Kraft Brewed

As the Cold War moved through the late ‘50’s, America became obsessed with what became known as the “missile gap.” While it came out that the Soviets were not, as thought, way ahead in nuclear armament production, I fear we are now in a new kind of deficit to the Russians. Call it the Billionaire Behavior Gap.

This came to mind as breathless headlines alleged well-moneyed American men, including New England Patriots owner Bob Kraft, were patrons of Florida brothels. This, in and unto itself, would not raise that many eyebrows until one finds out where these acts are alleged to have occurred. When the name Jupiter emerged, I assumed that a group of these absurdly wealthy men had financed a space mission to the great planet where they could, um, rocket off, outside the prying eyes of anyone in the solar system. Not quite. It turns out that it was Jupiter, Florida. A brothel in a strip mall in Jupiter, Florida. I’m not trying to understate the serious cost of human trafficking, forced prostitution, money laundering, or any other aspects of these larger crime rings. I’m not even trying to demean strip malls. But Houston, we have problem.

Now wealthy men cavorting around with women who are either not their current wife/the wife of business rival/or of the world’s oldest profession has a long and distinguished history. William Randolph Hearst squired Marion Davies around; Nelson Rockefeller was “researching his art book” with a female assistant the night of his death. Sure it’s unseemly, but nothing unexpected—all part of the discrete culture of pied-à-terres off of Park Avenue and large suites at the local Four Seasons or St. Regis reserved for such trysts. In contrast, a quick search reveals a La Quinta Inn as high-end accommodation in Jupiter, Florida. I can only hope it’s at least beachfront.

And then there are the Russians. One oligarch publicly spent tens of millions of dollars on an apartment, ostensibly a gift for his daughter, at the famous 15 Central Park building while never really denying one of the perks would be to shield this asset from the wife he was divorcing. Another oligarch bought the Brooklyn Nets, angering New Yorkers only because he didn’t buy the Knicks and remove the despotic Dolan family from their reign of terror. Speaking of dictators, a few years back Vladimir Putin up and disappeared for a few days in order to visit his girlfriend in Switzerland who had just given birth to their love child. Perhaps Vlad was inspired by Kraft employee Tom Brady who had impregnated beautiful leggy model/actress Bridget Moynahan, only to turn around and take up with a new model. One that only needed to go by one name. And being his own kind of oligarch, Brady could fix things with plenty of child support.

And so where is the U.S. now? A former hedge-fund chief, another former c-level at Citibank, and the aforementioned NFL owner are tangled up in a retail human trafficking and sex ring. But with all that money, couldn’t they have just gone old school? Did they have some weird Hugh Grant envy, wanting to see how the other 99.99% live, or at least how they pick up hookers off Sunset Boulevard? Doesn’t any one of these three men want to be involved with an age appropriate (or at least the age of their adult daughter and not adult granddaughter) and beautiful woman? Elizabeth Hurley is still single.

But there is hope. Recently, three different NFL owners each bought themselves yachts that, collectively, cost $530 million. Nothing like the vastness of the ocean to hide your monkey business (unless you are Gary Hart). So our billionaires are now kind of like a scrappy bunch college kids playing against a well-financed and fearsome team of professionals. I can almost hear Al Michaels exclaiming, “Do you believe in miracles? Yes!”

© 2019 Alexander W. Stephens, All Rights Reserved

I Have An HQ2 To Sell You

“Psssst, I have a bridge to sell you. Definite landmark, original stone work. I can give it to you cheap.” I was reminded of this urban lore about the Brooklyn Bridge this week while listening to the screaming surrounding Amazon’s recent decision to pull out of New York City for its HQ2 project. While there was much, and justifiable, enthusiasm for Amazon’s largesse, eventually the deal got a resounding Bronx cheer. Many in the area, indeed around the country, are wondering how the tech juggernaut and the city got to this place. Simply put, it was a deal that didn’t need doing put forth by a trio that couldn’t be trusted.

When we think about government diving in with Billions (that’s with a B) of dollars of tax relief and capital improvements, we look for scenes of empty lots, burned out buildings, and drug paraphernalia on the streets (that whole Jimmy Carter visiting the South Bronx thing). In that same vein Times Square of the late ‘80s and early ‘90s matched the description of urban blight. In fact that might be insulting to blight; the only thing the area did well was as to act as the poster child for the FBI’s five major crime categories. Enter Governor Cuomo (Mario the Greater) who, through aggressive (albeit legal through public authorities) land acquisition and tax incentives, began a process of condemning and transferring property to well-funded and committed developers. With Mayor Giuliani then restoring both the spirit and application of law and order throughout the city, the stage was set for a complete transformation. The result, some 25 years later, is a canyon of bland steel and glass towers and somewhat annoying cartoon characters hustling for tips. And while it doesn’t recreate the aura of the Great White Way, it beats a trip to the morgue from the knife of pimp or drug dealer.

