Reconstructing Harry

Looking Back: The Real Deal this month introduces a new feature, taking a look at some of the real estate titans who have shaped New York City.

There’s an old story about Harry Helmsley, retold in Tom Shachtman’s book “Skyscraper Dreams.” The scene is a party at the Rainbow Room during the legendary real estate magnate’s heyday. Guests are enjoying themselves, clinking glasses, but Helmsley is standing alone by a window, surveying the lights of the city. A guest drifts over to ask him what he’s doing. “Just taking inventory,” Helmsley replies.

The August death of Helmsley’s wife Leona at 87 brought another crop of headlines for the tabloids’ “Queen of Mean.” She left most of her late husband’s fortune to charity, $12 million to her dog, and none at all to two of her four grandchildren, the offspring of her son from an earlier marriage, whom she disinherited for “reasons that are known to them.”

It was a fitting coda to a sordid saga that began in the 1980s, when Harry Helmsley, who was in his seventies, began to lose his mental capacities and his wife took control of his empire, turning the Helmsley name into a watchword for frivolity, greed and snobbery. People who knew Harry Helmsley say that, though he had his flaws, he deserves to be remembered for more than a lurid association with his second wife’s capricious bequests. As much as he genuinely loved Leona, the pair couldn’t have been more different.

Harry Helmsley was a billionaire, but not the sort of man who measured his achievements in dollars. He loved his buildings most of all: He called them “my children.” Once he bought one he seldom sold it, and unlike many of his contemporaries — “Big Bill” Zeckendorf comes to mind — he never got too ambitious and never hit the skids. His was a career of careful acquisition backed by intricate analysis of financial data, which Helmsley kept in hundreds of red loose-leaf notebooks before the advent of computers. At the time of his death in 1997, he owned part or all of scores of New York properties, including the Empire State Building, One Penn Plaza, half a dozen hotels, and the ornate Park Avenue skyscraper that is still called the Helmsley Building.

In an interview, Peter Ricker, who spent nearly 20 years in the Helmsley organization and is now chairman and president of Chicago-based MB Real Estate, recalled that for most of his business career, until around the time of his remarriage in 1972, Helmsley, a Quaker, lived with his first wife in a modest house in Briarcliff Manor in Westchester. He cut his own lawn. “Before Leona, it was all about work,” Ricker said. Helmsley showed little interest in anything other than making deals, which he pursued with tremendous glee. “If I was a girl, I’d be pregnant all the time,” Helmsley once said. “When someone comes in with a good deal, I can’t say no.”

Helmsley started out as a broker in the Great Depression years, doing business in foreclosed buildings. Eventually, he started assembling investors and buying buildings himself. One big early purchase was the Flatiron Building, which housed the offices of the brokerage that employed him, Dwight, Veerhis & Perry. Helmsley did so well that he bought the brokerage too, eventually renaming it Helmsley-Spear.

He was said to have a genius for bringing out the best in a building, for finding ways it could make more money for him than for its previous owner. Often, the key was efficient management. Critics called Helmsley cheap, and he was happy to plead guilty to that charge.

In the late 1940s, Helmsley formed a partnership with Lawrence Wien, an attorney. It proved to be most important business relationship of his life. Wien had devised a way for investors in real estate to avoidécorporate taxes while still writing off the yearly depreciation in the value of the buildings they owned. Through Wien’s method of “syndication” — essentially a complicated sale-and-lease-back arrangement — Helmsley could promise his investors a stable, tax-sheltered return on their stake. For a while, until the rest of the industry caught on to what Wien and Helmsley were doing, they had more money to play with than anyone else, and that allowed them to go on an unparalleled buying spree. Wien found the money, but Helmsley was the negotiator, and those who dealt with him still tell tales of his skill at the bargaining table.

“He literally did it on the back of the envelope,” said Joseph Grotto, Sr., who ran the Brown Harris Stevens real estate brokerage for Helmsley for 14 years, until the mid-1980s. “He thought about it; he had his yardsticks. He would close his eyes, and you could literally see the machinery going about it inside of his head. And he came up with the answer, and the answer was usually right.”

By the late 1960s, Wien and Helmsley were going their separate ways. Wien devoted himself to philanthropy. Helmsley moved into the hotel business and started constructing office and residential buildings of his own. One Penn Plaza, 140 Broadway and the New York Palace Hotel are probably his most notable developments. The final hotel building caused considerable controversy because Helmsley originally wanted to tear down the Italianate Villard Houses on Madison Avenue, designed for a 19th century railroad baron by McKim, Mead and White, to make way for it. (Helmsley did eventually incorporate the structure into his design as the hotel’s entrance. Most New Yorkers know it as the former home of Le Cirque 2000.)

In the Reagan era, being mentioned in the newspapers in the same breath as the likes of young upstarts like Donald Trump did not fully agree with Helmsley, who was at his best when he was out of the spotlight, sizing up properties he could see and touch.

“I remember in the ’80s,” Ricker said, “when the real estate market was going crazy, he said to me, ‘I can’t buy in this market because it’s not the way it’s supposed to be. You’re supposed to borrow at 6 percent and make 10 percent, not borrow at 10 percent and make 6 percent.'”

By that time, Helmsley’s mind was losing its sharpness. Unlike so many of the men he did business with — Zeckendorf, Lew Rudin, Seymour Durst — he never had any children, and when his health began to fail, there was no one to take over his company but Leona. Her decisions led to both Helmsleys being indicted for tax evasion and other crimes in the late 1980s, but Harry was excused from a trial for medical reasons. (Leona was convicted and served 19 months in prison.) After his death, it took many years to unravel all his partnerships and sell off his properties. Harry Helmsley thought of his buildings as his family. Today they are all owned by other people.