House of Outrageous Fortune: Fifteen Central Park West, the World’s Most Powerful Address

by Gross, Michael

  “The demography started changing. New York was conquered by outside people like myself. The city became more international, more cosmopolitan.” Kondylis simultaneously became a senior partner in the firm of Philip Birnbaum, the successful but undistinguished architect of the Galleria, where his first job was Madison Green, a banal condo on Madison Square Park. But with his next commissions, Manhattan Place on the East River and Trump Plaza (both completed in 1984), Kondylis came into his own. He’d decided that to be successful, condos had to be iconic. “The black building, the pink building, the building with the balconies,” he says. Manhattan Place occupied “a whole city block on the waterfront and had great views and was sunbathed because of its bay windows in contrast to prewar buildings with small windows and dark rooms.” It also had a health club, a jogging track on its roof, a swimming pool with a retractable ceiling, and a restaurant and party room. It caught Trump’s attention, which changed Kondylis’s life.

  His Trump Plaza was distinguished by its Y-shaped design, which created extra corner apartments boasting magnificent views, as well as a health club, garage, and sundeck. It was not “distinguished,” Paul Goldberger wrote in the New York Times, “but it surely glitters amid the banality of the rest of Third Avenue.” Other critics of Kondylis and Trump, who would continue working together for twenty-five years, scorn the model they championed: flashy, eye-catching façades and lobbies leading to undistinguished, boxy apartments with staggering views. But their commercial appeal was inarguable. Unlike co-ops, condos could be traded, just like stocks. “People started to look at apartments the way they look at cars and labels,” Kondylis says. “Apartments became commodities, proof of success. The market caught on fire. Everyone had to have a brand name, an architect and great kitchens and bathrooms, to justify the cost and satisfy the ego. The idea of buildings as lifestyle had come to Manhattan.”

  Two more mixed-use, luxury-lifestyle condo towers—both near Carnegie Hall—sprang from Manhattan’s schist in the mid-1980s. Harry Macklowe, a broker-turned-developer, had started planning what became Metropolitan Tower two doors down from the concert hall on Fifty-Seventh Street in 1983. Bruce Eichner, a prosecutor-turned-developer, hired the German architect Helmut Jahn to design CitySpire, just to the south, across Fifty-Sixth Street, in 1985. Nearby blocks were already home to a number of sophisticated luxury co-ops such as the Osborne and Alwyn Court, but they were more than a century old. The sparkling new condos were a welcome addition. Metropolitan Tower was completed at the end of 1986, CitySpire the following year. For a moment each held claim to the title of New York’s tallest residential building, but height alone would make neither one iconic, nor would it turn the busy streets around them into a sought-after residential neighborhood. But they were vital links in the chain that would eventually connect Olympic Tower to Fifteen Central Park West.

  Metropolitan Tower, architect Peter Claman’s $165 million, forty-six-story triangle rising from a twenty-story rectangle, and clad in a ruthless, reflective black-glass curtain wall, came on the market with apartment asking prices as high as $5 million. Macklowe set its condos apart from the nineteen thousand others already in the development pipeline by promoting them as better-than-luxury homes. A reporter described the building’s promotional video as “an everyday story of rich folk who give up their stately homes in England, their yachts in the Aegean, and their ranches in Texas to come to New York to take advantage of the lavish facilities in Metropolitan Tower.”

  Macklowe hoped to get a mind-boggling $1,300 per square foot for a penthouse duplex with views in all directions—and an average price of $500 per square foot. To attract that kind of money, he offered 1920s frills such as a full floor of separate staff quarters, a waiting room for chauffeurs, a private dining club with a catering kitchen for parties, health club and pool, and valet and limousine service. “Apartment kitchens have been purposefully minimized because the majority of tenants at this profile level are not interested in preparing food,” Macklowe said.

  Despite all that and the Léger tapestries in the building’s lobby, critics still said his apartments were overpriced with odd corners that made them hard to decorate, minuscule kitchens, and too-small closets, and detractors mocked his claim to have sold half of them before the building opened. Initially, a significant number of apartments were sold to Japanese and Italian investors who swooped in and bought America on the cheap in those years, picking up as many as a dozen apartments at a clip and renting them out. Not until mid-1991 did Macklowe finally sell the 7.5-room penthouse for $4,328,000, about a million less than he’d hoped for.

