The Real Deal New York

The Closing: Peter Kalikow

The real estate dynasty heir on getting duped by contractors, buying the New York Post and running the MTA
By Mark Maurer | July 01, 2018 01:00PM

Peter Kalikow (Photo by Studio Scrivo)

Peter Kalikow is president of the development and management firm H.J. Kalikow & Company and a third-generation executive in the Kalikow family real estate business. He joined his father and uncles out of college in 1967 and became the company’s president in 1973. After his father, Harold, died in 1983, he took full control of the business and oversaw the development of several office towers, including 101 Park Avenue. To date, H.J. Kalikow has built more than 5 million square feet of commercial and residential properties, including 195 Broadway in the Financial District and the Concorde, the Kenilworth and the Corniche on the Upper East Side. The firm’s portfolio is now worth more than $5 billion, Kalikow said. In 1991, he filed for bankruptcy and, at the time, owed over $1 billion to more than a dozen lenders. He largely emerged from debt a few years later with help from fellow developers Sheldon Solow and David Mack. Kalikow also had a career outside real estate for nearly two decades, having served as chair of the Metropolitan Transportation Authority, commissioner of the Port Authority of New York & New Jersey and owner and publisher of the New York Post. He came very close to taking over as chair of the Real Estate Board of New York, but his 2006 deal to leave the MTA for that position fell through. REBNY’s then-president, Steven Spinola, instead selected Related Companies’ Steven Ross.

DOB: Dec. 1, 1942
Hometown: Forest Hills, Queens
Lives in: Manhattan, Westchester, Montauk and Boca Raton
Family: Married with two children (In their 30s)

You’re from Forest Hills, Queens. What were you like as a kid? I was the worst kid that you could be. But I look back on it as a magical childhood because I had two great parents. My friend’s father used to beat him with a strap. My father would chase me with a strap, but he intentionally never caught me. My sister and I grew up in a building owned by my father and his family, in a neighborhood with apartment houses all owned by them. In the early 1950s, we moved to a private house.

Was real estate a big presence in your life growing up? My father used to take me around in the car, and he would stop off at one of his construction sites. I would walk around his buildings in Forest Hills and Briarwood while he was talking to people for hours. When we were kids, the best place to play soldier was in a building under construction, because it looks like a building under destruction.

At what point did your father show you the ropes of the business? He never actually showed me the ropes. He would sometimes tell me stories anecdotally. He never said, “Here’s how it works: This is the building site, and we’re going to excavate here and put in the sump pump.” But when I saw a plaster wall, I knew exactly what was behind it, and I knew if the light switches were turned the wrong way.

What were your college years like? By the time I went to college, I was behaving. But I wasn’t studious. I went to Boston University for one year. I did a little too much partying, and I got mono in the second semester of my freshman year. At Hofstra after that, I was lucky to get in and lucky to get out. In those days, there was a built-in incentive to stay in school. If you didn’t, they took away your 2-S, a student deferment, and you got drafted.

Did you jump into the family business after college? When I graduated, I went to work for my dad and his brothers. They would give me jobs that didn’t need to be done. They gave me a week to count refrigerators. I finished after a day and a half. How hard could that be? I took another job from them. They were doing a building, and I did the lobby of Methodist Hospital in Brooklyn — which my father built in 1937. I encouraged my father to break off on his own from his brothers, and eventually he did.

Did that mean you had to take on more responsibility? I was prepared and did take on more responsibility.  We really wanted to be the masters of our own fate.

What kind of mistakes did you make when you started developing? On my first project, in Great Neck, when the contractors would ask me for an opinion, they didn’t give a shit about my opinion. That was a way to get me to say something so that they could give me bills for extras. The next job I learned — there’s no more extras coming out of Peter Kalikow’s buildings. That’s been my way from my second building on.

You built the office tower 101 Park Avenue in 1982 for about $160 million at the start of the real estate boom. What obstacles did you face? It was a risk, but I always thought if I did the right building, we would get the rents we needed. We had a seven- or eight-year blight in office [development] because of the 1970s recession. We started with $25 a square foot, but we ended up getting $50. I felt that by watching the costs and hurrying up, we could come out okay. And we did. I had already built seven or eight apartment houses in Manhattan before that. My father, who died in 1983, thought it was cool to have a building like this. He didn’t have as much pressure on him, but he didn’t mind it being a risk.

At what point did you take on the business solo? The late 1970s. My father was getting on in age, though I shouldn’t say it because he was the age I am now. He liked being in Florida more than New York. Every year, he would stay longer and come back feeling better.

You bought the New York Post from Rupert Murdoch in 1988 and eventually sold it back to him in 1993, while you were going through bankruptcy. What was that like? I was always interested in news. The Post was in danger of going under. I thought I was smarter than I was, and I figured I could make it work. I had a good idea, but not enough money to make it work. After six years, I realized it was the most inefficient way to run a business.

