05.29.2011 – Martha Stewart Posts (Tasteful) ‘For Sale’ Sign – Week On the Web – CRAIN’S NEW YORK BUSINESS

Martha Stewart posts (tasteful) ‘For sale’ sign

Media and home decor franchise explores options, while Albany decides on a property tax limit and hedge funder David Einhorn invests in the Mets.

By Benjamin J. Spencer
May 29, 2011 5:59 a.m

Bloomberg News

Even DIY craft maven Martha Stewart knows when she needs help. On Wednesday, her limping Martha Stewart Living Omnimedia announced that it had hired Blackstone Advisory Partners to evaluate its options, including a possible sale of the company.

The news sent MSLO shares soaring nearly 30%—to all of $5 each. The value of Ms. Stewart’s famed franchise, nearly $2 billion back in early 2005, was a mere $250 million after the day’s trading.

It’s been a hard few years for the media and home decor franchise. Magazine ad dollars dried up; a merchandising deal with Kmart wasn’t renewed. In January, NBC dropped Ms. Stewart’s morning television show and its related spinoffs, relegating them to Hallmark Channel oblivion. The company’s CEO position has been vacant since 2008; Lisa Gersh, a founder of Oxygen Media, is slated to assume the post June 6.

The company’s announcement came just as 69-year-old Ms. Stewart, who has had the job title of chief editorial officer the past few years, is set to rejoin its board of directors, ending a five-year banishment due to her 2004 federal conviction for obstruction of justice.

TAX-SQUEEZED SUBURBANITES, REJOICE: Gov. Andrew Cuomo and state leaders agreed to impose a 2% limit on annual property tax increases statewide. The guv says property taxes soared 5.5% per year between 1999 and 2009, and the new cap aims to combat economic decline. Still, the state teachers union said limiting tax increases would devastate low-income schools outside of New York City. Legislators seem set to vote on the cap next month. …

HEDGE FUNDER DAVID EINHORN BET $200 MILLION ON THE METS, buying a minority stake in the financially strapped team. Whether that’s enough to buy a championship, or even downplay owner Fred Wilpon’s recent tongue-lashing, remains to be seen. …

THE HUFFINGTON POST IS NOT OFF THE HOOK, YET. A federal judge declined to throw out a lawsuit claiming the media company’s founders, Arianna Huffington and Kenneth Lerer, stole the idea for the online news site from a duo of Democratic political consultants—a charge AOL Huffington Post Media Group said is “pure fantasy.” …

THE FEDS ARRESTED GERARD DENAULT, the lead manager on the controversial CityTime project, and charged him with receiving $5.6 million in kickbacks from a technology subcontractor. Mr. Denault, who oversaw the rollout of the computerized timekeeping system for more than 100,000 municipal workers, could not be reached for comment. His employer, Virginia-based SAIC, has not been charged with wrongdoing. …

TWO MASSIVE, LONG-VACANT BROOKLYN PROPERTIES WERE FINALLY CLEARED for redevelopment. A judge rejected a community group’s lawsuit and green-lighted a $2 billion redo for the former Domino Sugar factory in Williamsburg. The city is now free to rezone the 11-acre site for a mixed-use residential project. And in Sunset Park, a 1.1 million-acre warehouse shut since 2000 gets its own shot at redemption: The city’s Economic Development Corp. tapped Salmar Properties to redevelop the charmingly named Federal Building #2 for light industrial use.


04.28.2011 – Refinancings Plummeted in Minority Areas – CRAIN’S NEW YORK BUSINESS

Refinancings plummeted in minority areas

Approvals for refinanced mortgages fell by 14% in New York City neighborhoods with sizeable minority populations while soaring 110% in predominantly white areas at height of recession.

By Benjamin J. Spencer
April 28, 2011 1:57 p.m
The number of mortgage refinancings approved by lenders in New York City’s neighborhoods with sizeable minority populations “plummeted” from 2008 to 2009, the last year for which figures are available, according to report released Thursday by the Neighborhood Economic Development Advocacy Project, a fair housing nonprofit. The drop occurred even as refinancings in predominately white neighborhoods soared.

