nb10p01.qxp 3/2/2007 7:23 PM Page 1 TOP STORIES “When I die, Developers rush I would like it to squeeze through to be right in tax-break window this chair” PAGE 2 —Joseph Diskint, 83, ® financial services agent Spa Finder close Page 28 to deal with travel giant Orbitz to boost growth VOL. XXIII, NO. 10 WWW.NEWYORKBUSINESS.COM MARCH 5-11, 2007 PRICE: $3.00 PAGE 3 MARKET TURMOIL THE FALLOUT Zagat.com could be calling on eBay to use its Skype NEW YORK, NEW YORK, P. 6 Global convulsion rocks Pataki hasn’t lost presidential bug; Wall Street mainstays Joel Klein makes the case for control THE INSIDER, PAGE 14 Investors rethink speculative stakes; E-learning ready to firms better-prepared than last time make a comeback; By week’s end, his holdings, a report card on BY AARON ELSTEIN which had been just 5% cash on Monday morning, were charter schools over the past few years, 50% cash. “I think the EDUCATION, PAGE 19 as investors regained their odds of a dislocation last- appetite for super-specu- ing several weeks are high lative stocks, hedge fund enough that I couldn’t BUSINESS LIVES manager Jonathan More- sleep at night if I hadn’t land put together a portfo- sold,” says Mr. Moreland, WHAT, ME lio with some of the most MARKET research director at Insider RETIRE? obscure stuff on offer. TURMOIL Asset Management. She’s 86 and But when markets New York companies Last week’s reality worldwide shuddered last of virtually all kinds check left investors re- still on the took a drubbing. job. Why week,Mr.Moreland wast- assessing their insatiable ed little time in hitting the WINNERS Only desire for dicey invest- seniors keep 17 firms managed working sell button. He purged to gain at all. ments—from small U.S. PAGE 27 dozens of risky stocks, in- LOSERS 17 firms fell companies to emerging cluding Ceco Environ- more than 10%. market debt to subprime mental,a pollution control Page 4 residential mortgages. company whose value was That spells trouble for up 300% in two years, and Wall Street firms, which were big AT DEADLINE Rural/Metro, a health care firm that losers in the market rout. The times/redux marshall mantel/the new york john rocketed nearly 900% in five years. See GLOBAL on Page 8 BLACK TUESDAY: The Dow grabbed headlines as world markets created anxiety. TROUBLED WYCKOFF HEIGHTS HOSPITAL IN BROOKLYN gave several senior executives and clinical staff members IOUs WILLIAM instead of paychecks when it McCOMB Spitzer’s had trouble meeting payroll says Liz Liz Claiborne late last month. In a Claiborne is statement, the hospital said it ready for is “currently experiencing change. next prey: some challenges with short- shedding excess term cash flow. We are working closely with the state insurers Health Department and the emerging long-term strategy will unions to resolve this issue. New chief gets rid jettison other small retail brands, [Staff ] will receive their of weak retail chains; overhaul the lagging outlet divi- Bid to restore rate paychecks this pay period.” sion and push for overseas retail ex- will overhaul outlet pansion. He made the changes af- regulation alarms THE OYSTER BAR & unit, expand abroad ter spending the last four months health plans, hospitals RESTAURANT in Grand listening to his managers. Central Terminal has made “When someone new comes in, some changes to its age-old BY ELISABETH BUTLER you get everyone in the mood for BY GALE SCOTT menu—hoping to capitalize change,” Mr. McComb says. “I on the notoriety it received as demi moore might say, a wanted to front-load the most sig- gov.eliot spitzer’s battle with the last week from being named younger man is all one needs to nificant parts of change.” state’s hospitals over how to reform as the rendezvous where an rekindle that youthful glow. Liz Liz Claiborne was a power- the health system is spilling over insider-trading scheme was Claiborne Inc. is trying to follow house under longtime Chief Exec- into a new arena: the regulation of See AT DEADLINE on Page 2 that advice as its new, 42-year-old utive Paul Charron, who broke insurance rates. buck ennis chief executive inaugurates sweep- new ground by backing away from The governor recently alarmed ing changes. the department store market,delv- health insurers by announcing 10 Last week, William McComb ing into specialty retail, and pur- that he intends to pursue tougher 5 began his makeover by lopping off chasing younger brands such as rate regulation. In an unexpected two of the giant apparel company’s Lucky and Juicy Couture. But twist, the state’s hospitals say that underperforming retail chains.His See NEW on Page 8 such a move would hurt them as ELECTRONIC EDITION well. Sources in the governor’s of- MORE LIZ NEWS Tim Gunn on his new role as chief creative officer Page 29 fice agree and say that, in fact, NEWSPAPER See GOVERNOR on Page 8 71486 01068 0 CNYB 03-05-07 