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Economix Blog: Why Europe’s Job Picture Looks Different

Square Feet: Pier’s Developer Looks for a Creative Tenant Mix

The plans are part of a larger effort to redesign Pier 57, a long-abandoned former shipping and passenger terminal that spans about a half-million square feet at 15th Street in the meatpacking district.

The $200 million project, set to break ground in October and to be completed in 2015, will also include a food bazaar akin to a Southeast Asian night market, with noodle pullers and sushi bars. There will also be 400 shipping containers housing some 200 stores and start-up companies. The developer, Youngwoo & Associates, is designing an approximately two-acre public green space for the roof.

“It is all about start-ups, pop-ups, showcasing new talent,” said Young S. Woo, founder and a principal of Youngwoo. “In the 1950s, the American shopping mall came to small-town U.S.A. and it killed Main Street and local creativeness — now that cycle is reversing itself.”

To that end, the developer has spent the last several years, since winning approval to develop the site in 2009, working to find the right tenant mix. It has sent teams to tour Brixton Market in London, Granville Island Public Market in Vancouver, Canada, and the Rise commercial building in Hong Kong. It has been to Istanbul, France and countless markets in Latin America, where Mr. Yoo was raised.

“We have had four years to perfect the model, to see what has been successful,” said Zachary Beloff, the firm’s marketing director.

For companies that offer an original concept or use of space, but cannot afford the market rent, Youngwoo will offer discounts. “We would make up for the lower rent because that store would presumably drive foot traffic to the pier and allow overall sales — and thus overall rents — to increase,” Mr. Beloff said.

The 560,000-square-foot Pier 57 has been vacant since New York City Transit abandoned it in 2003, except when it briefly housed protesters detained during the 2004 Republican National Convention. Youngwoo has a 49-year lease with the Hudson River Park Trust for the pier, and will spearhead and pay for redevelopment and leasing. Its scheduled 2015 opening date is roughly the same time that the Whitney Museum will open its doors four blocks to the south on Gansevoort Street.

Youngwoo has rebranded Pier 57 the SuperPier, a term used in a 1952 article in Popular Mechanics magazine that detailed its construction. After the original Pier 57 was destroyed by a fire in 1947, it was rebuilt as a shipping and passenger terminal for the Grace Line. The builders eschewed the wooden piles that supported most piers, and instead used three caissons, enormous concrete boxes. The hollow boxes were poured in a diked basin upstate, then towed, floating, down the Hudson River to the pier site.

The boxes now form the pier’s basement, which Youngwoo has leased to the company Brooklyn Boulders for a climbing gym.

“The space down there is really cool — it is cold year round and you can feel that you are underwater,” said Lance Pinn, a co-founder of Brooklyn Boulders.

The company is also in talks to build an ice-climbing wall outside. “So not only will we be the only underwater climbing gym in the world and the only fully dedicated climbing gym in Manhattan, but we could have the only ice-climbing wall in a major American city,” Mr. Pinn said.

Another early tenant was the clothing company Opening Ceremony, which will open a store on the mezzanine level, at the 15th Street entrance. “We haven’t decided how much space to take yet,” said Carol Lim, a co-founder of Opening Ceremony. “Our plans are still under development, but we are always looking to the environment to take our cue, and because it is on the West Side, near a lot of outdoor walking and bicycling, we may focus on that.”

Opening Ceremony discovered the Pier 57 project because it was looking for a site to hold its first show for New York Fashion Week. Beginning Thursday, the company will have a weeklong marketplace at the pier that will also function as a preview of what is to come. The event, called BTW, for By the Water, will include pop-up stores like The Newsstand by the creative firm Alldayeveryday, and food vendors including Asiadog.

When the project is completed, most long-term anchor tenants will be in conventional storefronts that will range from 3,000 to 20,000 square feet and cost $100 to $150 a square foot. Opening Ceremony’s permanent store, on the other hand, will be made from shipping containers, called Incuboxes.

Youngwoo will also offer the Incuboxes, which will come at a flat rate that includes taxes, electricity and other fees, to start-up companies. “It is almost like turnkey spaces,” Mr. Beloff said. “We want to make it easy for them, as painless as possible.” The spaces will range from 80 to 160 square feet at a cost of $600 to $5,000 a month. Thirty percent of them will be leased for less than one year, while the remainder will have two- to 10-year leases.

DealBook: As Investors Jump Ship, SAC Looks to Cut Back

Book Looks Behind the Scenes at Fox

A few days before the presidential election last November, Roger Ailes, the chief executive of Fox News, ordered that Geraldo Rivera’s microphone be cut off after Mr. Rivera angrily defended the Obama administration against charges levied by others on Fox. So says a forthcoming book about the 2012 campaign by Jonathan Alter, a columnist for Bloomberg View and a contributor to MSNBC, a Fox competitor.

