20090921-NEWS--0001-NAT-CCI-CN_-- 9/18/2009 7:53 PM Page 1 INSIDE How TOP STORIES Mike schemed Why New Yorkers for third will feel recession’s term pain well into 2010 ® Book excerpt, PAGE 2 Page 11 Designers outsmart the VOL. XXV, NO. 38 WWW.CRAINSNEWYORK.COM SEPTEMBER 21-27, 2009 PRICE: $3.00 copycats, using prints, baubles, bells and whistles POWER PAGE 2 Flash: People meters put news-radio BROKERS stations atop heap Marie-Josée Kravis is building “I’m doing more now.” PAGE 3 MoMA’s collection. –Laurie Tisch And they’re off! Who IN PUMPS to watch (and ignore) in coming elections At biggest arts organizations, THE INSIDER, PAGE 8 The Yankees are these women are in control losing at something IN THE MARKETS, PAGE 4 BY MIRIAM KREININ SOUCCAR “No one thought I would Katherine Farley “is responsible three years ago,Mercedes Bass took the fate Most succeed.” —Mercedes Bass for every piece” of redevelopment. of the Metropolitan Opera into her own hands. 50 The New York socialite, the wife of billion- Powerful aire investor Sid Bass,had long served on many of the city’s most prominent cultural boards Women and had donated millions. But after learning about the serious financial problems the opera faced at a board meeting in 2005, the lady who lunched sprang into action. THEY RUN She came home that night, spoke to her THE CITY’S husband and the next day wrote an unrestrict- BIGGEST ed check for $25 million to the Met for imme- FIRMS AND diate use, the largest gift the opera had ever re- “Opening nights are too “We’ve all had professional BUSINESS LIVES ceived. If that wasn’t enough, three weeks later, INSTITUTIONS froufrou.” —Agnes Varis lives.” —Catherine Marron See POWER BROKERS on Page 21 PAGE 15 getty images, newscom GOTHAM GIGS He nose something you probably don’t P. 29 G ANNE FISHER traces the leap from cubicle to Get ready, Wall Streeters, Posh pads literature P. 29 G MOVERS & SHAKERS begging A peek at John Barker’s for your trial of the century ad boutique P. 30 G GAEL GREENE doesn’t for buyers get a Peruvian spot P. 31 First criminal case of the bank bubble Big chill ravishes INDEX could mean prison market for homes for Bear Stearns duo costing over $10M NEW YORK, NEW YORK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _6 REAL ESTATE DEALS PLUS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _9 EDITORIAL _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _10 BY AARON ELSTEIN BY AMANDA FUNG SMALL BUSINESS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _12 RALPH CIOFFI: Feds allege it was march 2007.The housing former lehman brothers chief NEIGHBORHOOD JOURNAL _ _ _ _ _ _ _ _ _ _ _ _ _13 Bear Stearns fund manager sold market was starting to crack. So while telling clients to buy, just executive Richard Fuld sold his 16- CLASSIFIEDS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _24 too, perhaps, was Ralph Cioffi. when mortgage bubble popped. room Park Avenue co-op last HOT JOBS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _29 The hedge funds he managed newscom month for $25.9 million,$6 million EXECUTIVE MOVES _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _29 at Bear Stearns were crumbling less than the price he’d set in May. SeeTHE ATWEEK DEADLINE AHEAD _on _ _ _ _ _ _ _ _Page _ _ _ _ _ _ _ _ _ _ _ _ _ _2 _ _ _ _ _ _ _ _ _ _ _ _31 because they were stuffed with rities. The collapse of his funds early tremors spelled bad news for All appearances to the contrary, subprime-mortgage-related secu- three months later was the first outfits like his. Mr. Fuld ranks as one of the lucky boulder in the avalanche that de- “It may not be a meltdown for ones.His 6,200-square-foot spread, 38 stroyed Bear Stearns a year later the general economy but in our with its stunning library and five 5 and sent the rest of Wall Street world it will be,” he wrote to a fireplaces, is one of the relatively into a death spiral. colleague in a prescient March 15 few superposh