20151214-NEWS--0001-NAT-CCI-CN_-- 12/11/2015 6:08 PM Page 1 Bankrupt juicer is back P. 7 | Nonprofit contractors want $15 an hour P. 9 | PLUS: Cracking down on cooked books P. 11 CRAINS ® DECEMBER 14-20, 2015 | PRICE $3.00 BUSINESS

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DECEMBERCRAINS 14-20, 2015

FROM THE NEWSROOM | JEREMY SMERD Pawns of the administration IN THIS ISSUE 4 AGENDA

AMID GROWING FEARS of terrorism and public pressure to 5 IN CASE YOU MISSED IT As the state and city crack down keep crime low, financial institutions in New York are 6 WHO OWNS THE BLOCK on labor-law violations, once again under scrutiny to share information about 7 REAL ESTATE businesses are fighting back. their customers with law enforcement. Striking the right 8 INSTANT EXPERT balance between security and privacy is a challenge, 9 NONPROFITS particularly for the 430 or so licensed pawnshops in 10 the city. SMALL BUSINESS SPOTLIGHT Their industry has been fighting a two-year battle with 11 FINANCE the city over attempts by the 12 VIEWPOINTS police to gain blanket access to the personal data of The fact that people FEATURES pawnshop customers. The latest skirmish came last week, when dozens of pawnbrokers were supposed to “use pawnshops 14 ECONOMIC OUTLOOK 2016 respond to a subpoena by the Department of Consumer does not 24 GOTHAM GIGS Affairs demanding pretty much every business record they make them 25 SNAPS have generated since the beginning of the year, including 26 FOR THE RECORD the name, age, address and physical description of every criminals. 27 PHOTO FINISH customer. A DCA spokeswoman said the agency issued the subpoena “to review compliance with our laws and rules.” Patrick Kerr Complying would mean submitting hundreds of thousands of documents to an agency that only has authority to inspect pawnbrokers’ books in a limited fashion, not to collect business data, according to Eric Modell, president of pawnshop chain Modell Financial and the head of the Collateral Loanbrokers Association of New York. He said his company and others refused to divulge their customers’ information and will look to quash the subpoena in court, perhaps this week. “The pawn industry will continue to fight to protect our customers who use P. 24 pawnshops in the ordinary course of their lives,” he said. “The fact that people use pawnshops does not make them criminals.” CORRECTIONS In the Dec. 7 Best Places to Work in , TOMMY For pawnbrokers, the subpoena was particularly galling because it came after a JOHN (No. 53) was founded in 2008, not 2010. Also, state judge in July ruled that a city law signed by Mayor on his WISDOMTREE (No. 6) offers 23 days off annually, not 43. penultimate day in office violated the state constitution. That law, like the MARC HURLBERT’S mother passed away when he was 4 weeks old. This information was misstated in the Nov. 30 Consumer Affairs subpoena, asked for details on customers, which is why “A man on a mission to save lives.” pawnbrokers saw the subpoena as an end run around the court ruling (which the city may yet appeal). The judge in the case had said the law amounted to warrantless searches of innocent New Yorkers. The threat to Modell’s business is obvious: Customers are more likely to sell or pawn their goods on the black market if doing so legally means handing over personal information to law enforcement. To the rest of us, it is a reminder of how ON THE COVER the struggle between privacy and security in the age of terror is quietly playing out ILLUSTRATION: ELLEN WEINSTEIN in businesses across the city.

DIGITAL DISPATCHES NEXT WEEK’S ISSUE Go to CrainsNewYork.com READ Related Cos. and WHAT TO EXPECT Oxford Properties Group 2016 BOOK OF LISTS secured $5 billion in financ- ing for 30 Hudson Yards— K OF Our annual compilation the tallest office tower at includes the most impor- the far West Side develop- tant details about the ment. It abuts a 1 million- O square-foot mall. industries, companies > ■ LISTS and leaders shaping New A judge sided with state Attorney General Eric York’s economy. Get it O Schneiderman and barred next week; keep it all the nation’s largest daily year long. fantasy sports sites from operating in New York. The B 2016 firms will appeal. Vol. XXXI, No. 50, December 14, 2015—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double LISTEN issues the weeks of June 29, July 13, July 27, Aug. 10, Aug. 24 and Dec. 21, by Crain Communications Inc., 685 Third Ave., New Download a discussion of the York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send address changes to: hottest stories of the week, with music by Crain’s New York Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. the Hungry March Band. For subscriber service: Call (877) 824-9379. Fax (313) 446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. CrainsNewYork.com/podcast (GST No. 13676-0444-RT)

BUCK ENNIS ©Entire contents copyright 2015 by Crain Communications Inc. All rights reserved.

DECEMBER 14, 2015 | CRAIN’S NEW YORK BUSINESS | 3 20151214-NEWS--0004-NAT-CCI-CN_-- 12/11/2015 7:21 PM Page 1

AGENDAWHAT’S NEW DECEMBER 14, 2015 For de Blasio and Cuomo, a time to take stock—and shift gears

new year is a chance for a new beginning, and New York’s top two elected officials sure could use one in 2016. Mayor has become steadily less popular, despite his seemingly populist message. And if New Yorkers were Aasked what Gov. Andrew Cuomo has been up to lately, more would say “attacking Mayor de Blasio” than anything else. It’s time for both men to reboot. De Blasio spent much of his first two years in office hammering home CUOMO AND a message that most New York City residents have been getting the DE BLASIO should heal short end of the stick for ages. He implicitly and often explicitly blamed their rift so the his predecessor, Michael Bloomberg, earning himself dislike among two can govern Bloomberg’s fans. And he dwelled almost exclusively on a few issues, rather than gripe. such as subsidized housing, minimum wage and stop-and-frisk. When his approval rating kept falling, he blamed himself for failing Disagreements between governors and mayors are inevitable, but to communicate. Actually, New Yorkers have heard him loud and clear. Cuomo’s gratuitous criticism is a distraction that hurts the city and The 30-something percent who dream of winning a housing lottery, state. The governor should use his great political acumen to solve the crave a $15-an-hour job or dwell on state’s problems, as he did in his first criminal-justice reform approve of The mayor attributes his problems to term. The mayor, for his part, must learn how de Blasio is doing. The rest poor communication of his message. how to stand up for the city without wonder why the mayor doesn’t speak Actually, New Yorkers have heard him provoking Albany’s ire. Engage to their issues, such as running a small legislators and the governor in business without the government loud and clear. conversation, not ideological warfare. making it harder. Ethics reform should top the The mayor says he’s been focused on accomplishing his agenda, not governor’s agenda next year, but we’d also like him to focus on on his poll numbers. But it’s hard to accomplish your agenda with poor infrastructure rather than piecemeal economic-development grants. poll numbers. The mayor must broaden his appeal. He could start by We don’t know what the businesses of the future will be, but we know promising no new business mandates in the remainder of his term, people, information and electricity will need to move more efficiently. having already required sick pay, transit benefits, wage bonds and New subway signals, road pricing, better broadband and Cuomo’s changes to job applications and help-wanted ads. power-grid upgrade must be priorities. These are not glamorous, but Cuomo ought to drop his childish belittling of de Blasio. they are the foundation of a strong economy. – THE EDITORS

FINE PRINT When the price of crude oil fell below $36 a barrel last week, it marked its lowest level in nominal terms since 2009. But adjusted for inflation, crude is at its cheapest since 2002, according to Macrotrends.net, an economic-research site.

BY GERALD SCHIFMAN STATS 25 WORDS OR LESS COST CRUNCH EMPLOYER EXPENSES inin thethe citycity havehave How many prosecu- been rising and are expected to CITY AND THE “tions will it take be- increaseincrease againagain inin 2016.2016. fore Albany gives the people of New York the honest govern- Projected 2016 increase ment they deserve? % in base salary at NYC-headquartered % Uptick in total compensation costs for 2.5 companies, a 2.2% gain in real wages NYC area workers from September — U.S. Attorney Preet Bharara’s tweet, 1.6 2014 through September 2015 his second ever, after winning the conviction of former state Senate % Hike in NYC midtown Majority leader Dean Skelos and his office rents from Projected 2016 per-employee health 3.1 2013 to 2014 son Adam on eight counts of bribery $ benefit cost for NYC area employers, and corruption 14,276 up 5.2% from 2015

ADDICTED TO NUMBERS? GET A DAILY DOSE AT @STATSANDTHECITY SOURCES U.S. Bureau of Labor BUCK ENNIS, AP IMAGES Statistics, Korn Ferry, Mercer, Cushman & Wakefield

4 | CRAIN’S NEW YORK BUSINESS | DECEMBER 14, 2015 20151214-NEWS--0005-NAT-CCI-CN_-- 12/11/2015 7:22 PM Page 1

AGENDA ICYMI CRAINS EDITOR IN CHIEF Rance Crain publisher, vp Jill R. Kaplan assistant to the publisher Alexis Sinclair, 212.210.0701 EDITORIAL Trump’s biz is as impervious editor Jeremy Smerd assistant managing editors Barbara Benson, Erik Engquist, Peter S. Green to critics as his campaign web editor Amanda Fung copy desk chief Steve Noveck ew Yorkers have condemned for propos- art director Carolyn McClain ing to bar Muslims from the U.S., making anti-Semitic photographer Buck Ennis senior reporters Joe Anuta, Aaron Elstein, jokes, and calling Mexicans rapists and murderers. But Matthew Flamm, Daniel Geiger N reporters Rosa Goldensohn, that doesn’t mean his incendiary campaign for the presidency Jonathan LaMantia, Caroline Lewis has hurt his business here, where the Trump name is on apart- data reporter Gerald Schifman web producer Peter D’Amato ment towers, golf courses and even public skating rinks. columnist Greg David contributing editors Tom Acitelli, Although the terms of Trump’s agreements are mostly Theresa Agovino, Paul Bennett, secret, it’s likely that only a felony conviction would allow a Erik Ipsen, Judith Messina, Cara S. Trager ADVERTISING condo association or licensee to take his name off a building. www.crainsnewyork.com/advertise advertising director Irene Bar-Am “First of all, you need to have a majority of condo owners [email protected] or in a building say, ‘I want to try to break the branding con- 212.210.0133 senior account managers tract,’ ” said Robert Ivanhoe, an attorney with Greenberg Traurig. Zita Doktor, Jill Bottomley Kunkes, Rob Pierce account managers Jake Musiker, “If Trump has 30 years on his contract, you’d have to pay Stuart Smilowitz marketing coordinator LeAnn Richardson him what he would earn in 30 years.” sales/events coordinator Ashlee Schuppius Though Mayor Bill de Blasio last week called Trump “dan- 212.210.0282 [email protected] gerous” and a “demagogue,” he is powerless to take ONLINE general manager Rosemary Maggiore Trump’s name off the two skating rinks, the and golf course that he 212.210.0237 [email protected] manages for the city. “In August, we reviewed the city’s existing contracts with Donald Trump and CUSTOM CONTENT found no legal way to cancel these contracts,” said a de Blasio spokeswoman. director of custom content Patty Oppenheimer 212.210.0711 While condo boards have the ability to hire and fire management companies, it is telling that the [email protected] Trump Organization has stayed on at many of the buildings it has constructed, including Trump World Tower at EVENTS www.crainsnewyork.com/events U.N. Plaza. “Trump buildings are extremely well managed,” said Leonard Steinberg, president at residen- director of conferences & events Courtney Williams, 212.210.0257 tial brokerage Compass. “Like it or not, he does a good job.” [email protected] manager of conferences & events Because of that following, Steinberg and others believe Trump’s antics on the political stage will Adrienne Yee have little impact on the value of his properties in New York City. AUDIENCE DEVELOPMENT director of audience & content “These buildings that bear his name will continue to be valued based on the state of the market—not partnership development his personality,” said Louise Phillips Forbes, a residential broker at Halstead Property Management. Michael O’Connor, 212.210.0738 [email protected] – PETER GREEN CRAIN’S 5BOROS www.5boros.com Irene Bar-Am, 212.210.0133 [email protected] DATA POINT SPECIAL PROJECTS Jump-starting 2 WTC NEW YORK CITY FINISHED NINTH Cash flush manager Alexis Sinclair 212.210.0701 [email protected] Rupert Murdoch’s 21st Century Fox Two NYPD officers from Flushing’s OUT OF 10 STATE REGIONS IN REPRINTS and News Corp. will get a rent break 109th Precinct were arrested on reprint account executive Krista Bora at Larry Silverstein’s 2 World Trade GOV. ANDREW CUOMO’S ANNUAL bribery charges for allegedly taking 212.210.0750 PRODUCTION Center, thanks to $9 million in sub- ECONOMIC-DEVELOPMENT GRANT payoffs from local karaoke bar own- production and pre-press director sidies from the Port Authority of ers to ignore drug use and other Simone Pryce New York and New Jersey. The pub- CONTEST, WITH $84.1 MILLION violations at the venues. media services manager Nicole Spell – AMANDA FUNG SUBSCRIPTION CUSTOMER SERVICE lic funds are supposed to speed AWARDED TO 92 PROJECTS. www.crainsnewyork.com/subscribe construction of the tower, ensuring [email protected] Murdoch’s media empire makes the 877-824-9379 (in the U.S. and Canada). $3.00 a copy for the print edition; or $99.95 move and unlocking $600 million one year, $179.95 two years, for print for transportation spending, the , as food-delivery wars subscriptions with digital access. Port Authority said. heat up during the holiday season. to contact the newsroom: www.crainsnewyork.com/staff Amazon also promises 60-minute 685 Third Ave., New York, NY 10017-4024 Protecting wages delivery from Mario Batali’s Italian- phone: 212-210-0100 fax: 212-210-0799 A judge upheld a state rule requiring food emporium, Eataly. Entire contents ©copyright 2015 Crain Communications Inc. All rights nail salons to buy bonds to ensure reserved. ®CityBusiness is a registered workers get paid any back wages due. Obamacare push trademark of MCP Inc., used under license The White House has tasked New agreement. A Fifth Season CRAIN COMMUNICATIONS INC. York-based health care startups BOARD OF DIRECTORS owner Aby Rosen ZocDoc and Oscar with coaxing the chairman Keith E. Crain Pepsi challenged? hopes to raise $30 million for an nation’s uninsured to get coverage president Rance Crain The Mets made it to the World treasurer Mary Kay Crain, Cindi Crain eatery to replace the fabled Philip for 2016. Oscar created a two- executive vp, operations William Morrow Johnson-designed Four Seasons minute video starring its ubiquitous Series this past season, but that executive vp, director of strategic restaurant in the iconic Park cartoon characters explaining wasn’t enough for Pepsi—Citi operations Chris Crain executive vp, director of corporate Avenue office tower. Rosen says insurance concepts. Field’s marquee sponsor since the operations K.C. Crain he’s looking for as many as 100 stadium opened in 2009. The soda senior vp, group publisher David Klein Mickey invests in Vice vp/production, manufacturing David Kamis investors, pledging a 120% return company didn’t renew its deal with chief financial officer Thomas Stevens before partners take any proceeds Disney invested an additional $200 the team, and the red Pepsi sign chief information officer Anthony DiPonio and a 40% cut of future profits. million in ’s Vice Media to towering over the second deck in founder G.D. Crain Jr. [1885-1973] help finance original programming right field will be removed. Rival chairman Mrs. G.D. Crain Jr. [1911-1996] secretary Merrilee Crain [1942-2012] Vino in one hour for Vice’s new cable channel, set to Coca-Cola has been in discussions Amazon has added booze to its launch in February. Disney now to join the Mets roster.