  But Metropolitan Tower quietly attracted a brace of celebrities over the years, such as Miles Davis, Diana Ross, Michael Jackson, Martin Scorsese, Jackie Mason, Patrick Swayze, Marc Anthony and Jennifer Lopez, and O. J. Simpson attorney Johnnie Cochran. The daughter of the late shah of Iran, and the late Norio Ohga, former chairman of Sony Corp., who owned the penthouse, also lived there. The big black building was definitely not just for white people.

  Helmut Jahn’s CitySpire, a seventy-two-story office-condominium tower, benefited from twenty-six stories of air rights bought from the city-owned landmark City Center theater and a bonus of twelve more floors that Eichner earned by paying to renovate the theater. His lender, European American Bank, and several other companies had already leased office space on its bottom twenty-two floors when the apartments above went on sale in March 1987 at prices ranging from $190,000 for a studio to more than $1 million for a three-bedroom duplex penthouse. Eichner promised purchasers private conference and billiards rooms, a fitness center, and such novel perks as priority reservations in “exclusive” restaurants and a branded “SpireCard” credit card. Ads for the building showed Jahn’s slender stone-and-glass tower topped by a Moorish-style copper dome in silhouette over the slogan “Above it all.”

  Alas, that wasn’t quite true. That June, it emerged that, due to a miscalculation, the tower had been built eleven feet higher than the design approved by the city. After almost a year of wrangling, Eichner agreed to cut down some setback parapets, eliminate sixteen spires that were part of the original design, drop a lawsuit against the city, and add three finished floors of rehearsal space above a pedestrian arcade that connected to the adjacent City Center—and give that to the city gratis in exchange for not having to lop off the top of his tower. Until the space was finished, the two top floors of CitySpire—where its most expensive residences were located—could not be offered for sale. Even after the agreement, arguments continued, and at one point the steel ribs erected to hold the dome were removed.

  But that wasn’t CitySpire’s only problem. Shoddy finishes, an inappropriate granite base, and cramped apartments (more than two-thirds of CitySpire’s condos were one-bedroom units or studios) symbolized a miscalculation of the market. Nonetheless, after a year, foreign money rode to the rescue, and by the time closings began, 200 of the 340 units were spoken for, with about a third sold to offshore beneficiaries of a decline of the dollar against other currencies.

  CitySpire’s bad luck continued, however. In mid-1989, a fire broke out in one of the still-unfinished penthouse duplexes. Then, in December 1990, after the building was ostensibly completed (though neither its pedestrian arcade nor the promised rehearsal space had yet been built), it started to whistle—a high-pitched noise that generated hundreds of complaints and fines and was blamed on louvers in the copper dome. By then, Eichner was in money trouble, too.

  In 1993, the bank that had foreclosed on CitySpire turned to Will and Arthur Zeckendorf to market the seventy-five apartments left unsold—the first project of their new company, Zeckendorf Realty. Fourteen months after they’d signed on, the Zeckendorfs had disposed of the last of them. But even twenty years later, in 2012, when the owner of the penthouse there put it on the market, asking $100 million in a bid to top Sandy Weill’s $88 million sale of his penthouse at Fifteen Central Park West, the reputation-challenged CitySpire was and remained an also-ra
n. Appropriately enough, the building that finally topped CitySpire was Donald Trump’s 861-foot Trump World Tower near the United Nations, Costas Kondylis’s elongated tribute to the iconic Seagram Building. Completed in 2001, it would hold the title of New York’s tallest apartment tower until 2014.

  As the Zeckendorfs already knew, Manhattan real estate is a feast-or-famine business, and by the late 1980s Donald Trump was in big trouble. He was stuck paying millions in annual taxes for the hundred acres of the former Penn Central yards stretching from Fifty-Ninth to Seventy-Second Streets along the Hudson River, where he’d envisioned a development called Trump City. But the project had been put on indefinite hold. Big Bill Zeckendorf had once “had the same city-sized dream,” for his Television City, Tom Shachtman wrote in his book Skyscraper Dreams, “and had been bled dry by holding the area.”

