20101025-A--0001-NAT-CCI-CN_-- 10/22/2010 7:33 PM Page 1 INSIDE CRAIN’S TOP STORIES ENDORSES FOR Department stores GOVERNOR, hope makeovers U.S.ORS SENATORST will attract sales ® Page 10 PAGE 2 VOL. XXVI, NO. 43 WWW.CRAINSNEWYORK.COM OCTOBER 25-31, 2010 PRICE: $3.00 Goldman’s MASTECTOMIES mortgage Craft no more? bets bite Colicchio expands beyond his brand back hard PAGE 3 CHECK OUT Aqueduct fiasco Purchase of servicer tramples Dems one of several missteps THE INSIDER, PAGE 8 OF THE now haunting firm Workplace politics: clamping down on BY AARON ELSTEIN election arguments in late 2007, as the nation’s subprime SMALL BUSINESS, PAGE 14 crisis began evolving into something HOSPITAL much worse, Goldman Sachs saw an opportunity to make money. For $428 million, it snapped up Litton Loan Servicing,one of the largest companies handling monthly mortgage payments Latest from plastic from consumers with poor credit his- tories—and foreclosing on them if necessary. surgeons: in-office Today,Litton is probably one acqui- sition that Goldman wishes it hadn’t cancer operations made. “It was a fur-lined trap,” says San- ford C. Bernstein & Co. analyst Brad BY GALE SCOTT Hintz.“It looked comfortable going in, See GOLDMAN on Page 28 anastacia, a pop star with a global follow- BUSINESS LIVES MORE Bank of New York also mired in ing, visited Manhattan plastic surgeon An- mortgage mess. In the Markets Page 4 GOTHAM GIGS drew Kornstein seven years ago for a breast reduction. In preparing for the cosmetic pro- P. 29 Cap’n Crunch Time cedure, she learned from a preoperative ● ANNE FISHER on mammogram that she had cancer.To accom- how to win the name modate the singer’s desire for privacy, Dr. P .. 29 State GOP game Kornstein, director of the Museum Mile ● MOVERS & SHAKERS Surgical Center on Fifth Avenue, persuaded Saks.com’s personal a highly regarded surgeon at New York-Pres- misses shopper P .. 30 Detail from artist Vicki Behm’s byterian Hospital/Weill Cornell to perform a ● GAEL GREENE digs in at A Breast Cancer lumpectomy at the plastic surgery center. the party Bill’s Bar & Burger P. 31 Notebook. Anastacia has since gone public with her cancer. She probably does not know that hav- ing the operation done in an office rather than Election looking like INDEX a hospital was something new, Dr. Kornstein says. “She’s just happy I saved her life.” a lost opportunity NEW YORK, NEW YORK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _6 With little fanfare and no advertising, some OPINION for NY Republicans _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _11 plastic surgery offices in New York City have NEIGHBORHOOD JOURNAL _ _ _ _ _ _ _ _ _ _ _ _ _13 added a new specialty: breast cancer surgeries. CLASSIFIEDS BY ERIK ENGQUIST _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _24 These include mastectomies and lumpec- FOR THE RECORD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _26 tomies, followed immediately by reconstruc- republican candidates are poised to HOT JOBS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _29 tion, all without the overnight stay that is the sweep Democrats out of state and feder- EXECUTIVE MOVES _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _29 See OFFICE MASTECTOMIES on Page 23 al offices across America—except in RÉSUMÉ REVIEW _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _30 New York,where they trail in the polls in THE WEEK AHEAD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _31 every statewide race and are not favored to win any of the 26 House of Represen- tatives seats held by Democrats. More than a week before voters cast ballots, Republicans are already REAL ESTATE Six forgotten lamenting the election as a lost oppor- streets become hot retail strips P. 16 tunity.