CRAINSNEW YORK BUSINESS NEW YORK BUSINESS® FEBRUARY 27 - MARCH 5, 2017 | PRICE $3.00 CENTER STAGE How film and TV studio executives such as Hal Rosenbluth helped transform two Queens neighborhoods PAGE 12 VOL. XXXIII, NO. 9 WWW.CRAINSNEWYORK.COM DEPORTATION KITCHEN A CO-OP’S ECONOMICS COUTURE CONSCIENCE P. 6 P. 8 P. 15 NEWSPAPER P001_CN_20170227.indd 1 2/24/2017 6:45:37 PM FEBRUARY 27 - MARCH 5, 2017 CRAINSNEW YORK BUSINESS FROM THE NEWSROOM | MATTHEW FLAMM | SENIOR REPORTER IN THIS ISSUE Trump’s business impact 4 IN CASE YOU MISSED IT 5 POLITICS Small businesses HOW MUCH CONTROL presidents have over the economy is al- may lose their 6 INSTANT EXPERT ability to control ways a matter of debate. Despite the fact that President Don- health care costs ald Trump bills himself as a savvy businessman, questions 7 HEALTH CARE abound over whether his policies will be good for business, 8 SPOTLIGHT and by extension, New York. 9 VIEWPOINTS Apart from being unpredictable (not a favorite quality 10 THE LIST among the corporate crowd), the former reality-television FEATURES star thrives on—and encourages—conflict and drama. Just ask Macy’s, which is enduring two Trump-inspired boy- 12 STUDIO CITY cotts: the one the president himself initiated when 15 CONSCIENCE OF A CO-OP the retailer dumped his apparel brand in 2015 and the grassroots #GrabYourWallet campaign calling on It would be naive shoppers to bypass the store until it drops the Ivanka to think Trump’s P. 20 “ ALVARO GAVIRIA Trump brand. policies will have no Wall Street has sustained a historic stock mar- ket rally, but Goldman Sachs recently said the gains impact on the city. could reverse themselves if the White House is un- It’s just a matter of able to roll back financial reforms quickly. whether it’s modest Now a major concern is the degree to which Trump and Republican lawmakers curb immigration. or significant That’s of particular significance to New York, where 20 GOTHAM GIGS immigrants have resurrected neighborhoods while fueling new businesses—from 21 SNAPS restaurants on Staten Island to startups in the Flatiron District—at a higher rate than 22 FOR THE RECORD native-born Americans. The foreign-born also make up nearly a third of the city’s 23 PHOTO FINISH “creative class,” or knowledge workers, said New York University’s Steven Pedigo. CORRECTIONS Trump’s broadly conceived travel ban and new, stepped-up immigration- Developer BRP Cos. is building 669 affordable enforcement measures target those here illegally but could wind up having long- apartments at 147-22 Archer Ave., Queens. There term consequences for the economy. will not be a hotel. “City tries again in Jamaica,” “What’s important is the signal that sort of policy sends to the rest of the world,” published Feb. 20, misstated those facts. said Ralph McLaughlin, chief economist of residential real estate site Trulia. “Are we a country that will inspire people to come here?” One irony is that a president who made his name in New York real estate could end up weakening demand in the housing market. In the metro area, for example, 34% of homeowners are foreign-born. New York’s growth depends largely on immi- grants, who in turn buy products Americans sell. It’s too soon to know the effects, but that hasn’t stopped some from worrying. “It would be naive to think [the policies] will have no impact on the city,” said ON THE COVER Jonathan Miller, CEO of real estate consulting firm Miller Samuel. “It’s just a matter PHOTO: BUCK ENNIS of whether it’s modest or significant.” DIGITAL DISPATCHES CONFERENCE CALLOUT MARCH 7 Go to CrainsNewYork.com MEET NEW YORK’S READ Jay Z will BRAVEST LEADER become the first rapper inducted New York City has experienced into the Songwriters > a historic drop in fire fatalities. Hall of Fame. Fire Commissioner Daniel Nigro will detail his priorities and ■ A group including insights for how to build James Dolan and the on that success. Wilpon family wants to invest in a new hockey arena for the Island- THE YALE CLUB ers when the team’s stint at Barclays Center ends in 2019. A site in Elmont, N.Y., that is 8 to 9:30 a.m. DANIEL NIGRO controlled by the New York Racing Associa- [email protected] tion is under consideration. ■ President Donald Trump’s top economic Vol. XXXIII, No. 9, Feb. 27, 2017—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for adviser, Gary Cohn, recused himself from double issues the weeks of June 26, July 10, July 24, Aug. 7, Aug. 21 and Dec. 18, by Crain Communications Inc., 685 Third matters pertaining to Goldman Sachs, his Ave., New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send address changes to: Crain’s New York Business, Circulation Department, 1155 Gratiot Ave., Detroit, MI 48207-2912. former employer of 25 years. For subscriber service: Call (877) 