Crains New York - March 11, 2013 - (Page 4)

Team Bloomie reunites to talk rebuilding options BY ANNIE KARNI Mayor Michael Bloomberg doesn’t believe in seawalls. That much he made clear after Superstorm Sandy. “It would be nice if we could stop the tides from coming in,” he said in December. “But King Canute couldn’t do it, and neither can we.” Despite his citation of the 11thcentury Danish ruler to dismiss the notion, the possibility of stormsurge barriers in New York Harbor is alive and well in the administration, which is preparing a master plan to make the city storm-resilient. The idea is “the elephant in the room,” one administration official said, and addressing it will be a major component of the report, due in May. “All options are on the table and will be evaluated in the report,” a spokesman for the city’s Economic Development Corp. said. A vast number of recommendations is expected in the analysis, which is likely to include a deep dive into rebuilding the most affected areas—lower Manhattan; Staten Island; the Rockaways and Breezy Point, Queens; and Red Hook and Coney Island, Brooklyn—and citywide recommendations for dealing with climate-related events. Alumni consulted An EDC spokesman said the team has consulted with hundreds of experts and community leaders as part of its research. Notably, the administration has also tapped into its deep bench of former officials now in the private sector but still strongly loyal to the city and their old boss.To help craft its rebuilding master plan, the city is getting the old band back together. The Dan Doctoroff band, to be exact. Last month, a group of former Bloomberg administration heavyweights,many who worked under the former deputy mayor for economic development and rebuilding, reconvened around a conference table to discuss the post-Sandy road map. IN THE MARKETS bloomberg news by Aaron Elstein Hank Greenberg: comeback kid? F ive years after the epic collapse of American International Group, and eight years after he was shoved out the door of the insurance company that he built and ruled with an iron fist, Maurice “Hank” Greenberg is back. This time, the executive is trying to build a new insurance giant with many of the same people who worked for him at AIG. Business, he proclaimed, is going very well indeed. “I’m having a lot of fun,” said Mr. Greenberg at an appearance last month at the Japan Society to discuss his recent book, The AIG Story. OK, wait a minute. A comeback for Mr. Greenberg? This is 4 | Crain’s New York Business | March 11, 2013 “There’s a lot of loyalty among the old Doctoroff crew,” said a former administration source, especially among those who worked on the city’s 2007 sustainability initiative. Three now work in real estate, whose interests are sure to be affected by the blueprint. James Whelan, Mr.Doctoroff ’s former chief of staff, is senior vice president of public affairs at the Real Estate Board of New York; David Lombino, a former executive vice president at the city’s Economic Development Corp., is director of special projects at Two Trees Management; and Ashley Cotton,a former senior policy adviser, is director of external affairs at Forest City Ratner Cos. Adam Freed, a former deputy director of the city’s Office of LongTerm Planning and Sustainability and now director of the Nature Conservancy’s Global Securing Water Program at Columbia University,also attended.Administration officials included Larry Blackmon, a deputy parks commissioner, and Karen Becker, a projects manager in Parks Planning. Tokumbo Shobowale, the city’s chief business operations offi- the guy who in the mind of some is the archvillain of the financial crisis, the man whose empire collapsed into the mother of all bailouts. (Mr. Greenberg contends AIG collapsed because his successors were inept.) This is the guy who, after news of his suit against the government hit in January, moved The Daily Show’s Jon Stewart to quip that he was writing his own book, Don’t Buy Maurice Greenberg’s Stupid F—king Book (Because It’s Going to Be Terrible). By the way, Mr. Greenberg will turn 88 years old in May. So while it’s probably too late for Mr. Greenberg to rebuild what he had at AIG, the man who portrays himself in his book as a combination of James Bond and Jamie Dimon is trying anyway. “He’s angry and out to prove a point,” said Linda Lamel, a former New York state insurance regulator and former president of the College of Insurance. “The government took something away from him, and now he is driven to take it back.” The name of Mr.Greenberg’s enterprise, Starr Cos.,is not new—nor is Mr.Greenberg new to it. Starr traces its roots back to 1919, and Mr. Greenberg ran it while he was also building AIG. When Mr. Greenberg was thrown out by AIG’s board in 2005 after an accounting scandal and pressure from then-Attorney General Eliot Spitzer,he turned his attention to Starr.In 2007,he acquired an insurer from Warren Buffett’s Berkshire Hathaway that was being wound down, merged it with Starr, infused it with more than $200 million in cash and began building. Starr bears more than a passing resemblance to the old AIG. Its finance chief, Howard Smith, served