Crains New York - June 17, 2013 - (Page 18)

IN THE BOROUGHS BRONX Continued from Page 3 “Even a nice Hispanic bank would be a good idea,” Mr. Pappas said. And so it goes in the Bronx, the city’s most underbanked borough, and the second-most-underbanked county in the nation—a place where almost 30% of households lack bank accounts or access to financial instiMEDIAN HOUSEHOLD tutions. INCOME for Webster Critics Ave. (ZIP code 10458) blame banks for skirting poor neighUNDERBANKED/ borhoods beUNBANKED Bronx cause there’s households too little profit to be made. Bankers, on EST. CITY FUNDS on deposit in local banks the other Sources: U.S. Census, hand, tend to University Neighborhood pin the blame Housing Project on lowincome residents who struggle to meet the minimum requirements needed to maintain accounts. $25,027 30% $7B Costlier services Webster Avenue, where the median household income is about $25,000 a year—a little more than half the citywide average—is just one of a number of areas in the borough where even some community groups have abandoned efforts to sign up residents for bank accounts. Among other things, they note such pushes are hobbled by the area’s large number of undocumented immigrants, who lack the necessary basic identification papers. For area residents, however, the alternatives are not good. “People rely more on check cashers or fringe financial services that fill the vacuum,” said Greg Jost, deputy director of the University Neighborhood Housing Program, which tracks the issue. “And a lot of those services are more costly.” Another result, advocates say, is an increase in crime,in a place where immigrants who carry, rather than deposit, their cash become the targets of theft and violence. Businesses, too, pay a price. Owners like Mr. Pappas have to drive more than a mile to make deposits or do their payroll. They also miss the increased foot traffic and commercial stability bank branches can lend to a street. Nonetheless, the tide is running against neighborhoods like Norwood. A recent Bloomberg Businessweek analysis of the 1,826 branch closings across the country in recent andrew j. hawkins Bank on it? Not here MAKING DO: In the absence of banks, residents have few good alternatives. years found that more than 90% were in ZIP codes where income was below the national median. Community outreach In an effort to put more pressure on financial institutions, the City Council last year passed the Responsible Banking Act, which would require banks to disclose their activity—number of branches opened, loans given out, etc.—in lowincome neighborhoods before the city decides where to deposit the billions it keeps in banks across the five boroughs. Subsequently, the council swiftly overrode Mayor Michael Bloomberg’s veto of the bill. A year later, though, the administration has yet to appoint any members to the Community Investment Advisory Board, which would oversee data collection and analysis. That inaction has drawn criticism from Council Speaker Christine Quinn, among others. Meanwhile, some community banks are doing what they can. With five branches in the Bronx, Popular Community Bank has no plan to open more. But according to Brian Doran, Popular’s region executive for New York,it is doing “extensive community outreach” to help low-income residents meet the minimum requirements needed to open a savings account. “It’s a little challenging,” Mr. Doran said. “We are a bank of immigrants,and we’ve always serviced the immigrant community, so we do have programs to help people, provided they can establish their identity to the necessary degree.” In the meantime, along thoroughfares like Webster Avenue, where even cellphone shops double as bill-payment centers, residents continue to make do with the resources available. “Not close,” one elderly woman replied when asked to identify the closest bank.“But the check-cashing place will do a lot of things the banks won’t—like the Con Ed [bill].” Ⅲ LISTEN to a discussion at CrainsNewYork.com/podcasts FROM AROUND THE CITY STATEN ISLAND Neighbor rises to aid oldest house Staten Island’s oldest dwelling is getting some much-needed help courtesy of a neighbor who was so appalled by what he saw on a tour of the Billiou-Stillwell-Perine House a year ago that he sprang into action. “I felt guilty, like I had to do something,” said Steven Lobaido, a contractor who had last seen the interior on a third-grade trip. A leaky roof, last mended 30 years ago, had taken its toll.To help reverse that damage, 90 people turned out on June 9 at the first of several planned fundraisers at the two-story, 332year-old house in the island’s Old Town section.At the event,local musician Bob Wright sang “Along the Kings Highway,” a piece about the house that he wrote for the occasion. Ed Wiseman, executive director of Historic Richmond Town, which oversees the property, said he hopes to raise $25,000 to match a grant of that amount and begin the restoration. —shannon mcmahon REAL ESTATE DEALS PLUS T he surprise exit of Cushman & Wakefield’s chief executive last week and the search for a new one highlight the challenges facing the 