SoBRO Hosts First Reginald F. Lewis Lecture Series on Successful Franchising

March 4, 2011: SoBRO held a moderated panel discussion today at Hostos Community College that pooled together several experts within the franchising industry to discuss successful business practices. The event was the first in a series of wealth creation lectures named after the investor and business tycoon Reginald F. Lewis, who, in 1987, engineered the largest offshore leveraged buyout in US history. Ms. Loida N. Lewis, Reginald Lewis’s widow and successor as Chairman and CEO of the consumer products conglomerate TLC Beatrice, introduced the discussion. The event was moderated by Professor Hector Lopez, Chairman of the Business Department at Hostos Community College.

After remarks by Professor Lopez, Loida Lewis, and SoBRO’s President and CEO, Phillip Morrow, and Dr. Felix Rodriguez, President of CUNY/Hostos Community College, five panelists provided their perspectives on franchising: Esther Yip, the owner and operator of five Wendy’s franchises; William Landers, Vice President of Business Relationships at HSBC Bank; Radame Perez, Chief Operating Officer of Mastermind Realty; Julie Lusthaus, Partner in the Law Office of Einbinder & Dunn, LLP; and Gary Chipurnoi, Financial Services Professional at New York Life Insurance Company. Ms. Yip stressed the hard work of running a franchise for 25 years, explaining that her days often begin at 5am and does not end until late into the night. She also acknowledged the value of having a supportive franchisor, Wendy’s in her case, that is not inflexible in dealing with start-up operations. Mr. Landers of HSBC emphasized the importance of a sellable business plan when approaching a financial institution for a loan, while Mr. Perez of Mastermind Realty gave informative tips about securing a successful business location, such as searching for a densely-populated neighborhood close to the corner of a city block, to mass transportation, and schools such the bustling retail area on Fordham Road. Ms. Lusthaus provided the audience with legal issues in the franchising agreement to which potential franchisees should be alert, and Mr. Chipurnoi of New York Life underscored that planning for long-range financial goals and leadership succession is just as vital for a business owner as day-to-day questions of financial solvency.

A question-and-answer session allowed the audience of community members and aspiring franchise operators to participate, giving the program an interactive atmosphere. In a lighthearted moment, Ms. Yip described that her sons were not allowed to patronize other fast food stores because she stood by the rule, “never eat from your competitors!”

The Successful Franchising lecture will be followed by other best practice lectures at various Bronx-based colleges in the coming months in order to encourage wealth creation among Bronx entrepreneurs. The series complements SoBRO’s repertoire of small business assistance programs, including the Procurement Technical Assistance Center, Industrial Business Zone Program, and Entrepreneurial Development Program.

SoBRO, a not-for-profit community development corporation, has been serving the South Bronx since 1972.  SoBRO’s programs include adult education and workforce training, real estate and community development, technical and financial assistance for businesses, and an array of programs for youth. For additional information about SoBRO, call 718 292-3113 or visit www.sobro.org.

LIU STATEMENT ON DOE CONTRACT REJECTION

City Comptroller John C. Liu stated the following in response to inquiries about his rejection of a $20 million teacher recruitment contract for the Department of Education (DOE):

“Twenty million dollars to recruit teachers as the DOE insists on laying off thousands of teachers seems curious at best,” said Comptroller Liu.

The five-year contract, with the “New Teacher Project,” was submitted in early February. The DOE was seeking the contract to “recruit, select, train and provide job search support to non-traditional candidates to become public school teachers.”

The contract submission comes at a time when agencies are being asked to cut services, including the DOE’s plan to lay off 4,600 teachers.

The Independent Democratic Conference

Independent Democratic Conference Plan would save $37 million; Strengthen State IG Office

The Independent Democratic Conference today released a plan to streamline New York's patchwork Inspector General system and further empower the State Inspector General to be the top watchdog of New York's bureaucracy.

This proposal, which would eliminate overlapping and duplicative layers of state government and consolidate what are often competing operations, would result in $37 million in savings.

“Each of these specialized inspectors general was established with the best of intentions, but over time it has led to an inefficient and increasingly unaffordable system,” said Senator David J. Valesky, (D-Oneida.) “The Independent Democratic Conference's aim is to make the necessary changes that will allow a more effective and efficient system to root out fraud and abuse in our state government.”

Currently, the state has an overall inspector general, as well as specialized IGs that are intended to oversee the MTA, Medicaid fraud, welfare fraud, and Worker's Compensation Fund. These “boutique” IGs are in statute, which prohibits the State Inspector General from pursuing investigations in these areas. Former Inspector General Joseph Fisch railed against this probation and advocated for its change.

“Bureaucracy should not stand in the way of oversight,” Senator Jeffery D. Klein, (D-Bronx/ Westchester), said. “If someone with multiple state contracts is defrauding one agency, they are likely committing fraud upon another part of state government. The IDC's plan would allow the Inspector General to pursue malfeasance wherever it may hide.”

