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CMM Spotlight: The Argyle Theatre

Posted: May 3rd, 2018

There’s no shortage of lofty reasons to eagerly await opening night at the state-of-the art Argyle Theatre in Babylon Village, namely: the positive impact of arts and culture on a region’s vitality. Millennials want to live and work in places where they can also play and find entertainment. The arts and culture sector often outranks other sectors in U.S. spending. Entire communities are planned around cultural spaces and the arts.

Not to mention, live theater is just SO GOOD!

The Argyle Theatre opens this month with a full schedule of Broadway-caliber shows, from Guys and Dolls to The Producers, featuring professional equity actors, at the newly renovated 1920s movie house that most recently housed Bow Tie Cinemas until closing in 2014. Joe Campolo, CMM Managing Partner and a lifelong patron and supporter of the arts on Long Island, was thrilled to receive a behind-the-scenes tour of the Argyle Theatre in April as construction crews completed the last phase of renovations.

The Argyle Theatre’s grand opening this month is the culmination of a lifelong dream for father and son co-owners Mark and Dylan Perlman, who purchased the building in 2017. The Argyle is set to become a regional destination: it is the second year-round professional equity theatre on Long Island and offers a convenient, right-in-my-backyard alternative to NYC for Long Islanders seeking a night out featuring live entertainment with the quality and style of Broadway. Only a five-minute walk from the Babylon LIRR station and surrounded by the vibrant Babylon Village downtown restaurant and shopping scene, the venue is sure to attract theatergoers beyond Long Island as well. A shuttle to and from the train is planned, and a bike rack is going up outside the building. (For those coming by car, the Argyle’s website will list nearby lots where parking is permitted during showtime.)

“We’re looking to make people think and feel,” said co-owner Mark Perlman of bringing professional, live theater to Long Island’s South Shore. “We’re incredibly excited to bring the Argyle Theatre to the public after a very long process.” The beautifully renovated single-theatre space features 250 seats at orchestra level and an additional 250 at mezzanine level, as well as top-of-the-line lighting, sound, and rigging systems.

Season tickets are available as well as single-show tickets for an inaugural season that also includes Hairspray, Peter and the Star Catcher, The Hunchback of Notre Dame, and Spring Awakening. Marty Rubin, the Argyle’s Director of Sales, has also put together corporate event packages for businesses looking beyond the boardroom for a unique venue that transports visitors to different time periods and places. Classes, summer programs, and children’s programs are also planned.

CMM is excited to welcome the innovative Argyle Theatre to Long Island and support its role in keeping our island a vibrant cultural destination. Check out these photos of our private tour in the weeks before the Argyle’s grand opening, then head over to https://argyletheatre.com/ or call 844-631-LIVE for tickets.

 

Pictured: Argyle Theatre co-owner Dylan Perlman, sales director Marty Rubin, and co-owner Mark Perlman invited CMM Managing Partner Joe Campolo to the 1920s-era former movie house on Main Street in Babylon Village during the last phase of construction in April. The Argyle Theatre’s inaugural season begins this month. Next photo: The iconic “Babylon” fluorescent sign will shine once again in Babylon Village.

The space has been completely renovated from its most recent past life as Bow Tie Cinemas. This state-of-the-art facility will now offer year-round professional equity theatre. Next photo: The 500-seat Argyle Theatre now seats 250 at orchestra level and 250 at mezzanine level.

The new single-theatre space features an orchestra pit, balcony, and top-of-the-line lighting, sound, and rigging systems. Next photo: Inside view of the front doors during construction. These posters advertise the last movies screened at the former movie theater before closing in 2014.

 

Marty Rubin and Joe Campolo check out the balcony. Next photo: Center and right, owning and operating the Argyle Theatre is a dream come true for father and son team Mark and Dylan Perlman. On the left is sales director Marty Rubin, who has reconnected with Mark, his former baseball teammate at Queens College.

Enter stage left: the view from the stage. This stage will feature productions of Guys and Dolls, Hairspray, Peter and the Star Catcher, The Hunchback of Notre Dame, Spring Awakening, and The Producers in its grand opening season. Next photo: The Perlmans paid careful attention to every detail during the restoration. Here, a view outside from upstairs.

The Perlmans honored the theatre’s past, as well as their own journey to making their dream a reality, by including period furniture with a personal twist. This couch belonged to Mark Perlman’s parents. Next photo: Just one of the many dressing rooms backstage being readied for opening night.

State-of-the-art lighting awaits installation backstage. Next photo: This box office is now open! Single show and season ticket packages are on sale now – call 844-631-LIVE.

CMM Spotlight: Tesla Science Center at Wardenclyffe

Posted: April 26th, 2018

The Tesla Science Center at Wardenclyffe may not yet be open to the public, but innovation is already on full display on these hallowed grounds in Shoreham where famed inventor Nikola Tesla conducted research.