15,000-person Manhattan-based real estate services company, brokers at the company say. When CEO Glenn Rufrano stepped down after just three years with the company, both he and his interim successor, Carlo Sant’Albano, described the decision as mutual and amicable. Mr. Sant’Albano, who is Cushman’s top European executive and a former chief of its Italian parent company, Exor, said he hopes to name a successor by year’s end. Mr. Rufrano, who has a track record as a corporate turnaround expert, was brought into Cushman during the recession,at a time when it was bleeding red ink. He was also regarded as a good man to help take the company public, a long-rumored exit strategy for Exor. But while he succeeded in pushing Cushman’s gross revenue to $2.05 billion in 2012, its second-best year ever, the IPO never came. “Taking a business public is always in the cards,” Mr. Sant’Albano said last week.“But there is no plan to take Cushman public at this time.The objective is to strengthen our platform, to be in the top three and even better than that.” In recent years, Cushman has lost market share to larger public rivals Jones Lang LaSalle and CBRE, and smaller firms have begun to nip at Cushman’s heels as well. Newmark Grubb Knight Frank, for instance, was acquired by financial company BGC Partners in 2011, a merger that gave it access to capital and a leg up in competing for the business of BGC’s clients in the financial industry. Real estate executives expect the choice of the new CEO to signal Exor’s ambitions for the company. An executive with Wall Street credentials could herald a shift from brokerage to other service lines like real estate investment management, which Mr. Rufrano had begun to build up. A leader like Mr. Rufrano’s predecessor, Bruce Mosler, who is a top broker at the company, could shift the executive role back into that of a rainmaker for the firm. “They need someone with business experience, who is of the caliber 18 | Crain’s New York Business | June 17, 2013 BARE BONES Firm scores twice at one building The Kaufman Organization looks as though it has pulled off the rare feat of having its cake and eating it, too. The company recently sold 100104 Fifth Ave., the midtown south office building it owned in partnership with Invesco. Buyer Clarion Partners paid $230 million,handing Kaufman a hefty profit on the building it bought for roughly $93 million barely three years ago. Kaufman was also able to capitalize on rising rents in the neighborhood by brokering a deal with one of its former Fifth Avenue tenants. Under the deal, Leadership Directories, which provides online contact information for people in business and government, will move to 1407 Broadway, a Lightstone Group-owned building below Times Square. The tenant will take 12,370 square feet in a 10-year lease. The asking rent for the space was $47 per square foot, well below average asking rents in midtown south, which have risen into the $60s per square foot and beyond. “Like a lot of tenants, Leader- 827 10TH AVE. 483 10TH AVE. 151 W. 30TH ST. ASKING RENT; TERM: $100 per square foot; five years ASKING RENT; TERM: Low $30s per square foot; seven years ASKING RENT; TERM: $80s per square foot; 10 years SQUARE FEET: 600 SQUARE FEET: 4,000 SQUARE FEET: 11,750 TENANT; REPS: Johnny Bong Ryoo; Aaron Gavios and Justin Lerner of Square Foot Realty TENANT; REP: Western Pest Services; Alan Weisman of Lee & Associates TENANT; REPS: Dragon Sphere NY; Maria and Sasha Majerovsky of Citywide Properties Inc. LANDLORD; REPS: Site Five HDFC; Mr. Gavios and Mr. Lerner SUBLANDLORD; REP: FGX Global Express; Mr. Weisman LANDLORD; REPS: 151 West 30th Street; Maria and Sasha Majerovsky BACK STORY: The hairstylist will open his first New York salon in Hell’s Kitchen at 10th Avenue and West 55th Street. BACK STORY: The New Jersey-based exterminator will return to New York after a decade, owing to a boost in business after Superstorm Sandy. BACK STORY: The handbag shop will open a new location, taking approximately 5,750 square feet on the ground floor and 6,000 square feet of basement space. ship Directories was looking for a more affordable area of the city, like the garment district,” said Grant Greenspan, a principal at the Kaufman Organization who arranged the deal for the tenant. Mr. Greenspan is also the agent istockphoto Next Cushman chief faces daunting tasks that a public company would hire,” said Arthur Mirante,who was Cushman’s chief executive for 20 years and is now an executive at rival Avison Young. “There aren’t that many around in the real estate industry.” for 1407 Broadway, an assignment he has had for some time. He recently implemented a strategy centered on capturing more tenants who have been priced out of midtown south. —daniel geiger http://www.CrainsNewYork.com/podcasts

Table of Contents for the Digital Edition of Crains New York - June 17, 2013

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
SMALL BUSINESS
BUSINESS PEOPLE
OPINION
GREG DAVID
FOR THE RECORD
REPORT: FORTUNATE 100
THE LIST
REAL ESTATE DEALS
CLASSIFIEDS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crains New York - June 17, 2013