy. of State of NY Office loc: NY County. SSNY has been State on 7/11/16. Office location: NY County. Princ. bus. addr.: 700 S. Waverly (SSNY) on 1/15/14. Formed in DE designated as agent upon whom proc- County. Princ. bus. addr.: 825 Berk- Rd., Holland, MI 49423. LLC formed in 1/14/14. Office loc.: New York Coun- ess against the LLC may be served. shire Blvd., Ste. 200, Wyomissing, PA DE on 7/31/16. NY Sec. of State desig- ty. SSNY is designated as agent of SSNY shall mail process to: The LLC, 2 19610. LLC formed in DE on nated agent of LLC upon whom process LLC upon whom process against it may River Terrace Apt. 10S, NY, NY 10282. 9/25/15. NY Sec. of State designat- against it may be served and shall mail be served. The address SSNY shall Purpose: Any Lawful Purpose. ed agent of LLC upon whom process process to: c/o CT Corporation System, mail copy of process to is 240 E. 55th against it may be served and shall 111 8th Ave., NY, NY 10011, regd. St., 2H, New York, NY 10022. The of- mail process to: c/o CT Corporation agent upon whom process may be NOTICE OF FORMATION of Mi Casa Up- fice address required to be maintained System, 111 8th Ave., NY, NY 10011, served. DE addr. of LLC: 1209 Orange town LLC. Art of Org filed with Secy. of in DE is 2711 Centerville Rd., Ste. regd. agent upon whom process may St., Wilmington, DE 19801. Cert. of State of NY (SSNY) on 05/11/2016. 400, Wilmington, DE 19808. Cert. of be served. DE addr. of LLC: 1209 Or- Form. filed with DE Sec. of State, 401 Office location: NY County. SSNY desig- formation filed with the Secy. of State, ange St., Wilmington, DE 19801. Cert. Federal St., Dover, DE 19901. Purpose: nated agent upon whom process may John G. Townsend Bldg., 401 Federal of Form. filed with DE Sec. of State, all lawful purposes. be served and shall mail copy of proc- St., Ste. 4, Dover, DE 19901. Pur- 401 Federal St., Dover, DE 19901. ess against LLC to principal address: pose: Any lawful activity. Purpose: all lawful purposes. Notice of Formation of 1400 Broadway 5030 Broadway NY, NY 10034. Pur- Notice of Formation of B&B ATLANTIC Bakery, LLC. Arts. of Org. filed with NY pose: any lawful act. LLC Arts. of Org. filed with Secy. of NOTICE OF FORMATION OF 305 WEST Dept. of State on 10/4/16. Office loca- State of NY (SSNY) on 09/15/16. Of- END NORTHWIND LLC. Arts of Org filed tion: NY County. Princ. bus. addr.: 921 fice location: NY County. Princ. office with Secy of State of NY (SSNY) on Broadway, NY, NY 10010. Sec. of 6 CONVENT PROPERTIES LLC. Art. of of LLC: 419 Park Ave. South, 7th Fl., 9/29/16. Office location: NEW YORK State designated agent of LLC upon Org. filed with the SSNY on 07/21/16. NY, NY 10016. SSNY designated as County. SSNY designated agent upon whom process against it may be served Office: New York County. SSNY desig- agent of LLC upon whom process whom process may be served and shall and shall mail process to: CT Corpora- nated as agent of the LLC upon whom against it may be served. SSNY shall mail copy of process against LLC to tion System, 111 8th Ave., NY, NY process against it may be served. SSNY mail process to B&B Urban, Attn: Alan principal business address: 40 EX- 10011, regd. agent upon whom proc- shall mail copy of process to the LLC, Bell at the princ. office of the LLC. Pur- CHANGE PLACE, Ste 1201,NY NY ess may be served. Purpose: any lawful 628 Broadway, Suite 400, New York, pose: Any lawful activity. 10005. Purpose: any lawful act. activity. NY 10012. Purpose: Any lawful purpose.
OCTOBER 24, 2016 | CRAIN’S NEW YORK BUSINESS | 23 GOTHAM GIGS
GRAPE EXPECTATIONS: McCormack tends to macerating fruit that will become made-in- New-York wine.