Looking across the East River at Long Island City, we would anticipate some vision of urban decay. Well, we could try to see into Long Island City except there are walls of apartment buildings lining the shore. If we were to walk behind those buildings we might get lost from…all the construction, cranes, and closed streets. To say there is plenty of development in the area is an understatement. And those who cry “Gentrification” clearly missed that train some 20 years ago. Of course, there is some blight to fight. A little research unearthed the troubling fact that there is one, and only one, Starbucks in that immediate area. But at three Billion dollars, that’s one expensive cup of coffee, even for Jeff Bezos. So the great question remains; like a false claim of bridge ownership, why was there a need to help out an area that is drowning in privately-financed development? Where else might there be blight? Still the South Bronx. Outer Albany. Any industrial upstate city. Heck, you could buy a large chunk of upstate New York for three Billion dollars. One county has more cows than people, and there’s only so much Chobani yogurt we can eat. So those crickets you hear (especially if you are around all those cows) are the sounds made by those who offer any concrete reason for elevating Long Island City out of frantic development and into homogeneous high rises.

Besides the utter lack of any need for government assistance, the deal suffered from the worst possible combination of proponents. Starting at the top of this fetid heap is Governor Cuomo (Andrew the Much Lesser). For those not familiar with his management style, it borders on absurd with a large strain of narcissistic self-congratulation. Wonder why people (and tax dollars) are leaving the Empire State? Our noble leader proclaimed that winter is driving people away and to the south. You read that right, and for your sanity should not ponder it much further. In the category of shirking any responsible, the Lesser Governor keeps maintaining he does not control the MTA (the public authority that tries to runs the subways and regional trains). This despite the fact he appoints a controlling number of board members and the Executive Director. While New Yorkers may have voted for him, it’s clear that not that many actually believe the guy. Consider this strike one.

Further down the heap is the city’s Mayor, Bill de Blasio. In what might be the most shocking part of this whole story, the notoriously morning-shy man actually got out of bed to meet and work with the Lesser Governor to get this deal done. So sure was he of how well received this would be, de Blasio prevented the City Council from having any ability to legislate against it or change the terms. Why the utter lack of confidence? Perhaps because he was elected with the fewest votes than any other New York City Mayor since WWII. Perhaps his aides gave him some extra morning coffee so he could see how unpopular the deal would be. Perhaps he thought he could pass the buck up to his political nemesis the Lesser Governor. But what he failed to comprehend is that if you give the middle finger to the populace and its elected legislature, you had better be in a position of power to back it up. That power would come from the people, and they would not have it. Strike two.

And then there is the third player, mighty Amazon. In announcing HQ2, they set off a beauty contest between cities that would have embarrassed the Miss America pageant. Of course we were all surprised when Amazon announced that they awarded the prize to two cities, not the one as advertised. But never mind that good people, New York was going to be blessed with 25,000 high-paying jobs and their personal income taxes! Um, maybe. Because when the deal collapsed, Amazon promptly said that unlike Miss America, they weren’t going crown a runner up city. So where was the need for those 25,000 jobs? Might, just might, it be that Amazon wanted a made-to-measure palace that would get tax credits and, if they didn’t make their ultimate number, would still be one of the greatest real estate deals of all times? And nobody believed that the subways, which still don’t work, would magically deliver thousands and thousands of new passengers to a stop that is already overcrowded on a line that doesn’t work without even more delays. And how is it that other leading tech companies (most notably Google’s 2.4 Billion dollar buy of a Chelsea building for their expanding footprint) are willing to expand without a dollar of taxpayer money? We may trust Amazon to delivery Prime in two days, but everything else is suspect. Strike three.

No doubt most New Yorkers supported, or at least were indifferent to, the concept of Amazon’s HQ2. And yes, there was the usual cabal of union shakedown artists, “affordable” housing activists, and social equality agitators all trying to get a cut of the action. Yet at the end of the day nobody, but nobody, could justify the taxpayers paying three Billion dollars to get Amazon’s jobs, if they every materialized. It was a stick-up job by the gang that couldn’t shoot straight. At least in the old Times Square you knew the criminals were serious when they demanded your wallet. This group couldn’t even sell you the Brooklyn Bridge.

© 2019 Alexander W. Stephens, All Rights Reserved