20100301-NEWS--0001-NAT-CCI-CN_-- 2/26/2010 7:45 PM Page 1 INSIDE There’s danger in TOP STORIES crowning Say ‘Ah, not again.’ Cuomo Sick-days law back —Greg David on the presumed on council agenda ® front-runner PAGE 4 Page 11 Condé Nast leads mag publishers’ VOL. XXVI, NO. 9 WWW.CRAINSNEWYORK.COM MARCH 1-7, 2010 PRICE: $3.00 charge onto iPad PAGE 2 Pressure Why private equity queen mounts for Lynn Tilton wants to Paterson start up her own bank to quit PAGE 3 Sibling barflies Neutered guv has the Gerbers ride out little support; Ravitch the recession is waiting in the wings PAGE 2 BY ERIK ENGQUIST Scammers target PERFECT PITCHMAN: His efforts at NYC & as the political world buzzes about entrepreneurs Company are credited with bolstering tourism activity when Gov. David Paterson’s tenure SMALL BUSINESS, PAGE 9 here during tough times. will end, the question has changed from whether he can mount an election cam- NEWS paign—the answer was no—to whether he can ANALYSIS BUSINESS LIVES govern at all. With his public and political support evaporat- ing, and a problematic state budget and other crucial issues facing Albany in the next two months, the pressure on him to resign will build. In some ways, it is an acceleration of the inevitable.The Legislature was be- See PRESSURE’S ON on Page 22 EDITORIAL Bowing out, ungracefully PAGE 10 HEALTH CARE HEAVIES Docs, unions, hospitals GOTHAM GIGS ready to fight funding cuts in Albany PAGE 22 Jonathan Levy really is a trailblazer P. 25 G ANNE FISHER writes buck ennis about the benefits of cash reserves P. 25 Owners test G MOVERS & SHAKERS A New York Fed VP market with reflects on the crisis P. 26 G GAEL GREENE still CITY’SNO.1 SELLER P. 27 tower sales loving Picholine How hard-charging adman George Fertitta After long absence, INDEX transformed tourism agency NYC & Co. lenders and buyers NEIGHBORHOOD JOURNAL _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _3 city.A former advertising executive who ran his own edge back into fray IN THE MARKETS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _4 BY LISA FICKENSCHER successful firm for more than three decades, Mr. NEW YORK, NEW YORK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _6 Fertitta faced his biggest test in his new role as chief BY THERESA AGOVINO THE INSIDER _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _8 when mayor michael bloombergtapped George executive when the economy tanked in 2008. Fertitta to take over the city’s tourism and market- “Our job was to weather the storm and figure out REAL ESTATE DEALS PLUS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _12 ing agency in June 2006, he was turning to an exec- a way to take advantage of it,” says Mr. Fertitta. manhattan’s catatonic commercial FOR THE RECORD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _18 utive with no ties to the industry and one who rel- By most measures, he accomplished his objec- sales market is showing signs of rousing. CLASSIFIEDS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _20 ished his role as a reformer. tives while transforming the agency from one that Prospective buyers are flocking to HOT JOBS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _25 His mandate was to refashion NYC & Compa- resembled a trade group serving many special inter- the two properties that owners put on THE WEEK AHEAD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _27 ny into a marketing powerhouse that would attract ests to a professional marketing organization an- the block last month—the office tower more tourists,conventions and splashy events to the See SELLING THE CITY on Page 17 at 340 Madison Ave. and The Helms- ley Carlton House residential hotel at 680 Madison Ave. Meanwhile, 600 09 5 Lexington Ave. hit the market last REPORT NYC TOURISM week, and 125 Park Ave. is expected to Cruise ships discover NY as port of call follow at the end of the month.Both are ELECTRONIC EDITION office towers. PAGE 15 “We haven’t seen this much for sale Plus: City’s largest events at the same time in at least a year or so,” NEWSPAPER See SELLERS on Page 22 71486 01068 0 20100301-NEWS--0002,0003-NAT-CCI-CN_-- 2/26/2010 7:36 PM Page 1 IN BRIEF THE COCA-COLA CO., WHICH OWNS 711 FIFTH AVE.—FORMER HOME OF THE WORLD OF DISNEY store—is considering using the space for its own retail store, according to real estate sources. Unlike the Coca-Cola store that occupied the corner space in the early ’90s, which used only about 3,000 square feet to sell clothing, toys and memorabilia, the new venture will utilize all 61,000 square feet of the retail space vacated by Disney last month, sources say.Though details were not disclosed, the Coca-Cola store is expected to be an “experience” store, similar to the new Disney store in Times Square opening this fall. THE GLOBAL ECONOMIC MELTDOWN PUSHED CONSTRUCTION STARTS IN NEW YORK CITY down by 29% last year, to $16.6 billion, according to an analysis by the New York Building Congress. However, the trade group reported that signs of life emerged in the fourth quarter of last year, when $5.6 billion worth of work began, up 51% from a year earlier. Public-sector work saw the biggest rebound, as construction of roads, bridges and other projects reached $2.9 billion. Construction starts for nonresidential properties like offices, schools and hotels were steady, hitting $2.4 billion in the last three months. buck ennis BY THE NUMBERS Gerbers are raising the bar Weekly shift of the city’s economy THE OLYMPIC TORCH IS EXTINGUISHED. So is hope for fast economic pickup, after news that everything from consumer confidence and with time-tested lounge act home sales to bank lending plummeted. $3.63B -2.1% -0.1% tional venues. Scott, 49, the older of the To be sure, the brothers have taken VALUE OF Jan. DROP IN vehicle WEEKLY NY-LA brother duo two brothers by 18 months, lives in Bed- some knocks over the past year, including construction crossings on CHANGE in ford, N.Y.; he manages the business.Their a costly legal dispute involving two of their starts in metro NY, city’s bridges, Bloomberg/ with 30 sites counts up 110% from tunnels in Dec. Crain’s NY Stock tag-team approach has not only won them bars (now closed) in the Hard Rock Hotel year earlier vs. year earlier index 18 years of success in a famously fickle in- in San Diego. What’s more, revenues at Source: McGraw-Hill Source: Metropolitan Starwood Hotels, dustry, but has also helped their company Gerber Group bars that have been open for Construction Transportation Authority plow through the recession intact—and more than a year were off by between 5% Delta Air as fans even to expand beyond their core hotel and 12% in 2009. RISING RENT ROLLS: After swelling for several months in business. Overall, though, with the addition of a row, vacancy levels have been edging downward at an BY LISA FICKENSCHER increasing rate in the past three months. “They both have great strengths, and nine venues last year in W hotels in cities they both understand the industry,” says including Fort Lauderdale, Fla., and San- rande and scott gerber, the nightlife Carlos Becil, vice president of luxury tiago, Chile, Gerber Group’s revenues impresarios behind hot spots such as brands in North America for Starwood were up 25% in 2009 over year-earlier lev- Whiskey and Stone Rose, look nearly Hotels & Resorts Worldwide Inc. “That’s els, to more than $50 million, according to identical. But their roles in the Gerber why they are in so many of our hotels.” Scott Gerber. Group couldn’t be more different. Indeed, the Gerbers operate bars in 12 Late last year,the duo struck a licensing Rande, who lives in Malibu, Calif., and of Starwood’s 36 W hotels. deal with airport food and beverage oper- is married to model Cindy Crawford, cre- “They are our preferred operator,”notes ator HMSHost to open a Stone Rose Bar ates the buzz surrounding their 30 interna- Mr.