and forth. Often in real estate negotiations where the other party feels they have the upper hand, they aren’t satisfied until they see you bleed. With these air rights, however, I was beginning to hemorrhage. Even after we came to another agreement, the bloodletting wasn’t quite over.
Two days before the deadline for tax incentives we were counting on in building the tower, a city councilman appeared out of nowhere with another demand for community benefits before passing the deal. So we negotiated up until the very last minute; the council voted in favor of our assuming rights at ten o’clock the last day before we would become ineligible for a special real estate tax program the city was offering in Lower Manhattan.
There were many times I thought it wouldn’t happen and many more that I wanted to give up out of sheer frustration, but three years after the initial idea to build a tower, we got approval to start construction on the $500 million building. And then six months later, before the foundation was completed, the economy collapsed. Left with a pile of debt instead of a building, I faced a major dilemma. Should I throw more money onto the pile or cut my losses there and then?
One of the dangers of the real estate business is that often you are competing against people who have money but are not that knowledgeable. It’s a counterintuitive idea. Yet those with money (the only barrier to entry into the real estate market) but no experience in the buying and selling of property drive up prices because they want to get in on “the action”—and their power lies in their checkbook. If you pay a certain amount simply because the guy next door has paid it, you will not survive this ruthless industry that has created far more bankruptcies than it has billionaires. Saying no is the most important judgment you make. On the other hand, nothing happens until you say yes. Risk is an undeniable fact of real estate, mitigated only by having your own view of the market and believing in your instinct.
I have made my fortune from seeing value where others never thought to look. I pioneered the New York co-op market by taking apartments that no one dreamed anyone would ever buy, such as walk-up tenements in the West Village and housing complexes in middle-class black neighborhoods, and turning them into lucrative investments. In the process, I not only earned the title of King of Co-ops but also helped transform the city’s landscape from neglected rentals to prized homes.
It’s my life’s work to find value where others don’t. The unknown authors and agents that I enlisted to build up my father’s literary agency after his death; the unrecognized talents who have turned Omi, my artists’ colony upstate, into an internationally prominent cultural center; and those discarded in prisons or the political underdogs I have championed: All have brought an unparalleled richness to my existence.
I don’t give up easily—not on people or properties—and I wasn’t ready to give up on 50 West, not even after a global financial crisis made the land practically worthless. I struck a deal with the lender even though they were initially calling for me to either turn over the property or pay the $55 million I owed them, which I didn’t have. Instead, I convinced the bank to sign a new agreement that turned the short-term line of credit for the foundation into a regular land loan. I offered up $10 million in good-faith pay-downs and a personal guarantee of $22 million to secure the loan, and I agreed to pay a higher interest rate.
Everyone told me I was crazy. Why would I pay $3 million a year in interest alone, in addition to property taxes and insurance that totaled another $2 million annually, for a piece of land with no income on it? Why take the risk when I could be done with the whole mess by giving it back?
Because that land was my chance to fulfill a dream of building an iconic skyscraper. Plus, I thought, one day it was going to be worth a hell of a lot more.
EARLY REMEMBRANCES OF THINGS PAST
My father accompanied the writer out of his office.
“Sandy, this book is going to be a big, big best seller,” the writer said to my father. “Big. Not just in Europe but here in America too. I’m going to make us lots of money. You’ll see.”
“Yes, yes, Lazi,” my father said with a slight note of skepticism.
The Hungarian writer Ladislas Faragó had made his name as a foreign correspondent in 1935 covering the Ethiopian-Italian War, an assignment he turned into a historically important and wildly popular book, Abyssinia on the Eve. But he was as much an old friend of my father’s as a valued client of Sanford J. Greenburger, my father’s literary agency. So Dad took special care in showing him to the door, walking past my desk, where I was busy balancing the agency’s checkbook, and my mother, who was tending to her usual administrative work. Faragó kissed her hand in the old-fashioned style before he was hustled out the door by my father—just as Leo was entering.
“What brought the Hungarian schemer?” Leo, lighting a cigarette, asked once my father returned.
It was true; Faragó, who had written many best-selling books on military history and espionage (including, later on, Patton: Ordeal and Triumph), had picked up a trick or two from his reporting. An expert on propaganda and other methods of using the mind as a weapon, he was assigned during World War II to a unit engaged in psychological warfare against the Japanese. When it came to his own business affairs, he was no less stealthy. Once, he sneaked into my father’s office and helped himself to the company checkbook, writing a check to himself and forging my father’s signature. Although the sum was not large, my father was perpetually broke, so even small amounts were a problem.
“Ah, Lazi’s okay,” my father said.
“You know, one can be a good writer and still not be a good person,” Leo said.
Leo Frischauer did not mince words. In fact, offering up his opinion, solicited or otherwise, was about all Leo ever did. Each day he arrived like clockwork to my father’s small office on 42nd Street that was half literary agency and half café for a variety of European intelligentsia, even though technically he didn’t work there. In the context of the parade of writers and publishers who created a constant flow of smoke, gossip, and eccentricity, it wasn’t odd that Leo had a desk but no title or work responsibilities. Efficiency was never a priority at the agency.
I watched my father and Leo smoke and talk as if this were new and exciting territory and not how they had spent every day of their lives for the last twenty years. I never asked my father how he felt about Leo; he was kind of just a given.
Like most everything else in the office, Leo’s story was mythic, unconventional, and not at all clear. My hazy understanding was that Leo—who came from a family of wunderkinds that included Paul, a well-known novelist, and Eddie, a champion bridge player who helped Austria bring home the 1937 world title—had made a huge sum of money as a very young lawyer in Vienna. He wanted to celebrate his windfall by taking his girlfriend on a trip around the world, but his mother disapproved. His girlfriend then committed suicide, which, although something of a Viennese habit during that period, gave Leo such a virulent hatred of money that he gave all of his away. Over five o’clock tumblers of whiskey, there were tales of Leo leaving the equivalent of a $100,000 tip for his favorite waitress at his regular café in Vienna. Once the money was gone, Leo decided he didn’t want to work anymore. Ever again.
When Leo first came to New York, he went to see my father, who knew his brother Paul. He walked into the office, introduced himself, and then asked my father whether he could come the next