BY LANCE PIERCE
A rare vintage The head winemaker at Brooklyn Winery aims to craft a drink for the people
or about two months in the early fall each year, sales of $5.2 million, including from its wine bar, last year. Conor McCormack is crushing it seven days a McCormack didn’t set out to become a winemaker. CONOR MCCORMACK week. It’s not just a metaphor; he’s head wine- Born in Ireland, he was raised mostly in San Jose, Calif., maker at Brooklyn Winery in Williamsburg, and by the time he graduated from college, he was playing AGE 39 Fand this is harvest season. bass in a rock band. By age 25, he was looking for temp BORN Limerick, Ireland McCormack and his staff unpack crates of fresh grapes jobs and answered a Craigslist ad for a harvest position in RESIDES Prospect-Lefferts as they arrive by the truckload from vineyards nearby Berkeley, Calif. “It would be outside Gardens, Brooklyn in upstate New York, California and Washing- “Wine is very in beautiful vineyards, doing stuff I’d never EDUCATION B.A. in music, ton. He expects to receive about 150 tons of subjective. done before, like driving forklifts,” he said. San Francisco State University grapes this season. This frenzied eight-week “Who wouldn’t want to do that?” SNIFFING THE COMPETITION period is called “crush.” If you like it, By the end of the season, he found himself McCormack doesn’t drink Brooklyn “Once it comes off the truck, it’s go-time,” you like it in charge of the small harvest crew. Over the Winery vintages at home and ” encourages his employees to follow McCormack said, explaining that the delicate next two years, he set out to learn as much as suit. “It’s very important to drink fruit travels in chilled containers but, because his ware- he could on the job, took winemaking courses at the Uni- wines that are not your own,” he house is not climate-controlled, it must be processed im- versity of California, Davis, and worked in Napa Valley. said. “Otherwise, you can get stuck mediately—whether a shipment arrives at 6 a.m. or 11 p.m. He got into urban winemaking and was working in the in your own flavors,” a condition The team of three full-timers sorts, de-stems and dumps San Francisco Bay Area in 2010 when Brooklyn Winery’s called “house palate.” the grapes into vats for maceration, a softening process founders lured him to New York City with the opportunity HIGH MARKS Brooklyn Winery that leaches tannins and flavor compounds. McCormack to be head winemaker of their new venture. has won several awards under McCormack’s supervision. Its 2014 doesn’t believe in crushing grapes underfoot. McCormack likes to keep things unpretentious. His unoaked chardonnay won double “I had my [4-year-old] daughter do it once, but she was goal is for people to approach his wine without being in- gold and its 2013 cabernet franc so cold she was miserable,” he said. timidated. “Wine is very subjective,” he said. “If you think won gold at the 2016 New York Founded in 2010, Brooklyn Winery makes 18 to 20 dif- it tastes like raspberries and someone else thinks it tastes Wine & Food Classic. ferent wines—reds, whites, rosés and sparkling, priced from like bananas, who’s wrong and who’s right? If you like it,
BUCK ENNIS $15 to $67 per bottle. It produced about 9,000 cases and had you like it.” — HILARY POTKEWITZ
24 | CRAIN’S NEW YORK BUSINESS | October 24, 2016
P024_CN_20161024.indd 24 10/21/16 3:15 PM SNAPS
Fishing for strong stewardship of the river Guests at the Oct. 13 Friends of Hudson River Park gala raised $3.1 million while enjoying Manhattan’s waterfront. The evening began at Pier 62 with cocktails and carousel rides as the sun set. Some of the revelers even cast fishing lines before heading to a star-studded dinner at the Pier Sixty event venue at Chelsea Piers.
Actor Matthew Broderick, an event honoree; Hudson River Park Trust President and CEO Madelyn Wils; and entertainer Harry Connick Jr., the gala’s host. Scott Lawin, chief operating officer at Moore Capital Management, and Gregory Boroff, executive director of Friends of Hudson River Park, at Chelsea Piers.
Funds to empower women Seeking a cure for a Laurie Tisch, pres- tick-borne ident of the Laurie disease M. Tisch Illumina- tion Fund and event honoree; New Jersey Sen. Cory Booker; and Ana Oliveira, president and CEO of the New York Women’s Founda- tion, which provides Katharina Harf, grants for work that co-founder of DKMS, and improves women’s Carlos Brito, CEO of lives, at the founda- Anheuser-Busch InBev, tion’s fall gala, held supporting the Global at the Plaza Hotel. Lyme Alliance.
T ory Burch, CEO of Tory Burch; Jessica Johnson-Cope, pres- ident of the Johnson Security Bureau; and event honoree Dina Habib Powell, pres- ident of the Goldman Sachs Foundation. The Oct. 13 evening Honoree Arthur J. Mirante II, tristate president of Avison Young, with his wife, raised $600,000. Elizabeth, and event host Rosanna Scotto, anchor of Good Day New York, at the Oct. 13 gala for the Global Lyme Alliance, which raised nearly $3 million.