BUCK ENNIS $7.99 one-hour delivery service in owns a 10% stake.

DECEMBER 14, 2015 | CRAIN’S NEW YORK BUSINESS | 5 20151214-NEWS--0006-NAT-CCI-CN_-- 12/11/2015 5:39 PM Page 1

AGENDA WHO OWNS THE BLOCK REAL ESTATE

35TH STREET AND SIXTH AVENUE

Shopping in Macy’s midtown shadow

Remnants of Seventh Avenue’s garment district in the West 30s ‘ BY TOM ACITELLI

is the busiest shopping season of the year in New York City, and much of that is on INVESTMENT POTENTIAL 142 W. 36TH ST. shopping streets around This 17-story building sold in the Tthe midtown south area dominated by spring of 2015 as part of a $118 Macy’s block-long flagship. million deal that also included near- The blocks around that retail mecca by 234 W. 39th St. The buyers, a partnership of Waterman Interests offer buying opportunities of their own, and USAA Real Estate, apparently including the one just north of Macy’s saw the potential in an area of rising home turf. It includes women’s clothier rents—most of 142 W. 36th’s leases Woman Within, wholesaler Socks Croft will expire in the next five years. Tod Waterman, Waterman Interests’ (which sells exactly what you think it founder, was a Crain’s 40 Under 40 would), menswear retailer Robbie & honoree in 2001. AT THE ARCADE 132 W. 36TH ST. Co. and by-appointment bridal design- er Jenny Yoo. An entity called Kaufman Arcade Associates owns the nearly This clothing-heavy focus is no accident. The 197,000-square-foot office and buildings on the west end of the block, along retail building, also known as the Seventh Avenue, lay within Manhattan’s old Kaufman Arcade Building or just the Kaufman Arcade. The entity garment district, better known today as the and the building are controlled by fashion district. Unsurprisingly, fashion-design the family-owned Kaufman firms such as Carmen Marc Valvo, Organization. Wiesner Products and Donna Moran FATHER, SON, PLUS 1 occupy office space in these buildings, 463 SEVENTH AVE. which also include showroom space for The 267,000-square-foot office and various brands. retail building is owned by a partner- ship between Dan Shavolian and The owners of the buildings on the father-son investors Marty and Eric block’s western half have benefited Meyer. Shavolian is the owner and from this shift from apparel manufac- CEO of an LLC called Foremost Real turing to design and sales. Ground-floor Estate. The Meyers are principals at commercial brokerage Colliers rents have increased from between $125 International as well. and $150 per square foot annually to well over $200, according to reports. (As KING KONG CONNECTION for those manufacturing hubs, they’ve moved 1333 BROADWAY beyond the U.S., never mind the old garment Empire State Realty Trust owns the district.) 354,962-square-foot office and At the other end of the block, a single build- retail building. The Malkin family, ing dominates the streetscape. It’s controlled by including CEO and Chairman Anthony Malkin, controls the pub- the same entity that manages the Empire State MANY OWNERS licly traded trust. The trust gets its 131 W. 35TH ST. Building, as well as many of the city’s other mar- name from its most famous hold- quee commercial addresses. In between, too, is This building was converted to an ing, the Empire State Building. an example of that rare Manhattan species, the office co-op in 1983, and had 13 owner-occupants as of early office co-op, where individual companies own December, according to the Rudder the space they occupy as well as, collectively, Property Group, a brokerage that the building itself. Ⅲ has arranged sales there. OASIS

6 | CRAIN’S NEW YORK BUSINESS | DECEMBER 14, 2015 20151214-NEWS--0007-NAT-CCI-CN_-- 12/11/2015 6:00 PM Page 1

AGENDA REAL ESTATE

Investor will give juice business another shot Equity fund to reopen eight Organic Avenue locations next month BY AARON ELSTEIN

f it’s juice you crave, you’re in recognition,” he said. Fans include luck: More than 200 estab- Gwyneth Paltrow, who featured lishments across the city spe- Organic Avenue’s products on her cialize in making the stuff. Goop website. IThe folks seeking to revive kale- But a successful comeback juice-craze pioneer Organic seems highly unlikely: A flood of Avenue hope they haven’t bought a competitors have mimicked lemon. Organic Avenue’s wholesome After shutting its stores and fil- drinks and food concept. The GONE BUST: The chain ing for bankruptcy in mid- Department of Health lists 264 shut down and filed for October, the firm’s assets were sold juice bars across the city, from bankruptcy in October. at auction for $1.7 million Healthy Blendz in to Arrow Equity Fund. Brooklyn to Let’s Get Arrow’s chief, Mark Tress, Juiced in . Fresh in yogurt, cookies, french fries and Manhattan locations are considered told New York Business juices are also whipped up other singular items have failed in highly desirable. However, high Journal he will work with 264 in delis, fitness clubs, New York in the past several years. rents were likely an important rea- Organic Avenue founder JUICE BARS hotels and even Starbucks. Crumb’s Bake Shop got a second son the outfit filed for bankruptcy Denise Mari to rejuvenate in the city—too “It’s a very saturated turn last year when the cupcake in the first place. Court records the chain. Tress didn’t many, some space,” said Andrew maker was bought out of bank- show it owed more than $700,000 return calls, and Mari said analysts say Moger, chief executive ruptcy, but in September one of its to landlords as of Nov. 30, includ- in an email that she isn’t of restaurant advisory new owners, CNBC reality-TV star ing $125,000 for its Bryant Park ready to discuss plans. firm Branded Concept Marcus Lemonis, sold his stake. shop and $110,000 for the one on The plan is to revive eight loca- Development, and former presi- Asked if she could think of a East 86th Street. tions by mid-January, said Rob dent of Two Boots, an eight-store specialty food retailer that became Moger said that if Organic Tramantano, an executive at Keen- pizza chain. “The juice business in successful again after shutting Avenue’s new owners want to sig- Summit Capital Partners, which New York is a very challenging down, Faith Hope Consolo, chair- nificantly alter or broaden menu managed the asset sale. “Organic proposition as a stand-alone man of Douglas Elliman Real offerings, they first might have to Avenue is a brand that’s been business.” Estate’s retail group, replied, “No.” get permission from their land- around for 15 years and got a lot of Many food retailers specializing In its favor, Organic Avenue’s lords. Ⅲ

Scandal? What scandal? that the agency move away from Program. using cluster housing. Standards “Hopefully they will move City extends homeless sites after scathing report BY ROSA GOLDENSOHN were higher at city-run, full-service enough people out so that they shelters, DOI found, while cluster won’t need clusters anymore, and buildings “routinely ignore basic will pay these providers significant- dvocates for affordable In March, the Department of health and safety measures.” ly less than what is in these dollar housing hate it. The Investigation issued a blistering A de Blasio administration amounts,” Goldfein said. mayor’s own chief inves- report about odious conditions at spokesman said some cluster sites Giselle Routhier, policy director tigator called for it to be cluster sites citywide, including at were closed in the wake of the of Coalition for the Homeless, said Acut back. But so-called cluster facilities run by two of the organi- report, and that the new contracts the Homeless Services proposal housing for the homeless is about to zations soon to win new contracts, will allow operators access to fund- “doesn’t bode well for the commit- get another $200 million from the Acacia Network and Bushwick ing to make needed repairs and ment” in the agency’s operational de Blasio administration, which is Economic Development Corp., improvements. He added that the plan, released in March, to use proposing contracts that could run known as BEDCO. deals will also allow the city to hold fewer cluster sites. through 2024. “At the time of the inspection, the providers accountable. “We think the solution is for the Cluster sites—privately owned one elevator was broken and stuck In the past, City Comptroller city to aggressively work to phase apartments leased and overseen by on the sixth floor,” the report said has held up contracts out the program and revert the units shelter operators—are notorious for of an Acacia site. “The other had a with owners of violation-riddled back to permanent housing for the filthy and sometimes dangerous large puddle of urine on the floor.” properties. Mayoral aides said homeless families currently residing conditions, and critics say they It noted a broken window with Stringer’s action ensured that the there,” Routhier said. exacerbate the housing crisis by glass strewn across the hallway of sites would not be fixed up. But with record numbers of fami- sucking up mostly rent-regulated the facility for homeless families. Cluster operators “don’t have the lies in shelters and mounting public units for temporary use. Before he The poor conditions have been resources and the history and the concern about street homelessness, became the administration’s Human corrected, Acacia said in a statement. background to deliver services of the administration can’t afford to Resources Administration commis- The city paid $95 a night, on aver- the same quality” as well- live up to those ideals just yet. sioner, Steven Banks said the city age, for the Acacia apartments—two established nonprofit shelter “In the short term, they have to was “shooting itself in the foot” by to three times what market-rate ten- providers, said Josh Goldfein of keep using these places until they housing homeless people in them. ants pay in those neighborhoods, Legal Aid’s Homeless Rights Project. can bring the census down through Now the Department of according to the report from Advocates say they hope the new move-outs,” said Goldfein. Homeless Services has proposed Department of Investigations contracts will not be used in full. The city has 3,079 units of cluster four cluster housing contracts in the Commissioner Mark Peters. The agreements on the table include housing, down 1% from 2014. The Bronx and Brooklyn totaling more It cited BEDCO buildings for ver- more than $69 million for BEDCO, administration said it had formed a than $200 million over four and a min and 56 outstanding fire, build- $61 million for LCG Community repair squad that has cleared more half years, with an option to extend ing and housing violations. Services, $48 million for Acacia and than 10,000 violations, or 83%, at Ⅲ BUCK ENNIS them four more. Peters recommended at the time $29 million for CRF-Cluster Model inspected shelters.

DECEMBER 14, 2015 | CRAIN’S NEW YORK BUSINESS | 7 20151214-NEWS--0008-NAT-CCI-CN_-- 12/11/2015 6:01 PM Page 1

AGENDA INSTANT EXPERT LAW BY BRENDAN O’CONNOR

Why is the government suddenly cracking down on wage theft?[in 5steps]

THE PLAYERS THE ISSUE Mayor Bill de Blasio launched the Office of Labor Standards earlier this month to enforce existing laws, educate employees about A series of campaigns by powerful labor-rights groups has 2 their rights, monitor worker safety and collect and analyze data. brought the issue of wage theft to the forefront of New York Gov. Andrew Cuomo has positioned himself as a staunch advocate, too, 1 City politics. A recent report from the Center for Popular creating a 700-person task force to probe labor abuses and passing a Democracy says some 2.1 million New York state residents spate of new laws to protect workers. Advocacy groups including Make lose up to $3.2 billion annually from employers who violate the Road New York encourage workers to speak out and are drawing the labor laws by taking illegal tax deductions, paying salaries that support of city and state leaders, while state Attorney General Eric fall short of minimum wage, denying overtime pay or using Schneiderman (pictured) has been aggressively prosecuting violators. several other tactics. Despite the passage of the Wage Theft Business owners have been mostly silent, lest they be cast as Prevention Act—a 2010 state law requiring employers to notify defenders of worker exploitation. workers of all labor laws and accurately track hours and pay (and which increased penalties on violators and protects employees who speak out from retaliation)—labor groups argue that workers are still losing. “The 2010 bill put good laws on the books,” said the CPD’s Connie Razza. “But what we really need is strong enforcement.”

SOME BACKSTORY A New York Times exposé this past May alleging 4 widespread abuses of mostly immigrant workers at nail salons led to a crackdown. Cuomo required salon owners to Laws have been purchase wage bonds to passed to YEAH, BUT... compensate wage-theft victims. protect workers With government officials increasingly looking over their “We will not stand idly by as shoulders, business owners are fighting back. Two trade workers are deprived of their in restaurants, 3 groups representing mostly Korean and Chinese nail- hard-earned wages and robbed of car washes, salon operators sued Cuomo in September, claiming the their most basic rights,” he said. wage-bond regulation unfairly discriminates against law- City and state laws to protect construction abiding businesses. “This misguided requirement is setting up workers in industries including and domestic thousands of nail salons to fail and will result in thousands of restaurants, car washes, services, such job losses across New York,” said plaintiff attorney Michael construction and domestic Park. The Association of Car Wash Owners filed a similar suit in services such as nannies and as nannies and October, accusing the government of “putting its thumb on the housecleaners have also housecleaners. scales” by forcing nonunion shops to secure bonds worth five been enacted. times as much as those mandated for unionized shops. Employers’ lawyers say that the changes will lead to employee lawsuits, and contend that efforts to weed out a few “bad apples” are unfairly targeting entire industries.

WHAT’S NEXT A New York state judge last week dismissed the nail-salon owners’ claim, saying the government had “sufficiently 5 demonstrated” that many workers are being deprived of due wages. Schneiderman also upped the ante this summer, adding the threat of jail time to owners of several Papa John’s restaurants (pictured) accused of wage theft. The City Council introduced a bill requiring contracts for all freelancers; violators face fines and even imprisonment. “My office will not hesitate to criminally prosecute any employer who underpays workers,” Schneiderman said. “We will continue to be relentless in pursuing widespread labor violations, large and small.” BUCK ENNIS, AP IMAGES, NEWSCOM

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AGENDA NONPROFITS

Nonprofit contractors push Cuomo for $15 wage

Full implementation would cost taxpayers $300 million BY ROSA GOLDENSOHN

aseworkers, contracted social-serv- But if the state hikes longtime budget New York hires Institute. early-child- ices workers. Pleased wages for its contract watchdog. “These are about 40,000 to The proposal calls hood teach- with those measures, the workers to $15 an hour costs the agencies 50,000 employees at for a six-year phase-in ers and coalition turned its and the city follows themselves could not 2,500 human-services of the pay raise. It Cchild-welfare agents attention to the Cuomo suit, the expense absorb, so the city nonprofits at a cost of would cost the state contracted by the state administration, the would be “significant,” would have to commit $1.5 billion, the coali- about $60 million to want the same $15 an spokeswoman said, Kellermann said. to covering these costs, tion reports. About $70 million in its first hour from Gov. adding that it is continu- “The cost of which would mean a half of them make less year, according to Andrew Cuomo that ing to advocate for fur- increasing all of them significant new city than $15 an hour, esti- Parrott, and $250 mil- state employees and ther increases at the city to that level would be expense on a recurring mated James Parrott of lion to $300 million fast-food workers level. substantial,” said the basis.” the Fiscal Policy annually after that. Ⅲ received. Cuomo is already pushing for the legisla- ture to pass an across- the-board minimum- wage hike to $15, but wouldn’t need a new law to satisfy the non- profit workers’ re- quest. “He can take action on his own,” said Jennifer Jones Austin, a close ally of Mayor Bill de Blasio and a leader of the new wage push. “We’d like to see this in the governor’s State of the State [speech in January].” A coalition led by the Federation of Protestant Welfare Agencies, headed by Jones Austin, said state subsidies would be needed for non- profits to pay the $15 minimum.

