CRAINS 20160627-NEWS--0001-NAT-CCI-CN_-- 6/24/2016 9:10 PM Page 1 CRAINS ® JUNE 27-JULY 10, 2016 | PRICE $3.00 DOUBLE ISSUE NEW YORK BUSINESS The dynamic duos shaping the city’s economic, political and cultural life are bigger than the sum of their parts Pages 12-21 Christine Trump’s Skyscraper Quinn’s workers on stilts political take raises comeback offense hackles P. 6 P. 6 P. 9 VOL. XXXII, NO. 26 WWW.CRAINSNEWYORK.COM 0 71486 01068 5 26 NEWSPAPER 20160627-NEWS--0002-NAT-CCI-CN_-- 6/24/2016 9:11 PM Page 1 JUNECRAINS 27-JULY 10 FROM THE NEWSROOM | JEREMY SMERD A better way to pay IN THIS ISSUE 3 AGENDA In our June 20 issue, we wrote about Donald Trump’s use of a 4 IN CASE YOU MISSED IT Industry City 1960s-era zoning rule allowing him to build 20 extra stories 6 POLITICS serves up a food court at Trump Tower in exchange for creating public spaces on 7 RETAIL the site. The added floors netted him around $530 million, 8 WHO OWNS THE BLOCK we calculated. What did the public get? A couple of hard-to- 9 REAL ESTATE access gardens that are so poorly maintained that the city on 10 June 23 fined Trump $10,000. VIEWPOINTS Privately owned public spaces are great when they work. FEATURES But many POPS are neglected or 12 POWER COUPLES poorly designed. That’s why the City Council just allowed Very few developers some along Water Street downtown to become retail spaces. Critics, including the Municipal Art Society, said the “have been required to city gave away a public good without getting enough back. upgrade the Such problems are often addressed piecemeal, but POPS infrastructure needed need a more comprehensive approach because the public benefit could be greater. The value of floor height is for more density measurable, the extra tax revenue collectible. Some of that should be reinvested in the infrastructure that is strained when taller buildings bring more commuters and residents into neighborhoods. “There’s been this constant cry for density, and yet very few developers have been required to upgrade the infrastructure needed to sustain the density we’re 25 GOTHAM GIGS calling for,” said Gina Pollara, president of the Municipal Art Society. “There’s such 26 EXECUTIVE MOVES a stress on public space that we’re spilling onto the streets.” 27 SNAPS The money for these upgrades already exists. Well-appointed and maintained public plazas increase the value of nearby buildings. The city captures that added CORRECTION value through property taxes, but the money gets gobbled up by the general fund. Commercial lawyer LAUREN RUDICK of Hiller PC is a gradu- ate of New York Law School. Her school affiliation was incor- There’s a better approach. The Bloomberg administration financed the No. 7 rect in “Hoping to buy low, sell high,” published June 20. extension through property-tax revenue that will be generated by the Hudson Yards development. Likewise, the proposed $2.5 billion streetcar connecting Brooklyn and Queens waterfront communities will be paid for by additional tax revenue that comes from the rise in these properties’ values if the streetcar is built. While Hudson Yards revenue has been slow in coming and the BQX streetcar is still just a proposal, tax-increment financing offers a blueprint, as does One Vanderbilt—the 67-story tower SL Green is being allowed to build near Grand Central in exchange for more than $200 million in infrastructure improvements. The city’s infrastructure is crumbling: Transit is overcrowded, and old power ON THE COVER lines and sewers remain vulnerable to outages and storms. The city can’t depend PHOTO: iStock on Albany. But the private sector can step up—and benefit from the upgrades that could make New York a better place to live and work. DIGITAL DISPATCHES CONFERENCE CALLOUT JULY 20 Go to CrainsNewYork.com READ CRAIN’S Italian shoe company Aquazzura BUSINESS OF GARBAGE sued Ivanka Trump, claiming her fashion line knocked off one of its designs. Don’t miss the trash talk as Crain’s ■ dives into the money, politics A bill to give financial incentives for local and policies behind New York’s television productions to hire women and dirtiest industry and why minorities in writing and directoing roles the city and businesses still died in Albany. struggle with high costs and ■ President Barack low recycling rates. Obama named the > JOHN JAY COLLEGE OF site of the Stonewall CRIMINAL JUSTICE riots a national monument. 