Showing posts with label Turns. Show all posts
Showing posts with label Turns. Show all posts

Wednesday, August 7, 2013

As Cost of Importing Food Soars, Jamaica Turns to the Earth

Across the Caribbean, food imports have become a budget-busting problem, prompting one of the world’s most fertile regions to reclaim its agricultural past. But instead of turning to big agribusinesses, officials are recruiting everyone they can to combat the cost of imports, which have roughly doubled in price over the past decade. In Jamaica, Haiti, the Bahamas and elsewhere, local farm-to-table production is not a restaurant sales pitch; it is a government motto.

“We’re in a food crisis,” said Hilson Baptiste, the agriculture minister of Antigua and Barbuda. “Every country is concerned about it. How can we produce our own? How can we feed our own?”

In a region where farming is still often seen as a reminder of plantations and slavery, the challenge runs deep, yet at regional meetings for years, Caribbean officials have emphasized that “food security,” primarily availability and access, is a top priority. Many countries are now responding, branding foreign food like meats and high-calorie snacks a threat, and locally grown food responsible and smart.

Jamaica started earlier than most. A decade ago, the government unveiled a national food security campaign with the slogan “grow what we eat, eat what we grow.” Grocery stores now identify local produce with large stickers and prominent displays.

Members of rival political parties have also been mostly unified in support of expanding agriculture by experimental means; Jamaica is now one of several countries that have given out thousands of seed kits to encourage backyard farming.

Schools are heavily involved in the effort: 400 in Jamaica now feature gardens maintained by students and teachers. In Antigua and Barbuda, students are now sent out regularly on planting missions, adding thousands of avocado, orange, breadfruit and mango trees to the islands, but in Jamaica, gardening and cooking are often part of every school day.

Teachers like Jacqueline Lewis, the acting director of a small school in east Kingston with a thriving farm, are on the front lines of what is considered a battle. That is how Ms. Lewis, 53, treats food and farming, as issues of national and local security.

A grinning disciplinarian who is quick to pull a lollipop from a second grader’s mouth, or to shout “Why ya late?” to dawdling students, she studied food and agriculture after growing up poor and walking barefoot with a grumbling belly as a child to the school where she now teaches. In 1998, she planted her first garden on a craggy strip of dirt in front of the school.

It stayed small, mostly peppers and cabbage, until a few years ago when a European development agency helped pay for a chicken coop and an expansion. Now her garden includes a second, larger plot. The government has yet to give her a cent (the agriculture minister said rural schools were the first priority), but officials have often praised her work, and so have her students.

On one recent morning, a dozen boys wandered toward her an hour before classes. Following quick directions, one group gave water to the chickens. Another, alongside Ms. Lewis, gingerly stepped into the garden to water Scotch bonnet peppers, and check if the callaloo — spinach, kind of, but earthier — was ready to harvest.

When Ms. Lewis grabbed a machete to show one shy 14-year-old how to loosen a carrot stalk, all the boys watched. When he pulled out a thick bunch, with stalks as bright as a sugary orange soda, they all cheered. “You will not go to town and find carrots like this,” Ms. Lewis said.

She later noted that many of the children came from troubled backgrounds and struggled in class. Farming, she said, gave them a reason to come: attendance and achievement have soared since the school, Rennock Lodge All-Age School, started offering free breakfast for students, usually stews made with ingredients they grew themselves.

“You can’t think when you’re hungry,” Ms. Lewis said.

Thursday, June 20, 2013

Advertising: Longing to Stay Wanted, MTV Turns Its Attention to Younger Viewers

TRYING to win over a fickle teenager isn’t easy. Trying to win over millions of them every night is — as the kids say — cray cray.

But that’s exactly what MTV has had to do since its inception in the 1980s as the cable channel for disenchanted youth.

“Unlike other brands that get a lock on the audience and age with them, we have to shed our skin and reinvent ourselves,” said Stephen K. Friedman, president of MTV.

The channel is in the process of shedding its skin again, this time to appeal to viewers age 14 to 17 who have different preferences than the 18- to 25-year-olds who make up the older portion of the millennial generation (a cohort born roughly between 1981 and 2000 and also known as Generation Y or the Facebook Generation).

