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

by Gross, Michael

  He was right to worry. One of those cars was attacked, and in May 1996 he and his partner at Uralkali were arrested as the masterminds of a murder. Evgeny Panteleymonov, the only one of Rybolovlev’s executives to refuse bodyguards, had been shot in the doorway of his own apartment building. Oleg Lomakin, arrested for the shooting, won a promise of reduced charges for saying Rybolovlev put him up to it. This murky murder plot was allegedly hatched because Rybolovlev felt Panteleymonov had threatened his income stream by telling him that a joint venture had been taken over by criminals.

  The potash prince was jailed on charges of conspiracy to murder and spent eleven months in prison. For the first month and a half, he was moved to a new cell every week in what he considered an effort to break him. In response, he announced his medical credentials and started treating his fellow inmates, winning a position of respect in each cell. The day he turned thirty, all the local radio stations played his favorite song, “Hotel California” by the Eagles. Offered his freedom if he would sell his shares in Uralkali, he refused. He later told the Russian edition of Forbes that he was ready to spend ten years in jail and wouldn’t give up what he’d worked for. Finally, Rybolovlev was released on bail of a billion rubles, and at the end of 1997, Russia’s Supreme Court dismissed the charges against both executives and found Lomakin guilty of organizing the murder; his puppeteers, assuming they ever existed, were never identified.

  “I prefer to regard this as a mistake of the law enforcement agencies,” Rybolovlev said in a rare interview. He added that his attitude never wavered. “When you’re afraid, that’s the beginning of the end. Business and fear are two incompatible things, so you must know how to control this feeling. As soon as this becomes impossible, anyone can come to a proprietor and take everything away from him. This means that you must be absolutely confident: no matter what happens, you won’t give away what’s yours.”

  In a profile of Rybolovlev in Kommersant, a Russian newspaper, he is described as “a totally lonely person,” who’d by then cut ties with all his old associates, spent most of his time on airplanes, and a week or less a month with his family (they’d had a second daughter, Anna, in 2001). He was “a sea of charisma but with steel teeth and the cold gaze of a professional appraiser. . . . a matchless and most rare intellect of a strategist and at the same time blindness to people and their human qualities.”

  Rybolovlev’s interest in American real estate emerged in the summer of 2008 with his purchase of a mansion in Palm Beach, Florida, from Donald Trump for $95 million. He bought the property through an LLC and called it an investment. Around the same time, he offered Shlomo Ben-Haim’s brokers $75 million for his 15CPW penthouse and his offer was accepted. He even transferred a deposit and contracts were drawn up. But Ben-Haim got cold feet. It was, a real estate lawyer speculates, most likely after he learned of the serious tax implications of a short-term capital gain by certain types of corporations owned by foreign nationals. Several months later, in March 2009, Prominence Acquisition LLC was formed as the successor by merger of Prominence Corp., which owned the apartment. Three weeks after that, it changed its name to Prominence LLC. Simultaneously, the penthouse reappeared in the database of listings used by New York City brokers. But economic reality had by then come even to Fifteen; the most insane phase of the flipping frenzy ended and Ben-Haim’s new price was more realistic: $47.5 million.

  Dmitry Rybolovlev was no longer interested, but he’d be back at Fifteen before long. Not that Ben-Haim cared. It took next to no time to sell the penthouse for $37 million to a limited liability company named after the Russian city Novgorod. So it was easy to assume, as the real estate blog Curbed did, that the “mysterious buyer” had “Russian overtones.”

  Though Rybolovlev’s interest in the building was still a secret shared only by insiders, Fifteen was no secret among the newly enriched Russians who’d been bringing their money to Manhattan for years already. Like many of the world’s new rootless, wealthy nomads, they were buying houses all over, traveling between them at a moment’s notice, and sometimes using them to avoid taxes or other claims on their purses. Before long, Rybolovlev’s wife would accuse him of buying US real estate to hide money from her.

