The Dark Side of Real Estate – Part 7

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Harry Macklowe and wife, Patricia Landeau, a French former fashion executive in her early 60s. She is the mother of four children. In March of 2019, the two love birds finally legalized their relationship and their nuptials took place at Brooklyn’s Weylin inside the former Williamsburgh Savings Bank. Photo Credit: lipstickalley.com

By: JV Staff

Did Harry Macklowe Double Cross Mort Zuckerman?? 

As the economic downturn that was created by the lockdowns during the height of the coronavirus pandemic continue to ravage the average New Yorker who is struggling to meet their bills and other financial obligations, others who are not reeling from monetary stresses are apparently skipping out on their fiscal responsibilities.

As was recently reported in the New York Post, local real estate magnate Harry Macklowe has been regularly missing rent payments to the landlord of the iconic 767 Fifth Avenue building where the eponymously named Macklowe Properties is located.

The landlord in question is fellow real estate titan and former publisher of the US News & World Report magazine and the NY Daily News, Mortimer Zuckerman. Photo Credit: Wikipedia.com

The landlord in question is fellow real estate titan and former publisher of the US News & World Report magazine and the NY Daily News, Mortimer Zuckerman.

For those not in the know, Macklowe is a long time New York based real estate developer who has made quite a name for himself in the industry that he has devoted his life to.

As the son of a garment center executive from Westchester County, Macklowe, now 83, was raised in a Jewish home. He graduated from New Rochelle High School in 1955 and became a real estate broker in 1960 after attending several universities.

Macklowe quickly transitioned from broker to builder. Keenly interested in architecture and modern art, he soon became known for developing sleek modernistic buildings like the Metropolitan Tower and for his starkly white minimalist offices, according to Macklowe’s Wikipedia profile.

The world-famous 432 Park Avenue condominium complex, which also happens to be the tallest residential building in the Western Hemisphere. Photo Credit: Wikipedia.com

His firm, Macklowe Properties, owns or has owned a number of New York landmarks including 400 Madison Avenue, 540 Madison Avenue, the historic Drake Hotel (which he demolished to make way for 432 Park Avenue) and Two Grand Central Tower, as was reported by Wikipedia.

In 1985, Macklowe was fined $2 million for ordering the late-night demolition, without a permit, of four buildings, including a welfare hotel, in Times Square. In 2003, he made his mark by purchasing the General Motors Building for a record price of $1.4 billion.

The value of the skyscraper soon doubled, thanks in part to his persuading Apple to build a subterranean Apple retail store beneath the building’s plaza, an idea he personally and successfully pitched to Steve Jobs, according to the Wikipedia report. Jobs then proposed that the entrance to the sunken store be a 32-foot all-glass cube, which the city approved and was opened to the public in 2006.

In February 2007, during the peak of the real estate market, Macklowe purchased seven Manhattan skyscrapers for $6.8 billion from the Blackstone Group, according to the Wikipedia report. He used $50 million of his own money and financed the rest with $7 billion in short-term loans (due in February 2008) from Deutsche Bank and the publicly traded hedge fund the Fortress Investment Group. In early 2008, he failed to refinance a $5.8 billion loan from Deutsche Bank and lost all seven buildings. Among the buildings forfeited were the General Motors Building (which collateralized the loan) and the Credit Lyonnais Building.

And now back to the current debacle that Macklowe finds himself immersed in. According to the Post report, Macklowe stopped paying his $200,000 a month rent tab when the coronavirus struck without warning in the middle of March. Industry insiders are scratching their heads in dismay, considering the fact that Macklowe was save from financial ruin in 2008 by Zuckerman’s Boston Properties.

An unnamed person with knowledge of what is really happening in this odd turn of events, told the Post, “It’s shocking. They saved him and gave him a sweetheart deal and this is how he behaves?”

In 2016, Zuckerman stepped down as Boston Properties chairman but still retains a 5-percent stake in the company he co-founded, according to the Post report.

