nb31p01.qxp 7/27/2007 7:34 PM Page 1 TOP STORIES REAL Kids and parents ESTATE share fashions as Tenants stock up on fall shopping starts space; top leases and PAGE 3 ® property sales Out-of-town firms Page 15 offer young lawyers quick partner path VOL. XXIII, NO. 31 WWW.NEWYORKBUSINESS.COM JULY 30-AUGUST 5, 2007 PRICE: $3.00 PAGE 3 OK! profits from HOUSING MELTDOWN: THE VICTIMS bizarro Britney; CNBC readies for a fight with Fox Subprime NEW YORK, NEW YORK, P. 6 NYC foreclosures mount Democrats in a mess hits whirl over Spitzer; Defaults forecast HOUSE OF BLUES through 2008 as rating how the governor Initial foreclosure filings in the two hardest-hit boroughs. can regain trust rates reset; outer PAGES 12, 27 boroughs suffer agencies Outsourcing scare BY TOM FREDRICKSON tells only half the Shares of Moody’s, story: India, China the number of New York City S&P wilt as hybrid homeowners facing foreclosure is trade boosts NYC on track to reach the highest annu- securities dry up ALAIR TOWNSEND, P. 13 al point in more than a decade. Since January, lenders have BY AARON ELSTEIN started foreclosure actions on BUSINESS LIVES 7,000 one- to four-family homes cascading prices of oceans of se- WOMEN IN THE RING in the five boroughs, according to curities backed by subprime mort- the Neighborhood Economic De- gages are exacting a heavy toll on Boxing velopment Advocacy Project. By the world’s two top credit-rating a big hit the end of the year, the number is agencies—Moody’s Investors Ser- at gyms expected to exceed 14,000, which vice and Standard & Poor’s. around would represent a 60% increase Shares of New York-based the city over 2006. Moody’s and McGraw-Hill Cos., PAGE 33 “We have to brace ourselves,” lindström bekka the parent of S&P,have both fallen says Sarah Ludwig, NEDAP’s ex- more than 10% this month alone. ecutive director. “It’s going to get next six to 18 months and add to the hoods where bad loans are concen- Investors fear that the hugely lucra- worse before it gets better.” problem. trated are at risk of losing their tive business of rating such exotic Fueling the rise in initial foreclo- When loans are reset, many middle-class presence. financial instruments will dry up. sure filings—the first step in a homeowners will face monthly According to NEDAP,three of Meanwhile, a Moody’s share- process that generally takes more mortgage payments that are hun- the hardest-hit neighborhoods in holder filed a suit earlier this month AT DEADLINE than a year before owners lose a dreds of dollars higher. Some will the city are in Brooklyn—Bed- alleging that a top executive had home—are subprime loans. Those lose their homes in foreclosure; ford-Stuyvesant, East New York misled investors about ratings of MORE THAN A WEEK AFTER A include many adjustable-rate mort- others will sell before they reach and Flatbush;two are in Queens— subprime debts,and lawyers for the STEAM PIPE EXPLOSION near gages that are poised to reset in the that point. As a result, neighbor- See FORECLOSURES on Page 8 See SUBPRIME on Page 8 Grand Central Terminal paralyzed hundreds of IN THE MARKETS Local losers in global stock plunge Page 4 businesses, five of the 11 buildings surrounding the site were still closed on Friday. Meanwhile, Consolidated Edison mailed $395,238 to Tourism slowdown 906 firms that claimed they had lost business, and the Small Business Administration began surveying the scene. If bites Big Apple the SBA declares a disaster, businesses will be eligible for low-interest loans of as much as $1.5 million. On Monday, Hotel prices, visa restrictions cited; the city’s Department of Small city boosts effort to reach visitor goal Business Services will distrib- ute applications for zero- According to recently released interest loans of up to $10,000. BY LISA FICKENSCHER statistics, the number of visitors to the Big Apple rose a mere 2.8% last THE CONTRACT BETWEEN growth in the city’s red-hot year, to 43.8 million. That com- BROADWAY stagehands and The tourism industry, which employs pares poorly with a 6.8% increase League of American Theatres 350,000 people and pumps $24 bil- in 2005 and marks the lowest rise See AT DEADLINE on Page 2 lion a year into the New York econ- since 2003. omy, is showing signs of cooling. American tourists, numbering 36.5 million, had the sharpest de- cline in growth—up just 2% from 31 5 2005. Domestic tourism had grown at an annual average of 5.8% from 2003 through 2005. ELECTRONIC EDITION “The domestic market is more price-sensitive,” says Fred Dixon, buck ennis vice president of tourism develop- THIS IS A SLUMP? Packed sidewalks belie declines in the growth rates for both domestic and NEWSPAPER See TOURISM on Page 8 foreign visitors. The tourism industry employs well over 300,000 New Yorkers. 