GOTHAM GIGS Christian Gibbs is a musician who’ll CRAIN’S® move you P. 7 NEW YORK BUSINESS VOL. XXIX, NO. 22 WWW.CRAINSNEWYORK.COM JUNE 3-9, 2013 PRICE: $3.00 The Cats conundrum Candidate Catsimatidis credits luck, instinct for his success, but buck ennis his deals had dark sides, too Grand BY CHRIS BRAGG Central’s AND AARON ELSTEIN In 1986, the small northwestern owner Pennsylvania town of Warren faced economic ruin: A major employer, United Refining, an 84-year-old lawyers up oil company on the edge of the Al- legheny River, was mired in bank- ruptcy. In swooped an unknown Manhattan grocery mogul, John Reclusive investor Catsimatidis. “I recognized the value,” Mr. to fight City Hall Catsimatidis recalled, from his Red Apple Group’s cluttered, over who gets unpretentious office on air-rights windfall 11th Avenue. “I shook it away from ‘Larry the Liquidator,’ as they say, BY DANIEL GEIGER and I saved 5,000 jobs. The people there still Seven years ago, Andrew Penson, head say,‘Thank you.’ ” of an obscure investment firm called But the town Argent Ventures, quietly snapped up would soon get ownership of one of the most famous to know an- train stations in the world,Grand Cen- other side of tral Terminal, with dreams of minting its economic hundreds of millions of dollars by sell- savior. For ing off the landmark’s more than 1 mil- more than a year lion square feet of unused development after Mr. Catsimatidis’ rights. takeover, plant security Now—almost a year after his plan wiretapped and recorded was broadsided by Mayor Michael conversations of 100 people Bloomberg’s proposal to create out of inside and outside the com- whole cloth millions of square feet of pany, its attorneys admit in development rights in midtown east court records.The security and sell them off to jump-start a new firm pleaded no contest to generation of bigger, smarter office 100 misdemeanors, and towers—Mr. Penson is fighting back. Mr. Catsimatidis agreed to He’s accusing the city of violating pay a $1 million fine. He de- his constitutional property rights and nied any involvement, an account has hired one of the nation’s foremost contradicted by the security official who constitutional lawyers, David Boies of carried out the crime,asserting that Mr. Bush v. Gore fame, to press his case in See CATS on Page 24 court if need be. darren thompson darren Mr. Penson claims the mayor’s air- rights proposal leaves him no choice. The city aims to charge $250 per square 15 foot for development rights that would allow property owners to build larger towers than current zoning allows. In ELECTRONIC EDITION return, the city hopes to use the pro- ceeds from the sales to fund hundreds NEWSPAPER 2013 See GRAND CENTRAL on Page 8 ENTREPRENEURSTOP PAGE EDITOR’S NOTE The flight stuff FYICRAINSNEWYORK.COM Before last week, I wouldn’t have expected to see Kathryn Wylde Mayoral candidates share and Stuart Appelbaum sharing the same sentence, much less the same the labor endorsements opinion. But there they are on Page he dream of a labor movement unified 11, together at last: The president behind one Democratic mayoral and CEO of the business-backed candidate is dead. In fact, nearly the Partnership for New York City Glenn Coleman T opposite has been achieved in recent weeks: and the president of the Retail, Unions have spread their political backing istockphoto Wholesale and Department Store among the four leading contenders not named Anthony Weiner. Union, jointly arguing for a “full and sustained Last week, the city’s largest municipal union, District Council 37, endorsed city Comptroller commitment from all stakeholders” to drag New John Liu. Earlier last month, the politically potent health care workers’ union 1199 SEIU and the York’s three wheezing airports into something even Communications Workers of America threw their weight behind Public Advocate Bill de Blasio. remotely resembling the 21st century.“Our region’s Former Comptroller Bill Thompson picked up key support from a coalition of 20 uniformed law- airports have gone from first to worst,” they note. enforcement unions. And Council Speaker Christine Quinn won the nod of the United Auto Ten of 14 terminals at JFK, LaGuardia and Newark Workers, which also represents employees in health care, gambling and other industries. airports need redevelopment. A half-century-old Still, endorsements are pending from three major unions: the United Teachers Federation, 32BJ air-traffic-control infrastructure can delay thousands SEIU and the Hotel Trades Council.They have some of the city’s most active operations. of flights across the country on the sunniest of days, The fact that union support has splintered among several Democratic candidates is costing travelers and their employers billions of unsurprising, given that none appears an inevitable winner.The latest Marist poll found Ms. dollars.Then there’s the typical tourist’s trail of tears Quinn clinging to a lead with 24%, while