Crains New York - July 22, 2013 - (Page 1)

CRAIN’S NEW YORK BUSINESS VOL. XXIX, NO. 29 ® IN THE BOROUGHS Three amigos boost Bronx business PAGE 3 FPO WWW.CRAINSNEWYORK.COM JULY 22-28, 2013 PRICE: $3.00 INFRASTRUCTURE REPORT Merger boomlet goes bust It took 44 years and $5 billion, but an aquatic artery is finally built. Manhattan faucets will never run dry Wall Street’s dealers hit worst dry spell in decade despite big uptick in early 2013 Tunnel vision BY DANIEL GEIGER It’s the biggest infrastructure project that no one has ever heard of, and if all goes well, no one will even notice. Yet without this nearly $5 billion behemoth, Manhattan could well run dry. It is the city’s Water Tunnel No. 3, begun when Richard Nixon was in the White House, worked on in fits and starts ever since, and about to deliver its first 350 milliongallon daily dose of water to an area stretching all the way from West 79th Street to lower Manhattan.Turning on the latest 8.5-mile leg of the tunnel is a historic occasion. While no celebrations are yet planned, experts are already beginning to breathe easier. “For someone like me, who struggles to get to sleep at night, it will be a big relief to have another major artery that feeds Manhattan,” said James Roberts, the deputy commissioner of the city’s Department of Environmental Protection, the tunnel’s builder. “Tunnel No. 1 has been in continuous service for a century, and because of that we’ve never had a chance to even inspect it.” Meanwhile, the problem with Tunnel No. 2, which was finished in 1936, is that it serves only Brooklyn, Queens and Staten Island. For just over 80 years the fate of Manhattan has hinged on a single, increasingly leaky, now 96-year-old conduit. Finding the billions of dollars to build a new tunnel was always going to be difficult. Unlike other grand infrastructure projects—the extension of the No. 7 subway line, a new park along the Hudson River, or a replacement for Staten Island’s Goethals Bridge—the public will not ride on, lounge in, cross over or even see the new water tunnel. In fact, the only sign of its existence will be that pristine water continues to flow uninterrupted from Manhat- BY AARON ELSTEIN It looked as though Wall Street’s lucrative deal-making machine was back big-time in February, when, in mere days, Warren Buffett teamed up with a private-equity firm to acquire Heinz for $23 billion, American Airlines and US Airways announced an $11 billion merger, and Dell Inc. popped up with a $24 billion leveraged buyout offer. And then, as quickly as the merger boomlet had begun, it was over. In fact, 2013 is shaping up to be the slowest year for corporate mergers and acquisitions since 2004, with activity down 11% from last year. “It’s clear that the pace of M&A activity has declined materially from 2012, which was itself a relatively slow period,” lamented Scott Bok, chief exON TAP: Turning on the latest leg of the city’s third water tunnel will be a historic occasion. Bloomberg bigs head for the exits Sadik-Khan, Burden mull biz partnership as the exodus begins BY ANDREW J. HAWKINS dep See WATER TUNNEL on Page 17 MORE INFRASTRUCTURE NEWSPAPER See MERGERS on Page 23 Modular constuction has its moment P. 13 THE LISTS Largest construction firms P. 14 Largest architecture firms P. 19 The city’s transportation chief, Janette Sadik-Khan, and planning czar, Amanda Burden, are close friends who share a passion for creating vibrant, sustainable cities.They have been travel companions—to India, Amsterdam, Rotterdam, Copenhagen—and even sat next to each other at a recent benefit gala honoring Ms. Sadik-Khan. And when the Bloomberg administration draws to a close this year, the powerful pair could go into business See BLOOMBERG on Page 24 http://WWW.CRAINSNEWYORK.COM

Table of Contents for the Digital Edition of Crains New York - July 22, 2013

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
REAL ESTATE DEALS
SMALL BUSINESS
OPINION
GREG DAVID
REPORT: INFRASTRUCTURE
CLASSIFIEDS
NEW YORK, NEW YORK
SOURCE BREAKFAST
OUT AND ABOUT
SNAPS

Crains New York - July 22, 2013