The figures are drawn from a national report covering seven large urban areas, in which NEDAP partnered with six other urban justice organizations. The groups examined the most current federal Home Mortgage Disclosure Act data, focusing on conventional mortgage refinancings.

Combining the New York City figures with demographic data, the group found that lenders decreased the number of loans made in neighborhoods “of color” by 14%, while loans approved to applicants in predominately white neighborhoods soared by 110%.

“In New York, we’re seeing a step in exactly the wrong direction,” said Sarah Ludwig, a co-director of NEDAP. She said the disparity points to the existence of a “dual credit market that corresponds to the racial composition of neighborhoods.”

In a separate statement, she added that “Fair access to credit is absolutely critical to New York City’s communities of color, which have decidedly borne the brunt of the foreclosure crisis—on top of decades of persistent lending discrimination.”

Caitlyn Brazill of New York University’s Furman Center for Real Estate and Urban Policy said that the rate of housing depreciation could be a factor in lower bank approvals. She pointed to an October 2010 report by the Furman Center focusing on individual borrowers rather than geographic data.

“We did look at home price depreciation across New York City,” Ms. Brazill said, “and there have been greater rates of depreciation in predominately minority areas.”

The NEDAP report also found that loan applications from particularly African-American and Hispanic communities fell even further—by 27%—than approvals from 2008 to 2009, the depths of the recession. During the same period, applications originating from majority white neighborhoods went the other direction, soaring 78%.

Ms. Ludwig said this suggested that banks had not reached out enough to those hardest hit by the subprime mortgage crisis. “There definitely doesn’t seem to be a lot of marketing to these communities,” she said.

The New York Bankers Association did not have an immediate reply.

CLARIFICATION: The report found that approvals for refinanced mortgages fell 14% in New York City neighborhoods with sizeable minority populations. NEDAP partnered with six other organizations nationwide to produce the report, of which New York City numbers were one part, and NEDAP Co-director Sarah Ludwig said banks are not doing enough marketing in minority neighborhoods. These facts were unclear in an earlier version of this article.

02.22.2011 – New REIT Goes Totally Green – CRAIN’S NEW YORK BUSINESS

New REIT goes totally green

CleanTech to put its money into everything from wind farms and geothermal plants to land for transmission lines; hoping to catch a rising renewable energy wave.

By Benjamin J. Spencer

February 22, 2011 1:48 p.m.

A brand new real estate investment trust is seeking investors by touting an unusual focus: the REIT is only interested in buying up properties that can be used for clean energy production.

Manhattan-based CleanTech REIT is wooing investors with promises of cashing in on the early stages of what it calls a “global shift” in energy production. Properties qualifying for purchase will include potential and existing sites of wind and solar energy farms, geothermal plants, and hydroelectric plants, as well as land for energy transmission lines.

“There’s sort of a land grab going on right now,” said Mikhael Gurfinkel, CleanTech’s chief investment officer, who is also managing director of Basic Element, a Russian private equity firm. “European developers are coming in and grabbing up these properties as we speak.”

Company officials point to the instability of fossil fuel prices driving more clean energy projects and leading to hoped-for appreciation in the value of green energy properties. CleanTech plans to invest widely.

“Our returns aren’t tied to any one technology or geography,” said Beth DiSanto, the REIT’s general counsel, who is the founding partner of an eponymous real estate law firm specializing in REITs. Formerly, she worked with Mr. Gurfinkel at law firm Clifford Chance. Ms. DiSanto said that the strategy of investing in multiple types of clean-energy producing properties is designed to help reduce the risks.

While investing in green technologies has become very hot in recent years, it is unusual for a REIT, especially one making such investments its sole focus.

“I’m not aware of any other REIT per se that is doing this,” said Ross Smotrich, a REIT analyst for Barclay’s.

CleanTech will rely on a host of government incentives and tax credits for renewable energy to help it increase returns for its investors. One of those incentives, the federal Production Tax Credit for renewable energy, was recently extended under the American Recovery and Reinvestment Act until the end of 2012.