Additionally, many state agencies have administratively established their own inspector generals that function as internal affairs units. While the IG's Office is not barred from pursuing cases in these agencies, the IDC is concerned about the overall efficiency of this model.

Governor Cuomo has also expressed concern with the current proliferation of inspectors general. In the Fourth Volume of his New New York Agenda, “Clean Up Albany; Make It Work,” he called for a review of the current structure as part of his approach to create an “effective system against government corruption.”

The IDC's plan includes:

• Empowering the State IG to pursue wrongdoing in every part of state government.
  The IDC plan calls for eliminating any statutory prohibition that would exempt a government entity from State IG scrutiny. Former Inspector General Fisch requested this authority during testimony he gave to the Senate Investigations & Government Operations Committee in 2009:

“Right now I do not have, statutorily, the authority to investigate agencies that have their own inspector general,” Fisch said. “The perfect example is the MTA. The MTA has its own inspector general. If that impediment did not exist, I would very quickly undertake an investigation of the MTA.”

• Establishing a dedicated MTA Oversight Unit within the State Inspector General's Office. Using funding currently allocated to the MTA Inspector General, this unit would be used to exercise the IG's new-found jurisdiction of the authority. This new structure would preserve much-needed oversight of the MTA and its vendors, while, if warranted, enabling the full resources of the State Inspector General's Office to be used to pursue an investigation.
• Merging the Medicaid and Welfare Inspectors General with the Attorney General's Medicaid Fraud Control Unit. All three entities are charged with pursuing fraud within the Medicaid system. However, the Welfare Inspector General, who is charged with pursuing Welfare recipient fraud throughout New York State has a staff of seven employees. By contrast, the Office of the Medicaid Inspector General has a staff of more than 650 and a budget of $80.4 million. It also reported -$66,000 in fraud recoveries, according to its most recent report. The AG's Medicaid Fraud Control Unit reported fraud recoveries of $283.2 million in 2009. The IDC recommends that, in order to fulfill these added responsibilities, federal funding that is currently going to the Medicaid Inspector General (projected at $47.1 million in the 2011-2012 budget) be reallocated to the Attorney General's Office.

• Directing the Governor's Spending and Government Efficiency (SAGE) Commission to conduct a comprehensive review of all non-statutory IG offices. The SAGE commission should determine if any duplications exist, and make necessary recommendations for further efficiencies. A search of the Department of Civil Service Web site found at least 523 state agency positions that have investigative functions.

“At a time when New York State is facing a $10 billion deficit it is critical to streamline the state’s central watchdog in an effort to efficiently root out systemic corruption, fraud and waste,”  Senator David Carlucci (D-Rockland/Orange) said.  “We have identified four areas of consolidation that are projected to save a combined $37 million to the state which can be used to help plug the state’s current budget deficit.”

The projected savings directed by the IDC's plan are outlined below. (Since the Workers Compensation Fraud Inspector General is funded through a special revenue fund and not taxpayer dollars, the IDC recommends no change in its status. However, by lifting the statutory exemptions, the State IG will have the authority to also pursue Workers Comp cases when appropriate.)

Inspector General’s Offices	Pre-Consolidation	Post-Consolidation
	2011-12 Budget	2011-12 Budget	Savings (General Fund Unless Noted )
State IG	$5.6 million	$11.2 million	N/A
Welfare (OWIG)	$1.6 million	$0	$0.4 million
Workers’ Comp (OFIG)	N/A	N/A	N/A
MTA IG	$14 million	$1.4 million	$7 million*
Medicaid (OMIG)	$80.4 million	$0	$29.6 million
MFCU	$47.9 million	$95 million	N/A
Total Savings			$37 million

*Indicates savings from designated MTA fund

“This is a win-win,” said Senator Diane Savino, (D-Staten Island/ Brooklyn). “By streamlining the state’s inspectors general system, we ensure that taxpayer dollars are spent as wisely and efficiently as possible and maximize the state’s ability to root out corruption and bring accountability to our government.

BREAKING NEWS

It is being reported that Brooklyn State Senator Carl Kruger will surrender to federal prosecutors tomorrow. 

We will have more details as they become available, but this is said to be an ongoing investigation for several years.

AS STRIKE LOOMS, BRONX APARTMENT BUILDING WORKERS TO RALLY
-- Thousands of Bronx Workers Could Walk Off the Job on March 15th--

  With a potential strike less than a week away, apartment building workers will march and rally in the Bronx to call on the Bronx Realty Advisory Board (BRAB), an industry association representing building owners, to sign a fair agreement before their contract expires at 12:01 A.M. on March 15^th.

  Contract negotiations between 32BJ SEIU, the union representing the workers, and BRAB have been underway since early February, and several issues, including health care and retirement savings remain, outstanding. The current contract covers building superintendents, janitors, handypersons, porters, firepersons, doormen, elevator operators and garbage handlers. Failure to reach a new contract could trigger a strike of more than 3,000 apartment building workers at over 1,000 residential buildings throughout the Bronx.