“There are few places around the country where Republicans are not tak- ing advantage of this marvelous Re- LIST Top construction firms P. 21 publican year,” says Gerry O’Brien, a NEWSPAPER See NY’S GOP on Page 28 20101025-A--0002,0003-NAT-CCI-CN_-- 10/22/2010 7:52 PM Page 1 partment stores, opting for places that IN BRIEF cater to their particular need or style pref- Department stores erence. THE CITY’S CULTURAL CAPITAL BUDGET FOR “Gen Y shoppers are starting to make THE NEXT FOUR YEARS WILL BE $750 MILLION, bigger purchases for homes and to dress lit- with the money going to 320 projects at 190 tle kids, but the department stores have organizations, Culture Commissioner Kate try on new looks never been relevant in their lifetimes,” Ms. Levin told a Municipal Art Society conference Tackett says. Friday.That’s down about 7% from the previous Department store sales fell a record four-year cultural capital budget of $803 11% last year,to $67.1 billion,according to million, which listed 170 projects at fewer Falling sales fuel expensive makeovers Kantar. And the Columbus, Ohio, firm organizations. predicts that the category, which accounts everything from cocktail dresses to appli- for 1.9% of non-auto retail sales in the VORNADO REALTY TRUST BOUGHT THE RETAIL BY ADRIANNE PASQUARELLI ances until the 1990s,when specialty stores U.S., versus 5% in 1994, will continue los- SPACE IN THE LUCIDA CONDOMINIUM FROM like Banana Republic and mass marketers ing market share. developer Gary Barnett for about $165 million, department stores often sell makeovers like Target muscled them aside. Younger Desperate to reverse that decline,stores according to sources.The 150,000-square-foot to their customers, but the retailers are the consumers have consistently shunned de- are updating their decades-old New York purchase includes stores on East 86th Street ones getting face-lifts stores into state-of- leased to Barnes & Noble, Sephora and H&M. these days. the-art facilities. The deal also includes 24 rental units in the 20- Challenged by plung- Lord & Taylor has story building built in 2008. ing sales and reluctant spent between $20 consumers, major New million and $25 mil- BERLIN & DENMAR, A MEAT AND CHEESE York stores such as Lord lion on its redesign, SUPPLIER AT THE HUNTS POINT COOPERATIVE & Taylor, Bloomingdale’s according to sources. Market in the Bronx, filed for Chapter 11 and Saks Fifth Avenue A full-scale renova- bankruptcy protection, citing “multiple have spent millions to RUNWAY READY: Lord & tion of Macy’s,which independent events” that made it impossible for modernize and fine-tune. Taylor officially unveils its is reportedly in the the 30-year firm to pay its bills. According to The changes, just in time new look on Oct. 26. works, could carry a the filing, those events include employee for the holiday season, tab in the hundreds embezzlement and the $1.1 million buyout of range from floor and de- of millions. two former shareholders who then formed partment spruce-ups to Experts say retail- competing companies. Norman Milekowski, complete building over- ers must do some- B&D’s vice president, says he is confident the hauls. The moves illus- thing, but they ques- supplier will “pull through.” trate the category’s fight tion the cost. “You’ve to remain current in a re- got to be careful tail landscape dominated about looking like a BY THE NUMBERS by specialty, big-box and dirty, old, empty discount stores. restaurant, but you Weekly shift of the city’s economy Many of the improve- have to be able to af- ments aren’t just structur- ford these very ex- HAUNTED HOUSING The national foreclosure al. Several establishments pensive efforts,” says crisis just gets messier by the day. And that threatens homeowners, lenders and the are also pumping up the Mark Cohen, mar- economy alike. Only the lawyers win. appeal factor by incorpo- keting professor at rating more fast-fashion Columbia University 13% $335.8M 0.7% elements into their mer- Graduate School of chandise mix. Big Apple Business. PROPORTION VENTURE funding RISE in of adults who for metro area passenger flagships are retailers’ Lord & Taylor is watch TV only firms in 3Q, up revenue at NY golden eggs, with the hosting a party Oct.