FOUR MEN IN A ROOM If only we could listen in on that CRAIN’S® Albany conversation... PAGE 6 NEW YORK BUSINESS VOL. XXIX, NO. 19 WWW.CRAINSNEWYORK.COM MAY 13-19, 2013 PRICE: $3.00 DIGITAL NY WTC site sits empty as rivals lease up With no big deal inked since Condé Nast, all three buildings there have huge vacancies RIDING HIGH: Tom Pinckney leads eBay New York’s push to remake online shopping. BY DANIEL GEIGER The 408-foot spire that will crown 1 World Trade Center as the tallest build- ing in the hemisphere was lifted last week to the top of the 104-story tower, the latest milestone in the $14 billion rebuilding of the trade center site. How eBay NY plans Down below, however, there is less to celebrate. As of today, more than 3 mil- lion square feet of to conquer the world vacant office space is expected to open in 2014 at 1 WTC BY MATTHEW FLAMM and the neighbor- ing tower under The Chelsea quarters of eBay New York make up a tiny outpost of the $14 billion San Jose, Calif.-based e- construction, 4 WTC. And more commerce company. But as online shopping heads toward a new stage, the Sixth Avenue location, which than 2 million opened in the fall, could become the tail that wags the giant dog.The 30 or so engineers and developers in the square feet are on high-ceilinged third-floor offices are working on making shopping on eBay more like hanging out on Pinter- the drawing board est—turning a site once known for auctions of attic junk into an eye-pleasing stream of See eBAY on Page 19 at 3 WTC, whose construction is buck ennis stalled at seven stories for lack of commercial ten- ants. buck ennis Airbnb: hugely popular, still illegal No office lease TOWER TOPPED: has been signed at 1 WTC last week fraction of the cost of a hotel to INSIDE streets, where most hotels are the site since mag- Startup has $1B impact. stay in the city an average of six REPORT TECHNOLOGY bunched,Airbnb directs dollars to azine publishing Now it lobbies to go legit nights. That kind of demand is From MoviePass to The neighborhoods that don’t usually giant Condé Nast signed a deal to lease expected to generate around $1 Verge: Who’s who in see the spending spoils of the $55 about 1.2 million square feet at 1 billion in local economic activi- Silicon Alley PAGE 11 billion-a-year tourism industry. WTC two years ago. BY ANNIE KARNI ty in 2013, outstripping the im- THE LIST: NY’s top tech But the San Francisco-based The deal was hailed at the time as a pact of the city’s booming IPO candidates PAGE 15 company is hardly trumpeting validation of the site’s prospects as an Airbnb, the website that allows people to rent cruise-ship industry five times its success here. A long-awaited office neighborhood,but the buildings their apartments by the night,has over the past over, according to figures cited study expected to back up the continue to lose out on the handful of few years quietly become an economic by tech-industry leaders with knowledge of bold economic claims has been delayed indef- major office tenants currently in the leviathan in New York City. About 30,000 the site. initely. There are no ads for the site in New market. New Yorkers are signed up as hosts, and last And with about 87% of listings outside the York City. And Airbnb declined to comment Time Warner Inc., for example, is year hundreds of thousands of visitors paid a swath of Manhattan between 14th and 59th See AIRBNB on Page 19 the biggest office tenant now looking See WTC on Page 18 ELECTRONIC EDITION NEWSPAPER EDITOR’S NOTE Spread the new FYICRAINSNEWYORK.COM Amazing, sometimes, how much resistance there can be in New Insurer comes up big York to things new. Old York shouts and sues over the new bike- in BofA settlement share stations plopped in front of nsurer MBIA guaranteed tens of billions’ worth “their” streets. (Memo to the 99 of securitized mortgages last decade, so when the Bank St. co-op in the West housing bubble popped, it was left holding the Village: It’s not your stretch of newscom Glenn Coleman I bag on so many junky securities that it nearly street; it’s ours, so shush and share collapsed. Part of its survival strategy was to sue the banks that allegedly lied about how dreadful like good little privileged citizens.) the mortgages were, and last week the strategy paid off, big time. Old York refuses to innovate and instead takes to Bank of America Corp., one of the biggest targets of MBIA’s litigation, agreed to settle in a deal court the new smartphone apps that let consumers in brokered by Benjamin Lawsky, head