CNYB 02-09-09 A 1 2/6/2009 8:42 PM Page 1 INSIDE THE TOP STORIES INSIDER New York earns Democrats fail dubious distinction first budget test of losing less than ® in Albany London PAGE 2 Page 9 Investors fall out of love with VOL. XXV, NO. 6 WWW.CRAINSNEWYORK.COM FEBRUARY 9-15, 2009 PRICE: $3.00 Rupert Murdoch PAGE 3 Harassed Fashion Week’s new uptown home Scion slips up companies not a hit PAGE 3 swat at SPECIAL REPORT Golden boy Kent Swig’s swagger now a stagger gadflies BY THERESA AGOVINO AIG, Citigroup, Time Warner seek kent swig seemed to have it all. The scion of a prominent West Coast real estate clan, he started scooping up downtown of- to silence vocal fice buildings at bargain prices a decade ago and established him- group of investors self as an industry force.The blond, handsome Mr. Swig lives in one of Manhattan’s toniest co-ops, and his father-in-law, Harry Mack- lowe, is a famous New York landlord. BY AARON ELSTEIN But the 47-year-old’s foray into residential and hotel devel- SMALL BUSINESS opment has been disas- after last year’s stock market NO, THEY’RE NOT CRAZY trous. Last month, Leh- collapse, it’s no surprise angry in- Four local entrepreneurs are man Brothers began vestors are ready to storm the gates. launching new businesses, foreclosing on his hotel and What’s striking is how far compa- recession be damned.These residential project downtown. nies will go to lock investors out. are their stories PAGE 13 That action followed another More than a dozen of the na- G lender’s suing him for default and tion’s largest and Venture capitalists dip a fr fraud on a stalled condo conversion in ed most troubled h toe back into the market a lower Manhattan. r corporations, in- 15% p PAGE 13 e Mr.Swig’s luck in midtown has been bet- r cluding Citigroup PERCENTAGE of G shareholder How to market your ter, but his condo conversion there has Inc.and American resolutions tied business on a budget been plagued by problems, including International to one especially PAGE 16 lawsuits over tenant safety. Addi- Group Inc., are pesky investor tionally, late last year, he was al- trying to silence a legedly assaulted at a meeting by small, but extremely vocal, group one of his partners. of investors who seek to hold share- The developer says he is holder votes on proposals that could “shocked”by the suits,and he de- rein in executive pay and change nies all charges.“Maybe I’m naive, how boards are elected and over- but I had more faith in the system,” Mr. seen. The companies argue that Swig says. the gadflies are doing the bidding Mr. Swig’s empire of millions of square of a single activist and violat- feet of Manhattan office space was run- ing securities rules, disquali- BUSINESS LIVES ning smoothly until 2005, when he fying their resolutions from pushed into the soaring residential mar- being voted on by all investors HAPPY TOGETHER ket. The sectors are very different, and Mr. at annual stockholder meet- Couple entrepreneurs See SCION’S SLIPUP on Page 8 See SWATTING on Page 8 work hard all year to keep passion in their PAGE 27 marriages Down and out in NYC on $500,000 a year INDEX And the trading floors. ernment bailout debate. Most are simply NEW YORK, NEW YORK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _6 So, how quickly would you You see, an estimated managing directors, partners and senior REAL ESTATE DEALS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _12 burn through half a million? 