Son of Man Who Ordered Demo of Palace & Carousel House Shuts Iconic NYC Paper

Is it a family trait?
Some people make lots of money but never see the value in anything worthwhile. When Jared Kushner's dad, Charles Kushner, and his Westminister Properties bought the redevelopment rights from Asbury Partners to build Wesley Grove, phase one of which stretches out along Lake Ave in Asbury Park, he demanded the City tear down the Palace Amusements at the East end of the block. A group of us tried to protest, just like we asked Kushner's people if they were going to upgrade Wesley Lake. But the City acquiesced to Kushner, starting first with the 1888 Carousel House, which figured in the short stories of legendary author Stephen Crane, reducing it to splinters before the sun could peak over the Casino building. A few years later Kushner reneged on his deal with the Partners and the City, and refused to complete the multi-phase Wesley Grove, which is now owned by Madison Marquette, a retail developer of Washington, DC. One of the vacant lots, affectionately known locally as the "Stump Farm", populated with pilings hammered into the ground for construction, exists today as a modern art display.
A few years back Charles' son Jared bought a cherished New York weekly and, well, "Carouseled it", so to speak.

Dylan Byers - does an excellent job telling the story for AdWeek. See if you notice some parallels.


War for the Observer: Management Battles With Legacy

Real estate scion, right-hand man leave elite paper shell of former self

Feb 14, 2011

- Dylan Byers

When Jared Kushner bought The New York Observer in 2006 from its benefactor and owner, Arthur Carter, New York City’s salmon-colored staple had been losing about $2 million dollars a year. But the paper, which had always been financially troubled, had incalculable cachet. For the cultural and media elite it chronicled, it was a must-read, and a significant voice in local politics and real estate. Created in its storied form by Graydon Carter, who would go on to edit Vanity Fair, briefly edited by Susan Morrison, now of The New Yorker, and then guided by longtime editor Peter Kaplan, the paper’s relatively small circulation of 50,000 understated its influence.
Kushner, a then-25-year-old real estate heir, paid nearly $10 million for this cachet. He saw the Observer not only as a way to improve his standing—as one of the paper’s former reporters has written, “owning the Observer opened doors real estate never could”—but also to prove himself. By running the Observer like a business—marketing the brand, building a Web presence, and providing more editorial resources—he would add profitability to the brand’s coolness and clout. In so doing, he would demonstrate his own value and maturity.
This uncertain business proposition meant Kushner would have to turn the small-circulation periodical into an advertising miracle. To this end, in March 2009, Kushner hired Christopher Barnes, the co-founder and former publisher of AM New York, as president of the Observer. Since arriving, Barnes has been on an aggressive campaign to increase ad revenue and cut costs and to dominate the editorial culture of the paper.

But according to Adweek’s extensive interviews with many of the Observer’s former business and editorial employees, Barnes’ campaign—and Kushner’s apparent faith in Barnes—is destroying much of what gives the paper value.
Through a representative, both Kushner and Barnes declined to be interviewed for this article.

The Observer now is a very different place than it was when Kushner bought it. The once tony publication, which reflected Kaplan’s strong editorial voice and nostalgia for the city’s journalistic traditions, is now driven by Barnes, a local retail ad-space salesman.
“You’ve got a paper, or a brand, that is selling itself on being a premium brand, and they hired a guy whose entire background is in local, classified sales,” one source said in disbelief. “There could not, in my mind, be more of a disconnect.”
Two weeks ago, former Gawker editor Elizabeth Spiers became the Observer’s fourth editor in half as many years. Her appointment signals Kushner’s still-strong desire to enhance the Observer’s voice and build its Web site, which is regarded as behind the times. (One of the paper’s former columnists recently explained that he left the Observer last year because he “didn’t want to get left behind” on the Web.) Spiers will report to Barnes—"She’s going to run screaming in a couple of months,” one former employee said.
Meanwhile, Kushner, who is less and less of a presence in the Observer offices, seems to have higher ambition as a proprietor than mere prestige. In that, he's been closely counseled by—and become friends with—News Corp. mogul Rupert Murdoch, whose two young daughters were flower girls at Kushner's wedding to Donald Trump's daughter Ivanka. Advised by Murdoch to get himself a strong manager, Kushner found Barnes, who he sees, according to multiple sources, as his salvation, if not “as a god.”
Within the paper itself, however, Barnes is, practically speaking, the anti-Christ.