Known for his groundbreaking contributions to alternating current (A/C) electricity, fluorescent lighting, radio, and the technology behind the x-ray, wi-fi, and more, the Serbian-American inventor and engineer has been enjoying a posthumous resurgence in popularity after dying impoverished in 1943. (The 187-foot-tall broadcast tower Tesla built at the Shoreham site was torn down in 1917 for scrap to help pay Tesla’s bills at the Waldorf Astoria.)  But now, decades after Tesla’s death, Elon Musk’s celebrated electric car bears Tesla’s name in recognition of the inventor’s creation of the induction motor and A/C transmission, and Tesla is finally achieving the recognition his scientific contributions deserve.

CMM’s Marc Alessi serves as Executive Director of the Tesla Science Center, which is being developed on the Shoreham site as a technology center housing a business incubator for fledgling companies engaged in scientific research, as well as a museum dedicated to educating the public about Long Island’s rich scientific opportunities past, present, and future. The Center’s vision is to educate visitors about the magnitude of Tesla’s accomplishments right here on Long Island and their impact on modern-day life, as well as foster curiosity, experimentation, and lifelong learning.

“This isn’t just another science museum. The fact that Tesla conducted his research on these grounds sets it apart,” said Joe Campolo, CMM Managing Partner and National Advisory Board Chairman for the Tesla Science Center, who recently had the opportunity to venture behind the locked gates for a tour. Once the restoration of the complex is complete, Campolo said, “this Long Island site will be a destination for innovators and science enthusiasts around the world.”

Campolo recently worked to secure an unprecedented donation of one million dollars from CMM client Softheon, Inc. to the Tesla Science Center to help solidify Long Island’s spot in scientific history, and Peter Klein of Klein Wealth Management – HighTower Advisors is exploring partnerships with entrepreneurs and science advocacy groups to bring in additional funding. Programs planned for the site include presentations, lectures, and visiting experts; science teacher association conferences; student field trips; and science competition workshops, mentoring, and awards, as well as a permanent Tesla exhibit and a host of other rotating science exhibits.

Learn more about the story of the Tesla Science Center in these photos, and visit teslasciencecenter.org to contribute to this one-of-a-kind effort.

 

Marc Alessi, Joe Campolo, and Peter Klein in front of Nikola Tesla’s lab during a recent visit. The lab was designed by noted architect Stanford White.

A look at the lab from another angle. Peerless Photo also operated at this site. Next photo: Alessi, Campolo, and Klein have all taken leadership roles to make the Tesla Science Center a reality and promote Long Island’s rich scientific history.

A statue of Nikola Tesla from the Government of the Republic of Serbia peers out over the site.

 

A famous multiple-exposure photograph of Tesla in his Colorado Springs lab in 1899 with a “magnifying transmitter” high voltage generator. Credit: Wellcome Collection https://wellcomecollection.org/works/zncts6ch. Next photo: The broadcast tower, 1904 (photographer: unknown). The tower is long gone, but the lab still stands today.

 

Marc Alessi, Peter Klein, and Joe Campolo examine site plans.

Tesla is now a household name. Next photo: Planning is well underway for the restoration of the site.

Commemorative bricks surround the Tesla statue at the Shoreham site. “TO THE GREATEST MAN WHO EVER LIVED. THIS IS OUR LEGACY.”  “Master of Electricity, Man Out of Time.” “In the Space Between Intellect & Insanity Lies Genius.” Next photo: “ENCOURAGE LEARNING AND INNOVATION AT ALL AGES.”

“Tesla: Better Than the Other Guy.” Next photo: “Tesla, still getting walked on after all these years.”

  

CMM’s Marc Alessi has been instrumental in developing the Tesla Science Center since his service in the New York State Assembly. Next photo: “Here’s to humble scientists.”

 

“Never forget the underdog.” “For the love of science.” Next photo: “Tesla lives on in the hearts & minds of inventors!”

The future site of classrooms and exhibits at the Center. Next photo: This house will be reconfigured for office space.

    

Tesla was born in the Austro-Hungarian Empire and had both Serbian and Croatian ancestry. He emigrated to the U.S. in 1884 and ultimately became a U.S. citizen. Next photo: A closeup of part of the former site of the Wardenclyffe Tower.

 

Tax Cuts and Jobs Act – How Are You Going to React? Part 2 – International Provisions

Posted: April 20th, 2018

Tags: ,

Alan R. Sasserath, CPA, MS
Partner, Sasserath & Zoraian, LLP

As discussed in a previous article, the Tax Cuts and Jobs Act (“TCJA”) is here to stay and our challenge is to understand how to react to it to minimize our taxes.  This article will focus on the international provisions of the TCJA and how US companies with foreign operations and foreign companies with US operations should react.  It’s a worthwhile read if you own all or part of a foreign company or are thinking about expanding your business beyond the US.

