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

by Gross, Michael

  The architect came up with a number of solutions, all incorporating a low building facing Central Park and a tower behind it nearer to Broadway, both growing out of a podium base a few stories tall with retail all around. Pelli, lobbyists, attorneys, and specialists went back and forth with the city. Avlon avoided the meetings. For him it was just part of the chess game, a useful exercise or, as he puts it, “a rough massing response to a problematic spatial association.” But when he realized that the City Planning Commission was focused on the rarity of a full-block development site, a lightbulb went off and he understood he might induce the city to enter into a quiet understanding of special treatment for his special block. The raw power of real estate in New York City cannot be overstated.

  The Special Lincoln Square Zoning District was formally revised in February 1994, and city planners endowed Avlon’s rare block with special zoning status. Formally speaking, the agreement limited the size of what could be built there, but it actually enhanced the development possibilities. The new rules mandated a 125-foot street wall on Central Park West and a lower one on Broadway. But Avlon successfully argued that the greater good was to protect the streetscape of Central Park West and reflect the block’s importance as a transition point from high-rise midtown to sedate Central Park West.

  “It was a critical site,” says Joseph B. Rose, then the chairman of the planning commission. “The goal was to let them do something special there, to recognize the Central Park street wall but tie it in to Columbus Circle, which I saw as the gap tooth in Broadway’s smile. The redevelopment of the Mayflower site was crucially important to making that part of town work. What evolved was not an accident. I find it quite gratifying, actually.”

  His success with the city aside, Avlon still didn’t know whether he wanted to develop his block, net-lease it, sell part of it, sell it all, or enter into a joint development venture with others. But those who don’t need money often make the most of it. So Avlon was content to sit back and watch, sometimes from that penthouse he kept atop the Mayflower. He held an annual holiday party there to which he invited all the city’s top developers—as if they needed to be reminded that they were partying atop a gold mine.

  * * *

  I At the time, John Barrington Bayley, a classical architect, proposed a radical Roman-style remake of Columbus Circle, opening tunnels beneath it for traffic and surrounding the statue with a massive colonnaded portico and pedestrian forum evocative of Bernini’s St. Peter’s Square, only with the Vatican’s big basilica replaced by a concert hall and opera house, public houses of worship of a different sort. Within, Bayley envisioned a great gallery inspired by the Hall of Mirrors at Versailles. But his dreams never made it past the sketch phase.

  Part Five

  * * *

  INHERITANCE

  Greatness of name in the father oft-times

  overwhelms the son; they stand too near one another.

  The shadow kills the growth: so much, that we see the

  grandchild come more and oftener to be heir of the first.

  —BEN JONSON, TIMBER; OR, DISCOVERIES MADE UPON MEN AND MATTER

  Will Zeckendorf rejects the notion that he and his brother inherited their first ground-up development project from their father. “The simple fact of the matter is that, yes, our father bought 515 Park, and then he got, as usual with him, waylaid on six projects and was in financial difficulties,” Will says. “We were always partners in 515, Arthur and I. From the get-go. And there came a time when Arthur and I wanted to go in a different direction and we flat bought him out. Period. End of the discussion. So at that point we had a hundred percent but we had nothing, because all we had was a mortgage that was worth thirty or forty million dollars more than the property and a Japanese firm that wanted to go back to Japan.” Once their new partners at Goldman Sachs bought that mortgage and ripped it up, though, nothing turned to something. In 1998, the brothers Zeckendorf finally became developers on their own account.

  “You cannot let a legacy tell you how to run your business life,” Will continues. “I’m hugely proud of my grandfather. The B-word [bankruptcy] is just a footnote; I look at his accomplishments. But the experience with my father from 1989 to 1992 was not fun. We were young. We had no wealth to speak of. We were getting paid, but no more than that, and we were essentially unemployed in 1991. It was traumatic. The ship was underwater, and unquestionably those three years instilled some things in us: One building at a time. Keep debt down, cash high, and structure low-risk deals. We struggled and then things started to click. I think Arthur and I are fundamentally self-made. But we got an education that was unrivaled, a gold-plated education, the best education one could have gotten, from our father. Five or six years of massive responsibility.”

