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

by Gross, Michael

  Brian France, the CEO and chairman of NASCAR, who’d signed a $10.8 million deal for 34A in the tower five months after his star driver Jeff Gordon bought in the house, sold for $12.5 million to India-born, Nebraska-raised Gotham Makker, a onetime portfolio manager for Ken Griffin’s Citadel hedge fund, and his wife, Vicky, a gynecological-cancer doctor at Memorial Sloan-Kettering. They’d moved to 15CPW from Time Warner, where they’d bought an apartment from Fifteen’s Joseph Betesh and Joanna Cutler. First, they bought a small rear apartment, selling it when they moved upstairs. Makker soon joined the 15CPW condo board.

  Richard Fields, a casino and hotel developer, flipped 38A, which he’d bought for $13.6 million, for $27 million, to a faceless corporation. A year into the Great Recession, the Israeli energy entrepreneur Eliahu Zahavi sold his $4 million unit for $7.35 million in cash to Larry Ruskin, a retired businessman from Calgary, Canada.

  Though Ruskin was upset when a brief bidding war forced him to up his offer for the place by thousands, his distress soon faded. “You keep seeing the prices going up,” he says with a satisfied smile. The biggest negative about the building, he adds, is the letters from real estate brokers urging him to sell. “A day doesn’t go by you don’t get two or three,” he says.

  The desire that motivated those letters and at least some of the flips was surely stirred by the owners of three trophy units who tried to sell early and cash out big. The noise their listings made was amplified in the echo chamber of Manhattan real estate—and sealed Fifteen’s reputation as the world’s richest new building. In May 2008, still playing catch-up with the New York Post, Josh Barbanel caused a sensation when he led his New York Times column with the scoop that a $100 million offer had been made for a Fifteen penthouse. Appropriately, perhaps, the story came from the apartment owner himself, a biotech hedgie who has seen more than his share of bad publicity.

  Lindsay Rosenwald comes from Abington, a suburb of Philadelphia, attended Penn State, where he studied economics, then spent two years in health care before enrolling in medical school at Temple. But even there, he kept a hand in finance. “I put my student-loan money in a brokerage account,” he says, “and started investing in health care and biotech. I made a lot of money.” Nonetheless, he pursued medicine, interning in his hometown and then setting up a suburban practice. “The two and a half worst years of my life,” he says. In 1985, he quit and got a job at an investment bank as a junior analyst of pharmaceutical and biotechnology companies. A fellow analyst who knew that the diminutive, curly-haired, and sharp-eyed Rosenwald wanted a wife and family pressed him to meet Rivki Davis. She was one of four daughters of J. Morton “Morty” Davis, né Davidowitz, the son of a pushcart peddler.

  A Harvard Business School graduate, Morty Davis joined D. H. Blair, an investment bank, in 1961. Blair, which had its roots in the garment business, was known as an aggressive firm, and Davis fit right in. By 1966, he’d made himself into a brand of sorts, soliciting clients for Blair by advertising the Davis Letter, which that year discussed “inflation . . . the Viet Nam War . . . the economy . . . the stock market . . . Elizabeth Taylor . . . the New York Yankees . . . and what you as an investor should do right now!” By 1968, he was Blair’s president, quoted in the Wall Street Journal predicting market trends.

  Rosenwald and Rivki Davis went out on a few dates. He thought her stunning. But as an Orthodox Jew, she feared a romance with someone less religious. Still, impressed with his professional skills (he’d found a promising diet drug in Europe and created a company to try to bring it to market in America), in 1986 she recruited Rosenwald to Blair, where she was her father’s in-house lawyer. “They were big in biotech and wanted a medical doctor who understood medical technologies,” Lindsay says. “We worked there together for a while and then we became involved romantically.”

