BROKELYN a Boom in Food Manufacturing Showed Just How Easy It Is to Launch a Startup in New York

CRAINS

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Wheelchair-friendly taxi shortage angers owners P. 5 | Hospital closure hints at a reckoning P. 7 | Music festivals usher in a rivalry P. 15

® MAY 30-JUNE 5, 2016 | PRICE $3.00 NEW YORK BUSINESS

BROKELYN A boom in food manufacturing showed just how easy it is to launch a startup in New York. Surviving here, however, is the hard part PAGE 13

VOL. XXXII, NO. 22 WWW.CRAINSNEWYORK.COM

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MAYCRAINS 30-JUNE 5, 2016

FROM THE NEWSROOM | JEANHEE KIM A chance to remember IN THIS ISSUE 3 AGENDA

TIMOTHY MELIA WAS A Marine, a firefighter and a family man 4 IN CASE YOU MISSED IT who died in a car accident on Long Island a year ago. Tim 5 TRANSPORTATION was also my husband’s first cousin, one of 21 in that 6 ASKED & ANSWERED generation of the proud and boisterous Melia family. 7 HEALTH CARE On May 27, at the start of the Memorial Day weekend— 8 WHO OWNS THE BLOCK when we remember those who have lost their lives in 9 Wanna sell some service to the nation—family, friends, Marines, the highest- REAL ESTATE high-end condos? Try publishing a ranking officers of the city’s Fire Department and dozens of 10 VIEWPOINTS glossy magazine uniformed firefighters gathered 11 THE LIST for the unveiling of a plaque dedicated to him. Through his work It was a chance to keep Tim in our memories. “Through FEATURES his work he saved the lives of New Yorkers,” he saved the lives “ 13 FOOD FAIL Commissioner Daniel Nigro said. “Our gratitude will not be of New Yorkers. 15 BATTLE OF THE BANDS diminished with time.” Our gratitude will Tim grew up in Massapequa, the second-oldest of five. About a year after the Sept. 11 terrorist attacks, he turned 18 not be diminished and enlisted in the Marine Corps. He served two tours in with time Iraq, fighting in Baghdad and Fallujah. Then he returned to serve the people of New York City. Like his father, uncle and grandfather—and more than 1,400 other veterans and active reservists—Tim joined the FDNY. He was a firefighter for nine years with Engine 332 in East New York, in P. 6 the same Brooklyn district that his grandfather had commanded decades earlier. James McGovern He also became a father. Tim and his wife, Lisa, had four children in quick succession: Madison, Desiree, Chloe and Timothy Jr. They bought a house in Bay 20 GOTHAM GIGS Shore, Long Island, with a swing set and a pool in the backyard. 21 SNAPS A week before his 31st birthday, Tim’s car flipped over on a lonely road a half- 22 FOR THE RECORD hour from home. His death reminded me of a conversation I’d had with him when 23 PHOTO FINISH he returned from Iraq. He had been sleeping well, he said. His biggest issue was that he had to concentrate to drive on the sedate streets of Long Island. As an armored- vehicle driver, he had been trained to zigzag to avoid roadside bombs. Because Tim died off-duty, the benefits to his family are limited. The FDNY Foundation, however, has an educational fund for the Melia children, and the Uniformed Firefighters Association provides assistance through a fund established for families of those who have died off-duty but while in active service. A year has crystallized some memories. For example, his fellow firefighters remember that Tim grew his hair long to piss off the officers. “That Timmy had a hard head,” said Capt. John Saville, his superior for eight of his nine years in the ON THE COVER FDNY. His wife revealed to me that it was Tim who potty trained their daughters. PHOTO: BUCK ENNIS “Before he was a Marine, before he was a firefighter, he was a father,” Lisa said. “He was a hero and I miss him. We all do.” DIGITAL DISPATCHES Applications remain open! DEADLINE EXTENDED Go to CrainsNewYork.com CRAIN’S FASTEST- READ Coney Island’s GROWING COMPANIES Luna Park debuted two new rides Each year, Crain’s recognizes the Memorial > New York-area companies Day weekend: the with the highest three-year Endeavor (shown revenue growth rate. right), a thrill ride, and Public and private companies Convoy, a classic train with at least $10 million ride for kids. in revenue are eligible. ■ SHOW EVERYONE HOW The 92nd Street Y will rename its Center FAST YOU REALLY ARE for Innovation and Social Impact the Belfer Center for Innovation & Social Impact follow- CrainsNewYork.com/ ing a $15 million gift from the Belfer family. ApplyFast50 ■ Jamestown, the owner of Chelsea Market, Vol. XXXII, No. 22, May 30, 2016—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double plans to spend $35 million to $50 million issues the weeks of June 27, July 11, July 25, Aug. 8, Aug. 22 and Dec. 19, by Crain Communications Inc., 685 Third Ave., to double the size of the 1.2-million-square- New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send address foot meatpacking-district property’s retail changes to: Crain’s New York Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. space. The owner has already started For subscriber service: Call (877) 824-9379. Fax (313) 446-6777. $3.00 a copy, $99.95 one year, $179.95 two years.(GST renovating the building’s lower level. No. 13676-0444-RT)

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AGENDAWHAT’S NEW MAY 30, 2016 Success of council’s crime reform depends on what police make of it

he lopsidedness of the City Council’s 47-2 vote last week to soften penalties for minor offenses belied the unease it generated among many New Yorkers. Their concern is that Pollyannaish politicians are ushering back the rampant Tlawlessness that once plagued the city. Police Commissioner Bill Bratton—the city official most trusted by the MISGIVINGS business community—rightly criticized earlier versions of the council’s held by Bratton proposal. But if public safety takes a turn for the worse, this legislation moved the City Council to com- will only be partly to blame. promise on Importantly, the bill was amended to address Bratton’s concerns. penalties. Police retain their authority to demand identification, so they can check for outstanding warrants. The legislation only encourages—rather than policing. Although studies haven’t proved that cracking down on compels—cops to issue summonses rather than make arrests for such behaviors like turnstile-jumping reduces violent crime, infractions that low-level, nonviolent offenses as littering, making noise, drinking or harm the quality of life should have repercussions. urinating in public and being in a park after hours, but police will still Just because officers don’t have to arrest New Yorkers who gather on have ample power to punish infractions that bother New Yorkers. the sidewalk to drink or smoke marijuana does not mean disturbing the The key is how police will use the dis- peace should be without consequences. cretion that the commissioner succeeded With their newly codified discretion, Using their newly codified discretion, in preserving. Directing officers is police must intensify enforcement of Bratton’s job, not the council’s, but the police should intensify enforcement of quality-of-life rules, not relax it. new bill helps by establishing penalties quality-of-life rules, not relax it The council estimates that each year commensurate with infractions. Officers the bill will divert more than 100,000 may be more likely to take action against behavior that merits punish- cases from the overburdened criminal-court system, spare nearly 10,000 ment but not necessarily an arrest, which is labor-intensive for police people from permanent criminal records and avoid the issuance of and potentially life-changing for suspects. Among the city’s poor, hor- 50,000 warrants. We hope this can happen without giving up New ror stories abound of heavy-handed treatment by a dysfunctional crim- York’s gains. But if things go the wrong way, the bill permits the mayor inal-justice system. Needless arrests burden society by hindering people and the NYPD to police the city almost exactly as they have in the past. from finishing their education and moving up the economic ladder. They remain accountable for reducing crime and must do what’s need- That said, crime has fallen dramatically under “broken windows” ed to ensure the city remains not just safe but livable, too. – THE EDITORS

FINE PRINT New York’s inability to get other locales to accept its garbage is likely to increase the cost of waste disposal. In late May, a $3.3 billion, 30-year contract to ship a quarter of the city’s waste to the Finger Lakes fell through because of local opposition. An earlier plan was killed by critics in New Jersey. “The Department of Sanitation is perceived as desperate,” one insider said.

BY GERALD SCHIFMAN STATS

25 WORDS OR LESS MIDDLE-WAGE BOOST THE FEDERAL OVERTIME threshold will rise to $47,476 in December, boosting the incomes of

thousands of working-class New Yorkers who work more than 40 hours per week. CITY AND THE The pictures look Number of NYC workers who Additional average annual earnings for “ weren’t previously eligible for each of the 67,000 workers, totaling like awkward 67,OOO state or federal overtime $300 $20 million in extra wages family photos INDUSTRIES WITH AVERAGE ANNUAL WAGES NEAREST THE NEW THRESHOLD — Phil Shawe on having to share a School teaching $51,310 stage with his ex-lover Liz Elting, with whom he has been in a protracted Dentist Office $47,516 court battle over the translation company they own equally. The two were Overtime Salary Threshold $47,476 photographed giving awards to Health & Personal Care Stores $42,817 TransPerfect’s sales force. After spending $5 million a year on legal Building Services $42,258 fees, the partners must sell their business, a judge ruled. Health Practitioner Office $42,231

ADDICTED TO NUMBERS? GET A DAILY DOSE AT @STATSANDTHECITY SOURCES NYC Comptroller, ISTOCK, NEWSCOM Center for an Urban Future

MAY 30, 2016 | CRAIN’S NEW YORK BUSINESS | 3 20160530-NEWS--0004-NAT-CCI-CN_-- 5/27/2016 8:09 PM Page 1

AGENDA ICYMI CRAINS EDITOR IN CHIEF Rance Crain publisher, vp Jill R. Kaplan assistant to the publisher Devin Arroyo, 212.210.0701 EDITORIAL Could a SoHo hotel hold the editor Jeremy Smerd assistant managing editors Erik Engquist, key to Trump’s tax returns? Peter S. Green, Jeanhee Kim web editor Amanda Fung copy desk chief Steve Noveck art director Carolyn McClain ONALD TRUMP says he won’t release his tax photographer Buck Ennis returns until the IRS is finished auditing senior reporters Joe Anuta, Aaron Elstein, Matthew Flamm, Daniel Geiger them. What caught the tax man’s eye? It reporters Rosa Goldensohn, Jonathan LaMantia, Caroline Lewis, D Addie Morfoot could have something to do with the Republican candi- data reporter Gerald Schifman date’s involvement with the Trump SoHo. web producer Peter D’Amato Trump has a 15% stake in the giant glass tower that columnist Greg David contributing editors Tom Acitelli, rose at the corner of Spring and Varick streets about a Theresa Agovino, Barbara Benson, Erik Ipsen, Judith Messina, decade ago. The majority investors are developers Cara S. Trager ADVERTISING Bayrock Group, whose founder, Felix Sater,was convict- www.crainsnewyork.com/advertise ed of securities fraud, and the Sapir Organization, advertising director Irene Bar-Am [email protected] or whose late founder Tamir Sapir rose from immigrant cab 212.210.0133 senior account managers driver to Manhattan real estate mogul before losing much of his fortune. In 2007, Bayrock swapped its Zita Doktor, Jill Bottomley Kunkes, Rob Pierce, Stuart Smilowitz stake for a $50 million loan from an Icelandic firm, according to a recent report from Britain’s The senior marketing coordinator LeAnn Richardson Telegraph. That conversion is important because profits on equity investments are subject to capital- sales/events coordinator Ashlee Schuppius gains taxes, but loan payments are not. The Telegraph reports that converting the equity into debt may 212.210.0282 [email protected] cost the U.S. government as much as $100 million in lost tax revenue. ONLINE general manager Rosemary Maggiore How does all this affect Trump? It’s hard to say, but his signature is on documents approving the 212.210.0237 transaction, though his attorney insists that merely means Trump was acknowledging that he knew [email protected] CUSTOM CONTENT what was happening, not that he approved it. Bayrock said the Telegraph story was misleading and director of custom content Patty Oppenheimer 212.210.0711 inaccurate and that the IRS signed off on the transaction in question. [email protected] Even if what happened at the SoHo tower is 100% legit—and it may be—complex deals like this custom content manager Giovanni Perla [email protected] don’t look especially good to the Main Street voters who make up much of Trump’s support. It’s EVENTS www.crainsnewyork.com/events entirely plausible that Trump’s tax returns contain details of similar arrangements. Which may be why director of conferences & events he won’t release them. – AARON ELSTEIN Courtney Williams, 212.210.0257 [email protected] manager of conferences & events Adrienne Yee DATA POINT AUDIENCE DEVELOPMENT Hold the salt WTC transit link director of audience & content The city can start fining chain THE CITY WILL FACE A $3.8 An underground passageway link- partnership development restaurants up to $600 beginning ing the PATH train at the World Michael O’Connor, 212.210.0738 BILLION BUDGET GAP BY 2019, [email protected] June 6 for not using a salt-shaker Trade Center to nine subway lines at $800 MILLION MORE THAN CRAIN’S 5BOROS icon on menus to warn customers of the Fulton Center has opened. The www.5boros.com foods that contain more sodium MAYOR BILL DE BLASIO 350-foot-long tunnel runs under Irene Bar-Am, 212.210.0133 than doctors recommend. The rule Dey Street between Broadway and [email protected] ESTIMATED, ACCORDING TO REPRINTS took effect in December, but Church Street. reprint account executive Krista Bora enforcement had been on a tempo- CITY COMPTROLLER SCOTT – AMANDA FUNG 212.210.0750 rary hold pending a court challenge STRINGER. PRODUCTION from the National Restaurant production and pre-press director Simone Pryce Association. An appeals court lifted media services manager Nicole Spell that hold. SUBSCRIPTION CUSTOMER SERVICE option to treat offenses as a crime. www.crainsnewyork.com/subscribe Domino’s sued for wage theft [email protected] 877-824-9379 (in the U.S. and Canada). Domino’s Pizza, its affiliates and Sex toy shop workers organize $3.00 a copy for the print edition; or $99.95 one year, $179.95 two years, for print three franchises were sued by the Employees at Babeland, an adult toy subscriptions with digital access. state attorney general’s office for store with three locations in the to contact the newsroom: underpaying workers at least city, voted to join the Retail, www.crainsnewyork.com/staff 685 Third Ave., New York, NY 10017-4024 $565,000 at 10 New York stores. The Wholesale and Department Store Gawker seeks buyer phone: 212-210-0100 fax: 212-210-0799 state said the company had known Union. Babeland becomes the first Gawker founder Nick Denton has Entire contents ©copyright 2016 since 2007 that its computer system sex shop to be organized. The move Crain Communications Inc. All rights tapped investment banker Mark reserved. ®CityBusiness is a registered undercalculated gross wages, but will allow workers to address wage trademark of MCP Inc., used under license still encouraged franchisees to use issues and other unique matters Patricof of Houlihan Lokey to explore agreement. it. It’s the latest suit in the attorney associated with adult retail work, a possible sale. Gawker lost a $140 CRAIN COMMUNICATIONS INC. million invasion-of-privacy suit filed BOARD OF DIRECTORS general’s campaign against such as customer harassment. chairman Keith E. Crain wage theft. by Hulk Hogan over a sex tape of the president Rance Crain New vice chair wrestler that the site posted online. treasurer Mary Kay Crain, Cindi Crain Gawker, which is appealing that executive vp, operations William Morrow Lighter penalties for quality-of-life offenses Steve Cohen, a former top staffer for executive vp, director of strategic The City Council approved a suite of Gov. Andrew Cuomo, will succeed verdict, had revenue of $48.7 million operations Chris Crain last year. One party is reportedly executive vp, director of corporate bills that reform the way low-level Scott Rechler as vice chair of the operations K.C. Crain offenses are prosecuted. The new Port Authority of New York and interested in buying Gawker in a deal senior vp, group publisher David Klein laws create a civil penalty for pos- New Jersey. Rechler, who had held valued at $50 million to $70 million. vp/production, manufacturing David Kamis chief financial officer Thomas Stevens session of an open container of the post at the bistate agency since Separately, tech magnate Peter Thiel chief information officer Anthony DiPonio alcohol in public, reduce punish- 2011, said his decision to leave was emerged as the person bankrolling founder G.D. Crain Jr. [1885-1973] ment for breaking park rules and prompted in part by his growing Hogan’s legal attack on Gawker as chairman Mrs. G.D. Crain Jr. [1911-1996] secretary Merrilee Crain [1942-2012] instruct the NYPD to develop real estate business and by the con- payback. The site outed Thiel as gay guidelines for when to issue civil tinued influence of politics on the in 2007.

