REMEMBERING ED KOCH CRAIN’S® NEW YORK BUSINESS VOL. XXIX, NO. 5 WWW.CRAINSNEWYORK.COM FEBRUARY 4-10, 2013 PRICE: $3.00 newscom THE INSIDER Mayor grew into a friend of business BY ANDREW J. HAWKINS AND CHRIS BRAGG Ed Koch was not a businessman. But it could be argued that no mayor has done more for business in New York City. He inherited a city that had been saved from EYE-POPPING bankruptcy by the state but was still mired in revenue, not just debt and hemorrhaging jobs and people. carpet, makes Resorts World stand out. Mr. Koch slashed the budget and landed federal loans, eventually paying them off early. He implemented responsible budgeting prac- tices now common to the city’s fiscal manage- ment, reassuring the business community. “At the time, there was a real question about See THE INSIDER on Page 6 resorts world casino new york city world casino newresorts york Betting on tourists CITY HALL DAYS: Ms. Townsend with her boss in the 1980s Aqueduct racino to launch aggressive bid for city ALAIR TOWNSEND visitors as rivals ready plans to lure gamblers upstate You did good, The 15-month-old racino is adjacent to a But that could change soon. In the next BY LISA FICKENSCHER horse-racing track and is already popular 90 days, the company will launch a free dai- Mr. Mayor with locals.More than 10 million people vis- ly bus service from midtown Manhattan that Gov. Andrew Cuomo’s plan to attract some ited in its first full calendar year. Resorts could deliver more than a half-million visi- of the city’s 52 million tourists to economi- World generated $638 million in revenue in tors annually to the racino’s doorstep. The Ed Koch used to say that he gave the city back cally hard-hit regions by building three casi- 2012, of which $435 million went to state bright red buses, the signature color of Re- its spirit.Now,with crime low,years of balanced nos upstate is about to face stiff competition coffers—contributing more in taxes than any sorts World and symbolic of good fortune in budgets behind us, an economy bristling with well before a shovel breaks ground. other casino in the country. Chinese culture, will run every 30 minutes the energy of young tech entrepreneurs and the Resorts World Casino is on the verge of Only a fraction of the visitors, however, for 18 hours a day, making just two or three city a magnet for more than 50 million tourists launching an aggressive strategy to lure were from out of town,according to the casi- stops before heading through the Queens- annually, the dark days of the 1970s and early tourists to its Queens location at the Aque- no, which is owned by a Malaysian-based Midtown Tunnel. 1980s seem like distant memories. duct Raceway. gambling conglomerate, Genting Group. See BETTING on Page 24 New York was reviled then, held up as the poster city for profligacy and weird ways,a place many were afraid to visit or to send their chil- REPORT HEALTH CARE dren to college or to work. It was a city in steep decline, with few ready to posit that it could be The road to Obamacare begins in turned around. med school PAGE 13 THE LIST: Ed Koch had few doubts, and he put his ELECTRONIC EDITION enormous energy, intellect and force of will to Top executive recruiters PAGE 16 making it happen. He balanced the budget one NEWSPAPER See GOOD on Page 2 REMEMBERING ED KOCH You did good, FYICRAINSNEWYORK.COM Mr. Mayor Continued from Page 1 Bloomberg’s budgetary year ahead of the schedule mandated by a swan song is no gift state law basically putting the city into receivership. He made all New Yorkers feel t first glance, Mayor Michael part of his team by asking,“How’m I doin’”? Bloomberg’s $70.1 billion budget plan, He directed an ambitious plan to salvage derelict housing by turning it into affordable Aunveiled Jan. 28, seemed like a parting apartments. He sponsored incentive pro- gift to New Yorkers: no new taxes, no layoffs grams to expand business in the outer bor- and no slackening of city spending. newscom oughs. He increased the Police Department as rapidly as resources allowed. He was a Alair Townsend But a closer look at the mayor’s 12th and final budget raises some questions, if not hackles. For relentless cheerleader for the city he loved. example, he is counting on earning $600 million from the sale of yellow-taxi medallions, a sum He used to say that “public service is the noblest of professions that remains tied up in the courts.There’s also no mention of the loss of $250 million in state aid if done honestly and done well.” As a member of his team for after a breakdown in talks between the administration and the teachers’ union over a new more