On Tuesday, MTV will introduce its latest deep dive into generational behavior: a nationwide study of 1,800 “young millennials.” The findings will be presented to marketers and MTV programmers to help show how the channel and its sponsors can speak to the younger end of the audience.

These younger viewers grew up looking up to Katniss Everdeen, the gritty heroine from “The Hunger Games,” rather than Harry Potter, the study says. Older millennials were told by their baby boomer parents that “they were special and gifted, with a magic wand capable of changing the world” and “the world is your oyster.” The Generation X parents who are raising this younger crop of millennials tell them “you have to create your own oyster,” the MTV study says.

Generational studies have been pivotal to MTV’s past success. Faced with double-digit declines in ratings in 2008, the channel embarked on an immense research project to try to understand the country’s roughly 80 million millennials and, in turn, to get them to want their MTV.

That study helped inform hits like “Jersey Shore” and “Teen Mom” and by 2010, ratings among MTV’s core audience of 12- to 34-year-olds had increased by 24 percent to 895,000 viewers, according to Nielsen.

“Candidly, we were hanging onto Gen Xers a little too long,” said Mr. Friedman, who called the 2008 research “a wake-up call.”

Last year, the average number of prime-time viewers age 12 to 34 fell 23 percent, to 834,000, compared with the same period a year earlier, according to Nielsen. (Jason Rzepka, senior vice president for brand communications and public affairs at MTV, pointed out that online streaming had affected nightly ratings, but that the channel remained the most watched basic cable channel among viewers 12 to 24.)

The new study, called “Young Millennials Will Keep Calm & Carry On,” comes at a turning point for MTV. “Jersey Shore,” the channel’s highest rated series ever, ended in December after six seasons. Around the same time, the channel began to notice shifts in behavior and tastes among younger viewers.

“Catfish: The TV Show,” a documentary series about online dating that had its premiere last year, emerged as a surprise hit with an average of 3.2 million viewers an episode and was the highest-rated premiere for an 11 p.m. series. MTV has attributed the show’s popularity, in part, to this younger demographic.

Alison Hillhouse, the vice president of MTV Insights who oversaw the study, said 14- to 17-year-olds were even more comfortable with social media and technology than their older siblings. She calls them “digital latchkey kids” because their hands-off Generation X parents have largely left them alone to navigate the Web.

Unlike the “Yes We Can” optimistic older millennials, this younger group of teenagers has a raised awareness of economic problems, MTV says.

“At age 13 they know they won’t find their dream job right away,” Ms. Hillhouse said. More than three-quarters of 14- to 17-year-olds interviewed said, “I worry about the negative impact that today’s economy will have on me or my future.”

Viacom, the parent company of MTV, is known for its in-depth audience research and for matching that research with marketers’ needs. MTV will take its latest findings to advertisers like Procter & Gamble, Unilever and Pepsi to help inform them about what type of ads will work on this more pragmatic group of teenagers.

“There’s always the research people at the table that helps us really ground the ideas in insight,” said Claudia Cahill, chief content officer at OMD, part of the Omnicom Media Group unit of the Omnicom Group. Ms. Cahill serves as the intermediary between MTV and brands like Pepsi, Hewlett-Packard and State Farm.

Research played a role in Pepsi’s “Live for Now” campaign on MTV and its sister channel, VH1, Ms. Cahill said.

“Marketers who aren’t of this generation have to use tactics to get these teenagers involved,” she said.

The trick for MTV will be to not rely too heavily on cultural anthropology. Skeptics of MTV’s approach say a research-based algorithm could never lead to the alchemy of Madonna in a conical bra, the couch-side cackles of “Beavis and Butt-head” or the first season of “The Real World,” when viewers got a first glimpse at “what happens when people stop being polite and start getting real.”

MTV will be taking its findings to writers and producers, but Mr. Friedman says he wants the findings to inform creators, rather than dictate what they create. Research, he says, is not brought into the development process until the channel tests pilots with focus groups.

“It’s a marriage of science and art, and you don’t want to underestimate the importance of the art,” Mr. Rzepka of MTV said.