BUCK ENNIS penalties. The NYPD will retain the agency’s decisions.

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AGENDA TRANSPORTATION

STALLED: Forced to buy wheelchair-ready Fleet owners say accessible models like the cabs but finding none Toyota Sienna are unavailable. Taxi owners say city rules make it difficult to keep cars on road BY MATTHEW FLAMM

city require- president of the Com- wheelchair-accessible the shortage. That would ment that mittee for Taxi Safety, an taxis have been strong,” represent about 3.5% of half of yel- industry advocacy with close to 200 put into yellow cabs. compete against Uber, savvy rivals having no low cabs be group. service this year. As Wheelchair accessi- Lyft and other app-based accessibility require- Awheelchair-accessible A Nissan spokesman many as 500 medallions bility has been a sore vehicle services. Fleet ments for their own cars, by 2020 has hit a speed acknowledged a short- could be idle by the end point with the industry, and medallion owners even as the apps arrange bump: Fleet owners age, saying, “Sales of of the year as a result of which is struggling to object to their tech- rides in accessible taxis. Ⅲ required to switch models say they are not available. Fleet owners must replace cabs that come George Chatzopoulos off the road today with OWNER CHIP’S FAMILY RESTAURANT wheelchair-accessible models so that by 2020 half their cabs will be accessible. They are upset because Nissan, which won the contract to supply city cabs, hasn’t produced enough of its NV200 accessible vehicles to meet demand. According to one fleet owner, Nissan is telling the taxi industry that it will not have a consistent supply of the model until next February. Meanwhile, the owner has medallions that are sitting idle Serving up because they’ve been designated for accessible vehicles—and none hospitality. can be found. Medallion owners can apply for a waiver to use other accessible models, but the only one they consider acceptable—the Toyota Understanding Sienna—is also unavailable, taxi insiders say. The Taxi and what’s important. Limousine Commission said it is aware of the issue and is in discus- sions with Nissan about solving the problem. At Chip’s Family Restaurant, they know that offering excellent food and treating customers warmly is the recipe for success. “We are issuing appropriate extensions And owner George Chatzopoulos appreciates the same level of friendly service from M&T Bank. We helped him grow and to all owners who are even financed his food truck – enabling him to take his tasty treats on the road. Our eagerness to help businesses like Chip’s specifically affected,” is why M&T is a leading SBA lender1 in the country and why we’ve been recognized by Greenwich Associates for excellence the spokesman said. 2 The fleet owner said in small business banking. To learn how M&T can help your business, visit mtb.com/businessbanking. the extension did him no good because it was for cars he has taken off the road and can’t use anymore. He described it as a chance to throw good money after bad. In other cases, LENDING SOLUTIONS | MERCHANT SERVICES | TREASURY MANAGEMENT | DEPOSITORY SERVICES “medallions may al- Equal Housing Lender. ready be in storage, so 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. there is no vehicle 2Based on the 2015 Greenwich Excellence Awards in Small Business Banking. retirement to extend,” ©2016 M&T Bank. Member FDIC.

BUCK ENNIS noted David Beier,

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AGENDA ASKED & ANSWERED LAW INTERVIEW BY AARON ELSTEIN

JAMES MCGOVERN Hogan Lovells

ames McGovern was chief of the criminal division at the The transition to U.S.Attorney’s Office in Brooklyn until April, when he private practice is joined the law firm Hogan Lovells.After the financial “ crisis, McGovern was one of the few prosecutors who took easy for me because J Wall Street executives to trial when he led a case against I never saw myself as two former Bear Stearns money managers. Before he left, wearing the white his office filed criminal charges against pharmaceutical executive hat and doing more Martin Shkreli and also brought a widely watched bribery case noble work than my against FIFA, the international governing body of soccer. opponents .

You were a litigator who will now defend white-collar clients and conduct internal investigations. Will you miss your old job? Sure, I’ll miss it. I did 78 trials over the years, and there’s nothing much better than that rush of walking into court and bringing your “A” game. Preparing for trial is hard work, but preparation lets you do stuff that’s magical. The adrenaline is fabulous.

How do you feel about defending the sort of people you used to prosecute? The transition to private practice is easy for me because I never saw myself as wearing the white hat and doing more noble work than my opponents on the defense. I just saw myself as a litigator. I always enjoyed the competition, the fight of it.

The Bear Stearns executives you charged with cheating investors were ac- DOSSIER quitted by a jury. Does that explain why no similar cases were brought? WHO HE IS Partner, Hogan I don’t think there was a chilling effect. Federal and state investiga- Lovells tions continued in earnest after the Bear Stearns case. AGE 49 Still, those investigations resulted in not very much. BORN Brooklyn The complexity of the instruments at the heart of the cases was a RESIDES Brooklyn problem. The issue wasn’t the jury’s ability to understand or prose- EDUCATION B.A., Siena cutors’ ability to digest the facts. Rather, it was really hard to say College; J.D., Catholic University whether the people involved actually understood what they were do- of America ing. In hindsight we say, “All that subprime garbage, who could have WAVING THE FLAG ever thought it would make money?” But one fund in the Bear While he’s no supporter of FIFA, Stearns case was profitable for around 37 months. McGovern is a big soccer fan. In 1994, he went to the Meadowlands Rather than bring charges for misbehavior, the government often entered to watch the World Cup match into deferred- or non-prosecution agreements with Wall Street firms between Ireland and Norway. The on the condition that they sin no more. Are these agreements effective national teams battled in 98-degree deterrents? heat to a 0-0 draw. He has also been a New York Giants season-ticket holder. They are because you can craft them in a multitude of ways. But I can understand why the public might feel that the agreements don’t PATH TO THE FIRM represent full accountability. The government is sensitive to the Prior to joining the U.S. Attorney’s Office in Brooklyn in 2004, McGovern worked effects of a prosecution; it doesn’t want to unnecessarily run com- for the Justice Department in panies out of business because of the actions of a few. Washington, and before that at the district attorneys’ offices on Staten Island What’s new on the white-collar-crime front? and in Manhattan. Along the way, he spent There’s a really big push on enforcing the Foreign Corrupt Practices two years in private practice.

Act, which is about bribing people in other countries to win business. BUCK ENNIS The Justice Department in Washington has turned up the gas on this, and I suspect there are going to be some very big cases out of the Northeast in the near future. There’s a global initiative underway to enforce rules like these.

Speaking of global initiatives, soccer fans all over the world applauded when you charged FIFA officials with bribery. What I love about FIFA is I hear colleagues who say “It’s just like this” or “It’s just that” and it’s just like nothing. What I mean is this was an organization that existed in the ether; no one was regulating them at all. Their officials shouldn’t have engaged in the things they were alleged to engage in. And not to excuse any of them, but there was no regulation. Ⅲ

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AGENDA HEALTH CARE

Closing a hospital—or not? Framing the question is part of the solution as Mount Sinai cuts losses at Beth Israel New York’s new health care is coming: far fewer beds and an effort to trim costs with more ambulatory clinics BY JONATHAN LAMANTIA

ount Sinai Health have closed before us [since 2000]. scription for managing these reforms is Judy Wessler, a community health System’s announcement This is not a closure. That’s why we just as applicable today as it was then: advocate and the former director of last week that it would call it a transformation. That’s why it’s “It means convincing communities the Commission on the Public’s close its 825-bed Beth taking four years.” that change and consolidation will Health System, said she’s not con- MIsrael Medical Center on First Avenue The restructuring is part of a broad- bring better care. It means we are all vinced Mount Sinai Beth Israel will be and 16th Street drew an outcry from er trend in New York health care. The going to have to be born again.” able to offer the local community the neighbors who thought the hospital federal government awarded New Communicating changes that pri- same level of care once the hospital was gone for good. That the system York state $8 billion in Medicaid oritize preventive care in doctors’ moves. would open a 70-bed hospital and money in April 2014 as part of a offices over expensive inpatient treat- “In a perfect world, I might like emergency room a couple of blocks statewide plan to reduce avoidable ment in hospitals is a huge challenge— this plan,” said Wessler. “It’s not a away offered little solace. hospital use by 25% by as Mount Sinai found perfect world.” The radical restructuring came as mid-2020. Nobody here is out last week. Davis Manhattan currently has more hos- no surprise to those in health care State health care said May 25 that pital beds than average: six beds per circles. officials and policy “closing doors, Mount Sinai would 1,000 people, compared with the U.S. Since 2000, 19 New York City hos- insiders have long taking away the invest at least $550 average of 2.3 beds per 1,000 people, pitals have closed. Dr. Kenneth Davis, acknowledged that the million to increase and 3.0 in the rest of the boroughs and Mount Sinai Health System’s presi- changes associated keys and telling Beth Israel’s outpa- Westchester. dent and chief executive, doesn’t with reducing hospi- tient services while The aging hospital will be replaced want to be responsible for the loss of talizations would patients to find cutting 89% of its with a new 70-bed hospital and emer- No. 20, but keeping Beth Israel open reverberate throughout another place inpatient beds. The gency room. Beth Israel’s separate 153- was not an option. The hospital and its the state’s health care restructuring will last bed Bernstein Pavilion behavioral care affiliates lost $115 million in 2015, an system. But for years through July 2020. The facility will remain open. Davis, a psy- enormous sum even when compared hospitals and the communities they plans will be financed with cash from chiatrist, said building a robust ambu- with New York City’s most troubled serve have been in denial. the health system, not debt, Davis latory care network of doctors’ offices, hospitals. Indeed, Beth Israel, which At a fall 2014 Crain’s health care said. surgery centers and mental-health reports its financial statements com- conference, Stephen Berger, the for- He said efforts are underway to services is key to Mount Sinai provid- bined with Sinai’s Brooklyn campus, mer leader of New York’s efforts to preserve about 4,000 union jobs by ing better care to city residents. lost about $221 million from opera- align hospital capacity with demand, retraining and redeploying workers. Mount Sinai will spend $85 million tions in the past three years. foretold Wednesday’s events during There won’t be any administrative to expand outpatient mental-health “Nobody here is closing the doors, an impassioned speech on the future of job cuts, either. care, an urgent need for the city. taking away the keys and telling New York’s Medicaid program. “No “There will be no layoffs,” he said. Davis hopes Mount Sinai can be a everyone who is employed there, one has offered up their institutions for “With the turnover we have, plus the model for others. “We have more they’re no longer employed there, and closure, reuse or downsizing except programs that we’re building, we are people with mental illness incarcer- telling patients to find another place,” when financial collapse seems immi- confident that we will be able to find ated than in hospital beds, more on Davis said, exasperated at the confu- nent,” said Berger, who is the chair- jobs for all the employees, particular- the street than in hospital beds,” said sion about his plan. “That’s been the man of private investment firm ly because this is such a gradual Davis. “The mental-health system model of the 19 other hospitals that Odyssey Investment Partners. His pre- transition.” is failing.” Ⅲ