Was real estate on the back burner as you took on these other roles? I was doing five things at once. I had a project uptown I was vacating tenants on; I was building my hotel and an apartment house at Broadway and 62nd Street; and I was running the other real estate I had. I was really busy, and then the collapse of the early 1990s came.

How did that affect your business? It almost pushed me out. But we worked hard and solved our problems. We bought debt for a cheap price, reorganized the business and built everything that came our way.

What are your biggest development achievements? The soup-to-nuts renovation of 195 Broadway, which really was a crappy building. It always annoyed me that the phone company [AT&T] owned that building. They didn’t put a dime into it. We bought it in 1983 for $74 million, upgraded it and sold it in 2005 for $266 million. Also, the Hotel Millennium, which is in back of it. We built the first Downtown hotel outside the World Trade Center.

What was your time as chair of the MTA like? There’s the saying, “By the time you figure out how the job works, you’re up for re-election.” In a way, that’s true about the MTA. I had seven or eight years as chair­­­. In my first year and a half, I knew the concepts but not the details. From 9/11 on, I don’t think there was anybody better than me. We got 7 million people out of this city in three hours. [Former MTA COO] Mark Shaw said, “We’re getting everyone out of the city. Do we charge fares?” I said, “Did we have a snow day this year?” He said no. I said, “Good, we don’t charge fares.” That’s policy now, but it wasn’t then.

What do you think of Mayor de Blasio’s push for a millionaires’ tax to pay for the subway system? A million bucks ain’t what it used to be. If you’re a millionaire living in the city, you’re in the third tier. I think it’s the typical reaction of an unreconstructed ’60s liberal who thinks that taxation is the way to the future. I’m a Republican. When de Blasio runs out of other people’s money, the city’s going to go back to the way it was under John Lindsay. Lindsay was the worst mayor we ever had, and with a little hard work, I think de Blasio could get there. Right now, he’s No. 2.

You were almost chair of REBNY. What happened there? I said to the governor, I will stay as chair of the MTA until you replace me. It took him nine months. I resigned in February or March, and I didn’t get out until November. The chair of REBNY had been vacant for two or three months at that time. I said I’m not going back on my word. I also had an ulterior motive, I admit. I wanted to sign the full-funding grant agreement for East Side Access and the Second Avenue subway.

These days, you’re largely out of the spotlight. Is there a past job you miss doing? At 75, I can’t work at the speed or the pace that I worked when I was 50. Some people like Larry Silverstein can. I’m not that good. At my age, I should be devoting time to other things. That’s why I spend time at the New York-Presbyterian Hospital, why we did the Kalikow School at Hofstra, and why I’m a trustee at the New York Holocaust Museum. I get more satisfaction out of what I do at the hospital than building a building some days. Without me, these surgeons wouldn’t have a place to operate.

You were a vocal supporter of Donald Trump leading up to the election. Are you in touch with him these days? I know him well, but I don’t call him. If he wants to talk to me, he’ll call me. But he’s busy. His relaxation is golf, and I hate golf — it’s boring. Trump’s done a good job, and he’s not like any other president we’ve had. He didn’t pay for five cents’ worth of network time, and he knew exactly what he needed to do to get elected. Half the country’s mad. So, they’re mad. I’ve never in my life seen people treat a newly elected president as badly as he gets treated. But he’s tough. I could never deal with the crap he’s taken.

You have an extensive Ferrari collection. Where’d this hobby come from? I own 50 Ferraris, many of which are in the basement garage of 101 Park Avenue. When I was 15, I saw my first Ferrari and became enthralled. This was when Ferraris started winning races. When I came home from camp in 1958, my mom bought me a magazine about Ferrari victories and how it’s the car to beat. When I was 24, they bought me a Ferrari. I don’t have any racecars, which everybody thinks are so valuable. They are not elegant. No interiors.

Your daughter, Kathryn, was arrested in 2013 for selling heroin and admitted at the time that she was an addict. What was that like for you? She met her addiction issues head-on and has been sober for over five years. She now devotes her time to helping others to overcome their addictions. She leaves the house at 6 a.m. — this is a kid I couldn’t wake up with a shotgun. She taught me a lot about addiction. The way to deal with it is not to lock these kids up. Remember when Obama pardoned hundreds of nonviolent drug offenders? They deserved to be pardoned. You don’t lock up kids who are addicted to opioids.

What do you see as the future of this firm? My son, Nicholas, is a movie producer and director in California. My daughter, who I thought always would succeed me, is into helping people who are addicted to narcotics. I don’t know what I’m going to do. I guess I’ve got to live until 90 now.

Do you plan to retire? You retire from the family business when they put you in the coffin. I can’t retire. I own these properties I have to manage. I gave myself a 70th-birthday present: Fridays off. I’m going to wait until 78 to 80 and give myself Mondays off. Working three days a week at a business you own is not bad. That’s probably where I’ll end up.

—Edited and condensed for clarity