DealBook: Headhunter for the Rich Turns on Them

Wall Street’s masters of the universe have a new enemy: Adrian Barrie Smith.

Mr. Smith, a British recruiter who supplies butlers, maids and other domestic workers to some of the world’s wealthiest families, has turned on his former clients.

Over the last 18 months, Mr. Smith has filed lawsuits against the families of some of the most prominent names in finance, including Stephen A. Schwarzman, the chairman of the Blackstone Group; Carl C. Icahn, the activist investor; Leonard Blavatnik, the Russian investor who recently acquired Warner Music; Howard Lutnick, the chairman and chief executive of Cantor Fitzgerald; and George Soros’s former wife, Susan Soros Webber. To top it off, he filed a suit against Jerry Seinfeld and his wife, Jessica. Before that, he sued Ron Perelman, the billionaire investor, and the singer Mariah Carey.

This week, Mr. Smith is expected to be in court with a case against the wife of Kenneth A. Buckfire, co-founder of Miller Buckfire, the restructuring firm.

In virtually every instance, Mr. Smith has accused his clients of some form of breach of contract and has then trotted out a list of complaints about race and age discrimination. His targets see it as mudslinging, even extortion. Mr. Smith says he is simply trying to get the truth out about New York’s powerful.

“I could tell you stories that you simply would never believe,” Mr. Smith told me in a recent e-mail. “Who sits in the private planes and homes, dinner parties of the elite? The butlers, the nannies, the housekeepers.” He added, “And who do they e-mail, and tell all the gossip to? Me.”

When I first heard of Mr. Smith a little more than a year ago, I have to admit, I was intrigued. He promised the secrets of the city’s biggest names and stories worthy of a Park Avenue version of the TV show “Desperate Housewives.” He offered himself up as a Robin Hood crusading on behalf of the working class that serve the wealthiest.

But I came to believe that his intent could well be to tell fanciful stories in hopes of drawing media attention to extract settlement payments in his lawsuits.

In 2011, Mr. Smith was convicted of aggravated harassment of a potential client, Tania Higgins, the wife of a hedge fund manager. “I will have a really great laugh when I see your house crumble,” he said in a voice mail message to her that included profane language that can’t be printed here. “I will have my revenge.”

When it became clear that I intended to write about him, Mr. Smith sent a series of blistering e-mails threatening me with a lawsuit. “Bring your lawyer. You personally will be sued,” he said in one e-mail. “You are on notice! A jury made up of New Yorkers will judge you, plus all your colleagues, and the press worldwide,” he told me.

One of his early rambling e-mails said, “It would be nice if someone focused on the truth rather than merely just making me look foolish.” But he quickly moved to more threats: “Who are you taking money from? Who are you doing a favor for? Someone got to you today. Right?” His final e-mail on Monday said, among other things, “You throw dirt on me, and surely it’s my right to return the favor. Walk away. That’s my advice.”

In an interview last year with a colleague of mine, Mr. Smith admitted that he had a temper, and that “curse words were used” in some of his previous business dealings. But he defended himself against allegations that he was a bully who had harassed, or even blackmailed, his high-powered clientele.

“Do I look like a bully? Do you see any tattoos on me? I don’t even drink,” he said.

And yet his Twitter account is an unfiltered diatribe against his targets.

“Gail Golden Icahn is so lazy she cannot squeeze her own toothpaste, or switch on the TVs, cook, clean or drive a car. She hires someone!” he wrote.

Another, misspelling included, said: “Rupert Murdock apparently aided his friend Nelson Peltz to burn his house to the ground for insurance money. Tommy Mottola helped. Wow.”(Mr. Mottola’s former wife is Ms. Carey.)

In his case against the Seinfelds, he contended that the family’s butler rejected a qualified housekeeper because the butler said the Seinfelds would think “she is not cute enough and she’s a little fat.”

I mention these claims not to dignify them, but rather to illustrate the nature of his claims.

In my reporting, I discovered that Mr. Smith had outstanding lawsuits against media organizations including the News Corporation, the Daily Beast, and yes, even The New York Times. (Ms. Higgins’s case against him was mentioned in passing in an article about housekeepers in the New York section last year.) He also brought a case against The Daily Telegraph in Britain, contending that the paper used a photograph of Mr. Smith without his permission.

