The Real Deal New York

This month in real estate history

January 31, 2010
By The Real Deal

Construction of the World Trade Center.

1964: Real estate leaders oppose World Trade Center plan

Top real estate developers joined together to fight the proposed development of the 10 million-square-foot World Trade Center in Lower Manhattan, 46 years ago this month. Led by Empire State Building syndicate head Lawrence Wien, the group included Seymour Durst, Harry Helmsley and Robert Tishman.

They formed the Committee for a Reasonable World Trade Center to fight the project backed by Port of New York Authority, later renamed the Port Authority of New York and New Jersey. The group argued that the government agency, which was to receive tax breaks for the project, would be unfairly competing with private developers.

The group, claiming to represent the owners of 20 percent of the 157 million square feet of Manhattan office space, said the proposed towers (which were to be the tallest in the world) would overwhelm an already saturated market. But backers of the 16-acre project said Wien was a vocal critic only because he did not want the Empire State Building to lose its ranking as the tallest in the world, a criticism he rejected.

Forty-three years later, some of the same real estate families came out in opposition to the development of the Freedom Tower, now known as 1 World Trade Center, which will be built on the site of the since-destroyed World Trade Center. Durst’s son Douglas Durst and Wien’s grandson Anthony Malkin wrote an open letter in 2007 criticizing the development as too costly and poorly planned.

1929: For first time, stock sales finances building construction–leaving no mortgage

307 East 44th Street

Riding the real estate boom of the 1920s, the developer of the Plaza Hotel joined with a bank in an unusual plan to finance the construction of two Turtle Bay apartment buildings with the public sale of stock and no mortgage, 81 years ago this month.

The buildings, at 307 and 310 East 44th Street, were the first in a larger plan to raise $100 million to develop commercial real estate with the sale of stock and do away with first and second mortgages.

United States Realty and Improvement, led by the Plaza’s Harry Black, and lender National City, used a $4 million stock issue to develop two apartment buildings to house fine artists and architects on either side of 44th Street between First and Second avenues.

“Under the proposal … the issuance of mortgages against real estate operations will be entirely eliminated,” an article at the time describing the developer’s plans said. The buildings were completed in 1930.

While it was not new to use stocks or bonds to finance real estate development — Fred French pioneered the system in the development of Tudor City on the East Side, built between 1926 and 1930 — the Beaux Arts apartment project was described as the first effort to finance real estate using stock and no mortgage.

1896: Precursor to the Real Estate Board of New York is formed

The Real Estate Board of Brokers, a trade association that later changed its name to the Real Estate Board of New York and became the leading voice for the industry in the city, was formed 114 years ago this month.

The Board of Brokers, an offshoot of the then-13-year-old Real Estate Exchange and Auction, was created to protect the interests of brokers and promote deals in an industry that handled millions of dollars of sales annually.

The founders sought to develop a place where “members can meet, where they will find all the latest information affecting real estate, and where they can meet their customers and have conveniences for the transaction of their business,” stated an article in the New York Times from February 1896.

To help the members, the board created listings for people looking to buy and sell property, and shared privileged information such as “blacklists” of defaulting tenants and unfair owners.

The group changed its name in January 1913 to reflect a representation of a wider group of interests beyond brokers.

Compiled by Adam Pincus

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