Health reforms at Rikers will be slow to roll out City health system hopes to aid inmates after release BY CAROLINE LEWIS

reating change behind said, will come as Health + Hospitals RIKERS PLAN: bars isn’t easy. The latest establishes itself inside the jails and Change will not come easily because city agency to appreciate learns to work with the city’s many agencies must that truism is the public Department of Correction and the work together. Chospital network, NYC Health + union representing correction offi- Hospitals. Since it took control in cers. January of health care at Rikers Island A top issue is the inability to get treatment. Poor coordination agency grapples with a system-wide and other city jails, two inmates at sick inmates to health appointments between medical staff and the correc- transformation designed to improve Rikers have committed suicide after in a timely fashion, or sometimes at tion officers who have to escort services for the city’s poorest and fix a not receiving necessary mental- all. Sarah Kerr, an attorney with the inmates to appointments has been a budget shortfall expected to approach health services. At a City Council Legal Aid Society’s Prisoners Rights recurrent issue, according to a joint $2 billion by 2020. It hopes to plug hearing last Thursday, officials said Project, said she’s hopeful planned report by Health + Hospitals and the some of that gap by boosting mem- that even the smallest changes will be changes will improve conditions. Department of Correction. bership in its subsidiary MetroPlus, slow to take effect. Still, her clients continue to complain A seemingly simple change, which offers Medicaid health insur- Health + Hospitals has announced they aren’t being taken to appoint- installing medical complaint boxes in ance plans. a slew of improvements for city jails ments for specialty care, and in one the jails into which prisoners can By connecting with departing since taking over the correctional case she cited, medical staff took drop written comments, will take as prisoners, Health + Hospitals is not health contract from for-profit com- more than an hour to respond to a long as eight months, Elizabeth only well-positioned to improve pany Corizon. Some rely on millions prisoner who’d suffered a seizure. Ward, the senior director of opera- access to care in communities, it may of dollars in additional funding in the The problem is that doing any- tions for correctional health services, also reduce the likelihood that former fiscal 2017 budget for new on-site thing behind bars requires multiple told City Council members last inmates will return to Rikers. And the clinics, additional mental-health staff agencies to work together. A lock- Thursday. new enrollees and their families could and other health features. down of a cell wing may stop a pris- Health + Hospitals has begrudg- simultaneously boost the fortunes of Ⅲ DAVID POKRESS,DAVID GETTY IMAGES Other improvements, officials oner from leaving his or her cell for ingly taken over care at Rikers as the the ailing public hospital system.

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AGENDA WHO OWNS THE BLOCK

111 WASHINGTON ST.

Lower Manhattan keeps getting higher A wave of renovation and new construction lands south of the World Trade Center

BY TOM ACITELLI 86 TRINITY PLACE In December, Clarion Partners bought a 70% stake in the 182,000-square-foot building for $105 million. (Asset manager rush of development and sales is Legg Mason took a controlling interest in transforming the area immediately Clarion in January.) Sellers Michael Steinhardt and Allan Fried paid $17 million southeast of the World Trade for the building in 2011. It was vacant after Center. There’s a new elementary the American Stock Exchange moved to 11 Aschool, several distressed-asset sales and a Wall St. in 2008. Steinhardt and Fried had handful of new apartment buildings and hotels, planned to convert most of the building into a hotel and lease the rest as office space. 125 GREENWICH ST. including the boutique Riff near Greenwich and Clarion did not respond to requests for com- A team led by developer and marketer Michael Rector streets, as lower Manhattan’s residential ment about what it might do with the space. Shvo bought the site in August 2014 for population has nearly tripled since 2000 to $183.94 million. The partnership included more than 60,000 today, according to the developer Bizzi & Partners and New Valley, an Alliance for Downtown New York. investment firm controlled by Howard Lorber, chairman of real estate brokerage Douglas 110 GREENWICH ST. The next addition is an 898-foot, 88- Elliman. The owners also bought development story condo set to rise at 125 Greenwich St., The Torkian Group, led by Hersel Torkian, bought rights from neighboring 86 Trinity Pl. for $3 mil- with 273 luxury apartments. The tower will the 14-story, 60-unit apartment building in lion in August 2014. be one of the tallest buildings to open October 2014 for $52.85 million from a joint venture involving several families, according to the downtown since Sept. 11, 2001, and is being Wall Street Journal. The new owner made designed by Rafael Viñoly, the Uruguayan upgrades, and the property remains an apartment architect of the supertall 432 Park Ave. building. condo tower. The Greenwich Street project secured $175 million in financing in March from Chinese investors through the federal EB-5 program, 111 WASHINGTON ST. which grants green cards to This vacant parking garage is asking $170 foreigners who invest at least million, through broker Cushman & 102 GREENWICH ST. $500,000 in the U.S. Wakefield. Already-secured air-rights Salt Equities, a real estate asset- While some projects have deals with adjacent parcels mean the management firm started by Sal 11,208-square-foot lot could be built up stalled, even those owners Smeke and Michael Wahba, bought to 349,526 square feet. Pink Stone the five-story, 2,171-square-foot and would-be developers Capital, controlled by Richard commercial building here in March have made out well. After a Ohebshalom, bought the garage in June 2012 for $6 million from GB 2011 in a $57.55 million distressed-mort- plan to convert 2 Rector St. to Development Group. A 36-room Riff gage sale. That deal included five other Hotel opened in 2015. residences never material- sites: 105 and 109 Washington St., and ized, the office building was 102, 106 and 108 Greenwich St. sold earlier this year for just over $221 million—more than $80 million above its 2 RECTOR ST. 2011 purchase price. And 42 TRINITY PLACE Investor Cove Property Group, real estate equity an empty parking garage Before it declared bankruptcy in 2011, Syms, the fund Multi-Employer Property Trust and pension- at 111 Washington St., clothing store, whose flagship was on this site, fund investment manager Bentall Kennedy had bought air rights to neighboring 67 Greenwich where the current owners bought this 27-story, 400,000-square-foot office St. in 2008 for $8 million, sparking rumors of a building in March for $221 million. The sellers, had planned to erect a 51- major development. Now, Trinity Place Holdings, Kushner Cos. and the CIM Group, paid $140 mil- story, 429-unit apartment which manages Syms’ remaining real estate, is lion for it in 2011. They had reportedly consid- planning a 35-story tower with approximately 85 tower with retail, is now ered a residential conversion. condos, retail and a 476-seat elementary school. Ⅲ for sale. The tower will be called 77 Greenwich St.

50 TRINITY PLACE

Los Angeles-based Fit Investment Corp. bought this vacant site in January 2012 for $15 million from hotelier Sam Chang. Plans are pending with the city to build a 29-story hotel there. WWW.OASISNYC.NET

8 | CRAIN’S NEW YORK BUSINESS | MAY 30, 2016 20160530-NEWS--0009-NAT-CCI-CN_-- 5/27/2016 4:06 PM Page 1

REAL ESTATE

Price tag for de Blasio’s streetcar is half-a-billion dollars short Streetcar from Sunset Park to Astoria may be financed without municipal bonds,raising costs BY JOE ANUTA

axpayers could end up paying an extra which is much larger—and therefore more reliable— half-billion dollars to build a streetcar than property-tax revenue from buildings sur- connecting Brooklyn and Queens, accord- rounding a specific project. The lower risk means ing to a watchdog group’s estimate. buyers are willing to accept a lower interest rate. TRather than using municipal bonds to pay for the A group of real estate owners and developers Brooklyn-Queens Connector (aka BQX), Mayor Bill backing the streetcar, Friends of the Brooklyn de Blasio wants to create a nonprofit development Queens Connector, said the city was better off fund- Real estate firms corporation to issue the bonds, paying buyers back ing the project this way. with the increases in tax revenue expected as the “This is one mechanism that the city could use to go for glossy look streetcar spurs development along its route. do it without burdening the general fund, increasing Funding the entire project this way taxes or competing with other transit prior- Specialty magazines are a new and often could add $400 million to $500 million in ities,” said Ya-Ting Liu, the group’s execu- pricey weapon in condo sales BY JOE ANUTA interest over a 40-year period, the Citizens $2.5B tive director. Budget Commission said. The commission The comparison with the Hudson Yards REAL ESTATE COMPANIES are increasingly pouring looked at 2011 bonds issued for the Hudson FINANCING: financing is telling. That project, on big bucks into an odd marketing gimmick: maga- Yards project, which used a similar financ- Cost of tram Manhattan’s far West Side, was delayed as zines and newspapers. For brokerages, the allure of ing setup. De Blasio has pegged the cost of before interest the city’s real estate market recovered from print offers a way to reposition themselves as the streetcar’s construction at $2.5 billion, payments the 2008 crash, and failed to generate the lifestyle companies, while developers can frame a before interest payments. full projected increase in real estate tax and neighborhood in the way most conducive to selling “We are confident that the value captured from other revenue to pay its bondholders, so the city had or renting apartments. But as ailing media compa- this transformative investment in our city’s future to pick up the tab. Why, then, would the de Blasio nies across the country can attest—print can be will cover project costs,” said a spokesman from the administration and the tram’s backers want to spend expensive. city’s Economic Development Corp. “We are also in more money than necessary to pay for the streetcar? Last year, Douglas Elliman put out two thick, the process of hiring a financial adviser to ensure this There’s a long list of projects the city needs to finance glossy lifestyle magazines, Elevate and Elliman, fea- project is delivered in the smartest and most cost- within the limits of what it can borrow using munic- turing full-page photos and articles about designers, effective way possible.” ipal bonds. Economic-development bonds will cost musicians, fashion icons and developers, along with Municipal bonds are cheaper to issue because taxpayers more, but they will assure elected officials, apartment listings. Each copy likely cost the broker- they’re backed by the city’s legal obligation to repay developers and others who support the project that it age from $3 to $5 to produce, said Reed Phillips, them and by the city’s general revenue stream, won’t be left at the back of the line. Ⅲ managing partner of DeSilva + Phillips, media merg- er and acquisition advisers. The two issues of Elliman published last year— with a print run of 300,000 copies each, according to a report by MediaWire Daily—were inserted in We’re Banking newspapers at a likely total cost of about $1.8 million to $3 million. The Elevate title was cancelled this on Your Success. year, though the company says it has been combined with Elliman. Watch your business grow with Town Residential produces a similar glossy mag- Emerald Business Checking azine, released annually, while the Corcoran Group decided earlier this year to produce its lifestyle pub- No-Fee Beneﬁts Include: lication online. • Debit and Credit Transactions Douglas Elliman has said that its print products are part of a multimillion-dollar marketing effort to with Fraud Monitoring position itself as a lifestyle brand and expand • Domestic Wire Transfers nationwide, The Real Deal reported. • Cash Management Even developers are getting into the business. In • Bill Pay April, World Wide Group and Rose Associates host- • Remote Deposit Services ed a launch party for a one-time publication called 57 Newspaper, which a press release said “celebrates • And Many More the iconic personalities that are as legendary as the elegant retailers and restaurants that line Manhattan’s 57th Street, more recently known as Country Bank offers the latest products and services of the big banks but with something you won’t find at the ‘Billionaires Row.’” The editor, Peter Davis, is an old big banks...personal service with a country sensibility. Because we are a Family Controlled Bank, you get hand at chronicling New York City’s high society direct access to decision makers who can provide financial solutions to help your business succeed...allowing (who also was listed as an editor for Elliman), and the you to spend more time caring for your patients and managing your office. For more information, stop in or call contributing writers include Michael Gross, the one of our conveniently located branches. We’re your friendly neighborhood bank for business. author of apartment house tell-all 740 Park. The only advertisement in the nearly 50-page magazine? An CONVENIENT Flagship Branch Second Ave. Branch invitation to check out the developers’ new building BRANCH 655 Third Avenue 902 Second Avenue New York, NY 10017 New York, NY 10017 at 252 E. 57th St. LOCATIONS 212-292-5254 212-829-9998 Manhattan-based Lightstone Group, which is building a 700-unit apartment complex in Woodlawn Branch Riverdale Branch Scarsdale Branch 4349 Katonah Avenue 583 West 235th Street 80 Garth Road Gowanus, publishes what looks like a community Bronx, NY 10470 Bronx, NY 10463 Scarsdale, NY 10583 newspaper a few times a year called the Gowanus 718-324-7100 718-601-8300 914-722-1500 Gowilla, featuring write-ups of local artists, businesses, bars and events (including a recommenda- Minimum opening deposit is $100.00. Accounts with daily average balances less than $100,000.00 will incur a $30.00 monthly service charge and all services will be charged according to the Bank’s current fee schedule. All terms are subject to change at the Bank’s discretion. New business customers only. Equal Opportunity Lender. Member NYCE, PLUS. tion for artisanal pickles)—along with a link for Ⅲ BUCK ENNIS readers to check out rentals at 365 Bond.