In a twist, after threatening to sue the musician Lou Reed in 2011 and getting into a heated argument with Mr. Reed’s manager, Mr. Smith had the manager arrested on charges of harassment. That case was dismissed, but a separate case was brought against Mr. Smith, who pleaded guilty to a charge of aggravated harrassment in the second degree.

In Ms. Icahn’s case, Mr. Smith was hired to find a housekeeper but was quickly fired after she discovered he was finding potential prospects on Craigslist, not from the pool of experienced housekeepers he said he had relationships with, according to people briefed on the case. The cases against the others seem equally thin.

When I called many of the subjects of his suits, virtually every one of them refused to speak about him or even provide a “no comment.” They all said that they feared his retribution, name calling and other backbiting.

Oddly enough, Mr. Smith’s litigious efforts appear to be working, at least outside of court. Mr. Schwarzman paid about $19,000 to settle his case, according to people briefed on it, hoping Mr. Smith would go away. Ms. Icahn offered him $1,500, which he rejected.

But the courts could be slowing Mr. Smith down. Last December, the city’s small-claims court barred Mr. Smith from bringing any new cases without receiving permission from the court in advance, citing 51 cases he has brought since 2006. The order said it was intended “to avoid the possibility of the use of the small-claims part for the purpose of harassment.” On Tuesday, Mr. Buckfire’s lawyers are planning to seek a permanent injunction stopping Mr. Smith’s lawsuit against their client.Mr. Smith now says he is writing a book. The title? “Filthy & Rich in New York City.”

Thursday, April 25, 2013

Advertising: Trying to Burnish Its Image, Johnson & Johnson Turns to Emotions

The company’s McNeil Consumer Healthcare unit recalled more than 280 million packages of over the counter medications like Motrin, children’s Tylenol liquid and Benadryl in 2010, and the same year, its DePuy Orthopedics unit recalled two popular artificial hip replacement models.

About 10,000 lawsuits have been filed involving those artificial hip devices and while a Chicago jury this month rejected claims of wrongdoing by Johnson & Johnson in one suit, another lawsuit in March yielded a less favorable outcome when a Los Angeles jury ordered the company to pay more than $8.3 million in damages to a Montana man.

In the midst of that turmoil — and perhaps to distance itself from the bad press of product recalls and pending litigation — the company on Thursday is introducing its first corporate branding campaign in more than 10 years. The company will announce the campaign, called For All You Love, at its annual shareholder meeting in New Brunswick, N.J.

The cornerstone of the campaign, a 60-second black and white video, begins with a shot of a sleeping baby about to get a gentle kiss from its mother. In the background, a softer, almost childlike version of the Guns N’ Roses song, “Sweet Child O’ Mine” plays.

“Love,” says a woman’s voice. “It’s the most powerful thing on the planet.” Happy clips from everyday life — a father bathing with his baby, a grandfather playing piano with his granddaughter and a teacher playing with her students — are seen during the spot, as is the occasional Johnson & Johnson product like Band-Aids and baby shampoo.

“Love is family,” says the voice-over. “Love is the reason you care for the tiny and the fragile.”

The campaign was created by TBWA/Chiat/Day, part of TBWA Worldwide, a division of the Omnicom Group. It is the first time the agency has worked with Johnson & Johnson.

“This is the chance to reassert this very iconic brand to the world,” said Rob Schwartz, the global creative president of TBWA Worldwide. The creative team at the agency was inspired by a company statement produced in 1943 that highlighted its responsibility to its consumers, employees, communities and stockholders. Mr. Schwartz described the statement as “one of the best corporate documents ever.”

Based on that, the agency created a manifesto about love that will appear in print publications, including The New York Times and People magazine on May 10. Television commercials and digital ads will begin appearing on May 6 during shows like “Modern Family” on ABC, “The Voice” on NBC and “American Idol” on Fox, and on Web sites like abcnews.com. The videos feature real people and real relationships, not actors, Mr. Schwartz said. Subsequent videos for the campaign will also focus on the philanthropic work the company supports. The campaign is estimated to cost $20 million to $30 million through the end of the year.