as chief financial officer at AIG under Mr. Greenberg, and several heads of Starr’s numerous subsidiaries are also AIG alumni. Like AIG, the company is global with a particular focus on Asia. At the recent Japan Society event, Mr. Greenberg emphasized he visited China and other Asian nations nine times last year and plans to make at least four more trips this year. Privately held Starr doesn’t release financial results, but insurance The ex-AIG chief is ‘angry and out to prove a point’ research firm A.M. Best estimates the group wrote $1 billion worth of policies last year, and data filed by certain subsidiaries with state insurance regulators offer a glimpse behind the curtain. For example, back in 2008, Starr Indemnity & Liability wrote less than $20 million worth of net premiums. But that business by 2011 had grown to more than $400 million and generated $20 million in pretax operating income through the first nine months of last year, compared with $5 million in the year-earlier period. This growth has come while the property and casualty business has stagnated, with net written premiums industrywide of $447 billion in 2011, according to A.M. Best, the same amount as in 2008. While the public may still be fu- bloomberg news Dismissed by mayor, seawalls get attention cer, was also consulted. At the highest level, Mr. Doctoroff himself is involved. The former deputy mayor, who is president of Bloomberg LP, confirmed via email that he had advised the city informally on the post-Sandy plan. The co-leader of the entire initiative is also an alumnus. Marc Ricks, a former Doctoroff chief of staff, is on a six-month leave from Goldman Sachs to spearhead the Sandy plan alongside Economic Development Corp. President Seth Pinsky. It was Mr. Ricks who called upon his former colleagues for their input. Thirty full-time staffers are working on the report, and public outreach to elected officials has been an important component. But assembling the alumni for a pro bono advisory meeting highlights the degree to which Mr. Ricks and the team want to get outside the government echo chamber, sources said. The administration also wants to craft a report that stands out. Part of the upcoming challenge for Mr. Bloomberg, long a champion of reducing the city’s carbon footprint, will be making his plan the most comprehensive among several that have already been offered by elected officials vying to be seen as poststorm leaders. Sen. Charles Schumer has taken credit for getting funding for a $20 million coastal protection study by the U.S. Army Corps of Engineers. And Gov. An- DOCTOR IS IN: Former Deputy Mayor Dan Doctoroff is helping with the rebuilding plan. drew Cuomo has announced he wants to spend $400 million on home buyouts in the state’s floodplains. The city hopes its alumni network can help it craft a plan that makes a splash. That’s one reason why Mr. Bloomberg’s Special Initiative for Rebuilding and Resiliency has consulted with hundreds of stakeholders, a spokesman said. “These include community leaders and elected officials, scientists, academics, environmental groups, a wide range of government agencies and many others, some of whom previously worked for the administration,” he said. “We look forward to continuing these discussions when we publish the report this spring.” Ⅲ rious with Mr. Greenberg’s suing the government for rescuing AIG, he is seen within the insurance industry as an oracle. Ms. Lamel estimates that one out of every five people who work in the industry has worked at some point at AIG. “More than anywhere else, it was where you could get rich in the insurance business,” she said, and many who came to see Mr. Greenberg last month at the Japan Society did so to thank him for favors large and small over the years. “You paid for my M.B.A. at NYU, so I’m grateful to you,” one man in the audience told Mr. Greenberg, who wisecracked: “Did you get your money’s worth?” Mr. Greenberg seldom spoke publicly after AIG’s collapse but is making more appearances lately before carefully screened audiences to promote his book,which a Financial Times columnist said “combines the stiffness of a corporate annual report with the ludicrousness of a communist dictator’s hagiography.” In addition to appearing at the Japan Society—where he is a board member—he has spoken at the National Press Club, on CNBC and on Bloomberg Television. Meanwhile, he’s continuing to press his suit against the government even though public opinion is almost universally against him. He said at the Japan Society that his attorneys, led by star lawyer David Boies, are getting ready to take depositions and gather evidence that the government’s bailout terms were so harsh that they violated the constitutional prohibition against excessive “takings.” “We’ll see where it goes. I feel optimistic,” he said, adding: “I don’t give up easily.” Ⅲ

Table of Contents for the Digital Edition of Crains New York - March 11, 2013

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
CORPORATE LADDER
OPINION
GREG DAVID
REAL ESTATE DEALS
REPORT: SMALL BUSINESS
STARTUP GUIDE
CLASSIFIEDS
NEW YORK, NEW YORK
OUT AND ABOUT
SNAPS

Crains New York - March 11, 2013