MAY 30, 2016 | CRAIN’S NEW YORK BUSINESS | 9 20160530-NEWS--0010-NAT-CCI-CN_-- 5/27/2016 4:07 PM Page 1

AGENDA VIEWPOINTS

Tourism, B’way stats look good, BROADWAY NUMBERS YEAR ATTENDANCE GROSS but I give them mixed reviews 2015-16 13.3 million $1.37 billion New records don’t tell the whole story of these economic drivers 2014-15 13.1 1.36 2013-14 12.2 1.37 2012-13 11.6 1.14 BROADWAY JUST thirds of all ticket buyers, so lower earnings than danced its way to Broadway can be taken as a proxy expected and said its 2011-12 12.3 1.14 another record sea- for the number of visitors and their outlook was deterio- 2010-11 12.5 1.08 son with more than willingness to spend. (Earlier this rating because of a 9% 2009-10 11.9 $1.02 13.3 million the- year, the Broadway League noted a quarterly decline in atergoers and gross decline in suburbanites, for reasons sales in the Americas. Source: The Broadway League ticket sales of near- that haven’t been adequately It primarily blamed ly $1.4 billion. An explained.) lower tourist spending GREG DAVID increase is always The overall visitor numbers are in New York and other key markets. its high, and that has helped as well. better than a good. NYC & Co.’s official forecast Macy’s has been complaining about The addition of some 10,000 decline, but like so many statistics for 2016 is just shy of 60 million vis- the lack of visitor spending at its hotel rooms this year, along with that track the city’s tourism indus- itors—another record—and a slight- flagship 34th Street store for almost Airbnb’s popularity, is keeping try, these numbers raise the ques- ly larger percentage increase from a year now. room rates affordable, which keeps tion of whether the glass is half full last year’s 58.3 million than What does all this tell us as the the number of visitors high. or half empty. Broadway had. summer tourism season gets into Once here, tourists are very Let’s start with the record in the The city’s hotel-tax receipts, full swing? careful with their money. Brazilians 2015-16 season, which ended May though, have fallen in recent Tourists continue to come to in particular, who once came to the 22. The increase over the prior year months—the only source of revenue New York in large numbers despite city primarily to shop, are counting was minimal: 1.6% in attendance to do so. The Independent Budget a stronger dollar that has made the their dollars closely. and 0.6% in sales. As Crain’s point- Office attributes the decline pri- city more expensive and foreign Tourism remains robust, but not ed out, there would have been no marily to Airbnb stealing market destinations cheaper. Terrorist everyone is on the gravy train record without the runaway hit share from hotels, although the attacks in Europe have dampened anymore. Ⅲ Hamilton and its very expensive hotel building boom is holding what should have been a surge of tickets. down room rates as well. Americans across the Atlantic. The GREG DAVID blogs regularly at Visitors accounted for two- Last week, Tiffany’s reported dollar has declined somewhat from CrainsNewYork.com.

Work crews should look like NYC Make construction unions more accessible to locals, minorities BY ERIC L. ADAMS

ew buildings are sprout- construction sites in Brooklyn, I that reflects the ing in New York City have not seen the future at work. membership’s every day. But longtime Crews lack the rich diversity found diversity and cre- residents typically see in the communities around them. ates opportunities Nthem as not providing sufficient Few of the workers live in any of the for local workers. affordable housing or access to boroughs, let alone in mine. For the There are even well-paying construction jobs. underemployed residents who walk models within the Meanwhile, many of us in govern- by the backhoes and cranes, the Building Trades, ment have been so overwhelmed by exclusion from these well-paying such as the New the affordable housing crisis that we jobs is a daily source of frustration. York State Laborers have neglected the dearth of local While Brooklyn grows right in front Union, that can be middle-class jobs, an equally of them, their path to the middle instructive for those locals that still the final destination. Anecdotal important issue for New Yorkers. have strides to make in training and evidence suggests that highly paid This problem has been especially For the underemployed employing neighborhood youth. union jobs do not collectively overlooked in the protracted debate Young people lack access to the reflect our city’s cultural mosaic, over 421-a, a housing-construction residents who walk by the jobs being vacated by an aging con- even as there are qualified, certified tax incentive that had mixed suc- backhoes and cranes, struction workforce. According to a alternatives all around us. For far cess in delivering affordable units Center for an Urban Future report, too many, apprenticeships are a before it expired five months ago. the exclusion from these construction workers’ average age road to nowhere. Last year, when Gov. Andrew is fast approaching 50, and 20,000 This conversation must be about Cuomo punted negotiations about well-paying jobs is a daily construction jobs will be filled over job creation for all. The 421-a requiring prevailing wages on 421-a source of frustration the next 20 years. Elected leaders debate has centered on prevailing projects to the Real Estate Board of and policymakers should be all-in wages, but we need to ask where New York and the Building and on creating real pathways for quali- those wages are going. We should Construction Trades Council (talks class seemingly shrinks. fied city residents in this booming, reframe this discussion, much as that ultimately hit a brick wall), he I support unions—I’m a union well-compensated industry. affordable housing advocates have did not merely put thousands of man myself from my days in NYPD The construction unions have done when they ask “Affordable for future affordable apartments at risk. blue. I also have a responsibility to long relied on apprenticeships to whom?” In this case, the question isn’t He became the latest elected official speak up when I see where my diversify their ranks, but no reliable whether livable wages are needed on to ignore an opportunity to reverse brothers and sisters in labor can do statistics show these programs these projects, but rather, “Livable the distressing lack of local and better to ensure equal opportunity enhance local or minority represen- wages for whom?” Ⅲ minority representation on jobs done in local employment. SEIU Local tation on job sites. Paid on-the-job by the unionized building trades. 32BJ is a model for how to do it right training is good, but that is sup- Eric L. Adams is the Brooklyn borough

GETTY IMAGES When I have visited many of the in New York City, with leadership posed to be part of a journey, not president.

10 | CRAIN’S NEW YORK BUSINESS | MAY 30, 2016 20160530-NEWS--0011-NAT-CCI-CN_-- 5/27/2016 4:07 PM Page 1

AGENDA THE LIST NEW YORK AREA’S LARGEST HOSPITALS Ranked by 2015 operating expenses

THE SCOOP TRENDS LESS PROFIT FOR THESE NONPROFITS HOSPITALS’ DIMINISHING RETURNS After surging in 2014, combined profits for Crain's top 25 sank by $428 million to return to 2012- 2013 levels. Figures are shown in millions. Net profits he hospital industry is in upheaval right now, and Mount $1,500 Sinai Health System in particular is struggling. Mount Sinai $1,397 Beth Israel (No. 9) and Mount Sinai St. Luke’s-Roosevelt $1,200 (No. 11) suffered the largest revenue drops among hospitals $1,022 Ton Crain’s list. The dips help explain why Mount Sinai announced last $900 $1,003 $968 week that Beth Israel would be significantly downsized. If Mount $781 Sinai can take solace in anything, it’s that the short-term outlook for $600 other city hospitals isn’t good either. “For the hospitals doing the best, there’s likely a bubble, partly $300 due to the Medicaid expansion,” said Allen Miller, chief executive officer of COPE Health Solutions, a consultancy. “You’re not going to $0 2011 2012 2013 2014 2015 see big profits for a while, because they’re in this change stage.” All but two of the 25 hospitals on the list show increased operating BIGGEST LOSERS expenses as they transform the way they deliver care. Seventeen took Change in revenue in smaller profits than they did in the year prior. Diminished profits Mount Sinai Beth Israel and higher expenses are two trends that won’t be changing anytime -14.8% Mount Sinai St. Luke's-Roosevelt 89% soon, as hospital systems spend capital to transition away from tradi- Reduction in tional inpatient services and toward outpatient care. -12.2% inpatient beds at “Hospitals are being told to stop readmissions and improve quali- University Hospital Mount Sinai Beth ty outcomes—inside and outside the hospital,” said Miller. “For the -2.4% Brookdale Hospital Medical Center Israel as part of hospitals to do that, they have to staff up and invest. It takes a long -2.1% restructuring time to see the impact of the transformation. Initially you have more The Valley Hospital costs to cover it.” +2.2% — GERALD SCHIFMAN Source: Crain’s research

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MAY 30, 2016 | CRAIN’S NEW YORK BUSINESS | 11 20160530-NEWS--0012-NAT-CCI-CN_-- 5/27/2016 4:08 PM Page 1

AGENDA THE LIST NEW YORK’S AREA’S LARGEST HOSPITALS

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12 | CRAIN’S NEW YORK BUSINESS | MAY 30, 2016 20160530-NEWS--0013-NAT-CCI-CN_-- 5/27/2016 4:17 PM Page 1

FOOD | STRUGGLING TO GROW

Landreth invested little more than butter, flour and sugar. A friend of a friend got her into the then-fledgling Brooklyn Flea, even though she was baking in a kitchen that wasn’t certified to make food for the public. Weekend sales led to a few wholesale accounts, and Landreth was soon unloading 1,200 mini-cupcakes every week, netting enough to make baking a full-time job. She spent just 30 cents to make a cupcake, she said. A dozen sold for $18; one cupcake at the Brooklyn Flea cost $2. “But even with that,” she said, “once you staff up and pay all CLOSING TIME: Gaia DiLoreto the insurance and the employee taxes and all shuttered her local foods that fun stuff, the volume needs to be pretty store, By Brooklyn, in April. high.” Landreth skipped the “fun stuff,” but paying employees under the table and working out of a home kitchen led to a reckoning about Kumquat’s future, and she closed the business. Regulations aren’t “scale-appropriate,” said Karen Karp, a food-business consultant. “We t’s the ultimate foodie fantasy. Move to should be able to create a permit for someone Brooklyn, start an artisanal-food busi- who has a very well-equipped home kitchen ness in your kitchen and expand to that meets the standard.” Foodies become a globally known brand, car- The EDC helps support three kitchen incu- ried in gourmet shops and Whole Foods bators. Together, the newly opened Brooklyn stores across the U.S. The fantasy often FoodWorks in Bedford-Stuyvesant, the becomes a nightmare: Run out of capital, cash Entrepreneur Space in Long Island City and in a Iand room for expansion and throw in the towel HBK Incubates in Harlem, which both opened or relocate to another city. in 2011, allow around 200 small-business own- “Even if you know things are headed in the ers to cook. At Brooklyn FoodWorks, rentals pickle right direction, it’s still death by a thousand start at $30 an hour for 10 hours a month and cuts,” said Liz Gutman, one of three partners at drop to $25 an hour for 80 hours or more. Liddabit Sweets. Privately run commercial versions include ENTREPRENEURS FEEDING THE CITY’S Liddabit, which sells candy made from Hana Kitchens in Sunset Park, Mi Kitchen Es Su FOOD-MANUFACTURING REVIVAL FIND high-quality ingredients, has loyal customers, Kitchen and Organic Food Incubator in Long 2,200 square feet of production and office Island City, and Union Food Lab in THAT LAUNCHING IN NEWYORK IS space at Sunset Park’s Industry City, and Morningside Heights. MUCH EASIER THAN GROWING HERE growing e-commerce and wholesale business- “I don’t think I would have been able to es. Even so, “none of the partners have been have such a long time to make all those mis- BY CARA EISENPRESS paid in a long time,” she said. takes, learn about the business, go about it at The gourmet-food-production scene that my own pace, if I was doing anything legally,” emerged in Brooklyn around 2008 gave chefs said Landreth. the chance to sell artisanal food to a growing Payroll and taxes at her new business, retail audience. As the businesses grew, the com- bakery Butter & Scotch in Crown Heights, are plexity of operating in a busy city, including all in order. Landreth and her partner, Allison the lack of midsize production spaces, Kave, raised $500,000 to start the company, UNABLE TO MILK IT increased regulation and the substantial and have been selling birthday cakes, pies, Bradford Still said selling Fresh Till Death’s fresh almond milk to investment needed to scale up to a profitable cocktails and wholesale caramel corn since wholesalers for $20 a gallon wasn’t profitable, so after two years, size, forced some companies to shut down, early 2015. “We just squeak by,” she said, so he stopped. others to recalibrate, and still others to flee to she inoculates herself against the frustrations cheaper locations, despite an enthusiastic with a reminder: “This is pretty amazing. We customer base. have a bakery and a bar in Brooklyn.” Now, New York City’s Economic Devel- $4 opment Corp., venture capital firms and SCRATCH’ed out independent commercial kitchen operators A lack of working capital put Matthew PER BOTTLE are looking at how to help food startups Tilden, who owned wholesale and retail bakery The cost of delivery $2-$4 by bicycle for about 5 stick around long enough to boost the SCRATCHbread in Bedford-Stuyvesant from LABOR bottles from the Fort city’s economy. 2010 until last fall, out of business. While he Greene cafe to a Food manufacturing accounted for 16,000 expected to gross $1 million in 2015, he owed wholesale customer jobs in the city in 2014, up 16% from 2009, payroll and sales taxes and $10,000 for a $20 in Greenpoint according to EDC. In part, that’s because New Department of Health fine for a grease trap that One gallon York City is an easy place for entrepreneurs to had to be replaced. “I needed catering rev- wholesale, test their ideas and recruit the semi-skilled enue” to balance the equation, he said. But an delivered workers they need. investor who had signed a contract to help him $8 “New York is a great big test kitchen,” said build out the necessary facilities “just disap- One pound Adam Friedman, executive director of the Pratt peared.” Despite lines out the door, sales alone of almonds $4-$6 Center for Community Development. “The couldn’t finance the expansion. makes a Net income per gallon gallon of before taxes and other challenge is that it’s an incredibly high-cost After a bourbon-fueled, soul-searching milk expenses environment.” weekend, Tilden decided not to sign a lease for Labor, rent, materials, transportation and the new space. “I built this with two hands, a compliance with city, state and sometimes dream and a ton of hard work,” he wrote to his federal regulations cost more in New York. newsletter list. “But that’s not enough. Small Regulations weren’t always so strictly business is a brutal, endless beating if you can’t enforced. To start her mini-cupcake company, get ahead.... I’ve used up every single drip of pas-

