Crains New York - May 28, 2012 - (Page 17)

THE WEEK ON THE WEB MAY 21-27 CRAINSNEWYORK.COM 4 NEW YORK PLAZA SAVOY PARK CHEAT SHEET May the force be against you: The state’s Department of Financial Services launched hearings this month into force-placed insurance for homeowners WHAT THE HECK IS FORCE-PLACED INSURANCE? The phrase refers to policies that homeowners are required to buy when they’re purchasing a house but are unable to put up a 20% down payment. Banks buy the policies on borrowers’ behalf and add the cost to the monthly mortgage bill. Attorneys general in a number of states have complained that the premiums are excessive and the coverage inadequate. ANY OTHER PROBLEMS? Yep. Investigative reporting from American Banker has revealed that banks sometimes collect unearned commissions—some might say kickbacks—from insurers to which they steer business. DFS has served subpoenas to 31 banks, including Bank of America, Citigroup and JPMorgan Chase. I n New York real estate, you win some and you lose some. Harbor Group International won some (and then some) last week when it sold the 22-story 4 New York Plaza for $270 million—more than double what it paid for the office tower just two years ago. ¶ The buyer, a venture between an investment arm of HSBC Holdings and Edge Fund Advisors, told The Wall Street Journal it was attracted to the 1.1 million-square-foot building because of its impressive 95% occupancy rate. Tenants like the New York Daily News and American Media Inc. call the tower home. ¶ Then there is the apartment building Savoy Park in Harlem. It lost half its value in less than a year, plummeting to $75.5 million from $153 million last August. ¶ The ownership group, which includes Vantage Properties and Area Property Partners, bought the rent-regulated West 139th Street complex near the height of the market in 2006, for $175 million, and planned to lure higher-paying renters. Didn’t happen. Adding to the building’s woes, the owners have since refinanced the property, loading $367.5 million of debt on it. YANKEES CLIPPER. Rumor (in the form of a Daily News story) had it that Hal Steinbrenner, inspired by Magic Johnson’s record $2.18 billion purchase of the Los Angeles Dodgers, is looking to sell the family’s baseball team. Experts say the 27-time World Series champs could be worth up to $3 billion. Mr. Steinbrenner, however, says this is “pure fiction.” Mets fans can at least keep dreaming. ... SHE’S BA-A-CK. After a five-year ban from serving as director or officer of a public company, DIY queen Martha Stewart will be returning to Martha Stewart Living Omnimedia’s board as its nonexecutive chairwoman. Ms. Stewart, 70, chaired the company from 1996 to June 2003, before she went to prison for conspiracy and other misdeeds. ... TWEET THIS. CornellNYC Tech has tapped Greg Pass, Twitter’s onetime chief technology officer, as its entrepreneurial officer for its Big Apple engineering campus. ... LEGISLATIVE MERRY-GO-ROUND. After the New York Racing Association’s president and general counsel were canned for misappropriating bets, local pols stood behind a shake-up of the nonprofit’s board. The current 25 members will be replaced by 17 directors, seven of whom will be appointed by the governor. Meanwhile, officials continue to investigate the unusually high number of horse deaths at Aqueduct Racetrack this year. ... MYSTERY SOLVED? Police said a former employee of a SoHo bodega confessed to the 1979 murder of 6-year-old Etan Patz. Pedro Hernandez, who now lives near Camden, N.J., was never named a possible suspect in the boy’s disappearance. When Etan went missing over three decades ago, his was one of the first photos of missing children to appear on a milk carton. ... AN ‘A’ FOR EFFORT. City Councilmen Jimmy Vacca and Domenic Recchia want the Metropolitan Transportation Authority to start restaurant-like grading of subway stations for things like cleanliness, peeling paint, rats and flooding. The MTA’s response? No way. A spokesman for the MTA noted it already publishes monthly statistics on station and train conditions. ... WE’RE JUST FRIENDS! Prosecutors played a controversial tape of two executives accused of insider trading at the trial of former Goldman Sachs Group Inc. director Rajat Gupta. But the wiretapped chat reportedly didn’t reveal any juicy tidbits. Instead, it portrayed the pair as close friends. Mr. Gupta, a former McKinsey & Co. chief, is accused of passing confidential corporate info to the now-convicted