  That education, followed by graduate work at Millennium Tower, set the stage for 515 Park. They’d demolished the old building there and were laying a new foundation when they finally revealed plans for their $100 million building early in 1998. The news earned them a front-page story in the New York Times under a headline that made it clear that something significant had changed—both for the brothers and for luxury living in Manhattan: “A Haven for the Super-Rich with Room for the Servants.”

  Their part-ownership of Brown Harris Stevens had confirmed what they’d seen at Millennium.I Only two decades earlier, grand East Side apartments from the heyday of Candela and Carpenter had been white elephants. But in the years since, they’d become rare trophies, and since co-ops were hard to buy and sell, a pent-up demand existed for similarly grand domiciles. The Zeckendorfs decided to refresh the old template.

  After studying floor plans and touring some of New York’s best prewar buildings (many of them managed by Brown Harris Stevens), they wrote a business plan about “how to hark back” to the grandest buildings in Manhattan “and translate that into modern living,” Arthur says. They studied 834 Fifth Avenue and 740 Park, seeking a way to build old-fashioned apartments for the newfangled rich. Obviously, they’d be condominiums, but what kind of condos would they be? “Prewars are great,” says Arthur, “the best housing ever built. But with the exception of a few buildings—834 Fifth, 2 East Sixty-Sixth, 740 Park, and the San Remo—they’re generally cookie-cutter. The same windows, the same brick. So you copy but you want to make it better.”

  In the larger narrative, 515 Park was a rehearsal, a training-wheels version of what would follow across town. The Times announcement notwithstanding, it was also a stealth condominium, particularly after the Sturm und Drang that had accompanied the Trump International and the Time Warner Center. But it revealed the brothers’ ambition and their style, which had matured since their days marketing West Side condos. Now, they decided to offer not just standard-issue amenities—gym, concierges, setback terraces—but to revive such old co-op chestnuts as five-bedroom duplexes, twenty-by-thirty-foot parlors with ten-foot ceilings, fireplaces, stately baseboards and moldings, and a ground-floor restaurant with a catering kitchen for large parties. They’d also reinvent servants’ quarters and individual wine cellars as new profit centers by moving them out of apartments and selling them (and storage spaces) separately. This was the sort of opulence that had, after the 1930s, disappeared. They added 150-square-foot marble bathrooms and state-of-the-art heating, air-conditioning, electrical, and technological systems as sweeteners. All in all, 515 Park was going to be, as the Times put it, a hot young thing “made to look like a gracious old dowager.” Lamb dressed as mutton, you might say.

  Convincing their backers at Goldman Sachs that this was a good idea wasn’t easy. Though the bank’s real estate professionals were on the Zeckendorfs’ side, they had to get approval from an investment committee that included top Goldman hands, some of whom had their doubts about reviving 1929-style apartments. So the Zeckendorfs ferreted out where the skeptics lived, printed floor plans of their personal apartments, and explained why, in each instance, 515 Park would be better. “People really dug that,” says someone who was i
n the meeting where they won approval of their plans.

  The Goldman honchos weren’t the only skeptics. Owners of the condos would “have no say about who their neighbors are,” the Times warned in the last sentences of its page-one story. “The only guarantee would appear to be that they will all have a lot of money.”

  At the turn of the century, people with a lot of money were quite a bit different from those who’d long called the rarefied but hidebound East Side home. In May 1998, when the Zeckendorfs celebrated the start of the building at a caviar-and-champagne reception in the pit of the finished foundation, New York’s economy was soaring, new money was sloshing around town, and the very notion of what constituted wealth was being redefined by the almost unfathomable fortunes being spun out of the ether of the Internet and high-tech-driven finance. Whether they’d made their money on Wall Street, as entrepreneurs, or had just inherited it, the new wealthy had a new set of expectations. Empty nesters and jet-setters who would once have settled for a tiny Manhattan pied-à-terre with a Pullman kitchen suddenly wanted mansions in the sky, even if they only planned to use them a few weeks a year.