BUCK ENNIS, ISTOCK Kumquat Cupcakery, back in 2008, Keavy CONTINUED ON PAGE 14

MAY 30, 2016 | CRAIN’S NEW YORK BUSINESS | 13 20160530-NEWS--0014-NAT-CCI-CN_-- 5/27/2016 4:18 PM Page 1

FOOD | STRUGGLING TO GROW

NO PIECE OF CAKE: Frustrated by sion I had. Now I’m burnt toast.” the cost of doing business here, they had five distributors helping “Often, the manufacturer makes Matt and Allison Robicelli plan to push the condiments into more the project and says, ‘I can sell it for move their bakery to Baltimore. markets, and close to $1 million in X amount,’” said Tor Newman, the sales. But negotiations with retail chief executive of Ace Natural, a chains disheartened them, and New York-area distributor of working with manufacturers wore organic foods. “They go to the end them down. “If you’re a small com- user and sell at that price. They’re pany without a desire to be litigious, not thinking that they’ll need to what happens is you have a con- give the distributor X amount, tract, and a company that’s much minus their margin.” The end user, bigger and can do a truckload in of course, might not be so willing to one day [shows up]. Well, sudden- suddenly pay 25% more. ly your time gets bumped.” When Didi Schiller started SlantShack Jerky co-founder Baking for Health around 2000, David Koretz also gave up on manu- the homemade factor was part of facturing in Brooklyn. After finding the appeal of her vegan, gluten- traction for the brand in New York free baked goods including raw City, he moved production to almond fudge and “cheesy” crack- Vermont and then to Illinois, where ers, she said. Schiller lined up sales he found an experienced co-packer for her 15 products without engag- with space to produce 25,000 ing a distributor. When she out- pounds of jerky this year, which grew her apartment, she rented Koretz says will gross $1 million. cooking space in a Manhattan syn- Headquarters remain in New York. agogue and hired two people to “It’s like operating in a business help. At her peak, from 2004 to 2008, she was goods like yogurt drinks, beef jerky and bone hospice,” Allison Robicelli, co-owner of an eight- bringing in roughly $300,000 a year with margins broth, for which food safety rules are copious. year-old cupcake company, Robicelli’s, said of as high as 40%. That calculation drove Lya Mojica and Taylor working in Brooklyn. “We’re all sitting here wait- Then, she said, “the whole market started to Flynn to a breaking point just a year and a half after ing for the end.” She’s now in the process of mov- change.” Though Schiller sold to a few of the starting their grass-fed bone-broth business, Bone ing her headquarters from Brooklyn to Baltimore. early Whole Foods, she eventually hired a dis- Deep & Harmony, when the pair was selling 400 The EDC wants to bring more co-packers to the tributor, which cut into her margins. In 2015, $18 quarts of broth a week. They had begun by city, and is examining proposals that came in last she closed down. simmering soup at a butcher shop called Harlem fall, said Miquela Craytor, who leads its manufac- “People don’t go into this setting themselves up Shambles, then moved to a restaurant in down- turing efforts. for success,” said Nicole Bermensolo, the owner of town Manhattan. They knew they’d soon need a “Once we lose them to a co-packer outside of tofu dessert company Kyotofu and a partner in spot that could accommodate their 60-quart pots New York City, it makes it that much more difficult Sunset Park’s Hana Kitchens incubator. “People do on a 24-hour production schedule, because broth to bring them back, even if they would like to,” she it on a shoestring. They end up with labor-inten- has to cook for hours, and offer enough storage so said. She would not disclose which sector—meat, sive products. If at some point your product cannot that they wouldn’t have to shuttle batches dairy, baked goods, or jarred products—the new be semi- or fully automated, you can’t make between their facility and their office. Paying for co-packers would specialize in. money at this business.” full-time rentals at commercial kitchens was out of Of course, local makers keep on cooking, and a Once out of a home kitchen, number of hit products have found running a food business is a lot sustainable growth in the city, like running any business. “ONCE WE LOSE THEM TO A CO-PACKER despite the challenges. Entrepreneurs need capital to OUTSIDE THE CITY, IT MAKES ITTHAT “It really is pretty incredible how market, advertise and increase most everyone from [the early production. MUCH MORE DIFFICULTTO BRING THEM Brooklyn Flea days] is still here,” “You grow to a point where BACK, EVEN IFTHEYWOULD LIKE TO” Landreth said. These are companies you’re in Whole Foods or another like The Good Batch, Ovenly, Salty retailer, and there’s a whole other Road and Early Bird granola, which set of challenges, like distribution charges and their price range. emerged in the early days, when barriers to entry marketing,” said Bermensolo. “We were doing well,” said Mojica. “But for us were lower, and have scaled here despite the Transportation and logistics, too. At Fresh Till to move to a manufacturing facility, we would obstacles. Death, a fresh-nut-milk company, the owners— have had to make a big move, to really invest in the “It’s not rocket science,” said Shamus Jones, the who ran a café—were already covering the cost of a company, sell outside of New York.” founder of Brooklyn Brine, a 10-person company commercial kitchen. The operation worked when that sells pickles and condiments worldwide. “You they could use bicycles to deliver. As orders Giving up charge more money. You run a lean operation. You increased, the owners realized the refrigerated They decided to close their broth business, exploit economies of scale.” vans they’d need would eat up their profits, and though they co-authored a cookbook. Flynn’s Jones has invested in machinery and production they stopped delivering almond milk to all but one husband, an acupuncturist, now sells broth made space, but his pickles also clock in on the simple café in 2014, two years into the project. at the same Manhattan restaurant but under a new end in terms of manufacturing and regulation. Even with investment capital, finding an avail- name, the Simple Broth, and faces identical chal- Nonetheless, he pays employees at least $16 an able midsize commercial facility smaller than lenges. “[My husband] looked at us and laughed a hour, and buys his glassware from Pennsylvania, 10,000 square feet is nearly impossible, said little and thought we were just playing house,” not China. Christopher Havens, a commercial broker at Flynn said. “Now that he’s into it, he’s like, ‘Oh, I Still, it’s hard for a foodstuff to be both a global CitiHabitats. “Someone who is making jelly and get it.’” behemoth and a homegrown darling, said Gaia jam in 2,000 square feet, they’re going to have a Making the jump to production facilities doesn’t DiLoreto, who owned By Brooklyn, a Carroll hell of a time finding space,” he said. Landlords guarantee success. Wendy Smith, who owned Gardens shop specializing in Brooklyn-made consider food producers tough tenants. Brooklyn-based SchoolHouse Kitchen with her products from 2011 until it shuttered this April, in “They need a lot of power, drains, they have a mother, Patsy Smith, from 2007 to 2012, avoided part because the local goods she carried were now lot of shipping,” Havens said. The EDC is working some of the New York City traps. The company available far and wide. with its partner incubators to create “step-out” used out-of-town co-packers to make its preser- “For a lot of people,” she said, having spaces to help companies too big for shared vative-free chutneys, vinaigrettes, and flavored “Brooklyn” on a package “captured an authenticity kitchens and too small to build their own facilities. mustards based on Patsy’s recipes. SchoolHouse and a genuine goodness that people were missing.” Outsourcing production to what the food grew to offer a dozen products sold by several But over time, she said, “people weren’t sur- industry calls certified co-packers is an attractive regions of Whole Foods. prised anymore. We lost some of the shininess Ⅲ BUCK ENNIS alternative, particularly for makers of high-protein When Smith and her mother decided to close, of Brooklyn.”

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ENTERTAINMENT | FIGHTING FESTIVALS

SUMMER LOVIN’: Will New Yorkers go to Randall’s Island twice this season for fun, sun and live music?

his summer, it’s Kanye versus featured 20,000 fans paying $100 each. By last Kendrick in New York City. The year, it had become a three-day event across BATTLE famous hip-hop artists will each four stages on Randall’s Island, drawing 50,000 headline rival three-day music festi- fans per day. Competitors have taken note. vals on Randall’s Island. The compet- North American concerts are a $6 billion Ting shows by the two largest concert promoters industry. Festivals have gained such a foothold OF THE in the nation are being seen as a rap battle in a within it that music artists now gear their tours larger fight for dominance in the city’s live- around them instead of scheduling individual music scene. concerts, said Mark Schulman, the producer of On June 3, the Governors Ball will stage its Panorama for parent company BAND sixth annual festival with headliners Kanye AEG/Goldenvoice. That has made festivals more West, the Strokes, the Killers and Beck. On July popular for music fans, too. 22, the first-ever three-day Panorama fest lands Los Angeles-based AEG/Goldenvoice is the PROMOTERS on the island with a lineup featuring Kendrick second-biggest concert promoter in the nation. Lamar, Arcade Fire, LCD Soundsystem and Sia. It produces Coachella, last year’s highest- The big names are grossing music fes- a huge boon to tival. In 2015, The nation’s largest fans, who can see “IN NEWYORK,WE ARE nearly a third of concert producers are several acts in one AEG’s revenue day or weekend, WITNESSING ONE OFTHE reportedly came fighting for dominance but also a sign of LARGESTTERRITORIAL from festivals, up in New York City— the continuing from just 10% five consolidation of BATTLES IN RECENTYEARS” years earlier. indoors and out the music industry Sensing an at the expense of opportunity in BY STUART MILLER independent producers. New York, AEG started planning in 2014 for a “In New York, we are witnessing one of the concert to be held in Flushing Meadows Corona largest territorial battles in recent years,” said Park just two weeks after this year’s GovBall. Kirk Sommer, partner and co-head of William Those plans infuriated the company that ran Morris Endeavor Music. GovBall, Founders Entertainment. “The timing of this proposed event is an aggressive, greedy ONCE UPON A TIME attempt by AEG to push a small independent A city of eight million people might seem big company of born-and-bred New Yorkers out of enough for two music festivals seven weeks business and out of the market,” its executives apart, but the fact is that until 2011, when three said in a 2015 petition it circulated asking the 26-year-old New Yorkers debuted the city to deny AEG the permits it needed. Governors Ball—then on Governors Island—by Though the Parks Department rejected AEG’s paying a dozen mostly unknown bands from application for a concert in Queens, the compa- their own pockets, all attempts in New York ny took the July spot on Randall’s Island’s City had been short-lived flops. schedule and, using its clout, began booking