That credit and others like it have been critical to the recent growth of the renewable energy sector in the U.S., noted Steve Caldwell, senior solutions analyst at the Pew Center on Global Climate Change.

While renewables are still a small part of overall U.S. consumption, according to the U.S. Energy Information Administration, the percentage is rising. In 2009, the latest year figures are available, renewable energy made up 8% of total U.S. consumption, according to the agency’s website.

02.18.2011 – More City Construction Action for Women, Minorities – CRAIN’S NEW YORK BUSINESS

More city construction action for women, minorities

Mayor says city will increase percentage of construction contracts awarded to firms owned by women and minorities. “Hats off to the mayor,” said Women Builder’s Council president

By Benjamin J. Spencer
February 18, 2011 3:49 p.m.

Mayor Michael Bloomberg’s decision Friday to open more city construction contracts to women- and minority-owned builders in New York City was music to the ears of those who have been fighting for years for more access to the lucrative jobs.

“These new goals will be very, very significant,” said the Women Builders Council president, Sandra Wilkin. “Hats off to the mayor for pursuing this and knowing the changes that need to be made to make New York more efficient and help businesses grow.”

Under the changes to Local Law 129, the new goals, or percentages of city contracts awarded to women and minority firms, will increase. The exact amount of the increase will be determined later by the city.

“Any increase from 0% is significant,” said Ms. Wilkin. Before, she said, bonding, insurance and finance for construction projects were often out of reach for smaller firms, including those run by women.

“It’s significant for the city as well; it will increase the work force,” she said, adding that she knows personally of several women contractors who will immediately benefit from the new goals.

The city’s decision comes after a broader state goal announced by Gov. Andrew Cuomo Thursday, in which he increased the goals for women and minority state contracts to 20%.

02.17.2011 – Walmart Foes Testify Before City Council – CRAIN’S NEW YORK BUSINESS

Walmart foes testify before City Council

Anti-Walmart advocates and ex-employees seeking to block the entry of the world’s largest retailers into New York City air allegations of widespread labor abuses.

By Benjamin J. Spencer
February 17, 2011 3:49 p.m

Updated: February 17, 2011 6:15 p.m

Lawyers, advocates and former Walmart employees testified against the potential entry of the mega-retailer into the five boroughs before three committees of the City Council Thursday. As expected, their testimony was almost unanimously critical of the Bentonville, Ark.-based company’s conduct.

Several witnesses presented testimony, based on workers’ lawsuits, of what they charged were widespread labor abuses built into Walmart’s corporate structure. The allegations spanned the country and ranged from Walmart forcing employees to work extra hours with no pay, to repeated instances of management retribution against workers who tried to unionize.

The comments of Council members themselves on Walmart also skewed negative, with the exception of Queens Councilman Eric Ulrich, who said he supported the retailer’s entry into the city to combat rampant unemployment in his district.

“In this country, you’re innocent until you’re proven guilty,” said Mr. Ulrich, referring to various civil action suits pending against Walmart, many of which allege labor, civil rights and human rights violations on a company-wide scale.

Former Walmart grocery manager Sandra Carpenter said when she attempted to educate “immigrant employees not familiar with the rights that we are supposed to have in this country,” the managers at her store engaged in retribution by forcing her to work off the clock for up to two hours a day. She estimates she lost more than $4,000 in overtime payments.

Attorney Claude Leblanc, who represents 190 Walmart workers in Jonquiere, Quebec, said that when his clients attempted to unionize, Walmart shut the store down and fired everyone.

“This kind of closure, within the law of the province of Quebec, is illegal,” said Mr. Leblanc, whose clients won damages from the retailer.

The comments of City Council members themselves on Walmart also skewed overwhelmingly negative.

“No one would argue with the desire to seek out lower prices,” said Deborah Rose, Council chair of the Committee on Civil Rights. “But often, a store’s low prices come with a high price for workers.”

“If you don’t adhere to the standards of this city, you will not reap its benefits,” added Julissa Fererras, chair of the Committee on Women’s Issues for the Council.

But Mr. Ulrich asserted that it was “not the government’s job” to block private enterprise.

