CRAINSNEW YORK BUSINESS NEW YORK BUSINESS® NOVEMBER 26 - DECEMBER 2, 2018 | PRICE $3.00 THE STATE OF INEQUALITY Outreach workers such as Stephania Ponce connect New Yorkers to the city’s social safety net, which our special report shows is the most robust in the nation PAGE 11 VOL. XXXIV, NO. 48 WWW.CRAINSNEWYORK.COM THE VAST Getting DEBATING AND prices THE FATE LUCRATIVE right at OF NYC’S WORLD AGING OF STATE NYP MOVIE SUBSIDIES P. 4 PALACES NEWSPAPER P. 6 P. 15 P001_CN_20181126.indd 1 11/21/18 5:57 PM NOVEMBER 26 - DECEMBER 2, 2018 CRAINSNEW YORK BUSINESS ON THE COVER PHOTO: BUCK ENNIS FROM THE NEWSROOM | GREG DAVID | COLUMNIST Balancing act EVER SINCE THE Occupy Wall Street movement grabbed worldwide attention in 2011, the issue of inequality has nev- er been far from the spotlight, especially in New York City. But how inequality actu- ally plays out in society is not just about the chasm between the richest and the rest but about how governments respond to that gap—espe- cially at the state and local levels. To probe that issue, the Ravitch Fiscal Reporting Program I run at the CUNY Newmark School of Journalism funded e orts at KUOW in Seattle, WABE in Atlanta, Austin’s Texas Tribune and Crain’s New York Business to research the safety nets and tax policies in those areas. P. Here, Cara Eisenpress and I amassed the details of how the city seeks 15 to protect its neediest residents, and we came to understand why our safety net is the most robust in the country. IN THIS ISSUE I also came away from the project with a stark realization of how UP FRONT 15 THEATER WARS policies in states such as Georgia, Texas and Washington make the City’s aging movie palaces now lives of the poor more di cult in exchange for easing the burden on 3 EDITORIAL neighborhood battlegrounds the rich. Politicians in those states argue that low taxes and miserly Moral of mayor’s Nycha plan: 20 GOTHAM GIGS social services are key to their economic success. at claim was chal- Good results are good politics Parkour athlete builds lenged in the governors races in Georgia and Texas, but the voters, if 4 IN CASE YOU MISSED IT business by ipping over only by a slim majority, opted for leaders committed to the status quo. City Council shines light obstacles New York is the complete opposite. e blue wave that swept the on hospital price disparities state this month means the debate next year will be about expanding 5 IN THE MARKETS Adviser to New York’s rst our safety net and taxing the wealthy more heavily to pay for it. is family of tax evasion gets story is crucial to understanding exactly what the outcome of that prison; KKR, Bain Capital help debate will mean for all New Yorkers. Toys R Us ex-staffers 6 INSTANT EXPERT The vast and lucrative world of state subsidies 7 REAL ESTATE CONFERENCE CALLOUT Long Island City bracing NEXT WEEK for Amazon impact CRAIN’S 2018 BUSINESS 8 SPOTLIGHT BREAKFAST FORUM Going beyond the niche at a kosher steakhouse P. Andy Byford will discuss his plan 20 to x the subways and buses and 10 VIEWPOINTS 21 SNAPS his ideas for reforming the culture City falling behind as others Photos from the city’s biggest embrace the cloud; put transit ANDY BYFORD, of New York City Transit. fundraisers and charity events president, New upgrades on Amazon wish list York City Transit 22 FOR THE RECORD Our tally of the week’s buys, NEW YORK FEATURES busts and breakthroughs ATHLETIC CLUB CASTING A WIDE NET PHOTO FINISH 8 to 9:30 a.m. 11 23 CrainsNewYork.com/ City’s safety net made possible Rockefeller Center spruce rises events-BKByford2018 by the inequality it targets amid Christmas tree shortage Vol. XXXIV, No. 48, Nov. 26, 2018—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double issues Jan. 1, June 25, July 9, July 23, Aug. 6, Aug. 20 and Dec. 24, 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 changes to: Crain’s New York Business, Circulation Department, PO Box 433279, Palm Coast, FL 32143-9681. 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 BUCK ENNIS, GETTY IMAGES contents copyright 2018 by Crain Communications Inc. All rights reserved. 