Below is a discussion of some of the international provisions that affect controlled foreign corporations (“CFCs”).  CFCs are generally foreign entities owned more than 50% by a US “person” (individual, partnership, corporation, etc.) or persons.  Of course, we will also discuss what the US owners of CFCs should think about to minimize the effect of such provisions.  (Please keep in mind that this is a high-level discussion of the Federal tax provisions and you should consult your tax advisor regarding such planning.)

1. Transition Rules to the Modified Territorial System: The new international tax system under the TCJA is known as the Modified Territorial System (“MTS”).  The TCJA was signed into law on December 22, 2017 and went into effect on January 1, 2018.  At the time the law was signed, there were large amounts of previously untaxed income that were retained in foreign countries under the pre-TCJA international tax system.  Accordingly, there wasn’t a lot of time to plan for this provision of the TCJA for calendar year entities.  Under the transitional rules, such previously untaxed income will be taxed to the U.S. owners at either 15.5% or 8%.  This provision applies to US C corporations that own more than 10% of a foreign entity and other US owners, other than S corporations, of a CFC.  S corporations are permitted continued deferral.  Again, calendar year taxpayers had nine days to plan to try to do what they could to get to the 8% tax rate or avoid the tax in its entirety.

However, fiscal year taxpayers do have time to plan since the tax relates to the last fiscal year beginning before January 1, 2018.  Accordingly, if your fiscal year end is September 30 and you have $250 billion in previously untaxed, overseas profits (think Apple), then you have until September 30, 2018 to plan a way to decrease the tax rate from 15.5% to 8%.   The main driver of the difference in tax rates is whether the untaxed overseas profits are sitting in cash and similarly viewed assets (15.5%) or harder assets like inventory or fixed assets (8%).  Again, if you have a fiscal year, whether you have $250 billion or $1 million in overseas profits, you should be doing whatever you can to reduce the tax rate from 15.5% to 8%.  One last item to note is that this tax can be paid over eight years with a timely election.

2. Global Intangible Low Taxed Income (“GILTI”): If you ever wondered what our elected officials thought of U.S. companies with foreign operations, please see this acronym: GILTI (pronounced “guilty”), and you will learn everything you need to know.  GILTI relates to the global minimum tax that the US now charges on US CFCs.  It is possible that majority owned foreign entities/minority owned US entities get dragged into these rules as ell.  Under the pre-TCJA rules, if a CFC owned an active foreign entity, then that foreign entity’s earnings were not taxed in the US until such funds were repatriated to the US.  Now, under TCJA, practically speaking, if a US person owns an active CFC, then they are required to calculate the amount of tax on such foreign income (known as GILTI) after certain adjustments are made to the foreign income.

The calculations of the tax on GILTI for a US C corporation and an individual, either directly or via a pass-through entity, are very different.  For a C corporation, the effective tax rate is 10.5% of GILTI before foreign tax credit.  Also, if the foreign corporation paid 13.125% or more of tax to the foreign country, then the tax on GILTI  would be zero for that year due to the allowance of the foreign tax credit.  For an individual, the effective tax rate is 37% of GILTI.  That’s right: there is a 26.5% difference in tax rate and potentially 37% difference with the inclusion of the foreign tax credit in tax rate between owning a CFC via a C corporation and an individual since individuals are not permitted to utilize the corporate foreign tax as a credit against US individual tax in this situation.  However, there is an election that an individual can make to be treated as a C corporation for the purpose of this tax effectively lowering their rate to that of a C corporation.  Since the election has been in the law for many years and GILTI is a new concept, we don’t know if an individual will be entitled to all the benefits afforded to a C corporation.  We are waiting for further guidance on this.

If you own a foreign entity that will be subject to GILTI either directly or through a pass-through entity, then you may want to contribute such ownership into an LLC ASAP.  With an LLC, you are permitted to make an election to be treated as an S corporation, C corporation, partnership or disregarded entity.  While such election is generally required to be made within 75 days of formation, that period can be extended if there is reasonable cause.  I would hope that the IRS would accept “ambiguity of the tax law” as reasonable cause to file a late election.

3. Foreign Derived Intangible Income (“FDII”): FDII generally relates to property sold or services provided by a US C corporation to a non-US person. The tax calculations are similar to the GILTI tax calculations; however, the effective tax rate on this income is 13.125% as opposed to the 10.5% tax rate on GILTI.  One of the strategies to get the benefit of the 13.125% FDII tax rate would be for a company that is a pass-through entity to drop their non-US sales into a separate C corporation to take advantage of the low tax rates on such income.  However, this planning strategy would more likely apply to entities that were not eligible for the pass-through entity 20% deduction under the TCJA.  Also, foreign corporations that set up a US C corporation would be eligible for this benefit as well for sales via the US C corporation.  Could the US become a tax haven for foreign companies in high tax jurisdictions?  Finally, DISCs are still available as well to be used in conjunction with this planning opportunity.