  “New York City has always been a port town,” says Will Zeckendorf. “Foreigners always felt welcome here.” Between a third and half of the “Russians” who bought from the 15CPW sponsor are, more accurately, Eastern European Jews who’d left the Soviet Union years, even decades, earlier, fleeing a society they deemed anti-Semitic. But others who kicked Fifteen’s tires came from the post-Soviet era and were closely scrutinized, say members of the 15CPW team. Was their money real? And where did it come from? “We definitely turned some down,” a development team source says carefully.

  Eyal Ofer is more candid: “I don’t think we allowed Russians to be first.” They did what they could to ensure that early buyers would be “an inducement and not a deterrent. Since we were all intending to live there, we wanted to make sure that at least the first round [would be] people whom we’d like to be with. We wanted to have the right group of people, a base of quality, not of pure money. We weren’t just selling square footage. We created a community.” They were able to use the frenzied desire for apartments as an excuse to fend off some buyers. “They were told that there’s competition on the apartment,” says Global Holdings executive Samuel Kellner. “The hype was on, so it was very believable that there [were] competing bids. So people of certain disqualifications were told that their apartment was sold to others. There was an attempt to keep the building American, the buying group distinctive.”

  Among the real estate lawyers watching this process with interest was Edward Mermelstein, who’d left his native Ukraine in 1974 to get an education in New York. In the last decade, he’d built a thriving practice advising what he calls “high-net-worth” individuals, mostly Eastern Europeans, but also Germans, Italians, Koreans, and Chinese, on the purchase of “second to fifth homes” in New York City. In 2001, several of his clients had contracts at Time Warner, but after September 11, “everybody took off,” he says. “They were very scared the New York market would collapse” and moved their money to Cyprus, Switzerland, London, and even Miami, instead.

  But a counterbalancing force was at work, particularly for Russians. “They understood that Russia was a very unstable place, and as quick as they made money, they could lose it,” so by 2003, they were eyeing Manhattan again. Mermelstein advised them to avoid cooperatives. “They have no way of showing credit history,” he says. “There was no history. Why start the process and subject clients to an impossibility?” So Eastern Europeans focused like lasers on high-end condos, and their wealth changed the market. “Pricing has skyrocketed because they were willing to pay whatever it took,” says Mermelstein. “They go to developers and say, ‘You’re asking fifty million dollars? Here’s sixty, but we close next week.’ ” Like so many others, Mermelstein had watched the Mayflower lot and alerted clients as soon as it was in play. “The clients that missed out on Time Warner understood it would not be good to make the same mistake twice.” But he understood that the 15CPW developers weren’t exactly eager to sell to them. “It was definitely kept quiet,” he says. “You had the titans grab the top apartments.”

  Still, some Russians did manage to infiltrate the ranks of early buyers. Natalia Pirogova, a real estate investment-fund manager and developer who was then building a hotel-condo on Madison Avenue, was the first buyer of 16M, a small two-bedroom overlooking Broadway, which she rented out, and later she bought 27C, a much larger unit, from Rosita and Ricardo Leong, two ethnic Chinese based in the Philippines, where the seventy-seven-year-old Leong, a graduate of Fordham University, is a director of several companies. Pirogova rented it out to Andrew Roberts and Susan Gilchrist. Roberts, an author, historian, and broadcast personality, is a self-described “reactionary,” a noted neoconservative and supporter of Israel. The New Republic once described him as “a caricature of a caric
ature of the old imperial historians.” He is also the heir to a British dairy and a Kentucky Fried Chicken franchise fortune. He followed his wife to America when the former journalist was named the CEO of Brunswick Group, an international corporate public relations firm. A business associate of Pirogova’s, Luiza Dubrovsky, bought and occupies an adjacent unit, and Marina Martyslane and Z. Richard Mecik, who run an airport-equipment supplier, own a small two-bedroom unit over Broadway, which they rent out for $16,500 a month.

  The most important Russian in the building—at least until Dmitry Rybolovlev came along—doesn’t live there, either, but apparently his son does. With an estimated $1.6 billion fortune, Valery Mikhailovich Kogan ranked number 804 on the 2012 Forbes list of the world’s billionaires, and number 61 among its Russian members, thanks to his co-ownership of a company that holds a seventy-five-year contract to run Moscow Domodedovo Airport.

