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Comptroller Liu Awards Management of $962 Million Bond Sale to Loop Capital Markets

David Mark Greaves
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Our Time Press Interviews  John Liu Comptroller, City of New York.

Comptroller Liu, can you tell us what’s different about this process and what has happened in the past?
Would you believe that the way the city sells bonds, billions  and billions of dollars each year is done by rotation, meaning a few of these really large companies, household names, actually take turns being the lead underwriter for these bond sales. There’s a fair amount of profit involved in being the lead underwriter. The problem with this method is that it’s the same people taking turns. I never understood why that had to be the case. So this particular bond deal, which ultimately turned out to be nearly $1 billion, was done by what is formally called a bakeoff, which is instead of having the same people take turns and just calling out the next one in line, we open it up to 14 companies who we have done business with and have a certain track record with the city and let them put proposals to be the lead underwriter.
It was competitive because all these proposals were evaluated on the merits and in the process the firm that gained the highest evaluation turned out to be a minority-owned firm, Loop Capital.  I’m very happy with the result of this particular bond offering.  First and foremost, it saved our taxpayers $82 million – essentially, this bond offering was a refinancing of previous bonds-secondly, it shows what can be achieved if we open up the process and let everybody get in on the level playing field. And in this case, we opened up the process and gave everybody a chance and a minority firm came out on top.
Is “rotation” a practice in other parts of the city’s contracting as well?
Well, first of all, would you believe they actually call this rotation
‘the Syndicate”.  You can’t make this stuff up.  Apart from that, I don’t know exactly where else in city contracting this concept of rotation occurs but I am going to bet that it is not only in bond underwriting that the city follows this kind of approach.
I really believe that the city’s purchasing power, i.e., the ability to put out billions of dollars worth of contracts every year, has the potential of not only creating jobs overall but to eliminate these historical disparities that exist within our city. Disparities in contracting the minority and women on firms as well as disparities in unemployment rates, where you have communities throughout the city who face much higher unemployment levels than the average for the city.
The question of minority grew out of the Civil Rights Movement, do you break out or can the Comptroller’s office do a break out of the minorities.  Are they African-American, Asian or Latino?
There is not enough of that done. We have a Local Law 129  that sets goals for the different types of business ownerships such are the Latino-owned, African-American, Asian or women-owned.   And they are broken down by type of business ex: construction or professional services, etc. These goals are laid out in  Local Law 129 but it has been nearly impossible to track the city’s progress with regard to compliance with Local Law 129. So this is an issue that is at the top of my priorities and in the absence of readily available information, we are conducting studies in my office to start to get our arms around this problem.
There was a time when Dinkins was mayor that the city had a very strong minority contracting process.  Does the Bloomberg Administration have a system for minority contracting?
Mayor Dinkins was one of the first, if not the absolute first, strong voice in this city to address this issue. The problem being the disparities in minorities getting contracts from the city.  Mayor Dinkins put in place a set of concepts and procedures that in intervening years have not been upheld. What my office is focused on is continuing the legacy that Mayor Dinkins began 20 years ago.
Can you elaborate on what this kind of contract procedure could potentially mean for the Kings County community?
When we open the doors to more minority contracting, we open up economic opportunities to everybody, especially residents in the New York City neighborhoods and let me add that minority-owned firms have a strong track record of hiring people in our neighborhood.
The Department of Education changed how they purchase books.  You mentioned the rotational aspect of bond buying, but the DOE put a high size limit to the companies that can sell books and African-American firms that had been selling to the city were lost.   What kind of rules exist and can you have any effect on those rules that take minority firms out of the process?
It is unclear where else in city contracting this rotational concept is in practice. None-the-less, it is  my goal to ensure that the way the city lets out contracts doesn’t discriminate in any way and, furthermore, that contracts are let out in a way that chips away at historical disparities.    I’m very excited about what’s happening here and this is only the beginning.

Racial Barriers to Highest Level Financial Transactions Shattered in Bond Sale Award