  Fueled by the money of the superrich, Manhattan real estate had been flying high for three years, with prices leaping an average 20 percent a year. So once the 515 Park condo plan was approved and the units went on the market in late spring 1998, the developers had high expectations for quick sales despite unprecedented prices. Their optimism was rewarded when 40 percent of the apartments were sold in the first two months. Before the year ended, they’d raised prices on the best remaining units to $3,000 per square foot, with penthouse duplexes exceeding $15 million, easily topping the record prices achieved a year earlier at the Trump International. “The building embodies the bull market,” USA Today wrote in summer 1999. “515 Park Avenue is about as good as the good life gets.”

  Even the usually reticent Arthur Zeckendorf started boasting. “Breaking new records every week,” he crowed, claiming to have signed contracts from Wall Streeters, entrepreneurs, and tech types. Demand for the maids’ rooms was so high, he continued, that they’d removed and broken up an apartment to create more. By spring 1999, only six apartments were unsold, and at the end of that summer, only two remained. Names of buyers had begun to leak out, including record-company and fashion executives, and the theatrical producer James Nederlander Sr. Even Donald Trump was impressed. “They’ve done a really terrific job,” he told the New York Post, which named 515 the city’s new top condo.

  The building had already opened and owners were moving in when it emerged that another purchaser was Jon Corzine, who’d been the chairman and CEO of Goldman Sachs when it agreed to finance the building, but had since been forced out of the investment bank and was running for a US Senate seat in New Jersey. He’d bought a duplex penthouse as an investment, as he intended to remain in his longtime home in New Jersey, but his purchase was one more indication of 515’s instant cachet.II By that point, the Zeckendorfs were already on to their next project.

  Early in the year 2000, as 515 Park was selling out, Arthur and Will zeroed in on two more development sites. One was just down the street from 515. In March, they bought a six-story apartment house on East Sixtieth Street between Madison and Park. A Goldman Sachs client owned the adjacent property, and in 2001 the Whitehall team introduced Will and Arthur to him. It proved a fortuitous encounter.

  Eyal Ofer was one of two sons of Sammy Ofer, a Romanian Jew whose grandfather arrived in the Mediterranean port of Haifa, then in Palestine, in 1924. “Foreign ships used to arrive at the port, and vendors would rush to the vessels and ask for captains’ favors in accepting their supplies,” says Eyal. “So this is how we started a shipping business.” Shortly after Israel won its independence, Sammy Ofer became a shipowner, buying his first vessel on the day Eyal was born in 1950. “So he called me and the ship Eyal.”

  In the late 1960s, Sammy Ofer enrolled Eyal in a British school and, later, moved to London himself. Eyal went home to Israel for military service, but then returned to England to study maritime law while working for his father, who’d relocated their shipping interests to Monaco in the late 1970s. In 1980, when oil prices peaked, Sammy Ofer decided to diversify and sent Eyal, his wife, and children to New York to scout its real estate market. Over the next decade, Eyal “figured out New York ways,” he says. “We did not know the name of a street. We had no clue. And we had to identify the good guys from the bad guys, and we had to take advice from people we had no familiarity with.”

  Ofer’s first purchase was a brownstone on Forty-Second Street near Fifth Avenue. He paid $800,000 for it. His father told him he was crazy—“the Deuce,” as it was known, was still a derelict corridor full of prostitutes and drug addicts. “Those people will move,” Eyal promised his father, “but the building will stay.” Sammy wouldn’t listen—and ordered him to sell it immediately. “In less than a month, I called him back and I said we sold the building.”

  “How much you lost?” Sammy asked.

  “I sold it for $1.8 million,” Eyal replied—a million-dollar profit.