    Bronx Apartment Building Workers Rally for New Contract

 

 --Thousands of apartment building workers

  --32BJ Vice President Kyle Bragg

  --Congressman José E. Serrano

  --State Senator Jeffrey Klein

  --Assembly members Carl Heastie, Vanessa Gibson

  --Council members Larry Seabrook, Fernando Cabrera

  --Community supporters

 Thursday, March10, 2011 at 4:00 p.m.

   Franz Segal Park in the Bronx @ 153rd Street & Grand Concourse

   Take 2, 4, 5 train to 149th Street -- Grand Concourse

 

  With more than 120,000 members, 32BJ is the largest property service workers union in the country. For more information, visit www.standwithbuildingworkers.org .

 

NAACP and Manhattan BP Scott Stringer Weigh in on Rep Peter King's Hearings

  Celeste Katz of the Daily News tells us here that the NAACP and Manhattan Borough President Scott Stringer have both sent letters to Congresssman Peter King to hold off on his Homeland Security committee hearings on the radicalization of Muslims.

  The NAACP letter has more of a national theme to it, while Manhattan Borough President Stringer's letter is more geared just to New York City. BP Stringer has announced that he should be running for mayor in 2013.     We will take his letter as the first candidate out of the gate on the issue, and await letters from other potential candidates for mayor in 2013.

BOROUGH PRESIDENT DIAZ

BREAKS GROUND AT NEW JETRO FACILITY

This morning, Bronx Borough President Ruben Diaz Jr. joined Jetro Cash & Carry CEO Stanley Fleishman, Bronx Overall Economic Development Corporation President Marlene Cintron, representatives of the Empire State Development Corporation and the New York City Industrial Development Agency, as well as other business leaders to break ground on the construction of a new facility for Jetro in Hunts Point.

The new facility, which will be approximately 200,000 square feet in size, will offer new space for both Jetro and its affiliate, Restaurant Depot. The $50 million construction project will be assisted in part by up to $21 million in tax incentives approved by the New York City Industrial Development Agency. Those credits had been supported by Borough President Diaz.

This environmentally-friendly project, scheduled to be completed in early 2012, will employ nearly 200 individuals in addition to creating a new, user-friendly facility for the thousands of businesses that rely on Jetro and Restaurant Depot’s wholesale food services.

“Jetro Cash & Carry is a major economic engine in the Bronx, and serves as a hub for the food industry throughout the entire region. I am thrilled to see this company invest in the Bronx, and I am proud to have played a role in making this eco-friendly, job creating development a reality. I also want to thank the Empire State Development Corporation, the New York City Industrial Development Agency and the Bronx Overall Economic Development Corporation for their amazing work on this project,” said Bronx Borough President Ruben Diaz Jr.

“The new facility, with a full Jetro and Restaurant Depot, will be a wonderful complement to the Bronx, to our team, to our customers and to the community. It will both help ensure that Jetro and Restaurant Depot remain a leader in low cost food distribution in the most important city in the United States, while also helping to make sure that our small grocery stores and restaurants remain competitive. I am extremely grateful to Borough President Diaz for his leadership and support on this project. In addition, I would also like to thank the Bronx Overall Economic Development Corporation, the Empire State Development Corporation and the New York City Economic Development Corporation for their invaluable assistance,” said Stanley Fleishman, CEO of Jetro and Restaurant Depot.

“When Jetro proposed a plan for the renovation of its distribution center, the State was willing and able to do its part to assist, contributing a $1.5 million incentive package that combines Metropolitan Economic Revitalization Fund and Downstate Revitalization Fund grants,” said Kenneth Adams, Empire State Development President & CEO, designate.  “ESD applauds our partners in City government for their generous contribution as well.  The expansion of Jetro is a great example of how the state offers assistance to companies that are willing to invest in our communities and remain an important player in our regional approach to economic development.  We wish Jetro continued success.”

“Assistance from the New York City Industrial Development Agency was a critical element of this $50 million project, which will generate millions of dollars in private investment,” said New York City Industrial Development Agency Chairman Seth W. Pinsky. “The new facility will allow Jetro Cash & Carry to expand its business and create jobs in the Bronx.” 

“This new facility will help us to maintain The Bronx as the City’s leader in providing New Yorkers with fresh and affordable food. This project is a win-win for everyone, and will create dozens of new jobs for Bronxites. The Bronx Overall Economic Development Corporation and Borough President Diaz are truly delighted to be part of this important project,” said Marlene Cintron, president of the Bronx Overall Economic Development Corporation.

This project was highlighted in Borough President Diaz’s recent “State of the Borough” address.

  Steve Smith, owner of the property; Joseph Tazewell, representative of ESDC;  Marlene Cintron, president of BOEDC; Borough President Ruben  Diaz Jr.; Miriam Tannenbaum, representative of Chase Bank; Stanley Sleishman,  CEO of Jetro and Restaurant Depot; and Ilir Sadikay, representative of NYCIDA.