‘Significant’ expenses Last week’s call was directed at the gover- nor, not the mayor, even though more social-services staffers under city contracts make less than $15 an hour than under state contracts—at least 30,000 people, accord- ing to Carol Keller- mann, president of the Citizens Budget Com- mission. A federation spokes- woman said her group asked the city in late Sometimes life pulls you in unexpected directions. 2014 for the same $15 wage, and that de Blasio Our insurance plans help raised it to $11.50 an hour for workers at keep your business on track. city-funded nonprofits. The mayor also allocat- Finding health insurance to meet your employees’ needs as well as your bottom line can be complicated. ed $5 million for a We help make fi nding the right plan simpler, while our broad Oxford Metro Network helps make getting care easier. career-pathways pro- Which is a healthy solution for everyone. gram and a 2.5% cost- of-living adjustment for

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AGENDA SPOTLIGHT SMALL BUSINESS

Crowdfunding, microfinance lender launches in New York

When strangers invest in your business,interest-free BY CARA EISENPRESS

year after Gary Simon lost his job in 2012 as the director of building services at the 92nd Street Y, he opened a Brooklyn- based residential and commercial cleaning company. But GMS Cleaning Service grew slowly, and resources ran low. “I thought, ‘What am I doing? I don’t have enough funds to Amake this happen,’” he said. To invest in a new vacuum cleaner, a carpet shampooer and other equipment, Simon asked for a $1,000 loan on Kiva Zip, a nonprofit plat- form that uses crowdfunding to make microloans to entrepreneurs. Last week, Kiva NYC, a local version of Kiva Zip’s community-lending GARY SIMON turned to Kiva platform that has partnered with New York institutions and donors, to raise $1,000 to buy officially opened to business owners in the region after a four-year pilot materials for a cleaning in New York and 11 other cities. Now entrepreneurs have the singular business he launched after opportunity to raise up to $10,000 interest-free. Simon, for example, losing his job. owed his lenders only the $1,000 he borrowed. His repayment helped prove Kiva’s hypothesis: Lending to those who might not qualify for commercial loans was not as risky as it seemed. That’s because Simon and others establish “character credit,” rather than presenting the usual packet of cash-flow statements and credit scores. Borrowers post their campaigns on a private Kiva network, then per- suade 20 of their own contacts to lend $25 each. DANIELLE KATZ “If you get them, that means you have something that the world is seeking a second Kiva loan to expand Brooklyn Doodles, an arts doesn’t see,” said Premal Shah, president and co-founder of San enrichment program for children from 6 Francisco-based Kiva, founded in 2005 to send microloans abroad. Once months to 5 years old. the private group has vetted a borrower, his or her campaign goes live to more than 1 million Kiva lenders—everyday people who put in $25 or more. Currently, Kiva has $105 million in investments. Only campaigns that reach their goal receive their loans. During the pilot, 95% of campaigns raised the full amount, and 90% of loans were paid back, Shah said. Lenders are usually looking to help other people, according to Shah. They don’t make any profit, and because they are repaid they don’t receive a tax deduction. Instead, many reinvest their dollars in new projects.

Global platform Kiva itself stays afloat through grants, corporate sponsors and dona- tions, and PayPal processes all transactions for free. In 2009, Kiva began to expand its services nationally to reach American entrepreneurs who did not have a good shot at a mainstream loan. The company said 200 New York City businesses borrowed from Kiva during the trial period. “Accessing capital is one of the biggest hurdles facing small-business owners,” said Greg Bishop, commissioner of the city’s Department of Small Business Services. The department is Kiva NYC’s biggest partner and will help businesses explore the use of microloans. There are 60 “trustees” here in New York City as well: institutions and businesspeople who mentor and endorse borrowers. MetLife Foundation, Deutsche Bank Americas Foundation, and others have donated to match ALEX BRASS is halfway toward his goal of Kiva funds in New York City up to an overall amount of $1.1 million. raising $10,000 on Kiva for his bottled green During the pilot, businesses were listed on a separate site, reaching matcha tea company, MetaMatcha. just 1,000 Kiva lenders daily. Now their campaigns will be on the main page, visible to the 25,000 lenders worldwide who visit Kiva every day. “It gave us confidence to be funded in less than seven days by people FOCAL POINTS from all over,” said Chelsea Brownridge, founder of Brooklyn-based Dog Parker, which sells access to sidewalk kennels that keep pups safe while their owners shop or dine. LOCATION San Francisco. with partnerships in cities around the U.S. Kiva lenders invest based on shared interests in dogs, education, tea or anything else—not just because they want a new coffee shop in their FOUNDERS Matt Flannery, Jessica Jackley and Premal Shah neighborhood. “I wanted to appeal to people like me,” said Alex Brass, INVESTORS Kiva is a nonprofit. Its biggest donor is HP Company Foundation whose company, MetaMatcha, sells bottled green matcha tea to city gro- ($5 million). Other donors and grant-makers who’ve contributed $1 million ceries. His $10,000 campaign is nearly halfway underwritten. include PepsiCo Foundation, Deutshe Bank, Pearson, MetLife Foundation, Likewise, Brooklyn Doodles, an art-focused preschool program, had Capital One, Google, Moody’s, the Diller-von Furstenberg Family Foundation, already raised funds in its Crown Heights community through bake sales and Ernst & Young. PayPal and Google contribute free services with a total of and races. Founder Danielle Katz borrowed $5,000 to subsidize tuition more than $1 million. for her economically diverse clientele and to pay her assistant teacher. PLAN FOR GROWTH By creating robust partnerships with local institutions Now Katz is taking out a second Kiva loan to pay for insurance, a back- in U.S. cities, Kiva plans to expand access to loans for businesses whose yard renovation, and yoga and science instruction. creditworthiness limits their ability to take out commercial loans from banks. Repaying the loans should make it easier to qualify for commercial Ⅲ DAVID ZHENG,DAVID ELFA FRID, DOODLES BROOKLYN loans. “Kiva is the first rung on the credit ladder,” said Shah.

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AGENDA FINANCE

Fraud charges against Bankrate point to crackdown on fuzzy math 106 Regulators see uptick in accounting irregularities BY AARON ELSTEIN NUMBER of enforcement actions by the wo top executives at Bankrate, a New whether they are sufficiently robust in SEC in 2015, Companies tend to emphasize non- York-based financial information light of current market practices.” the most GAAP figures when they have grim news to services firm, are fighting federal The differences between non-GAAP since 2011 report. accounting-fraud charges after their and real results can be substantial. In the For example, falling energy prices Tcompany paid regulators $15 million to settle the second quarter, for instance, earnings at New caused Manhattan-based oil and gas explorer accusations, part of a little-known epidemic of Jersey-based drugmaker Merck & Co. that didn’t Hess Corp. to swing to a second-quarter net loss “good news” book-cooking as the government comply with accounting rules were $1.7 billion of $567 million, a sharp reversal from the nearly takes a fresh look at troubling accounting prac- higher than those that did. At Manhattan-based $1 billion profit it posted a year earlier. To dull tices in corporate America. Time Warner Cable, the difference was $1 billion, the pain, Hess recommended investors look past Bankrate’s former Chief Financial Officer and at New York-based MetLife, $700 million. its write-down of North Dakota oil fields by Edward DiMaria and Director of Accounting In most cases, companies say they provide nearly $400 million. Ignore a few other costs and Matthew Gamsey allegedly fabricated $800,000 non-GAAP information to offer a more complete Hess’s “adjusted” loss was only $147 million. worth of revenue and made $400,000 worth of picture of their financial affairs. Accounting “We believe that investors’ understanding of marketing expenses disappear so the firm could experts agree it’s legitimate for companies to our performance is enhanced by disclosing this meet Wall Street financial targets in 2012. After exclude certain costs when tallying up their oper- measure,” the company said at the time. Bankrate reported its inflated figures, its stock ating results. The classic example is the cost of With a majority of S&P 500 companies price rose and the CFO then allegedly sold more repairs after an earthquake for a company based in reporting results that don’t comply with GAAP, than $2 million worth of Bankrate shares. a place where such disasters are rare. the SEC is looking for abuses. The agency has The case is an extreme example of something But problems arise when companies start to filed 106 accounting-related enforcement that’s gotten the attention of federal regulators: exclude everyday business expenses, such as actions so far this year, the most since 2011. That Companies reporting results that don’t comply interest payments, taxes, compensation or even includes September’s fraud suit against Bankrate with generally accepted accounting rules, or rent. Early last decade, corporate earnings and its executives. GAAP. reports became so misleading that the SEC Bankrate quickly settled, but the former CFO Data collected by Olga Usvyatsky, a vice pres- cracked down—its first target was Donald and accounting director are fighting. In a letter to ident at research firm Audit Analytics, show 363 Trump’s casino company—and in 2003 regulators a federal judge earlier this month, their lawyers members of the Standard & Poor’s 500 have started requiring companies to explain how their argued the SEC “fails to adequately plead fraudu- reported non-GAAP results of some kind this preferred results differed from those that comply lent intent and materiality.” Court filings year. Major companies routinely ask investors to with accounting rules. revealed that Gormsey, a certified public overlook operating expenses that they say are not “The intent was to limit non-GAAP reporting, accountant, didn’t think his boss’ directive to reflective of their underlying business. But lately but it’s had the opposite effect,” said Audit cook the books was wise, groaning in one email: the accounting contortions have gotten so twist- Analytics’ Usvyatsky. “F[***]me–seriously–oyyyyyyyyyyyyyy.” Ⅲ ed that regulators are getting concerned. “Non-GAAP measures are used extensively and, in some instances, may be a source of con- fusion,” Securities and Exchange Commission Chairman Mary Jo White told a group of accountants last week in New York. “This area deserves close attention, both to make sure that our current rules are being followed and to ask OUR VETERANS WERE THERE Rough ride for FOR US taxi lender’s stock

THE SHARE PRICE of Medallion Financial, which bankrolls the purchase of taxi medallions, plunged 12.52% Dec. 7 amid uncertainty about what the city- issued placards are worth. A day later, as the compa- ny asked securities regulators to investigate the IT’S OUR drop, the stock—with ticker symbol TAXI—rose 7%. By week’s end, the lender’s stock had rebounded TIME TO BE a bit from its low of $6.35 per share, but was still well off its 52-week high of $11.05. In November 2013, before competition from Uber started to drive down THERE FOR THEM yellow-cab revenue, TAXI shares hit $17.74. On Dec. 3, investor website Motley Fool cited a November individual medallion sale that appeared to establish a new low price: $325,545. Two years ago, individual medallions sold for more than Help US MAKE SURE ALL NYC veterans have a place to calL home $800,000. But on Dec. 9, the Taxi and Limousine Commission said the November sale was not an To help, or learn about financial incentives for owners & brokers, arm’s-length transaction, but essentially a refinanc- calL 311 or visit NYC.gov/misSionhome ing of a foreclosed medallion—implying that the sale did not establish a new market price for medallions. The placards are required for a cab to legally pick up street hails in the city. Two other November sales valued corporate medallions, which can be held by nondrivers, at $875,000. — ERIK ENGQUIST

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AGENDA VIEWPOINTS

Mayor de Blasio’s midterm DE BLASIO SPENDING 2014 Bloomberg budget report card yields GPA of B- $73.7 billion Good grades for Hizzoner on money and crime. Politics and leadership? Not so much 2017 de Blasio budget

BILL DE BLASIO will hurt the city’s prospects. as his primary $80.1 billion complete half his Fiscal responsibility: B. The first year antagonist, con- Note: before budget rollovers and use of reserves term as mayor on of the de Blasio administration con- stantly outmaneu- Source: OMB Five-Year Financial Plan Dec. 31, and tinued the budget prudence of the vers him. De Blasio because this is my Bloomberg era. The second year has also stumbled in MAYOR’S APPROVAL RATING last column before been a completely different story. his forays into No opinion then, it seems a With tax revenue soaring, the national politics 4% good opportunity to mayor is spending it on city work- and occasionally GREG DAVID assess how he’s ers’ contracts, more police, the even with a City done in his first two MTA (under duress), the homeless Council composed years. I’ve given him a grade in each and other programs. City spending almost entirely of Disapprove 58% 38% Approve of five key areas. is projected to increase by 9% in his politicians who Economy: A-. After the 2013 mayoral first term, and the capital budget share his progres- election, more than a few business- will add tens of billions to the city’s sive view of the people believed the economy would enormous $100 billion debt. world. Source: Marist Poll, Nov. 3 be at risk after 20 years of pro-busi- Crime: B+. This is a much higher Leadership: C-. All ness leaders in City Hall. A progres- grade than the “sky is falling” media one has to know about what New Insiders make two points on the sive mayor, they believed, would coverage in the tabloids and on the Yorkers think about the mayor’s mayor’s behalf: Two years is more shatter confidence, and his allies’ television newscasts would suggest. leadership is his approval rating: than enough time for him to recov- extreme rhetoric on Inauguration Yes, murders will increase slightly 38% in the latest Marist poll and er, and you can’t beat someone Day exacerbated those concerns. this year—maybe shootings, too. 32% in the most recent Quinnipiac with no one.The first point is true, Instead, the city has seen record Then again, on a per capita basis, poll. but if Mayor de Blasio’s approval job growth in 2014 and 2015, and New York remains the safest big city So averaging these grades the ratings remain this low, a strong most forecasts for next year are for in the country. way I do for my students at the candidate will emerge to challenge more gains, if at a slower pace. The Politics: C. The mayor’s political CUNY Graduate School of him in 2017. mayor has imposed a series of new failings are the most surprising Journalism, the mayor would get a requirements on businesses, such as result of the first two years. Gov. B-, which isn’t a passing grade at GREG DAVID blogs regularly at paid sick leave, but they haven’t Andrew Cuomo, who has emerged the J-school. CrainsNewYork.com.

coal plants is that jobs Act fast on global warming and tax revenue will And don’t throw out the city’s composting programs, readers say be lost when they close. This requires rethinking the pur- No more lumps of coal tric bills of residents and businesses pose of corporate sub- Re “Nothing else matters if we for very marginal benefits. sidies, and how to don’t stop climate change” It makes no economic sense to effect an equitable (Editorial, Dec. 7): Gov. Andrew continue such costly subsidies. transition in local Cuomo has committed New York to Utilities and other experts have economies dependent major reduction in greenhouse concluded that transmission-line on coal. Resources gases and proposed visionary upgrades would provide a perma- being funneled into measures for the state. We can all nent solution to regional power the pockets of plant owners would carbon tax, this cost is unaccount- be proud of the stance he has reliability at a fraction of the cost, be better directed toward job ed for. taken. However, the time for talk- without locking us in to more dirty retraining and revenue support for The governor has set laudable ing is over. It’s time to remind our- coal at a time when we should be the affected communities. Stopgap goals to reduce New York’s climate selves and the governor that action phasing out carbon-intensive fuels corporate welfare schemes for coal- pollution by 40% by 2030, and is needed, not just because of envi- as quickly as possible. Coal plant owners are not a long-term 80% by 2050. To make that a reali- ronmental pollution but because of bailouts mean that consumers and solution. ty, however, he must pledge to simple business economics. businesses keep dying plants on Coal is a fuel of the past, not the phase out coal completely by 2020. Powering electricity generation life support without long-term future. Sinking money into an indus- It’s a crucial step forward, and long with coal in New York state benefits. This is a bad investment try whose days are numbered is sim- overdue. doesn’t make business sense any- choice for everyone but coal-plant ply a waste. On the other hand, pro- SYDNEY WARD more. Coal plants carry huge direct owners, who are receiving sweet- viding programs and funding that Manhattan and indirect costs that are too heart deals, and sends the wrong support communities in their transi- often absorbed by citizens and message to the marketplace. tion beyond coal would help usher in Don’t throw food out with the communities. It’s time for coal to Direct costs aside, burning coal a sustainable economic model. It’s a bathwater get out of the way. releases toxic pollutants into our choice between a dead end and a The Manhattan Solid Waste New York’s four coal plants air, water and soil. Communities path forward. Advisory Board disputes “An alter- operate far below their capacities and society pay the price via respi- Finally, the most enduring cost native to the city’s costly compost- and, as they grow less and less ratory ailments, diminished quality of coal is climate change. Coal con- ing mandate” (Op-Ed, competitive, are increasingly being of life, increased medical costs and tributes 13% of New York’s carbon CrainsNewYork.com), in which propped up with hundred-million- environmental degradation. It’s a emissions from electricity genera- Brad Gerstman and David Schwartz dollar ratepayer subsidies. These hidden “pollution tax.” tion, despite providing only 4% of blast composting as a component of add costs every month to the elec- A chief argument for keeping its electricity. In the absence of a handling New York City’s food

