Crains New York - July 22, 2013 - (Page 4)

IN THE Fatty Crab lands big partner MARKETS “We traveled the country and the world to figure out what spots we wanted to hit next,” said President Rick Camac. “Our last stop was in Philly, the closest city to us, and all the restaurants I loved were Stephen Starr restaurants.” BY LAURA LORENZETTI Fatty Crab is clawing its way to the top. New York restaurant group Fatty Crew, owner of the popular Fatty Crab and Fatty ’Cue concepts, has inked a deal with Philadelphiabased restaurateur Stephen Starr to go national. Mr. Starr, owner of Buddakan and Morimoto, will help open Fatty Crab restaurants in eight cities in the U.S. and one in London. The Starr partnership signals the latest growth spurt in Fatty Crew’s expansion of its Southeast Asian dining concept, which aims to grow to a $60 million to $80 million company within the next five years. Fatty Crew owns four restaurants in New York City, one in the U.S. Virgin Islands and a recently opened Fatty Crab in Hong Kong. City-specific menus That gave Mr. Camac the idea to reach out directly to Mr. Starr to gauge his interest in opening up a series of Fatty Crab restaurants together. “Very simply, I love their operation and I love their name,” said Mr. Starr. “We want to be a part of their growth, and I think with our name and their culinary credentials, we can do really well.” Starr Restaurants will be the operator and will run the day-to-day management. Fatty Crew will collaborate on the dining experience and develop city-specific menus that focus on local and seasonal ingredients. Chef Zakary Pelaccio, while still a partner in Fatty Crew,stepped out of the dayto-day operations two years ago to focus on his restaurant venture Fish & Game in Hudson, N.Y., though he may consult on new menus. The first joint venture will open in Washington, D.C., in about three to six months. The team is seeking existing restaurant spaces, cutting down on build-out time and expenses.Each new eatery will cost between $600,000 and $2 million, depending on the size and location. “You have a growth-concept company that’s going to have an organization behind it that really understands the industry and can provide resources,” said Gary Levy, a partner with CohnReznick who advises some of the top restaurateurs and chefs. The Starr partnership is part of Mr. Camac’s business plan to grow Fatty Crew. He will continue to run the existing Fatty Crew-owned and -operated stores, maintain licensing deals such as the Williams-Sonoma Fatty ’Cue sauce collection, develop partnerships such as the one with Starr, continue to grow its wholesale business with outlets such as the Barclays Center food court and FreshDirect, and build a new catering division. Ⅲ by Aaron Elstein newscom Asian-food chain taps Stephen Starr in bid to go national Detroit ain’t even the half of it A cohnreznick.com/think s a general rule of thumb, any time the municipalbond market makes big news, the news is bad, ordinarily because this $3.7 trillion marketplace is as exciting as a meeting of the local mosquito-abatement council. Then came last week’s bankruptcy in Detroit. “No disrespect intended, but the truth is that Detroit is a second- or third-tier problem,” said Matt Fabian, a managing director of Municipal Market Advisors, a leading independent research firm. What does CohnReznick think? Game-changing insight can guide your business forward. Find out what CohnReznick thinks at CohnReznick.com/think. The reason why Mr. Fabian ranks the largest municipal bankruptcy in American history so low in terms of impact is simple: Rising interest rates and a wild investor stampede out of the market have done far more damage. For state and local governments, rising interest rates mean higher borrowing costs. That shift already has forced some issuers to postpone bond offerings in the hopes that rates will recede. The state of New York, the nation’s largest municipal borrower last year, is heading for its steepest drop in issuance in a decade, according to Bloomberg.(The decline has made New York’s existing bonds more valuable, by the way.) As states and cities head for the sidelines, they’re finding a lot of their investors already there. Retail investors have yanked money out of muni-bonds mutual funds for eight consecutive weeks, according to research firm Lipper Inc., and for 17 of the past 20. Mr. Fabian said the Detroit bankruptcy could simply trigger further outflows as more investors become aware of the risks in muni 24 CohnReznick is an independent member of Nexia International 4 | Crain’s New York Business | July 22, 2013 bonds.That, of course, means more selling pressure, which means lower bond prices and still higher interest rates to persuade investors to overcome their aversions. For some on Wall Street, an industry that knows all about bailouts and government assistance, the troubling thing about Detroit’s bankruptcy is that no bigger government entity stepped in to rescue it. It’s an article of faith among munibond investors that somehow, some way,they will get paid no matter how dire an issuer’s financial situation. “In the past, Michigan had a good reputation as a state helping out its localities when they were in difficulties,” groaned Richard Larkin, a muni-bond analyst at brokerage firm H.J. Sims. But Detroit was in just too big a hole for Michigan to fill. Maybe the Motor City is a special sort of basket case, but there are lots of financially troubled cities and towns, including plenty in New York. Imagine if state or federal governments decided they just couldn’t afford to rescue them. The muni-bond market is starting to think about that. Ⅲ THE NUMBER OF MUNICIPALITIES in the state of New York experiencing “some level of fiscal stress,” according to Comptroller Thomas DiNapoli (pictured). The stresses include low fund balances, patterns of operating deficits and inadequate cash on hand. Cities under the greatest stress include Niagara Falls and Ramapo, in Rockland County. http://www.cohnreznick.com/think http://www.CohnReznick.com/think http://www.cohnreznick.com/think

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