Crains New York - June 11, 2012 - (Page 2)

IN BRIEF STRAUSS DISCOUNT AUTO’S 580 EMPLOYEES FOUND THEMSELVES JOBLESS LAST WEEK when the auto supply and service retailer suddenly shuttered its 19 stores across the city and its remaining 27 shops in New Jersey and Pennsylvania. The South River, N.J.-based company filed for bankruptcy and is looking for a buyer. “The assets and stores are being heavily marketed,” said Eric Horn, an attorney representing Strauss. He said “a combination of factors” led First Niagara, the company’s senior lender, to cease funding, but would not elaborate. The company has filed for Chapter 11 at least three times since 2006. It once operated 110 stores but had only 46 at the latest bankruptcy filing, including nine in Brooklyn and six in Queens. Website Sheepshead Bites first reported the story. NEW YORK’S HEALTH CARE ECONOMY Hospitals suffer growing pains Costs grow 6.3% as med centers face merger pressures BY GALE SCOTT Hospital spending in New York’s crowded, competitive health care scene keeps growing, pumping billions of dollars into the local economy. But that hasn’t made hospitals healthier. Expenses at the top 25 hospitals in the New York metropolitan region reached $24.4 billion in 2011, up from $22.9 billion in 2010, a 6.3% increase, according to Crain’s annual ranking of the area’s largest hospitals (page 16). For some, like the Hospital for Special Surgery, bigger operating expenses BIGGEST GAINERS Percentage change in operating expenses, 2010 to 2011 NYU Langone +17.5% North Shore University Hospital +10.0% St. Barnabas Medical Center +9.7% Memorial Sloan-Kettering +8.6% Hospital for Special Surgery +8.6% FOUR RUNDOWN, OVERLEVERAGED MULTIFAMILY BUILDINGS IN THE BRONX received an injection of much-needed capital courtesy of a new owner, Workforce Housing Advisors Inc. Morgan Stanley will provide $7.5 million in interim financing to help start the rehabilitation of the Creston Avenue buildings, which have piled up code violations and liens. The money will be used to pay down the $750,000 in outstanding property taxes, municipal liens and repair bills that the previous owners amassed, according to Workforce founding partner John Crotty. His firm initially bought the note on the buildings, which total 120 units, and foreclosed on them earlier this year. are due to a rise in patient volume. But for many, the increase has not been matched by an equal uptick in revenue as hospitals face growing governmental pressure to cut costs by treating patients outside the very place that traditionally generates income: the inpatient bed. The cost constraints have led to a wave of consolidation. The latest example came last week, when NYU Langone and Continuum announced the possibility of a merger. If Continuum’s acutecare facilities (Beth Israel Medical Center, St. Luke’s-Roosevelt Hospital and New York Eye and Ear Infirmary) were combined with NYU Langone, it would be the largest hospital in the city. Their merger talk has not surprised industry analysts, who have long predicted further hospital consolidation here. “Market forces are definitely picking up where the Berger Commission left off,” said David Sandman, who served as the executive director of the state panel See HOSPITALS on Page 24 BY THE NUMBERS Weekly shift of the city’s economy HOME SWEET HOME Last week brought signs of a recovery in house construction as well as the first cut in Chinese interest rates in four years and hopes that other central banks would follow suit. Everyday Health closes in on WebMD’s online dominance Brooklyn-born firm is now No. 1 in traffic and expects to take revenue lead within five years BY MATTHEW FLAMM The past few months have been busy ones for health information Web property Everyday Health. Its debut TV effort, Everyday Health, was nominated for an Emmy—a first for a show from a digital company. It launched 11 programs on YouTube and announced a slew of hires for its sales and video teams. But most significantly, the SoHobased company, its executives say, has been taking advertising market share from its chief rival, WebMD. Everyday Health already leads in Web traffic. The pioneer in the online consumer health care sector, Chelsea-based WebMD has lately run into a host of troubles, including a failed bid to go private and a stock price that’s fallen 50% from a year ago. Now Everyday Health is hell-bent on surpassing the revenue leader to become the dominant player in a field that is a particular strength of the New York digital media scene. The numbers show Everyday Health gaining on every front. Advertising and sponsorship revenue at WebMD fell 20% in the first quarter, compared with the year-earlier period, to $88 million—the second straight quarter of double-digit declines. Ad revenue at privately held Everyday Health,by contrast,spiked 40% in the first quarter, according to Ben Wolin, co-founder and chief executive. The company is approaching $200 AVERAGE U.S. ADULTS RISE IN paying using helmets all monthly May rent passengers flying in Manhattan, through NY area or most of the time riding a bike an all-time high airports in 1Q, vs. Source: Source: Centers for year earlier Citi Habitats Disease Control and Prevention 19% $3,438 6.4% Source: Port Authority of NY & NJ HOMEGROWN NYC developers have been racking up permits for residential housing units pretty steadily for the past six months. +232.4% % change year-over-year +164.2% +75.1% -42.7% 11/11 12/11 1/12 2/12 3/12 4/12 Source: U.S. Census Bureau +105.6% +68.4% ADDICTED TO NUMBERS? GET A DAILY DOSE AT @STATSANDTHECITY CORRECTIONS Gabrielle Gould was previously counsel at Freshfields Bruckhaus Deringer. Her title was misstated in the May 28 Executive Moves. Greg Pass, the founding entrepreneurial officer for CornellNYC Tech, is 36. His age was misstated in the June 4 Corporate Ladder. The name of the merger advisory firm Peter J. Solomon Co. was misstated in the June 4 “Big Banks losing M&A biz.” vol. xxviii, no. 24, june 11, 2012—Crain’s New York Business (issn 8756-789x) is published weekly, except for double issues the weeks of July Fourth, Labor Day and Christmas, by Crain Communications Inc., 711 Third Ave., New York, NY 10017. Periodicals postage paid at New York, N.Y., and additional mailing offices. Postmaster: Send address changes to: Crain’s New York Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. 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) ©Entire contents copyright 2012 by Crain Communications Inc. All rights reserved. KEYS TO SUCCESS: Acquisitions and licensing deals, online video and advertising analytics have helped co-founder Ben Wolin (a 2008 Crain’s 40 Under 40) woo Big Pharma dollars. million in revenue this year, according to a person familiar with the firm. Revenue in 2011, boosted by 30% growth in ad sales over the prior year, came to $130 million. WebMD, meanwhile, is forecast to have $500 million in revenue in 2012, down 11%, according to Barclays Research. Having built up the company through acquisitions, partnerships, licensing See EVERYDAY HEALTH on Page 24 2 | Crain’s New York Business | June 11, 2012 buck ennis

Table of Contents for the Digital Edition of Crains New York - June 11, 2012

Crains New York - June 11, 2012
Table of Contents
Local hospitals suffer growing pains
Meet two of the busiest property buyers in town
Sin City: Pot, pop and ponies, by the numbers
New York, New York
Brooklyn Heights morphs into retail hot spot
The Insider
Real Estate Deals
Viewpoint
Greg David: Why city’s med centers must merge or die
Small Business
Plus: NY’s top hospitals list
Classifieds
For the Record
Tourists’ ticket to exclusive events
How to overcome the tech talent shortage
Executive Moves
Dewey partner down but not out
Hot and spicy at Singapura
The Weekahead

Crains New York - June 11, 2012