75,000 New Yorkers vice presidents of something or other. NEIGHBORHOOD JOURNAL _ _ _ _ _ _ _ _ _ _ _ _ _12 earn more than The Big O vows to change the “cul- CLASSIFIEDS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _25 $500,000 a year, ac- ture of excess.” In light of the cru- BY HILARY POTKEWITZ CORPORATE LADDER _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _29 cording to 2007 sade against seven-figure data compiled by the incomes, Crain’s con- EXECUTIVE MOVES _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _29 when president Barack Obama last week an- Manhattan Institute, ducted a highly unscien- TABLE TALK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _30 nounced a $500,000 salary cap on pay for top an economic think tank. tific survey of the typi- THE WEEKS AHEAD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _30 brass at institutions receiving federal bailout Few of them carry the au- cal expenses of a SeeWEEK AT IN DEADLINE REVIEW _ _ _on _ _ _ _ _ _ _ _Page _ _ _ _ _ _ _ _ _ _ _ _ _ _2 _ _ _ _ _ _ _ _ _ _ _ _31 funds,a collective shudder went through the cor- gust C-suite titles targeted by Manhattan banking ner offices of Manhattan. And the private clubs. the anti-exec crowd in the gov- See DOWN on Page 2 06 5 THE FUTURE OF NEW YORK CITY AGENDA FOR HARD EDITORIAL Ideas to boost OP-ED Alair Townsend finds ELECTRONIC EDITION TIMES Report on the Future development, media, tourism defiant optimism and of NYC conference Pgs. 19-22 and emerging industries P. 10 wonders if it is enough P. 11 NEWSPAPER 71486 01068 0 CNYB 02-09-09 A 2 2/6/2009 8:32 PM Page 1 IN BRIEF Down and out in New York THE MAGAZINE INDUSTRY LOST 525 TITLES IN 2008, ACCORDING TO A REPORT BY ONLINE Continued from Page 1 database MediaFinder.com.The overcrowded LIFE ON A FERRAGAMO Brahmin to see how far $500,000 would regional category led the pack with 33 take him or her. While half a million won’t casualties, including Niche Media Holdings’ SHOESTRING BUDGET $500,000 punt anyone to skid row,the results were not Atlanta Peach and Greenspun Media’s Las Vegas pretty. Life.The recession also took a toll on travel Federal, state and city taxes cut that magazines—18 went out of business—followed TAXES You’re the top—tax bracket, that is. Washington, Albany and City Hall together $500K nearly in half. The remainder is all by the home and automotive categories, which gobble up about 40% of your paycheck. but gone before groceries touch the granite each lost 17 publications. In 2007, 591 titles $201,070 countertop in the Park Avenue apartment folded; the count was somewhat inflated by the or back-to-school clothes arrive for the two number of crossword puzzle and college $298,930 kids attending Brearley and Harvard. Nev- student magazines that ceased publication. er mind medical bills, holiday presents or HOUSING the therapy sessions needed to adjust to the HOME FORECLOSURES CITYWIDE SPIKED IN $75,000 $223,930 new regime. JANUARY AND ARE EXPECTED TO WORSEN AS Figure $4,000 a month “No doubt: If you were the guy who was more New Yorkers lose their jobs and the credit maintenance fees for the CHILDREN making $20 million, and starting a month market remains frozen. Foreclosures in New Park Avenue co-op and $106,275 from now you’ll only be making $500,000 York City rose 64% from December levels, $15,000 a year in prop- Includes tuition at Brearley for the rest of the year,that is a huge,huge according to the latest report by erty taxes for the second ($33,025) and a year at Harvard adjustment,” says Nicole Gelinas, a sen- PropertyShark.com. Foreclosures in Staten home. Garage: $12,000. ($52,650). Music les- ior fellow at the Manhattan Institute. Island and Queens continued to balloon: sons, sports teams It’s an adjustment some top brass Queens foreclosures were up 56% versus and tutors quickly may be unwilling to make.Within a day December, and Staten Island foreclosures were $117,655 add up to another of the president’s announcement,Gold- up 76%. Brooklyn bucked the overall trend in $8,000. man Sachs announced intentions to opt January, recording a drop of 14% from the CHARITIES out of the government’s Troubled Asset previous month. $25,000 Relief Program and repay its $10 billion Civic involvement is typi- $92,655 federal loan in short order. The salary THE NEW YORK BOTANICAL GARDEN HAS BEEN cally part of a top exec- caps are not retroactive, but Goldman FORCED TO DELAY FURTHER WORK ON A $55 utive’s job description.