of New York’s Financial Services Department. BofA is to pay need of a ride “e-hail” a nearby driver who wants the MBIA $1.6 billion in cash, extend it a $500 million credit line and acquire up to 4.9% of MBIA’s business. (Memo to the taxi and limo cabals: Forget shares. That’s right: BofA and MBIA have gone from worst enemies to BFFs. Nearly simultaneously, waiting for you to catch up with the world; I’ll just state Attorney General Eric Schneiderman (above) accused BofA and Wells Fargo of ignoring the grab a Citi Bike and pedal to my crosstown lunch terms of last year’s national mortgage settlement and threatened to sue. meeting.) Old York writes a “progressive” law to Down the Street, JPMorgan Chase & Co.’s annual stockholder meeting next week will be protect middle-class housing that—oops—makes closely watched as investors vote on whether to strip CEO Jamie Dimon of his role as chairman. illegal the new online room-rental services that are (See page 4.) While some investors would like to punish Mr. Dimon for the $6 billion “London helping New Yorkers raise extra cash to afford their whale” loss, the bank insists it is best served with him leading the board. Even with the whale loss, apartments by renting out a room for the night. JPMorgan coined $21 billion in profits last year. —aaron elstein (Memo to state Sen. Liz Krueger: Do something about the impossible position in which you’ve placed TENNIS SERVES A LAND SWAP. The the final version of the bill strikes the fast-growing Airbnb and its thousands of customers U.S.Tennis Association finally agreed right balance between working fami- HOORAY! in the five boroughs.) As Crain’s reporter Annie Karni to replace parkland in Flushing lies and businesses. Mayor Michael ON ITS FIRST DAY Meadows Corona Park that it will use Bloomberg vowed to veto it, but the with Kickstarter, shows in her Page 1 story, Ms. Krueger wrote a state Brooklyn’s law passed in 2011 that banned short-term stays in to expand its 42-acre Queens tennis City Council plans to override. … Mermaid Parade complex,which hosts the popular U.S. SPEAKING OF GREEN LIGHTS. Cornell raised $27,000 of residential dwellings to stop landlords from Open each summer. The agreement NYC Tech’s new 2 million-square- the $100,000 it needs to produce converting apartment buildings into illegal hotels. ends months of local protest and re- foot tech campus on Roosevelt Island the annual Brava. But Ms. Krueger penned it so broadly that it’s turns to the community 1.6 acres of also got the City Council go-ahead.In extravaganza. parkland in exchange for less than an response to local residents’ concern technically illegal to rent out one’s primary home for acre that the association needed for its about how the project will disrupt a few weeks to tourists or business visitors such as $500 million expansion. Community their community,the school agreed to OY VEY! highly skilled computer engineers who travel here for and park advocates pushed for replac- monitor air quality and transport con- ing the parkland to set a precedent. … JOSEPH LHOTA, job interviews and short-term work and need struction equipment via barge to lim- GOP mayoral FALCONE BANNED FROM WALL STREET. it traffic on the island’s main road. … candidate and alternatives to $300-a-night hotels. New York’s tech Billionaire hedge-fund manager VERIZON HANGS UP ON 140 WEST ST. former MTA industry, desperate for engineers, seeks to tweak her Philip Falcone agreed to a two-year Verizon Communications wants to chair, called Port Authority police law so that the good guys, like Airbnb and so many of ban from the finance industry to settle sell or lease half its historic corporate “mall cops.” He its customers, are back in compliance. Ms. Krueger Securities and Exchange Commis- headquarters in lower Manhattan. later apologized. sion charges. It accused Mr. Falcone, The move comes a few months after tells Crain’s she does not buy Airbnb’s numbers or whose riches stem from betting the telecom giant decided to relocate plight. Same old, same old. against subprime mortgages in 2007, roughly 1,100 workers to downtown of manipulating the Brooklyn. Critics ac- by 10%. If there aren’t any takers, lay- market, using hedge- ‘A massive cused the company of offs are possible.Meanwhile,the Dai- THIS WEEK IN CRAIN’S fund assets to pay his abandoning lower ly News pink-slipped at least a dozen taxes and favoring cer- 21st-century Manhattan after it staffers, mostly in its outer-borough tain clients at the ex- pocketed $185 mil- bureaus.