David Mark Greaves
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Our Time Press interviews James Reynolds, Jr., CFA. Co-Founder, Chairman and CEO, Loop Capital Markets after winning the New York City $987 million bond sale manager “bakeoff”.Chairman Reynolds, what is the significance of being named manager of this bond offering by New York?
It is very important and significant; New York is one of the single largest issuers of municipal bonds in the world and one of the most sophisticated issuers of municipal bonds in the world. To work with New York City, you are genuinely working with the biggest and the best.  So the opportunity to work with NYC is certainly a challenge and a pleasure. It truly brings out the best in you. It was a very significant transaction for us. When people think of business deals involving nine and ten digits, they usually think of white men and country clubs.  How did you get the business from those mainstream companies?
I think you have to give the credit to Comptroller John Liu and the tone he has set in the office in New York City. You also have to give a significant amount of credit to the staff, specifically Alan Anders in the Mayor’s Office of Management and Budget and Deputy Comptroller Carol Kostik and Mark Kim in Comptroller Liu’s office.
Essentially, what they did was they created an absolutely, totally level playing field. Much like you see in athletics, basketball and baseball for example, where everybody is playing by the same rules. There is no favoritism and no discrimination. What they were able to do was put a situation out there to 14 firms who were asked to solve the exact same problem: how to give NYC a structure that provided them with the optimum financial transaction. The firm that was going to win it was going to be the firm that really knew the city better, knew the city’s finances better, but was also creative. It wasn’t going to be one that was the biggest, it wasn’t going to be the one that played golf with the people that made the decision, it was going to be the one that had the best idea. That was all we asked and I think that what any minority firm asks. Just to give them a level field to work on and let us work.
What difference does it make to people  on the ground in Chicago or in NY between Loop Capital getting the contract versus a mainstream firm?
First of all, I think a publication such as yours, which touches the folks and that is very important to the community, probably wouldn’t write about it if Goldman Sachs got the business. It wouldn’t be as newsworthy.  But I think to us it is a very big deal and there is a  very deep message here and it’s many faceted.
I’m calling you from Italy, I’m on vacation with my family right now but I think it’s so important for you to write about this. And I think it is very important for the comptroller to talk about this because there is a genuinely important message here.  Loop Capital is an African-American-owned firm, I started this firm in 1997 when there were 6 people including my wife, now there’s about 150. We do about $200 billion worth of deals a year.
But the significance of the comptroller putting it out there so that a firm that is a minority- owned business can  have a chance to be a book-runner in a billion-dollar financing which is one of the biggest that the city does.  The significance of that, particularly at this stage of his tenure, I think he is delivering a message to the city of New York in terms of what he stands for and what he’s committed to. So it is totally different with Loop Capital getting it as opposed to JPMorgan or Barclay’s or Goldman Sachs or any of those guys.  The message is so different and I think so meaningful and so motivating for a lot of folks.
When you were in high school what were you thinking of doing and how did you get to the financial industry?
When I came out of high school in the ’70’s I didn’t even know what investment banking was and I don’t think I knew a single African-American at that time who had any clue what investment banking was. We just weren’t involved in that business at that time and, candidly, there are not many of us involved in the business today some forty years later. I wasn’t exposed to any sophisticated level of finance such as that we do today. The only thing I was taught as a kid coming up by my parents was to work hard do the best you can at whatever you’re doing. And to commit yourself to really hard, work and treat people fairly and be honest. Those basic values and virtues.  But never any thoughts about high finance at the level that we’re doing now. It wasn’t until I got out of college that I went on to graduate school to get my MBA that I really started to learn about investment banking.
We have an internship program that brings in about 20-25 high school and college kids every year in New York and Chicago, primarily African-American, and we expose them to investment banking very early. We do that because I don’t want them to learn about it by accident like I did. In this bond that we have working with New York City, we have African-Americans working on this deal that are still in school. They learn and know by the time they get out of high school and college that there is a minority-owned firm doing billion-dollar deals out here and they know how it’s done. We’re committed to teaching.
Speaking of values, did a religious institution play a role in your life at all?
When I was a kid my father was a deacon at the church. I was in the church about 5 days a week.  I did everything, directed the choir, set up the chairs, swept the floors, took the collection. I have a very solid religious background. Those are important values that you learn and that stay’s with you and they stayed with me.
Out of the things that were valued in your home which would you say was the most important?
My father was the hardest-working person I’ve ever met. People think that heroes to a guy like me are celebrities or politicians, but no.  It’s the single parents, the woman who comes in tired after working two jobs, clears the table for them to study.  She does not know where school will lead them, but she knows it’s important for her kids to learn. It was my father that comes home working two jobs that he knows are dead end jobs without a lot of future, but he needs to do it so his children will have a better life. Most days my father would come in and he wouldn’t even take off his clothes, he’d just go to sleep in them and get up and go to work again.  My father was a taxi driver and entrepreneur like me.  He drove a jitney cab.
I want to express my sincere appreciation to New York City, Comptroller Liu and the environment that he is fostering there.  He’s newly elected and this is one of the first big things he’s done in terms of minority inclusion and he’s doing it the right way with minority business and economic power.  It’s not just talk.
I hope the readers find something motivating in this because we set out to work very hard.  We’re just a regular group of people, just hard working folks, and things worked out for us.  We have been calling on New York City since 1998 and I started the firm in 1997.  In 1998, we were at the bottom and now we’re at the top.  Just do the homework, put in the time, learn your craft and in the right circumstances, things will work out for you.