  Only six years earlier, Trump had acknowledged his debt to Big Bill, but drew a key distinction. “I used him as a model,” Trump said. “He was a great visionary but he wasn’t fiscally conservative. Having seen the way he went down taught me to be overly so.” Now, though, Trump’s overreaching was making headlines. The Wall Street Journal would soon conclude that his personal guarantees on loans might exceed $600 million.

  But Trump was not one to go down without a fight. In 1993, contracts were out on 81 percent of the apartments at his latest condo, Trump Palace, averaging $634 per square foot. And despite the collapse of the real estate market, Trump Tower, by then a decade old, was commanding resale prices of $1,000 per square foot. “That was a barrier,” recalls Marilyn Kaye, one of the first condo specialist-brokers in New York. “Donald always said he’d get more. People said it would never happen.” But it did. Like his signature tower, Trump himself would survive, prosper—and continue to drive his detractors to distraction—for years to come. But it would be the end of the century before he completed his comeback. Meantime, Arthur and Will Zeckendorf were setting the stage for their own.

  In July 1992, excavation began on a block bounded by Broadway, Columbus Avenue, and Sixty-Seventh to Sixty-Eighth Streets for what was touted as the most significant mixed-use condominium project in New York City history. Lincoln Square was set to include a multiscreen movie theater, a sports club, a post office, retail stores, and rental and condo apartments for both the middle class and the wealthy. This was the first of three connected projects near Lincoln Center that would stir up intense controversy, but would also set the stage for the construction of Fifteen Central Park West—and define its architecture. But it wasn’t the first building project in the neighborhood with the name Lincoln Square. Given their family history, it is not surprising that all three generations of real estate Zeckendorfs would have played a part in its story, which stretched back almost forty years.

  In 1955, a Slum Clearance Committee headed by Robert Moses, who’d been a planner working for the city and the state since the 1920s, first used the name Lincoln Square when it proposed razing about thirty acres north of Lincoln Center between Broadway and West End Avenue—a decaying working-class neighborhood sometimes called San Juan Hill—so that Bronx-based Fordham University could consolidate the four separate schools it ran in Manhattan. The plan was expected to cost more than $75 million.

  A year later, Moses presented a revised plan that would cost twice as much and had been expanded to fifty-three acres and eighteen city blocks, in which 595 parcels would be cleared and only half a dozen buildings would survive the slum-clearance project. Not only Fordham but also a new music and arts center sited on a so-called superblock three blocks long would be its beneficiaries. They were to be joined by new municipal buildings, a housing development, stores, hotels, and office buildings. In June 1956, the cultural center was incorporated as a nonprofit called the Lincoln Center for the Performing Arts. John D. Rockefeller III was chairman (and his father was one of the backers) of the group that had brought the Metropolitan Opera, the New York Philharmonic Symphony, and the New York City Ballet together as partners in the project. A month later, plans were announced by Wallace K. Harrison, the Rockefeller architect who’d also designed X City for Big Bill: Lincoln Center’s style was to be “monumental modern.”

  Big Bill and Webb & Knapp soon signed on to build the Lincoln Towers portion of the project, and he became one of its spokesmen when, inevitably, critics began tearing into the plan, which delayed implementation until mid-1958, when the first of more than five thousand families were evicted and relocated after the US Supreme Court refused to stop the redevelopment. Construction of Lincoln Center began in 1959, Philharmonic Hall (later renamed for the audio pioneer Avery Fisher) opened in 1962, the New York State Theater in 1964, the Library and Museum of the Performing Arts in 1965, the Metropolitan Opera finally moved north in 1966, and in 1969 the Juilliard School and its Alice Tully Hall joined them. Eventually, the center would be home to more than two dozen indoor and outdoor performance venues and would host everything from the New York Film Festival to fashion shows.

  New apartment towers followed in Lincoln Center’s wake. Paul and Seymour Milstein, whose father had made a fortune from a flooring company, bought an entire block of Broadway three blocks north of the theater complex in 1961. Dorchester Towers, sold as a luxury rental building “with virtually all the accouterments of east side apartment living,” according to the New York Times, opened there in 1965 and took three years to fill. A white brick building typical of the era, it really had none of the virtues of old apartment houses, east or west.