FOREST WOODWARD That first GovBall, a single-day affair, CONTINUED ON PAGE 16

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ENTERTAINMENT | FIGHTING FESTIVALS

big-name acts, including some that GovBall had been pursuing. That spelled trouble for Founders. AEG, because of its size, could offer performers gigs at multiple festivals (and prohibit them from playing elsewhere in those markets). GovBall could not. “GovBall didn’t have a leg to stand on; they’d have to fold up entirely or sell to a bigger organizer,” said Michael Nelson, managing editor for the music website Stereogum. Founders partner Tom Russell said the company had rejected offers from private-equity investors and others in the past but came to realize “it was time to muscle up.” “We need a partner to ensure we get the very best talent,” said Russell. He and Jordan Wolowitz (the third founding partner, Yoni Reisman, left Founders in April) wanted to sell WAR OF WORDS: Rappers Kendrick Lamar and Kanye West to someone “who would allow us to operate in will headline the Panorama and the same manner, promoting the same music, Governors Ball festivals on food and art we always have.” Randall’s Island this summer. The company turned to Live Nation—the biggest festival network in the United States and in Europe, with 900 brand partners and more than 300 artists under management. In April, Live Nation bought a majority stake in 2001 debut. Festival-goers paid an average of Randall’s Island’s shores. Soon after Live Founders. (No one would discuss the price tag $424 per ticket, according to Billboard—which is Nation’s purchase of Founders, AEG moved to but, by comparison, Live Nation reportedly paid much more than for a regular concert. buy concert promoter Bowery Presents. That $125 million for a controlling interest in the Some longtime Governors Ball regulars view added Terminal 5, Bowery Ballroom, Music Hall company that owned the Lollapalooza and AEG’s incursion as bullying, and the sale to Live of Williamsburg, Mercury Lounge and Rough Austin City Limits festivals.) Nation as a necessity. With Founders still in Trade to the roster of New York City venues it charge of GovBall, however, they remain hope- books, increasing its venues to six from one. GOLIATH VS. GOLIATH ful it will retain its indie style. “They’ve created “Buying the Bowery Presents gives AEG a real Established festivals are far more profitable a really strong brand with a unique vibe,” said presence in New York,” Scher said. than individual concerts. Plus, they attract the John Rofe, 30, who plans to attend this year. “A Douglas Arthur, an analyst for Huber 18- to 34-year-olds who are the demographic festival is more than just a bunch of names on a Research, said that with AEG being “very holy grail for sponsors. The sponsor dollars that lineup poster.” aggressive on the live-music front,” Live flow in “are more significant than ticket sales But Anthony Poveromo, who has attended Nation, which owns venues from Irving Plaza to because that’s where the margin is” for the every GovBall since 2012, said he just sold his Jones Beach, may counter AEG’s move. Jordan event promoters, said Amy Yong, an analyst at 2016 tickets and bought Panorama tickets Zachary, Live Nation’s chief strategy officer, Macquarie Capital. instead to see Arcade Fire and LCD said only that the company “will continue to Live Nation and AEG together drew about 2.7 Soundsystem. “I don’t feel allegiance to a festi- look for the right opportunities to complement million people to their festivals in 2014, and each val,” the 24-year-old said. He suspects GovBall our portfolio there.” grossed more than $1 billion in concert revenue, will change under the new regime. “People who “It’s an arms race in New York now,” 10 times more than the third biggest company. think it won’t are lying to themselves— Stereogum’s Nelson said. Veteran independent promoter John Scher said Bonnaroo and the others have become way And still looming across the East River is the AEG’s and Live Nation’s willingness to overpay more mainstream,” said Poveromo. vast Flushing Meadows Corona Park. AEG exec- for national exclusivity cuts out competition and utives have said they are still pursuing access to leads to higher ticket prices. For example, AEG’s A FIGHT TO THE FINISH it, something Live Nation has taken note of. Coachella last year grossed $84 million off The battle between Live Nation and AEG for In mid-May, word leaked out about a possi- 198,000 tickets, up from 25,000 attendees in its live-music audiences has spilled beyond ble Founders festival in October in the Citi Field parking lot—which is not under Parks Department control—next to Flushing Meadows. But given that it is rumored to be on STRENGTHENING THEIR HOLD LOCALLY the weekend of Rosh Hashanah, at a time of shorter days and cooler weather, Nelson is Live Nation owns bigger amphitheaters in the suburbs, but AEG has more venues in New York City. skeptical. “It feels more like a strategic play AEG LIVE NATION made with AEG in mind than an earnest attempt PNC Bank Arts Center (New Jersey) 17,500 to launch a viable festival,” he said. “I’ll be sur- prised if this gets off the ground.” Nikon at Jones Beach 15,000 For now, that still leaves New York with Ampitheatre at Coney Island Boardwalk 5,000 twice as many festivals as it had a year ago. Eventually there will be a winner and a loser. Terminal 5* 3,000 “Not everyone can be the next Coachella,” said Playstation Theater 2,100 Adam Fer, co-author of “Rockonomics Revisited,” published in the April International Irving Plaza 1,025 Journal of Music Business Research. “All good Bowery Ballroom** 575 things must come to an end. It may not be next year, but soon we may see some contraction.” Music Hall of Williamsburg* 550 The survival of the festivals may come down Gramercy Theatre 400 to how much each company worries about ced- ing that patch of dirt to the competition. In Mercury Lounge** 250 other words, Panorama and GovBall may battle Rough Trade* 250 on longer than the finances would dictate sim- 0 5K 10K 12K 15K ply because the other rival remains standing. *Ownership expected once Bowery Presents deal is closed. **AEG will have the ability to book, but will not own, this venue “It could become a war of attrition,” said Ⅲ GETTY IMAGES Nelson.

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PUBLIC & LEGAL NOTICES BUSINESS OPPORTUNITIES

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Arts. served and shall mail process to: 245 DE Div. of Corps., John G. Townsend of State of NY (SSNY) on 04/13/16. Of- of Org. filed with Secy. of State of NY (SSNY) Park Ave., 24th Fl., NY, NY 10167, princi- Bldg., 401 Federal St. - Ste. 4, Dover, fice location: NY County. Princ. office of on 4/27/16. Office location: NY County. pal business address. DE address of LLC: DE 19901. Purpose: Any lawful activity. LLC: 4 Irving Pl., NY, NY 10003. SSNY SSNY designated as agent of LLC upon 850 New Burton Rd., Ste. 201, Dover, designated as agent of LLC upon whom DE 19904. Cert. of Form. filed with DE whom process against it may be served. Notice of Qualification of Aptevo BioThera- process against it may be served SSNY Sec. of State, 401 Federal St., Dover, DE SSNY shall mail process to: c/o The LLC, peutics LLC. Authority filed with NY Dept. shall mail process to Corporation Service 19901. Purpose: any lawful activity. 192 Lexington Avenue, Ste. 1100, NY, of State on 4/12/16. Office location: NY Co., 80 State St., Albany, NY 12207-2543. NY 10016. Purpose: any lawful activity. County. Princ. bus. addr.: 920 Cassatt Purpose: Gas pipeline and storage. NOTICE OF FORMATION OF Rd., Ste. 100, Berwyn, PA 19312. LLC Notice of Formation of Blue Note USA, PROGRESSIVECAREER LLC. Articles of formed in DE on 1/15/16. NY Sec. of Notice of Formation of Bravest Warriors LLC. Arts. of Org. filed with NY Dept. of Organization filed with the Secretary of State designated agent of LLC upon LLC. Arts. of Org. filed with NY Dept. of State on 4/4/16. Office location: NY State of NY (SSNY) on 04/19/2016. whom process against it may be served State on 4/1/16. Office location: NY County. Sec. of State designated agent Office location: NEW YORK County. and shall mail process to: c/o CT Cor- County. Sec. of State designated agent of LLC upon whom process against it SSNY has been designated as agent poration System, 111 8th Ave., NY, NY of LLC upon whom process against it may be served and shall mail process to: upon whom process against it may 10011, regd. agent upon whom process may be served and shall mail process Steven Bensusan, 131 W. 3rd St., NY, be served. The Post Office address to may be served. DE addr. of LLC: 1209 to the principal business address: NY 10013, principal business address. which the SSNY shall mail a copy of any Orange St., Wilmington, DE 19801. Cert. c/o Spielman Koenigsberg & Parker, Purpose: all lawful purposes. process against the LLC served upon of Form. filed with DE Sec. of State, 401 LLP, 1745 Broadway, 18th Fl., NY, NY him/her is: 220 RIVERSIDE BOULEVARD Federal St., Dover, DE 19901. Purpose: 10019, Attn: Richard Koenigsberg, Notice of Qualification of Nelson Tree- APARTMENT 28F NEW YORK, NY 10069 all lawful purposes. CPA. Purpose: any lawful activity. house and Supply, LLC. Authority filed The principal business address of the LLC with NY Dept. of State on 4/7/16. Office is: 220 RIVERSIDE BOULEVARD APART- Notice of Formation of DBA NY Office, location: NY County. LLC formed in WA MENT 28F NEW YORK, NY 10069 Notice of Formation of FLOWER SHOP LLC. Arts. of Org. filed with NY Dept. of on 9/12/11. NY Sec. of State designated Purpose: any lawful act or activity. CORTLANDVILLE, LLC Arts. of Org. filed agent of LLC upon whom process against State on 4/14/16. Office location: NY with Secy. of State of NY (SSNY) on it may be served and shall mail process County. Princ. bus. addr.: 27 W. 24th 05/10/16. Office location: NY County. to: c/o CT Corporation System, 111 8th Notice of Formation of Apex Global, LLC, St., Ste. 10B, NY, NY 10010. Sec. of Princ. office of LLC: Windsor Properties, Ave., NY, NY 10011, regd. agent upon Art. of Org. filed with Sec’y of State (SSNY) State designated agent of LLC upon Attn: Paul D. Glantz, 99 Park Ave., NY, whom process may be served. WA and on 2/2/16. Office location: NY County. whom process against it may be served NY 10016. SSNY designated as agent principal business address: 32925 SSNY designated as agent of LLC upon and shall mail process to: National of LLC upon whom process against it SE Issaquah Fall City Rd., Fall City, WA whom process against it may be served. Corporate Research, Ltd., 10 E. 40th may be served. SSNY shall mail process 98024. Cert. of Form. filed with WA Sec. SSNY shall mail copy of process to Cecilia St., 10th Fl., NY, NY 10016, regd. agent to the LLC at the addr. of its princ. of State, 801 Capitol Way S., Olympia, Soh, 315 W. 36th St., Ste. 17B, NY, NY upon whom process may be served. office. Purpose: Any lawful activity. WA 98501. Purpose: all lawful purposes. 10018. Purpose: any lawful activities. Purpose: any lawful activity.

MAY 30, 2016 | CRAIN’S NEW YORK BUSINESS | 17

P017-18_CN_20160530.indd 17 5/27/2016 4:00:43 PM TO PLACE A CLASSIFIED AD, CALL 1 800 444 6007 OR VISIT CRAINSNEWYORK.COM