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VIEWPOINTS

A good food program spoiled WIC is so burdensome that most of the city’s small retailers shun it BY MITCHELL KLEIN AND RAMON MURPHY

he public-benefits program neighborhoods. Women, Infants, and Senseless licensing obstacles. Even Children badly needs an after independent retailers join overhaul in New York. WIC, they must go through the TReforms could bring thousands more same lengthy process to accept WIC retailers into WIC, benefiting stores at any new store. and low-income shoppers alike. Punitive enforcement. When an Instead, the state’s Department undercover agent goes into a store of Health has proposed vendor rules and sees a problem, he withholds that discriminate against small- notification so he can rack up mul- stores by divided highways, elevat- many store owners decline to partici- store owners and would reduce tiple violations on future visits. This ed roads, six-lane interstates and pate in the program. access to healthful food. The pro- fails to protect the state or con- other barriers. These are just some of the reasons posal masks a more endemic prob- sumers and leads to huge financial Arbitrary and capricious response to WIC in New York falls short of its goal lem: oversight so onerous that only exposure for WIC vendors. fraud. Two years ago, some store to provide healthful food for women, 20% of bodegas take part in WIC. Big fines and false compassion. Fines owners were caught exchanging infants and children. Callous and non- The program in New York presents are calculated in a way to maximize cash instead of infant formula for sensical administration may be con- significant challenges to merchants. penalties. We’ve seen small stores WIC vouchers. The state responded venient to regulators, but it is costly to Rather than help solve the problem of fined up to $40,000 for errors worth by forbidding stores without a everyone else in the WIC program and food deserts in the inner cities, it less than $3. For such minor infrac- pharmacy from selling formula. certainly does not advance the contributes to it. Here’s why: tions, other agencies merely issue a While convenient for regulators, public interest. Bureaucratic nearsightedness. Ad- warning. WIC violators are offered this can be devastating to recipients The proposed new rules do nothing ministrators appear more interested payment plans, but that is hardly and retailers. to address these issues, but instead are in shortcuts than caring for WIC consolation to stores that generally Complex reimbursement. New York designed to reduce the number of WIC recipients. In New York, a store operate on small margins. state removed the price limits printed vendors, assuring that food deserts owner can get a liquor license in 48 Ignorance of the city’s retail ecosys- on WIC checks, leaving retailers remain, if not expand. The reforms we hours, but it generally takes an tem. When administrators look at uncertain of the maximum they can need are nowhere in sight. independent owner three to four vendor access for WIC recipients, charge for a WIC food item. Thousands months to get a WIC stamp to sell they look at maps and draw straight of retailers’ WIC checks were returned Mitchell Klein, a consultant, has advised milk. The process is expedited for lines between consumers and because of prices over the regional the food industry on regulatory issues for corporate chains, which do not retailers. In reality, WIC recipients average, triggering bank fees from $10 40 years. Ramon Murphy is president of operate stores in many inner-city are separated from participating to $25 per check. It is clear why so the Bodega Association.

COMMENTS high levels of compounds that are detrimental to marine and plant life. waste and promote disposers that The city’s centrate is either sent for send the material to wastewater disposal or released into receiving treatment plants. Our board advo- waters, such as Jamaica Bay. cates a mixed set of solutions, defi- There are engineering solutions nitely including composting. to these problems. These externali- Gerstman and Schwartz call ties could one day become opportu- expansion of the city’s composting nities—biosolids for composting, program “an expensive logistical biogas capture for energy, and nightmare.” This is throwing in the innovative capture and use of cen- towel without seeking out the solu- trates. But those solutions are in the tions that make composting an future. important part of the waste- New York’s solid-waste system treatment mix in New York, San is increasingly moving to compost- Francisco, Seattle, Berlin, Toronto, ing food scraps—that is, diverting Seoul, Milan and other major urban waste from landfills—using a mix of centers. Composting—which the innovative solutions that engage op-ed called an “outdated 20th- communities and produce econom- century methodology”—has ic opportunities and jobs. worked in many places and times, Composting also creates organic including New York City right now. materials that build our degraded While wastewater treatment soil and help with rainwater plants might be a necessary part of absorption. the waste-disposal mix, they come We welcome the authors’ sugges- with problems. Gerstman and tion that a pilot program for com- Schwartz wrote that “all of the mercial food-waste disposers be waste processed through the city’s instituted to produce the data and wastewater treatment facilities is show environmental impacts—just easily transformed into the very like city composting, which has compostable material.” However, already gone through pilot programs New York City composts very little that produced positive data. of these biosolids. As a result, most We welcome partnering for solutions of the end products from sewage rather than adversarial stances. plants wind up in landfills. BRENDAN SEXTON Centrate, the water that results Chairman

GETTY IMAGES after sewage is treated, contains Manhattan Solid Waste Advisory Board

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ECONOMIC OUTLOOK 2016 Feeling bullish e asked 11 expert New Yorkers for their outlook on everything from real estate and health care to politics and tech.Their answers point to the strengths of New York’s increasingly diverse economic base, Wand while all agree a recession in the U.S. or abroad would hit the city hard, many also expect New York’s economy will keep growing in 2016, attracting more people to the world’s greatest city and creating more opportunity. The boom times present their own problems: rising labor and real estate costs, streets clogged with traffic, a new manufacturing industry that is a shadow of the old and, of course, untold other challenges that lie unforeseen in the year ahead.

ANAND SANWAL INTERVIEW BY MATTHEW FLAMM

WHO HE IS Chief executive and co-founder, CB Insights TECHNOLOGY AGE 41 BORN Whitehouse Station, N.J. ECONOMY EDUCATION University of Pennsylvania, the Wharton School BONA FIDES In 2008, with colleague Jonathan Sherry, launched CB RONNIE LOWENSTEIN INTERVIEW BY AARON ELSTEIN Insights, a venture-capital database and research company focused on startups; it is now a go-to resource for investors, bankers, analysts, WHO SHE IS Director of the New York City Independent Budget Office reporters, budding tech companies and anyone else who wants to get a handle on the stars of the new economy. AGE 64 BORN New York City Venture-capital spending is booming. What do you EDUCATION Guilford College; Columbia University, Ph.D. in economics expect for 2016? BONA FIDES Worked at the IBO since its inception in 1996, and has led Investors are going to become more critical. There it since 2000. Previously was an economist at the Federal Reserve Bank of will still be lots of mega-rounds, but there will New York and taught economics at Barnard College. also be a fair number of companies that had big rounds but aren’t growing as expect- What’s your outlook for the city’s economy? ed and are going to experience diffi- The most important indicator for us is job creation, and we culties. You’re starting to see it now. go into 2016 with meaningful momentum. My guess is we’ll see more than 90,000 new jobs in 2015, which are fewer And this is happening because …? than the 121,000 we had in 2014, although that was the most Company valuations have gotten a little ahead of in any year on record going back to the 1950s. I think next themselves. Money has been very easy for a while, year should be good, but probably not as strong as this year. and the exit market has not been great. Investors, obviously, need a return. What makes you think so? For starters, the real estate market is still going gangbusters. Investors have been pretty rough on some New York tech Permits to build residential housing are extraordinarily high, companies that went public in 2015. Stock prices for Etsy and while some of that was related to the rules changing, and OnDeck, for instance, have plunged dramatically. even after accounting for that, the numbers are still quite What’s that about? strong. Additionally, commercial residential sales are higher Ultimately, I think that’s a good thing. [Investors] are than during the peak in the last decade. Obviously, that was punishing them for fundamentals that aren’t super- a bubble and the question is whether we’re in one now. We strong. For OnDeck, there are a lot of emerging com- all know nothing lasts forever. petitors. It’s in a challenging space. And Etsy’s per- formance hasn’t been what [investors] had expected Besides real estate, what parts of the economy are strong? from a growth company. The hotel industry. Occupancy was more than 90% in the summer even though there were many new hotel rooms, plus Who will win in 2016, and who will struggle? Airbnb. Apart from that, education and health care jobs con- Business-to-business companies with real revenue and tinue to grow. And Wall Street had a strong first half of the good business fundamentals will be in a better place than year, though the second half doesn’t appear to be so robust. consumer tech companies, which tend to be much more Firms like JPMorgan Chase and Goldman Sachs have already hit-driven. Cybersecurity, fintech and Internet of Things: warned their people that bonuses won’t look so good. I expect those will continue to do well. E-commerce and [education] tech: Their exit environments haven’t The tech community likes to say it has matched the city’s financial been particularly friendly. They will have challenges. sector, at least when measured by head count. Is that true? The issue is defining what a technology job is. Apart from Silicon Valley continues to be the 800-pound gorilla of your local bodega, there aren’t many jobs that don’t have a tech. Why did you set up shop in New York? tech component. It’s clear we’ve got huge influxes of Part of it was just family. Part of it was that all the big young, educated people who aren’t all zooming into data companies are here, like Dow Jones and Thomson finance. There’s an excitement and spirit to what they do Reuters. And the Valley is crazy expensive when it that’s not quantifiable, and I wouldn’t underestimate any of comes to rent and salaries. As a bootstrapped company that. That said, pay in tech is just a fraction of the financial for many years, we’ve tried to make money every industry’s, where it averages $400,000 a year. So in terms moment. The Valley would have made that impossible. Ⅲ of economic spillover, financial services still have much

BUCK ENNIS more impact.

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SAM SCHWARTZ INTERVIEW BY ROSA GOLDENSOHN TRANSPORTATION WHO HE IS Founder, president, CEO, Sam Schwartz Engineering AGE 67 BORN Brooklyn EDUCATION Brooklyn College; M.S. in civil engineering, University of Pennsylvania BONA FIDES Schwartz, a former city traffic commissioner, coined the term “gridlock” and became known as Gridlock Sam. He recently authored Street Smart: The Rise of Cities and the Fall of Cars.

What’s on the transportation horizon for New on a and ride it from York this year? 96th Street to Times Square. It will open to My concern is there will be a major infra- the public sometime in 2017. [North structure failure sometime in 2016 or 2017. Brooklyn] riders are going to still stuff into the L train, or watch three or four trains go A bridge collapse? by until there’s room. We won’t see any- More likely a concrete failure, which will thing like [’s universal fare card] result in engineers shutting it down. The until 2019. concrete will either rain down on the traffic below or punch a hole through the deck. You drove a cab while in college. What do you That hole could be as big as a car. Or it’ll be think will happen with Uber and taxis? a major water-main burst. We may see Fifth The mayor’s going to come out with a report; Avenue underwater with the sun shining. Uber is going to instantly challenge it. The mayor may try to introduce some legislation. Even though the number of finance jobs in the city has shrunk? Why now? He’s going to find himself weakened by his It’s still huge. Down from the peak, certainly, but it Our infrastructure is reaching the end of its City Council—Uber has bought up just about picked up last year. I don’t think it has changed dra- useful life. The big period of building in every major lobbyist. So to see a cap [on car matically since. New York City was 1890 to 1930. It was services’ growth] is unlikely. If the mayor such a rapid period of building that now decides to go a pricing way, Uber has already What is your worst fear for the year ahead? there’s going to be a rapid period of failure. said to me that they would support a pricing If there’s a U.S. recession, our goose would be cooked. formula that was fair as long as it was applied We weathered the last downturn in far better shape than Are there any particularly problematic spots? to everybody the same way. the nation as a whole, but typically we fare worse. Most worrisome to me is the BQE system in Extraordinary factors, such as bank bailouts, led to the Brooklyn Heights, the triple cantilever. That Is the number of for-hire vehicles going to keep last downturn being so shallow and short here the last needs to be addressed immediately. Probably expanding? time. Those steps are unlikely to be duplicated. Tourism the Kosciuszko Bridge—that’s also a struc- What we had in the 1910s and 1920s, the is still going strong, but that could change, given the ture that has the potential for some failures. car came up—gee, what a good business! strength of the dollar and the fact that there’s economic [Construction of a replacement is underway.] And we had a depression. So everybody just weakness elsewhere, especially in countries that send us took his own car and made it into a taxi. a lot of tourists, like China, Brazil and Canada. Your Move New York Fair Plan would toll the And if you go to Moscow now, everybody bridges and raise money for infra- does that, and that’s why Moscow doesn’t Any sign that gloomy scenario is imminent? structure projects. What are its prospects? move. So if you carry Uber to infinity, you There are some warning shots. The labor participation We are waiting for the “three men in the have paralysis. This was so disruptive. rate, for example, has declined by a little more than a room.” The governor hasn’t killed it, which We’ve never seen anything this dramatic, percentage point in the past five months after rising we take as a pretty good sign. but there’s something that’s coming that’s steadily throughout the recovery. The clear downward much bigger than this. And that’s the self- trend is troubling. But keep in mind, we’re a budget What about subways? driving cars. The Uber driver has a life of office. Even if every economist on staff thought the Sadly, we’re going to see pretty much the about 15 years, and then it’s going to be stars had aligned for the best year ever, we wouldn’t same subway system we had. At the end of autonomous vehicles anywhere, any time forecast that. It is much easier for the city to deal with 2016, I predict that Governor Cuomo will get you want them. Ⅲ more revenues than anticipated than less.

Would your outlook be more encouraging if Michael Bloomberg were still mayor? In terms of fiscal outlook, Michael Bloomberg and Bill de Blasio are not that different. I think many people were dubious when de Blasio said he was a fiscally conservative progressive, but he has been in terms of how he’s man- aged the budget. This administration is conservative on its revenue forecasts and has socked away more money in reserve than the previous one. Bloomberg’s last budget called for emptying out the retiree benefits trust, which is effectively a rainy-day fund with $3 billion in it. This administration reversed that and added to it.

This mayor agreed to pay city employees more, though. Yes, but those increases are fairly low. The contracts you’re talking about are not nearly as generous as many people believe they are. As for de Blasio’s biggest- ticket item, universal pre-K, Albany is funding it. And the mayor didn’t get his income tax on high earners. Once that failed, his administration doesn’t look so dif- ferent from Bloomberg’s from a fiscal perspective. Many people are surprised to hear that. Ⅲ

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ECONOMIC OUTLOOK 2016 RESTAURANTS

MARCUS SAMUELSSON INTERVIEW BY PETER S. GREEN

WHO HE IS Chef-owner of Red Rooster and Streetbird Rotisserie restaurants in Harlem AGE 45 BORN Ethiopia (raised in Sweden) EDUCATION Culinary Institute in Gothenburg, Sweden BONA FIDES At 23, he became the youngest chef to earn three stars from ; prepared President Barack Obama’s first state dinner; opened Red Rooster in 2010, raising the flag of haute cuisine in Harlem.

Gov. Andrew Cuomo has raised the minimum wage for fast-food workers to $15 an hour by 2018 and wants to extend the increase to all employees. How will that affect restaurants? You have to adjust. I have 160 employees—we adjusted to the health care law, and we will have to adjust to this. As a small-business owner, I know that change is something that comes constantly.

Danny Meyer is eliminating tipping at 13 of his restaurants. Would you do that? Will that trend catch on?