In addition to the provisions above, there are many others.  Also, there is a fair amount of confusion surrounding several provisions, some of which were mentioned above.  In addition to the suggestions above, here are a few others, in general, as they relate to the international provisions under the TCJA:

  • Revisit any “check the box” elections that you made or decided not to make in the past. Based on the changes resulting from the TCJA, you may come up with a different answer.
  • As you can see with GILTI and FDII, C corporations are favored under the TCJA. As mentioned above, there is an election available to individuals to, potentially, get the same benefits as a C corporation with regards to GILTI.  Don’t be so quick to convert your pass-through entities to C corporations.  Once you convert to a C corporation, there is a five-year waiting period to be able to elect S corporation status again without IRS consent.  Also, once S status is elected again, there is an additional five-year waiting period to get all of the benefits of S corporation ownership back.  That five-year waiting period is measured from the time you decide to revert to an S corporation.  It is not unheard of that the TCJA will be “reversed” depending on the results of future elections, but such a reversal would be unlikely, especially in the near term.
  • If you plan and are successful to avoid the CFC rules, then you must be wary of the Passive Foreign Investment Company (“PFIC”) rules. As onerous as the CFC rules above are, the PFIC rules can be even worse.
  • If you are going to go the C corporation route, try to restructure to get a potential future benefit in the way of section 1202 stock. The benefit of section 1202 stock is that shareholders can avoid all Federal and potentially State income tax on up to $10 million of gain in the event of a future stock sale.
  • The discussion above relates to Federal income tax changes. Please note that state taxes will apply as well and can be equally or more complicated.
  • Some of the provisions discussed above sunset at pre-determined dates. For example, the effective tax rate related to FDII increases from 13.125% to 16.41% for tax years beginning after December 31, 2025.

The bottom line: if you own a foreign entity, then you should consult with your tax advisor immediately if you have not already done so.  Once the technical corrections to the TCJA are deployed as we hope/expect later in 2018, we should have more clarity on the provisions that are unclear at the moment.  At that point, you should re-confirm that you are maximizing your opportunities from the tax perspective.

This article does not necessarily reflect the views of CMM and does not constitute legal or tax advice. Please consult with your accountant about your particular tax situation.

 

Hiding and Seeking Information During Litigation: Disclosure of Information Contained in Private Social Media Accounts

Posted: April 20th, 2018

Hide and seek. It’s a cute game when kids play, but what about in the context of a contentious litigation? The cute game transforms into a cutthroat endeavor to seek any information to sabotage the opposition’s case. Given the prevalence of social media (even Grandma has a Facebook account nowadays), the first point of attack to collect necessary intelligence tends to be the opposition’s social media accounts. The instantaneous nature of social media provides a window into the opposition’s everyday life. They share where they are, what they are doing, and who they are with. Some social media users try to ensure the privacy of their information by taking advantage of certain privacy settings, which raises the question: is hiding certain information (by making the contents of a social media account private) enough to avoid disclosure during litigation?

The Court of Appeals recently answered this question in Forman v. Henkin, No. 1, 2018 WL 828101, at *4 (N.Y. Feb. 13, 2018), where the Court held that information contained in a Facebook account, whether public or private, must be disclosed so long as it is relevant to the claims at issue. Eager for the instant gratification we receive with each like or comment on a post, we sometimes lack the foresight to consider how the information we post on social media may ultimately be used to verify facts, or, even worse, to impeach credibility. Say a salesperson is accused of soliciting customers in violation of a non-compete agreement, or an employee claims entitlement to overtime wages, or, most commonly, an individual sustains personal injuries—you can be sure that the defendants are scrubbing the plaintiffs’ social media accounts for evidence disputing the credibility of the plaintiffs’ claims. Especially considering the recent decision in Forman, even if the plaintiffs try to hide such information by making their accounts private, the defendants will now be entitled to seek it.

In Forman, the plaintiff fell from a horse and alleged that she suffered severe spinal cord and brain injuries. The plaintiff claimed that her injuries resulted in cognitive deficits, memory loss, difficulties with written and oral communication, and social isolation. During her deposition, she testified that she had a Facebook account that she deactivated approximately six months after the accident and that before the accident she posted “lots” of photos of her “active” lifestyle.

Unsurprisingly, based on the plaintiff’s claims, the defendant requested an authorization to obtain the contents of her Facebook account. The plaintiff refused to provide an authorization, arguing that the defendant failed to establish a basis for access to the plaintiff’s private portion of her account because the public information contained on her profile included only one picture, and that picture did not contradict her claims. In opposition, the defendant contended that just because the public information viewable on plaintiff’s Facebook profile did not contradict her claims did not mean that the postings on the private portion of the account might contain something relevant to the defense.