2 | CRAIN’S NEW YORK BUSINESS | NOVEMBER 26, 2018 P002_CN_20181126.indd 2 11/21/18 5:55 PM NOVEMBER 26, 2018 AGENDAMoral of the mayor’s Nycha plan: A HOUSING COMPLEX Good results are good politics in the Bronx that was renovated by a private developer under a new he reaction of some tenants and their advocates ranged from program skepticism to outrage when, in one of the city’s largest hous- ing deals of 2014, the New York City Housing Authority sold a stake in hundreds of deteriorated apartments to private Tinterests. e deal, begun by the Bloomberg administration, was done quietly, raising suspicions that greedy developers would pro t o low- income tenants and eventually push them out. A handful of elected o cials all but accused the city of a cover-up, and activists began hectoring the then-chairwoman of the Housing Authority. “Don’t privatize Nycha!” they chanted outside her events. But two years a er the transaction, when a Crain’s reporter visited one of the apartment complexes involved, she found happy tenants. ey beamed about their shiny new washing machines, manicured grounds and bright entrance- ways, and about the service of the private management company. Nycha that run up costs and delays. ey have more incentive than government retained an ownership stake to ensure that the properties stay a ordable. bureaucrats because they have to meet the terms of their contracts to get ese developments now have a solid future—unlike the rest of the sys- paid and remain in good standing to win more of them. tem, which has long been underfunded, poorly managed and falling apart. Even critics of the pilot program blessed the mayor’s $13 billion expan- If something sounds too good to be true, sion, or at least did not object. e former it usually is. But the project worked out so A test project worked so well that naysayers also are coming to grips with his well that Mayor Bill de Blasio announced plan to allow some private development on last week that by 2028 an additional 62,000 last week the mayor announced a authority land. at will not only provide of the authority’s 176,000 units would get $13 billion, 62,000-unit expansion units the city sorely needs but also funding new kitchens, bathrooms, windows, eleva- for the two-thirds of authority properties tors, boilers, roofs and common areas using not getting RAD, which is limited by the a similar arrangement. e program, called RAD, works by replacing a number of federal vouchers available. Unfortunately, piecemeal repairs development’s insu cient and unpredictable funding stream with reliable only will prolong the su ering; there is no sustainable solution for those Section 8 assistance, allowing a private entity to upgrade and manage the buildings. For the sake of their residents, the mayor should again put properties pro tably. Developers can do this far more economically and ef- results before ideology and open more Nycha land for mixed-income, ciently than Nycha can, in part because they are not burdened by unions mixed-use development where they could live with dignity. — THE EDITORS FINE PRINT New Yorkers stretched by city rents may feel as if they are between a rock and a hard place. According to a StreetEasy and YouGov survey of 2,550 tenants, 59% have considered moving in the past 12 months because of a rent increase. Among those who felt that way yet chose to stay, 47% believed relocating would be too expensive. BY GERALD SCHIFMAN STATS 25 WORDS OR LESS AHEAD OF SCHEDULE THE CITY'S FAIR WORKWEEK LAW aims to deter employers from changing workers’ hours at the last minute and similar practices. In its rst year, few businesses were punished. AND THE CITY The letter reveals a Number of fast-food and retail “pattern of interference 300K workers covered by the law with DOI investiga- Total employees paid restitution—$146 per person, tions and intimidation 1,200 on average—under the law against of cials that Number of Fair Workweek complaints Number of staffers in the unit should be unlawful” to reach the Department of Consumer handling Fair Workweek cases 120 Affairs, leading to 80 investigations 42 —Councilman Ritchie Torres on claims by red Department of Investigation Restitution paid by the owner-operator of 30 city Kentucky Fried Chicken outposts after the employer did not set a regular schedule, violated the paid- Commissioner Mark Peters that mayoral $80K sick-leave law and required workers to sign a document waiving premium pay aides requested probes be dropped SOURCE: Department of Consumer Affairs GETTY IMAGES, BUCK ENNIS NOVEMBER 26, 2018 | CRAIN’S NEW YORK BUSINESS | 3 P003_CN_20181126.indd 3 11/21/18 5:15 PM IN CASE YOU MISSED IT CRAINSNEW YORK BUSINESS president K.C. Crain senior executive vice president Chris Crain group publisher Mary Kramer EDITORIAL managing editor Brendan O’Connor Insurer, union, health system NEW YORK- PRESBYTERIAN’S assistant managing editors Erik Engquist, in showdown over high prices Forese said Jeanhee Kim, Robin D.