  Born in Ukraine, Kogan is a former Soviet navy man who’d studied economics and worked as a diplomat. In the 1990s, he and a partner, whose father reportedly had ties to the failing Soviet government, formed a company called East Line and, like Rybolovlev, grew wealthy, in their case by moving merchandise between Russia and China and dealing in real estate, a business that first brought them to the attention of authorities, who accused them of deceitful practices when they built homes on a former chicken farm near Moscow.

  Kogan moved to America after Russian authorities disputed the airport lease with East Line in 2005 and threatened to nationalize it. Ever since, it’s been unclear if East Line owns, leases, or merely operates the airport. After a terrorist attack there early in 2011, Kogan and his partner refused to confirm that they owned the airport, apparently out of fear they might be held accountable for the breach in its security. Later that year, East Line said Kogan’s partner owned the airport through a company based in Cyprus. Making matters even murkier, Haaretz, an Israeli newspaper, alleges that Kogan is connected to the secret services in Russia and repeats vague claims from the Russian press that he is a close but “secret” friend and skiing buddy of Russian president Vladimir Putin, while an investigative TV show in Russia claimed its government is persecuting East Line.

  What is sure is that Kogan collects luxury real estate. Public records indicate he owns a large villa near a golf course in the wealthy Silicon Valley suburb of Atherton, California, and a smaller home in Fairfax, Virginia. He also owns a $30 million apartment near Tel Aviv; five beachfront villas in Caesarea (which he razed and is replacing with a fifty-four-thousand-square-foot complex), just down the road from Israeli prime minister Benjamin Netanyahu’s vacation place; and an $18.5 million estate in Greenwich, Connecticut, which the Kogans also hoped to raze and replace with a home so massive, even by the loose local standards, that it set off protests (“It’s not a residence, it’s an industrial project,” said one neighbor). Kogan’s plans in Greenwich were subsequently scaled back considerably.

  More relevant to 15CPW is Kogan’s ownership of a $10 million duplex apartment on the thirty-fourth and thirty-fifth floors of the Zeckendorfs’ 515 Park, likely the reason he was able to get around the quiet ban on Russians and buy both penthouse 40A next door to Ben-Haim’s, for which Kogan agreed to pay almost $23 million, and a $2 million one-bedroom unit in the base of the tower, early in 2006. According to a member of the building staff, neither Kogan nor his wife is in residence. Instead, the staffer says, the sprawling penthouse is used by one of their two sons, Alex, an aspiring singer-songwriter who, New York’s Michael Idov wrote, has “been trying and failing to launch an awesomely bad rock career with Dad’s millions.”

  Neither Kogan père nor fils attracts much attention at 15CPW. But another Russian, this one a renter, got the staff’s attention when his father-in-law came to visit with a large security detail. Nikita Shashkin rented apartment 8B from Gerald Ross, a litigator who specializes in suing law firms on behalf of other lawyers. Ross invests in condos on the side and also owns unit 8A (for a total expenditure of $28 million). Shashkin, who was Ross’s tenant in 2012, worked for a Russian bank in Manhattan. In 2010, he’d married Luvov Khloponina at a lavish event where Joe Cocker sang, and among the guests were oligarch Mikhail Prokhorov, owner of the Brooklyn Nets, and Yuri Luzhkov, then the mayor of Moscow, attracted, no doubt, by the father of the bride, Aleksandr Khloponin, a former employee of both Prokhorov’s Norilsk Nickel company and the same bank where his son-in-law works. Presumably, Khloponin needs bodyguards because he’s a deputy prime minister of the Russian Federation.

  It was natural to assume that Novgorod LLC hid a Russian, too, but the man behind it isn’t Russian; he’s an American-born, London-based banker—and was once one of the best paid in the world. According to the Guardian’s annual survey of executive compensation at top public companies, he made £70 million between 2006 and 2008. He also scored a £10 million profit selling his seven-bedroom London town house in 2007, when he decided to move his family to New York. There, outside of banking circles, he was a relative unknown. Which may explain why his name never appeared on the oft-published lists of 15CPW’s wealthiest tenants.