The book, “The Center Holds: Obama and His Enemies” (Simon & Schuster, $30), which is set to come out June 4, includes a chapter about Fox’s influence on the campaign. Mr. Alter homes in on the channel’s extensive coverage of the Obama administration’s handling of the attacks on a United States diplomatic mission and C.I.A. outpost in Benghazi, Libya.

“Roger Ailes covered the Benghazi story as if it were Watergate just before Nixon’s resignation, with almost wall-to-wall coverage,” Mr. Alter writes before describing Mr. Rivera as the only Fox anchor who was “allowed to offer a dissenting view.”

Mr. Rivera did so on the conservative morning show “Fox & Friends” on Nov. 2, the Friday before Election Day. As the three hosts criticized the administration for failing to save the ambassador Christopher Stevens and three other Americans who died in Benghazi, Mr. Rivera protested. He accused the co-host Eric Bolling of lying, calling him “a politician trying to make a political point.”

“After the argument continued for several minutes, Ailes called the control room and told the producers to cut Rivera’s mic,” Mr. Alter writes.

A spokeswoman for Fox News did not respond to a request for comment on Sunday.

Mr. Alter suggests in the book that the episode is atypical; Fox programming, he writes, generally reflected Mr. Ailes’s views without his explicit instructions.

With these anecdotes — another recounts Steve Jobs personally ordering that Apple ads be removed from Fox News — Mr. Alter is contributing to a body of work about Mr. Ailes. A friendly biography by Zev Chafets was published in March, getting ahead of another book about Mr. Ailes and Fox that had been set for publication this month. That one, by Gabriel Sherman, is now scheduled for next January.

Europe Looks to Merkel of Germany to Revive Economy

BERLIN — Even as the United States economy displays unanticipated resilience, with a healthy jobs report released on Friday, the outlook for Europe’s economy grows ever dimmer. As it does, the pressure builds on Europe’s most powerful leader, Chancellor Angela Merkel of Germany, and her economic team to find a way to get the Continent growing again.

But this puts Ms. Merkel in a bind, as she has to answer to German voters in September when the country holds parliamentary elections. While the European economy may be deteriorating at an alarming rate, the electorate here is still enamored of her as the Iron Chancellor, advocating the austerity policies that are rapidly falling into disfavor elsewhere, among economists as well as the public.

Her response, in recent months, has been to try a delicate balancing act, quietly easing up on crisis-stricken states, giving them more time to narrow their budget deficits, while showing no outward signs of weakness that her political rivals can pounce upon.

But this stance may become increasingly untenable, if the United States’s more stimulative economic policies begin to bear fruit and Europe continues to struggle, as seems to be the case. The European Commission said Friday that the economy of its member nations would shrink by 0.1 percent this year, while the countries that use the euro would contract even more sharply, by 0.4 percent.

And there are signs that the contagion from the south is migrating north and beginning to drag down Germany’s export-driven economy, which is expected to grow by a meager 0.4 percent this year, adding another potential source of voter discontent to Ms. Merkel’s concerns.

So the question now is not just whether Ms. Merkel will further relax her insistence on strict austerity but how far she thinks she can go in an election year, or perhaps how far she needs to go to prop up her own economy. Few experts expect any drastic departures.

“In the end, she’s this sort of Prussian-Protestant determined person,” said Stefan Kornelius, an editor at the Süddeutsche Zeitung and the author of a new book about Ms. Merkel. “She’s not ideological, but she’s truly convinced about the rightfulness of her course.”

But the constant questions about austerity are taking their toll on Ms. Merkel, who has begun to bridle in public when people ask about spending cuts.

“I think budget consolidation is now interestingly labeled with the word austerity, which is otherwise not used in Germany,” Ms. Merkel said this week at a news conference with the new Italian prime minister, Enrico Letta. “In Germany we didn’t even know this word before the crisis.”

Aware of the shifting dynamics in Europe, Ms. Merkel has chosen instead to emphasize the need for structural reforms to the labor markets of struggling countries over slashed spending. And she is not insisting on strict adherence to budget-cutting goals. That may help in the long run but can do little to immediately pull economies out of free fall.

“Her overarching goal right now is to get re-elected, and she won’t get re-elected if she spends German money on French and Italian problems without getting anything in return,” Mr. Kornelius said.