  The Milsteins struck again in 1968 when they began demolishing a plot on Broadway across from Lincoln Center for Lincoln Plaza, but the city’s planning department filed suit to stop the forty-two-story tower, claiming that it threatened a proposed special zoning district to take effect the next year. It ran from Sixtieth to Sixty-Eighth Streets between Amsterdam Avenue to the west and an eastern boundary running between Broadway and Central Park West. The new zoning gave developers the right to build high-density towers like Lincoln Plaza if they provided street-level plazas and arcades. The Milsteins won the right to exceed the prevailing FAR by more than 30 percent and finished Lincoln Plaza in 1971.

  The Milsteins also owned the blockfront just to the south, and three years later they were still fighting with the city and community groups over their desire to erect a forty-three-story tower there. They finally won permission to build a shorter, thirty-four-story tower with arcades and a plaza. The Lincoln Plaza district was “a deadly failure,” says Roberta Gratz, the journalist and neighborhood activist. “They thought they’d get Bologna, with arcades. It was not Bologna. Then came the next one and the next one and the next one. Every year there was a zoning fight.” Thankfully, in the economically disastrous late 1970s, she concludes, “new construction ground to a halt.”I

  In April 1990, the owners of the American Broadcasting Company decided to sell two full blocks along Broadway between Sixty-Eighth and Sixty-Ninth Streets. A syndicate made up of Bill Zeckendorf Jr., Martin J. Raynes, another second-generation real estate operator, the American subsidiary of a Japanese conglomerate that had invested in Bill Jr.’s Central Park Place and Zeckendorf Towers, and the Goldman Sachs investment bank, which was playing matchmaker as well as investing its own money in the deal, won an option to buy the land.

  General Atlantic Realty, a branch of a private investment firm specializing in low-income housing, wanted a piece of it, too. It had pioneered a procedure that allowed the transfer of tax abatements and incentives to developers of luxury apartment towers, giving them the right to erect taller buildings, and made a deal with the Zeckendorf-Goldman-Sumitomo-Raynes consortium for a piece of the project. General Atlantic Realty’s principals were thrilled to hook up with “masters of the real estate universe,” says its then-president Philip Aarons. “But no sooner was the ink dry on the deal,” and a $10 million deposit paid, “than the world collapsed.”

  Raynes fell victim to the real estate downturn and would soon be driven out of business. Zeckend
orf fell out next. Will Zeckendorf well remembers the day he accompanied his father to Goldman Sachs “to break the news that he was fundamentally unable to make his capital call on the project,” Will says. They told Bill Jr. politely but firmly, “You’re out as a partner.” But Goldman was out, too. “The market nose-dived, we couldn’t raise the rest of the money and we lost the deposit,” says a party to the transaction. “But then, Chris came in and saved the deal.”

  Christopher Jeffries, a lawyer-turned-developer who worked alongside Aarons at General Atlantic, was an ambitious man who’d recently married Princess Yasmin Aga Khan, the daughter of Rita Hayworth and Prince Aly Khan. Jeffries wanted to try to take over the project, but General Atlantic balked. “Everyone thought it was valueless,” says Aarons. “There was nothing nearby you would call high-end other than a few nice blocks” of brownstones. So they decided to go it alone and, as “a departure gift,” General Atlantic gave Aarons and Jeffries the right to proceed, and they left to form their own company, Millennium Partners.

  Jeffries and Aarons won Goldman Sachs’s backing, and eager to keep the deal alive, the corporation that owned ABC agreed to a $13 million reduction in the original $105 million purchase price for its land and lenient terms on the second payment in exchange for equity in whatever was eventually built. Jeffries personally came up with $1 million to secure the arrangement. After bargaining for free office space from ABC, and fee-deferral agreements from their lawyers and architects, the Millennium team faced their biggest problem: finding the remaining $81 million in a market where the credit cupboard was bare. Jeffries came up with a compelling and creative way to finance the project. They would presell segments of the multiuse building, just as developers sell condos, only in this case, separate buyers would purchase blocks of rental and condominium apartments, the retail stores, the theaters, and a sports club facility. To differentiate those uses, the commercial entrances would face Broadway and Columbus Avenue, and the residences, Sixty-Seventh Street.