hedge fund manager Raj Rajaratnam. —emily laermer WHO SELLS THIS STUFF? Australia-based QBE Insurance and Manhattan-based Assurant are thought to be among the industry leaders. Last week, Assurant issued a statement saying force-placed insurance is a “critical component” of the housing system. It noted that rates are approved by state regulators and that customers are informed of those rates in advance. WHAT HAPPENS NEXT? The federal Consumer Financial Protection Bureau plans to issue rules governing the business. And various state regulators will surely demand millions in restitution from the insurers, though any recoveries will likely be small for individual customers. Classaction lawyers, meanwhile, are busy pursuing the insurers. —aaron elstein HOORAY! OY VEY! Little Orphan Annie finds a home on Broadway at the Palace Theater. The sun will come out, in previews, in early October. Dropping $250 for a VIP ticket at the first Great GoogaMooga Festival in Brooklyn got patrons … well, long lines and tiny snacks. Cue the refunds. SUBMIT YOUR OWN #CRAINSHOORAY OR #CRAINSOYVEY ON TWITTER! Wanted: techies Continued from Page 3 buck ennis ROOSEVELT ISLAND won’t see Cornell’s engineering students for about five years. ment well worth making. Just a few engineers can make the difference between profit and loss. “Our growth, and top line and bottom line, are all related to how many employees we have,” said Rameet Chawla, founder of Fueled, a mobile application design and development firm that is looking to fill at least four positions for engineers. “We could take on more clients if we had the staff.” The shortage is unlikely to improve soon. Immigration policies are one problem. Laws instituted after Sept. 11, 2001, make it hard for foreign graduate students—the majority of whom are enrolled in science and engineering programs—to stay here once their studies are finished. Despite calls for visa reform from LISTEN to a discussion at CrainsNewYork.com/podcasts Mayor Michael Bloomberg and business groups, there have been no signs of change in Washington. A report last week from the Partnership for a New American Economy and the Partnership for New York City cited estimates that by 2018 there would be only 550,000 American-born graduates with advanced engineering degrees to fill nearly 800,000 jobs. Tech crunch intensifying CornellNYC Tech will help. In about five years, the school will move to a new Roosevelt Island campus, where it will host 2,000 graduate students once it’s in full operation—in 2038. And a consortium of institutions led by New York University is creating what it’s calling the Center for Urban Science and Progress in downtown Brooklyn, which will add 530 applied-sciences graduate students by 2017. Experts note that the shortage in New York is a sign of success: Techsector employment has grown 30% since 2005, to more than 90,000 jobs, according to the city’s Economic Development Corp. But the competition for talent is only intensifying, as Facebook staffs an engineering center here and Twitter fills out a New York office. AOL is considering acquiring companies just to get the kind of sophisticated “big data”specialists it needs, said Chief Technology Officer Curtis Brown. Some companies are filling their needs elsewhere. Fast-growing adtech company Operative, for example, has six engineering openings in the city, where it houses most of its staff. But it has also hired three engineers in Austin, Texas, and has 30 in India—roughly a third of its total engineering staff. “You can move faster” with more locations, said Operative’s CEO, Mike Leo. “If I wanted to hire 10 engineers, it would take me a long time in New York.” May 28, 2012 | Crain’s New York Business | 17 newscom http://www.CRAINSNEWYORK.COM http://www.CrainsNewYork.com/podcasts

Table of Contents for the Digital Edition of Crains New York - May 28, 2012

Crains New York - May 28, 2012
Contents
Kids’ Lines Behave Badly for Retail Industry
City’s Scarcest Resource These Days? Engineers
Taxi! Follow That Cab’s Fare Increase
Nasdaq Attack the Facebook Fallout in the Markets
Bronx Retail Strip Goes From Famously Bad to Bustling
It’s the Return of the Automat
The Insider
Real Estate Deals
Opinion
For the Record
The Week on the Web
Classifieds
Taking Urban Farming to a New Level
Anne Fisher: Manufacturing Jobs Make a Comeback
Hot Jobs
Movers & Shakers: Russian Banker Shares His u.s.plans
Gael Greene: Fighting the Crowd at Primola
The Week Ahead

Crains New York - May 28, 2012