GEORGE NAPOLITANO/RETNA, DIMITRIOS KAMBOURIS/GETTY IMAGES FOR GLOBAL LYME ALLIANCE, STEVE REMICH DIMITRIOS KAMBOURIS/GETTY IMAGES FOR GLOBAL LYME GEORGE NAPOLITANO/RETNA, SEE MORE OF THIS WEEK’S SNAPS ONLINE AT CRAINSNEWYORK.COM/SNAPS GET YOUR GALA IN SNAPS. EMAIL THERESA AGOVINO, [email protected]
October 24, 2016 | CRAIN’S NEW YORK BUSINESS | 25
P025_CN_20161024.indd 25 10/21/16 4:55 PM FOR THE RECORD*
n RoundHouse the tenant, while the land- St., in the East Village. RKF signed a lease for 1 Knicker- NEW IN TOWN 866 Ninth Ave. BANKRUPTCIES lord, Jack Resnick & Sons, represented Extell Develop- bocker Ave. in Bushwick. Anchoring the renovated was represented in-house. ment Co. in the transaction. The new restaurant, n Blitz Facial Bar Balsley Park, this new Hell’s n Bronx Realty Ripco Real Estate Corp. Guadalupe Inn, will occupy 184 Fifth Ave., Brooklyn Kitchen kiosk has counter Enterprises Corp. n Market research firm represented the tenant. 2,300 square feet of space The Toronto-based mini spa service and outdoor seating. 969 E. 167th St., Bronx MMR Research Worldwide that was previously Kings opened its first U.S. location The menu offers Asian and Filed for Chapter 11 signed a five-year lease n CVS Pharmacy signed County Saloon. Asking rent in Park Slope. Blitz offers Mexican street fare. bankruptcy on Oct. 14. The for 5,909 square feet at a lease at Hunter’s Point for the space was $85 per five facial options ranging filing cites estimated assets 15 W. 27th St. Asking rent South Commons at 1-50 square foot. M Properties from $60 to $200. of $500,001 to $1 million for the space was in the 50th Ave. in Long Island Group represented the COMPANY MOVES and estimated liabilities of low $70s per square foot. City, Queens. The store will landlord exclusively in n CUT by Wolfgang Puck $500,001 to $1 million. The landlord, Kaufman occupy 11,218 square feet the transaction, while the 99 Church St. n Brooklyn Tattoo Organization, was repre- of frontage space on the tenant, Knickerbocker Uno, Celebrity chef Wolfgang 279 Smith St., Brooklyn n Cannelle Patisserie Inc. sented in-house, while ground floor of the build- represented itself. Puck has opened his After spending a decade on 75-59 31st Ave., Queens Velocity Real Estate rep- ing. The lease was a direct first-ever New York eatery, Smith Street near Atlantic Filed for Chapter 11 resented the tenant. The deal between the landlord, n Chefs Deuki Hong and in the Four Seasons Hotel Avenue, the tattoo parlor bankruptcy on Oct. 11. The company will move into Related Cos., and CVS. Lee Anne Wong took New York Downtown. has moved to a location be- filing cites estimated assets the space in November. CoStar Group indicates a 10-year lease to open tween Degraw and Sackett of $50,001 to $100,000 the asking rent was $75 Sweetcatch Poke Bar at 642 n Mew Men streets, near Boerum Hill and estimated liabilities of RETAIL per square foot. Lexington Ave. Asking rent 7 Cornelia St. and Carroll Gardens. $500,001 to $1 million. n Target took a 30-year lease for the 1,000-square-foot This new restaurant brings for its third location in Man- n The owners of Williams- space was $220 per square a balance of music and n Rouge Tomate hattan, this one for 27,000 burg restaurants Mesa foot. Kassin Sabbagh Realty ramen to the West Village 126 W. 18th St. REAL ESTATE square feet at 500 E. 14th Coyoacan and Zona Rosa represented both sides. n with a DJ and an open Operating on the Upper sound system. East Side before its August COMMERCIAL 2014 closing, the vege- n Law firm Lieff Cabraser GET YOUR NEWS ON THE RECORD * n O’Tea table-focused restaurant Heimann & Bernstein To submit company openings, moves or real estate deals, or to receive further information, 118-15 Queens Blvd., opened a new location in signed a 10-year lease email [email protected]. Queens Chelsea. The newest version extension at 250 Hudson For the Record is a weekly listing to help businesspeople in New York find opportunities, The new bubble tea spot of the eatery offers a wine St. The 27,778-square-foot potential new clients and updates on customers. Bankruptcy filings from the Eastern and is on the border of Forest list of more than 1,600 bot- space takes up the entire Southern districts of New York are listed alphabetically. Real estate listings are provided in Hills and Kew Gardens tles curated by master som- eighth floor of the 15-story order of square footage. near Union Turnpike. melier Pascaline Lepeltier. building. CBRE represented
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26 | CRAIN’S NEW YORK BUSINESS | October 24, 2016
P026_CN_20161024.indd 26 10/21/16 3:15 PM PHOTO FINISH
Culinary confinement n Friday evening, Oct. 14, the first customers took their seats in one of the “flavor concentration booths” at Ichiran in Bushwick. The stalls at the new 82-seat ramen restaurant, the brand’s first in the United States, are nearly identical to those at Ichiran estab- Olishments in Japan—in keeping with the chain’s promise of “low interaction” dining. Ramen is delivered through a small window between the foldable walls of booths to isolate guests from waitstaff and other diners, allowing them to focus exclusively on the meal at hand. The Brooklyn site was 10 years in the making, said Hana Isoda, who is leading the company’s North American expansion, thanks in large part to its operators’ insistence that all ingredients be imported from Japan to maintain the consistency of its tonkotsu-style pork-broth ramen. “We have researched every detail of tonkotsu,” said Ichiran President Manabu Yoshitomi. “We think that Brooklyn is primed to embrace our unique approach.” — PETER D'AMATO PETER D’AMATO
October 24, 2016 | CRAIN’S NEW YORK BUSINESS | 27
P027_CN_20161024.indd 27 10/21/16 3:16 PM T:10.25”
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