Prior to Forman, parties avoided disclosing private information on social media accounts by relying on precedent that required the party seeking disclosure to identify relevant information contained in the social media account before seeking disclosure. However, the Court in Forman keenly noted that requiring a party to identify relevant information before seeking disclosure effectively permits the disclosing party to manipulate privacy settings to avoid disclosure. This is not to say that parties are now entitled to unfettered access to social media accounts simply by virtue of commencing a lawsuit. Disclosure still must be narrowly tailored to the claims at issue in the case. Nonetheless, the most important takeaway from this case is that parties can no longer hide behind the veil of privacy to avoid disclosing information that may be detrimental to their case.

We all get the urge to share information on social media, but once litigation commences, plaintiffs are well advised to consider the potential ramifications of each post and how it could be used against you. When all is said and done, litigation involves people, which means it necessarily entails emotions and the impulse to make your story heard. However, during litigation, social media is not the proper forum to share your personal thoughts, feelings, and photographs. Let your attorney advocate on your behalf to avoid having your case debilitated by contradictory posts on social media that impugn your claims and credibility. Remember—even if you try to hide them, your adversary will be permitted to seek them.

CMM Spotlight: Cerini & Associates Presents the Imagine Awards

Posted: April 20th, 2018

Tax season may be behind them, but the team at Bohemia-based Cerini & Associates isn’t coming up for air just yet: after tax season comes Imagine season.

Six years ago, this full-service accounting firm, under the leadership of Managing Partner Ken Cerini, introduced the Imagine Awards to the Long Island nonprofit and business community. The program has quickly gained momentum. This year, the program received 177 applications and on May 1 will bestow awards on five nonprofits, recognize an additional 15 finalists, and bring over 400 Long Island business leaders together for an evening to celebrate and elevate the Island’s vibrant nonprofit sector.

Considering that servicing nonprofit organizations is a marquee component of Cerini & Associates’ DNA, it’s fitting that its visionary founder, Ken Cerini, first had an epiphany for the Imagine Awards about 15 years ago. “Things weren’t in the right place then, but six years ago, the pieces fell into place. The sector needed it,” Cerini recently told Campolo, Middleton & McCormick Managing Partner Joe Campolo, who stopped by to catch up in the hectic weeks before the event. “The NFP world can find itself in a tough spot with a storm happening due to changing government regulations, cutbacks in funding, and an increase in the demand for services – so we were looking to create a silver lining. We want to make sure the business community sees the work these organizations are doing.”

The Awards are a way of giving back to a sector that exists to give back, recognizing nonprofits in the categories of Social Impact, Innovation, Rising Star, Leadership, and, for the second year, Arts & Culture. “Collaboration is key to keep the not-for-profit sector vibrant,” Cerini explained. “The Awards encourage organizations to work together by educating them and the business community about what other organizations are doing.” Winning organizations (initially vetted by the Awards Committee and ultimately selected by a panel of high-profile judges whose identities are revealed at the event) receive a monetary prize, exposure, a professional promotional video, and opportunities to collaborate after the Awards on panels and other events.

This year, News 12’s Doug Geed will emcee the program, which raises funds through sponsorships and ticket sales. “The money we raise is then reinvested into the event and the community,” Cerini said. “Imagine, coming from the John Lennon song, is symbolic … Imagine is what nonprofits do every day; Imagining how to make a difference, change lives, and make Long Island a better place.”

Cerini & Associates’ mission to shine a much-needed spotlight on the nonprofit sector mirrors their relentless pursuit of value for their clients, which include not only major nonprofit organizations (C&A is one of the top 10 accounting firms in the New York metro area serving the nonprofit sector) but also the education sector (public school districts as well as private, special education, and charter schools) and for-profit businesses in the healthcare, technology, real estate, and construction industries. The firm, with four partners and about 50 employees, is known for its efforts to educate and provide training for their clients through seminars and publications. Not surprisingly, their clients become their ambassadors, accounting for the firm’s organic growth over the past 25 years.

CMM Live host Joe Campolo will welcome Ken Cerini to the show on May 15 for a special episode focusing on the nonprofit sector. We’re excited to hear more from this innovative leader who saw a void in the nonprofit world and filled it with an extraordinary event that empowers organizations to maximize their impact.

 

Joe Campolo of Campolo, Middleton & McCormick and Ken Cerini of Cerini & Associates compete in Ken’s dungeon-themed office. Next photo: Intricate designs adorn the door, chairs, and walls of Ken Cerini’s office. Who said accountants are boring?

A look at Ken’s sword collection. Next photo: Joe Campolo will welcome Ken Cerini to a nonprofit-themed episode of CMM Live on May 15.