While a Johnson & Johnson spokeswoman declined to comment on the company’s recalls or the lawsuits it faces, Michael Sneed, the company’s vice president for global corporate affairs, said the goal of the campaign was “to continue to reconnect with all of the people who come into contact with J.& J. in their daily lives.”

A campaign focused on love creates a sense of trust with the brand, said Kapil Bawa, a marketing professor at the Zicklin School of Business at Baruch College, part of the City University of New York. “Corporate branding tries to instill a sense of trust in the company and for J.& J., given the kind of products it makes, that trust is very, very critical,” Mr. Bawa said.

Mr. Sneed agreed. “I do think people want to understand what’s behind the brand,” he said. “They want to understand what they value.”

Many brand campaigns of late have included a major emotional hook, including a Procter & Gamble campaign from last summer’s Olympics about mothers and their athlete children and a Dove campaign about a forensic sketch artist drawing women based on their own descriptions. “They are trying to humanize the corporate entity,” Mr. Bawa said. “That’s why emotion is so important.”

Emotion was also present at the ad agency table, Mr. Schwartz said. “The smell of the baby powder, the scent of the shampoo, everybody got very emotional just from our meetings,” he said. “This is a very emotional brand, so we’ve got to deliver a very emotional idea.”

Sunday, November 18, 2012

DealBook: As Labor Talks Collapse, Hostess Turns Out Lights

What might be the last Twinkie in America — at least for a while — rolled off a factory line Friday morning. It was just like the millions that had come before it, golden, cream-filled empty calories, a monument to classic American junk food.

But it is likely to be the last under the current management. After not one but two bankruptcies, Hostess Brands, the beleaguered purveyor of Twinkies, Ho Hos, Sno Balls and Wonder bread, announced plans to wind down operations and sell off its brands.

Since filing for Chapter 11 bankruptcy protection in January, Hostess has been trying to renegotiate its labor contracts in a bid to cut costs. But the talks fell apart, and last week one union went on strike.

The so-called liquidation will probably spell the end of Hostess, an 82-year-old company that has endured wars, countless diet fads and even an earlier Chapter 11 filing. Although the company could theoretically negotiate a last-minute deal with the union, Hostess is moving to shut factories and lay off a large majority of its 18,500 employees.

But Twinkies and the other well-known brands could eventually find new life under a different owner. As part of the process, Hostess is looking to auction off its assets, and suitors could find value in the portfolio.

“The potential loss of iconic brands is difficult,” said the company’s chief executive, Gregory F. Rayburn. “But it’s overshadowed by the 18,500 families that are out of work.”

The company’s current problems stem, in part, from the legacy of its past.

An amalgam of brands and businesses, the company has evolved over the years through acquisitions. In the 1960s and 1970s, the company, then called Interstate, bought more than a dozen regional bakeries scattered across the country. A couple of decades later, it paid $330 million for the Continental Baking Company, picking up a portfolio of brands like Wonder and Hostess.

As the national appetite for junk food waned, the company fell on hard times, struggling against rising labor and commodity costs. In 2004, it filed for bankruptcy for the first time.

Five years later, the company emerged from Chapter 11 as Hostess Brands, so named after its most prominent division. With America’s new health-conscious attitude, it sought to reshape the business to changing times, introducing new products like 100-calorie Twinkie Bites.

But the new private equity backers loaded the company with debt, making it difficult to invest in new equipment. Earlier this year, Hostess had more than $860 million of debt.

The labor costs, too, proved insurmountable, a situation that has been complicated by years of deal-making. The bulk of the work force belongs to 12 unions, including the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

The combination of debt and labor costs has hurt profits. The company posted revenue of $2.5 billion in the fiscal year 2011, the last available data. But it reported a net loss of $341 million.

With profits eroding, the company filed for Chapter 11 in January. It originally hoped to reorganize its finances, seeking lower labor costs, including an immediate 8 percent pay cut.

The negotiations have been contentious.