MANUELA RAPPENECKER INTERVIEW BY GREG DAVID TOURISM WHO SHE IS General manager, Algonquin Hotel AGE 47 BORN Peterborough, Ontario EDUCATION Florida State University; M.B.A., Florida Atlantic University BONA FIDES Rappenecker has been the general manager for the Marriott-run property for almost two years. She has also been the manager of one of the chain’s Renaissance hotels in New York, which target a slightly less affluent clientele. She came to New York after a long career with Marriott in Florida.

Despite the strengthening of the dollar, New York will set another tourism is not the kind of person who record this year with an estimated 58.1 million visitors, up 3%. How is this would book a room through possible? Airbnb. Airbnb’s primary cus- The demand seems to be robust, even from countries where the dollar tomer is someone who is in New has strengthened the most. Visitors from those countries understand York for a longer stay, and families it’s going to cost them more. And since there are so many more hotel or couples who want amenities like rooms in New York, these visitors are getting a better rate, too. their own kitchen to lower their Yes, the latest statistics show that while occupancy remains costs. So it is true other Marriott unchanged from last year, in the low 80% range, the average room properties, like the Fairfield Inn rate is down about $30 a night. and Residence Inn, are bumping In response, we at the Algonquin have taken a different strategy up against Airbnb more. this year and into next year, being more aggressive in bringing groups at discounted rates or holding flash sales at 20% or 30% off for book- What role can government play? ings three or four months out. Also, with more hotel rooms, people When you think of the city and know they can wait longer to make a reservation and keep looking for what it offers, you can’t underesti- good deals when they are coming to New York, which makes the busi- mate the impact of how we have ness quite challenging. continued to grow the transportation system. Once you get here it is an easy What is the outlook for 2016? city to get around, even looking at the We are going to continue our strategy of aggressively booking business nonstop renovations of the airports. I early in the year, and then we will assess the state of the business and hadn’t been out to JFK for years, and I whether we can seek higher rates if business remains strong. was shocked at how improved it was. And when you go to LaGuardia, the only In the pipeline are 30,000 new hotel rooms. How do you think that will conclusion you can draw is that there is change the New York City market? unlimited demand for New York City I think the market is getting spread out as the hotels are built in areas because it is always packed. that didn’t have many hotels before. But, yes, there are more hotels in Times Square, too. I think while there has been apprehension for many What could derail the city’s tourism boom? years about the impact of more hotel rooms, we have been able to There is always the possibility of a natural or maintain our occupancy rate. unnatural disaster here or in another major city, like Paris, that puts people on a height- What do you think the impact of Airbnb will be for hotels in ened state of alert. Nevertheless, when I walk the city? around Times Square there are always new That is the big elephant in the room. We at the Algonquin haven’t seen shows to see, and I think we will see some new a big impact because our customer—business travelers during the venues that will attract visitors. There is just

BUCK ENNIS week and tourists focused on Times Square activities like the theater— pent-up demand for New York. Ⅲ

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This is something we’ve had in Europe for a very long time, but we have Look at Harlem, Queens, Brooklyn: When midtown rents got too a different tax system there. I want to take a wait-and-see approach. expensive, the conversation went there. Chefs are food entrepreneurs. Now the front of the house makes a better living because tipping works They will always find a way to have a dialogue with their customers, for them, but I have to think about the kitchen staff, too. and they will get there. We focus on finding an affordable price so we can offer a democratic experience. To make a neighborhood, you do New York City is arguably the food capital of the world—so many cuisines, so need local retail; you do need mom-and-pop stores. Look at SoHo: The much innovation. What changes can we expect to see? rents got too expensive. When you push too much, there’s no nightlife, Tokyo and Singapore would argue about being the food capital. The no evening business. Now the rents have come down and restaurants key thing is that food matters here and the quality is improving, and are moving back. The same with the Upper East Side. hopefully it is trickling down so the poor can eat better and the middle class can enjoy it more. “Restaurant” means to restore community, so New York’s restaurateurs say it’s hard to find qualified line cooks and sous- you see local restaurants helping their neighbors and the neighbor- chefs. You’re involved with a project called CCAP, Careers through Culinary hoods feel it, from hiring locally to bringing better food through green- Arts Program. What is it doing to help? markets. We will see restaurants change away from the four-wall Hiring practices in New York restaurants are highly competitive, so experience with UberEATS, for instance, so the restaurant can come to with every change I am pushing for more for my community. And it’s your door in a much more reliable time frame. Delivery of takeout will hard for young people to get into the business. With CCAP, we help keep evolving and technologically improving—delivery shouldn’t have kids learn life skills through food, and eventually we’ll be there when to be a matter of which block you live on. they think about going to college. When they come back to the com- munity, we have produced young adults who fill our needs. I tell them Can New York survive as a food city if rents go through the roof every time a the key skills are to be on time, to be polite and to put your best foot neighborhood becomes successful? forward. It’s part of the solution, not the solution itself. Ⅲ

PAUL FRANCIS INTERVIEW BY BARBARA BENSON HEALTH CARE Republic and what we can learn. WHO HE IS : New York state’s deputy secretary for health and human services Does consolidation—both among insurers and hospitals— AGE 61 worry you? BORN Santa Monica, Calif.; raised in Chappaqua, N.Y. It’s something we really have to watch. The five big EDUCATION Yale College; J.D., New York University School of Law national insurers are merging to three. New York is fortunate that it has a more robust nonprofit sector BONA FIDES A former CFO of Ann Taylor and Priceline.com, Francis served as director of state operations under Gov. David Paterson and director of than most markets. But there also is consolidation in agency redesign under Gov. Andrew Cuomo. the hospital industry. We have to balance the positive effects; it can reduce costs if it is done well. At the same time, it can create risk if there is too much You’ve been a lawyer, investment banker, corporate executive, venture consolidation. capitalist, director of Division of the Budget and of State Operations, Under the pressure of several trends, hospitals are and now the governor’s point person for health. What does the health closing, but they are, of course, big economic driv- sector mean to the New York economy, and how big a piece of the state ers. Will we see closures next year? budget is it? I don’t think we’ll see any closures next year. There The health care sector is the largest employer in most cities around the is $700 million in funding for a transition. We’ll see state. It certainly is in New York City. With federal dollars, the budget is over a multiyear period. There will be some tran- $60 billion for Medicaid alone. In terms of the state budget, it’s roughly sition, but not hospitals disappearing in 2016. equal to the $25 billion spent on school aid. It’s a huge part of the state budget. And the state is probably more responsible for health care than Brooklyn’s health care market is a trouble spot any other sector. It creates health care policy and is the purchaser of that will take lots of money and politics to fix. health care, through Medicaid, for one out of four New Yorkers. What’s ahead there next year? You will begin to see the direction of the Health care has so many sectors, among them hospitals, providers, in- transformation and concrete progress. surers, Medicaid and social services. Is one on your economic watch list Something as big as the transition of health for 2016? care for 3 million people won’t happen We’re in a period of tremendous disruption in health care. We are mov- overnight. ing from a hospital-centric model to providing care in the community and coordinating care among providers. Because we are in a time of What’s your worst fear about 2016? transition, the state is providing money to a number of hospitals. A great question. To a surprising degree, there’s consensus on how to improve Let’s take insurers. What are the touch points in 2016? health care based on empirical evidence. Health Republic’s failure really was a wake-up call. Thirteen of 23 co- That’s very different from income ops created under the Affordable Care Act failed. We want to make sure inequality or education. I really do we understand why. believe health care is an area where we will show a lot of positive changes. What will be the lingering impact of Health Republic’s failure—both financially and from a policy perspective—in 2016? That didn’t answer the It’s too soon to tell what the financial impact of Health Republic question. will be. From a policy perspective, we will really examine Right. When in doubt, say what decisions were made by the management of Health “cybersecurity.” Ⅲ

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ECONOMIC OUTLOOK 2016 MANUFACTURING

MARY ANNE TIGHE BY DANIEL GEIGER

WHO SHE IS CEO, New York tristate region, CBRE Group Inc. AGE 67 BORN Bronx EDUCATION Georgetown; master’s degree in art history, University of Maryland BONA FIDES Served as first and only chairwoman of the Real Estate Board of New York, the city’s most powerful real estate industry and lobbying group. She was among the first to suggest that the city rezone midtown east.

ANDREW KIMBALL BY GREG DAVID

WHO HE IS Chief executive, Industry City AGE 50 BORN New Haven, Conn. EDUCATION Hamilton College; Coro Public Affairs Fellowship Program BONA FIDES The 20-year resident of Brooklyn is one of the visionaries behind the concept of the innovation economy. He was previously CEO of the Economic Development Corp.

What is the new manufacturing? The new manufacturing is very different from the 1940s or ’50s in New York. It is a blending of sectors as a result of new tech- nologies and the ability of manufacturing goods in much smaller places than ever before. The innovation economy is defined as the broad range of making physical and digital products in media, design, fashion, film or art. They are the fastest-growing sectors in New York.

Give me three examples. Roll & Hill, which both designs and assembles really high-end lights and lighting systems for fancy apartments and hotels. Aerobo, COMMERCIAL REAL ESTATE a couple of young guys designing and making the next generation of drones—an engineering office that is now prototyping and assem- bling drones. FilmRise, which takes advantage of new technologies If the midtown east rezoning plan is passed in 2016, how will it immediately and broadband, and compresses films and prepares them for affect the neighborhood? Amazon Prime. You can’t go into the ground until your building is empty, so the word on the street is certain buildings are already putting demolition clauses in their leases. They’ll only do a lease with a right to terminate the deal if they decide to demolish or redevelop the building. investment sales activity in 2015. That’s bigger than the record set in 2007. People are still getting better returns out of real estate than fixed- Is that making tenants wary of leasing in those buildings? income investments. It discounts the value of the lease. But if your building is a site where you can build bigger and you’re a big landlord with the staying power, then it Co-working office space has become a craze in the city, driving WeWork’s behooves you to think about it. valuation to $10 billion. Can the industry and WeWork remain this popular? As long as the economy holds, the model is clearly something that is res- The Brooklyn office space market has added about 3.5 million square feet in onating for people. The moment we’ll know if this is in fact a systemic the past year and may have another 9.5 million feet in the next five years. change or a fad is the next time the cycle turns. Then we’ll know who the Will you focus more on Brooklyn? players really are. I have been Forest City Ratner’s agent for MetroTech and 1 Pierrepont Plaza. Our younger people here are teaching me Industry City, Speaking of downturns, aren’t we due for one? Williamsburg and Greenpoint. I don’t think most of my customers will We have had a long up cycle. What’s funny is that rents in midtown have want to put their main operations there. They’ll put their main opera- not yet matched their peak in the last cycle, and we’ve never had an up tions in Manhattan, but maybe there will be an aspect of their business cycle where the rents don’t go higher. It’s not a question of too much that they want to locate in Brooklyn. supply. People are hiring us now to help them buy out office tenants so that a building can be converted. We all know nothing is more valuable The Fed is widely expected to raise rates. What impact will a rate hike have than residential and hotels. on the real estate industry? In the near term they’re not going to raise them enough to be impactful Isn’t the market for residential and hotel space oversaturated, too? on our market. We’re going to have a record year of over $70 billion of The concern is an oversupply of apartments at $4,000 or $5,000 a square BUCK ENNIS

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ALAN SUNA INTERVIEW BY GREG DAVID FILM AND TELEVISION Why is the Brooklyn Navy Yard such a big success, now WHO HE IS Chief executive, Silvercup Studios employing 6,400 people, or double the number in 2001? AGE 63 The Navy Yard, Bush Terminal and the Brooklyn Army BORN Manhattan, raised in Kew Gardens and Roslyn, L.I. Terminal are each 4 million-plus square feet and formed the EDUCATION Cornell University; MIT/Harvard master’s program in real estate backbone of manufacturing in Brooklyn for 75 years. All of them fell into huge disrepair. Fifteen years ago, city govern- BONA FIDES Suna is a pioneer of the city’s film and TV production industry, launching ment began to say, “Let’s start investing in the basic infra- Silvercup Studios in 1983 and riding the ups and downs of the business. A vocal advocate of the state’s $420 million annual tax credit for film and TV production, he and structure at the Navy Yard because the people on the ground brother Stuart are building another studio, in the Bronx. have figured out there is a new form of manufacturing we can encourage.” We signed on Steiner Studios, which has exploded, and a wide range of other innovation-economy TV and film production in New York seems to be booming, with 46 episodic TV companies. shows produced here in 2014-15, up from 29 the year before, and 250 films so far this year, compared with 194 for all of 2014. What’s the story at Silvercup? What is different about what you are doing at Industry City? We are incredibly booked up. We have had one studio available in recent months The facility is not city-owned. The private sector hasn’t got- because one show shrunk in size. On a simultaneous basis we handle six network ten in this game in a big way on a campuswide basis because shows, including Person of Interest, Elementary, Younger, The Mysteries of Laura, it is so hard to make the economics work. Our plan is to bring Madam Secretary and a new show called The Family. retail to the base of these buildings to pay for $350 million in Madam Secretary, of course, is set in Washington, and infrastructure improvements and cross-subsidize the compa- The Family is set in Maine, which shows the impor- nies we lease to in the innovation economy. tance of the state tax credit in luring productions that could be shot elsewhere. What is the upside potential for you and for the city? We can go from 1,900 jobs two years ago to 4,000 today to While feature films seem to be growing, the key is ultimately 6,500 on-site and another 13,500 nearby, or television, right? 20,000 in total. With other similar projects in Brooklyn pur- I would estimate that 80% of the business in New suing the same objective, we could have 40,000 jobs in this York is episodic shows. sector in the next 10 years. Why is New York doing so well in film and TV Why can’t you find large-scale manufacturers to fill this space? production? It is clear that the days of the smokestacks are not coming New York has become a cleaner, safer city back. It’s challenging to find large-scale manufacturers in since the turn of the century. It especially has New York, and by that I mean firms that want more than become a magnet for young people, and so 50,000 square feet and have more than 50 employees in New many of the creative people in this business York, which is tiny, compared with factories elsewhere in the are young, like Lena Dunham of the hit United States or the rest of the world. HBO show Girls. She started working on the show with us when she was in her 20s. Can you produce good-paying jobs for people without higher degrees? You are building a Bronx studio. Why? What is happening at the Navy Yard, at Bush Terminal and at We have been looking at a site in Port Morris for Industry City is that upward of 50% of the people working at six or seven years. This represents a new product the complexes have just a high school degree, but the jobs for us. Our facilities here at Silvercup in Queens pay up to 40% more at entry level than service-sector jobs. are aging out and not always appropriate for the They provide a faster way up the economic ladder and they way people work today. The Bronx is a new tend to be primarily local employers. The focus should not be opportunity for us because we are going bigger on trying to re-create the 1950s. Instead, let’s focus on the and taller with clear heights of 52 feet—that industries that are doing the most to create opportunities for doesn’t exist anywhere—and clear spans of 100 those with less education. Ⅲ feet. It will be for shows that wouldn’t fit in our other facilities.