PUBLIC & LEGAL NOTICES

Notice of formation of DHP Express, LLC. Notice of Qualification of WALKER & Notice of Qualification of UIG, LLC. Appl. Notice of Formation of 785 FIFTH AVE Arts. of Org. filed w/Secy. of State NY DUNLOP COMMERCIAL PROPERTY for Auth. filed with Secy. of State of NY REALESTATE LLC Arts. of Org. filed with (SSNY) on 12/7/15. Office Loc: NY FUNDING II CB, LLC. Appl. for Auth. filed (SSNY) on 04/08/16. Office location: NY Secy. of State of NY (SSNY) on 05/03/16. County. Principle Office: 1732 1st with Secy. of State of NY (SSNY) on County. LLC formed in Delaware (DE) on Office location: NY County. Princ. office Avenue, #107, New York, 10128. SSNY 04/08/16. Office location: NY County. 03/21/16. NYS fictitious name: URBAN of LLC: 151 W. 46th St., 10th Fl., NY, designated agent of LLC upon whom LLC formed in Delaware (DE) on INNOVATION GROUP, LLC. SSNY NY 10036. SSNY designated as agent process against it may be served. SSNY 04/04/16. Princ. office of LLC: 535 designated as agent of LLC upon whom of LLC upon whom process against it shall mail process to DHP Express, LLC, Madison Ave., 12th Fl., NY, NY 10022. process against it may be served. SSNY may be served. SSNY shall mail process 1732 1st Avenue, #107, New York, NY SSNY designated as agent of LLC upon shall mail process to c/o Corporation to the LLC at the addr.of its princ. office. 10128. Purpose: Any lawful activity. whom process against it may be served. Service Co. (CSC), 80 State St., Albany, Purpose: Any lawful activity. SSNY shall mail process to c/o Corpora- NY 12207-2543. DE addr. of LLC: c/o Notice of Formation of NORTE UNITED, tion Service Co. (CSC), 80 State St., CSC, 2711 Centerville Rd., Ste. 400, LLC. Arts. of Org. filed with Secy. of State Albany, NY 12207-2543. DE addr. of Wilmington, DE 19808. Cert. of Form. Notice of Qualification of Transamerica of NY (SSNY) on 04/15/16. Office loca- LLC: CSC, 2711 Centerville Rd., Ste. filed with Secy. of State, Div. of Corps., Retirement Insurance Agency, LLC. tion: NY County. SSNY designated as 400, Wilmington, DE 19808. Cert. of John G. Townsend Bldg., 401 Federal St., Authority filed with NY Dept. of State on agent of LLC upon whom process against Form. filed with Secy. of State, 401 Ste. 4, Dover, DE 19901. Purpose: Any 1/7/2016. NYS fictitious name: TRIA it may be served. SSNY shall mail process Federal St., Ste. 4, Dover, DE 19901. lawful activity. Insurance Agency LLC. Office location: to Corporation Service Co., 80 State St., Purpose: Any lawful activity. NY County. Princ. bus. addr.: 408 St. Albany, NY 12207, regd. agent upon Notice of Formation of KEYSTONE Peter St., Ste. 230, St. Paul, MN 55102. whom and at which process may be REALTY NEW YORK CITY LLC Arts. of Org. LLC formed in DE on 4/3/2013. NY served. Purpose: Any lawful activity. Notice of formation of Life By Dru LLC. filed with Secy. of State of NY (SSNY) Arts of org filled with secy. of State Sec. of State designated agent of LLC on 06/18/02. Office location: NY County. upon whom process against it may be of NY (SSNY) on 2/2/2016. Office Princ. office of LLC: 15 Park Row, Ste. Notice of Qual. of Baccarat 42A Owner Location: NY County. SSNY designated served and shall mail process to: c/o LLC, Auth. filed Sec’y of State (SSNY) 23N, NY, NY 10038. SSNY designated CT Corporation System, 111 8th Ave., agent upon whom process may be as agent of LLC upon whom process 1/25/16. Off. loc: NY Co. LLC org. in DE served against LLC to principal busi- NY, NY 10011, regd. agent upon whom 1/11/16. SSNY desig. as agent of LLC against it may be served. SSNY shall mail process may be served. DE addr. of ness address: 460 W. 149th St. APT 62 process to the LLC at the addr. of its princ. upon whom proc. against it may be NY, NY 10031. Purpose: any lawful act. LLC: 1209 Orange St., Wilmington, DE served. SSNY shall mail copy of proc. to office. Purpose: Any lawful activity. 19801. Cert. of Form. filed with DE Sec. NRAI, 111 Eighth Ave., NY, NY 10011, of State, 401 Federal St., Dover, DE the Reg. Agt. upon whom proc. may be 19901. Purpose: all lawful purposes. served. DE office addr.: 160 Greentree Dr., 21-78 19TH STREET LLC. Art. of Org. NOTICE OF FORMATION OF Alpha Vari- Ste. 101, Dover, DE 19904. Cert. of Form. filed with the SSNY on 04/12/16. ance Solutions. Articles of Organization Office: New York County. SSNY desig- filed with the Secretary of State of NY on file: SSDE, Townsend Bldg., Dover, Notice of Qual. of Athelstan Advisors nated as agent of the LLC upon whom (SSNY) on 2/08/16. Office location: NEW DE 19901. Purp: any lawful activities. LLC, Auth. filed Sec’y of State (SSNY) process against it may be served. SSNY YORK County. SSNY has been designated 6/17/15. Off. loc: NY Co. LLC org. in shall mail copy of process to the LLC, as agent upon whom process against it DE 6/2/15. SSNY desig. as agent of Notice of Qualification of VILLAGE c/o Triena Capital Partners LLC, 447 may be served. The Post Office address LLC upon whom proc. against it may be GREENWICH LLC. Appl. for Auth. filed West 18th Street, 4A, New York, NY to which the SSNY shall mail a copy of served. SSNY shall mail copy of proc. with Secy. of State of NY (SSNY) on 10011. Purpose: Any lawful purpose. any process against the LLC served to Att: Devin Geoghegan, 15 W. 20th 04/11/16. Office location: NY County. upon him/her is: CORPORATION SER- St., NY, NY 10011. DE off. addr.: CSC, LLC formed in Delaware (DE) on VICE COMPANY 80 STATE ST. ALBANY, 2711 Centerville Rd., Wilmington, DE 02/12/16. Princ. office of LLC: c/o NY 12207. The principal business Notice of Qualification of APOLLO 19808. Cert. of Form. on file: SSDE, Grant, Herrmann, Schwartz & Klinger address of the LLC is: 5 East 44th St PRINCIPAL HOLDINGS XI, LLC Appl. for Townsend Bldg., Dover, DE 19901. LLP, 675 Third Ave., Fl. 26, NY, NY Suite 4A New York New York 10017. Auth. filed with Secy. of State of NY Purp: any lawful activities. 10017.SSNY designated as agent of (SSNY) on 05/18/16. Office location: Purpose: any lawful act or activity. LLC upon whom process against it may NY County. LLC formed in Anguilla be served. SSNY shall mail process to on 04/13/15. Princ. office of LLC: Notice of Formation of 204 Forsyth the LLC at the addr. of its princ. office. Notice of Formation of HUDSON 9 W. 57th St., NY, NY 10019. SSNY Lender LLC. Arts. of Org. filed with NY DE addr. of LLC: 2711 Centerville Rd., BERGEN LLC Arts. of Org. filed with designated as agent of LLC upon whom Dept. of State on 4/5/16. Office location: Ste. 400, Wilmington, DE 19808. Cert. Secy. of State of NY (SSNY) on 05/24/16. process against it may be served. SSNY NY County. Sec. of State designated of Form. filed with Jeffrey W. Bullock, Office location: NY County. Princ. office shall mail process to c/o Apollo Global agent of LLC upon whom process against 401 Federal St., #4, Dover, DE 19901. of LLC: 826 Broadway, 11th Fl., NY, NY Management, LLC at the princ. office it may be served and shall mail process Purpose: Any lawful activity. 10003. SSNY designated as agent of of the LLC. Delaware addr. of LLC: Cor- to: c/o Churchill Credit Holdings LLC, LLC upon whom process against it may poration Service Co., 2711 Centerville 250 Bowery, 2nd Fl., NY, NY 10012, be served. SSNY shall mail process to Rd., Ste. 400, Wilmington, DE 19808. principal business address. Purpose: all Notification of Qualification of Grossman the LLC, 826 Broadway, NY, NY 10003. Cert. of Form. filed with Secy. of State lawful purposes. Cedar Lane/36th Street, LLC. Authority Purpose: Any lawful activity. filed with Secy. of State of NY (SSNY) on of DE, John G. Townsend Bldg., 401 3/17/2016. Office location: NY County. Federal St., Ste. 4, Dover, DE 19901. LLC formed in NV on 1/9/2012. SSNY Purpose: Any lawful activity. Notice of Formation of EASTSIDE designated agent upon whom process Notice of Formation of 551 West 21st ADVANCED MEDICAL LLC Arts. of Org. may be served and shall mail copy of St Holdings, LLC. Arts. of Org. filed with filed with Secy. of State of NY (SSNY) process against LLC to: Janie Manage- Notice of formation of MED KITCHN, NY Dept. of State on 4/22/16. Office on 05/20/16. Office location: NY ment Corp., 335 Oak Avenue, River LLC. Arts of Org filed with Secy. of State of location: NY County. Sec. of State desig- County. Princ. office of LLC: 408 Jay St., Edge, NJ 07661. Principal business NY (SSNY) on 5/6/2016. Office location: nated agent of LLC upon whom process Brooklyn, NY 11201. SSNY designated address: 1655 Blue Spruce Road, Reno, NY County. SSNY designated agent upon against it may be served and shall mail as agent of LLC upon whom process NV 89511. Certificate of LLC filed with whom process may be served against process to: Duval & Stachenfeld LLP, against it may be served. SSNY shall Secy. of State of NV located at: 101 LLC to: 7014 13th Ave #202 Brooklyn, c/o Alan Cohen, 555 Madison Ave., 6th mail process to the LLC, c/o Michael North Carson Street, Suite 3, Carson NY 11228. Principal business address: Fl., NY, NY 10022, principal business Amoashiy, M.D. at the princ. office of City, NY 89701. Purpose: any lawful act. 41 W 82nd St. #1C NY, NY 10024. address. Purpose: all lawful purposes. the LLC. Purpose: Any lawful activity.

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18 | CRAIN’S NEW YORK BUSINESS | MAY 30, 2016

P017-18_CN_20160530.indd 18 5/27/2016 4:01:48 PM To place your listing, contact Joanne Barbieri • 212-210-0189

EDUCATION PROFESSIONAL SERVICES

Berkeley College United Security Services, Inc. Michael Smith was Kevin Cordero, New promoted to Presi- York Area Manager, dent. He previously United Security held the position of Services, Inc., a national security Senior Vice President, provider, opened a Finance and Chief Midtown office and Financial Officer BES hired Kevin Cordero Inc., the corporate as its New York Area Manager. office of Berkeley College. Mr. Cordero will work under the leader- Smith will and continue to be an ship of United’s SVP, Robert Tracy, instrumental leader in the concep- in conjunction with Garry tualization and implementation of McCarthy of GFM-Strategies, to initiatives aimed at making grad- offer advanced security strategies to uation an institutional priority and NY metropolitan area clients. leading students to achieve lifelong success in dynamic careers. Michael TRANSPORTATION began his presidency on June 9, 2015. He was inaugurated into office on Parsons Corporation May 13, 2016. Charles Manning, 64, joined Parsons Corporation as Senior FINANCE Vice President and Infrastructure Leader TIAA for New York and Kathie Andrade was New Jersey. Mr. promoted to CEO of Manning will focus Retail Financial Ser- on business development and representing Parsons to the region’s vices. She previously key stakeholders. Mr. Manning was held the position of previously Senior Vice President, President of Individual Design and Consulting Services, Advisory Services. North America at AECOM.

Announce new hires, promotions and board EXECUTIVE MOVES appointments to the New www.crainsnewyork.com/execmoves York business community

CRAIN’S EXECUTIVE MOVES

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MAY 30, 2016 | CRAIN’S NEW YORK BUSINESS | 19

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GOTHAM GIGS

CHANGING SCENE: Timothy McDarrah with a picture his father took of the Village’s Cafe Borgia in front of the vegan eatery that now occupies the space.

In his father’s footsteps For 50 years his father chronicled Greenwich Village for the Voice.Timothy McDarrah brings that era back to life

hen Timothy McDarrah was a child, as many of those landmarks fall to gentrification and his father would park him for the New York University’s expansion. TIMOTHY MCDARRAH evening with a silver-haired man Over burgers and beer last week at MacDougal Street’s named Andy at a downtown place Minetta Tavern, where William Burroughs used to treat AGE 54 calledW the Factory while he went out to photograph the perennially broke Ginsberg and Jack Kerouac to meals BORN Manhattan the Bohemians flocking to Greenwich Village. in the 1950s, McDarrah explained how he’s helping to RAISED Greenwich Village Tim’s father, Fred, was the photogra- preserve the history his father documented. EDUCATION Stuyvesant H.S.; B.A. pher and photo editor for the Village Tour members are handed a packet of My dad in urban affairs, SUNY Purchase; M.S. Voice for half a century, and from the “ postcards with photos of the places they in journalism, Columbia University 1950s to the ’70s, when the Village was was present visit. “Thanks to Dad’s pictures, we can PREVIOUS CAREER McDarrah the center of intellectual and artistic fer- at the show people what was there, and hopefully, was a reporter for the New York ment, the Voice was its chronicle. creation ” it resonates deeply enough with future Post’s Page Six, and for Us magazine. The shot of Bob Dylan saluting from a generations that they can enjoy what we CLOSE ENCOUNTERS Tours park bench? Fred W. McDarrah took it. A young Andy still have,” he said. sometimes run into the Village’s Warhol with oversize Brillo Pad boxes? Ditto. Allen The McDarrahs have also lent or sold Fred’s pictures current Bohemians, including Ginsberg in an Uncle Sam hat? McDarrah took that, too. to major museums, and his shots of Kerouac, feminist sculptor Jeff Koons, who McDarrah said was “very friendly,” and compos- As a kid in the ’60s, Tim met many of his dad’s Betty Friedan and artist Alice Neel hang in the National er Philip Glass, who stopped to talk subjects. “What did I know from Allen Ginsberg? He Portrait Gallery. Directors making films set in the ’60s with the group. was just a guy with a fuzzy beard smoking funny- have mined the 250,000-image archive. NO CUPCAKES “The tours aren’t smelling cigarettes.” Warhol muse Edie Sedgwick Wandering to Sheridan Square, McDarrah points to about celebrities,” said McDarrah. was a woman who helped Andy keep Tim amused. a Parks Department marker displaying a photograph “We don’t go to the Magnolia Now McDarrah, with his brother Patrick and their by his father, who died in 2007, of the bloody 1969 Bakery to buy the cupcakes from mother, Gloria, is battling to preserve some of the police raid and ensuing riots at the Stonewall Inn, a Sex and the City, and we don’t stop in front of the house that was the neighborhood’s old magic with his Save the Village turning point in the gay rights movement. “My dad exterior for Friends.”