A 2 3/2/2007 6:46 PM Page 1 AT DEADLINE Continued from Page 1 blogs in New York and 62 other organized. Catch of the day was cities, has raised $900,000 in its “Broker Grilled, Hot Sauce,” first round of outside funding. “Sing Sing Cassis Sorbet, served Those who have put money into 5 to 8,” “Insider Sake Oyster the startup include veteran tech Shooter” and “Stock Tips,” investor Esther Dyson and which is listed as “priceless.” Netscape cofounder Marc Andreesen. Manhattan-based NEW YORK REP. CAROLYN firms Union Square Ventures MALONEY IS PUSHING for a 15- and Milestone Venture Partners year extension of the Terrorism also invested in the Brooklyn- Risk Insurance Act and has the based site, which launched last support of Massachusetts Rep. week. Barney Frank, chairman of the House Financial Services TENANTS AT 195 BROADWAY, THE Committee. Ms. Maloney and FORMER AT&T BUILDING between 14 members of the committee Dey and Fulton streets, are up in will convene a hearing in the arms over plans to convert the HARD-HATTED DECISIONS: City Council chambers on lobby of the landmark building Neil Postighone (left) of the Hospital for Special Surgery’s Monday on the need for the into a retail space. Earlier this construction team reviews long-term extension. year, the landlord L&L Holding plans with Cannon Design’s The Bush administration is Co. received approval from the George Santos. expected to try to hold the Landmarks Preservation renewal to five years or less. Commission to create a glass- neff dave enclosed space in the lobby and THE ART SHOW, A FOUR-DAY lease it to a retailer.Thomson ANNUAL FAIR showcasing Financial—the building’s largest modern and contemporary art, tenant with more than 400,000 attracted 14,000 visitors, the square feet—wrote to the Building code blues most ever in the exhibition’s 19 landlord expressing concern that years.The 70 dealers—all a retail tenant will change the members of the by-invitation- character of the building and Tangle of rules, ensuing costs frustrate hospital architects only Art Dealers Association of lead to security breaches. America—reported record sales as well. Mary-Anne Martin NEWS RADIO STATION WCBS HAS BY GALE SCOTT Fine Art sold $3 million worth SIGNED A MULTIYEAR CONTRACT of pieces by Diego Rivera and to continue broadcasting New construction projects tend to cause headaches for architects. But when the ventures other artists. Pace Prints had to York Yankees games.Terms involve New York’s hospitals, watch out for pounding migraines. restock its booth three times. were not disclosed, but earlier Negotiating the maze of federal, city and state codes is bad enough.To make matters worse, The Art Show was part of a reports about the negotiations city-wide effort that included put the price tag at $70 million state officials in Albany and their own staff in New York City often differ sharply in their seven other fairs and numerous for five years, or 17% more than interpretation of the rules.Those conflicts routinely lead to delays, change orders and redos, gallery openings. the CBS Radio station paid for which inflate hospital construction expenses. Furthermore, the state Department of Health’s its previous deal. John Sterling OUTSIDE.IN, A WEB SITE THAT and Suzyn Waldman will Bureau of Architectural and Engineering Facility Planning is so short-staffed that it can no AGGREGATES neighborhood continue as announcers. I longer send inspectors to check on work in progress. The state, which must approve every hospital project, agrees that problems exist, but says CORRECTION that they are curable. Possible solutions include adopting a universal hospital building code—as 28 states, including New Jersey, have already done—restoring state staff whose jobs were cut a Liz Claiborne Inc. operated a Liz Claiborne store at 650 Fifth Ave. until 2003, when it remade the location as a Mexx store. The year was misstated in the Feb. 26 “At Deadline” column. decade ago, and scrapping state review of plans altogether, letting architectural firms certify See BUILDING CODE BLUES on Page 10 THIS WEEK IN CRAIN’S NEW YORK, NEW YORK----------6 Developers sprint to beat NEIGHBORHOOD JOURNAL----------------------------------------------9 foundations before it’s too late. much as $100 a square foot in taxes, VALERIE BLOCK ---------------------------13 Close to two dozen Among those working feverishly to and it translates into lower rents for be in the ground by year’s end is the tenants. THE INSIDER------------------------------------ projects will be 14 Angel Group,which is building two “I am seeing a lot of developers WEEK IN REVIEW -----------------------16 started over the next projects on Second Avenue: a rental trying to beat the deadline,” says several months building in the East 50s and a con- Stephen Kliegerman, executive di- 29 REPORT: dominium in the East 70s.