Things are getting hairy for Harry.
In our cover story this issue, we go inside the courtroom to bring you tales from real estate’s biggest divorce case — the battle between Harry and Linda Macklowe.
Harry, the developer responsible for 432 Park Avenue, the tallest condo building in the city, has been showing the same tenacity and fighting spirit that helped him build a 13 million-square-foot property empire over the years (one that’s seen its share of ups and downs, to put it mildly). Linda is no slouch either when it comes to hand-to-hand combat, including choice words directed at her husband during the proceedings.
Both sides are going for the jugular in trying to determine who gets the lion’s share of a $2 billion fortune. That means, paradoxically, trying to water down their own assets to claim a larger slice of the other’s, as we detail in the story. In Harry’s case, lawyers are painting his marquee projects as lackluster and at-risk so that Linda gets less money when the assets are split, reporter E.B. Solomont writes.
Billionaires used to hide from the public. These days, they seem to be airing out their laundry in public at every turn — from the U.S. president to his peers.
My editor’s note last month included a fictional master’s class in how to become a lawsuit-happy billionaire mogul. And our 4,000-word story on Macklowe this month sheds even more light on the character traits that help one earn a billion dollars. Namely:
Distorting reality: Billionaires sometimes have their own version of reality, which allows them to more easily pursue their single-minded vision. The term “reality distortion field” was coined by an Apple executive to describe Steve Jobs’ ability to convince himself and others to believe almost anything with a mix of charm, charisma, bravado, hyperbole, marketing, appeasement and persistence. Donald Trump’s reality distortion field seems to involve labeling all news he doesn’t like as “fake news.” And Macklowe’s argument in the divorce case that he is worth negative $400 million might fall into that category, too.
Relishing the zero-sum game: There are winners and losers, and friends and enemies, but that’s about it. There are few shades of gray for some moguls. How else do you explain dragging divorce proceedings with your wife of 58 years into open court, or suing your son for $300 million over website domains? Of course, marriages and family life is complicated, but it usually doesn’t come to this for most people.
Never trusting anyone: Trump reportedly once told his oldest son: “Don’t. Trust. Anyone. Ever.” That was when Donald Trump Jr. was four years old, per a 2006 interview with CNBC. Putting up skyscrapers in NYC is often one man against the world, and it requires an iron constitution, which doesn’t leave room for a lot of warm and fuzzy goodwill. A corresponding quality is not having any self-doubt. The problem with that is the inability to see blind spots ahead, as both Trump and Macklowe have experienced — namely, when Trump’s business empire crumbled in the early ‘90s and when Macklowe’s property empire fell apart during the subprime crisis.
Elsewhere in the issue, it’s “tranche warfare” as majority investor AmBase battles developers Michael Stern and Kevin Maloney over 111 West 57th Street — which would replace 432 Park Avenue as the tallest condo tower in the city if it’s completed.
There are foxes in the henhouse when it comes to public housing, with private developers circling around NYCHA properties. As the housing agency deals with a $17 billion backlog, it is spending more time talking with New York real estate players about developing on parcels the city owns.
We also have a profile on Ben Ashkenazy, who has a minority stake in the Plaza Hotel and is angling to buy the iconic property, a move that would cement his status as a big-time player (he’d also be Harry Macklowe’s landlord).
Finally, something new and something old in this issue. We take a look at the impact of blockchain — a fast-growing technology that supporters say will revolutionize real estate deals by enabling digital currency. On the other end of the spectrum — about as brick and mortar as you can get — we take a look at the top property management companies in the city and the exploding demand for white-glove service.