The Real Deal New York

This month in real estate history

The Real Deal looks back at some of New York's biggest real estate stories

April 28, 2010
By The Real Deal

1965: WILLIAM ZECKENDORF’S FIRM THROWN INTO BANKRUPTCY

The weakened real estate empire of one of Manhattan’s leading property owners and developers, William Zeckendorf Sr., was forced into involuntary bankruptcy 45 years ago this month.

Webb & Knapp — which Zeckendorf controlled as president, chairman of the board and majority stockholder — had been losing day-to-day control of properties for months and had been paying creditors late. The flamboyant dealmaker who backed dozens of Broadway plays and frequented nightclubs formally lost control of the company on May 18, 1965, when a federal bankruptcy court named a trustee to take over operations.

Zeckendorf, who was 59 at the time, had built the Midtown-based firm into a national powerhouse, at times owning the Chrysler and Graybar buildings and developing L’Enfant Plaza in Washington, D.C., and Century City in Los Angeles.

But Webb & Knapp was highly leveraged with unsupportable debt. And Marine Midland Trust, one of the company’s creditors, filed in federal court to force Webb & Knapp into bankruptcy, seeking to protect its $4.3 million in unsecured debt that it feared it would lose if other lenders filed first.

The realty empire had been unraveling for more than a year. Owners of the Commodore and Astor hotels in Manhattan evicted Zeckendorf affiliates as operators within the previous 12 months and were seeking millions of dollars in judgments.

In 1968, Zeckendorf filed for personal bankruptcy, showing assets of $1.9 million and debts of $79 million, nearly all derived from his ownership of Webb & Knapp. He died in September 1976 at the age of 71.

1936: INFLUENTIAL TOWNHOUSE OWNER BLOCKS

ROCKEFELLER SKYSCRAPER

William Cromwell, a partner with the prominent law firm Sullivan & Cromwell, blocked the development of a Rockefeller Center skyscraper 74 years ago this month when he announced he would not give up his townhouse, two days after developers said they planned to tear it down.

Cromwell lived at 12 and 14 West 49th Street, two four-story townhouses in a row of buildings across from the newly constructed Rockefeller Center. He was a prominent attorney and friend of Nicholas Butler, president of Columbia University. The university owned the land under his property, which was part of the larger development parcel that was leased by Columbia for Rockefeller Center.

On May 19, architects for Rockefeller Center filed plans for a $3.5 million, 32-story tower stretching between 48th and 49th streets mid-block between Fifth and Sixth avenues. It would be erected on the site of Cromwell’s townhouses, a report of the plans said.

But on May 22, the New York Times reported Cromwell would refuse to leave his home. In fact, he remained a resident there until his death in 1948.

In 1949, architects for Massachusetts Mutual Life Insurance, which controlled a larger parcel including the corner of 48th Street and Fifth Avenue, filed plans for a tower occupying an L-shaped site including the former Cromwell homes. The 28-story building with an address of 600 Fifth Avenue was completed in 1950, and includes seven-story frontage on 49th Street at the former Cromwell site.


1911: CITY’S BIGGEST EXHIBITION HALL, GRAND CENTRAL
PALACE, OPENS

 The largest trade-show building in New York City, Grand Central Palace, opened its doors in Midtown 99 years ago this month, with a show on architecture and engineering. The inaugural show’s exhibits included one for home and apartment fixtures that displayed examples of installations at John D. Rockefeller’s estate in Pocantico Hills in Westchester County.

The show hall was the first of a series of buildings constructed by New York Central Railroad, which owned the air rights over the tracks leading to Grand Central Terminal.

The Palace competed with the smaller Madison Square Garden, next to Madison Square Park in Midtown South, for the city’s largest trade shows. It remained the largest exhibition hall in the city until the opening of the New York Coliseum at Columbus Circle in 1956.

Compiled by Adam Pincus

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