The Teamsters, which has 6,700 members at Hostess, said it played an instrumental role in ousting Hostess’s previous chief executive, Brian J. Driscoll, this year after the board tripled his compensation to $2.55 million. The union also hired a financial consultant, Harry J. Wilson, who had worked on the General Motors restructuring.

While highly critical of management missteps, the Teamsters agreed in September to major concessions, including cuts in wages and company contributions to health care. As part of the deal, the union was to receive a 25 percent share of the company’s stock and a $100 million claim in bankruptcy.

“The objective was to preserve jobs,” said Ken Hall, the Teamsters’ general secretary-treasurer. “When you have a company that’s in the financial situation that Hostess is, it’s just not possible to maintain everything you have.”

But Hostess reached an impasse with the bakery union. Frank Hurt, the union’s president, seemed to lose patience with Hostess’s management, upset that it was in bankruptcy for the second time despite $100 million in labor concessions. He saw little promise that management would turn things around.

“Our members decided they were not going to take any more abuse from a company they have given so much to for so many years,” said Mr. Hurt. “They decided that they were not going to agree to another round of outrageous wage and benefit cuts and give up their pension only to see yet another management team fail and Wall Street vulture capitalists and ‘restructuring specialists’ walk away with untold millions of dollars.”

About a month ago, Mr. Rayburn said, the bakers union stopped returning the company’s phone calls altogether. For its part, the bakery union said the company had taken an overly aggressive approach. David Durkee, the union’s secretary-treasurer, said Hostess had given an ultimatum. “They said, ‘If you do not ratify this, we are going to liquidate based on your vote.’ ”

With the company standing firm, the bakery union struck last week, affecting nearly two-thirds of the company’s factories across the country. The Teamsters drivers honored the picket line, further shutting down the operations. The company gave union members until 5 p.m. on Thursday to return to work.

Mr. Rayburn said the financial strain of the strike was too much for the company, which had already reached the limits of its bankruptcy financing. Over the last week, Hostess lost tens of millions of dollars as many customers’ orders went unfilled. And its lenders would not open their wallets one more time.

By Thursday morning, Hostess’s executives were ensconced in the company’s headquarters in Irving, Tex., still hoping that enough employees would return to work to resume production. A small number of workers had already crossed the picket lines that had sprung up at most of the baker’s factories, but more than 10 plants remained well below their necessary capacity.

Mr. Rayburn’s deadline of 5 p.m. passed without either side backing down. Soon after, executives asked the company’s legal advisers to finish the court motions that would begin the liquidation. Papers had been drawn up well before that afternoon.

Around 7 p.m., Mr. Rayburn had his final discussions with the company’s board and his senior managers and made the call to begin winding down.

“We were trying to focus on where people were having success, but I had to make a call,” Mr. Rayburn said.

Thursday, October 18, 2012

Square Feet: Gritty Koreatown Block Turns Hot With a Taste of Home

At the time, Korean food and culture were even more of an outpost in the life of the city than was this gritty block between Broadway and Fifth Avenue, which was mainly a thoroughfare for commuters using Penn Station and fans headed to Madison Square Garden.

But over time, as the Korean immigrant population has grown, 32nd Street has become a destination for immigrants hungry for a taste of home, as well as for curious foodies.

So many Korean businesses have crowded onto the street in recent years that the block has begun to burst at the seams, spilling restaurants and Seoul-based patisseries onto nearby side streets and Fifth Avenue, and pushing karaoke bars, night clubs and spas upward onto higher floors in these mostly class B buildings. Competition has been so fierce along this block that ground-floor retail rents can easily be more than twice what they are on nearby side streets and occasionally up to even 25 percent higher than on Fifth Avenue.

At the same time, Korean culture has steadily emerged from the shadow cast by Americans’ longer familiarity with Japan and China. The rising popularity of K-pop — as demonstrated in the breakout hit “Gangnam Style” — and of Korean television dramas has drawn younger and more non-Korean crowds to what is now known as K-town. Many restaurant owners now describe their clientele as heavily “foreign,” as in non-Korean.