 

 

Kim Roffi, a partner at Cerini & Associates, smiles in anticipation of the end of tax season! Next photo: At Cerini & Associates, employees are encouraged to personalize their workspaces.

 

Fun and games: jerseys and sports memorabilia line the walls of the office.

Imagine Awards materials past and present. In only six years, the Imagine Awards program has become a must-attend event woven into the fabric of Long Island. Next photo: Registration closes soon for the Imagine Awards! Don’t miss out – head over to http://ceriniandassociates.com/long-island-imagine-awards/ for tickets.

CMM Spotlight: City National Bank

Posted: April 13th, 2018

Innovation doesn’t always come in the form of small tech startups dotting the halls of sleek business incubators. Sometimes, innovation comes in the form of a 60+-year-old bank with 72 offices nationwide and $48.7 billion in assets.

Joe Campolo, Managing Partner of Campolo, Middleton & McCormick, recently had the opportunity to welcome West Coast-based City National Bank to Long Island. He caught up this month with Davi Tserpelis, a longtime friend of the firm and a veteran Long Island banker who recently made the move CNB to grow its Long Island presence. Tserpelis, Senior Vice President – Regional Business Banking Manager, Personal & Business Banking, is focused on building a team of CNB ambassadors as priority number one.

“The culture at CNB is to put people first,” Tserpelis explained, “and not every banker is the right fit. We look for people who want to take the time to get to know clients and get creative finding solutions for their needs. The culture is really unique – the focus is on cultivating true, personal relationships.  The CNB PRIDE statement stands for our people, relationships, integrity, dedication, and entrepreneurs and we are dedicated to our PRIDE culture.” And once on board, new team members can expect great support and tools on how to service clients the CNB way, adding client value to the many years of experience they have under their belt.

Indeed, CNB is all about customized solutions and taking a holistic approach to preserving and building a client’s wealth. Advising takes the place of product-pushing; CNB’s focus is on providing one-stop concierge services to meet all the financial and banking needs of their clients. Senior Business Banking Relationship Manager Dan Kim, who recently joined the Long Island team, said that CNB offers customized solutions he’s never seen in his 15 years in business banking.

CNB – which merged with Royal Bank of Canada in 2015 – was founded in 1954 in Los Angeles by entrepreneurs, for entrepreneurs. In the 1960s, CNB developed a reputation as a “bank to the stars,” and continued to grow in the decades since. Well known on the West Coast, the bank entered the New York City market 15 years ago, and currently has three branches and their wealth management arm there. Serving New Yorkers for the past decade and a half, CNB recognized that expanding to Long Island was a natural fit, where the financially-savvy clients the bank specializes in – sophisticated entrepreneurs, entertainment industry executives, high-net-worth individuals, and other professionals who value the “white glove touch” – abound.

CNB is investing heavily in talent to support the Long Island market, and is attracting the attention of seasoned bankers like Tserpelis who, like the bank itself, are selective about whom they do business with. “We’re looking for clients who expect and value the service experience that we offer,” Tserpelis said.

On Long Island and in Queens, the CNB team is focused on wholesalers, importers and exporters, and entrepreneurs. Business and personal banking is one unit at CNB, underscoring the bank’s commitment to serve as a one-stop solution that’s invested in its clients’ success. Their ladder logo and slogan, The way up™, are emblematic of the entrepreneurial spirit that thrives on Long Island, and we wish them all the best as they embark on their latest expansion!

Busy growing City National Bank’s presence on Long Island, team members Dan Kim and Davi Tserpelis welcomed CMM Managing Partner Joe Campolo to their office.

Davi Tserpelis, Senior Vice President – Regional Business Banking Manager, Personal & Business Banking at City National Bank, poses with her colleague Dan Kim at CNB’s New York City headquarters on Park Avenue.

CMM Spotlight: Pride Products

Posted: April 12th, 2018

How do you transition from distributing paper products stored in your mother-in-law’s garage using an old van to owning a 150,000-square foot facility and becoming one of the leading distributors of general merchandise and food throughout the world? According to David Emrani, co-founder and president of Pride Products based in Ronkonkoma: “a lot of hard work.” An engineering background, comfort conducting business across the globe, and supportive colleagues who are also family don’t hurt, either.

Joe Campolo, Managing Partner of Campolo, Middleton & McCormick, recently sat down with CMM clients and friends David and Roya Emrani, the husband and wife team behind Pride Products, and their son Dustin, the company’s VP of Operations, to learn more about their unique American success story.

Today, Pride Products operates a major warehouse and showroom on Veterans Memorial Highway near MacArthur Airport, catering to over 5,000 stores nationwide and exporting to countries worldwide. But to follow the careers of the trailblazers behind the company, you’ll need to venture beyond Long Island.