This Week: "Eat, Pray Love" From Brooklyn to Bali

Bernice Elizabeth Green
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Our Time Press visits Bali through the adventures of our outreach specialist Nadia Fattah, and her daughter Taaeba. The Fattah women traveled to the beautiful Indonesia locale just days after Sony Pictures wrapped location filming for Eat, Pray, Love starring Julia Roberts opening nationwide, this Friday.

Brooklyn's Taaeba Fattah met Bali medicine man Ketut Liyer earlier this year. Ketut is the transitional center of the film based on the best-selling book "Eat, Pray, Love" by Elizabeth Gilbert.

Elizabeth Gilbert’s autobiographical bestseller on which the film is based reveals how the author finds herself through a soul-searching journey to three different places in the world, unique in what they offer her. In Our Time Press, the Brooklyn-based Fattah women, inveterate world travelers, offers a universal message for our readers and the world.

Images of the home of the “medicine man” around which the Bali section of the film centers, will be featured, and later in the month, through the photographs of Barry L. Mason and Hiroki Kobayashi the stunning and stylish Taaeba will show readers where to go — within blocks and a few miles of home — to get the Bali-look. Through Home Shopping Network, OTP reveals, you may not need to leave your home at all. So, here’s to life’s basics: eating, praying and loving.


For Quincy Senior Residence, a Day of Family, Friends, Young People and Heart

Editor, Our Time Press
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There’s a lot of heart in what goes on at the Quincy Senior Residence at 625 Quincy Street in Brooklyn.  Just ask Tyrease Slaughter, age 7, who performed last Saturday before some 250 people at the Center’s annual Family and Friends Day fest.
The food delighted.  The bright orange QSR tee-shirts and caps impressed.  The presentations and gifts were generous. But there was something extra special about this year’s event, exquisitely organized and hosted by Phyllis Hurd, executive director of the of the five-year-old residence and Rhonda A. Lewis, CEO of QSR’s umbrella Bridge Street Development Corporation (BSDC).
“You can jump, you can say you’re in God’s Army, you can say, ‘Look at what I do,’ but it doesn’t mean a thing if your heart’s not in it,” sang out young Slaughter, a student of Excellence Charter School and grandson of Bedford Stuyvesant pioneer community advocate Ulysses Slaughter.
Each year, the Family and Friends event gets larger and includes something more than the year before.  This year, Hurd presented star vocalist Linda Miller, performing a range of music. Hurd also showcased young emerging dancers and vocalists, drawing particular attention to the talents and gifts of young men in our community.
Ms. Miller, a former prodigy, now distinguished vocalst, who  performed songs from her  CD, “Rough Side of the Mountain,” was very generous in her salute to the young emerging stars.  She told us, “It was something to witness disciplined young men performing, showing their work and praising the Lord.”
She praised the intergenerational aspect of the “reunion” event.  Too often, if it’s a senior affair, the young people are left out, she told us.  And if it is youth-focused, the seniors rarely get to witness their artistry.
As part of her mission to put heart into each event, director Hurd starts her event planning months in advance and builds on the successes of previous events.  That effort is beyond her job description and  day-to-day tasks.  But it does not matter; Hurd sees her assignment as a kind of ministry; it’s something she wants to do.  “What’s important  is to see the seniors dancing, laughing, singing and knowing they are valued,” she told us.
“This year, I felt the best way to glorify and praise them was to reveal to them  the results of their hard work; they needed to see young men being positive, giving and doing good,” she told us. “Too often, they are afraid and intimidated by what they see and hear.  Today, they were allowed to see the other side, the success stories and that their work was not in vain.”
And there was a benefit to the young people. “They were cheered by their elders, and complimented,” observed Ms. Hurd.  “So they felt valued.  And because they feel valued, they will value others.”
Both Ms. Hurd and Ms. Lewis, who grew up with their families in Brooklyn, share the philosophy that seniors are the “jewels of the community” and they approach their respective positions, organically and holistically, with an informed and wizened spirit derived from the teachings and examples of the elders who guided them. 
The ingredient of “heart” has a lot to do with the level of “compassionate energy,” noted Ms. Lewis, who hired Ms. Hurd, a former corporate finance analyst, as a temp a few short years ago and watched her grow to her current status as a professional community organizer (and somewhat of a celebrity in the community because of her reputation for proficiency). 
Sometimes, their demands for efficiency and strategic planning may not be understood immediately, but nonetheless, Ms. Hurd and Ms. Lewis’ respective sets of eyes are always on the prize. And the results are always spectacular … as for the Quincy Street Residence’s Family & Friends Reunion Day.
Other talents showcased at the event were the lively QSR Choir and a vocal duet  by Jason Slaughter, age 11, singing “Lately” and his brother Tyrease. 
Just as entertaining was the presence of the indefatigable Ophelia Perry of Church Women United, and Alma Carroll and Vernell Albury, among so many other pioneers. In addition, State Sen.Velmanette Montgomery sent a special message through her omnipresent community affairs representative, Joan Eastmond.
“Residences should be more than places to be; they should be sanctuaries where people can live and age gracefully, and enjoy themselves,” said Ms. Hurd. 
 Ms. Lewis revealed to Our Time Press that BSDC is about to embark on another ground-breaking move for the community: the construction of the 23-unit Noel Pointer residence on now-vacant land on Lafayette Avenue.  This effort– at which Ms. Hurd will undoubtedly play a major role in event planning — is on the heels of the success of the emergence of BSDC’s new Joshua Court residence at 300 Putnam Avenue – the first multifamily building in Bedford Stuyvesant to be outfitted with solar panels.  We expect Ms. Lewis will see that young violinists and other musicians from the Noel Pointer School of Music will perform. (Details for this real estate initiative will be announced shortly.) To reach Quincy Street Senior Residence, call (718) 443-6329.    To reach BSDC, call (718) 399-0146.