Mr. Weiner was close behind at 19%. Some 23% of from customs to baggage claim to cab line or voters were undecided. —andrew j. hawkins AirTrain. But first things first: Deploying a GPS- style air-traffic technology known as NextGen at SAC CASH-OUT. Investors have until sioner Raymond Kelly and Sen. New York-area airports would basically bring June 3 to decide whether to yank their Charles Schumer disapproved of the HOORAY! America’s epicenter of travel misery up to airspeed, cash from SAC Capital Advisors, the National Park Service’s decision to KATZ’S DELICATESSEN, known for its hedge-fund firm at the center of an move security screening to Ellis Island towering pastrami sandwiches, yet the Federal Aviation Administration has yet to celebrated 125 years in business. insider-trading investigation. Iron- from Battery Park. Mr. Schumer said make New York the first priority in its rollout. “We wood Capital Management didn’t the procedure is “putting millions of all must speak up—loudly—and get the agency to do wait to pull its entire $100 million in- Americans at greater risk.”Both called the smart thing before it makes a bad decision that vestment. Meanwhile, SAC’s largest for the Park Service to screen visitors outside investor, Blackstone Group, is at Battery Park and New Jersey before has consequences for decades,” Ms. Wylde and Mr. said to be considering withdrawing boarding ferries,which was the proce- Appelbaum write. If you agree with these two close to $400 million,twice as much as dure before Liberty Island closed for unlikely co-pilots that it’s time to reverse course at previously expected. … NASDAQ’S Sandy repairs. … IAC UNLOADING New York’s airports, a good first stop would be the FACEBOOK FINE. Nasdaq OMX NEWSWEEK. Weeks after IAC/Inter- OY VEY! Group will pay $10 million to settle ActiveCorp. Chairman Barry Diller THE CITY’S NEW website of a new advocacy group called the Global charges that it violated numerous rules publicly declared that he wished he’d 911 system briefly failed Gateway Alliance at globalgatewayalliance.org. concerning Facebook’s initial public never bought Newsweek, his compa- three times offering last year. It’s the largest fine ny officially started exploring a sale of after its May the Securities and Exchange Com- the online-only publication. The 29 launch. mission has levied move comes six THIS WEEK IN CRAIN’S against an exchange ‘You build part months after the 80- for “poor systems and year-old magazine … KERIK LEAVES PRISON. Former IN THE BOROUGHS-------------------------- 3 decision making.” … of it, you get went all-digital. IAC, NYPD Commissioner Bernard Kerik GET YER EMPIRE STATE which recently re- was released from prison to finish his IN THE MARKETS----------------------------------4 the money, BUILDING HERE. In- designed Newsweek four-year sentence in his New Jersey THE INSIDER -----------------------------------------------6 vestors approved a then you build .com, said the sale home. He pleaded guilty to tax fraud plan to fold the famed would allow it to fo- and lying to federal officials while be- BUSINESS PEOPLE ---------------------------7 the next part ...’ Empire State Build- cus on its Daily Beast ing considered for a cabinet position U.S. Transportation REAL ESTATE DEALS -----------------------9 DEADLY ing into a real estate Secretary Ray LaHood, on brand. … under President George W.Bush.Mr. LETTERS TARGET OPINION --------------------------------------------------------10 investment trust with how Congress will pay for Kerik is best known for leading the 18 other properties the new rail tunnel under POLS. Letters laced NYPD after the attacks of Sept.11.… GREG DAVID--------------------------------------------11 and take it public for the Hudson River, which with poisonous ricin LEAVE YOUR BIKE LOCK AT HOME. As FOR THE RECORD---------------------------12 about $1 billion. The got $185 million in federal were sent to Mayor the city’s bike-share program gets un- green light is a major aid to begin construction Michael Bloomberg derway, a bicycle enthusiast group is TOP ENTREPRENEURS-------------15 victory for the Malkin and a Washington of- testing a bike valet concept. Trans- CLASSIFIEDS -----------------------------------------20 family, which controls the tower. An- fice housing his gun-control nonprof- portation Alternatives will offer free thony Malkin, president of the family it. The letters, postmarked in Shreve- storage of bikes and helmets at a June NEW YORK, NEW YORK SOURCE COFFEE------------------------------ 26 firm, will become the REIT’s CEO. port, La., contained anti-gun-control 5 concert held at Barclays Center. Brooke Stone heads a firm OUT AND ABOUT ------------------------------ However, a legal challenge may yet rants. A similar letter was mailed to Concertgoers will get the bikes ped- that brings personal 27 hold up the offering. … LIBERTY President Barack Obama,and the FBI aled back to them after the show.