Ms. Merkel is forced to navigate dissension within her own conservative ranks at the slightest wavering from the disciplined German line, and a new party on the right, the Alternative for Germany, pressing for the more extreme step of a breakup of the euro.

To critics, Europe is facing an undeniable economic crisis and Germany is making decisions based on politics. “They are prevaricating all the time and allowing short-term domestic considerations to determine euro-zone policy,” said Charles Grant, director of the Center for European Reform, London.

Critics contend that fiscally solid countries like Germany have already gotten plenty in return and that the narrative of parsimonious Northern Europeans bled dry by profligate southerners is a false one. They have pointed to studies quantifying how Germany has been able to save billions of dollars because lower interest rates for perceived safe havens have made borrowing money dramatically cheaper.

Chris Cottrell contributed reporting.

House G.O.P. Looks to a Round 2 Obama Hopes to Avoid

“I will not have another debate with this Congress over whether or not they should pay the bills that they’ve already racked up through the laws that they passed,” the president said, pausing to repeat himself. “We can’t not pay bills that we’ve already incurred.”

But it is not clear exactly how Mr. Obama can avoid engaging in just such a tug of war.

In the wake of the president’s victory on taxes over the New Year’s holiday, Republicans in Congress are betting that by refusing to unconditionally raise the $16.4 trillion debt ceiling, they can force Mr. Obama to the bargaining table on spending cuts and issues like reform of Medicare and Social Security.

That would inevitably reprise the bitter clash over the debt ceiling in the summer of 2011, when the government came close to shutting down before lawmakers and the president agreed to a $1.2 trillion package of spending cuts in exchange for Republican agreement to raise the debt ceiling by about the same amount.

And that is exactly what Republicans want.

The party’s caucus in the House will discuss its debt ceiling strategy at its retreat in Williamsburg, Va., in a couple of weeks, according to a top Republican aide, who said it was determined to insist again on spending cuts that equal the increase in the amount the country can borrow.

“The speaker told the president to his face that everything you want in life comes with a price. That doesn’t change here,” the Republican aide said. “I don’t think he has any choice.”

That strategy could risk a new round of criticism aimed at Republicans from a public weary of brinkmanship. The 2011 fight ended with a last-minute deal but led to a downgrade in the rating of the nation’s debt and a slump in the economic recovery.

But Brendan Buck, a spokesman for Speaker John A. Boehner, said Republicans had made it clear what they wanted in exchange for a willingness to allow borrowing to increase.

“If they want to get the debt limit raised, they are going to have to engage and accept that reality,” Mr. Buck said. “The president knows that.”

In fact, the White House has been on notice for months that Republicans view the debt ceiling as leverage in the next budget fight. Now, the question is what Mr. Obama and his advisers can do to sidestep that fight.

One possibility is to turn to business executives for support. Many top chief executives view the possibility of a debt ceiling crisis as a significant impediment to the nation’s economy just as it is beginning to grow again. Those executives might try to pressure Republican lawmakers not to use the country’s credit as a negotiating tool.

Mr. Obama might also take to the road again, using the power of his office to try to convince the public that another fight over the debt ceiling risks another economic crisis. Public polls after the last debt ceiling fight suggested that more people blamed Republicans for the threat of a default.

The president and his aides have signaled that they will try to educate the public by explaining that the increase in the borrowing limit is necessary to cover debts that the government has already incurred. In his statement on Tuesday night, Mr. Obama warned about what would happen if the country did not meet its obligations.

“If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic — far worse than the impact of a fiscal cliff,” Mr. Obama said.

In the coming days and weeks, Mr. Obama is likely to try to focus negotiations on the other looming issue: how to avoid deep across-the-board cuts to the nation’s military and domestic programs. The deal passed on Tuesday postpones those cuts for two months, but Mr. Obama and lawmakers in both parties are eager to avoid them.

Instead, the president wants a debate over spending cuts and tax changes that would remove loopholes and deductions for wealthy Americans.

That fight is coming. The question is whether the president can avoid conducting it in the middle of a nasty, drawn-out debate over the debt limit.

Sidley Austin Looks to Riverbed to Build a Broader Network

Sidley Austin had a legacy network connecting its 17 offices in the U.S., Asia and Europe, resulting in slow data transfers and limiting the firm's ability to centralize IT resources. To create better connectivity between offices, the firm upgraded its network with Riverbed appliances.

Sidley Austin Looks to Riverbed to Build a Broader Network

Sidley Austin had a legacy network connecting its 17 offices in the U.S., Asia and Europe, resulting in slow data transfers and limiting the firm's ability to centralize IT resources. To create better connectivity between offices, the firm upgraded its network with Riverbed appliances.