Crains New York - November 26, 2012 - (Page 15)

REPORT R E A L E S TAT E INSIDE NY’s top property managers find themselves in the eye of the superstorm PAGE 16 Deals Brooklyn baker branches out; watchmaker resets lease clock PAGE 20 Insurance hikes hit builders Claims by injured workers, big settlements push premiums up dollar settlements for crane accidents and other lawsuits. “In our New York portfolio, New York’s builders are reeling from we’ve seen the average claim involva huge upward spike in the cost of ing New York Labor Law approach insuring against claims by injured $4 million,” said Tom Grandmaiworkers, one that is likely to push up son, executive vice president and the cost of development and at the construction casualty leader for the same time eat into profits for an in- U.S. and Canada at AIG Property dustry still strugCasualty. Tradigling to bounce tionally, the indusback from the retrywide cost of incession. suring New York Cost of insuring NYC projects Construction projects for workfor workers’ compensation and companies and ers’ compensation, liability: their subcontracgeneral liability and tors, which work excess liability is HISTORICALLY under a state labor “3% to 4% of the law that puts abvalue of the consolute liability on struction,” he said. the employer for “Today, that numinjuries sustained ber is 8%-plus.” TODAY on high-rise projMuch of the inects, say that their crease is in the balpremiums have as looning cost of reinmuch as tripled in surance, or this year’s billing secondary layers of Source: AIG Property Casualty cycle. Insurance coverage, according companies, squeezed by low invest- to Ken Colao, president of CNY ment yields on their assets on one Builders, a Manhattan-based conside, and big payouts for catastroph- struction management company ic events such as the 2011 tsunami that specializes in hotels and residenin Japan and soaring medical costs tial development.Typically, he said, a on the other, were hiking premiums reinsurer has to pay only after the first in New York even before Super- $1 million of coverage is used up, storm Sandy blew into the area.The but that level is being pierced more moves are also being driven by a frequently. growing number of multimillionSee INSURANCE on Page 20 BY STEPHEN KLEEGE THROUGH THE ROOF 3% to 4% 8%-plus HARD HIT: Arthur Rubinstein, owner of Skyline Steel Corp., has seen his insurance costs nearly triple. buck ennis Downtown gears up for huge retailing growth Four shopping hubs are on track as area eyes revitalization BY ADRIANNE PASQUARELLI In early October, the financial district welcomed an unusual newcomer. A three-story department store called Trinity Place—boasting trendy European-label apparel and accessories sprawled over 26,000 square feet of highly polished hardwood floors—opened at 61 Broadway in the heart of a neighborhood still far better known for high finance than high fashion. Even Marian Rebro, the store’s chief executive, acknowledges that his choice of locales might strike some as odd. “Why would I want to go where there are no good retailers or shopping?” he asked. “I look at this as an opportunity and a challenge.” Mall mecca The latter point is certainly true, now more so than ever in the havoc wrought by Superstorm Sandy. But the fact is that the storm is just one more hardship in a retail market that never recovered from the loss on 9/11 of the vast, highly successful mall in the World Trade Center. “There’s no real apparel retail or fashion retail; it’s all food and service, so any of the majors have been hesitant to locate there because they don’t have that synergy [with similar stores],” said Robin Abrams, executive vice president at Lansco Corp. Despite the near-term dislocations caused by Sandy, that may change in a huge way in the next three years. Already several hundred million dollars are beginning to pour into the creation of four giant retailing hubs with a total of nearly 1 million square feet of space, roughly equivalent to Macy’s ninefloor flagship at Herald Square (see box, page 21). Two of them, Brookfield Place, formerly known as the World Financial Center, and Pier 17 on the East River will be radical revamps. The other two, at the World Trade Center and the Fulton Street Transit Center, will be brand new. What See DOWNTOWN on Page 21 November 26, 2012 | Crain’s New York Business | 15

Table of Contents for the Digital Edition of Crains New York - November 26, 2012

Crains New York - November 26, 2012
IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
OPINION
ALAIR TOWNSEND
GREG DAVID
SMALL BUSINESS
REPORT: REAL ESTATE
THE LIST
REAL ESTATE DEALS
CLASSIFIEDS
FOR THE RECORD
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crains New York - November 26, 2012