  By the end of 1988, they were married and had a child when Rosenwald was named a managing director of the firm, heading a team charged with finding more medical advances worthy of investment. “To make money honestly on Wall Street, you have to find legitimate inefficiencies in a business” and exploit them, he says. When he decided to bet on unproven drugs that couldn’t gain strong patent protection in America (meaning the companies that marketed them would have only short exclusivity periods), “some companies laughed at me,” he recalls, but he bet that even without those protections, a good new drug could quickly make a fortune, and after Blair took his first company, Interneuron, public, its stock leapt from fifty cents to $50 a share, the company was worth $2 billion, and Rosenwald was briefly considered the richest man in biotechnology, worth about $675 million.

  Rosenwald says he’d “always wanted my own shop” and, in July 1995, left Blair to found Paramount BioCapital, a venture capital business. He says his departure was unrelated to issues like those reported in a front-page article in the Wall Street Journal in 1991, which revealed an SEC (and National Association of Securities Dealers) investigation of Morty Davis and D. H. Blair for what the paper called a “churn and burn” scheme to pump up the value of newly issued stocks, then dump them for big profits before they fell in value. The Journal also revealed that NASD had fined the firm two years earlier for unfair pricing of stock; that a year before that, two Blair clients had brought a $3 million civil-racketeering suit against it; and that in 1986 a Blair customer had charged Davis with breach of contract and won a $3 million jury verdict. Davis’s troubles with regulators went back even further. In 1973, the Securities and Exchange Commission had charged that he and Blair had illegally used insider information while trading in a biomedical stock. “What’s the secret of his success?” Forbes asked in the mid-1980s. “Better you shouldn’t ask.”

  Separated from Blair, if not his father-in-law, Rosenwald won both fervent admirers and detractors as he built Paramount into a merchant and investment bank and asset management firm. The crash of Interneuron after a similar drug to its Redux was found to be dangerous and Redux was abruptly pulled from the market has often been used as a stick to beat him. So while several websites of unclear origins hail him as a great leader in biotech, thanks to his investments in clinical research and drug development, others have charged that his investment success stories are balanced by “evident abysmal failures,” as the Seeking Alpha stock-market-opinion website put it late in 2012; the stories of some of those companies, the “enticing smoke screens” used to promote them, and the subsequent “dilution” of their value “through stock issuance and bad financing deals” harken back to the pump-and-dump charges leveled against Rosenwald’s father-in-law.

  “It’s easy to take potshots at people on Wall Street, unfortunately,” says Rosenwald, who proved the Seeking Alpha story to be false and had it removed from the site. Attacks on him continue all over the Internet, as well as in several books, that reach a finding of guilt by association with his father-in-law. “What am I going to do? Divorce my wife?” he asks. “Morty’s a wonderful guy, a wonderful father-in-law, a wonderful business associate.” Rosenwald admits he hired “reputation management” professionals to create those websites that extol him on the Internet. But he clearly prefers to defend his own record, first in venture capital with Paramount and then, since 2009, as the cofounder of OpusPoint Partners, a biotech-focused hedge fund.

  Rosenwald was among the first twenty buyers at 15CPW, picking up the A-line duplex on the eighteenth and nineteenth floors of the house for $30 million on the day of the September 2005 ground-raising after watching the block for years. He decided against one of the tower penthouses and chose his duplex despite its $30 million price because “it’s more a painting than an apartment,” he says. “It’s a very limited asset. You can never put a price on it. I didn’t know if I was overpaying at the time. But I was one hundred percent certain that over the long run the rate of return would be fabulous.”

  As major donors to Republicans, to medical and homeless charities, yeshivas, and a Torah-study website, the Rosenwalds would fit right in with their neighbors
at 15CPW, but they live in Lawrence, a Long Island suburb favored by religious Jews, near Rivki’s father. Lindsay never planned to flip; he had the apartment decorated even though he only used it “very occasionally,” he says, usually on the nights he played with an Orthodox Jewish ice hockey team at a rink in Manhattan. Then he was injured and stopped playing, and “my wife wasn’t rushing to move back into the city.”

  Meantime, a broker had called and asked what he’d sell the apartment for. In a second call, she offered $95 million, but then she never called back. “So I didn’t think it was real,” Rosenwald said. Nonetheless, word of the call made it into broker gossip, and Barbanel of the Times heard about it, called Rosenwald, and reported that he’d said he’d actually gotten five or six calls offering as much as $100 million, but turned them all down. He also told the reporter that he’d heard of a $125 million offer on another apartment.