Born in Tehran, Iran, David came to the United States at age 19 and earned a B.S. in electrical engineering from the University of Texas at Arlington and an M.S. from Southern Methodist University. He began his career at Texas Instruments designing and manufacturing airport surveillance radar systems. Feeling homesick, he eventually returned to Tehran and went on to serve as a Second Lieutenant in the Iranian army. But as relations between the U.S. and Iran soured as Ayatollah Khomeini came to power, David returned to his adopted country in 1979, this time to California. He worked as a senior engineer at Litton Industries in Los Angeles. One week after closing on his house in the Golden State, his cousin invited him to Long Island to work in paper manufacturing. David took the chance.

Meanwhile, Roya had emigrated from Iran in 1976 to enter 12th grade in the U.S., and then studied medical technology at C.W. Post. She and David later met at a party. The couple didn’t have much capital, but after working with family in New York, their entrepreneurial nature led them to strike out on their own in 1983.

Out of Roya’s mother’s garage in Plainview, the couple started selling toilet paper and tissue to restaurant suppliers and eventually to retailers, which prompted them to add health and beauty products to the mix. By 1990, they were wholesaling to retailers nationwide – notably, becoming one of the earliest local businesses to establish a direct link to China – and operated six Dollar King stores on Long Island. But as David explains, expanding national chains eventually pushed many of the mom and pop dollar stores out of business.

The entrepreneurial Emranis therefore shifted their focus to supplying to those discount stores rather than operating them, as well as wholesaling to a wide range of grocery, variety, party, and gift stores. Today, Pride Products is the best friend that retailers can hope for – supplying the best quality products for the best price. They focus on good value, high quality paper and plastic disposables, health and beauty aids, home and office supplies, housewares and hardware, and seasonal products, offered to an ever-growing list of independent retailers at a good price. The Emranis currently employ 80 people, and David estimates that he has hired an astronomical 5,000 people in his lifetime.

That’s not to say there aren’t challenges. Trucking and freight costs are high, which David predicts will force many distributors to become regional rather than national. Even ten years after the recession, consumers are still very money-conscious. Government regulation and red tape also lead to delays and expense. But there are expansion plans in the works: Dustin is working on a new division of Pride focused on selling goods directly to consumers. And going against the tide, David predicts that online shopping for value priced consumer goods will actually decrease in popularity in the next five years, as people realize they are getting a better price at brick and mortar stores. Always seeking to diversify, the Emranis are also pursuing real estate investment opportunities.

Pride Products is a fitting name for an incredible operation that started out so unassumingly, and to describe the motivating force behind a family who came to America for its entrepreneurial promise. The American dream is thriving at Pride Products.

 

 

Family affair: Dustin, Roya, and David Emrani of Pride Products in their Ronkonkoma warehouse; David Emrani, president and co-founder of Pride Products, poses with CMM managing partner Joe Campolo in Emrani’s office on Vets Highway.

 

Merchandise lines the shelves of the 150,000-square foot facility. These products are destined for supermarkets, discount stores, drug stores, independent retail stores, and the shelves of your home. Originally operated with one van out of a Plainview garage, Pride Products now buys in bulk, providing customers with the highest quality merchandise at the most competitive prices.

 

Another look at the warehouse. David Emrani was one of the first business people from Long Island to establish a direct link to China. It’s not hard to imagine the job creation spurred by a warehouse this size. Pride Products currently employs 80 people, and Emrani estimates that he has hired an astronomical 5,000 people in his lifetime.

Left: Business owners Roya and David Emrani stand proudly by a sign showing the breadth of their product offerings. Right: Born in Tehran, David Emrani came to the United States at age 19 and earned electrical engineering degrees from the University of Texas and Southern Methodist University. He returned to Iran in the mid-1970s and served as a Second Lieutenant in the Iranian armed forces. Returning to the U.S. in 1979, Emrani settled in California. He came to New York in 1981 and worked in business ventures with extended family before starting Pride Products with his wife, Roya, in 1983.

Left: Roya Emrani emigrated from Iran in 1976. Right: A group of Long Island business leaders: David, Roya, and Dustin Emrani, with Joe Campolo.

 

Malafi Elected to Board of Directors of American Red Cross on Long Island

Posted: April 6th, 2018

Ronkonkoma, NY – Campolo, Middleton & McCormick, LLP, a premier law firm with offices in Ronkonkoma and Bridgehampton, is pleased to announce that partner Christine Malafi, Esq. has been elected to the Board of Directors of the American Red Cross on Long Island, the preeminent nonprofit organization providing no-cost emergency and disaster relief to those in need.

The American Red Cross on Long Island serves more than 2.8 million peChristine Malafiople in Nassau and Suffolk counties. The organization, which celebrated its centennial anniversary in 2017, responds to emergencies and disasters across the region—home fires, floods, building collapses—providing shelter, food, clothing, and emotional support. The Red Cross strives to prevent and relieve suffering in our community and around the world through five key service areas: disaster relief, supporting America’s military families, blood donation, health and safety services, and international services.