“I’ve never seen someone so universally reviled,” one source said. (Without being prompted, many sources identified only three people at the Observer who might not hate Barnes.) Asked why Barnes is so disliked, the source gave three reasons that were echoed by all those who spoke with Adweek: One, he views editorial content “as a support function” for advertising; two, he thinks “it shouldn’t take time or money to put [the paper] together”; and three, he believes “that every single person is replaceable.”

“He’s a used car salesman,” one former employee said in an e-mail.
As one source put it, “There’s a real feeling—and I think everyone could tell you this as well—that editorial is interchangeable.” Indeed, almost every member of the editorial staff who was there when Barnes arrived has either left or been let go.
Barnes seems to take pleasure in his ability to fire people and pride in his ability to underpay them. “Christopher is so proud of the way he fired people when he came on board,” one former employee said, referring to his sacking of much of the Observer’s digital team. He would also mock employees who had been hired for painfully low salaries.
What’s more, staffers don’t earn their low pay just for doing their own jobs. As one source said, “almost everyone at the Observer works on some other Kushner company . . . All the people are doing the Web site for Kushner companies, or people are working on HR for Kushner companies, or helping have a Kushner event. . . . Any new project can just be dolled to whoever: any new magazine, any new newspaper or vertical Web site—there was never anyone hired for it. It was just, ‘OK, well this person is going to also do that.'”

Mostly, Barnes has concentrated on turning the once journalistically oriented Observer into a predominantly sales-focused organization. One of the first things Barnes did was set up whiteboards in the office, available for all to see, where he made a list of how much revenue each sales representative was bringing in per month—something former employees describe as both “humiliating” and “pathetic.” When the Observer moved to its new two-story offices in midtown Manhattan last summer, he insisted that a wall of each floor’s main hallway be laminated for the same purpose. The list for classified sales reps, on the downstairs wall, also includes the number of phone calls each has made—something Barnes is able to track through a device he had installed in their phones, according to a former employee. (Barnes has started a similar list for the editorial staff, tracking the amount of page views each writer’s stories have received.)
A large part of the Observer’s revenues now come from its advertorial supplements, and Barnes continues to increase the number the company produces. Indeed, the company has largely transitioned from what the Observer was under Kaplan into a new company whose principal business is producing free-standing advertising supplements that, one source told Adweek, Barnes “refused” to clearly label as advertorial. In 2010, there were no less than 36 of them, ranging from real-estate focused supplements like Luxury Rentals or Neighborhood Spotlight, to travel and leisure supplements, education supplements, and, most notoriously, Observer Playground, a lifestyle magazine “for the New York mom.” (In 2010, two dentists brought and subsequently dropped a lawsuit against Playground editor Lyss Stern for failing to write a favorable piece about them, which they said she had agreed to do instead of paying her $45,000 dental bill.)

Robyn Weiss, a salesperson who one source credited as “the reason the Observer continues to exist,” is responsible for many of these supplements. (Her official title, according to the Observer’s Web site, alternates between associate publisher, real estate director and entertainment director.) “Whatever she wants from Christopher, she gets,” a source said, “so she started creating more and more products.” In late 2010, Weiss brought in over $300,000 in advertising revenue in a single month.
Barnes’ heavy attention to advertising and his disregard—or even contempt—for editorial content have, predictably, led to conflicts between Barnes and the Observer’s editors. Kaplan, who joined the paper in 1994 and was its longest-serving editor, left the month after Barnes arrived. His replacement, Interim Editor Tom McGeveran, announced his resignation five months later. It wasn’t long before the next editor, Kyle Pope, started demanding that he be allowed to report to Kushner instead of Barnes, a former employee said. By August 2010, Pope was reportedly telling his staff that he was at war with Barnes and calling the Observer a “shitshow.”
By that point, the paper was a shitshow. Consider one incident that occurred the same month: One Monday morning, staff members showed up at the Observer offices to find a distraught sales representative packing her things. The sales rep had resigned the preceding Friday, giving two weeks notice. Yet according to the sales rep and sources familiar with the event, when she showed up that morning, Barnes, apparently upset about her resignation, started screaming at her, demanding that she leave.