8:30 a.m. to 10 a.m. Businesses around the area [email protected] that saw a flood of mourn- ers after the mass shooting in Orlando will donate a portion of their profits. Vol. XXXII, No. 26, June 27, 2016—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double issues the weeks of June 27, July 11, July 25, Aug. 8, Aug. 22 and Dec. 19, by Crain Communications Inc., 685 Third Ave., LISTEN New York’s basketball follies, what New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send address Brexit means for New York, and our inaugu- changes to: Crain’s New York Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. ral power couples list. All on our podcast. 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) CrainsNewYork.com/podcast BUCK ENNIS, ISTOCK ©Entire contents copyright 2016 by Crain Communications Inc. All rights reserved. 2 | CRAIN’S NEW YORK BUSINESS | JUNE 27, 2016 20160627-NEWS--0003-NAT-CCI-CN_-- 6/24/2016 8:46 PM Page 1 AGENDAWHAT’S NEW JUNE 27, 2016 New York’s basketball teams ignore basic business tenets at their peril eorge Santayana famously said, “Those who cannot remember the past are condemned to repeat it.” It’s sage advice for any business. Unfortunately, New York’s two National Basketball Association franchises Ghave indeed forgotten their history, or at least the philosopher’s quote. Possibly both. A decade ago, the floundering New York Knicks leaped at an opportunity to acquire a onetime superstar point guard whose pro- ductivity had been crippled by injuries but who still looked good on a marquee. Today, only the most diehard Knicks fans recall Steve Francis—at pan out. They have since cut ties with both players and virtually BAD PLAN: Paul Pierce and least, those who have not repressed the memory of that psycholog- everyone else from that ill-fated team. Kevin Garnett ically scarring era in team history. Francis had $49 million remaining The outcome was no surprise to anyone familiar with NBA histo- delivered little on his contract and was a shell of his former self, which is why he ry. In the 1980s, after Cleveland Cavaliers owner Ted Stepien hob- and cost the Nets three top was available in the first place. His acquisition set back the rebuild- bled his team by continually trading first-round draft picks for mar- draft picks. ing effort that the Knicks were stubbornly trying to avoid. ginal veterans, the league forbade teams to give up their top selec- Last week, the team made a trade eerily reminiscent of the tions in consecutive years. But the Nets evaded the Stepien Rule by Francis debacle. It brought in Derrick dealing their 2014, 2016 and 2018 Rose, a former league MVP who has a $21 Trading for declining veterans rather picks. It was like wading past the million salary but hasn’t been the same than building for the future has been a no-swim line at the beach and since suffering a series of knee injuries. being pulled into a rip current. The move seemed more about selling losing strategy for the Knicks and Nets When teams seek short-term pricey seats and suites at Madison Square gains at the expense of long-range Garden than building a championship roster. success, it’s akin to companies making bad acquisitions to meet A day later, the Brooklyn Nets watched helplessly as the fast- their next quarterly earnings target. Better to build with vision and rising Boston Celtics chose a strong, young player with the third patience. Earlier this month, the Cavaliers won their first champi- overall selection in the NBA draft—one of three first-round picks onship on the backs of two players they had drafted first overall. gift-wrapped by the Nets in 2013 in exchange for aging, well- Big-name players sell tickets, but winning teams sell more—and compensated stars Paul Pierce and Kevin Garnett. The Nets were elevate a city. So, no more panic moves, please—New York hasn’t trying to make a splash upon moving to Brooklyn, but it didn’t enjoyed an NBA title since 1973. Just in case you forgot. — THE EDITORS FINE PRINT Some 43% of New Jersey-based small and medium-size businesses surveyed by wealth management firm RegentAtlantic say they wouldn’t launch their companies there if they were starting over; many are considering a move to New York, where the corporate income tax rate is 7.1%, compared with 9%, and the estate tax exemption is $4.2 million versus $675,000—though New Jersey will raise it to $5 million by 2020. BY GERALD SCHIFMAN STATS 25 WORDS OR LESS EVEN AS FEWER CARS traverse Manhattan than did a few years ago, vehicle transit has become so inefficient in midtown that biking and SLOW JAM even walking can be faster options.