“We are so happy to welcome Christine to our team of leaders,” said Neela Mukherjee Lockel, Chief Executive Officer of the American Red Cross on Long Island.

Malafi’s credentials include chairing CMM’s Corporate department, one of the most robust teams in the New York region. Her practice focuses on mergers and acquisitions, corporate governance, and labor and employment matters, as well as municipal, insurance coverage, and fraud issues. She represents buyers and sellers in multimillion dollar transactions and serves in a general counsel role for many of CMM’s internationally-based clients.  Prior to joining CMM, Malafi made history as the first woman and youngest person to serve as Suffolk County Attorney.

In addition to her new role with the American Red Cross on Long Island, Malafi serves on the Boards of Family Service League, Girl Scouts of Suffolk County, and Natasha’s Justice Project, as well as the Board of Governors of Touro Law School.

CMM Spotlight: Flexible Systems

Posted: April 5th, 2018

What’s the sign of a successful day at Flexible Systems? When clients don’t call.

“Our goal is to service our clients so well that they don’t need to call us,” said Marty Schmitt, one of Flexible’s three founders and partners. “When they don’t have IT problems to call about, that’s how we know we’re doing our job.”

Flexible Systems is a longtime HIA-LI member and good friend of Campolo, Middleton & McCormick, LLP, collaborating with the firm on cybersecurity panels to educate the business community, as well as servicing mutual clients. Joe Campolo, CMM Managing Partner and HIA-LI Board Chairperson, recently spoke with Schmitt about Flexible’s story, the company’s vision for the future, and the decision to call the Hauppauge Industrial Park home.

Founded in 1984 by three friends who met at Stony Brook University, Flexible is an IT support and technology consulting powerhouse based in the Hauppauge Industrial Park. The company works with clients on Long Island and beyond to help them choose the best technologies for their unique needs. Flexible also offers world-class IT support to keep networks up and running and fix any issues that may arise, but it’s their role as their clients’ tech advisors that truly sets them apart.

“We’re not just responding and reacting to problems – we’re their IT partners,” Schmitt explained. “We strategize with them about which technologies are worth the investment and help them use technology to increase their efficiency.”

Today, as cyber criminals can take down the computer systems of entire cities and major organizations seemingly at the push of a button, Flexible Systems also offers critical cybersecurity services to help businesses of all sizes keep their data safe. They work with clients to reduce the risk of falling victim to cybercrime, and also help businesses with remediation if they’ve already experienced a breach.

Flexible business development executive Kevin Edwards added, “Even the savviest companies are not always aware of the many regulations that affect their businesses and how to remain compliant.” Therefore, as part of their information security compliance services, Flexible helps clients navigate the increasingly complex web of regulations, from the household names (HIPAA) to the lesser known (the Gramm-Leach-Bliley Act, which regulates how consumer data is shared and safeguarded). “For smaller clients that may not have an in-house compliance or privacy officer, Flexible fills that role,” Edwards explained. Edwards participated in CMM’s series of cybersecurity seminars for the business community co-presented last year by BNB Bank, and works regularly with CMM’s cybersecurity team on compliance and remediation issues.

An active member of HIA-LI, Flexible credits the organization for fostering critical relationships and building referral networks. Flexible also appreciates HIA-LI’s extraordinary focus on supporting the businesses in the Hauppauge Industrial Park (HIP). In the “good problem to have” category, Flexible, with over 125 employees, has now outgrown the Oser Avenue facility that it moved into in 2014. In need of more space, Flexible has worked with the Suffolk County IDA to purchase a 40,000-square foot facility on Motor Parkway – double the size of its current headquarters.

It was a no-brainer for Flexible to stay in the HIP, Schmitt said. “It just makes sense for us to be near like-minded businesses of similar size – there are a lot of synergies, not to mention that the park is centrally located.” This location has helped them attract top talent from Stony Brook University and Farmingdale State College, whose graduates have impressed Flexible’s leadership team.

For those occasions when clients do have to call Flexible, “our response needs to be immediate,” Schmitt said. The company therefore always has extra headcount and continues to bet on growth. It’s a business model that’s obviously working.

Learn more about Flexible Systems at https://www.flexiblesystems.com/.

A training session underway; co-founder and Rangers fan Marty Schmitt.

Flexible’s colors feature prominently in their logo and their hallways.

College friends and business partners Joe Saggio and Marty Schmitt (not pictured: co-founder Seth Belous); Joe Saggio, Marty Schmitt, and Joe Campolo.

Kevin Edwards, Joe Saggio, Marty Schmitt, Joe Campolo.

Flexible’s outdoor patio, pictured here in warmer weather. Employees enjoy barbecues and music outdoors on Fridays during the summer – a forward-thinking approach to recruit talent and show employees how much they’re valued.