  Only after he entered the rogues’ gallery of international finance was the face behind Novgorod LLC unmasked: Robert Edward “Bob” Diamond III. When Diamond bought Ben-Haim’s penthouse for $37 million, he was the CEO of Barclays Capital, the investment arm of the global bank. Three years and one month later, in summer 2012, he was CEO of all of Barclays when he quit his job after becoming the poster child of the LIBOR interest-rate-fixing scandal. By then, he’d moved into his apartment. But first, he’d stalked the building like a cat, visiting Goldman partner Ravi Singh’s apartment multiple times before making a lowball bid Singh rejected. Diamond also rented 9G with his wife, Jennifer. But finally, he became an owner and embarked on a renovation. His applications to the city estimated its cost at just under $1.8 million. A small price to pay (especially compared to Rybolovlev’s) for an alpha dwelling in which to lick one’s wounds and, perhaps, plot a comeback.

  The last of the spectacular but failed flip-outs at 15CPW crept onto the market just after Ben-Haim sent Rybolovlev packing. In November 2008, one of the duplexes in the house was said to be available via a whisper listing for between $75 and $90 million. Richard Ullman had bought the smallest of the three duplexes atop the house, apartment 18B, between Lindsay Rosenwald and Idan Ofer’s larger units, for $23.5 million, early during sales. A onetime pharmacist, he’d designed one of America’s first prescription benefit plans in the 1970s, then made a fortune as a founder of two companies that managed those programs. He sold the first of those for more than $500 million in 2002 and was running the second when he bought at 15CPW.

  Though he would later be described as a devoted family man, Ullman bought the apartment after getting a divorce from the mother of his three children and marrying a younger woman he’d been dating since 2001. His new wife, Barbara Marcin, was a Harvard MBA who worked as an investment fund portfolio manager and lived in a condo of her own at Broadway and Sixty-Second Street. By the time of their marriage, Ullman owned a home and an apartment in New Jersey, a home in the country club community of Windermere, Florida, and a condo in the Trump International. The Ullman Family Partnership, which included his two sons and a daughter, had bought its first apartment at the Trump in 2001 and sold it after buying a second on the forty-fourth floor for $8 million in 2003. Two and half years later, the same family entity bought the 15CPW duplex, apparently as an investment.

  In 2008, the Ullmans moved to Florida and the next spring made their Fifteen listing official. Though the apartment appeared on a broker’s website at an undisclosed price, the New York Times reported Ullman wanted $55 million. Some speculated that Ullman was selling due to financial reversals, but that seems unlikely; a financial statement he’d prepared in 2006 showed he was then worth almost $460 million. (The recession barely affected Fifteen, but its effects were briefly felt; Ullman’s price drop, like Ben-Haim’s, likely reflected the new reality.) Mul
tiple offers followed, but only one reached his magic number of $50 million. Unfortunately, that buyer, Merryl Tisch, a New York heiress, backed out for reasons unknown.

  The Trump aerie remained the Ullmans’ New York residence until October 2009, when they sold it for $16 million to a trust associated with Linda Mirels, the daughter of Nathan Kirsh, a property tycoon from South Africa and Swaziland, and then the wife of Hilton Mirels, an orthopedic surgeon in Westchester. The Mirelses already owned an apartment, 8D, at 15CPW, for which they’d paid just over $14 million.

  In June 2011, Ullman was diagnosed with cancer, began chemotherapy at a New York hospital, and occupied his 15CPW apartment on a sustained basis for the first time. In the interim, it had gone on and off the market, says a source close to the Ullmans. Unfortunately, that September he learned his treatments had failed and his cancer had spread; he was soon admitted to a hospital and spent his last five days there.

  Six months later, some of what followed was revealed when Barbara Ullman filed suit against her husband’s children, claiming that she was entitled to his share of his last business, and $3 million he’d promised to her in writing, and that his sons had broken his promise to give her the Florida home outright as well as lifetime use of the duplex. In her complaint, she claimed that, at the time Ullman learned he was ill, he had not written a will since 1993 and was only reminded of that fact when an attorney representing one of his sons showed up at his home with a new one Ullman had no hand in drafting. Though he was too ill to read it, Barbara continued, he signed it anyway, albeit with a visibly shaky hand, and only read it the next day, when he decided it would have to be redrafted because it didn’t give her enough.