CRAINS P001_CN_20160104.qxp 12/30/2015 5:49 PM Page 1 ® JANUARY 4-10, 2016 | PRICE $3.00 NEW YORK BUSINESS HIGH TIMES IN THE OLD TOWN Legalization across the nation has flooded New York with marijuana. Crain’s goes underground to see how the city’s illegal-weed industry is dealing P. 13 ALSO Inside one of New York’s last buyers clubs P. 17 Building small Tax changes PLUS VOL. XXXII, NO. 1 WWW.CRAINSNEWYORK.COM has never you need THE LIST 01 5 been so big to know about NYC’s largest (or lucrative) in 2016 P. 7 business P. 5 improvement districts P. 11 NEWSPAPER 71486 01068 0 20160104-NEWS--0002-NAT-CCI-CN_-- 12/30/2015 5:43 PM Page 1 JANUARYCRAINS 4-10, 2016 FROM THE NEWSROOM | JEREMY SMERD The rules Crain’s lives by IN THIS ISSUE 3 AGENDA 4 IN CASE YOU MISSED IT “THE ARRIVAL OF THE NEW YEAR seems an appropriate time to state what Crain’s New York Business is, as well as our 5 REAL ESTATE A scorecard to track journalistic philosophy.” Those words were written years 6 ASKED & ANSWERED opposition to the mayor’s ago by Greg David, the editor of Crain’s from 1985 until 7 SMALL BUSINESS affordable- 2008, who took the opportunity each January to remind housing plan 8 INSTANT EXPERT readers of the rules we live by. I quote him because I share 9 SPOTLIGHT his belief that it’s important to regularly reintroduce ourselves to readers—and to note how we changed during 11 THE LIST the previous year. So who are we? Greg, who is now a columnist here, I want stories that FEATURES used to call Crain’s a newspaper, but technology and an 13 increasingly competitive media landscape have moved us “inform me, interest COVER STORY far beyond our roots on the printed page. We are a news me, sometimes 20 GOTHAM GIGS organization that connects New York business owners, amuse me, and are so 21 SNAPS managers and investors with the information and analysis 22 FOR THE RECORD they need—online, in print and in person. Our daily online well written they are 23 PHOTO FINISH output keeps pace with today’s news, which changes by the a pleasure to read second. And it’s available almost anywhere: on our website or picked up by a competitor, or via email alerts and, increasingly, social media. P. 20 Late last year, we redesigned our flagship print product to reflect the changes in how news is consumed. As a result, we’re more newsmagazine than newspaper. The emphasis remains on news, but in print, we are less concerned with capturing the activities of the week than helping readers cut through the cacophony of it all. Our original reporting is less centered on ephemera and more on the issues, ideas, businesses and people that help us better understand our Frank Raffaele industries and our city. CORRECTIONS Sometimes readers thank us for writing about them; often we get angry letters ASTORIA BANK’S ADDRESS is 1 Astoria Bank Plaza, Lake and calls from those who don’t like what we’ve written or how we’ve written it, Success, N.Y. It was misstated as 1 Astoria Federal Plaza in the list of the New York area’s largest thrifts that ran in the even if it was accurate. This tells me we’re doing our jobs right. Greg put it best April 20, 2015, and Dec. 21, 2015, issues. when he wrote: “I want stories that inform me, interest me, sometimes amuse THE JANUS PROPERTY CO. developed and continues to me, and often make me mad and are so well written they are a pleasure to read.” own and manage 129-135 W. 138th St. This information was misstated in the “Properties still owned by Abyssinian” We don’t have an ax to grind, nor do we advocate on any individual’s behalf. chart in the Nov. 23 story “Abyssinian Agonistes.” Abyssinian has no ownership interest in this property Advertisers receive no preference. We accept ideas from any source. Those who and merely rents a small community facility space at know what appeals to us will have more success, especially if they go to our staff this location. page online and email or call the reporter they believe is best suited to the story. We are busier than ever, so we can’t possibly respond to every pitch. Keep it short. What we want in 2016 is to continue what we’ve been doing since this paper launched in 1985: to provide news, information and insight that New Yorkers Ⅲ and those interested in New York business still cannot get anywhere else. ON THE COVER PHOTO: BUCK ENNIS CONFERENCE CALLOUT JANUARY 14 DIGITAL DISPATCHES CRAIN’S BUSINESS Go to