  “So, you know what you’re doing?” his father marveled. “Okay, go and find another one!”

  “And the rest was history. In eighties Manhattan, you could not go wrong.”

  Though Ofer eventually returned to London and the shipping business, he continued to invest in real estate through the 1990s, expanding the family’s interests around the world. Meantime, Sammy Ofer moved into the top rank of Israeli business when he acquired Israel Corp., the country’s largest holding company, in 1999, adding chemicals, energy, raw materials, and semiconductors to the family portfolio.

  That year, the family was said to control $3.5 billion in businesses, including three banks, several more financial firms, Judea Hotels, and the Royal Caribbean cruise lines. The Ofers were also in joint ventures with wealthy American counterparts such as the Pritzkers of Chicago and the Millers of Denver, as well as the handful of families who composed Israel’s transnational commercial ruling class. That brought them into the orbit of Goldman Sachs.

  Though domiciled in Monaco (Eyal Ofer holds dual citizenship in Israel and the European Union), the Ofers had ties with Israeli politicians and economists, some of whom moved freely between employment by Israel the corporation and Israel the country. That made the Ofers controversial. They sued to block the airing of a 2008 documentary that looked into a purported cozy relationship with the government. Ofer brushes it off, saying he was more upset by the family’s first appearance, in 2007, on a newspaper list of the ten richest families in the United Kingdom. He admits, “Our holdings in Israel are the largest,” but says he called the Times of London, which had published the list, to complain. “I managed to convince the editor that I don’t belong there.”

  His brownstone on East Sixtieth Street attracted more welcome attention. “One day we get a call from Will [Zeckendorf],” Ofer recalls, “and he said that he is interested to buy our brownstone. We told him the building is not for sale.” Zeckendorf pushed to meet. “We knew then little about Will except that he was involved with Goldman in 515, and so we tried to get out from him what was his unique interest in the dilapidated, secondary brownstone, in a fine location, which we always esteemed for greatness but it took too long to achieve it.”

  Initially, Will refused to say, so Ofer refused to continue the conversation. Zeckendorf wanted “to fish without paying for the license,” says Ofer. But soon, Will was back with “a guy from Goldman Sachs. ‘Okay. Full disclosure. We own jointly with another party three other brownstones and we have an intention to develop a skyscraper there. And your building, to tell you the truth, is the key to the safe because without it [our] building is too narrow. With it, it is just the right size. Now, will you sell?’ ” Ofer said yes, but not for cash. He wanted part ownership of the skyscraper. “So we negotiated and we got the right proportions of ownership and we became friends. In the meantime, the land of the Mayflower Hotel was about to be
auctioned. Everybody wanted to participate.”III

  No one concerned can now recall with precision when the Zeckendorf brothers first met John Avlon, another shipping heir and son of a man who started life doing manual labor in a port. But Will is sure that he encountered Basil Goulandris, one of John P.’s grandsons, at a dinner party. “He had a site he’d talked about for years,” Will remembers, “and he said, ‘Actually we’re thinking of doing something.’ And he set a meeting up for Arthur and me to go visit John Avlon at the Mayflower.”

  Avlon made a deep impression on the brothers. “John is American but with European manners,” Will says. “He conducted meetings in a very formal way around the coffee table. A Mayflower maid would offer you coffee.” Everyone had his designated seat. “We were told to sit in a specific location,” says Arthur. “And his right-hand man, Bob Konopka, was always there.” Konopka had worked for the Mayflower’s owners and joined Avlon’s company when it bought the hotel.

  Their first meeting was “perfectly pleasant,” says Will, and they continued to get together for the next seven years, always following a similar script. Avlon would tell them the block wasn’t for sale, but the corporation that owned it might be. That meant any buyer would face significant exposure to taxes and various corporate liabilities, even unfunded pension liabilities for the hotel workers. Avlon also said that the remaining rent-regulated tenants in the building would be “your problem, not our problem”—and quoted “a very high price.”