Crains New York - January 21, 2013 - (Page 1)

CRAIN’S NEW YORK BUSINESS VOL. XXIX, NO. 3 ® HIS HEAD IS FULL OF GOLD A BROKER BECOMES AN OWNER PAGE 8 WWW.CRAINSNEWYORK.COM JANUARY 21-27, 2013 PRICE: $3.00 Foursquare doesn’t quite check out To be sold, LIPA may need a bailout Albany would have to take on at least $4B in debt to grease deal for private buyer of utility The social-media darling of city’s tech scene is ripping through its cash BY AARON ELSTEIN Customers of the Long Island Power Authority in Nassau, Suffolk and parts of Queens counties suffered through prolonged blackouts after Superstorm Sandy thanks to the utility’s widely lambasted mismanagement. Now it may be time for the rest of New York to share in the pain. The financial engineering required to privatize the beleaguered utility figures to generate hefty costs paid for by all taxpayers. “You’re talking about the bailout of Long Island,” said Matthew Cordaro, chairman of the Suffolk County Legislature’s LIPA Oversight Committee and a former operations chief at LIPA’s predecessor, the Long Island LightAMOUNT of debt ing Co. “I can’t held by the Long imagine people in Island Power the rest of the state Authority will stand for that.” Gov. Andrew Cuomo said earlier this month in his State of the State address that he wanted to “abolish” LIPA: “It has never worked. It never will.” But analysts believe that persuading a private company to buy the much-maligned utility would require the state to assume at least $4 billion of LIPA’s $7 billion in debt. A sale would then trigger nearly $1 billion in additional costs: early-termination fees paid to bondholders, as well as penalties for the derivatives contracts that would suddenly become void, according to people who have studied a privatization. “It would be painful, no question,” said Steve Mitnick, a former energy BY MATTHEW FLAMM Since its launch in 2009, Foursquare Labs Inc. has been the face of the New York City tech industry, leading the way with a location-based social-media application that seemed to be on every cool person’s smartphone. With scarcely any revenue, but with millions of users “checking in” at bars and restaurants, the startup raised $50 million from top-drawer investors in a June 2011 funding round that valued the company at $600 million. Nowadays, however, Foursquare is more of a poster child for questions about the future of social-media startups. $7B buck ennis See LIPA on Page 20 See FOURSQUARE on Page 20 FUNDING SEARCH: Chief Executive Dennis Crowley and company are burning through $2 million a month. That’s as much revenue as Foursquare made in 2012. NEWSPAPER REPORT SMALL BUSINESS Coming in 2013: Higher taxes, health care bills and more regulation PAGE 13 THE LISTS Top SBA lenders and loans PAGES 15, 16 http://WWW.CRAINSNEWYORK.COM

Table of Contents for the Digital Edition of Crains New York - January 21, 2013

Crains New York - January 21, 2013
In the Boroughs
In the Markets
The Insider
Business People
Corporate Ladder
Opinion
Greg David
Real Estate Deals
Report: Small Business
Classifieds
New York, New York
Source Lunch
Out and About
Snaps

Crains New York - January 21, 2013