The Post reported that Macklowe had no choice but to sell the GM Building which according to some was the crown jewel of his real estate portfolio. The Post reported that he sold it to a group led by Boston Properties during the 2008 financial crisis to pay off debts he accumulated the year before at the height of the market.

The Post reported that Zuckerman’s group paid $1.5 billion and assumed $2.5 billion in debt for the GM Building and three other office towers. The cost of the GM Building amounted to $2.9 billion, the highest price paid for a single office tower.

The anonymous source that was referenced to earlier in this article told the Post that Macklowe pays approximately $100 for office space on the 21st floor of 767 Fifth Avenue and the size of the impressive office is around 28,000 square feet. The source reiterated that this comes to $2.8 million a year but adds that this price is considered “below market.”

The other tenants at the 50-story tower have been paying their rent throughout the pandemic, as was reported in the Post.

On the personal front, Macklowe has had his formidable share of headlines in recent years concerning his well publicized divorce from wife, Linda Burg-Macklowe. Harry and Linda were married in January of 1959 and have two children, William and Elizabeth.

Harry decided to dump the mother of his children, who had stayed by his side through thick and thin during the 59 years that they were married, for a younger woman. That may not come as a surprise as many men of stature and great wealth often hunt around for a trophy wife in their advanced years in order to make themselves feel more vibrant and appealing, but this particular divorce sent ripple effects around the New York social scene.

The new love interest for 82 year old Harry was Patricia Landeau, a French former fashion executive in her early 60s. She is the mother of four children. In March of 2019, the two love birds finally legalized their relationship and their nuptials took place at Brooklyn’s Weylin inside the former Williamsburgh Savings Bank.

Sources indicate that during the knockout, drag out divorce, it was reported that Macklowe lost half of his $2 billion fortune in the lengthy battle. That means that ex-wife Linda walked away with $1 billion.

According to an October 2019 article in Forbes Magazine, there was a “staggering amount of property between them.” There were two Manhattan apartments, one in the Plaza valued at $72 million, a $19 million Hamptons estate, cars and the 150-foot yacht, and the piece de resistance, the billion-dollar art collection (according to a recent insurance valuation by Christies).”

The Forbes article reports that Harry & Linda owned 150-plus pieces by Picasso, de Kooning, Rothko, Warhol, and many others. Harry’s appraisers have valued the lode at $788 million; Linda’s have it at $625 million.

Either way, that’s a whole lot of money.

Speaking to the Post after their wedding, Harry’s new bride said, “What he did for me is amazing. He’s been working all his life to make all this money and for me he’s giving half of everything — the art collection, the money. He had nothing.”

The Forbes article also reported that Harry & Linda could be heard exchanging bitter words on a fairly consistent basis while they attended soirees in the museum-donor circuit.

The acrimonious split of the billionaire art-collecting couple was an unprecedented one in size and scope and was one of the largest in New York history. It was indeed a protracted battle as it dragged on for several years as the asset battle took center stage. It is also noteworthy to mention that Linda is a trustee of the iconic Guggenheim Museum.

According to a 2019 report on the artnet.com web site, the contents of the Macklowe art collection read like “a connoisseur’s dream.” The artnet article said: “The 165 works under consideration for sale include an Andy Warhol Marilyn estimated to be worth $50 million (according to valuations released by the court), nine works by Picasso, a Jackson Pollock worth up to $35 million, roughly a dozen works by Jeff Koons—including a $10 million bronze sculpture Vest With Aqualung—and a $12 million Brice Marden.

Subsequent to the wedding, the Post reported that Macklowe gifted his new wife, a stunning proclamation of love in the form of a massive portrait on his world-famous 432 Park Avenue condominium complex, which also happens to be the tallest residential building in the Western Hemisphere. Each black and white portrait of the couple stands a whopping 42 feet by 24 feet.