824-9379. Fax (313) 446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. ■ Alan Colmes, the onetime liberal voice of (GST No. 13676-0444-RT) ©Entire contents copyright 2017 by Crain Communications Inc. All rights reserved. Fox News, died at 66. BUCK ENNIS, AP IMAGES 2 | CRAIN’S NEW YORK BUSINESS | February 27, 2017 P002_CN_20170227.indd 2 2/24/17 8:35 PM WHAT’S NEW FEBRUARY 27, 2017 AGENDAWhen housing policy is personal, politicians should butt out n 1963 a co-op tower went up on St. James Place in Brooklyn under a relatively new affordable-housing program, known as Mitchell-Lama, that was created to give New Yorkers of lim- ited means and little access to financing the opportunity to own Ia home. Shareholders were told they could eventually cash in on their asset’s appreciation by selling their apartments on the open market if SHAREHOLDER RIGHTS: Owners several conditions were met: They would have to wait at least 20 years, of this Brooklyn pay off the building’s underlying mortgage and then go through an co-op should have been able to obscure process involving shareholder referendums. (See page 15.) decide their fate without pressure For the St. James residents, it took 50 years before the mortgage was from elected paid off. Last week a vote was held to decide whether to craft an offering officials. plan that would preserve the option to go private but not commit to it. But some public officials felt it was their job to pressure owners of the know their personal circumstances. Some residents who endured Clin- 326 units to remain in Mitchell-Lama. That would mean owners could ton Hill’s more dangerous years—when they brought in guards and attack sell their stakes only for five-figure sums, rather than the hundreds of dogs to patrol the building—wanted to reap the rewards of the neighbor- thousands of dollars that apartments in their Clinton Hill neighborhood hood’s turnaround. Others sought to bequeath their now-coveted units to fetch these days. A day before ballots were cast, Public Advocate Letitia their children, not a stranger who wins a housing lottery. “In 1963 I took James, state Sen. Velmanette Montgom- a chance, investing my meager resources ery, Assemblyman Walter Mosley and It’s wrong for politicians to ask people in 21 St. James Place,” owner Lawrence Councilwoman Laurie Cumbo told the Whiteside wrote. “Now, after more than residents it was their duty to keep their to essentially donate their homes in 50 years of shareholder investment … I’m building affordable. James even pandered the name of affordable housing told it would be unfair to others if I cash in to residents on race, imploring them to my winning ticket. Are you kidding?” protect the “culture” of the area from gentrification, by which she meant He won’t get the chance: His side lost the vote. The politicians cheered. not selling at market rates to buyers who likely would be white. “What But they were out of line to get involved in the first place. If they want to about the impact on diversity?” James demanded. “Do any of you care?” make personal sacrifices to slow gentrification, they are welcome .to James Laying a guilt trip on the owners was unconscionable on many levels. bought a nearby multiunit brownstone for $550,000 in 2001 that would To begin with, the decision was theirs alone. For some it was a wrenching fetch several times that amount today. Will she hold a lottery for a lucky choice, and the last thing they needed was bullying by outsiders who don’t winner to buy it for a fraction of its value? Don’t count on it. — THE EDITORS FINE PRINT A rule went into effect in September that made it harder for traders of corporate loans to earn income if the process for transferring funds took too long. A recent study revealed that within weeks of the change, the average time for a loan to move from seller to buyer dropped 21%—from 19 days to 15 days. Because the loans are settled manually, the improvement was hailed as a triumph of humans over robots. BY GERALD SCHIFMAN STATS 25 WORDS OR LESS CLIMBING THE INCOME LADDER UNDERPRIVILEGED STUDENTS AT New York’s public colleges get well-paying jobs by their early 30s in greater numbers than at nearly every other school in the United States. A higher percentage AND THE CIT of low-income Columbia University students also do, but the school has so few such students The conclusion is that it trails local public counterparts in what a recent study called “mobility rate.” “inescapable that he Portion of Columbia students who ascend is, despite his flaws, % from the poorest fifth of households 3.1 to the top fifth, compared with CUNY schools’ 7.2% and SUNY–Stony Brook’s 8.4% one of the most Y extraordinary men Portion of low-income Columbia students % who reach the top income quintile, of his generation.