20150330-NEWS--0001-NAT-CCI-CN_-- 3/27/2015 7:10 PM Page 1 SPEED BUMP IN LOWER MANHATTAN Downtown grows, services don’t CRAIN’S® PAGE 4 NEW YORK BUSINESS VOL. XXXI, NO. 13 WWW.CRAINSNEWYORK.COM MARCH 30-APRIL 5, 2015 PRICE: $3.00 HUMANS OF NEW YORK BUSINESS Photographer Brandon Stanton, who turned a personal passion into an international media brand, leads this year’s class of rising stars PAGE 11 13 5 VIACOM DIOS The Web gods are disrupting the media conglomerate—and the rest of the TV industry—as they did music, radio and newspapers PAGE 4 NEWSPAPER 71486 01068 0 The 2015 Sprinter Your dream fits in a Sprinter. Starting At: Businesses of all kinds can lower costs and improve productivity with the 2015 Mercedes-Benz * Sprinter. The Sprinter’s standard turbo diesel engine delivers up to 18%1 greater fuel efficiency $39,995 while newly extended 20,000-mile service intervals2 can help lower your total cost of ownership. 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Performance is limited by wind severity and available traction, which snow, ice and other conditions can affect. Always drive carefully, consistent with conditions. 20150330-NEWS--0003-NAT-CCI-CN_-- 3/27/2015 6:37 PM Page 1 EXECUTIVE EDITOR’S NOTE FYICRAINSNEWYORK.COM Karma kids There’s a Buddhist saying: If you E.Village explosion want to know your past, look at the present; if you want to know underscores city’s your future, again, look at the infrastructure woes present. The maxim explains the concept of karma, which, in the n the aftermath of a probable Tibetan translation, is a gas explosion that caused a fire Jeremy Smerd combination of the words “work” Iand the collapse of three and “seed.” The idea? Like a seed, buildings in the East Village each of us contains genetic Thursday—a year after a deadly information that reflects our past and determines Bill de ap images blast in Harlem—Mayor our potential. But what we do with that potential is Blasio spoke about the need to take up to each of us. Which brings us to this year’s 40 a hard look at the aging pipes and wires beneath the city streets. ¶ “This is a very important Under 40. Crain’s launched the franchise in 1987 to moment in terms of assessing our situation, in terms of our buildings and infrastructure,” the attract young readers. But seen over time, 40 Under mayor said at a press conference near 121 Second Ave., where an explosion kicked off a seven- 40 is a longitudinal study of the city’s ever-changing alarm blaze that eventually engulfed the buildings around it. ¶ Repairs won’t come cheap. It could economy.The rise of tech startups has dressed cost up to $26 billion just to replace all the leak-prone gas mains in New York City, according to a down business attire: less hair, fewer ties, zero report released by a nonprofit last year. And when combined with the cost of bringing the rest of shoulder pads. The industries and firms our 40s the Big Apple’s infrastructure up to snuff, the price tag could rise as high as $73 billion—an represent have also changed: fewer execs from big amount just shy of Mr. de Blasio’s entire proposed budget for next year. ¶ Last March, the Center corporations, more entrepreneurs angling for for an Urban Future released a report estimating that it would cost $47.3 billion to bring the city’s venture-capital dollars. But 40s remain disruptors. core public infrastructure up to a state of good repair. But that number did not include gas mains, In 1988, that meant Paul Tudor Jones storming the which are replaced and maintained by Consolidated Edison or National Grid, both heavily gates of Wall Street. This year it’s Jon Stein, whose regulated private companies. ¶ Approximately 6,300 miles of gas mains run under the city’s firm, Betterment, is upending investment streets. About half of them are made from cast iron or unprotected steel, both of which have the management. Brian Williams, Class of ’98, defined potential to crack and leak.The center estimated that it costs between $2.2 million and $8 million the voice-of-God anchorman (and turned out to be per mile to replace a gas main, meaning that the tab could run between $7.2 billion and $26.4 less than perfect). In 2015, Humans of New York billion. ¶ Con Ed and National Grid have pledged to replace more than 50 miles of leak-prone creator Brandon Stanton represents one-man gas mains annually for the next few