Many people say the state tax credit is a giveaway. foot, or higher. What is the highest an office building is selling You believe that without it, the business would dry up. for? It’s under $2,000 per square foot. For a decent residential Classic economic-development theory is “prime the building, you can sell units for $2,000 to $3,000 a foot. pump.” Use government money to get an industry going, and then it will succeed on its own. That Which has been and will continue to be more successful, the doesn’t work in our business because the industry is WTC site or Hudson Yards? so mobile. Consider the successful TV show Fringe, Both can be successful. We’re going to see downtown in its which was done at Silvercup for several seasons. fullest form next year. We’ll have the Calatrava station, 70 When the future of the tax credits was in doubt, Pine will open; by 2020 it’s all there. Whereas the Yards will Warner Brothers moved the show to Canada almost continue to amaze, but it’s a longer time horizon. overnight. The tax credits were eventually continued, but the studio wouldn’t take the risk. What would you like to see from Mayor Bill de Blasio’s adminis- tration in 2016? California has raised its tax credit to $330 million The real estate industry feels we’re being really well served by a year because it is losing business. Has that had this mayor. Affordable housing is one of his main goals, and an impact here? he knows that if he has an adversarial relationship with the I have not seen it, because it is primarily aimed real estate industry, it’s not going to get done. To me, the at the feature films that California was losing to midtown east rezoning is something that I want to see get other places, like Louisiana. Also, since the film done; it does so many things at the same time, creating and TV business is so much larger in California, $330 public-realm and mass-transit improvements while strength- million is not that large compared with New York’s ening nonprofits in the area. Ⅲ tax break. Ⅲ

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ECONOMIC OUTLOOK 2016

HANK SHEINKOPF INTERVIEW BY ROSA GOLDENSOHN POLITICS WHO HE IS Political consultant AGE 65 BORN Bronx EDUCATION York College; M.A., criminal justice, John Jay College; M.Phil. and Ph.D., political science, CUNY Graduate Center BONA FIDES Sheinkopf has worked on more than 700 campaigns since 1969, including those of Michael Bloomberg, Eliot Spitzer and Bill Clinton.

Could Democrats take the state Senate this year? Whether the state Senate and the U.S. Senate flip has entirely to do with whom the Republicans nominate [for president]. If they nom- RESIDENTIAL REAL ESTATE inate somebody who’s on the edges, the turnout against them will be significant. If they nominate somebody more in the center, it’s going to be harder to dislodge the Senate Republicans. INTERVIEW BY JOE ANUTA LISA GOMEZ What do the Albany corruption cases mean for the next legislative session? WHO SHE IS Chief operating officer, partner, L+M Development Partners Will Gov. Andrew Cuomo push ethics reform this year? AGE 53 Trust him to do that. Full disclosure, public disclosure, more sig- nificant disclosure. Not just by politicians but probably by lobby- BORN New Orleans ists, maybe consultants. The [legislative] institutions will continue Louisiana State University; New York University Schack Institute EDUCATION functioning. This is not the first time leadership has changed, nor of Real Estate is it the first time a speaker and a majority leader have been indict- BONA FIDES Gomez helps run one of the city’s top development firms building ed, or, in a couple cases, convicted. The gravity of the charges is affordable- and market-rate housing, and chairs an affordable-housing developer what’s stunning. But the calls will be for a full-time legislature and trade group. full disclosure, and that will probably be in legislation.

What does the rental market look like right now? The mayor’s approval numbers have been brutal, It is very difficult for people to find rental housing in the city. We’ve especially from whites. Is he going to win them back? always had a very constrained supply, and economic forces have con- There’s every chance that he can get back above spired to push that supply further down. Some of the anger that you 50%. But it’s up to him. It’s got to be about action. hear about in the communities with the mayor’s housing proposals Rhetoric ain’t big here. New Yorkers, when they go reflects people’s deep concerns about what is happening in New York. to sleep at night, want the mayor out there like Batman, going around the place, checking the locks The median household here can pay rent of about $1,325. Is there any way to on each house, and that the lights are on and build apartments for them without subsidies? there’s no potholes. They don’t want a social No. It’s all about land price. We have a scarcity of land. It is a happy experiment. problem to have, but it’s very difficult. You’re also competing against The best way to define what is going on condo developers in most neighborhoods. And there is a lot of money, in the polls is to say there is a large portion including foreign capital and equity funds, chasing very little product. of the electorate who feels things are not in control. Therefore they’re responding Is development important to bringing down the cost of living here? negatively toward the mayor, because the It is. You can’t build your way out of this, though. Preservation [of mayor’s job is to manage, not to set social affordable housing] is also important. policy. They might say that they really want social policy, but they really want What is the biggest problem facing residential development in 2016? the homeless to not be living on their Predictability is probably up there. We are not rushing out to buy land doorsteps, they want streets cleaned speculatively, because it’s hard to know what is going to happen with and they want crime stopped. And 421-a [an affordable-housing tax break] and the mayor’s proposal. when they feel things are out of control—whether in fact it is true or What will happen if 421-a, which offers a huge property-tax cut on new not—they are going to act. developments, is not renewed in January? There would be a further bifurcation of the market. There are options Why would that be the perception, even if it’s for pure affordable housing without 421-a, and luxury condos don’t not true? need it to begin with. So what we see as an attainable price point for Two reasons: media coverage and bad man- New Yorkers would continue to become more out of reach. agement of the perception. He keeps saying the same thing again and again and again. What will happen with the mayor’s zoning proposals? This is a job for very strong personalities. You The Zoning for Quality and Affordability proposal is really positive. have to be tough to do this, because the per- There is a lot of negativity around it, but it addresses a lot of things that ception of this town is that it’s a tough place. make moderate-income housing development less economic. Where we end up with mandatory inclusionary housing we’ll have to see. In Could he be a one-term mayor? strong neighborhoods, you can afford to make it work, but in weaker Every night Bill de Blasio needs to go home and neighborhoods, I don’t know. I don’t know how that happens at all pray that nothing crazy happens. If nothing without 421-a, or some other replacement tax abatement. crazy happens, he will be fine. But the problem in New York is that something crazy happens How will developers react to more affordable-housing requirements? all the time. People who predict his Developers are mutable creatures. Mixed income has never been a demise are wrong. Could anything hap- problem in New York. It is how we live: You live across the street pen in New York? The answer’s yes. The from somebody who is wealthier or poorer than you, or even in the last mayor who got unelected after one term was David same building. Ⅲ Dinkins. Riot. The [previous] one? Abraham Beame. Riot. It

BUCK ENNIS doesn’t happen that often. The stars have to line up. Ⅲ

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Notice of Qualification of TCW LLC, Notice of Qualification of MetaProp Advisors Notice of Qualification of Hojeij Ficticious Name: TCW U.S. LLC. Authority LLC. Authority filed with NY Dept. of State on Branded Foods, LLC. Authority filed with CAPTAIN COPY filed with Secy. of State of NY (SSNY) on 11/25/15. Office location: NY County. Princ. NY Dept. of State on 10/28/15. Office The Last Word LLC 10/30/15. Office location: NY County. LLC bus. addr.: 18 W. 21st St., NY, NY 10010. LLC location: NY County. Princ. bus. addr.: Speaking, Writing, formed in Delaware (DE) on 08/27/15. formed in DE on 5/26/15. NY Sec. of State 1750 The Exchange, Suite 200, Atlanta, Consulting & Production SSNY designated as agent of LLC upon designated agent of LLC upon whom process GA 30309. LLC formed in DE on 646.434.6738 z 734.237.6614 whom process against it may be served. against it may be served and shall mail 7/22/15. NY Sec. of State designated lastword.com Carol Dunitz, Ph.D. SSNY shall mail process to: 1251 Avenue process to: c/o CT Corporation System, 111 agent of LLC upon whom process of the Americas, Ste. 4700, NY, NY 10020. 8th Ave., NY, NY 10011, regd. agent upon against it may be served and shall mail TELECOMMUNICATIONS The address of the Registered Agent: whom process may be served. DE addr. of process to: c/o CT Corporation System, 111 National Registered Agents, Inc., 111 LLC: 2711 Centerville Rd., Ste. 400, 8th Ave., NY, NY 10011, regd. agent upon Eighth Ave., NY, NY 10011. Address to be Wilmington, DE 19808. Cert. of Form. filed whom process may be served. DE addr. NYC'S MOTOROLA maintained in DE: 160 Greentree Dr., Ste. 101, with DE Sec. of State, P.O. Box 898, Dover, of LLC: 1209 Orange St., Wilmington, MOTOTRBO SPECIALISTS Dover, DE 19904, also the principal office. DE 19903. Purpose: all lawful purposes. DE 19801. Cert. of Form. filed with DE Sec. of State, 401 Federal St., Dover, MOTOTRBOTM Arts of Org. filed with the DE Secy. of State, Professional Digital Two-way Radio Division of Corporations, John G. Townsend DE 19901. Purpose: all lawful purposes. System provides significant productivity Bldg., 401 Federal St., Ste. 4, Dover DE 39 EAST 72ND STREET LLC Articles of gains - reliably and affordably. 19901. Purpose: any lawful activities. • Clearer voice capability and enhanced Org. filed NY Sec. of State (SSNY) battery life 12/2/13. Office in NY Co. SSNY desig. Notice of Qual. of Kinneret Investments • Integrated voice and data for better agent of LLC upon whom process may be productivity and privacy GP, LLC, Auth. filed Sec’y of State (SSNY) • Text messaging Notice of Formation of FHRP INVESTMENTS, served. SSNY shall mail copy of process 1/14/15. Office loc: NY County. LLC org. • Doubles channel call capacity for LLC. Arts. of Org. filed with Secy. of State to c/o United States Corp. Agents, Inc., in DE 12/23/14. SSNY desig. as agent the price of one license of NY (SSNY) on 10/30/15. Office location: 7014 13th Ave., Ste. 202, Brooklyn, NY of LLC upon whom proc. against it may *$100 TRADE-IN PER RADIO NY County. SSNY designated as agent of 11228, which is also the registered be served. SSNY shall mail copy of proc. Call to learn more or to LLC upon whom process against it may agent upon whom process against the LLC to Att: Mony Rueven, 120 W. 45th St., schedule a professional, may be served. Purpose: Any lawful purpose. no-obligation survey or be served. SSNY shall mail process to: c/o NY, NY 10036. DE office addr.: CSC, on-site demo. eResidentAgent, Inc., 12121 Wilshire Principal business location: 1155 Avenue 2711 Centerville Rd., Wilmington, DE Blvd., Ste. 1201, Los Angeles, CA 90025. of the Americas , 6th Fl, NY, NY 10036. 19808. Cert. of Form. on file: SSDE, Purpose: any lawful activities. Townsend Bldg., Dover, DE 19901. Purp: any lawful activities. Notice of Formation of Tick Tock Series, LLC. Arts of Org filed with Notice of Qualification of QPT 24th 33 East 33rd Street SSNY on 9/3/2015. Office location: STREET DEVELOPMENT LLC Appl. for Auth. Notice of Formation of NU VINTAGE New York, NY 10016 NY County. Princ. bus. addr.: 838 filed with Secy. of State of NY (SSNY) on RECORDS, LLC Arts. of Org. filed with 212-532-7400 Greenwich St. PHB, NY, NY 10014. www.metrocomradio.com 11/18/15. Office location: NY County. LLC Secy. of State of NY (SSNY) on 11/13/15. SSNY designated agent upon whom formed in Delaware (DE) on 11/12/15. Office location: NY County. SSNY desig- process may be served against LLC SSNY designated as agent of LLC upon nated as agent of LLC upon whom process to: 440 W 47 St. #3i NY, NY 10036. whom process against it may be served. against it may be served. SSNY shall POSITION AVALIABLE Purpose: any lawful act. SSNY shall mail process to c/o mail process to Corporation Service Co., Corporation Service Co., 80 State St., 80 State St., Albany, NY 12207, regd. AO, Senior Operations Analyst Albany, NY 12207-2543. DE addr. of LLC: agent upon whom and at which (AllianceBernstein L.P. - New York, NY) 2711 Centerville Rd., Ste. 400, Notice of formation of We Do Strong, LLC. process may be served. Purpose: Any Prfrm studies & produce rprts in post Wilmington, DE 19808. Cert. of Form. Arts of Org filed with Secy. Of State of NY lawful activity. invstmnt portfolio analytics. F/T. Reqs filed with DE Secy. of State, Div. of Corps., (SSNY) on 10/7/2015. Office location: NY Master’s dgr (or frgn equiv) in Math, PO Box 898, Dover, DE 19903. County. SSNY designated agent upon Purpose: Any lawful activity. Acct’g, Finan, BusAdmin, CS or rel fld & whom process may be served and shall mail copy of process against LLC to Notice of Qual. of 110 Greene GP LLC, Auth. filed 2 yrs exp in job offered or analytical principle business address: 222 Sec’y of State (SSNY) 7/30/15. Office loc: wrk w/in financl ind. In lieu of Master’s Riverside Dr. #8A NY, NY 10025. Purpose: NY Co. LLC org. in DE 6/1/15. SSNY desig. dgr & 2 yrs exp as stated, will accept Notice of Formation of Pearson Place Any lawful act. as agent of LLC upon whom proc. against it Bach’s dgr (or frgn equiv) & 5 yrs exp Holdings, LLC. Arts. of Org. filed with NY Dept. may be served. SSNY shall mail copy of as stated. All stated exp mst incl the of State on 12/3/15. Office location: NY proc. to NRAI, 111 Eighth Ave., NY, NY follw’g: Relational database mgmt; cre- County. Sec. of State designated agent of 10011, the Reg. Agt. upon whom proc. may at’g complex SQL queries, navigat’g LLC upon whom process against it may be Notice of Formation of S7HARRISON, LLC be served. DE office addr.: 160 Greentree served and shall mail process to: c/o thru lg databases to identify objs need- Arts. of Org. filed with Secy. of State of NY Dr., Ste. 101, Dover, DE 19904. Cert. of Windels Marx Lane & Mittendorf, LLP, 156 (SSNY) on 11/12/15. Office location: NY ed & analyz’g data to draw conclu- Form. on file: SSDE, Townsend Bldg., Dover, W. 56th St., NY, NY 10019, Attn: Charles J. County. SSNY designated as agent of LLC upon DE 19901. Purp: any lawful activities. sions; hands-on exp wrk’g w/ lg data Hamilton. Purpose: all lawful purposes. whom process against it may be served. sets & solv’g complex data issues; & SSNY shall mail process to Corporation utiliz’g financl instruments & data Service Co., 80 State St., Albany, NY solv’g skills rel to financl mkts. 12207-2543. Purpose: Any lawful activity. Notice of Qualification of CHOLLA 34 Resumes: J. Alvia, AllianceBernstein Notice of Qualification of Panorama Music LLC. Authority filed with Secy. of State L.P., 1345 Ave of the Americas, New Festival, LLC. Authority filed with NY Dept. of NY (SSNY) on 10/30/15. Office of State on 11/25/15. Office location: NY York, NY 10105. JobID NEWRWA. location: NY County. LLC formed in County. Princ. bus. addr.: c/o AEG Live, Notice of Formation of LDL Chatham Delaware (DE) on 10/13/15. SSNY 145 W. 45th St., 9th Fl., NY, NY 10036. LLC Retail LLC, Art. of Org. filed with Sec’y designated as agent of LLC upon formed in DE on 11/20/15. NY Sec. of of State (SSNY) on 8/3/15. Office location: whom process against it may be PUBLIC AND LEGAL NOTICES State designated agent of LLC upon whom NY County. SSNY designated as agent of served. SSNY shall mail process to: process against it may be served and LLC upon whom process against it may be Joel D. Rubin c/o Seyfarth LLP, 131 S. shall mail process to: c/o CT Corporation served. SSNY shall mail copy of process to Dearborn St., Ste. 2400, Chicago, IL System, 111 8th Ave., NY, NY 10011, regd. NRAI, 111 Eighth Ave., NY, NY 10011, 60603. Address to be maintained in DE: BENKSHAW ENTERPRISES LLC Articles agent upon whom process may be served. the Reg. Agt. upon whom proc. may be of Org. filed NY Sec. of State (SSNY) 1209 Orange St., Wilmington, DE 19801. DE addr. of LLC: c/o The Corporation served. Purpose: any lawful activities. Arts of Org. filed with the DE Secy. of 11/16/2015. Office in NY Co. SSNY desig. Trust Co., 1209 Orange St., Wilmington, agent of LLC upon whom process may State, 401 Federal St., Ste. 3, Dover, DE 19801. Cert. of Form. filed with DE DE 19901. Purpose: any lawful activities. be served. SSNY shall mail copy of Sec. of State, 401 Federal St., Dover, NOTICE OF FORMATION OF ULLI’S process to 343 E. 74th St., #17CD, NY, NY DE 19901. Purpose: all lawful purposes. 10021. Purpose: Any lawful purpose. OILMILL LLC. Arts of Org filed with Secy. of State of NY (SSNY) on 7/14/2015. Office location: NY County. SSNY desig- NOTICE OF FORMATION OF TYCHE Notice of Qualification of MPNYC GP I LLC. nated agent upon whom process may be COMPLIANCE CONSULTING, LLC.Articles Notice of Qualification of Endale Capital Authority filed with NY Dept. of State on served and shall mail copy of process of Organization filed with the Secretary Onshore Fund LLC. Authority filed with NY 11/25/15. Office location: NY County. against LLC to principal business address: of State of NY (SSNY) on 09/03/2015. Dept. of State on 10/13/15. Office Princ. bus. addr.: 18 W. 21st St., NY, NY 34 E. 30th St. 3rd floor, NY, NY 10016. Office location: New York County. SSNY location: NY County. LLC formed in DE on 10010. LLC formed in DE on 11/4/15. NY Purpose: any lawful act. has been designated as agent upon whom 10/1/15. NY Sec. of State designated Sec. of State designated agent of LLC process against it may be served. The agent of LLC upon whom process upon whom process against it may be Post Office address to which the SSNY against it may be served and shall mail served and shall mail process to: c/o CT NOTICE OF FORMATION of ANNETTE LO shall mail a copy of any process against process to: 900 Third Ave., Ste. 1101, NY, Corporation System, 111 8th Ave., NY, NY LLC. Arts of Org filed with Secy. of State of Ny the LLC served upon him/her is: United NY 10022, principal business address. 10011, regd. agent upon whom process (SSNY) on 10/15/2015. Office location: States Corporation Agents Inc at 7014 DE address of LLC: c/o The Corporation may be served. DE addr. of LLC: 1209 NY County. SSNY designated agent upon 13th Avenue, Ste 202, Brooklyn, NY Trust Co., 1209 Orange St., Wilmington, Orange St., Wilmington, DE 19801. Cert. whom process may be served and shall mail 11228. The principal business address DE 19801. Cert. of Form. filed with DE of Form. filed with DE Sec. of State, P.O. copy of process against LLC to principal of the LLC is: 33 W 93rd Street, Ste Sec. of State, PO Box 898, Dover, DE Box 898, Dover, DE 19903. Purpose: all business address: 247 W 46th St. Apt. 3804 5R, New York, NY 10025. Purpose: any 19903. Purpose: all lawful purposes. lawful purposes. NY, NY 10036. Purpose: any lawful act. lawful act or activity.