“People need jobs,” said Mr. Ulrich, adding that if Walmart were allowed into his district, people would be “lined up around the block” with applications.

For the second hearing in a row, Walmart refused to send representatives to address the Council. Instead they issued a statement while hearings were still underway, rebutting many of the allegations of the panels.

In a press statement titled “Setting the Record Straight on Today’s City Council Meeting,” the company specifically countered the claim made by Councilman Charles Barron of Brooklyn, among others, that Walmart’s entry into New York would devastate the local economy by driving small business away and lowering the area’s wages and benefits.

The company cited a 2005 paper by economist Jason Furman, now an adviser to the Obama administration, that concluded “the company itself does not appear to pay lower wages or benefits than similar companies, or to cause substantially lower wages in the retail sector.”

The release also countered allegations of wage theft and other labor abuses.

Thursday’s hearing was the second City Council meeting in a month to deal with the controversy over Walmart’s interest in New York City locations such as Queens’ Jamaica Bay and Willet’s Point.

02.14.2011 – Sprawling Pfizer Plant in Brooklyn Sold – CRAIN’S NEW YORK BUSINESS

Sprawling Pfizer plant in Brooklyn sold

Surprise buyer plans to convert the 660,000-square-foot facility to light industrial and commercial use; sale leaves several large parcels unsold.

By Benjamin J. Spencer
February 14, 2011 2:11 p.m
 Two years after abandoning an attempt to redevelop its sprawling former manufacturing complex in Brooklyn, drug giant Pfizer announced Monday that it had reached a surprise agreement to sell a piece of that property to Acumen Capital Partners of Long Island City.

The 660,000-square-foot plant had been sitting vacant since 2008, when the Manhattan-based company ceased operations in the South Williamsburg neighborhood where it had begun operations in a small factory in 1849. At the time of the closing, 600 jobs were lost, a fraction of those employed at the plant in its heyday.

The buyer is Acumen Capital Partners, a Long Island City-based real estate investment firm specializing in buying empty buildings in the outer boroughs and converting them for light industrial and commercial use, as it now plans to do at the Pfizer site. The conversion should bring jobs back to the area.

“This is great news,” said Carl Hum, president of the Brooklyn Chamber of Commerce. “The track record that Acumen Capital has—it’s great at coming up with creative uses for buildings. It’s at the forefront of urban architecture.”

According to its website, Acumen emphasizes environmental sustainability when redeveloping properties, which could mean big changes for the aging plant. In Long Island City last spring, Acumen put a 40,000-square-foot vegetable farm on top of a six-story former auto plant on Northern Boulevard that it had bought a few years earlier.

In 2007, Pfizer sent out requests for proposals for its Brooklyn site, looking for construction of affordable housing, and job creation. Owing to the recession, the company was unable to identify any attractive proposals.

In a press statement Pfizer said: “We were subsequently approached by a party interested in acquiring only the existing manufacturing facility and adjacent parking lot,” a total of about eight acres. The statement went on to note that with the sale to Acumen it “would leave intact all of the vacant parcels north of the manufacturing building for future development.”

“We’re very excited about this project and the benefits it will bring to the neighborhood,” said Pfizer spokesman Christopher Loder.

Pfizer closed the 660,000 square-foot plant in 2008, resulting in the loss of 600 jobs in Brooklyn and setting off a debate over the future of former factory properties in the borough. Mr. Loder said Pfizer’s plans for the approximately five acres of remaining parcels, scattered north of the plant, still include the option of affordable housing.

“Although I wish Pfizer could have found a way to stay in its hometown of Brooklyn, I am thrilled that Acumen is helping to bring more light industry to our borough,” said Brooklyn Borough President Marty Markowitz in a statement. “This new facility will generate much-needed jobs, and attract the sort of innovative companies and artisans that redefine their craft every day.

02.08.2011 – Slideshow – New York City’s Largest Hotels – CRAIN’S NEW YORK BUSINESS

New York City’s largest hotels

by Benjamin J Spencer

All Photos Property of Hotels

1. Hilton New York