71486 01068 0 CNYB 07-30-07 A 2 7/27/2007 6:59 PM Page 1 AT DEADLINE Continued from Page 1 executive of DoubleClick; and Producers expired on Dwight Merriman, former chief Sunday night, and the two sides technology officer of expect to begin negotiations on DoubleClick; and Henry Monday.The league wants to Blodget, the former Merrill make major changes to Lynch stock analyst who was longtime rules about the banned from Wall Street for number of workers that pushing bad stocks.The Web producers must hire. Both sides site has also hired two editorial are taking steps to prepare for a staffers from Forbes.com. possible work stoppage. Local 1 of the International Alliance of BROOKLYN HOME VALUES ROSE Theatrical Stage Employees has 3% IN THE SECOND QUARTER set up a $4 million strike fund compared with the same period and, since the spring, has been in 2006, according to appraisal setting aside $50 a week from firm HMS Associates, which members’ paychecks.The league analyzed property sales in 16 has established a $20 million neighborhoods.The average reserve fund to cover producers’ sale price was $610,000, up from costs if the theaters go dark. $595,000.The biggest increases were for four-family homes, up CBS RADIO IS MOVING TOWARD 47% to $1.27 million from PICKING a permanent host for $863,000, while co-op and WFAN’s morning drive-time condo prices rose more than IMAGE GAP: slot, which has been vacant since 10%.Two-family and three- President Jeremy Don Imus was fired in April. family homes were the worst- Travis, pictured at But CBS may not be feeling performing category. the site of John Jay’s new facility, is pressure to move quickly. revamping the Arbitron ratings released last THE PORT AUTHORITY OF NEW curriculum and week showed that the absence of YORK AND NEW JERSEY last week hiring more faculty. Mr. Imus had no effect on certified Stewart International audience size during the spring Airport as the region’s fourth buck ennis survey.The morning show major airport.The move allows posted a 3.0 share among 25- to the agency, which is set to com- 54-year-old men—up from a plete its $78 million takeover of 2.9 share in the winter and the the Hudson Valley airport in previous spring. Former October, to issue construction John Jay graduates National Football League bonds.The next step is gaining quarterback Boomer Esiason is Federal Aviation Administration reported to be the lead approval for the deal. candidate to fill the slot. CUNY ‘cop shop’ shifting status to senior college SAINT VINCENT CATHOLIC A GROUP OF TECHNOLOGY MEDICAL CENTERS has asked the BY SAMANTHA MARSHALL ENTREPRENEURS has quietly bankruptcy court overseeing its launched an online publication restructuring for permission to professors from john jay college of criminal justice dominated the podium at the covering the city’s digital hire Cushman & Wakefield Inc. business scene. A beta version of to help find a new tenant to take Conference on Democracy and Global Security in Istanbul last month. In all, 20 representa- Silicon Alley Insider went over its lease for the 12th floor tives from the school spoke—more than from any other educational institution in attendance. online at www.alleyinsider.com at 450 W. 33rd St. Cushman & “It brought home to me the fact that our international reputation is really strong,” says on July 20. Its founders are Wakefield would be paid a Jeremy Travis, John Jay’s president. Kevin Ryan, former chief commission of $1.5 million. I That reputation is at odds with the school’s local image as little more than a “cop shop,” where most students focus on the minimum academic requirements they need to enter the police force. THIS WEEK IN CRAIN’S Mr.Travis, determined to bridge the perception gap, is implementing a plan to enhance See JOHN JAY on Page 9 NEW YORK, NEW YORK----------6 THE WEEKS AHEAD ----------------10 WEEK IN REVIEW -----------------------11 ALAIR TOWNSEND -------------------13 Aetna, NYU set care goals REPORT: REAL ESTATE --------15 DEALS--------------------------------------------------26 Aetna and other insurers have taken stays to 4.3 days from the current 4.4 Insurer to pay bonus a comparable approach with doc- days and increasing the percentage 34 THE INSIDER------------------------------------27 if hospital improves tors, requiring that they meet pa- of admitted pneumonia patients CLASSIFIEDS ----------------------------------28 tient-care standards to be included who get antibiotics in a timely fash- patient treatment on preferred lists for its members to ion to 72% from 68%.