Manhattan proper- Those calamities were well e-mail whose subject line was ties to actually change hands over ELECTRONIC EDITION into the future, of course, but that “fear.” “Dealers will lose millions the past year. winter, Mr. Cioffi quickly recog- and … business will not be the “It is an unusual thing,” says nized that the mortgage market’s See WALL STREET on Page 27 See POSH PADS on Page 26 71486 01068 0 20090921-NEWS--0002,0003-NAT-CCI-CN_-- 9/18/2009 7:54 PM Page 1 IN BRIEF MORE THAN 50,000 NEW YORKERS HAVE TAKEN ADVANTAGE OF A FEDERAL PROGRAM Designers weave t to give first-time homebuyers a credit of up to $8,000, according to data released last week by the Internal Revenue Service. Nationwide, more than 1.4 million homebuyers have applied for the credit to date. White House officials are considering whether to extend the Dec. 1 deadline. Local brokers say the credit has helped COLOR boost sales of New York City apartments valued at less than $3 million. Contract signings on BRIGHT SHADES created lower-priced Manhattan homes have been optimism on the runways. higher all summer. DESIGNERS: NEWLY MINTED AFL-CIO PRESIDENT RICHARD Nanette Lepore TRUMKA WILL MAKE HIS FIRST VISIT TO (left), Anna Sui New York City this week as head of the country’s largest labor federation. He will (right), Marc attend a Central Labor Council executive board by Marc meeting, and he’ll headline a Wall Street press Jacobs, Pamella conference Tuesday that will focus on executive Roland pay, financial regulation, green jobs, and health care and labor law reform.Then he’ll head up to the Bronx, where he’ll meet with labor and community leaders to draw attention to an ongoing fight for living-wage jobs as part of the Kingsbridge Armory redevelopment. SELF-PORTRAITS BY FAMOUS ARTISTS, WRITERS AND ATHLETES, INCLUDING KURT Vonnegut, Lauren Bacall and Kareem Abdul- PRINTS Jabbar, are going on the auction block Thursday. The 213 drawings, which were collected by FROM SAFARI to Manhattan bookseller Burt Britton, are being wildflowers, many offered by Bloomsbury Auctions. Presale designers estimates average several thousand dollars. featured CRAIN’S UPDATE unique IT’S OFFICIAL: Crain’s New York Business is back on newsstands patterns. citywide. Readers can find us in major locations such as Grand Central, Penn Station and Wall Street, among others. We have DESIGNERS: also increased the number of copies being distributed by 10%. Nicole Miller (left), Diane von Furstenberg BY THE NUMBERS (right) Weekly shift of the city’s economy NOT SO FAST. Investors are buying stocks as if boom times are in the bag, and manufacturing and even home building are rising, but there’s still a lot of financial wreckage to slow things down. CHEAPER EMBELLISHMENTS 292 -9.6% 4.47% FABRICS ADORNMENTS like ruffles, NUMBER of FALL IN imports AVERAGE 15-year hedge funds at Port of NY and fixed-rate DESIGNERS saved on costs by beadwork and floral appliqués closed in 2Q, NJ in July vs. a mortgage in mid- stood out on the catwalks. down 22% from year ago. Sept., lowest using less expensive materials. 1Q (Port Authority of NY since records DESIGNERS: Badgley Mischka (Hedge Fund & NJ) began in ’91 DESIGNERS: Zac Posen (left), Research) (Freddie Mac) BCBG Max Azria, Twinkle by (left), Carolina Herrera, Wenlan Marc Jacobs NYC RESIDENTIAL BUILDING PERMITS Percent change in units (year-over-year) Is it over? Not in New York City, Source: U.S. Census Bureau checks are being returned from customers Broadway ticket sales all tumbling and un- Fed chief may be right who had pristine payment histories and or- employment continuing to rise, the city’s vol. xxv, no. 38, september 21, 2009—Crain’s New York Business about contraction’s end, ders are off by nearly 25% compared with economy has further to fall before the im- (issn 8756-789x) is published weekly, except for combined issues this time last year. pact of this epic downturn finally subsides.