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Notice of Qualification of AmeriNational Notice of Qualification of S.E. MARLEY Notice of Formation of CS CROMWELL Notice of Formation of RCoast Partners Community Services, LLC. Authority filed CONSULTING, LLC Appl. for Auth. filed LLC. Arts. of Org. filed with Secy. of State LLC Arts. of Org. filed with Secy. of State with NY Dept. of State on 10/28/15. with Secy. of State of NY (SSNY) on of NY (SSNY) on 10/28/15. Office loca- of NY (SSNY) on 11/06/15. Office location: Office location: NY County. LLC registered 11/18/15. Office location: NY County. tion: NY County. SSNY designated as agent NY County. SSNY designated as agent of in MN on 6/1/15. NY Sec. of State LLC formed in Delaware (DE) on of LLC upon whom process against it may LLC upon whom process against it may designated agent of LLC upon whom 11/16/15. SSNY designated as agent of be served. SSNY shall mail process to: be served. SSNY shall mail process to process against it may be served and LLC upon whom process against it may be The LLC, 1350 Broadway, Ste. 1010, NY, c/o Anthony F. Vitiello, Connell Foley shall mail process to: c/o CT served. SSNY shall mail process to Stephen NY 10018. Purpose: any lawful activity. LLP, 888 Seventh Ave., Ninth Fl., NY, NY Corporation System, 111 8th Ave., NY, NY Edward Marley, Jr., 4705 Henry Hudson 10106. Purpose: Any lawful activity. 10011, regd. agent upon whom process Pkwy., Apt. 11F, Bronx, NY 10471. DE may be served. MN and principal business addr. of LLC: c/o Corporation Service Co., address: 217 S. Newton Ave., Albert Lea, 2711 Centerville Rd., Ste. 400, Notice of Qualification of Argentem Creek Notice of Formation of NORTE EQUITY, MN 56007. Cert. of Reg. filed with MN Wilmington, DE 19808. Cert. of Form. Partners LP. Authority filed with NY Dept. LLC Arts. of Org. filed with Secy. of Sec. of State, 60 Empire Dr. #100, St. Paul, filed with DE Secy. of State, 401 of State on 11/13/15. Office location: NY State of NY (SSNY) on 11/13/15. Office MN 55103. Purpose: all lawful purposes. Federal St., Ste. 3, Dover, DE 19901. County. Princ. bus. addr.: 165 W. 91st St., location: NY County. SSNY designated as Purpose: Any lawful activity. Apt. 8E, NY, NY 10024. LP formed in DE agent of LLC upon whom process against on 9/18/15. NY Sec. of State designated it may be served. SSNY shall mail process agent of LP upon whom process against Notice of Qualification of ROUNDABOUT to Corporation Service Co., 80 State St., it may be served and shall mail process Albany, NY 12207, regd. agent upon GP LLC Appl. for Auth. filed with Secy. Notice of formation of The Range NYC to: c/o CT Corporation System, 111 8th of State of NY (SSNY) on 11/05/15. LLC. Art. of Org. filed w/ Secy. of State of whom and at which process may be Ave., NY, NY 10011, regd. agent upon served. Purpose: Any lawful activity. Office location: NY County. LLC formed State of NY (SSNY) on 11/2/15. Office whom process may be served. DE addr. in Delaware (DE) on 07/01/13. Princ. location: NY County. SSNY designated of LP: 1209 Orange St., Wilmington, DE as agent for service of process. SSNY office of LLC: 183 Madison Ave., Ste. 19801. Name/addr. of genl. ptr. available Notice of Formation of Smart City shall mail process to 155 E. 49th St. #6B, 1214, NY, NY 10016. SSNY designated as from NY Sec. of State. Cert. of LP filed with Media, LLC Arts of Org. filed with NY, NY 10017. Purpose: Any lawful activity. agent of LLC upon whom process against DE Sec. of State, 401 Federal St., Dover, Secy. of State of NY (SSNY) on it may be served. SSNY shall mail process DE 19901. Purpose: all lawful purposes. 2/13/15. Office location: NY County. to the LLC at the princ. office of the LLC. Princ. office of LLC: 1200 Broadway, The regd. agent of the company upon Notice of Formation of UES EAST 82ND Suite 4e, NY, NY 10001. SSNY des- whom and at which process against the STREET L.P. Cert. of LP filed with Secy. ignated as agent of LLC upon whom company can be served is Alexander of State of NY (SSNY) on 11/17/15. Notice of Qualification of Endale Capital process against it may be served. Teicher, 183 Madison Ave., Ste. 1214, NY, Office location: NY County. Latest date Management GP LLC. Authority filed with SSNY shall mail process to the LLC NY 10016. DE addr. of LLC: c/o on which the LP may dissolve is NY Dept. of State on 10/13/15. Office at the addr. of its princ. Office. Corporation Service Co., 2711 Centerville 9/25/2045. SSNY designated as location: NY County. LLC formed in DE Purpose: Any lawful activity. Rd., Ste. 400, Wilmington, DE 19808. agent of LP upon whom process against on 10/1/15. NY Sec. of State designated Cert. of Form. filed with Secy. of State it may be served. SSNY shall mail process agent of LLC upon whom process against of the State of DE, 401 Federal St., Dover, to Ballon Stoll Bader & Nadler, P.C., 729 it may be served and shall mail process Name of Foreign LLC: AMRO DE 19901. Purpose: Any lawful activity. Seventh Ave., 17th Fl., NY, NY 10019. to: 900 Third Ave., Ste. 1101, NY, NY Construction Services LLC. Auth. filed with Name and addr. of each general partner 10022, principal business address. DE NY Dept. of State: 11/3/15. Office loc.: are available from SSNY. Purpose: Any address of LLC: c/o The Corporation NY Co. LLC formed in DE: 3/24/08. NY Notice of Formation of SFE MANAGE- lawful activity. Trust Co., 1209 Orange St., Wilmington, Sec. of State designated agent of LLC MENT LLC Arts. of Org. filed with Secy. DE 19801. Cert. of Form. filed with DE upon whom process against it may be of State of NY (SSNY) on 11/06/15. Sec. of State, PO Box 898, Dover, DE served and shall mail process to: c/o 19903. Purpose: all lawful purposes. Business Filings Inc., 187 Wolf Rd., Office location: NY County. Princ. office Notice of Qual. of Kudu Investment Fund of LLC: 4921 11th Ave., Brooklyn, NY Ste. 101, Albany, NY 12205. DE addr. Partners I, LP, Auth. filed Sec’y of State of LLC: 108 W. 13th St., Wilmington, 11219. SSNY designated as agent of (SSNY) 2/20/15. Off. loc: NY Co. LP org. in LLC upon whom process against it may DE 19801. Cert. of Form. filed with DE DE 12/9/14. SSNY desig. as agent of LP upon Notice of Formation of KAGAOAN ENGINEERING, be served. SSNY shall mail process to Sec. of State, 401 Federal St., Dover, whom proc. against it may be served. P.L.L.C.,a Professional Limited Liability Corporation Service Co., 80 State St., DE 19901. Purpose: any lawful act. SSNY shall mail copy of proc. to 515 Company. Art. of Org. filed with the Albany, NY 12207, regd. agent upon Madison Ave., 24th Fl., NY, NY 10022. SSNY on10/28/2015. Office Location: whom and at which process may be DE office addr.: CSC, 2711 Centerville Richmond County. SSNY has been des- served. Purpose: Any lawful activity. Rd., Wilmington, DE 19808. Cert. of LP ignated as agent upon whom process Notice of Qualification of 201 West on file: SSDE, Townsend Bldg., Dover, DE against it may be served. SSNY shall 54th Buyer LLC. Authority filed with NY 19901. Name/addr. of each gen. ptr. avail. mail a copy of process to: c/o The PLLC, Dept. of State on 8/6/07. Office loca- at SSNY. Purp: any lawful activities. tion: NY County. Princ. bus. addr.: 805 Notice of Qualification of Argentem Creek 224 Livermore Avenue, Staten Island, NY 10314. Purpose: Any Lawful act or activity 3rd Ave., 7th Fl., NY, NY 10022. LLC Holdings LLC. Authority filed with NY Dept. formed in DE on 7/18/07. NY Sec. of of State on 11/13/15. Office location: NY State designated agent of LLC upon County. Princ. bus. addr.: 165 W. 91st St., Notice of Qual. of Lakewood Discovery whom process against it may be Apt. 8E, NY, NY 10024. LLC formed in DE Fund, LP, Auth. filed Sec’y of State (SSNY) served and shall mail process to: c/o on 9/18/15. NY Sec. of State designated 5/29/15. Off. loc: NY Co. LP org. in DE Notice of Formation of SAVE GAN- CT Corporation System, 111 8th Ave., agent of LLC upon whom process against 5/28/15. SSNY desig. as agent of LP upon SEVOORT LLC Arts. of Org. filed with Secy. NY, NY 10011. DE addr. of LLC: c/o it may be served and shall mail process whom proc. against it may be served. SSNY of State of NY (SSNY) on 10/30/15. The Corporation Trust Co., 1209 to: c/o CT Corporation System, 111 8th shall mail copy of proc. to 650 Madison Office location: NY County. Princ. office Orange St., Wilmington, DE 19801. Ave., NY, NY 10011, regd. agent upon Ave., 25th Fl., NY, NY 10022. DE off. addr.: of LLC: 61 Jane St., Apt. 17K, NY, NY Cert. of Form. filed with DE Sec. of whom process may be served. DE addr. CSC, 2711 Centerville Rd., Wilmington, DE 10014. SSNY designated as agent of State, 401 Federal St., Dover, DE of LLC: 1209 Orange St., Wilmington, 19808. Cert. of LP on file: SSDE, Townsend LLC upon whom process against it may 19901. Purpose: all lawful purposes. DE 19801. Cert. of Form. filed with DE Bldg., Dover, DE 19901. Name/addr. of be served. SSNY shall mail process to Sec. of State, 401 Federal St., Dover, each gen. ptr. avail. at SSNY. Purp: any Elaine Young at the princ. office of the DE 19901. Purpose: all lawful purposes. lawful activities LLC. Purpose: Any lawful activity. Notice of Formation of Daphnie Yang Fitness LLC. Arts of Org filed with Secy. of State of NY (SSNY) on 9/16/2015. Office location: NY County, upon whom process may be served and shall mail copy of process against LLC to the WANT TO GET YOUR COMPANY principal business address: 63 Wall St. #3105 NY, NY 10005. Purpose: any IN FRONT OF 250,000 INFLUENTIAL lawful act. 0000048264 w.o.

BUSINESS PROFESSIONALS? Notice of Qualification of 157E55 Owner LLC. Authority filed with NY Dept. of State on 11/2/15. Office loca- tion: NY County. LLC formed in DE on 9/1/15. NY Sec. of State designated Contact Joanne Barbieri agent of LLC upon whom process against it may be served and shall mail at 212-210-0189 for process to: c/o CT Corporation System, 111 8th Ave., NY, NY 10011. DE classified advertising opportunities. address of LLC: c/o Corporation Trust Co., 1209 Orange St., Wilmington, DE 19801. Cert. of Form. filed with DE Sec. of State, 401 Federal St., Dover, DE 19901. Purpose: all lawful purposes.

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GOTHAM GIGS

THE COLLAR OF MONEY: Former Marist player Patrick Kerr’s gray safety collar is catching on among college and pro teams.