  Two weeks later, Barbanel published a follow-up report that two Fifteen apartments were “quietly” on the market as so-called whisper or pocket listings, unadvertised and unofficial. One was Rosenwald’s. Barbanel said he was looking for $90 million. The other was penthouse 40B, which was being offered for $80 million by its owner, who, the reporter speculated, was Amit Ben-Haim, a London investor who’d sold an Israeli biomedical company to Johnson & Johnson some years earlier for $400 million.

  Speculation about those apartments rose even higher a few days later when Dolly Lenz, a broker with a taste for publicity, said in a price-inflating speech that she knew of four 15CPW whisper listings, with one asking $150 million. If there were such listings, they never surfaced, but Lenz got her name in lights by stoking the frenzy.

  Rosenwald never did list his apartment. “I didn’t buy it as an investment,” he says, though he adds that if someone made him a “ridiculous” offer, “I’d probably take it.” Instead, about nine months after the $90 million flurry, he rented it out for $75,000 a month to a quiet businessman he won’t identify. But the tenant, Peter Fine, a real estate developer, should know that Rosenwald still hopes to convince his wife to move in and keeps close watch on his investment through binoculars mounted in his office a few blocks away, focused on his penthouse.

  A few days after Lenz gave her provocative speech, penthouse 40B came out of the shadows, when it was officially listed for $80 million. But the owner wasn’t Amit Ben-Haim, even though the deed was in the name of a Geneva company that lists him as chairman; the apartment actually belonged to his brother Shlomo, an Israeli scientist who, likely not coincidentally, is a friend of Eyal Ofer’s.

  Born in Haifa, Shlomo Ben-Haim studied nuclear physics at Technion, the oldest and most renowned university in Israel, and continued his education with a medical degree with a cardiology specialty and several doctorates. After his mandatory service in the Israel Defense Forces, he would teach medicine at both Technion and Harvard. At the former he met his wife, now a professor of nuclear medicine in London. They have four children and split their time between London and Caesarea, an Israeli coastal town named by King Herod for the Roman emperor Caesar Augustus, where Ben-Haim owns a $30 million villa.

  He first worked as a heart doctor in Haifa, where, in concert with an American investment banker named Lewis Pell, he began founding companies such as InStent, which marketed his invention, one of the first stents, the mesh tubes that keep blood flowing through vessels constricted by disease. After selling that company for $200 million in 1996, Ben-Haim and Pell became serial entrepreneurs. Their biggest success was Biosense, based on another invention of Ben-Haim’s, a catheter-like device that is inserted into the groin and sent to the heart through veins to give doctors a three-dimensional view of electrical activity within that organ and guide diagnosis and cardiovascular surgery.

  When a subsidiary of Johnson & Johnson bought Biosense for a reported $500 million in 1998, Shlomo got J&J shares worth $75 million, and brother Amit, who’d invested with him, walked away with another $88 million. Another investor in Biosense was a fund controlled by the Ofer brothers. Pell and Ben-Haim’s subsequent ventures created $1.33 billion in equity, with Ben-Haim’s share estimated at $200 million.

  Inevitably, perhaps, with that kind of money in play, he found himself entangled in litigation. “He has been sued twice by entrepreneurs of companies he founded, who accused him of stealing their assets,” Gail Weinreb wrote in Globes, an Israeli business newspaper, and “once by his former partner and friend, Lewis Pell, for alleged unfair distribution of assets between them.” In a 2004 suit, Ben-Haim was accused of making false accusations of sexual harassment. More recently, the founders of RF Dynamics, whom he’d removed from their posts, accused him of calling them thieves, and behaving in “an extremely deceitful and fraudulent way.” In 2012, the Israeli government sued him and another partner for stealing from a government-run research center technology that allowed cells, tissues, and organs to be frozen. Ben-Haim denied the claims in the RF Dynamics suit, and a spokesman for the company involved in the latter case described the charges as “scandalous” and Kafkaesque.