Speaking to the NY Times, Macklowe said at the time: “Since I wasn’t getting married during the summer in the Hamptons, I wasn’t able to hire an airplane with a banner to go up and down the shoreline. I thought: ‘I own a building. Why don’t I just hang a banner from my own building?’”

Other saw this act of purported love very differently. According to an article in divorcemag.com, the massive portrait of Harry and Patricia on his building was “perhaps one of the most impressive and grand acts of pettiness seen in recent divorce history – spurring talks about the lengths spouses will go to get back at an ex.”

The divorcemag.com report indicated that Susan Guthrie, a 2018 Top Attorney in the fields of Family Law and Mediation, said that this type of behavior seems to be common among high-conflict individuals going through a divorce: “As a long-time family law litigator, the placement of these enormous photographs in such a public fashion seems to epitomize the petty behavior that high-conflict individuals often exhibit in the divorce process,” she said.

 

The Criminal Insanity of Robert Durst Continues

Robert Durst is suspected of having murdered three individuals in different states: Kathleen McCormack Durst, his first wife, who disappeared in New York in 1982; Susan Berman, his longtime friend, who was killed in California in 2000; and his neighbor, Morris Black, who was killed in Texas in 2001. Photo Credit: AP

The heir to a real estate fortune, Robert Alan Durst, has been dominating the headlines for a number of years but the ink he gets from the media has little to do with big real estate scores or new buildings that he is either acquiring or having built.

The enigmatic Durst is a pathetic figure as he seems to always be at the center of a murder trial but somehow slithers his way out of it. He is suspected of having murdered three individuals in different states: Kathleen McCormack Durst, his first wife, who disappeared in New York in 1982; Susan Berman, his longtime friend, who was killed in California in 2000; and his neighbor, Morris Black, who was killed in Texas in 2001.

But, let’s start at the beginning. Durst who was born in 1943 is the son of  New York City real estate mogul Seymour Durst; and the elder brother of Douglas Durst, head of the Durst Organization.

According to a Wikipedia profile, Durst grew up in Scarsdale, New York, to a Jewish family. His siblings are Douglas, Tommy, and Wendy. Durst’s paternal grandfather, Joseph Durst, who was a tailor when he emigrated from Austria-Hungary in 1902, eventually became a successful real estate manager and developer, founding the Durst Organization in 1927. Seymour became head of the family business in 1974 upon his father’s death.

The Durst Organization is one of the oldest family-run commercial and residential real estate companies in New York City. The company is owned and operated by the third generation of the Durst family. As of 2014, it owns and manages more than 8.5 million square feet of Class A office space in Midtown Manhattan and over 1 million square feet of luxury residential rentals.

In 2010, the Durst Organization bid on and won the right to invest $100 million in the One World Trade Center Development, becoming a co-developer with the Port Authority of New York and New Jersey. Its contract with the Port Authority gives the company a $15 million fee and a percentage of “base building changes that result in net economic benefit to the project.” The specifics of the signed contract give Durst 75 percent of savings up to $24 million and stepping down thereafter (to 50 percent, 25 percent and 15 percent) as the savings increased.

When Robert was seven, his mother died as a result of a fall from the family’s Scarsdale home; he later claimed that, moments before her death, his father walked him to a window from which he could see her standing on the roof. In a March 2015 New York Times interview, however, his brother Douglas denied that Robert had witnessed her death. As children, Robert and Douglas underwent counseling for sibling rivalry; a 1953 psychiatrist’s report on 10-year-old Robert mentioned “personality decomposition and possibly even schizophrenia”.

Durst attended Scarsdale High School, where classmates described him as a loner. He earned a bachelor’s degree in economics in 1965 from Lehigh University, where he was a member of the varsity lacrosse team and the business manager of The Brown and White student newspaper. He enrolled in a doctoral program at UCLA later that year, where he met Susan Berman, but eventually withdrew from the school and returned to New York in 1969. Durst went on to become a real estate developer in his father’s business; however, his brother Douglas was appointed, in 1992, to run the company. The appointment caused a rift between Robert and his family.

