“Get ready for the f**king lawsuits”: Flatiron auction sparks joy, rage
Angry real estate player warns Jeffrey Gural’s lawyer on courthouse steps
There were no spoilers or any sign of Jacob Garlick at the second auction for the Flatiron Building, but the event Tuesday was not without oddities.
The building’s majority owners, led by Jeffrey Gural, surpassed at least four other bidders to acquire full ownership of the Flatiron Building on a sunny afternoon outside of the New York County courthouse before a crowd of reporters and spectators.
Gural appeared relieved. That was no surprise, given what happened at the first auction.
In March, a bearded 31-year old named Jacob Garlick showed up at the courthouse and topped Gural with a bid of $190 million. Two days later, Garlick failed to put down the deposit, triggering a do-over and a lawsuit by Gural’s group against Garlick and his investment firm Abraham Trust.
“I had no idea what to expect since last time this guy kept bidding,” Gural said after the second auction.
As Gural spoke to a gaggle of reporters, a short, middle-aged man behind him started screaming at Gural’s lawyer, Richard Dolan.
“Get ready for the fucking lawsuits,” the man, in a suit and shades, said. “We’ll see you at either the Appellate Division or the fucking Supreme Court.”
“Lovely,” Dolan responded. “The court is open every day.”
“You better fucking believe it,” the man shouted back.
As the angry man stormed off, someone in the crowd asked: “Is that Jacob Garlick?” Onlookers laughed.
Followed down the courtroom steps, the man said he represented 184 Broadway Equities LLC and his name was Paul Gottsegen. An internet search shows he has held high positions at Time Equities and Halstead Management and chairs a respected nonprofit that advocates for parks.
After warnings by courthouse security to stop blocking the steps, Gottsegen and his attorney claimed Gural never brought the $100,000 certified check as required by a notice published in The Wall Street Journal.
“To be a registered bidder you had to have a $100,000 certified fucking check from the bank. I have it,” Gottsegen declared, holding up a white envelope and declaring his comments off the record. “He’s not a registered bidder. He doesn’t have the fucking check.”
One insider claimed Gottsegen had wanted to place a bid of $10 million, below the minimum starting bid of $50 million. The winning bid was $161 million.
Gottsegen also mentioned something about a “fucking $2.2 million commission” at one point.
Other bidders were confused by Gottsegen’s claims. Gural routinely cuts nine-figure deals and his GFP Real Estate has over 12.8 million square feet of real estate, so his access to $100,000 is not an issue. The auction referee confirmed Wednesday that Gural had a check and submitted it when the auction concluded.
The auction itself was less dramatic. Gural showed up in a blue blazer, stood in front of auctioneer Matthew Mannion and methodically outbid his competitors over 20 minutes.
At least four other bidders attempted to keep up, including Eli Lever of New York-based 21B and Izek Shomof of Los Angeles-based Shomof Group.
A 20-year old Leon Horvath of Corcoran, who wore a Carolina blue suit with white loafers and slicked back his hair like Patrick Bateman, was joined by his father Lajos Horvath in what would have been their first real estate venture in New York City.
A mystery bidder, a lawyer bearing paddle No. 6, also participated.
Other real estate players looked on, including Eric Anton of Marcus & Millichap and Glacier Equities’ Myles Horn, who considered making a bid himself.
Nathan Silverstein, the 25 percent Flatiron Building owner whose dispute with the Gural group over how to renovate the vacant property had led to the auction, did not attend.
As the bidding reached $88 million, an unknown man in a black T-shirt and plaid blazer attempted to make a bid without a paddle. Mannion asked if he were a registered bidder. The man said he had sent an email, but Mannion did not accept his bid.
Lever bid up to $100 million before dropping out, pointing out that Gural’s group had the upper hand because it could credit bid. Shomof, who said he had experience with rehab projects in L.A., also dropped out.
Bidding went up by $2 million increments until $152 million. At $156 million, bidding increased by $500,000 at a time.
At the end, three bidders remained: Gural, the Horvath duo, and mystery bidder No. 6, who asked for a recess at $156 million. Another recess stopped the action at $159 million. When Gural bid $161 million, Lajos Horvath and bidder 6 kept their paddles down. Mannion pronounced Gural the winner.
Reporters swarmed Gural, who joked that he got a discount compared to the $189.5 million he offered at the first auction, in March.
“I still think we overpaid,” he said, “but we overpaid by a lot less.”
He added that one member of his ownership group, Sorgente Group, tried to broker a peace deal with Silverstein prior to the auction that would keep Silverstein a partner, but nothing came of it.
“He hates me,” said Gural of Silverstein. “I have nothing against Nathan. It is what it is between us.”
The owners must now figure out what to do with the dated landmark, which has been empty since lone tenant Macmillan Publishers left in 2019. Gural has previously said he expects a renovation to cost at least $100 million.
“I think I got to talk to my partners and come up with a plan. I would think either make half the building residential and half office or all residential,” said Gural. “We got to figure it out.”