BUCK ENNIS walking tours of key places in its social history, even was present at the creation,” he said. — PETER S. GREEN

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SNAPS

Miss America 2015 raises awareness of domestic abuse Miss America 2015 Kira Kazantsev brought personal experience to her role as the emcee for the Safe Horizon benefit on May 11. Kazantsev is a survivor of domestic violence and acts as an ambassador for the nonprofit, which provides a variety of services for those affected by crime and violence.

Amy Ziering, producer of The Hunting Ground, a documentary about sexual Mark Freedman, senior partner and managing director, Boston violence on college campuses; Kirby Consulting Group; Steven C. Parrish, founder, Steve Parrish Dick, director of The Hunting Consulting Group; Ariel Zwang, CEO, Safe Horizon; and Mark C. Ground; and Kira Kazantsev at the Smith, financial adviser and account vice president of investments, Safe Horizon benefit, which raised UBS Financial Services, at the Safe Horizon benefit at the Grand $1 million. Hyatt Hotel.

Crain Communications celebrates centennial Jets score one for the United Way

Rashad Jennings, running back for the New York Giants; Sheena Wright, president and CEO, United Way of New York City; Eric Decker, wide receiver for the New York Jets; Darryl White, chief executive officer, BMO Capital Market; and Robert Kueppers, partner, Sage Partners, at a benefit for the United Way of New York City that raised $1.8 million.

Anthony M. Carvette, president, Structure Tone; Joseph A. Cabrera, vice chairman, Eastern region, Colliers International; and Bill Flemming, president and CEO, Skanska USA Building, at the United Way of New York City fete on Crain Communications President Rance Crain (center) with Crain’s New York May 10 at the New Business Publisher Jill Kaplan and members of the Crain’s business and editorial York Hilton Midtown. staffs ringing Nasdaq’s closing bell May 12 to celebrate Crain Communications’ 100th anniversary as a family-owned, privately held business.

PATRICK MCMULLAN COMPANY, PETER SCARPACI, BUCK ENNIS SEE MORE OF THIS WEEK’S SNAPS ONLINE AT CRAINSNEWYORK.COM/SNAPS GET YOUR GALA IN SNAPS. EMAIL THERESA AGOVINO, [email protected]

MAY 30, 2016 | CRAIN’S NEW YORK BUSINESS | 21 20160530-NEWS--0022-NAT-CCI-CN_-- 5/27/2016 3:57 PM Page 1

FOR THE RECORD*

Galeria Melissa are the New York City $70s per square foot. lease for 4,100 square feet at tenant was represented by NEW IN TOWN 500 Broadway Department of Finance, 766 10th Ave. It will occu- Brooklyn Properties. The The Brazilian brand known owed $157,850.24; the New WeWork signed a 13-year py 3,100 square feet on the landlord was represented Amada for its funky, brightly col- York State Workmen’s lease for 60,000 square feet ground floor and 1,000 by CPEX. The asking rent 250 Vesey St. ored PVC footwear will Compensation Board, at 135 E. 57th St. The new square feet on the basement was $50 per square foot. James Beard Award- open a boutique shop in Bureau of Compliance, space in the Plaza district is floor of the building winner Jose Garces opened SoHo. owed $110,162; and the the office-sharing compa- between West 52nd and Shake Shack signed a 10- his first New York location, New York City Water ny’s 24th location in New West 53rd streets. The ten- year lease for 2,489 square a tapas restaurant, at Maison May Board, owed $74,148.25. York City. The tenant was ant was represented by JLL. feet in the underground Brookfield Place, in Battery 270 Vanderbilt Ave., represented by Savitt The landlord, 9300 Realty, concourse of Penn Park City. Brooklyn On Que Food Service Partners. The landlord, was represented by Winick Station. The burger joint Local restaurateur Group Charles S. Cohen, was rep- Realty Group. The asking will open in 2017, according Adore Me Catherine May opened a 870 Remsem Ave., resented in-house. The New rent was $35,000 per to a Shake Shack represen- 205 W. 39th St. second location in Clinton Brooklyn York Post reports that the month. tative who spoke with the The online-only lingerie Hill that serves soups, sal- Filed for Chapter 11 bank- asking rent was $80 per Commercial Observer. The retailer opened a showroom ads, and the French open- ruptcy on May 3. The square foot. ONE15 Marina signed a tenant was represented by in the garment district, faced sandwiches called filing cites estimated liabili- 10-year lease for 5,000 CBRE. The landlord, offering one-on-one fit- tartines. ties of $100,001 to RETAIL square feet at 360 Furman Vornado Realty Trust, was tings and stylist consulta- $500,000 and estimated Benjamin Moore Janovic St. in Brooklyn. The eatery represented in-house. The tions by appointment. Saluggi’s Pizza assets of $0 to $50,000. Paint and Decorating will occupy the space in asking rent was $500 per 399 Grand St. Center signed a 15-year Brooklyn Bridge Park. The square foot. Paloma Rocket The TriBeCa pizza shop will Osaka Den Inc. 7 Clinton St. open a second location, on 1440 Forest Ave., The self-service craft- the Lower East Side in July. Staten Island DEALS ROUNDUP brew bar opened on the Filed for Chapter 7 bank- Lower East Side. “Beer Whitman’s Burgers ruptcy on April 25. The fil- TARGET/SELLERS TRANSACTION BUYERS/INVESTORS TRANSACTION TYPE Ambassadors” are available 500 W. 30th St. ing cites estimated liabili- SIZE [IN MILLIONS] on-site for consultation, The popular East Village ties and assets of $0 to Manufactured Housing $2,040.0 Brookfield Asset SB M&A and patrons can choose to burger joint opened a third $50,000. Portfolio/NorthStar Management Inc. sample and purchase from location, on the High Line. Asset Management Group Inc. (Manhattan) 30 self-serve taps. REAL ESTATE DEALS InnVest Real Estate Investment $1,637.1 Bluesky Hotels and Resorts Inc. SB M&A SRO Gallery MERGERS & Trust/Beutel, Goodman & 1144 Dean St., Brooklyn ACQUISITIONS COMMERCIAL Company Ltd., KingSett Capital, Orange Capital (Manhattan), Husband-and-wife artists Property and casualty RBC Global Asset Management Don Doe and Cecilia AOL Inc. has purchased insurer Chubb signed an Inc., Westmont Hospitality Group Inc. Whittaker-Doe opened a Ryot Corp., a Los Angeles- eight-year lease for an extra first-floor gallery in a based virtual reality com- 45,910 square feet at 1133 Morgans Hotel Group Co./ $794.0 SBE Entertainment Group SB M&A Crown Heights townhouse pany. Ryot will provide Sixth Ave., bringing its Accommodations Acquisition Corp., Caerus Global Investors with a rotating collection of virtual reality content for total square footage in the (Manhattan), Kerrisdale Advisers work, including paintings Partner Studio, AOL’s building to 184,000. The (Manhattan), Northstar Capital Investment Corp. (Manhattan), OTK by Brooklyn-born artist branded-content division, additional space is on the Associates LLC, Pine River Capital Archie Rand. as part of the Huffington 11th and 35th floors of the Management L.P., the Yucaipa Companies Post. AOL reaches roughly 44-story building between LLC, Vector Group LTD. Sugarfish 500 million users. West 43rd and West 44th 33 E. 20th St. streets. The tenant was Kaminak Gold Corp./M&G $351.2 Goldcorp Inc. SB M&A Investment Management Known for its high quality New York-based invest- represented by JLL. The Ltd., the Electrum Group of fish, the sushi restaurant ment bank Investcorp has landlord, the Durst (Manhattan), Zebra Holdings and Investments S.à.r.l. will use the same world- sold Texas-based company Organization, was repre- wide vendors that supply CSID Corp. to credit report sented in-house. The ask- Gaiam Inc., Branded Consumer $145.7 Sequential Brands Group Inc. SB M&A its Los Angeles outpost for specialist Experian for an ing rents were $77 and $93 Product Business/Gaiam Inc. (Manhattan) its Flatiron district location, enterprise value of $360 per square foot. opening this month. million. CSID’s President Sofitel Paris Le Faubourg $136.0 Sun Hung Kai & Co. Ltd. SB M&A Joe Ross will retain his title Office Resources signed a Hotel/Mount Kellett Capital Management (Manhattan) TurnStyle at the technology security 10,178-square-foot sub- Columbus Circle, West 1501 Broadway. company, whose revenue lease at Four single-tenant industrial $112.8 Gramercy Property Trust Inc. SB M&A 57th and West 59th streets nearly doubled between The Boston-based office- properties in the Baltimore (Manhattan) This subterranean retail- 2012 and 2014. furniture company will MSA, Southern I-81 Corridor and Miami MSA and-food complex opened occupy the eighth floor, Snapchat on Eighth Avenue with 20 has acquired which is leased by advertis- Galil Medical Ltd./Investor $110.0 BTG SB M&A eateries and 17 retail stores, Bitstrips, a Toronto-based ing company Tremor Growth Capital (Manhattan), permanent and pop-up. company that makes per- Video. The tenant and the the Vertical Group, Thomas, McNerney & Partners Hours of operation are from sonalized emojis called bit- sublandlord, Tremor Video, 8 a.m. to 8 p.m. every day, mojis. A source who spoke were represented by CBRE. Aventura Corporate Center/ $105.2 Renaissance Properties Corp. SB M&A and live performances will to Fortune says the cash- The asking rent was $60 per Pacific International Equities Inc. (Manhattan) be held daily. and-stock deal is valued square foot. around $100 million. Selected deals announced for the week ended May 12 involving companies in metro New York. SB M&A: Verve Wireless signed a Strategic buyer M&A represents a minority or majority acquisition of existing shares of a company without the participation of a financial buyer. FB M&A: Financial buyer M&A represents a minority or majority COMPANY MOVES 10-year lease for 21,500 acquisition of existing shares of a company with the participation of a financial buyer. GCI: Growth capital BANKRUPTCIES square feet at 79 Fifth Ave. investment represents new money invested in a company for a minority stake. SOURCE: CAPITALIQ Fendi The mobile advertising firm 104 Greene St. Avenue C Tenants HDFC will occupy the entire The luxury Italian brand 73-75 Ave. C fourth floor of the 16-floor GET YOUR NEWS ON THE RECORD reopened in SoHo, with a Filed for Chapter 11 bank- property between East 15th *To submit company openings, moves or real estate deals, or to receive further information, robot bear that sits by the ruptcy on April 29. The and East 16th streets. The email [email protected]. store entrance. Like its filing cites estimated tenant was represented by For the Record is a weekly listing to help businesspeople in New York find opportunities, midtown east location, its liabilities and assets of Vicus Partners. The land- potential new clients and updates on customers. Bankruptcy filings from the Eastern and offerings include Fendi’s $1,000,001 to $10 million. lord, A&R Kalimian, was Southern districts of New York are listed alphabetically. Real estate listings are provided in signature leather handbags, The creditors with the represented by Lansco. The order of square footage. shoes and accessories. largest unsecured claims asking rent was in the high

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PHOTO FINISH

A different sort of sorter very weekday at 7 a.m., a huge conveyor belt rumbles to life inside Action Environmental Services’ waste transfer and sorting facility at Hunts Point in the Bronx. Workers stand Ealongside, picking out the plastic and cardboard before the remaining waste gets a high-tech treatment. When the belt reaches the Redwave sorting machine, beams of light shine through the loose trash. Optical readers measure how much light is passing through each piece—a way to determine instantly the type and color of material—and direct puffs of air to shoot the valuable white paper up to another belt for baling. White paper is the crème de la trash—commanding the best in commodities prices—but costly to sort out by hand. Action, which opened the transfer station in 2009, dedicated space there to combing paper out of the dry waste it receives from the city’s office buildings. Optical sorting technology allows Action and other companies such as Sims Municipal Recycling, which takes in the city’s residential recyclables, to keep their operating costs low while commodity prices remain in the dumps. “Paper is off 20% from last year,” said Action CEO Ron Bergamini. That is barely half of its 2011 peak. With its sorting system, Action moves 550 tons of recy- clable waste out of the Bronx every day. The facility is operating nearly at capacity. Still, said Bergamini, if volume increased, he would consider expanding. A stronger focus on recycling in offices would make that possible. The difference between paper and cardboard winding up in recycling streams or in landfills comes down to the individuals tossing it. “What we pick up from customers is the hand we’re dealt,” Bergamini said. — PETER D’AMATO PETER D’AMATO

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