Saving football players from themselves Inventor Patrick Kerr’s collar is designed to protect necks from nerve damage

atrick Kerr wants to save football’s neck. The Kerr Collar sells for $149.99 through the Kerr Sports web- Manhattan chiropractor designed a protec- site and retailers including Dick’s Sporting Goods. That PATRICK KERR tive collar to insert between a player’s shoul- price point makes it a “parental buy” and beyond the der pads and jersey to reduce the force of budgets of many school districts, Kerr said. A lower cost AGE 48 blows endured during games and practices. The device P would make his invention more accessible, but at $150 it BORN Belfast, Northern Ireland rises to support the neck and head as a player prepares generates “pretty good” margins that will let Kerr recoup RESIDES Manhattan to make a tackle. The aim is to control neck his R&D spending and cover $96,000 in movement, which could prevent a common annual product liability insurance. EDUCATION Marist College, injury called a stinger, a nerve condition that “The neck is All NFL teams have the device. A num- associate’s degree in health science can vary in severity. completely ber of college programs have purchased and B.A. in communications; Life “The neck is completely overlooked in overlooked collars for players, including Virginia University, doctor of chiropractic football,” he said. in football” Tech, where head athletic trainer Mike GRIDIRON Kerr played linebacker Concussions in the NFL highlight the bru- Goforth said about a dozen players wear at Marist from 1986 to 1989 tality of the sport—and got the Hollywood it. The Miami Dolphins have 18 collars and SELLING SAFETY Kerr Sports is treatment in Will Smith’s Concussion, a biopic of Dr. ordered a dozen more earlier this year, Kerr said. on target to sell 4,000 collars in Bennet Omalu, who discovered a link between football Still, the collar has a built-in marketing challenge: 2015, or $370,000 in sales, more and a debilitating brain disease. When a high-profile player wears it in prime time, it than double 2014’s number A former collegiate football player, Kerr made his is hidden beneath a uniform. own makeshift collar when he played by taping a piece With his office just 16 blocks down Park Avenue OUCH In a 2014 study of 304 of foam to his shoulder pads to protect his neck. As a from NFL headquarters, Kerr has tried and failed to football players at the high-school, chiropractor, he knew a device had to strike a balance meet with league officials, who could send sales soaring college and pro levels, half reported between safety and comfort while letting a player eas- with their endorsement—and, Kerr believes, protect having experienced a stinger ily move his neck to scan the field. players. “I always say [NFL Commissioner Roger] To translate that idea into a product took nearly a Goodell doesn’t have to walk that far to understand

BUCK ENNIS decade and $1 million in research and development. The exactly how to make football safer.” — JONATHAN LAMANTIA

24 | CRAIN’S NEW YORK BUSINESS | DECEMBER 14, 2015 20151214-NEWS--0025-NAT-CCI-CN_-- 12/11/2015 5:40 PM Page 1

SNAPS

Louie and Frank centennials bring in the crowds Centennial celebrations of jazz icons were a popular theme at recent charity fundraisers. At a Dec. 2 gala at Capitale, the Louis Armstrong House Museum of Corona, Queens, celebrated the 100th anniversary of the jazz legend’s first professional gig. The musician also known as Satchmo first took to the stage in 1915, at a bar in New Orleans, where he performed nightly for six months after hauling coal during the day. Meanwhile, Lincoln Center for the Performing Arts and the New York Philharmonic celebrated the legacy of Frank Sinatra, who would have turned 100 on Dec. 12. Singers including Sting covered songs that Ol’ Blue Eyes made famous.

John Utendahl, executive vice chairman of global cor- porate and investment banking at Bank of America, and Mila Lolli, model and fashion designer, at the Louis Armstrong House Museum’s annual gala.

Lincoln Center salutes Sinatra

Musician Cyril Neville and Robert F. Smith, founder, chairman and CEO of Vista Equity Partners, at the fundraiser for the Louis Armstrong House Museum, which raised $300,000.

YMCA honors Hispanic Achievers

Jim Rosenthal, chief operating officer at Morgan Stanley, and Jed Bernstein, presi- dent of Lincoln Center, at the Sinatra event, which raised $2.2 million to refurbish David Geffen Hall.

Richard Levine, senior vice president of CBRE Inc., actor Jack Tynan, Tim Tynan, CEO of Bank of America Merchant Services, and Antonio Perez, president of the Borough of Manhattan Community College/CUNY, at the YMCA of Greater New York’s Hispanic Achievers Reception on Dec. 1.

Tony winner Philip Berry, vice Bernadette chair of the board Peters and of trustees at City Grammy winner University of New Fantasia at the York, and Ruben Dec. 3 Sinatra Diaz Jr., Bronx bor- gala at David ough president, at Geffen Hall. the event, held at Le Parker Meridien. It raised $75,000 for the YMCA of Greater New York. SEE MORE OF THIS WEEK’S SNAPS ONLINE AT CRAINSNEWYORK.COM/SNAPS

TOP: LOUIS ARMSTRONG HOUSE MUSEUM/BOTTOM: YMCA MUSEUM/BOTTOM: HOUSE OFARMSTRONG LOUIS NEWTOP: GREATER YORK, GETTY IMAGES GET YOUR GALA IN SNAPS. EMAIL THERESA AGOVINO, [email protected]

DECEMBER 14, 2015 | CRAIN’S NEW YORK BUSINESS | 25 20151214-NEWS--0026-NAT-CCI-CN_-- 12/11/2015 5:42 PM Page 1

FOR THE RECORD*

mall. It will include Park Houses in Brooklyn square foot in the base- directly holds 864,947 NEW IN TOWN H&M’s signature men’s and West Brighton Plazas ment and subbasement. STOCK TRANSACTIONS shares. and women’s collections, I and II on Staten Island. The Scoreboard as well as a cosmetics sec- Nonelectronic bid docu- Switch Playground, a Goldman Sachs Group Prudential Financial Inc. JFK International Airport tion to showcase beauty ments are available Cape Town, South Africa- Inc. (GS) (PRU) The local-team sports products. Monday through Friday, based gym, signed a 12- Gary Cohn, president and Mark Grier, vice chairman, store opened its first U.S. from 9 a.m. to 4 p.m., at year deal for 754 square COO, exercised options on exercised options on location in JFK airport’s 90 Church St., sixth floor, feet on the ground level 39,290 shares of common 63,669 shares of common Terminal 4. Customers will BANKRUPTCIES for a $25 fee in the form and 5,413 below grade at stock at a price of $131.64 stock at a price of $76.15 find an assortment of mer- of a money order or certi- 176 Sixth Ave. J.W. Burke per share between Nov. 23 per share on Dec. 1, in a chandise, including First American Brands fied check made payable & Co.’s Jonathan Burke and Nov. 25, in a transac- transaction worth apparel, featuring all Inc. to NYCHA. Documents and Lena Roth represent- tion worth $5,172,136. On $4,848,395. On the same major New York profes- 55 W. 39th St. can also be obtained by ed the tenant. Walker the same days, he sold day, he sold 62,245 shares sional sports teams. Filed for Chapter 7 bank- registering with Malloy & Co.’s Rafe Evans 39,290 shares of common of common stock at a price ruptcy on Nov. 24. The fil- nyc.gov/nycha represented the landlord. stock at prices ranging of $86.93 per share, in a Snow Peak ing cites estimated assets business. To make The asking rent was $250 from $187.42 to $190.86 transaction worth 59 Crosby St. of $1,000,001 to $10 mil- inquiries, contact Erneste on the ground level and per share, in a transaction $5,410,958. He now direct- The Japanese camping and lion and estimated liabili- Pierre-Louis at (212) 306- $75 on the sublevel. worth $7,431,666. He now ly holds 323,754 shares. outdoor retailer opened its ties of $10,000,001 to $50 3609 or erneste.pierre- first New York City store, million. The creditors with [email protected]. in SoHo. The 2,200- the largest unsecured square-foot shop markets claims are HSBC, owed DEALS ROUNDUP its men’s and women’s $153,333; Drom REAL ESTATE DEALS collections as unisex. It Fragrances, owed TARGET/SELLERS TRANSACTION BUYERS/INVESTORS TRANSACTION TYPE SIZE [IN MILLIONS] plans to use its 1,100- $149,448.20; and Disney COMMERCIAL square-foot lower level as Consumer Products Latin Perkins Eastman American Residential $1,405.6 American Homes 4 Rent SB M&A an event space. America, owed $139,883. renewed its lease for Properties Inc./Discovery Group Holding Co.; JPMorgan 77,000 square feet at 115 Investment Management Inc. Ten-Ichi Ramen Gotham Installations Inc. Fifth Ave. The architec- (Manhattan); Kendall Family 382 Seventh Ave., c/o 853 Pulaski Road, ture firm has occupied Investments; Land and Buildings Investment Management; Long Brooklyn Greenlawn, L.I. the second, third and Pond Capital (Manhattan); Scopia The ramen restaurant Filed for Chapter 7 bank- sixth floors at the build- Capital Management (Manhattan); opened in . ruptcy on Nov. 23. The fil- ing between East 18th SSGA Funds Management Inc. Slurpy-noodle enthusiasts ing cites estimated assets and 19th streets for the Armacell GmbH/ $1,008.9 Kirkbi Invest A/S; FB M&A can choose from chicken, of $0 to $50,000 and esti- past 18 years. Stephen Charterhouse Capital Partners Blackstone Group (Manhattan) miso salmon, organic tofu mated liabilities of Siegel, Harly Stevens and and pork ramen, at prices $500,001 to $1 million. Paul Stimpfle of CBRE Rubicon Oilfield $300.0 Warburg Pincus (Manhattan) GCI ranging from $11 to $13. The creditors with the represented the tenant. International/not disclosed largest unsecured claims The Winter Organi- Mattson Technology Inc./ $294.3 Beijing E-Town Capital FB M&A Treadwell Park are American Express, zation’s Benjamin Winter Adirondack Research 1125 First Ave. owed $59,703; American represented the landlord & Management Inc. (Guilderland, The beer hall opened on Express Bank FSB, c/o in-house. NY); Columbia Management Investment Advisers; Firsthand the Upper East Side. It Jaffe & Asher, owed Capital Management Inc.; Royce & features 20 draft beers and $39,229; and The Hartford, The New York Stem Cell Associates (Manhattan) ciders that rotate weekly, owed $13,205. Foundation signed a 21- and an on-site capacitor year lease for 41,500 Rover Petroleum/not disclosed $250.0 Management of Rover Petroleum; GCI Riverstone Holdings (Manhattan) that measures each brew square feet at 619 W. to chemical perfection. A GOVERNMENT 54th St. The nonprofit Pulaski Financial Corp./ $210.9 First Busey Corp. SB M&A fireplace, self-serve pop- CONTRACT will occupy all of the Basswood Capital corn and pinball machines OPPORTUNITIES third and part of the Management (Manhattan) are a few of the amenities second floors of the 10- included. CONSTRUCTION story building between Undertone Networks Inc. $180.0 Perion Network Ltd. SB M&A (Manhattan)/Intercept Interactive Department of Design 11th and 12th avenues. (Manhattan); JMI Equity and Construction CBRE’s Gary Kamenetsky COMPANY MOVES Seeks competitive sealed and Stephen Siegel repre- HF Financial Corp./Dimensional $139.3 Great Western Bancorp Inc. SB M&A bids by 11 a.m. on Jan. 7 sented the tenant. The Fund Advisors; Heartland Advisors Inc.; Jacobs Asset Management Biang! for the installation of side- landlord, Taconic (Manhattan); M3F Inc.; Maltese 157 Second Ave. walks, adjacent curbs and Investment Partners, was Capital Management (Manhattan); Xi’an Famous Foods pedestrian ramps as nec- represented by JRT Realty PL Capital Advisors; PL Capital owner Jason Wang is essary in various locations Group’s Ellen Israel, Peloton Interactive Inc. $75.0 Catterton Partners Corp. GCI opening an outpost of his in Manhattan and the Kristen Morgan and Greg (Manhattan)/not disclosed Flushing eatery in the East Bronx. A bid document Smith. Village. Based on tradi- deposit of $35, in the form Selected deals announced for the week ended Dec. 3 involving companies in metro New York. SB M&A: tional Xian cuisine, the of a money order or com- RETAIL 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 family-style menu pany check, is required. The Museum of Modern acquisition of existing shares of a company with the participation of a financial buyer. GCI: Growth capital includes spicy lamb Bid documents are avail- Art Design Store signed a investment represents new money invested in a company for a minority stake. dumplings and freshly able at nyc.gov/buildnyc. 15-year renewal for its SOURCE: CAPITALIQ pressed buckwheat noo- To make inquiries, contact 15,000-square-foot store dles in chili oil and soy Yamina Youb at (718) 391- at 81 Spring St. Colliers sauce. 1016 or youbya@ddc International’s Patrick GET YOUR NEWS ON THE RECORD .nyc.gov. Breslin, April Kim, *To submit company openings, moves or real estate deals, or to receive further information, H&M Marvin Rosenberg and email [email protected]. 250 Greenwich St. GOODS AND SERVICES Ken Yip represented the For the Record is a weekly listing to help businesspeople in New York find opportunities, The Swedish clothing Housing Authority landlord, who was potential new clients and updates on customers. Bankruptcy filings from the Eastern and retailer will open a store at Seeks competitive sealed unnamed. Dallimore & Southern districts of New York are listed alphabetically, as are recently announced New the Westfield World Trade bids by 10 a.m. on Jan. 7 Co.’s Simon Dallimore York City agency contract opportunities. Real estate listings are provided in order of square Center mall in the spring. for maintenance painting represented the tenant. footage. Stock transactions at New York’s largest publicly held companies were filed with At 25,000 square feet, the of apartments at the The asking rent was $450 the Securities and Exchange Commission. Listings are in order of transaction value, and the information was obtained from Thomson Reuters. shop will be the largest Smith Houses in per square foot on the fashion retailer in the Manhattan, the Cooper ground floor, and $90 per

26 | CRAIN’S NEW YORK BUSINESS | DECEMBER 14, 2015 20151214-NEWS--0027-NAT-CCI-CN_-- 12/11/2015 6:02 PM Page 1

PHOTO FINISH

Saving by the bell t the entrance to Rockefeller Center on Fifth Avenue, Jack Tripari (pictured), 23, was belting out “All I Want for AChristmas Is You.” Or at least he was pre- tending to. The first-year cadet in the Salvation Army and his partner, 20-year- old Nate Deming, were drawing a crowd around their red kettle with a lip-synched medley of Christmas hits. The two are part of the 1,000-strong corps of volunteers and staffers manning 271 red kettles in New York City. While Tripari and Deming are training to become pastors in the Salvation Army—which is first and foremost a church—other ringers are lay volunteers, and some are hourly seasonal workers. Last year, they raised $2.18 million in the Greater New York area, which includes Long Island and the lower Hudson Valley. This year, the goal is a modestly higher $2.2 million. Though the organization doesn’t reveal how much the average kettle takes in, the duo, who play mainly to tourists, seem to do better than others in the city. “This is a high-traffic area,” said Tripari. “So you really gotta do something big to get their attention.” — PETER D’AMATO PETER D’AMATO

DECEMBER 14, 2015 | CRAIN’S NEW YORK BUSINESS | 27 B:11.125” T:10.875” S:10.25”

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General Information Production Specs PrePress Info Name OK FIX Date File name: 16717_ELWorkBusJrnlsDec_12.07.15.indd Bleed: 11.125” x 14.75” Application: InDesign CS6 8.0.2 D.A.: Chris Gallegos

Client: T-Mobile Trim: 10.875” x 14.5” Colors: Cyan, Magenta, Q.C.: Ricky Fischer Yellow, Black Job #: 15-TMO-180-P04 Live: 10.25” x 14” Fonts: Tele Proofreader: Jenny Keene Media Type: Back Cover Gutter: None Project Mgr: Julie Ayala

Release Date: 11.30.15 Common Size: None A.D.: None

Date/Time: 11-30-2015 9:46 AM Ad Size: None Copywriter: None

Creative Version: Apple iPhone 6s Output %: None C.D.: None Comments: NEW YORK CRAINS Print Pro.: Molly Costin AD 16717 Acct. Exec.: Emily Bollier NEW YORK CRAINS - 16717 Acct. Super.: Marisa Kahle NOV - 12/07/15 - 10.875” x 14.5 Client OK: