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NEW YORK BUSINESS Midtown East’s biggest landlords P. 6 | NYU’s answer to Cornell Tech P. 12 | Local bakers on the rise P. 26 CRAINS

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VOL. XXXIII, NO. 37 WWW.CRAINSNEWYORK.COM Candidate Bill de Blasio pledged bold changes that would bene t “all New Yorkers.” Our annual Stats and the City issue examines how well Mayor de Blasio delivered on those promises PAGE 14

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P001_CN_20170911.indd 1 9/8/17 4:13 PM TWO • NINETY • TWO MADISON AVENUE

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CN018347.indd 1 8/31/17 12:33 PM SEPTEMBER 11 - 17, 2017 CRAINSNEW YORK BUSINESS

FROM THE NEWSROOM | JEREMY SMERD | EDITOR IN THIS ISSUE

No longer just an island 4 AGENDA 5 IN CASE YOU MISSED IT THIS WEEK MARKS the o cial opening of Cornell Tech’s 6 WHO OWNS THE BLOCK A new tool campus on Roosevelt Island and a major milestone in the could help evolution of New York’s tech sector. If you haven’t been to 7 REAL ESTATE you save 8 ASKED & ANSWERED money on the campus yet, go. (You can now get there by ferry, in addi- medical bills. tion to the F line and the tram.) 9 HEALTH CARE I was there a few weeks ago to see the rst three build- 10 VIEWPOINTS ings on the 12-acre campus, which has turned the island FEATURES into a destination. ese buildings—the House, a luxurious apartment tower for students and faculty; the Bridge, which 12 NYU’S TECH EXPANSION has spaces for both instruction and collaboration; and the 14 STATS AND THE CITY Bloomberg Center, an academic building funded in large In the six years it 24 STEERING UBER part by the former mayor—total 850,000 square feet. took Cornell to build 26 CARB KINGS OF NEW YORK Michael Bloomberg can claim ownership of the entire enterprise. It was his administration, aer all, that con- its campus, the city’s ceived of the project in 2010 as a way to improve the city’s tech sector has P. 31 ability to compete in the global economy. His hypothesis grown by leaps and JUNIOR VOLPE was right: A school focused on creating commercially vi- able innovations and partnering with the private sector bounds could turn our educational industrial complex into a cre- ator of local jobs rather than an exporter of talent. Now the future is here. In the six years it took for the rst phase of Cornell’s tech- nology campus to come to fruition, New York’s tech scene has grown by leaps and bounds. Employment increased by 46,900 jobs, or 57%, since 2010, making the sec- 31 GOTHAM GIGS tor the city’s fastest-growing, according to a report last week by state Comptroller 32 SNAPS omas DiNapoli. And these are high-paying jobs—averaging $147,300 annually. 33 FOR THE RECORD e endeavor seemed to create a virtuous cycle. Other universities upped the 34 PHOTO FINISH ante, with Columbia and NYU making major investments of their own, as senior reporter Matthew Flamm details on page 12. e de Blasio administration has sup- CORRECTION ported the industry too, though with much less fanfare. In December it pledged Karen Geer has a Master of Laws in environmental law. The type of degree was misstated in Asked & $100 million to seed a life-sciences campus it said it hopes will “serve as an insti- Answered, published Sept. 4. tutional anchor for the life-sciences industry, much as Cornell Tech serves as an anchor for applied sciences and engineering.” Now the question on everyone’s minds is whether New York has a chance of landing the big kahuna: Amazon, which announced last week that it wants to open a second headquarters for as many as 50,000 employees (see ICYMI, page 5). Every North American city wants Amazon. And New York should pursue the opportunity with all the assets it can marshal. As with the applied-sciences project, the city that wins will get more than bragging rights. It will get a company that has the size and ON THE COVER inuence to transform an economy. Even one as big as New York’s. ILLUSTRATION: DARREN THOMPSON

DIGITAL DISPATCHES CONFERENCE CALLOUT SEPT. 19 Go to CrainsNewYork.com CRAIN’S ARTS AND CULTURE BREAKFAST NOMINATE On Nov. 27 our 20 JOIN CRAIN’S and a panel of Under 20 list will recognize cultural leaders, including Whitney the New York area’s youngest > Donhauser, president of the business brains. Let us know Museum of the City of New York, who you think should for a discussion of the be included. Go to CrainsNewYork most-pressing issues facing the .com/20Nominate. Meet our arts community. past honorees at CrainsNewYork .com/20Under20. NEW YORK ATHLETIC CLUB READ Kirsten Gillibrand, New York’s junior senator for eight years, has risen 8:30 to 10:30 a.m. to national prominence. But that has not [email protected]. helped her at home: Only 49% of New Yorkers view her favorably, a Siena College Vol. XXXIII, No. 37, Sept. 11, 2017—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double poll found. issues the weeks of June 26, July 10, July 24, Aug. 7, Aug. 21 and Dec. 18, by Crain Communications Inc., 685 Third Ave., New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing of ces. Postmaster: Send address ■ Northwell Health is in talks to acquire changes to: Crain’s New York Business, Circulation Department, 1155 Gratiot Ave., Detroit, MI 48207-2912. a slew of Upper East Side properties For subscriber service: Call 877-824-9379. Fax 313-446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. (GST No. 13676-0444-RT) ©Entire contents copyright 2017 by Crain Communications Inc. All rights reserved. for $300 million in order to erect a 250,000-square-foot building in their place. BUCK ENNIS

SEPTEMBER 11, 2017 | CRAIN’S NEW YORK BUSINESS | 3

P003_CN_20170911.indd 3 9/8/17 6:08 PM WHAT’S NEW SEPTEMBER 11, 2017

AGENDAWhen businesses yield to unjustified protests, expect more of the same

disturbing scenario is playing out involving a local company and an activist group that should concern every business in the city. It stems from an audit begun in December by Immi- gration and Customs Enforcement that found 21 employees Aof Tom Cat Bakery in Queens lacked authorization to work in the United States. e 30-year-old bakery had no choice but to let them go. As soon as the workers were noti ed by Tom Cat, they contacted their union representatives, who sat down with the bakery’s owners to see what could be done. Legally the undocumented workers were entitled to little or nothing, but Joyce Alston, president of Local 53 of the Bakery, Confection- ery, Tobacco Workers and Grain Millers union, said Tom Cat gave them everything she requested. e severance o er included one week’s pay for each year of service; full pay for unused vacation, personal and sick days; and 90 days of continued health care bene ts or their cash equivalent. further (he would not o er speci cs, saying that was up to the workers). Moreover, workers who acquire legal status would be allowed to seamless- To keep pressure on the bakery, Brandworkers scheduled a rally last week ly return to their job with no loss of seniority. “ ey were, honestly, co- outside high-end restaurant Le Bernardin, a Tom Cat customer. e eatery operative,” Alston said of Tom Cat executives. She described their attitude caved before the event, suspending its contract with the bakery, and the as: “What can we do to help our people? We demonstration was moved to another Tom don’t want to lose them.” Tom Cat Bakery did right by its Cat customer, the restaurant Robert at the While this was happening, a Queens- Museum of Arts and Design. based workers’ rights group, Brandworkers, workers, but an activist group is No business wants protesters at its door, was collaborating with some of the employ- pressuring customers to cut ties but abandoning Tom Cat to avoid trouble ees in an e ort to get an even sweeter deal, is hypocritical in a city where immigrants separate from the union’s. Tom Cat resisted; compose 63% of the food workforce. In- it made no sense to negotiate two agreements. In response, Brandwork- stead of dividing the business community, these protesters and employees ers organized protests and recruited politicians to pressure and shame the should unite with businesses to  ght ICE and the Trump administration’s bakery. Still, 14 of the workers accepted the robust severance package. pursuit of hardworking immigrants with clean records. Driving business But the other seven did not. Brandworkers’ leader, Daniel Gross, con- away from Tom Cat ultimately imperils its ability to employ New Yorkers cedes that Tom Cat’s o er was “nontrivial” but said it should have gone in good-paying union jobs. — THE EDITORS

FINE PRINT In spite of all the National Football League’s bad press lately, nosebleed seats still command nosebleed prices. The cheapest tickets to the New York Giants home opener—a not exactly compelling Monday night matchup with the Detroit Lions Sept. 18—cost $105 on TicketIQ. Here’s an alternative: Columbia University plays Sept. 16. These Lions are perennial losers, but for $10 you can sit anywhere you want.

BY GERALD SCHIFMAN STATS

25 WORDS OR LESS

SUCH THING AS A FREE LUNCH AND THE CITY FOR THE FIRST TIME all city public school students are eligible for free “My advice to anyone lunch. There is no guarantee the food will be healthful, though. interested in my acci- Number of students who can now get lunch for free, an increase dent: Avoid treadmills. 1.1M of 200,000 There are much safer ways to stay in shape Former price of school lunch, $1.75 amounting to $315 per year —Karen Hinton, former press secretary ONE SCHOOL’S FIRST-DAY MENU for Mayor Bill de Blasio, who returned SATURATED FAT (IN GRAMS) to work at Fenton Communications Popcorn chicken 4g Sept. 4 after 10 days in a coma, three Recommended daily limit Macaroni and cheese 5g of saturated fat in a brain surgeries and two months of 13g 2,000-calorie diet memory loss French fries 1g

BUCK ENNIS, ISTOCK ADDICTED TO NUMBERS? GET A DAILY DOSE AT @STATSANDTHECITY. SOURCES: Department of Education, American Heart Association

4 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017

P004_CN_20170911.indd 4 9/8/17 7:01 PM AGENDA ICYMI CRAINSNEW YORK BUSINESS Publisher, VP Jill R. Kaplan executive assistant Devin Arroyo, 212.210.0701

EDITORIAL editor Jeremy Smerd Can high-cost NYC really managing editor Brendan O’Connor DEAL MAKER: assistant managing editors Erik Engquist, Cities are Jeanhee Kim, Robin D. Schatz compete for Amazon’s HQ2? already vying copy desk chief Telisha Bryan to win Jeff Bezos’ art director Carolyn McClain ithin hours of Seattle-based Amazon’s announce- business. photographer Buck Ennis ment that it was looking to build a second head- senior reporters Joe Anuta, Aaron Elstein, Matthew Flamm, Daniel Geiger quarters, cities around the country were tripping reporters Jonathan LaMantia, Caroline Lewis W over themselves to prove they’ve got what it takes. data reporter Gerald Schifman web producer Peter D’Amato New York has been less vocal than others, but anyone think- columnist Greg David ing the city doesn’t need or have the room for a massive new contributing editors Tom Acitelli, Theresa Agovino, Erik Ipsen, Cara S. Trager corporate headquarters would be mistaken. On the contrary:

ADVERTISING Fresh from a spate of development home runs that include www.crainsnewyork.com/advertise Hudson Yards and Cornell Tech, the city is making the case advertising director Irene Bar-Am, 212.210.0133, [email protected] that it has the infrastructure and cachet to be the top choice. senior account managers “I can give you project spaces in each of the ve boroughs,” Lauren Black, Zita Doktor, Rob Pierce, Stuart Smilowitz, Debora Stein said Carlo Scissura, CEO of the New York Building Congress, senior marketing coordinator the construction industry trade group. “[Amazon] should not Charles Fontanilla, 212.210.0145 [email protected] waste time looking anywhere else.” sales coordinator Devin Arroyo, Scissura cited Hudson Yards as a good location for a potential $5 billion complex that Amazon says could total 212.210.0701, [email protected] 6 million square feet in its rst phases and 8 million square feet overall. e Queens-Brooklyn waterfront would ONLINE general manager also o er development sites with mass transit—another of Amazon’s requirements—including access to national Rosemary Maggiore, 212.210.0237, and international travel. Five airlines at three local airports already o er daily nonstop ights to Seattle. [email protected] CUSTOM CONTENT New York could provide the e-commerce giant with all the tech talent it says it needs—as many as 50,000 new director of custom content hires—and then some. “We have people with experience in other industries, like sales, marketing and media,” Patty Oppenheimer, 212.210.0711, Julie Samuels [email protected] said , executive director of the trade group Tech:NYC. “You get a cross-pollinated base of employees, custom project manager Danielle Brody, many of whom have technical skills, that is unique to New York.” [email protected] e biggest challenge, though, will be the city’s high costs. Amazon said, “e initial cost and the ongoing cost of EVENTS www.crainsnewyork.com/events doing business are critical decision drivers.” But local leaders are not worried. “Talent is expensive,” said Kathy Wylde, director of conferences & events CEO of the Partnership for New York City. “New York’s costs are competitive.” – MATTHEW FLAMM Courtney Williams, 212.210.0257, [email protected] manager of conferences & events Adrienne Yee, [email protected] Skipping out on the tab DATA POINT No complaints events coordinator Ashlee Schuppius, Mort Zuckerman sold the Daily News Maya Wiley is leaving her post as chair- [email protected] IN FISCAL 2016 THE CITY to Tronc, publisher of the Los Angeles woman of the city’s Civilian Complaint AUDIENCE DEVELOPMENT COLLECTED $184 MILLION IN director of audience & content Times and Chicago Tribune, for $1 and Review Board. New York Law School partnership development Michael O’Connor, the assumption of liabilities. Zucker- “QUALITY OF LIFE” FINES, SUCH professor Deborah Archer will ll the 212.210.0738, man purchased the 98-year-old tabloid position on an interim basis. Wiley, [email protected] for $36 million in 1993. AS LITTERING AND SIDEWALK former counsel to the mayor, is exiting REPRINTS VIOLATIONS, AN INCREASE OF the CCRB aer one year to concentrate reprint account executive Lauren Melesio, A Carton of bilk on teaching at the New School. 212.210.0707 Craig Carton, co-host of WFAN’s Boom- $41 MILLION FROM FISCAL 2012. PRODUCTION er & Carton sports radio show, was ar- MTA trains its sights on litter production and pre-press director Simone Pryce rested by the FBI for securities fraud, e MTA is raising littering nes from media services manager Nicole Spell wire fraud and conspiracy. He is alleged Estranged bedfellows $50 to $100 and increasing enforce-

SUBSCRIPTION CUSTOMER SERVICE to have run a Ponzi scheme through a Democratic Queens Assemblywoman ment to reduce delays resulting from www.crainsnewyork.com/subscribe phony ticket-resale business to help pay Michele Titus and her husband are su- track res, all part of Gov. Andrew [email protected] o multimillion-dollar gambling debts. ing the New York State Unied Court Cuomo’s Keep It Clean initiative. 877.824.9379 (in the U.S. and Canada). He faces up to 45 years in prison. System for wrongful termination and $3.00 a copy for the print edition; or $99.95 discrimination against black workers. one year, $179.95 two years, for print Magna Carter subscriptions with digital access. e suit claims that since Titus’ hus- to contact the newsroom: Graydon Carter, the celebrated 25-year band, a court ocer, was red in 2014, www.crainsnewyork.com/staff editor of Vanity Fair and longtime nem- he’s been agitated and they’ve stopped 685 Third Ave., New York, NY 10017-4024 esis of Donald Trump, is leaving the having sex. phone: 212.210.0100; fax: 212.210.0799 magazine in December. It was Carter Entire contents ©copyright 2017 who coined “short-ngered vulgari- In-app-ropriate Crain Communications Inc. All rights an” to describe Trump in the pages of A digital security research center dis- reserved. ©CityBusiness is a registered Spy magazine, which he co-founded in covered the unsecured records of more trademark of MCP Inc., used under license agreement. 1986 before going on to edit the New than 4 million users of the Time War- York Observer. ner Cable MyTWC app on an Amazon Remembering ‘Stick’ CRAIN COMMUNICATIONS INC Gene Michael, the architect of the chairman Keith E. Crain server. e records included transac- vice chairman Mary Kay Crain Bad bounce tion IDs, user names, Mac addresses, powerhouse Yankees of the late president K.C. Crain e New York Cosmos’ bid to return and serial and account numbers. 1990s, died of a heart attack Sept. senior executive vice president Chris Crain to the top of the city’s sports scene suf- 7. He was 79. Michael was GM secretary Lexie Crain Armstrong fered a setback when the U.S. Soccer Payback time of the team from 1991 to 1995, editor-in-chief emeritus Rance Crain setting up the franchise to win four chief nancial of cer Robert Recchia Federation denied the North Amer- e federal government is reimbursing ican Soccer League’s application to the state $26 million for costs related to World Series in ve years, start- founder G.D. Crain Jr. [1885-1973] remain in the second division. With protecting President Trump, his fami- ing in 1996. Nicknamed “Stick,” chairman Mrs. G.D. Crain Jr. [1911-1996] the entire circuit relegated to a lower ly and Trump Tower between Election he began his Yankee career as a tier, the storied franchise could strug- Day and Inauguration Day. e NYPD’s shortstop from 1968 to 1974.

gle to draw crowds and generate buzz. cut of the funds is $18.9 million. AP IMAGES

SEPTEMBER 11, 2017 | CRAIN’S NEW YORK BUSINESS | 5

P005_CN_20170911.indd 5 9/8/17 6:11 PM AGENDA WHO OWNS THE BLOCK

Largest landlords in the (Midtown) East The biggest, SL Green, is building New York’s second-tallest tower

BY TOM ACITELLI

ive landlords own nearly half of the commercial square footage in Mid- METLIFE/200 PARK AVE. town East that the city plans to rezone Newport Beach, Calif.–based Irvine Co., a private real to allow for taller o ce development, estate investment rm that Donald Bren chairs, has Faccording to brokerage CBRE. controlled a more than 97% stake in the 58-story, 3.1 million-square-foot tower since 2015. Tishman Four of the ve are based in Manhattan and Speyer, which acquired the building for $1.7 billion in are veritable household names in local real estate 2005, owns the rest and is still its managing owner. circles. ey all own trophy towers around Grand Central Terminal. GRAND CENTRAL TERMINAL/89 E. 42ND ST. e City Council on Aug. 9 approved the rezoning of approximately 78 blocks in the Midtown TDR Ventures, an investment group 450 LEXINGTON AVE. area. e move capped ve years of debate that includes Michael Dell and developers Thomas and Frederick Elghanayan, owns and negotiations, much of which focused the transit hub. An earlier iteration of the RXR Realty, a privately held real estate com- on enabling owners of landmarks such as group acquired it for $76.5 million in 2006, pany that Scott Rechler chairs, acquired this 910,273-square-foot, 32-oor of ce tower Grand Central to sell their air rights to de- along with dozens of miles of track extending north of the city and 1.3 million square feet from Istithmar, a Dubai investment rm, in velopers and the extent of the public infra- of air rights. (The current group formed last 2012. The price wasn’t clear, but RXR had structure investments builders would have year.) It leased Grand Central to the Metro- acquired roughly half of the tower’s $600 million debt before making a successful play to include with their projects. politan Transportation Authority in 2007 for a modest annual rent—$2.24 million—that for ownership. Rechler is also chairman of the Real estate investment trust SL Green decreases over time. The lease expires in 2274. Regional Plan Association and former vice Realty Corp.—the biggest landlord in the chairman of the Port Authority of New York and New Jersey. footprint, with 8.7 million square feet—is using 1.2 million square feet of air rights connected to Grand Central to construct 1 Van- derbilt Ave., slated to be one of the tallest towers GRAYBAR BUILDING/420 LEXINGTON AVE. in the U.S. It won the air rights last year aer a long-running legal battle with the transit hub’s Landgray Associates, a partnership of the former majority owner. 1 VANDERBILT AVE. children of late real estate broker Henry Hart Rice, owns the land under the 31-story, 1.5 e ve biggest landlords in the rezoned SL Green is expected to nish million-square-foot of ce tower. But SL Green area together own 19.4 million of the 40.3 mil- building this 58-story of ce has controlled the building itself through a tower in 2020. At 1,401 feet, leasehold since 1998. lion commercial square feet, according to data it is expected to be the city’s compiled by CBRE. SL Green’s 1 Vanderbilt is second-tallest tower, behind included in the data. 1 World Trade Center. e second-biggest commercial landlord in the Midtown East rezoning area is Tish- GRAND HYATT/109 E. 42ND ST. man Speyer, with 3.8 million square feet, or 9% of the share. ird is Vornado Realty Trust, with 2.9 The Hyatt Corp., which the Pritzker family controls, 120 PARK AVE. owns this 1,306-room hotel. In 1996 the company million. (Tishman’s and Vornado’s gures include bought out the Trump Organization, ending a 17-year their jointly owned, 1.27 million-square-foot 280 Global Holdings, a real estate invest- partnership. The two companies spent a reported ment company that Eyal Ofer controls, Park Ave. Also, Tishman’s gure includes 200 Park $100 million refurbishing the Commodore Hotel into bought the 26-oor, 749,775-square- the Grand Hyatt New York, though they eventually be- Ave., which it manages and partly owns.) foot of ce building for $525.8 million gan a legal ght over its management. The city owns RXR Realty, a privately held rm based in in 2008 from Philip Morris parent the land, and Hyatt leases it. The company was paying Altria, which was using it as its head- Manhattan, is fourth, with 2.3 million square feet. $6.5 million annually as of 2002. quarters. Chinese conglomerate HNA Group is h, with 1.7 million, entirely because of its $2.21 billion purchase of 245 Park Ave. in May. e footprint also includes the site of what was 125 PARK AVE. President Donald Trump’s rst ashy project in SL Green bought the 24-story, Manhattan. In the early 1980s, he partnered with 645,270-square-foot of ce the Pritzker family of Chicago to refurbish and re- building for $330 million in 2010. brand the failing Commodore Hotel next to Grand Central as the Grand Hyatt New York. ■ BUCK ENNIS

6 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017

P006_CN_20170911.indd 6 9/8/17 2:00 PM REAL ESTATE

DEBATABLE: Boro prez’s opinion could Adams’ ‘no’ on Brooklyn armory sway council. puts the mayor in a political bind Crown Heights project is latest test of private dollars funding public works BY JOE ANUTA

rooklyn Borough opment project on city-owned fund amenities on public land President Eric Ad- property,” wrote Adams, the has been met with opposition, ams’ vote against a latest to weigh in on the pro- such as when the state allowed recreation and hous- posal ahead of a City Council pricey projects in Brook- unfairly sways city planners at puts the de Blasio ad- Bing complex in Crown Heights vote, expected later this year, lyn Bridge Park to pay for its to green-light more ambitious ministration in a bind. If o- last week spelled trouble for in his recommendation. maintenance costs. projects in auent or gentrify- cials cave and fund the entire the city’s practice of leveraging e city has a long and City and state ocials con- ing areas with high real estate project through tax dollars, the real estate market to fund complicated history of tapping tend that exploiting the private values, and they worry that the they will be setting themselves public projects. private real estate dollars to market frees up tax dollars for saved public dollars are not up to make similar concessions Rather than allocating tax fund public projects. In some other projects and paves the spent to create equal amenities down the road, while leaving dollars, the de Blasio admin- instances private investment way for developments that in poorer neighborhoods. themselves with less money to istration envisioned largely has been welcomed. Last year, wouldn’t be possible otherwise. Picking a side comes with fund the projects that can’t be paying for the transformation for example, the city enacted e de Blasio administration is trade-o s. In the case of the underwritten by market-rate of the hulking Bedford-Union a policy called Mandatory In- currently using this argument armory, Adams concedes that housing. Armory into a sports facility by clusionary Housing that funds in two initiatives: allowing pri- if the condos and market-rate But if the city doesn’t fund letting developer BFC Partners new a ordable-housing units vate developers to build rental rentals are nixed from the proj- the full-service recreation cen- construct market-rate con- by allowing developers to build buildings in New York City ect—and his recommendation ter with public funds, critics dos on the site, while a rental extra market-rate housing on Housing Authority complexes makes it more likely this will will see it as a tacit admission building with market-rate and their land. and nancing the BQX street- happen—the capital for con- that projects built with taxpay- a ordable units would fund e concept was widely em- car along the Brooklyn-Queens struction and operating ex- er dollars are never as good operating costs. Almost im- braced because it was seen as a waterfront through taxes on penses will have to come from as those built with the sort of mediately the proposal incited way to compel developers in development that will spring somewhere else or the project private-sector money that is controversy. richer areas to pay for a ord- up around the tracks. will need to be scaled back. He available only in auent or “ere is no place for lux- able units instead of the city. But opponents argue that suggested studying an option gentrifying areas of the ve

ury condominiums in a devel- But selling luxury condos to this approach inevitably and without a swimming pool. boroughs. ■ AP IMAGE

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SEPTEMBER 11, 2017 | CRAIN’S NEW YORK BUSINESS | 7

P007_CN_20170911.indd 7 9/8/17 5:48 PM AGENDA ASKED & ANSWERED MEDIA INTERVIEW BY DANIEL GEIGER

RICH ANTONIELLO COMPLEX MEDIA

ashion designer Marc Ecko in 2003 hired Rich Antoniello as CEO of Complex Media, founded to cover the hip-hop culture that inspired Ecko’s apparel. People would laugh Antoniello transformed Complex into a digital-media when we dedicated Fplatform that captures 750 million visitors a year and has pro- “ duced breakout online talk shows such as Hot Ones and Sneaker 10 pages in the Shopping. Last year Verizon and Hearst bought Complex—valuing magazine to the company at $250 million—and last month Complex an- sneakers. It’s nounced a content partnership with the Fuse cable network. proved to be monstrous Television viewership is declining, so why partner with a cable channel? People still watch television, and advertisers want to run on TV. Fuse is one of the few linear cable channels that is growing, and it has the largest millennial audience on cable. Also, they were inter- ested in partnering on the content and sharing in the sales rights. We’re working on some ideas that will blow your mind. I can’t say much, but it’s going to be a little nuts. I love it.

Complex has been criticized for being a “culture vulture”—a white-run company that pro ts from minority culture. What do you say to that? DOSSIER Complex is hip-hop as a lifestyle. It’s youth culture. We’re 50% female and diverse, with white, black, Asian, Latino—everything un- WHO HE IS CEO of der the sun. I believe talent, not a résumé, should de ne a person. Complex Media What is it about the talk show Hot Ones that made it such a hit? SALARY “I can’t answer that. I do ne.” Sean Evans is a fantastic interviewer. He does his homework, yet he’s the kind of guy you want to have a beer with. There’s the AGE 46 disarming fact that they’re eating hot wings that strips away the BORN Downtown Brooklyn guests’ media training. Our brand is very positive and very fun. RESIDES Sutton Place Joe La Puma, who hosts Sneaker Shopping, is authoritative and as EDUCATION Bachelor’s in cool as it gets, but warm and inclusive. That embodies Complex. marketing and nance, SUNY Binghamton Evans was just on The Late Show. Is that a big win for you or Colbert? ACQUISITION PLAN He has a People say it’s validation. Sorry, we don’t need validation. Hot knack for real estate. In 2009 he Ones is coming up on 150 million lifetime views. It’s a cultural bought his apartment in the tony phenomenon. When we have Ricky Gervais and Russell Brand Sutton Place neighborhood right reaching out to us to be on the show, that says a lot. after Lehman Brothers collapsed, then a house on Long Island’s A year ago Hearst and Verizon purchased Complex. What has changed? North Fork a few months later. “I We’re producing more video content than anyone because of the wait for pain. That’s when you buy.” acquisition. Our goal is to get to 40 weekly shows by the end of TRENDSETTER Growing up in the fourth quarter, which is a huge commitment. Brooklyn, Antoniello became a fan of hip-hop and sneaker collecting, At some point don’t topics like, say, sneakers fall out of fashion? hobbies that made him a good t for Complex. Now he’s into People would laugh when we dedicated 10 pages in the magazine cooking and wine. He even has in ’02 and ’03 to sneakers. It’s proved to be monstrous. a sous vide cooker alongside his backyard grill so he can serve What is it like as a growing media company in New York City, where many up the perfect burger. media players are shrinking? HIS LIPS ARE SEALED “I It’s hard to compete against companies that put out products that can’t talk about revenue, but are not priced appropriately just to drive audience numbers. We we have been pro table since don’t play that way, and I don’t understand why boards let that 2010. We have experienced happen. You have to be disciplined and believe that your vision is a tremendous amount of forward-thinking enough and your execution will be superior. growth over the last year, coming from high-margin Where do you want to grow? portions of our business, like sponsored and brand- Business lifestyle. We have a channel called Complex Hustle and a ed content and licensing show called Blueprint. No one is talking to millennials from a busi- and syndication dollars.”

ness perspective. Fast Company, Inc. and Forbes don’t speak to BUCK ENNIS this generation. Millennials want to hear from entrepreneurs that didn’t go to Stanford, who didn’t get VC money, who didn’t have a rich dad. They want to hear about someone who hustled their way there —told in our voice and tone. ■

8 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017

P008_CN_20170911.indd 8 9/8/17 12:32 PM AGENDA HEALTH CARE

FAIR HEALTH Shopping for health care? lets users evaluate pricing for New tool lets you compare costs common procedures. Nonpro t launches a health-pricing website for New Yorkers BY CAROLINE LEWIS

his week Fair insurers, state governments, billboards. Whether people pare costs by provider for some could still educate you about Health, a Midtown employers and other payers return, however, will largely common procedures, includ- the ballpark cost of a procedure nonpro t that says of health care are striving to depend on the information ing those associated with ob- and could show you that prices it has the largest empower consumers by mak- it provides being specic and stetrical care and orthopedics. vary from provider to provider,” Tmedical-claims database in the ing cost information available accurate enough for patients, However, users will have to go said Delbanco. “But we’re also country, will unveil a health online. But studies show that Delbanco said. elsewhere for quality ratings. used to being able to customize care cost-transparency website just because tools are available Fair Health’s database in- things today. So until we get to for New Yorkers called you- doesn’t mean people use them. State grant cludes access to more than 24 that point, people might nd canplanforthis.org. “ e rst step is, people With the help of a $752,808 billion billed claims for med- these types of tools frustrating.” “It’s going to catapult New have to know the tools exist,” grant from the New York ical and dental procedures. Fair Health enlisted ad- York to the front of the pack said Suzanne Delbanco, exec- State Health Foundation, Fair But there are limitations to the vertising agencies to create in terms of consumer engage- utive director of the nonprot Health has created a website data. Because the reimburse- high-prole ads with slogans ment and health care literacy, Catalyst for Payment Reform. that is more inviting and dy- ment rates negotiated between such as “Planning for your and I think it will become a “As simple an answer as that namic than its old one. insurers and providers are pro- health care shouldn’t spike model for the rest of the coun- is, we have found a health plan e colorful site, which prietary, Fair Health can’t list your blood pressure” and try,” said Robin Gelburd, pres- might make a pretty decent Crain’s previewed ahead of its actual in-network costs by in- “Planning for your pregnancy ident of Fair Health. tool but do little communi- Sept. 12 launch, oers options surer; it can oer only average in- shouldn’t feel like labor.” e site is launching ahead cation with members that it’s for calculating costs based on a network costs. e site will like- “We’re trying to create an of the state’s all-payer database, there for them to use.” single procedure or a full epi- ly be most useful to people who incredibly so welcome mat a potentially similar resource Fair Health is prepared to sode of care. It pairs its features want to go out-of-network, to this information,” said Gel- that has been in development get people to the site with a with instructional videos so have high-deductible plans or burd. “It might be going too for six years. widespread advertising cam- users know what they are look- are uninsured, Gelburd said. far to say we’re trying to make With the rise of high- paign that will run in taxi- ing at. Perhaps the most useful “If you go to a website that’s it whimsical, but we’re at least deductible health plans, more cabs and on Times Square feature is the ability to com- not specic to your plan, it trying to make it digestible.” ■

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SEPTEMBER 11, 2017 | CRAIN’S NEW YORK BUSINESS | 9

P009_CN_20170911.indd 9 9/8/17 3:57 PM AGENDA VIEWPOINTS

Labor looks strong in NY, GETTING THEIR DUES Not all workers represented by unions are members, but they must pay dues anyway. but a dire threat looms That could soon change. Supreme Court could eviscerate unions’ funding United Federation of Teachers Total Nonmembers 4.8% 120,881 ORGANIZED LABOR is contract benets that the union wins. maintaining its strong ese workers can ask to be reimbursed District Council 37 (city workers) presence in New York, for the fraction of the dues that goes di- 16.9% 98,505 according to the latest rectly to political activity. data, but the U.S. Su- Conservative legal organizations Transport Workers Union Local 100 preme Court could have challenged this requirement, ar- soon make life very guing that union activity is inherently 11.7% 42,158 di cult for public- political and governments should not CUNY faculty GREG DAVID sector unions. be able to require workers to nance Overall 24.2% of actions with which they do not agree. 13.8% 20,034 the workers in the city are e rst such case to reach SOURCE: Murphy Institute at CUNY Graduate Center union members, a small up- the Supreme Court resulted tick from last year. More im- % in a 4–4 deadlock last spring, portant, the number is more which le a California law in- ers presumably will stop paying any- I teach at the Graduate School of Jour- than double the 10.7% average tact. But a second challenge, thing to unions almost immediately. nalism.) 24PORTION OF for all 50 states, according to from Illinois, is on the court’s at’s only the beginning of the But the political fallout in local elec- the recently released annu- workers in NYC docket for the current term, problem. When Wisconsin made pay- tions, where public-sector unions play al report from the Murphy in unions and the betting is that conser- ing dues voluntary, union membership a large role, could be very signicant. Institute at the CUNY Grad- vative Trump appointee Neil dropped precipitously, to 23%, last year, As their ranks shrink, unions will have uate Center. Something like Gorsuch will provide the deci- from 50% in 2013. a much harder time nding the mon- three-quarters of these workers are sive h vote to strike down the rule Unions are already intensifying ey to spend on election politics. And it government employees. nationally. their eorts to persuade nonmembers will become clear that they represent New York requires workers repre- e chart above, from the Murphy to join. It isn’t clear if they are having fewer voters than ever before. ■ sented by unions to pay union dues even report, shows the percentage of non- any success. (Full disclosure: I pay dues if they don’t want to be in the union, members representend by four of the to but am not a member of the Profes- GREG DAVID blogs regularly at under the theory that they receive the largest unions in the city. ese work- sional Sta Congress of CUNY, where CrainsNewYork.com.

Don’t let election-year politics lay waste to a crucial industry A council bill would not reduce trash—just spread it around BY KENDALL CHRISTIANSEN

uring election season, pa- Solid Waste Management Plan passed a trash bottle- rochial politics can trump by the City Council in 2006. neck when the sound public policy. Earli- In fact, last week the city opened next Super- er this month Mayor Bill de the h of seven new waste-export fa- storm Sandy or DBlasio—in a deal with Brooklyn Coun- cilities: e Hamilton Avenue marine Hurricane Har- cilman Antonio Rey noso—endorsed transfer station in Brooklyn will accept vey hits. Yet de legislation that risks destroying the 200 Department of Sanitation trucks Blasio is push- city’s commercial waste system. at that had delivered their loads daily to ing forward system currently works surprisingly transfer stations in many of the com- with no proper TRANSFER STATIONS are demonized though they provide an well to keep the ve boroughs clean munities this unnecessary legislation economic or essential service. and businesses’ waste recycled, despite aims to help. environmental a stunning lack of city support and con- Some history is in order. In 2001 the assessment, no stant attacks on its very existence. city closed the Fresh Kills landll and public review and minimal discussion it around—increasing costs, miles trav- Backed by the mayor at a town-hall started bringing residential waste to with the industry. eled and emissions. Nor does it help event with the councilman in his north- commercial transfer stations for ship- Granted, no one likes waste facilities. plan for the infrastructure needed to ern Brooklyn district, Intro. 495 has lan- ment to distant landlls. ese stations But their impact is regulated and less reach the mayor’s goal of sending zero guished for years without a majority of are only allowed in industrial zones, than critics’ rhetoric suggests. Gentri- waste to landlls by 2030. Its conse- the council sponsoring it. No wonder: and the city’s action increased the im- cation has added to the never-ending quences would be far-reaching: less It would arbitrarily reduce the capaci- pact on those areas. With the city now NIMBY pressure on this essential in- investment to improve facilities, higher ty of existing waste-processing stations redirecting residential waste to its ma- frastructure and demonized those costs for businesses, lost jobs for hard- below levels currently permitted by the rine transfer stations to be put in sealed committed to this dangerous and dirty working New Yorkers and, ironically, a state and the city. Council Speaker Me- containers and sent o by barge, San- work. But remember, the industry worse environment. lissa Mark-Viverito should resist pres- itation Commissioner Kathryn Garcia doesn’t generate waste. is hidden but It’s good election-year politics, per- sure for its consideration during the made good-faith eorts to negotiate vital sector handles what New Yorkers haps, but damaging long-term policy. postelection lame-duck session and call a reduction in commercial transfer- collectively produce—3 million tons of New Yorkers deserve better. ■ for new negotiations with stakeholders. station capacity. But the council reject- waste per year from restaurants, hotels, e bill’s supporters say it would ed them. Into that void jumped envi- o ces and stores; millions more from Kendall Christiansen is executive advance environmental justice by more ronmental activists with a jerry-rigged construction and demolition work; and director of New Yorkers for Responsible evenly distributing the impacts of proposal targeting waste facilities in the nearly all of what the Sanitation De- Waste Management, an organization of waste disposal. But long-promised in- few places where they can operate. partment picks up. about 50 companies engaged in various frastructure is nally coming on-line to e mayor’s own Department of Intro. 495 does not make waste aspects of commercial waste services in

MITCH WAXMAN/FLICKR do exactly that, as was intended by the Sanitation fears the bill could lead to magically disappear but merely shis New York City.

10 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017

P010_CN_20170911.indd 10 9/8/17 2:52 PM Construction contractors turn to insurance that puts them in the driver’s seat

ith insurance costs for real estate Crain’s: Owners of construction projects in New New York has led to the deterioration of coverage terms development projects rising and York City are often similarly curious about the part- for many subcontractors. The utilization of an OCIP or policies becoming more complex, ner-controlled insurance program (PCIP). What are CCIP eliminates these concerns. W the advantages and disadvantages when it comes to more construction fi rms are trying insurance projects in New York City? Do PCIPs have any bene- Crain’s: As the construction insurance market programs that offer greater transparency fi ts that make them well suited to the New York City continues to harden in New York, what are the most and control. market? What is their impact on premiums? prevalent challenges faced by developers in this space? How does an OCIP impact these challenges? Construction is booming in New York City but AON: Owners partnering in a controlled insurance many projects come with a measure of risk—and program have the advantage of transparency of PCIP costs, AON: The challenges faced by developers are similar to contractors must make sure they are properly shared management of claims and settlement authority, im- the challenges faced by contractors. Contractors have seen proved control of public relations, and shared accountability. insurance premiums rise drastically while coverage terms insured. Increasingly they are turning to owner- Some diffi culties of a PCIP would be in defi ning the roles of have continued to become more restrictive. It is not un- controlled and partner-controlled insurance each partner, such as deciding who will be the sponsor and common to fi nd labor law exclusions in some subcontractor programs, which bring them greater control controlling party for the placement of the insurance and who policies. Larger deductibles have led to increased uninsured of claims management and other key benefi ts. will post the collateral and what method of collateralization exposures for contractors and their subs. Relying on subcon- Crain’s Custom recently spoke with AON about will be used. There may also be challenges with the closeout tractors to provide completed operations coverage for many process and products-completed operations issues that years after project completion is also problematic. why such programs are increasingly in demand in arise after the project is complete. the New York City market. The coverage and risk transfer concerns have led to There have been a growing number of projects with owners purchasing owner’s interest liability policies, which contract values close to $1 billion in New York City. can be costly. This adds another layer of complexity to the These projects are highly visible and closely monitored overall structure of general liability insurance on a project. by the Department of Buildings and the public. For this reason owners are interested in becoming more active An OCIP has the ability to mitigate these challenges. The and involved in the insurance program, safety and claims single-insurer approach eliminates cross litigation and management for these projects whether it be through an ultimately has the ability to provide coverage certainty to OCIP or a PCIP. project owners with substantially higher limits. In addition, OCIP programs provide completed operations extensions Similar to the OCIP, a majority of the PCIP cost can be for 6-10 years post project completion without the need offset by the total traditional insurance premium cost of to continuously renew the program. the owner, general contractor and subcontractors. Any savings can be shared between the partners. Chris Spiridis Christine Tobin Regional Director – Project Account Executive, ARM Crain’s: Construction projects Aon Risk Solutions Solutions, Aon Risk Solutions Aon Risk Solutions tend to have complex claims scenarios. How does an OCIP or CCIP provide a benefi t to Empower a project where multiple Crain’s: The owner-controlled insurance program (OCIP) is a subject of great interest to construction defendants are involved? project owners in today’s complex environment. On what types of construction projects is it warranted— AON: Under a traditional in- and when are other options more suitable? What surance approach where the owner, GROWTH for your impact does an OCIP have on insurance premiums? general contractor/construction man- next ager and subcontractors all provide their own general liability insurance, PROJECT AON: The numerous coverage issues and increase in labor law claim settlements in New York have driven the the claims process is often cumber- For more information regarding Aon’s some. Claims involving construction Project Solutions practice, contact escalation in the number of owners that are interested Christopher Spiridis, Project Solutions in procuring owner-controlled insurance programs. It is projects often include multiple Leader for New York, at 212.441.2526 or appealing to owners because it provides named insured defendants. In this scenario, each at [email protected] status, certainty of coverage and project-dedicated limits defendant engages their insurer. This Visit aon.com/construction for more for the owners, general contractor and participating sub- involvement of several insurers and construction specific solutions contractors. When participating in a contractor-controlled attorneys delays the claims process insurance program purchased by the general contractor an and increases cost. Oftentimes cross owner may not have named insured status and the limits litigation ensues, which further delays may be shared with other projects in the general contrac- the claims process. tor’s portfolio. An OCIP also gives an owner the opportuni- ty to be involved with the management of claims. With the One of the most benefi cial aspects high visibility of the new construction projects in New York of implementing an OCIP or CCIP City, it is essential to an owner to maintain their reputation on a project is the single discovery and have positive public relations. when a loss happens. Under an OCIP or CCIP the claims process is OCIPs are most suitable for residential or commercial greatly simplifi ed as a single insurer projects over $200,000,000. An owner can also tailor an provides claims management for all OCIP to include multiple projects with different general enrolled parties within the program. contractors. In addition, OCIP and CCIP pro- grams provide broader coverage The traditional insurance premium cost of the owner, and signifi cantly higher limits for all general contractor and subcontractors totaled together parties. The continued hardening can offset a majority of the OCIP costs. In some cases an of the insurance marketplace for owner may save money. subcontractors operating in

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Ask_The_Expert_Aon_4.indd 1 8/23/17 10:33 AM TECH ED| SPACE RACE SREENIVASAN, the engineering dean, said NYU’s campus has helped focus and enrich the program.

programs, such as the Media and Games Network, known as Magnet, that connect Tandon with sister schools like Tisch for the arts and Steinhardt for ed- ucation. “Real estate is always very important to give some focus,” said NYU Dean of Engineering Kate- palli Sreenivasan. “And 370 Jay really enhances the possibility of collaboration with other units. [ese programs] now have a better way to advertise them- selves and a better identity.” NYU was in some ways an unlikely winner in the Bloomberg initiative sweepstakes. It had been without an engineering school ever since it sold its Bronx campus in 1973 and consolidated operations in Washington Square. In 2011, when the RFP went out, the university was still working through the merger with Brooklyn’s Polytechnic Institute that it had begun in 2008. NYU Polytechnic School of En- gineering wouldn’t come into being until 2014. Rather than compete against heavy hitters Cornell and Stanford for the Roosevelt Island location, NYU ornell Tech, New York’s newest uni- set its sights on the unoccupied 500,000-square-foot versity, will celebrate the completion building across the street from Brooklyn Poly. of its rst three buildings this week. “It was a little risky taking on 370 Jay before NYU has an But just a few miles from its Roos- [the merger with Poly] was fully baked,” said Lynne evelt Island campus, a dierent kind Brown, senior vice president of university relations, Cof tech college grows in Brooklyn. who has guided city and community outreach for New York University’s Tandon School of Engi- NYU’s expansion. “But we knew the Bloomberg ini- engineering neering will begin its move into 370 Jay St. during tiative was a once-in-a-generation opportunity.” the next month, marking the completion of a $350 NYU Polytechnic was renamed in 2015, million renovation of the 13-story former Metro- a year aer the merger was completed, following a politan Transportation Authority building in Down- $100 million donation from NYU trustee Chandrika school too town Brooklyn. Unocially, the move signals NYU’s Tandon. emergence as a potential tech powerhouse more than four decades aer it shut down its engineering ‘Seeding an ecosystem’ As Cornell Tech opens its long-awaited school in the midst of a nancial crisis. e growth of Tandon, which has included a set Roosevelt Island campus, NYU Tandon Tandon is also hiring 40 new faculty members of high-pro le startup incubators, has contribut- and renovating its civil, chemical and mechanical ed to a “tech triangle” in the borough that takes in undergoes a major expansion in engineering labs on its MetroTech Center campus— Dumbo and the Brooklyn Navy Yard, and which is Downtown Brooklyn across the street from 370 Jay St.—as part of NYU’s lately being dubbed New York’s Innovation Coast overall $900 million investment in the Brooklyn lo- with the addition of Industry City in Sunset Park. cation. Some experts think that Cornell Tech will eventual- BY MATTHEW FLAMM Situated in a cacophonous yet up-and-coming ly have a similar inuence on parts of Queens, such district for oces, retail locations and homes above as Long Island City. half a dozen subway lines, Tandon’s grittier environs “You have the potential for diversifying geograph- stand in sharp contrast to the pristine grounds and ically a core sector of the city’s economy,” Gotsch Ivy League provenance of Cornell Tech. But both said, adding that other businesses will follow the schools are focused on integrating academic study startups that come out of the schools. “Both schools into the cultural and commercial life of the city. And are going to be major drivers in pulling commercial along with Columbia, they’re helping New York at- activity outside of Manhattan.” tain critical mass as a center for tech e growing concentration of research and education. increasingly sophisticated tech tal- “It’s creating an engineering clus- FACT ent could also extend the range and ter,” said Maria Gotsch, chief execu- ambitions of the area’s tech scene. tive of the Partnership Fund for New “We’ve got companies that are York City. “And clusters by their na- really good at taking advantage of ture draw talent.” the infrastructure that exists to- e surge in activity comes six day to build rst-class services and $900MNYU’S INVESTMENT to revive years aer the launch of the program applications,” said Eric Hippeau, a that set it in motion: the Bloomberg its engineering school partner at New York venture capital administration’s applied-sciences rm Lerer Hippeau Ventures. “Now initiative, which sought to help the city overtake Sili- we’re going to have people thinking about the next con Valley as the tech capital of the world. Beginning generation of components of the infrastructure.” with a request for proposals for a major school to be He cited robotics and arti cial intelligence as built on city-owned land, the program included seed two areas that would bene t from deeper research. money for strategic projects such as Columbia’s Data e city’s Economic Development Corp., which Science Institute, which now has 30 tenure-track fac- led the applied-sciences initiative, is now putting its ulty and an incoming class of 150 graduate students. money into new technologies. One example: a lab NYU was awarded its Brooklyn building in 2012 at the Brooklyn Navy Yard for virtual reality and as a home for the newly created Center for Urban augmented reality that Tandon will be developing Science and Progress that will use data to improve with the EDC’s help and that is expected to open cities. Informally called the media, technology and next summer. arts building, or MTA in homage to the building’s “We were seeding an ecosystem,” said Kate Daly, earlier tenant, 370 Jay St. will house the center on senior vice president of the EDC’s Center for Urban its top two oors, as well as engineering programs Innovation. “We’ve really expanded far beyond that involving data and communications; a visualiza- mandate and are looking at supporting emerging

KARJEAN LEVINE tion and data analytics center; and collaborative technologies in diverse sectors.” ■

12 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017

P012_CN_20170911.indd 12 9/8/17 4:06 PM EXPLORE STATEN ISLAND

Broker James Prendamano of Casandra Properties predicts retail rents will take off once Commercial prices inching up along tourists discover the Wheel, the mall, and the National Lighthouse Museum, not to mention Staten Island’s Bay Street Corridor new bargain hotels that are a free ferry ride from Manhattan. “As soon as the mall opens and we see that switch flipped, rents on the street will probably start at $60 per square foot,” he said. Offi ce space is in short supply and little is planned. Rents there are stuck at $25-$30, Schneider said.

Buildable parcels meanwhile are selling for record prices. Schneider was the broker in 2013 when the 180,000 square foot lot adjacent to the restored St. George Theatre sold for 9.5 million or $50 per square foot. Last month that record was broken with the sale also brokered by Schneider of a roughly 45,000-square-foot buildable parcel on ents on retail and offi ce space have been been added. According to Michael Schneider of Bay St. for $150 per square foot, or $6 million. It’s sluggish along the Bay Street corridor Schneider Realty Services, rents currently hover a single story commercial strip slated to become Radjacent to the Empire Outlets site but in the low $20 per square foot range although a hotel. prices are slowly beginning to increase as the a national chain reportedly pays above $30 per openings of the mall and the New York Wheel square foot. Spaces average between 1,000 According to Prendamano of Casandra Properties, approach. Demand is strong but supply remains square feet and 1,500 square feet in the base of such prices are a far cry from when he fi rst started limited, according to Frank Rizzo, owner of low-rise buildings, some of which are a century developing the Bay Street Corridor, “and we had to Cornerstone Realty. old. Many are occupied by small businesses or sell our soul to get a Dominos Pizza down there.” social services agencies that moved in as the “Prices will have only one place to go and the neighborhood declined. Zoning changes and infrastructure remain trend is in the right direction,” he said. “They will issues at what will be a turning point for Staten be pushed higher.” By contrast, rents in the outlet mall have Island almost akin to the changes brought by the reportedly reached $100 per square foot in opening of the Verrazano-Narrows Bridge. Rizzo Retail space remains a bargain in the commercial one case, although most rent is in the $60 per- of Cornerstone acknowledges the magnitude of stretch that starts at the site of the mall and square-foot range, according to a source close the shift. “The opportunity is tremendous,” he said. runs about a mile and a half east along the to the operation. “The next few years on Staten Island will shape waterfront where 2,000 new housing units have the borough’s next 40.”

W

3

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Staten Island Full Page - 9/11 issue - MECH.indd 1 9/7/17 9:43 AM STATS AND THE CITY | 2017 TALKING POINTS “THE TRUTH IS, THE STATE OF OUR CITY, AS WE FIND IT TODAY, IS A TALE OF TWO CITIES—WITH AN INEQUALITY GAP THAT FUNDAMENTALLY THREATENS OUR FUTURE. IT MUST NOT, AND WILL NOT, BE IGNORED BY YOUR CITY GOVERNMENT.” —MAYOR BILL DE BLASIO, FEBRUARY 2014

his fall New Yorkers will vote for their next mayor. By all accounts Bill de Blasio’s re-election is a near certainty; a recent Quinnipiac poll had his Republican challenger, Assemblywoman Nicole Malliotakis, taking just 15% of the vote and 52% of New Yorkers backing the Democratic incumbent. TWith the election to serve—however imperfectly—as a referendum on the mayor’s rst term, our annual Stats and the City issue recalls his early promises and docu- ments statistically whether he has delivered on them since taking o ce in 2014.  e lo y quotations on the following pages are all from de Blasio himself, accompanied by charts and graphs tracing his progress on key issues.  e mayor’s highlights in- clude improving metrics on education and crime, and relief for residents plagued by stop-and-frisk policing. On the downside, many elements of his Dickensian narrative remain. Homelessness has continued its long rise, the housing market is as tight as ever, and income disparities in the city are still robust, even as wages have increased across the board. ILLUSTRATIONS: DARREN THOMPSON, INFOGRAPHICS: JENNIFER BALLONE ILLUSTRATIONS:

14 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017

P014_P017_CN_20170911.indd 14 9/7/17 7:52 PM AFFORDABLE HOUSING “WE HAVE TO FUNDAMENTALLY ADDRESS THE AFFORDABLE-HOUSING CRISIS. THAT’S HOW I BELIEVE I SHOULD BE DEFINED WHEN IT’S ALL DONE.” DECEMBER 2015

he mayor’s Housing New York plan aims to nance the construction of 80,000 a ordable apartments and preserve another 120,000. It’s poised to reach those goals by 2024 and outperform a Bloomberg-era policy that built and preserved 165,000 units.  e gains came from pushing the city’s nanc- ing arm into high gear and leveraging the private market. But critics say the Tvast majority of these units are beyond the means of the neediest New Yorkers.

Hammer time Affordable units designated for each income bracket  e city has added an average of 22,186 a ordable units per year under de Blasio. A  e r a record start, the pace of preservation and creation has begun to level o . New construction Preserved units Percentage Income bracket 20,000 of units % $97,921–$134,640 12.5 Middle income 15,000 % $65,251–$97,920 6.5 Moderate income

10,000

5,000 % $40,801–$65,250 48.5 Low income 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*

*City target SOURCE: Mayor’s Management Report

Breakdown of units in Housing New York projects % % $24,501–$40,800 MARKET RATE 17.1 Very low income 6 % AFFORDABLE PORTION OF 35.4 % AFFORDABLE 64.6 UNITS earmarked % $24,500 and under for seniors 14.8 Extremely low income % For building superintendents 0.5 Other units SOURCE: NYC Open Data NOTE: These are the ranges for a family of three in 2016. SOURCE: NYC Open Data Net change in rent-stabilized units 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

-880 -677 -5,110 -6,682 -6,373 -7,820 -7,646 -8,009 -9,042 -8,771 -9,336 -10,078 -10.7% -13,034 Change in rent- stabilized units since 2002 -15,465 SOURCE: Rent Guidelines Board

SEPTEMBER 11, 2017 | CRAIN’S NEW YORK BUSINESS | 15

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194,174 47,345 pposition to stop-and-frisk 23,625 13,180 OCT 05 OCT 10 helped boost de Blasio to victory in 2013. Arrests from 2009 2010 2011 2012 2013 2014 2015 2016 Crain’s Custom Event: Hispanic Fast 50 Reception the practice, which a judge SOURCE: NYPD Executive and Entrepreneur Awards that year ruled was uncon- Crain’sCrain's ranks the 50 fastest-growing companies in the New York area who have stitutionally singling out minorities, have Join Crain’s annual celebration of Hispanic business leaders who have thrived and raced ahead of the pack. These companies are on the cutting edge, not O Drug-related misdemeanors impacted New York City in major ways. It honors the achievements of the only making significant contributions to the strength of our local economy but plummeted by 98.1% over ve years.  ere Hispanic community’s brightest and boldest minds with distinguished also transforming the way we do business every day. has been no discernible e ect on safety, 80,000 careers and exceptional civic and philanthropic activities. and reported felonies have also fallen. As that issue vanished from the conver- Presenting Sponsor: Bronze Sponsor: Partners: Platinum Sponsor: Silver Sponsor: Host Sponsor: sation, another emerged. Homelessness was surging before de Blasio took o ce, 60,000 but its continued rise and the saturation of OCT 13 OCT 17 shelters made it harder to ignore. In 25 of the 41 months that de Blasio has been in Major felonies reported Family Business Summit: Hall of Fame Luncheon 40,000 o ce, the city’s nightly shelter population in 2016, an 8.6% drop Guiding Principles, Changing Circumstances has reached a record high.  e portion of from 2013 Crain’s New York Business recognizes what it means to command Whether they're first-generation startups or dynasties that have operated in New incredible power in this city. This year Crain’s will honor business leaders homeless adults on the streets dropped in York for 150 years, family businesses make up the heart and soul of New York’s Crain’s who have transformed the city in their professional work and in their civic 2015 and 2016 but is up so far this year. economy. Making them work, however, is not easy. Join Crain’sCrain’s as we explore 20,000 and philanthropic activities. 101,716 2009 2010 2011 2012 2013 2014 2015 2016 how New York family-owned businesses are staying true to their family values and the changes they need to successfully modernize their family-owned SOURCE: NYPD business to continue to grow. Supporting Sponsor: Silver Sponsor: WiFi Sponsor: Host Sponsor: HOMELESSNESS “THIS ADMINISTRATION IS MAKING UNPRECEDENTED INVESTMENTS IN OCT 25 NOV 13 PROGRAMS TO PREVENT AND REDUCE HOMELESSNESS AND KEEP NEW YORKERS Health Care Summit: Best Places to Work Awards IN THEIR HOMES.” NOVEMBER 2015 Confronting New York’s Diabetes Epidemic —

Innovations in Prevention and Treatment Each year, Crain’sCrain’s indentifies and recognizes New York City’s best employers with Portion of homeless adults on the streets shelter Diabetes is one of the leading causes of death in New York, and, with annual the annual Best Places to Work list. To honor these exceptional companies, Crain’sCrain’s Average population in June of each year diabetes spending totaling $21.5 billion statewide, it’s one of the biggest drivers hosts a celebratory luncheon. Meet and mingle with the winners and be part of health care costs too. This summit will look at the cutting-edge work being of this year’s unveiling of the rankings. done in New York to change the behavior of the 700,000 residents who have 17% 16.4% diabetes and the millions of others who are most at risk. 15.2% 14.2% 60,717 60,042 58,541

12.1% 55,745 11.3%

50,926 NOV 16 DEC 01 9.9% 9.9% 9.8% 9.7% 9.1% 8.3% 44,402 38,470

7.1% 36,960 $2.3B 36,329

33,285 Citywide spending on homelessness in scal year 2017, up 92% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 from three SOURCES: Department of Homeless Services, Coalition for the Homeless SOURCE: Coalition for the Homeless years ago

To register and for more information: crainsnewyork.com/events. For questions: [email protected] 16 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017 *Crain’s events calendar subject to change. Contact us to learn more about our events. **All New York Yankees trademarks and copyrights are owned by the New York Yankees and used with the permission of the New York Yankees

P014_P017_CN_20170911.indd 16 9/7/17 7:55 PM FP.indd 21 9/7/2017 11:34:29 AM ELEVATE YOUR BRAND MUST ATTEND To learn more about becoming a sponsor: CRAIN’S FALL EVENTS Irene Bar-Am | 212-210-0133 | [email protected] 50 Most Powerful Women in New York Fall Business Breakfast Forum Join Crain’s and this year’s 50 Most Powerful Women in New York at our Marisa Lago, Chair, NYC Planning Commission; Director, NYC Department of City celebratory luncheon. The women named to this hallmark Crain’sCrain’s list are Planning will discuss the city’s controversial rezonings, including Midtown East, running multinational corporations or the city. They are employing industrial districts, affordable housing mandates and why neighborhood planning thousands, overseeing billions of dollars in assets and determining what the is more than just zoning. nation reads, watches and wears.

Silver Sponsor: Supporting Sponsor: Associate Sponsor: Sponsors:

SEP 26 SEP 28 Entertainment Summit: NYC Summit: Fixing Mass Transit

Managing Growth of a Booming Industry Join Crain’sCrain’s as we bring together transportation stakeholders for a The state has extended the $420 million film and TV production tax credit until candid discussion about how to get this city moving again 2023 and studios are in the midst of a building boom. A panel representing —and how to pay for it all. unions, studios, businesses and production companies will discuss what needs to be done to deftly expand the industry as a whole.

Platinum Sponsor: Supporting Sponsor: Wi-Fi Sponsor:

OCT 05 OCT 10

Crain’s Custom Event: Hispanic Fast 50 Reception Executive and Entrepreneur Awards Crain’sCrain's ranks the 50 fastest-growing companies in the New York area who have Join Crain’s annual celebration of Hispanic business leaders who have thrived and raced ahead of the pack. These companies are on the cutting edge, not impacted New York City in major ways. It honors the achievements of the only making significant contributions to the strength of our local economy but Hispanic community’s brightest and boldest minds with distinguished also transforming the way we do business every day. careers and exceptional civic and philanthropic activities.

Presenting Sponsor: Bronze Sponsor: Partners: Platinum Sponsor: Silver Sponsor: Host Sponsor:

OCT 13 OCT 17

Family Business Summit: Hall of Fame Luncheon Guiding Principles, Changing Circumstances Crain’s New York Business recognizes what it means to command Whether they're first-generation startups or dynasties that have operated in New incredible power in this city. This year Crain’s will honor business leaders York for 150 years, family businesses make up the heart and soul of New York’s Crain’s who have transformed the city in their professional work and in their civic economy. Making them work, however, is not easy. Join Crain’sCrain’s as we explore and philanthropic activities. how New York family-owned businesses are staying true to their family values and the changes they need to successfully modernize their family-owned business to continue to grow. Supporting Sponsor: Silver Sponsor: WiFi Sponsor: Host Sponsor:

OCT 25 NOV 13

Health Care Summit: Best Places to Work Awards Confronting New York’s Diabetes Epidemic —

Innovations in Prevention and Treatment Each year, Crain’sCrain’s indentifies and recognizes New York City’s best employers with Diabetes is one of the leading causes of death in New York, and, with annual the annual Best Places to Work list. To honor these exceptional companies, Crain’sCrain’s diabetes spending totaling $21.5 billion statewide, it’s one of the biggest drivers hosts a celebratory luncheon. Meet and mingle with the winners and be part of health care costs too. This summit will look at the cutting-edge work being of this year’s unveiling of the rankings. done in New York to change the behavior of the 700,000 residents who have diabetes and the millions of others who are most at risk.

NOV 16 DEC 01

To register and for more information: crainsnewyork.com/events. For questions: [email protected] *Crain’s events calendar subject to change. Contact us to learn more about our events. **All New York Yankees trademarks and copyrights are owned by the New York Yankees and used with the permission of the New York Yankees

FP.indd 21 9/7/2017 11:34:29 AM STATS AND THE CITY | 2017 EDUCATION “MORE OF OUR STUDENTS MUST GRADUATE FROM HIGH SCHOOL. SO I AM SAYING TO YOU NOW: WE WILL REACH A HIGH SCHOOL GRADUATION RATE OF 80% OVER THE NEXT 10 YEARS. OUR SECOND MAJOR GOAL IS TO MAKE SURE OUR GRADUATES HAVE THE SKILLS TO MAKE IT TO THE NEXT LEVEL.” SEPTEMBER 2015

he mayor’s record on education is mixed. His hallmark universal pre-K program hit its targets and is being expanded to 3-year-olds, and his Percentage of high schoolers who graduate in four years goal of an 80% high school graduation rate is  e overall four-year graduation rate among city high schoolers has increased by about within reach. But college readiness, while im- 2 percentage points in each of the past 10 years, topping 72% last year. proved, remains low, and fewer seats at the city’s specialized T 80% high schools are going to Hispanic and black students.

72.6% College readiness

 e portion of students deemed college-ready a er four years of high school has risen under de Blasio, but only to 37.2%. Just half of graduates are college-ready. 70%

100% After 4 years of HS HS grads

80% 60%

60%

50.7% 49.1% 50% 46.8% 47.3% 40% 43.6% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 37.2% 34.6% 31.4% 32.6% SOURCE: Mayor’s Management Report 28.6% 20%

0 “BECAUSE OF PRE-K FOR ALL, 2012 2013 2014 2015 2016 8.6 to 1 TENS OF THOUSANDS OF SOURCE: Mayor’s Management Report LONG-TERM RETURN CHILDREN WILL DO BETTER for every dollar spent on high-quality early IN SCHOOL.” SEPTEMBER 2015 “I WILL MAKE SURE ALL CHILDREN, learning, a study found REGARDLESS OF SOCIOECONOMIC STATUS AND RACE OR ETHNICITY, HAVE ACCESS TO SELECTIVE AND Pre-K for all SPECIALIZED HIGH SCHOOLS.” JUNE 2013 Prekindergarten enrollment has more than tripled since the rst full school year of de Blasio’s tenure.

Racial composition at the city’s eight test-in, specialized high schools

2013–14 2015–16 75% 59.2% 60.1%

50%

24.5% 23.6% 25%

8.3% 5.2% 6.7% 2012 2013 2014 2015 2016 4.8% 2.9% 4.8% 0 Asian Black Hispanic White Other 15,834 15,917 19,287 53,120 68,547

SOURCE: Crain’s analysis of data from the NYC Department of Education SOURCES: Mayor’s Management Report, National Bureau of Economic Research

18 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017

P018_P019_CN_20170911.indd 18 9/7/17 7:42 PM ECONOMY “OUR MIDDLE CLASS ISN’T JUST SQUEEZED; IT’S AT RISK OF DISAPPEARING ALTOGETHER. THAT DISPARITY, THAT INEQUALITY CRISIS, IS THE GREATEST RISK TO OUR NEW YORK PROMISE. ... WE DEMAND A CITY THAT OFFERS EVERY NEW YORKER A FAIR SHOT, BECAUSE THAT IS THE CITY THAT WE ALL SIGNED UP FOR.”

FEBRUARY 2014

Income inequality in the largest U.S. cities, 2015 No. 1 NEW YORK RANKED FIRST among big CHICAGO U.S. cities in income LOS ANGELES 0.5314 PHILADELPHIA NEW YORK inequality in 2015, 0.5305 CITY per its Gini coef - 0.5049 cient, which measures 0.5514 income distribution HOUSTON on a scale from 0–1. 0.5286 New York's number has increased 0.8% since 2013.

SOURCE: American Community Survey

e Blasio’s rise to the mayor- alty was spurred by a prom- Percentage of city residents below the poverty line ise to curb the city’s growing 21.2% wealth inequality. Since his 20.1% 20.9% 20.9% 20.9% 20.0% 19.2% 18.5% 18.7% election the disparity has 18.2% Dgrown slightly, thanks to income gains by the highest earners. But there have been in- creases across the board. New Yorkers’ real hourly wage has risen at every income level and should continue, as he y minimum- wage increases through 2019 have been locked in by state law. And the percentage of residents living in poverty fell by nearly a full point last year, although it remains 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 high by historical standards. SOURCE: American Community Survey

Minimum wage in New York City New Yorkers’ hourly wages (in 2016 dollars) $15.00 Percentile 2013 2016 $15

90th $45.08 $49.15 $13.00

$12 80th $34.51 $36.06 $11.00

70th $27.10 $28.83 $8.75 $9.00 $9 60th $21.91 $23.08 $8.00 $7.25 $7.25 $7.25 $7.25 $7.25 50th $17.74 $19.23

$6 40th $14.89 $16.00

30th $12.40 $13.00 $3 20th $10.25 $10.96

10th $8.87 $9.50 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

SOURCE: James Parrott, Center for New York City Affairs SOURCE: State Department of Labor

SEPTEMBER 11, 2017 | CRAIN’S NEW YORK BUSINESS | 19

P018_P019_CN_20170911.indd 19 9/7/17 7:38 PM STATS AND THE CITY | 2017 TRANSPORTATION “OUR STREETS ARE TOO CROWDED. OUR SUBWAYS ARE TOO CROWDED. OUR WATERWAYS ARE NICE AND OPEN.” AUGUST 2017

he biggest issue plaguing residents is not the mayor’s fault. Even though the state’s Metropolitan Transportation Authority is responsible for the subway system, 41% of city voters blame de Blasio for its poor service, a Quinnipiac University poll found. e mayor has promoted his new fer- ries as an alternative, but their potential is limited. Meanwhile, the streets Thave become more congested yet tra c fatalities have dropped. Average travel speed in Manhattan south of 60th Street 4.5M “WE ARE FOCUSING ANNUAL RIDERSHIP on NYC’s ferries that THE FULL WEIGHT OF 2012 9.28 mph City Hall expects, just 0.3% of the subway's CITY GOVERNMENT TO 1.76 billion PREVENT FATALITIES % ON OUR STREETS. 66 IT’S ABOUT EACH OF 2013 8.90 mph PORTION OF SUBWAY TRAINS that reach US TAKING GREATER their scheduled terminal on time, RESPONSIBILITY EVERY down from 84% in TIME WE GET BEHIND January 2013 2014 THE WHEEL OR STEP 8.51 mph SOURCE: Citizens Budget Commission OUT ON THE STREET.” FEBRUARY 2014 $16.9B Three-year fatality count 2015 8.21 mph CONGESTION COST to New York drivers in 2016, or $2,533 per commuter SOURCE: Department of Transportation SOURCE: INRIX PEDESTRIANS 477 Oh, hail PEDESTRIANS E-hail companies have collectively overtaken taxis in the city and have been blamed for slowing tra c. While cab rides have declined, the rise of Ly , Uber, Via and other startups increased the total 427 number of hailed trips to 126 million in the  rst half of this year, up 38% from the same period in 2015. E-hail trips through June of each year, in millions Taxi trips through June of each year, in millions

MOTORISTS 297 77.1 MOTORISTS 69.0 66.4 244 59.3

38.0

BICYCLISTS BICYCLISTS 14.0 52 52

2015 2016 2017 2011–13 2014–16

SOURCE: Taxi and Limousine Commission SOURCES: NYPD, Department of Transportation

20 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017

P020_CN_20170911.indd 20 9/7/17 8:05 PM A ROUNDTABLE DISCUSSION ADVERTISING SUPPLEMENT TO CRAIN’S NEW YORK BUSINESS

e Future of Multifamily Real Estate in New York

D. Hara Perkins James Nelson Real Estate Director and Multifamily Housing Group Co-Chair Vice Chairman at Cushman & Wakefield, Goulston & Storrs Chair of REBNY’s Commercial Brokerage Board of Directors

t’s been a challenging time for James Nelson, vice chairman, Team Nelson on deregulation, corporate tax cuts and multifamily real estate industry and investment sales at C&W, and chair of repatriation of overseas earnings. Iprofessionals in New York City. For the first REBNY’s Commercial Brokerage Board of half of 2017, investment sales consideration– Directors. Real earnings improvement is significant or the total dollar value of all investment for the New York City apartment market. sales–was $18 billion, a 39% decrease from Crain’s: Sales activity in New York City’s We all know a New York City apartment is the first half of 2016, according to data from multifamily market picked up in May not purchased from wages alone—or most the Real Estate Board of New York (REBNY). and June, after a period of softness, of our wages—but also investment savings, The total number of transactions across the according to data from Ariel Property bonuses (if they still exist), and distributions. city decreased 6% year over year to 2,419. In Advisors. Will the Fed’s increase in Even the half-million-dollar studio apartment Manhattan, the slowdown hit especially hard, short-term interest rates in June—its is subsidized by mom and dad. with a 49% year-over-year decrease in sales fourth increase since 2015—have a consideration and an 8% drop in the number significant effect on whether the uptick If we see real earnings improvement, I of transactions to 467. will continue? would predict the uptick in sales activity will continue, even with the recent interest Nonetheless, there was some positive news. D. Hara Perkins: I would not expect a small rate increases. Citywide price per square foot across all move in short-term interest rates to asset classes increased 7% to an all-time slow overall activity. Maybe it would James Nelson: The high at $570/per square foot, according to hit pricing somewhat, more than market has been Cushman & Wakefield (C&W) data. Overall decrease overall activity. expecting gradual increases in the federal pricing increased by 2% in Manhattan funds rate. I don’t think this will come as to $1,483 per square foot, C&W’s finding That said, we can’t really speculate about much of a surprise to investors. We’ve showed. Though prices for walk-ups were the impact of interest rate increases alone already seen an uptick in cap rates [the down slightly, by 2% to $1,010, elevator on sales activity without considering the rate of return on real estate investments, apartments were up 15% to $1,011 per other potential federal legislative and based on the income they are projected to square foot. policy changes, like corporate tax rate generate] to a small degree. The current cuts and the subsequent repatriation of spread between average cap rates today To make sense of the current climate for overseas earnings. On Charlie Rose a few and the 10-year treasury is 2.3%, the multifamily investors and developers, Crain’s months back, Byron Wien of Blackstone widest point since 2002. What that’s really Custom spoke with D. Hara Perkins, director made predictions of earnings on the S&P’s saying is this is an opportunity right now and co-chair of the Multifamily Housing 500 going from 115 to 130, if we see this for investors to buy. They can get a much Group at law firm Goulston & Storrs PC, and administration successfully move forward better cash-on-cash return.

S1

Roundtable-The Future of Multifamily MECH.indd 1 9/6/17 6:32 PM A ROUNDTABLE DISCUSSION

There has been a slight upward pressure on cap Most of the attention is happening in areas that the concession packages. What you are seeing rates from 4.55% to 4.62% citywide across all have good transportation. That’s why Queens today, certainly for new construction, in many asset classes. Typically that means a downward has been so desirable. In Long Island City, cases, is 1-2 months of free rent and the owner shift in pricing. Interestingly enough on a price Jamaica and Sunnyside, it’s really a result of how paying the brokerage fee. I would say the rental per square foot basis, New York City is at an convenient they are and access to transportation, market is strong, but you do need to look at the all-time high based on our fi gures at $1,483 per such as the 7 line. concessions and time it takes to rent some of square foot across all asset classes. these apartments. The product that’s You might ask how do you have cap rates going “I would not have predicted 15 years going to move up as well as prices? When you look at the ago that you would be able to fi nd pain today is going to average rents being achieved, rents are going up. be the product Even though investors are looking for a little bit au chocolat in Bedford Stuyvesant that’s well located. more yield on their investments, the pricing is before the Grand Concourse.” That goes back to increasing as well to an all-time high. transportation and — D. Hara Perkins, Goulston & Storrs proximity to the Crain’s: Pricing appreciated in the second subway and in some quarter in the Bronx and Queens. What is cases the ferry. driving this trend—and do you expect it to With the L shut down, Queens is getting a lot of continue? the attention from Brooklyn. If you look at 2016 I don’t want to put too much weight on the numbers, Brooklyn was an $8.2 billion market subway. In Greenpoint, there are a tremendous D. Hara Perkins: I would not have and Queens was a $4.9 billion market. A lot of number of apartments coming on line. There is predicted 15 years ago that you would be investors are getting priced out of Queens and a ferry that will take you to 34th Street and the able to fi nd pain au chocolat in Bedford Northern Manhattan; that is why there has been Financial District. Many believe the waterfront will Stuyvesant before the Grand Concourse. I kept so much attention on the Bronx, which was a be an important part of revitalizing some of these thinking Long Island City and the South Bronx $2.4 billion market in 2016. The Bronx has that areas. When you look at the amenity package it would hit, but for so long they could not compete connectivity also, so we’ve seen a lot of attention. goes further than the gym and the rooftop. Some with the Brooklyn brand. You hear college Certainly it has a lot of industrial [areas] as well. buildings have yoga classes, private wine cellars, graduates around the country say they want movie-viewing spaces, and entire floors that to move to Brooklyn, not NYC. Now, fi nally, the Crain’s: The rental market has been are amenity floors. Now some of these amenity Bronx and Queens are trending. Why? an important source of growth for the spaces are on the top floor of buildings, making it multifamily market. What do owners of rental a major selling point to the building. The simplest answer is lower rents, decent properties need to do to stand out in an housing and not-totally-broken commutes: three increasingly competitive market? Crain’s: How is the transportation situation stops on the 5 train or one stop on the 7 train to in New York City affecting multifamily midtown Manhattan. D. Hara Perkins: In my practice, the development? two areas where I see a real competitive There has also been signifi cant city investment edge in the rental market are building D. Hara Perkins: My commute to work and support for these areas. I work a fair amount amenities and interior design, specifi cally design from the Upper West Side to 53rd and on New York City Economic Development for smaller apartments and shared apartments. 3rd went from 20 minutes to an hour in Corporation transactions, helping to reposition under two years. The 1 and E simply don’t work underutilized real estate into new hubs of jobs We are seeing everything imaginable for new at rush hour. How will we all get to work in a year, and activity, like Essex Crossing and Cornell Tech amenities: Uber waiting rooms, movie studios, in fi ve years? How will this impact multifamily on Roosevelt Island, both in Manhattan. EDC also yoga studios—outdoor yoga studios, outdoor development? has a number of projects in the Bronx, like Hunts showers, built-in kitchen composters, vegetable Point Peninsula; and Queens, with Hunter’s Point gardens, tiers of landscaped roof tops, dog- I hope we fi nd the political will to fi x the subway. South. The government investment is not merely walking terraces, blowout salons, robot-operated For now, I am keeping my eye on bicycles, ferries, subsidy, but years of cultivation. storage rooms. We are seeing the most creative motorcycles, driverless cars. use of common areas. More is more. Aside from lower rents, commute times, Bicycles are the most obvious recent and government investment, why does a Developers are also maximizing each square development with Citi Bike and bike lanes neighborhood attract the demographic it foot of apartment space in a variety of ways: a reality. Bikes have opened up whole new attracts? It’s not just the numbers. 250-square-foot micro apartments, shared areas, like the Brooklyn Navy Yard. If your apartments designed for roommates with target demographic likes to bike, then new Yale professor Robert Shiller uses the term occupied/vacant signs on the restroom doors, neighborhoods become prime targets for “narrative economics.” What’s the popular furniture that can be borrowed if a guest visits, multifamily investment. narrative driving the numbers? He asks, what moving walls, expandable tables, collapsible movie am I in? I love that approach. The artists beds. These are all part of the initial design and The ferries have been so much more successful are leaving LIC and heading to the Bronx. Does brand of the building. Less is more. than anyone anticipated. According to NYCEDC, Gucci’s “Soul Scene” campaign help explain by next year NYC Ferry’s six routes will carry an Bronx pricing? Does MOMA’s PS1’s outdoor I have a client who made wide, graceful stairwells estimated 4.6 million trips per year. NYC Ferry music series “Warm Up” explain Queens a central element of an apartment development reached from Astoria to the Rockaways. It’s worth appreciation? in order to encourage exercise among the looking at a map of the waterfront to see what residents. Another client renovated apartments areas will next open up if the ferries further expand. James Nelson: I do expect for with elderly tenants and placed treadmills and it to continue. There has been seated bikes in the hallways of the common Paris began eliminating parking spaces, rather a lot of interest in the boroughs. I think it’s really areas, rather than hidden away in a gym. The than use congestion pricing to reduce traffi c, a result of people looking for more value and tenants in both of these projects expressed an and was pretty soon overrun with motorcycles opportunity. What investors really look for is the interest in healthy living, and the developers and mopeds. Will this happen here as we get price per square foot. The average multifamily responded. I love when design succeeds in this more bike lanes, with few garages? Anecdotally, price per square foot in Manhattan is over $1,000 manner, changing the way we use space for the I have heard of three locally designed and built per square foot, in the Bronx it is around $200, better. motorcycle companies that lease space in new in Queens it’s about $350, and in Brooklyn it is creative offi ce/industrial design buildings in around $400. In Queens and Brooklyn, you can James Nelson: The average Williamsburg and the Brooklyn Navy Yard. This buy properties three to four times the size you rents have increased. The would make us even less centralized and subway- would get in Manhattan for the same investment. one thing you do need to pay attention to is dependent.

Roundtable-The Future of Multifamily MECH.indd 2 9/6/17 6:32 PM ADVERTISING SUPPLEMENT TO CRAIN’S NEW YORK BUSINESS

I cannot yet imagine the impact of driverless cars Crain’s: What are the key challenges for all have cities that are stronger on the multifamily on our urban centers. Right now I see the Uber/ investors in multifamily real estate in New investment target lists than New York City. Via/Lyft explosion and the Amazon/Jet last mile York City at the moment? delivery takeover and how congested our city James Nelson: It’s a seller’s streets are becoming. The way we move around D. Hara Perkins: The biggest challenge market. Even in 2015, which our city—and the way our stuff moves around—is I see working with multifamily investors had the most trades ever, in Manhattan it barely going through a major change. is simply the tightening of the market, reached 4% turnover. Historically, turnover in for a host of reasons: soaring construction New York City is only about 2.5%. The average James Nelson: It’s a huge costs, the expiration of 421a, and the scarcity of owner holds a property about 40 years. The driver, and if you look at construction financing. challenge is really finding product to buy. Most what’s happened on the Upper East Side with investors always complain about there not 2nd Avenue, especially the apartments on 1st Construction costs are now over $350 per being enough product on the market. That really Avenue and York, over the last 5-10 years they square foot. Commercial and multifamily pushes up pricing, even though we saw a decline have suffered with construction. Now that the construction starts in the first half of 2015 in the number of transactions the first half of 2nd Avenue subway has opened up, it’s been a were $19.3 billion and now $7.2 billion in the the year. A lot of long-term owners are really boon for the area. If you look at Hudson Yards, I first half of this year. We know 2015 was above generational. The rates have been so low and average, with 421a the financing has been so compelling that these abatements set to long-term owners decide to refinance instead “ There has been a lot of interest in expire. Still, that is a of selling. Lack of supply is always one of the the boroughs. I think it’s really a result significant decline. biggest challenges.

of people looking for more value and Also, national Other challenges are pro-tenant legislation and opportunity.” and international rising real estate taxes. Politicians say the real investors are no estate taxes haven’t increased. They are right —James Nelson, Cushman & Wakefield longer hot on New when they mean the tax rates haven’t changed York City multifamily. significantly, but the assessments have gone doubt that would have all been possible if not for It is on every sale list due to peaking rents and up dramatically. In the current administration the 7 train extension. They are now introducing vacancy rates higher than usual for New York it’s about 9% on average. In some cases, real apartments for sale or lease there. It’s becoming City. Also, New York City is not a millennial estate taxes are one-third of gross income. a 24/7 type hub, which is really what you need if destination, like Austin, San Diego, Charleston There is a much deeper story in this pro-tenant you are looking for strong residential demand. and Fort Lauderdale. Texas, Florida and California environment.

goulstonstorrs.com

Roundtable-The Future of Multifamily MECH.indd 3 9/6/17 6:32 PM VENTURE CAPITAL | RAISING HELL

HARD HITTER: Tusk was known as an aggressive political operative.

olitical operative Bradley Tusk got also take advantage of opportunities that come into the venture capital game by along among the 28 companies Tusk Ventures accident, but he couldn’t have had has a stake in. He steered a better start. In 2011 he agreed to Despite his long résumé and a turn toward a accept shares in a ride-hailing start- tech-friendly style of dressing—the blue suit he Pup in exchange for guiding entrepreneur Travis wears in his website photo has been traded for a Kalanick through the maze of New York’s taxi V-neck T-shirt and white slacks—Tusk had his Uber through regulations. ose shares of Uber, paid in lieu work cut out for him winning over investors. of Tusk Strategies’ $25,000-a-month fee, are be- “I was seen as ‘Who is this political guy, and lieved to be worth $100 million now. why am I giving him money?’ ” he recalled. Tusk ran Michael Bloomberg’s last mayoral “But people started to realize [that] almost ev- Ne w Yo r k campaign and was a top deputy to former Illinois ery new company is a tech company, and most Gov. Rod Blagojevich, who is serving a 14-year new businesses are regulated by government in A venture capitalist made sentence for rack- some way. And $100 million helping the e-hail eteering. (Tusk entrenched inter- was not implicat- ests don’t just say company conquer cabs. Now “ENTRENCHED INTERESTS ed in Blagojevich’s thank you when he’s showing other startups schemes.) Known DON’T JUST SAY they’re disrupted. how to upend the status quo as a hard-hitting THANK YOU WHEN ey punch back. operator, Tusk has So we’re needed.” turned his skills THEY’RE DISRUPTED. Tusk’s high- BY MATTHEW FLAMM toward helping lights as a coun- startups with the THEY PUNCH BACK” terpuncher in- potential to shake clude taking out up industries in Anthony Weiner New York, where regulations protect the status in the 2009 mayoral race by “belittling his re- quo. He’s still getting paid in equity, but he also cord and encouraging embarrassing articles wants to play for bigger stakes. in the New York dailies,” according to e His two-year-old Tusk Ventures is in the New York Times. Tusk also orchestrated the midst of closing its rst fund, having raised $31 scorched-earth campaign that ended the de Bla- million to invest in businesses in need of help sio administration’s attempt to impose a vehicle

BUCK ENNIS negotiating regulated markets. e fund will cap on Uber in 2015.

24 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017

P024_P025_CN_20170911.indd 24 9/8/17 11:28 AM FOCUS As a VC rm, however, Tusk Ventures punches ply. He sees his job as challenging “the veracity of above its weight for reasons that don’t entirely have to the status quo,” he said. “To say you can never do do with its campaigns. Starting with FanDuel, which NAME Tusk Ventures anything that hasn’t been contemplated before, then became a client in late 2015, the rm’s investments INDUSTRY Venture capital and advisory you can never progress as a society.” chief, Jordan Nof, began requiring that startups give services Tusk also feels that Uber, which of all his port- more than equity; they must also grant Tusk Ventures folio companies pushed the hardest at boundaries, the right to invest 10% of the money going into their FOUNDED 2015 was ultimately proved right. It won most of its bat- next funding round. LOCATION Flatiron District tles with municipalities and brought ride-hailing to at provision lets the rm jump the line of es- much of the country. When it comes to Kalanick, tablished VCs and join oversubscribed rounds, as it BUSINESS MODEL The rm takes equity who so damaged his company by disregarding rules did with insurance pioneer Lemonade when it raised in exchange for services that help that he was forced to step down, Tusk insists that he $34 million this past December. Other rms that companies overcome regulatory, fell short on workplace culture, not in his dealings took part in the round included industry giants Se- operational and communications with regulators. “He’s a true visionary,” he said. quoia Capital and General Catalyst. “A company like issues Tusk recently hired Uber’s former New York gen- Lemonade, we never would have gotten the chance eral manager, Josh Mohrer, as a strategic adviser to to invest as much as we did—or anything at all—but HOW MUCH EQUITY? Up to 5% of each help startups manage rapid growth. we were contractually guaranteed investment rights, company Tusk Ventures is hardly alone in operating in gray and we took advantage of the full allocation,” Tusk WHAT’S NEW It has so far raised areas. “Technology and consumer expectations are said. “So we get into deals that no other young, small $31 million for its rst capital fund and moving way more quickly than government can,” fund like ours could ever get into.” said Vincent Ponzo, who heads the Eugene Lang plans to close the fund by next month Entrepreneurship Center at Columbia Business Both sides of the spectrum School. “Companies are going to be the ones push- e arrangement has bene ts for the startups as ing regulations.” well, says Craig Elbert, co-founder and CEO of cus- At a tech event this year, his answer was that it de- And as more startups deal with regulations, the tomized vitamin subscription startup Care/of. Tusk pends on whether the punishment is a $100 ne or value of Tusk’s expertise grows. “Most VCs don’t Ventures has been advising the company since it a prison sentence. know how to navigate that environment,” said John launched last year, and it took part in the startup’s “His attitude is, there are ways in which it’s a Frankel, founding partner at Manhattan-based FF seed round in November and its $12 million Series good business model to break the law,” Lerner said. Venture Capital. He added that regulatory “arbi- A round in July. “And he holds himself out as someone able to advise trage” is increasingly becoming part of the invest- “We just want to be aligned with them in doing companies to break the law at minimal cost.” ment equation. what’s best for our business,” Elbert said. “So when She added that opposition to new businesses Tusk expects his venture fund to close by next they’re putting in capital, it’s nice for us because it isn’t always about entrenched interests protecting month and top out at $35 million. He and Nof say validates their support and further aligns us.” themselves. “ere are protections in the law not to the fund is just the beginning. In some quarters, however, Tusk is considered protect one industry or another but to protect con- “What’s interesting is that people who said no to a bad inuence. Susan Lerner, executive director sumers,” Lerner said. us for Fund 1, all of a sudden, when they saw the of good-government group Common Cause New Tusk’s response is that new technologies oen deals we were getting, said, ‘Hey, when are you guys York, takes issue with his advice concerning whether operate in gray areas that government agencies don’t raising Fund 2?’ ” Tusk said. “We have so much op- startups should ask permission or beg forgiveness. understand and to which current laws may not ap- portunity in front of us.” ■

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SEPTEMBER 11, 2017 | CRAIN’S NEW YORK BUSINESS | 25

P024_P025_CN_20170911.indd 25 9/8/17 11:28 AM FOODSUBJECT MANUFACTURING | CATEGORY | BODEGA BAKERS

PIE TIMES: Braithwaite has a small staff that starts baking each night at 11.

THE CARB KINGS OF NEW YORK Local and artisanal but hardly health-oriented. Meet the late-

BUCK ENNIS night bakers feeding neighborhood bodegas BY JEFF KOYEN

26 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017

P026_P028_CN_20170911.indd 26 9/8/17 11:52 AM umayun Kabir has been making his “Local businesses that produce deli- small patch of Carroll Gardens a cious food are not the culprits of mal- better place for more than 20 years. nourishment and health disparities,” Each night his bakery sends clouds said Dr. Nevin Cohen, associate profes- of cinnamon into the air, delighting sor of health and food policy at the City Hthe neighborhood’s late-night dog walkers and ear- University of New York. Rather, that 6,000 ly rising joggers. distinction belongs to the “ubiquitous NUMBER OF BAKED A Bangladeshi immigrant in his early 60s, Kabir unhealthy fast-food outlets, supersize is an unlikely contributor to the city’s locavore sodas and highly processed, mass-pro- GOODS Abu’s Homestyle movement. But he actually owns the perfect 100 duced snacks.” Bakery sells to bodegas Mile Diet business. His crew cranks out breads and But going up against Big Carb in each week pastries that a few hours later land in restaurants, 2017 isn’t easy. Not long ago New Yorkers supermarkets and food carts across the city on a shopped more like Europeans: ey stocked daily basis. ey’re made fresh largely by hand and up on household items at a large store and using high-quality ingredients. Between his orig- picked up the daily necessities at the local bak- inal, eponymous bakery and its two sister compa- er, butcher and fruit-and-vegetable stand. In nies, Brooklyn Patisserie and Smith Street Bread some neighborhoods, New Yorkers shopped ex- Co., it’s not hard to imagine that you have already clusively at local grocers and corner stores. enjoyed one of Kabir’s products. In bodegas his dan- Today large city retailers such as CVS and Rite ishes and croissants bear the Kabir’s Bakery label; Aid—once known merely as drugstores—are the at restaurants across Brooklyn, his handiwork may homes of suburbia-friendly shelves stacked high Yo u have been delivered during your bread course. with dry goods, frozen foods, milk, beer, bread and d o n’ t Yet when journalists and bloggers applaud the baked goods. Chain stores are not typically cham- think of city’s artisanal-food renaissance, bakeries like pions of local brands, so this proliferation means these people who Kabir’s are overlooked. Instead, foodies fawn over less retail space for the city’s small-scale and upstart cannot buy milk. It’s not mayonnaise stores, roo op honey makers and food makers. Every Twinkie sitting forever on a fair. Fi een dollars is fair.” cheese purveyors. Carbohydrates, gluten and cin- shelf at Duane Reade is one fewer opportunity for At this point Kabir could retire and never touch namon-sugar swirls are seen as fundamentally not one of Kabir’s cherry-and-cheese danishes to tempt another pastry again. But when asked about his plans, healthful and not hip. a customer. he responded, “I’m not  nished.” But as a certain Frenchwoman might have ad- And yet Kabir is holding his own against the To meet the city’s demand for mindfully baked vised, “Let the foodies eat quinoa.” Fussy foragers chain-store interlopers. In fact, he’s more than just goods, Kabir launched Brooklyn Patisserie, which inspired by Michael Pollan’s famous advice to “Eat competing—he’s thriving, as are a number of the specializes in pastries for high-end hotels, restaurants food. Not too much. Mostly plants,” have ample city’s other bakeries. and catering companies. Even airlines are getting into choices at Whole Foods and any number of nouveau the business of quality carbs. Without naming names, bodegas that have forsaken cheap six-packs for kale Starting from scratch Kabir said a few carriers are among Brooklyn Patis- salads. Sitting in his second- oor o ce overlooking serie’s customers. For everyone else there’s no shame in the occa- Fi h Place in Carroll Gardens, Brooklyn, Kabir When asked about operating in New York, Kabir sional cinnamon bun, especially when it was baked speaks openly and con dently, though at the same does not hesitate to sing the city’s praises. “New that morning in Brooklyn—not three months ago time, with the modesty of a self-made man grateful York is a great city, and especially Brooklyn,” he said. and two time zones away. for any wealth he’s accumulated. “ at’s why we are still in business. Otherwise the “I started as a cleaner,” he said. at was the early large companies would’ve beaten us. eir prices 1980s, when Kabir and his wife arrived in Brook- are cheaper; their distribution mechanics are much lyn from their native Bangladesh. He was better. We are still here because people know us as a grateful to eventually  nd an entry-level neighborhood bakery.” position at a bakery. Over the years, Kabir’s Bakery and Smith Street Bread Co. each he said, “I worked as assistant bak- post annual revenue between $2 million and $3 mil- er, baker, head baker, assistant lion, Kabir said. His  eet of  ve trucks distributes manager, then manager.” 30% of the bakeries’ output across the  ve boroughs When “there was nowhere (but in “mostly Brooklyn, Queens and Manhattan”); else to go,” Kabir bought his wholesale distributors take 60% of the inventory; the DOUGH way into the business and be- rest goes to Kabir’s three retail bakeries in Jackson came his boss’s partner. When Heights and South Brooklyn. that company decided to stop As part of a $1.5 million investment in the space baking fresh mu ns, Kabir saw he rents, Kabir is making his Carroll Gardens loca- an opportunity to launch his own tion friendlier to foot tra c. “We want to make it $15 business. With his partner’s blessing, he nice and clean,” he said. “I want people in the neigh- HOURLY WAGE of Kabir’s took over the mu n line and in 1993 opened borhood to walk in [and] see what we’re baking.” employees. The legal his  rst wholesale bakery, in Sunset Park. e Car- minimum is $11. roll Gardens operation followed a few years later. A local specialty In the decades to come, Kabir’s product line ex- Not far away, in Bedford-Stuyvesant, another panded to include croissants and danishes. With an- bakery is proud to open its doors to the public every other partner he launched Smith Street Bread Co., morning, welcoming chatty regulars and nosh-lov- supplying restaurants and supermarkets with boule, ing newcomers with the heady scents of pastries, THE CARB 60 ciabatta, focaccia and other loaves. Kabir’s compa- cakes and freshly brewed co ee. NUMBER OF staffers nies employ about 60 people. He estimates that Abu’s Homestyle Bakery, founded by Idris Com- across Kabir’s three 80% of his sta have been ry and now managed by his son, Idris Braithwaite, companies with him for more has been a neighborhood institution since 2000. e than a decade—an operation is a far cry from Kabir’s. A small sta of impressive  gure in just four or  ve begins baking at 11 every night. e KINGS OF an industry known team is assisted by a rotating roster of two or three for high turnover. local students enrolled in the Brooklyn Frontiers “My workers High School Learning to Work program. never make min- Unless you live nearby, you’d be forgiven for not imum wage. How knowing the Abu’s Homestyle Bakery name. Aside NEW YORK can a person live on from neighborhood foot tra c, much of the com- $9 an hour?” he said. pany’s business is wholesale to restaurants. And this “You go to a restaurant type of wholesale is largely a white-label business. and eat dinner for $150. CONTINUED ON PAGE 28

SEPTEMBER 11, 2017 | CRAIN’S NEW YORK BUSINESS | 27

P026_P028_CN_20170911.indd 27 9/8/17 12:02 PM FOOD MANUFACTURING | BODEGA BAKERS

MAKING IT: Kabir, right, here with baker Thomas Grossman, has grown his business into a multimillion-dollar operation.

But in the past few years, Braithwaite has been through hoops,” making adjustments to the label feat. But competing with mainstream baked goods is building another loyal customer base in an unlike- and tweaking his recipes. a challenge the Grogans have tackled for 25 years. In ly—but distinctly New York—location: bodegas. “My product can be somewhat temperamen- the beginning it was all hands on deck. David Gro- Just as McDonald’s franchises around the world tal because I don’t have the chemicals and preser- gan was their “rst and only salesman” during the customize their menu to meet local tastes, the city’s vatives,” Braithwaite explained. “When you have a company’s early years; their rst baker “split his time best bodegas serve as uno cial companions to the bean pie there on the shelf, my guys just made it. between baking and delivering.” eir initial clients census. ough it may seem like every corner store at was just made right here. e born-on date was were a handful of delis on the Upper East Side. sells the same few brands, in reality no two bodegas today or yesterday.” Over the years Sweet Sam’s has been asked to ac- are alike. Good thing, then, that his pies turn over quickly. commodate various nutritional trends—typically, “A bodeguero [bodega owner] with little success. “Back in the day,” buys products each week, and he can Lyn Grogan said, “a multinational bring anything that he feels his clients “I DON’T HAVE PRESERVATIVES. coee-bar chain asked us to develop will consume,” said Zulay Mateo-Bur- a line of low-fat mu ns. e low- gos, executive director of the Bodega WHEN YOU HAVE A BEAN PIE ON THE fat trend didn’t last because what it Association of the United States, a SHELF, MY GUYS JUST MADE IT. reduced in fat it added in carbs, and New York City–based development the avor was not as rich and as satis- corporation that advocates on behalf THE BORN-ON DATE WAS TODAY” fying.” As a result “our core products of food retailers. “With changes in a are essentially the same as they were neighborhood, the owner will change when we rst started,” she added. the merchandise depending on demands.” “I sell dozens of these every day,” a man behind the New York now accounts for just 12% of sales, but By instinct, chance or design, a smart bodeguero counter of Al-Saedi Grocery in Sunset Park, Brook- Sweet Sam’s remains a proudly local company. Ev- can maintain a portion of inventory that has ethnic lyn, said. ery cupcake, cookie and pound cake is produced in origins, is unique and is oen locally made. the Bronx, in a massive space packed with ovens as Seeing an opportunity, a few years ago Braithwaite Healthy growth long as a city bus and cooling racks 3 stories tall. e launched a specialty line of 4-inch pies—the per- Freshness and food safety are legitimate concerns, company is still privately held by the Grogan family: fect size for a bodega’s limited counter space. Every not just for local manufacturers; but for everyone David serves as president and the couple’s son, Aar- week under the Abu’s brand, Braithwaite sells an es- working with perishable products, including nation- on, is vice president. Like Kabir, the Grogans count timated 6,000 bean, sweet potato, coconut custard al brands with household names. In this regard, Big many of their original employees among their cur- and pecan pies to 150 bodegas, mostly in Brooklyn, Carb has the clear advantage: No one’s worried about rent sta. ey declined to release revenue gures. Queens and Harlem and on the Lower East Side. nding Listeria in Twinkies. No one’s suggesting that an oatmeal raisin cook- e journey to selling 6,000 pies a week wasn’t To compete with those seemingly immortal ie—no matter how freshly baked—is a health food. easy. When bodega sales started picking up, baked goods, savvy bakers position their products’ But even with identical calories and carbohydrates, Braithwaite said, the “big guys” started to notice shorter shelf life as an asset, not a liability. there’s little denying that cupcakes baked in the a “homegrown entity encroaching on their shelf “Our products do not have preservatives,” said Bronx are superior to Ding Dongs imported from space.” (ough Braithwaite declined to identify Lyn Grogan, vice president of product development the Midwest. them, it could be surmised that he was referring and marketing at Sweet Sam’s Baking Co., the Bronx- “We have yet to see a conict between healthi- to large wholesale bakeries based in New Jersey based business she founded with her husband, David. er eating and the enjoyment—in moderation—of and further aeld.) Soon enough city o cials came For a company with an 80,000-square-foot facil- gourmet bakery products,” Lyn Grogan said. “Our

BUCK ENNIS knocking. Braithwaite found himself “jumping ity and international distribution, that is no small sales were up last year.” ■

28 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017

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Pur- as agent of the LLC upon whom process thority filed with Secy. of State of NY Pemberwick Rd, Greenwich, CT 06831. pose: Any lawful activity. against it may be served. The address (SSNY) on 5/23/2017. Office location: Purpose: any lawful activity. to which the SSNY shall mail a copy of NY County. LLC formed in FL on any process against the LLC is: 340 11/22/2006. SSNY designated agent upon whom process may be served and Pemberwick Rd, Greenwich, CT 06831. MADISON AESTHETIC CARE, LLC Arti- NOTICE OF FORMATION OF EAST 19TH shall mail copy of process against LLC Principal mailing address of the LLC is: cles of Org. filed NY Sec. of State STREET DENTAL PLLC. Arts of Org filed to: 111 Eighth Avenue, New York, NY 340 Pemberwick Rd, Greenwich, CT (SSNY) 7/19/17. Office in NY Co. with the Secy of State of NY (SSNY) on 10011. Principal business address: 06831. Purpose: any lawful activity. SSNY desig. agent of LLC upon whom 07/19/17. Office location: NY County. 1740 Greystone Ct. Longwood, FL process may be served. SSNY shall SSNY designated agent upon whom 32779. Certificate of LLC filed with mail copy of process to 110 East 66th process may be served and shall mail Secy. of State of FL located at: 2661 St., NY, NY 10065, which is also the copy of process against PLLC to: 30 Executive Center Circle Tallahassee, FL Notice of Qualification of Jeunesse, principal business location. Purpose: Central Park S Rm 13C, New York, NY 32301. Purpose: any lawful act. LLC. Fict. name Jeunesse Global, LLC. Any lawful purpose. 10019. Principal business address: Authority filed with Secy. of State of 118 East 19th St. Ground Fl, New York, NY (SSNY) on 4/14/2017. Office loca- NY 10003 Purpose: any lawful act. tion: NY County. LLC formed in FL on Notice of formation of 7/9/2009. SSNY designated agent Notice of formation of SIRAJ A YackerDunnTalent Group LLC. Arts. of upon whom process may be served BHADSAVLE M D PLLC. Articles of Or- Org. filed with Secy. of State of NY and shall mail copy of process against ganization filed with the Secretary of (SSNY) on 7/13/2017 Office loca- VEYEP VAPOR, LLC Art. Of Org. Filed LLC to: 111 Eighth Avenue, New York, State of New York SSNY on tion: NY County. SSNY designated Sec. of State of NY 6/28/2017. Off. NY 10011. Principal business ad- 06/06/2017. Office located in New agent upon whom process may be Loc.: New York Co. C T Corporation dress: 701 International Parkway, York County. SSNY has been designat- served and shall mail copy of process System designated as agent upon Lake Mary, Florida 32746. Certificate ed for service of process. SSNY shall against LLC to: Marc Reibman, 26 whom process against it may be of LLC filed with Secy. of State of FL lo- mail copy of any process served Court St #1808, BK, NY served. SSNY to mail copy of process cated at: 2661 Executive Center Circle against the PLLC 240 E 39TH ST APT 11201.Principal business address: to The LLC, 111 8th Avenue, New Tallahassee, FL 32301. Purpose: any 28A NEW YORK, NY 10016. Purpose: 212 Warren Street, New York, NY York, NY 10011. Purpose: Any lawful lawful act. any lawful purpose. 10282 Purpose: any lawful act act or activity.

SEPTEMBER 11, 2017 | CRAIN’S NEW YORK BUSINESS | 29

P029_CN_20170911.indd 29 9/7/2017 4:05:42 PM TO PLACE A CLASSIFIED AD, CALL 1 800 444 6007 OR VISIT CRAINSNEWYORK.COM

PUBLIC & LEGAL NOTICES

Notice of Qualification of 312 CONEY IS- Notice of Qualification of 91 Diamond Notice of Qualification of TD PRIME Notice of Qualification of VIVOR, LLC LAND MANAGER LLC Appl. for Auth. filed Management LLC. Authority filed with SERVICES LLC Appl. for Auth. filed with Appl. for Auth. filed with Secy. of State with Secy. of State of NY (SSNY) on Secy. of State of NY (SSNY) on Secy. of State of NY (SSNY) on of NY (SSNY) on 07/27/17. Office lo- 08/15/17. Office location: NY County. 08/14/17. Office location: NY County. 07/27/17. Office location: NY County. cation: NY County. LLC formed in Dela- LLC formed in Delaware (DE) on LLC formed in Delaware (DE) on LLC formed in Delaware (DE) on ware (DE) on 12/24/14. SSNY desig- 08/11/17. Princ. office of LLC: 150 01/27/17. SSNY designated as agent 05/05/17. SSNY designated as agent nated as agent of LLC upon whom Broadway, Ste. 800, NY, NY 10038. of LLC upon whom process against it of LLC upon whom process against it process against it may be served. SSNY designated as agent of LLC upon may be served. SSNY shall mail proc- may be served. SSNY shall mail proc- SSNY shall mail process to c/o Corpo- whom process against it may be served. ess to: Mortar, 243 W. 30th St., Ste ess to c/o Corporation Service Co., 80 ration Service Co., 80 State St., Alba- SSNY shall mail process to the LLC at 400, NY, NY 10001. Address to be State St., Albany, NY 12207-2543. DE ny, NY 12207-2543. DE addr. of LLC: the princ. office of the LLC. DE addr. of maintained in DE: 108 West 13th St., addr. of LLC: 251 Little Falls Dr., Wil- 251 Little Falls Dr., Wilmington, DE LLC: c/o Corporation Service Co., 251 Lit- Wilmington, DE 19801. Arts of Org. mington, DE 19808. Cert. of Form. filed 19808. Cert. of Form. filed with Secy. tle Falls Dr., Wilmington, DE 19808. filed with the Secy. of State, 401 Feder- with Secy. of State, 820 N. French St., of State of DE, Div. of Corps., 401 Fed- Cert. of Form. filed with Secy. of State of al St, Ste 4, Dover, DE 19901. Pur- 4th Fl., Wilmington, DE 19801. Pur- eral St. - Ste. 4, Dover, DE 19901. DE, John G. Townsend Bldg., 401 Feder- pose: any lawful activities. pose: Any lawful activity. Purpose: Any lawful activity. al St., Ste. 4, Dover, DE 19901. Pur- pose: Any lawful activity .

Notice of Formation of HELMSLEY NOTICE OF FORMATION OF LL Execu- Notice of Formation of 114 EAST 13 SPEAR LOCKWOOD HOTEL SERVICES, tive Coaching, LLC. Articles of Organiza- Notice of formation of Lai Chung Gar- STREET 6A REALTY, LLC Arts. of Org. LLC Arts. of Org. filed with Secy. of tion filed with the Secretary of State of dens, LLC. Arts of Org filed with Secy. filed with Secy. of State of NY (SSNY) State of NY (SSNY) on 08/23/17. Of- NY (SSNY) on 8/3/2017. Office loca- of State of NY (SSNY) on 4/13/2017. on 08/07/17. Office location: NY fice location: NY County. Princ. office tion: NEW YORK County. SSNY has Office location: NY County. SSNY desig- County. Princ. office of LLC: 114 E. of LLC: 90 Park Ave., NY, NY 10016. been designated as agent upon whom nated agent upon whom process may 13th St., Unit 6A, NY, NY 10003. SSNY designated as agent of LLC upon process against it may be served. The be served and shall mail copy of SSNY designated as agent of LLC whom process against it may be Post Office address to which the SSNY against LLC to 90 State Street, STE upon whom process against it may be served. SSNY shall mail process to Cor- shall mail a copy of any process 700, Office 40, Albany, NY 12207. Prin- served. SSNY shall mail process to poration Service Co., 80 State St., Alba- against the LLC served upon him/her cipal business address: 393 Dean Corporation Service Co., 80 State St., ny, NY 12207-2543, regd. agent upon is: 7014 13th Avenue, Suite 202 Brook- Street, 1B, Brooklyn, NY 11217. Pur- Albany, NY 12207-2543. Purpose: Any whom and at which process may be lyn, NY 11228 The principal business pose: any lawful act. lawful activity. served. Purpose: Any lawful activity. address of the LLC is: 540 West 49th Street #CY7N NY, NY 10019 Purpose: any lawful act or activity

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P029_CN_20170911.indd 30 9/7/2017 4:06:14 PM GOTHAM GIGS

BUILDING THE DREAM: Volpe moved to New York from Brazil with the desire to create something.

BY LANCE PIERCE

Soldier, sailor, ferry-fleet maker To build the city’s 20 new high-speed boats, a Hornblower project director had to leave home

he moment Mayor Bill de Blasio named Horn- Shipyards operate 24 hours a day, seven days a week. blower the winner of the city’s new ferry con- “When you’re down there, there’s no holidays. ere’s no JUNIOR VOLPE tract in March 2016, Junior Volpe knew his life Sunday. You just go, go, go,” he said. was about to change. Volpe moved to New York from Brazil in 1999, fresh AGE 38 TAs the director of special projects for the ferry com- out of compulsory military service, knowing only that he BORN Sao Paolo, Brazil pany, Volpe would be in charge of managing the design, wanted to work in construction management. “I always RESIDES Mount Vernon construction and delivery of the vessels. e saw myself in production, involved in mak- EDUCATION Certi cate in NYC Ferry contract was for 20 high-speed “Building ing and building things,” he said. “Building business administration, Faculdades passenger boats. It was one of the biggest or- more than a what? I didn’t know.” Integradas de Ourinhos, Brazil ders of new vessels in U.S. maritime history. His rst job was as an apprentice ber- THE BEAUTIFUL GAME Volpe e rst 16 had to be nished and delivered dozen boats glass fabricator helping to build yachts at a spent several years as a professional by this summer, barely a year later. simultaneously shipyard in Mamaroneck, Westchester. He soccer player for clubs Londrina Esporte and União Bandeirante “Normally it takes eight or nine months worked his way up to joinery outeld man- has never been in the southern Brazilian state of to build a boat like this from scratch,” Volpe done before ager, in charge of a yacht’s interior, and then Paraná. He retired from futebol at said. “Now we were going to be building ” moved into vessel design and construction. 18 to begin military service. more than a dozen simultaneously. Nothing So when it came to overseeing the assembly HOME SWEET HOME He was like this had ever been done before.” of a eet, he was not afraid to get into the details—like the traveling to the Gulf Coast so much Once Hornblower got approval for the design, the com- welding style of the windows, the shade of paint and the that a June staycation was the rst pany found two shipyards in the Gulf Coast with enough upholstery fabric. “We needed consistency. We didn’t want time since Christmas he had spent ve nights in a row in his own bed. capacity between them to handle the order. a passenger or a crew member to notice any dierence be- Volpe le his Wall Street oce near Pier 11 behind and tween the boats from either shipyard,” he said. COMFORT FOOD Volpe frequent- ed the same two restaurants when began spending one week a month at company apartments By May Hornblower had delivered ve ferries, enough to working down south. “When you near the shipyards, either in Mobile, Ala., or Lafayette, La. launch the service one month early. For Volpe, it felt like a walk into a place and people know By September 2016 he was living three and half weeks a victory: “I was nervous, stressed, relieved and proud.” And your name, it’s time to move on.”

BUCK ENNIS month on the Gulf Coast, overseeing the work. back home —for a few days. — HILARY POTKEWITZ

SEPTEMBER 11, 2017 | CRAIN’S NEW YORK BUSINESS | 31

P031_CN_20170911.indd 31 9/8/17 12:44 PM SNAPS

Throwing the doors wide open Ronald Perelman, MacAndrews & Forbes chairman and chief executive, hosted a dinner and private concert at his East Hampton home to bene t the Apollo eater, for which Perelman is a board trustee. e party featured A-list performers such as Jon Bon Jovi, Citizen Cope, Gary Clark Jr., Alice Smith, Patty Smyth, Mavis Staples, Justin Timberlake and Pharrell Williams. ey helped raise more than $5 million to support the Harlem institution’s artistic, educational and outreach programs.

Apollo board member Robert Kraft, owner of Alicia Keys, Justin Timberlake, the New England Patriots and chairman and chief Rashida Jones and Chris Rock at executive of the Kra Group, with Jonelle Procope, the Aug. 12 celebration. president and chief executive of the Apollo, at the East Hampton festivities.

For four-legged friends Dining with authors Veterinarians International held e East Hampton a fundraiser at Library held its 13th Dopo La Spiaggia annual Authors Night in East Hampton fundraiser Aug. 12. It Aug. 11. Guests began with a cocktail included Christina party in a local eld. Blaustein and her Among those in husband, Howard attendance were Alec Blaustein, founder Baldwin; his wife, of Prime Clerk. Hilaria Baldwin; and Sen. Kirsten Gillibrand.

Dr. Scarlett Magda, founder and president of Veterinarians International, and Katie Cleary, founder of nonpro t Peace 4 Animals and worldanimalnews .com, at the event. Author Owen Pataki and his father, former Gov. George Pataki, at Authors Night, which also included 20 private dinner parties. e event raised a record $360,000.

GETTY IMAGES COURTESY OF THE APOLLO THEATER, EUGENE GOLOGURSKY/GETTY IMAGES FOR EAST HAMPTON LIBRARY, ROB RICH/SOCIETYALLURE.COM EUGENE GOLOGURSKY/GETTY IMAGES FOR EAST HAMPTON LIBRARY, GETTY IMAGES COURTESY OF THE APOLLO THEATER, SEE MORE OF THIS WEEK’S SNAPS AT CRAINSNEWYORK.COM/SNAPS. GET YOUR GALA IN SNAPS. EMAIL THERESA AGOVINO: [email protected].

32 | CRAIN’S NEW YORK BUSINESS | SEPTEMBER 11, 2017

P032_CN_20170911.indd 32 9/8/17 5:55 PM FOR THE RECORD*

NEW IN TOWN its co ee shop. $80,000; and Capital One ■ Sirius XM Holdings Inc. owner, Capital Properties. building. e average asking Bank, owed $75,000, are the (SIRI-O) Savitt Partners represented rent for the ground- oor ■ 280 CapMarkets ■ I.M. Pastry Studio creditors with the largest Board member David the tenant. space was $100 per square 1350 Sixth Ave., Suite 432 120 Essex St. unsecured claims. Zaslav sold 41,313 shares foot. e landlord, TFC, e San Francisco–based  - A $33,000 Kickstarter drive of common stock at prices ■ Knotel agreed to take was represented in-house nancial startup that advises enabled this bakery to debut ■ Ninety Fifth Street ranging from $5.52 to $5.62 17,464 square feet of o ce along with a team from clients on bond investments in Prospect-Le erts Gar- Square Inc. per share from Aug. 9 to space at 373 Park Ave. Winick Realty group. e opened its  rst city o ce, in dens, Brooklyn. Now it has 557 Grand Concourse, Aug. 14 in transactions e startup o ce-space tenant was represented Midtown. move into the Essex Market Suite 6005, Bronx worth $230,929. He now provider plans to occupy in-house. food hall. e printing-services com- holds 13,374 shares. the entire sixth and ninth ■ Menya Jiro pany  led for Chapter 11  oors of the 12-story build- ■ Mitchell Gold + Bob 123 William St. ■ Ridgewood Savings Bank bankruptcy protection Aug. ing. e asking rent in the Williams agreed to take ere are only three kinds 1035 Fulton St., Brooklyn 17, citing estimated assets REAL ESTATE 10-year deal was $62 per 10,000 square feet at 220 of ramen on the menu at One of the city’s largest and liabilities of $500,001 to square foot. e landlord, 36th St., Brooklyn. e Chef Jiro Anma’s Financial mutual-savings banks $1 million. AAA Contract- COMMERCIAL ATCO, and the tenant were luxury home-furnishing District spot. opened its seventh Brook- ing, owed $62,500; Nedel ■ WeWork inked a deal for represented in-house. company plans to open an lyn branch, in Clinton Hill. Lionel, owed $20,000; and 85,000 square feet at 115 upholstery-repair shop in ■ Oscar Wilde Bhayb Trust, owed $18,500, Broadway. e co-working- RETAIL Industry City. e asking 45 W. 27th St. are the creditors with the space company has 42 ■ Chelsea Piers inked a deal rent for the 10-year lease is Victorian-themed whis- BANKRUPTCIES largest unsecured claims. o ces throughout the city, for 52,000 square feet at 33 ranges from $15 to $25 per key bar opened in a centu- now including  ve in the Bond St. e 22-year-old square foot. SCG Retail ry-old Flatiron building. ■ Popi Trading Inc. Financial District. e ask- entertainment and sports represented the landlord, d/b/a Liner American STOCK TRANSACTIONS ing rent was $55 per square  rm plans to open a gym Industry City. RKF repre- Services NA foot. CBRE represented the in the Downtown Brooklyn sented the tenant. ■ MOVES AND EXPANSIONS 225 Broadway, Suite 2701 ■ CBS Corp. (CBS-N) e freight-forwarding Anthony Ambrosio, senior GET YOUR NEWS ON THE RECORD ■ Blank Slate Gourmet  rm  led for Chapter 11 executive vice president and * Market bankruptcy protection Aug. chief HR o cer, sold 8,167 To submit company openings, moves or real estate deals, or to receive further information, email [email protected]. 121 Madison Ave. 14, citing estimated assets shares of common stock at e folks at Blank Slate of $100,000 to $500,000 and prices ranging from $65.95 For the Record is a listing to help businesspeople in New York nd opportunities, potential Co ee + Kitchen, a co ee liabilities of $1,000,001 to to $66.44 per share Aug. new clients and updates on customers. Bankruptcy lings from the eastern and southern districts of New York are listed alphabetically. Stock transactions are insider transactions at bar in NoMad, opened a $10 million. Castleton Com- 10 in a transaction worth New York companies obtained from Thomson Reuters and listed by size. Real estate listings neighborhood grocery store modities, owed $217,000; $538,673. He now holds are in order of square footage. just two doors down from Access World, owed 195,593 shares.

TUESDAY, SEPTEMBER 26, 2017 12:00 P.M. – 2:00 P.M. Cipriani 42nd Street 110 East 42nd Street

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For more information: Ashlee Schuppius: 212-210-0739 [email protected] Alicia Glen Melissa DeRosa Cathy Engelbert Dr. Laura Forese Sheena Wright Deputy Mayor for Housing and Economic Secretary to the Governor CEO, Deloitte U.S. EVP and COO President and CEO For sponsorship opportunities: Development City of New York New York State NewYork-Presbyterian United Way of NYC Irene Bar-Am: PRESENTING SPONSOR: 212-210-0133 [email protected]

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SEPTEMBER 11, 2017 | CRAIN’S NEW YORK BUSINESS | 33

P033_CN_20170911.indd 33 9/8/17 1:34 PM P034_CN_20170911.indd 34

STEFAN ENGQUIST 34 | CRAIN’SNEWYORKBUSINESSSEPTEMBER 11,2017 A ers the band typically pulls inabout pulls $450forers typically theband show. asingle as Dire Straits once sang, but fair.  of told ehead theact report- troupe $40 to wait until she wasdone. It for wasmoney nothing, mayoral candidate Nicole one Malliotakis, of the her paid aides threatened act a musical to drown out apress conference by called and touristsPark, iswide are where plentiful. thesidewalk When two tens, four give ves. …” “If you don’t have you a$20bill, two give tens. can If you don’t have show. thesidewalk tobills see upon)—forlanded adonation, of over handed course. Onlookers chance to move to the front (thus lowering their chances of being ists. He and hisassistants o atered those theend of thelinea mance from to money wasthespiel extract tour- heused play Pay to (not) Street performing City near Hall lucrative, be can especially “Just you so know, contribution theusual is$20,” were they told. athleticism, nodoubt, but pe thereal City Hall. It wasan impressive feat of over six volunteers just outside street acrobat recently jumped rfor- — ERIKENGQUIST PHOTO FINISH 9/8/17 1:00 PM Building Owners. Time is running out... New York City is currently offering an amnesty program to waive civil and criminal penalties if there is improper gas work or appliances in your building.

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