Annie Lee, the founder of Daughter of Design, a wedding and event planning business, said there had been a big shift in the number of non-Koreans packing the street’s offerings. Ms. Lee, a Korean-American from Southern California, said that there had also been a “huge push” by the South Korean government to raise awareness of the nation’s food and cultural riches. Ms. Kwak, the owner of Kang Suh, is the president of the Korean Cuisine Globalization Committee, a promotional effort financed by the government that has backed everything from Korean food trucks to a large Korea Day celebration in Central Park last year. Kristy Park, one of very few Korean-Americans working as a commercial space broker, noted that her involvement in Koreatown deals had risen sharply. Although the area was not the initial focus of her job at Winoker Realty, she said she now got calls daily from Korean business people looking for a foothold on the street.

The crush of restaurants and retail in the area has made ground-floor space a prize to be fiercely competed for. Rents have risen sharply in the last five years, in some cases tripling as leases roll over, tenants and brokers say. Suzy S. Byun, the president of Realty Artes, a small brokerage the Korean-born woman opened in 2006 in a fifth-floor office at 16 West 32nd Street, said that would-be restaurateurs could pay as much as $1.5 million in key money to obtain leases for these spaces.

Others confirmed that the costly practice had become common, and say that though landlords once looked the other way while tenants pocketed the payments for such transfers, they now often share in the proceeds.

Landlords are saluting the area’s growing popularity. David Levy, a principal at Adams & Company, which includes two commercial buildings on West 33rd Street in the 27-building Manhattan portfolio it manages for an investor, said, “It has become such a vibrant area that tenants are expanding off of 32nd Street.” Mr. Levy said he just rented a store on Fifth Avenue to a tenant who found the space cheaper than on 32nd. He and others say rents for storefronts along Fifth Avenue in the low 30s can reach $300 to $350 a square foot, and $250 a foot or more along 32nd Street between Fifth and Broadway, while fetching only around $100 a square foot on nearby side streets.

For example, Mr. Levy also recently leased to a Korean restaurant a 2,000-square-foot storefront on West 33rd that had been occupied for seven years by an accessories showroom. The new tenant, he said, is paying $250 a square foot; the showroom tenant, whose rent had been about $100 a foot, has moved upstairs in the same building.

Sunday, September 23, 2012

Deals Competition Turns Into Free Online Transactions Class

Professor Karl Okamoto

It started in 2009 with a first-of-its kind transactional law competition in which small teams of law students competed to negotiate the best deals for fictional clients.

The meet was popular enough that its creator, Drexel University Earle Mack School of Law professor Karl Okamoto, took the idea a step further in 2011 by launching LawMeets, a free website that presents law students with transactional simulations. The students are presented with a business scenario and then submit videos in which they offer legal advice. The videos are rated by their peers and the best are evaluated by experts, who offer video feedback for all participants to view.

With a fresh grant of $500,000 from the National Science Foundation, LawMeets in October will expand its offerings with the first in a series of free online courses that combine lectures and simulations exploring the finer points of transactional law.

Okamoto hopes the LawMeets programs will help to fill a curricular void at law schools, where many business law courses focus on legal doctrine and precedents rather than the nuts-and-bolts of deals.

"Very few of these courses talk about how to get a deal done," Okamoto said. "Even in most business organizations classes, there's limited discussion on how to form an LLC and draft an operating agreement."

The first LawMeets course, the Basics of Acquisition Agreements, will last for two weeks -- from October 23 to November 7. The course is what is known as a MOOC -- massive open online course, a technology that law schools are only beginning to experiment with.

The course will include four video lectures, four interactive simulations and two panel discussions moderated by LawMeets faculty and transactional lawyers. Participants may view the lectures online at their own convenience, although there are cutoff dates for the student video submissions.

The lectures will be delivered by Okamoto; DLA Piper partner Jay Finkelstein; University of California, Davis School of Law professor Afra Afsharipour; and Cornell Law School professor Charles Whitehead.

Sixty participants have already signed up for the inaugural class in the few days since it was announced, some as far away as the United Kingdom and Australia. Okamoto hopes that 500 students participate, but the online platform can support thousands of users, he said.

Individual students can participate, but Okamoto hopes that law professors will incorporate its mini-courses into their own classes.