At one point, Barnes even got on his hands and knees, crawled under her desk, unplugged her computer, and walked away with the cord. The representative left that day without being given the opportunity to turn over her accounts, which had outstanding business deals. “It actually left the company reeling for a while,” one former employee said. “It really freaked a lot of folks out.”
Four months later, Harleen Kahlon, the general manager of digital, was forced to leave under similar circumstances. Sources say that during a meeting with Barnes and Kushner, Kushner became disproportionately irate and hostile in the middle of a disagreement. She returned to the office the following week and told Barnes she planned to resign; a few days later, Barnes had her escorted out of the building.
Throughout all of this, Kushner has “kept the wool over his eyes,” as one source put it. At this point, “I think it’s too difficult for Jared to even question whether Christopher is good,” the source speculated, “because then he would have to deal with the Observer.”

“Both Jared and Christopher have a deep hatred for anybody who works at the Observer,” a former employee said. “The reason for that is, on Jared’s part, that he resents the Observer [staff] for not helping him make it a success . . . The Observer is something that he has been embroiled in a fight with, and how dare the Observer defy his attempts to make it successful. They’re like, ‘How the fuck are you people coming in here and not making this work?’ And they fail to see that the common thread is the two of them.”
[The rest can be found at AdWeek  http://mee.bo/hMOgz1 ]

City Yields to Condo Owners on Pilot Tax Scheme

The council, which was in full attendance this evening, approved an ordinance amending its tax agreement, which is a Payment in Lieu of Taxes (PILOT), with Paramount Homes, owners of the North Beach condominium development in the northeast end of the City. The same deal is being struck with the owners of Wesley Grove's condominiums, said attorney Tom Hastie, who represents the City in redevelopment zone matters.

Under the revision, individual owners will pay $12, down from $15.20, per thousand of the sales price they paid for their properties. There are still about 60 unsold units in the North Beach complex for which the builder pays a lower rate of tax, a construction rate.

Little was mentioned of the iStar take over of Asbury Partners. City manager Terence Reidy complimented the Asbury Park Press for a "very accurate report" and repeated that the event was "a positive step". He estimated it will take one week for iStar's "paperwork to go through" after which it will have 100% of Asbury Partners' membership.

Commerce director, Thomas Gilmour, asked and received the council’s commitment to hold a special meeting December 24th to ensure that the city gets its application in for a $15 million low interest environmental loan tied to Federal Stimulus money.Reidy said the city could receive another $5 million as part of the proposal, but that it is “highly competitive.” January 15th is the cut off for the stimulus funds, said Gilmour. “After that we have zero chance of getting stimulus money.”

The city is considering dispensing with its fees on fire sprinkler systems in multi-unit buildings. The council seemed amenable to eliminating the fee, which, Reidy said, only yields about $25,000 - $26,000 a year. Apparently the system was set up to compensate the city for water used in the event the sprinklers were activated. Council member James Bruno pointed out that water companies capture those costs today anyway.

Whether to limit beach concerts from Memorial Day to the second week in September will be deliberated by the council. Gilmour said visitors come to enjoy the beach and some object to loud music. Deputy Mayor John Loffredo likened the request to the noise complaints on Cookman and called for consideration of the revenues to be lost if a music venue outlaws music. “We have to look at the revenues we’re getting,” council member Sue Henderson agreed. The revised pending noise ordinance was once again carried, this time until the second meeting of January.

He also noted that Asbury Park has been recognized with an award for its sustainable city efforts. Out of all the towns in NJ, only 28 were selected for this award.

At the council’s next meeting, it will introduce a resolution supporting marriage equality for NJ.

Mayor Ed Johnson said the Board of Education will, at its Jan. 5th meeting, honor Asbury Park’s Blue Bishops, the State Champs, and the Pop Warner Division Champs. “They are genuine Asbury Park heroes,” declared the Mayor.

A liquor permit renewal was approved for Chico Rouse’s new club, Chico’s House of Jazz, on Lake Avenue, which he hopes to open for New Year’s Eve. A liquor extension was approved for Langosta Lounge to use the space formerly occupied by the Stacey Gemma clothing store on the boardwalk, for the night of December 19th.