  Fellow entrepreneurs defended Ben-Haim, albeit anonymously. “Shlomo is a man of black and white,” one said. “So you’re either with him or not with him, in which case you’re out.” Ben-Haim himself is notoriously press shy. Asked once if he was harsh in business dealings, he responded with a modest smile and only said, “I have four children to support.”

  Ben-Haim agreed to buy penthouse 40B at Fifteen for $21.5 million three weeks after sales began, closed in April 2008, and listed it early that June. It stayed on the market until November, when it was suddenly delisted. In the interim, Ben-Haim had found a willing buyer. Dmitry Rybolovlev, the Russian oligarch who would eventually buy Sandy Weill’s penthouse, ostensibly for his daughter, had been in New York and Florida with his wife, looking for real estate. He wasn’t fond of winters in their home city of Geneva and was hoping to find a warm place to spend the season, as well as a pied-à-terre in New York, or so he said. He checked out the Plaza but really wanted to buy in 15CPW, even making an unsolicited offer for Sandy Weill’s penthouse. “That guy was running all around the building, trying to buy people’s apartments,” says another penthouse owner.

  Born in Perm, an industrial city in the Ural Mountains, Rybolovlev planned to follow his parents, both doctors, into medicine, studying to become a cardiologist like Ben-Haim while working as a cardiac-unit orderly and nurse, and marrying a fellow medical student, who quickly gave birth to their first child, a daughter named Ekaterina. Dmitry became a local doctor and prepared to join the Communist Party, but with the advent of perestroika, or restructuring, under Soviet leader Mikhail Gorbachev, some dormant capitalist instinct arose, and instead, he went into business with his father, setting up a company to sell alternative medical treatments using magnets.

  With the Soviet economy teetering on ruin, Rybolovlev found himself bartering treatments for goods instead of money and became a middleman for whatever was on hand—bringing beer from Moscow to Perm, for instance. A natural strategist, he realized he needed working capital to grow his accidental business career and “began to search for a new, lucrative niche,” a colleague told the Russian magazine Ogonyok.

  In 1992, Rybolovlev became one of the first graduates of a Finance Ministry–sanctioned broker course in Moscow, earning government certification as a securities dealer. In the Wild West days after the dissolution of the Soviet Union, with Boris Yeltsin as the new leader of the smaller Russian Federation, the shares of what had been state-owned industrial enterprises were distributed to workers. Returning to Perm, Rybolovlev opened an investment company, offered local businesses his services to keep track of all their new co-owners, and like other oligarchs-in-training around the country started buying up their shares on the cheap. By 1994, he had his own bank, Credit FH, and soon became its chairman; under its auspices, he made an agreement with the local committee that managed state property to keep an inventory of the shares of Uralkali, a former state-run enterprise
that mined potassium and manufactured potash for fertilizer. In partnership with the deputy chairman of that local committee, he located the shareholders and began to buy their Uralkali shares. Foreigners were trying to do the same thing, but Rybolovlev had an edge. He knew the local mentality and would pull semitrucks filled with the Russian cars called Ladas up to the gates of Uralkali and other factories and offer them to workers for their shares. In exchange for their acquiescence, he would buy apartments for factory bosses.

  In 1996, after Yeltsin was reelected over a Communist opponent, Rybolovlev became Uralkali’s chairman and began to turn the company into a potash powerhouse, combining it with a competitor from Belarus before offering its stock back to the public in 2007. Rybolovlev sold 12.75 percent of his Uralkali holdings, cashing out about $1 billion.

  His ascent to the ranks of billionaires wasn’t smooth, though. In the mad-bad Russian 1990s, enemies lurked in both the criminal shadows and the corrupt bureaucracy. In 1993, he moved his family to Odessa, Florida, and later that year (or in 1995—reports differ), he deposited them and presumably some of his money in Switzerland, hired security guards to protect his parents and all the directors of his businesses, and began forcing criminal elements out of his companies. “He himself left the bank only behind a live shield of bodyguards,” said a friend. “Identical cars with identical license plates” registered to him roamed the city to foil ambushes.