than seven years, I know how much he meant it. He hired me as budget director in 1981 as the result of a search he asked teacher-evaluation plan. And then there’s the closing of 20 firehouses and the slashing of 1,800 three business leaders to undertake.He didn’t know me,and nev- teaching positions through attrition. er asked about my political affiliation. In the past, the mayor’s harsher budget prescriptions were buffered via negotiations with the After three and a half years as his budget director, he asked City Council. Some of that is likely this year as well. me to be his deputy mayor for finance and economic develop- ment. On what I remember as my first day on the new job, he In retrospect, budget wonks give Mr. Bloomberg high marks for his fiscal stewardship. But they took me with him to the opening of a vertical mall at Herald also note dark days ahead for his successor, citing, among other things, unresolved contracts with Square. On one of the top floors there was a carousel that mall big public-employee unions. “The next mayor is going to have some very, very serious problems— officials asked him to ride—all alone,while cameras flashed.He Carol Kellermann did it gamely.In the car later,he instructed me:“See,Alair,child- very,” Citizens Budget Commission President told The New York Times. like but not childish.” It was yet another in a series of lessons Mr. Bloomberg’s response to reporters when asked if he feels he has left the city on sound from the master. fiscal footing? “I think so.” —andrew j. hawkins As a professional, what meant the most to me and, I believe, others who worked for him was the fact that he gave us respon- sibility and authority.He thanked us both privately and publicly, TIME CLOCKS STAFFERS. In its biggest ruptcy in the coming months. Any feeling that our success enhanced rather than diminished his round of layoffs since 2008,Time Inc. partnership would need state aid, ac- HOORAY! stature. After all, he had selected us. cut 500 jobs—6% of its total. It’s déjà cording to Brookdale’s CEO. Mean- PATH TRAIN In meetings deliberating tough issues,he sought all our views. vu for the publisher of Time and Sports while, his counterpart at Maimonides service More than once I offered an opposing view to the emerging con- Illustrated, which under former CEO told Crain’s that the hospital does not between sensus but was never ridiculed for it. Whatever the decision, I Ann Moore slashed thousands in the plan to use its assets to stabilize Brook- Hoboken and JEFFERIES’ $45M MAN. the World could sleep untroubled, knowing I had called it as I had seen it first decade of the new millennium. dale. … He’s Trade Center and done my job. The layoffs had been expected ever done it again. For the second time in resumed Jan. I saw firsthand his political courage and learned from it. Ed since CEO Laura Lang brought in three years, Jefferies Group Inc. CEO 30 for the first time since Koch was the right leader for the challenges the city faced, and consultants Bain & Co. for a top-to- Richard Handler ranks as Wall Superstorm we see his legacy all around us today. bottom review of the company. … Street’s best-paid leader. His $45.2 Sandy hit. Columnist Alair Townsend, a former publisher of Crain’s New York 9/11 FUND CHECKS IN. Payments million compensation package is Business, was a budget director and deputy mayor under Ed Koch. ranging from $10,000 to $1.5 million more than twice the $21 million raked will be sent to 15 emergency respon- in by Goldman Sachs’ Lloyd Blank- OY VEY! LISTEN to a discussion at CrainsNewYork.com/podcasts ders who worked at Ground Zero. fein and four times the $11.5 million 30 Rock is The payments will be the first to flow JPMorgan Chase paid Jamie Dimon, gone. The from a $2.8 billion after a tussle with the filmed-in-NY THIS WEEK IN CRAIN’S fund set up by Con- so-called London comedy aired ‘We can’t TWO MORE its series finale gress to compensate Whale.… on Jan. 31. first responders who afford to be FOR MAYOR. Billion- THE INSIDER -----------------------------------------------1 developed health aire John Catsima- ALAIR TOWNSEND------------------------------1 problems after work- timid’ tidis and NYC Public ing at Ground Zero —City Housing Authority Advocate Bill de Bla- IN THE BOROUGHS-------------------------- 3 after the 9/11 terrorist Chairman John Rhea, on sio tossed their hats that would grant the state power to de- ambitious new plans to IN THE MARKETS----------------------------------4 attacks.To date, how- into the mayoral ring velop such a plan,which the city needs ever, the two-year-old eliminate a backlog of last week.