years, though officials may call for that number to be bumped media brands. Of course, the individuals we up in the wake of both the East Village blaze last week and the deadly 2014 Harlem explosion. celebrate have benefited from those who came —joe anuta before. So when we fete our 40s, as we do every year, we’ll ask them to bring their mentors. Tricia POWERFUL WOMAN DEPARTS WALL ST. cus on its management of the land it the heels of another fare hike. Clarke-Stone, CEO of marketing firm Narrative, Ruth Porat, the CFO of Morgan owns beneath the Chrysler Building. Stanley and one of CITY OFFICIAL STEPS DOWN has already invited Russell Simmons, who launched Crain’s Most Pow- ‘I ate a corned CHERRY ON TOP Kyle Kimball, the head of the city’s the business with her. Mr. Simmons was a 40 in erful Women in Dell’s Maraschino Economic Development Corp. since 1992. Like I said, if you want to know the past of New York, will be- beef at Katz’s, Cherries, the Red 2013 and a Bloomberg administra- New York business, look at this year’s 40s. And if come Google’s new Hook, Brooklyn, tion appointee,will step down in June. finance head. She New York’s business that turned you want to know the future, well, look again. joins the ranks of greatest, out to be a cover-up BLUE PINSTRIPES WIN other financiers for a massive mari- Worth $3.2 billion, the New York joining tech firms, greasiest juana-growing oper- Yankees are the nation’s most valu- THIS WEEK IN CRAIN’S including Gold- pickle-lined ation, had received able baseball team, according to man Sachs’Antho- almost $2 million in Forbes. The franchise is tied with the IN THE BOROUGHS-------------------------- 4 ny Noto, who was subsidies and federal NFL’s Dallas Cowboys as the nation’s melting pot’ IN THE MARKETS----------------------------------5 appointed CFO of —Afghan President Ashraf disaster aid, includ- most valuable sports team. Twitter last year. Ghani, about his recent trip ing $900,000 after —emily laermer THE INSIDER -----------------------------------------------6 Superstorm Sandy. to the Big Apple OPINION-------------------------------------------------------------8 FOOD GIANTS SNUB The city could claw BANKS back the money if it’s ALAIR TOWNSEND------------------------------9 Billionaire Warren Buffett left found to have been improperly used. GREG DAVID ------------------------------------------------9 JPMorgan Chase and Goldman Sachs out of the largest M&A deal of CABLE DEAL STALLED, AGAIN HEALTH CARE ----------------------------------------10 the year: the $36 billion merger of The $45 billion merger between SMALL BUSINESS 40 UNDER 40 --------------------------------------11 Kraft Foods and Heinz,backed by 3G Comcast and Time Warner Cable Capital. The transaction creates one won’t close until mid-2015, several Paul Schrader and Jeremy CLASSIFIEDS -----------------------------------------36 Lyman’s Birch Coffee is of the world’s largest food and bever- months later than originally antici- REAL ESTATE-------------------------------------------40 age conglomerates. The banks have pated.The primary cause: regulatory thriving by catering to Silicon P. 7 SNAPS-------------------------------------------------------------- worked on deals for each company in delays, including the Federal Com- Alley techies. 42 the past, but this time around Lazard munications Commission’s pausing UNHEALTHY BOROUGH (SEE PAGE 38) advised Mr. Buffett’s Heinz, while its “shot clock” for completing its re- For the sixth straight year, the CORRECTIONS Centerview Partners advised Kraft. view of the deal. Bronx remains the least- healthy county in New York vol. xxxi, no. 13, march 30, 2015—Crain’s New York Business (issn 8756-789x) is published weekly, except for double issues the weeks of June 29, July 13, July 27, Aug. 10, COOPER UNION PROBE COMMUTERS CREATE DELAYS state, according to a recent re- Aug. 24 and Dec. 21, by Crain Communications Inc., 685 Third Ave., New York, NY New York state Attorney General Eric More than 2,300 subway train delays port that measured quality of 10017. Periodicals postage paid at New York, N.Y., and additional mailing offices. Post- master: Send address changes to: Crain’s New York Business, Circulation Department, 1155 Schneiderman is reviewing the finan- were caused by unruly passengers in life, clinical care and socioeco- Gratiot Avenue, Detroit, MI 48207-2912.