NYCHA Tenants Displaced after Contractor Missteps

Mary Alice Miller
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The summer of 2010 has been marked by a series of weeklong heat waves. After one recent heat waves when temperatures rose above 100 degrees for consecutive days, a rainstorm was welcome relief.
There was no relief for 6th—floor tenants living at 611 Blake Ave., also known as Unity Plaza, Building #26.
 On Tuesday, July 13, the tenant residing in  apartment 6K came home from work to find her apartment damaged by the rainstorm. Why? NYCHA had engaged the
services of a contractor who had been working to repair the roof since September 2009.
According to the tenant, the contractor started drilling on the roof in December. “I don’t know what they did, but yesterday it rained in my apartment. There is water damage everywhere,” she said.
 A visitor to the building was greeted by an acrid, moldy smell. Once on the 6th floor, emergency lighting dimly lit the hallways. There was no electricity in apartments. Tenants, visitors and NYCHA personnel had to navigate an obstacle course of buckets and bowls of dark yellow water, which dripped on everyone, even though it was no longer raining. There were puddles on the floors in the hallways and in the apartments. A brief tour of the roof revealed buckled—roof membranes and workers pumping water.
 The apartment 6K tenant gave a tour of her apartment the day after that rain. A large bowl in her sink was full of water waste. Her ceiling was still dripping. “It ruined everything,” she said. “All my food, stuff in my cabinets, my furniture, my TVs. Look. It’s still leaking.” Asked if she was at home when the leaking began, she said, “No, I was at work at the time. I came home to this disaster.”
 Council member Charles Barron and his wife, Assembly member Inez Barron, were onsite the entire day after the rain to assist tenants. Council member Barron said, “NYCHA hired an incompetent contractor who was supposed to lay a layer to prepare for the roof. They have been working on that since September. The rains came. He did not lay it well enough to make sure it protected the apartments from rain. It was raining in every apartment. Indoor rain. Worse yet, NYCHA leaves them. The electricity was still on.  There could have been an electrical fire because of the water. They didn’t call the fire department. I had to call the fire dept. to turn off the electricity. They didn’t relocate anybody. They left them in this crap, this dangerous, uninhabitable situation.  They left them all night. Some people had to pay out of their own pockets to stay in a hotel. Others made calls and stayed with their people. NYCHA just came today to assess the situation. Assess what? The fire department recommended the electricity be shut off until they dry everything and make sure the wires are dry.”
 Charles Barron said NYCHA should “Get the people out. Replace their property. Make sure they fire this contractor and get someone who can do this roof properly. You have flooded apartments. The electricity is turned off.
“Molding. A lot of children here have asthma. You abandon them, make them stay in this situation overnight. This is outrageous.”
In apartment 6B, water damage led to the ceiling peeling. Water came through the
ceiling fixtures. There were buckets to collect water in throughout apartment 6C. “Water came down on my bed,” said the tenant.
“I was sleeping, and it woke me up. I moved the bed, but the water was pouring out.” Her ceiling also had peeling. Water damaged her sofa and electronic equipment, including a 40—inch television.
Another tenant said, “You don’t know how it feels to be in a situation with no type  of assistance.”
 NYCHA eventually did evacuate tenants on the 6th floor, while the contractor is working on the roof and repairing apartments. 
 The issue now is damages. Council member Barron said tenants were instructed to meet directly with the contractor to negotiate losses. There are allegations the contractor is arbitrarily setting low estimates to replace damaged household items, including food, mattresses, electronic equipment and living room sofas. Barron feels NYCHA should have been present during meetings between the contractor and tenants. While some tenants settled, other tenants are upset because of what they are being offered, and complain that the contractor is not fairly assessing tenant claims.

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