CrainsNewYork.com BREAKFAST FORUM READ Related Cos. is in talks to invest in Meera Joshi, chairman and chief an 11-acre site on the Williamsburg water- executive of the city’s front that was the site of a huge warehouse Taxi and Limousine Commission, fire last year. But community members want will speak about the the city to follow through on a plan to annex future of the taxi industry, part of the site into Bushwick Inlet Park. the impact of Uber and much more. ■ Developers Michael Stern and Joe Chetrit com- NEW YORK pleted their $90 million > ATHLETIC CLUB purchase of the Dime 8 a.m. to 9:30 a.m. Savings Bank building [email protected] in Brooklyn, allowing them to build the tallest tower outside Manhattan. Vol. XXXII, No. 1, January 4, 2016—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for double issues LISTEN Get the inside dope on New York’s the weeks of June 27, July 11, July 25, Aug. 8, Aug. 22 and Dec. 19, by Crain Communications Inc., 685 Third Ave., New York, NY underground marijuana economy on this 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send address changes to: Crain’s week’s podcast. With music by the BUCK ENNIS New York Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. Brain Cloud. For subscriber service: Call (877) 824-9379. Fax (313) 446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. (GST No. 13676-0444-RT) CrainsNewYork.com/podcast ©Entire contents copyright 2016 by Crain Communications Inc. All rights reserved. 2 | CRAIN’S NEW YORK BUSINESS | JANUARY 4, 2016 20160104-NEWS--0003-NAT-CCI-CN_-- 12/30/2015 5:43 PM Page 1 AGENDAWHAT’S NEW JANUARY 4, 2016 Giving interest groups the power to legislate is looking worse by the day pecial interests have long had too much power to warp the leg- islative process in Albany. But rather than curtail this phenom- enon, lawmakers last year codified it—an unprecedented move that went overlooked as the public focused on the headline- Sgrabbing issue of corruption. Last June, Albany revised New York City’s 421-a tax abatement, a program that awards property-tax breaks to virtually every new apart- ment here. Legislators and Gov. Andrew Cuomo were under pressure to extend the program before it expired, but could not agree on a union- backed proposal to mandate higher wages for construction workers on some 421-a projects. So they approved a seven-month extension and a four-year revision with a truly incredible footnote: The new version Albany’s thinking was that the unions and developers both have would take effect only if the unions and developers on opposite sides of something to gain by continuing 421-a, so they’ll surely come up with a the wage fight come to terms on the wage mandate by Jan. 15. plan to save it before it lapses. But even if they do, a deal was never going In other words, the lawmakers asked the special interests to do the to happen until the last minute. The only thing lawmakers guaranteed lawmakers’ jobs. Representatives of con- was months of uncertainty when builders struction unions and developers were Albany lawmakers left New York City’s could have been producing units to alleviate empowered to decide if the law is to be the affordable-housing crunch and boost enacted and if so, under what terms. largest incentive program for new the city’s economy. What was a bad idea then is looking housing at the mercy of unions Moreover, the unions have tremendous worse by the day. To the surprise of no leverage. They don’t depend on 421-a near- one, unions and developers have been ly as much as developers do, so they have unable to compromise, putting the entire program in jeopardy of expir- less to lose if no agreement is reached and the program dies. ing when the current iteration sunsets next week. But the larger point is that the governor, Assembly and Senate—not Building apartments in New York City is hard enough without Albany special interests—should write the laws of the state. It was Cuomo who making the landscape even more unpredictable. And lawmakers’ abdi- championed the troublesome 421-a wage provision, so as the legisla- cation of their jobs to unelected interest groups with a major financial ture returns to Albany he should push it to pass a new bill that resolves stake in the outcome is hardly going to improve New Yorkers’ low opin- the matter. This experience has proved that if there is one thing law- ion of their state government.