On March 14, 2015, Durst was arrested in New Orleans on a first-degree murder warrant in relation to the Berman killing. On November 4, 2016, he was transferred to California and soon after was arraigned in Los Angeles on first-degree murder charges. In October 2018, Los Angeles County Superior Judge Mark Windham ruled there was sufficient evidence for Durst to be tried for the death of Berman. His trial began on March 2, 2020, but was postponed when Superior court judge Mark E Windham announced that the trial, which had been under way for six days, will stand adjourned until a later date due to the COVID-19 outbreak.

Durst was the subject of a multi-state manhunt after Black’s body parts were found floating in Galveston Bay, but although he admitted to the dismembering of Black (which he was not charged with), he was ultimately acquitted of his murder on the grounds of self defense.

In March of 2020, the AP reported that a prosecutor in a Los Angeles courtroom repeatedly told a jury that Durst did indeed kill his wife.

“Bob Durst killed his wife,” Deputy District Attorney John Lewin said at one point during his opening statement at the Durst trial, who is charged only with the murder of his friend Susan Berman in 2000.

The judge in the case has ruled that the prosecution can provide evidence and say that Durst killed his wife to establish motive for Berman’s killing, and Lewin took full advantage, repeating and emphasizing the statement, as was reported by the AP.

“On the day that Durst killed her,” Lewin said as he opened one part of his presentation. “They were married at the time he killed her,” he said in another part, “Durst killed Kathie when they were spending the weekend together,” he said later .

He said it so much that it drove Durst’s attorney Dick DeGuerin to interrupt.

“I’ve got to object to this conclusion that Bob Durst killed Kathie,” said DeGuerin, who said it was an impermissible legal argument and not a presentation of evidence. He was overruled.

Prosecutors charge that Durst killed his friend to prevent her from meeting with Westchester County officials who had re-opened an investigation into the suspected murder of Kathie Durst. After Kathie Durst mysteriously disappeared, Berman served as Durst’s unofficial spokeswoman but to her friends she related that Durst had acknowledged murdering his wife and said that she helped cover his tracks.

In June of 2018, it was reported that a lawyer representing the family of his ex-wife Kathie, announced that they would drop their $100 million wrongful death suit against him, if he fesses up to what happened to her.

Family attorney Bob Abrams told The Post at the time that, “Just to be 100 percent clear if, in the next 48 hours, Durst or one of his co-defendants tells us where he dumped Kathie’s body so we can retrieve it, we would immediately drop this lawsuit against him.”

Over Kathie’s 1982 disappearance, her three sisters Carol Bamonte, Mary Hughes and Virginia McKeon have a $100 million wrongful death case pending against the disgraced Durst.

In January of 2020, CBS News reported that according to his attorney, Durst is the author of the anonymous note that alerted police to the location of the body of Berman.

Durst has gone on record on numerous occasions saying that he was not culpable in his wife’s disappearance. CBS reported that she was  declared legally dead in 2017. Her body has never been found and no one has been charged in that case.

Durst participated in an HBO documentary about the case several years ago. Later, Durst admitted that his participation in the documentary was “stupid” which seemed to have implicated him. “The Jinx: The Life and Deaths of Robert Hurst,” is what landed him in jail in 2015.

One day before the finale of the HBO documentary, Durst was arrested in New Orleans while allegedly trying to escape to Cuba.

Durst has been held without bail since his arrest in 2015. He’s had some health issue including hydrocephalus, or otherwise known as “water on the brain.”

Durst would face life in prison without parole if convicted of murder with special circumstances of witness killing and lying in wait. There is also an accusation that he personally used a handgun to carry out the murder.

The May 23, 2017 headline from the Associated Press was startling: “Real estate mogul gets prison for fraud scheme”