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Inside the House of Outrageous Fortune: a Q&A with Michael Gross

Thursday, March 6, 2014
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Deputy editor Haley Friedlich sat down with AVENUE’s real estate columnist Michael Gross to discuss his newest book House of Outrageous Fortune: Fifteen Central Park West, The World’s Most Powerful Address (Atria Books, March 2014)

House of Outrageous Fortune by Michael Gross

This is your third real estate book; how did you become interested in the topic? After 740 Park, I didn’t want to be known as the “apartment house guy.” I decided I wrote books about institutions of American wealth. I made a list, and number seven was the Metropolitan Museum of Art. My editor said, “That’s the one.” Part of me has regretted that decision because that book [Rogues’ Gallery] got me into so much trouble! My then publisher next said, “Why don’t you write about real

estate in Los Angeles?” So I did Unreal Estate, which is also the namesake of my column. Then, seven to eight years after I wrote 740 Park, I realized everything had changed in New York. Suddenly, I thought I could be the “apartment house guy” again and decided to do a book on 15 Central Park West, and here we are!

 

How did you go about collecting all this information? It’s extremely
detailed; where do you even begin?
That’s why they pay me the medium-sized bucks! I had to do two things: figure out what story I was telling, and figure out who lived at 15 Central Park West. I read every article that had been written in the preceding four years about who lived at 15 Central Park West, and who had recently purchased an apartment at the address. Some of the information was right, but much of it was wrong . . . there was definitely some sloppy guesswork. At the same time, some of the guesswork was right on.

To be fair, many condos are purchased by trusts, corporations and limited liability companies and entities that have been specifically
instructed to hide real ownership. So, after looking through newspapers, I went to the deeds, which are public record. I did a spreadsheet of the whole building. At a certain point, I was back to human intelligence; I just started taking to people. Most of the people who identified building residents are confidential sources; but suffice to say, they were people who have intimate knowledge of who lives in that building.

Simultaneously, I was trying to figure out what the book was going to be. It would be the story of a gigantic paradigm shift, not only in New York real estate, but in what constitutes wealthy society in New York. There was the shift from the East Side to the West Side, from old money to new money and from industries that were traditionally the engines of wealth in New York to the new industries of wealth in New York. There was also the shift in co-ops, which were mostly owned by local people who lived in their apartments year round, to condos owned by foreign investors, only there to stay a few days of the year.

 

So how do you tell that story? I decided that it had to be a series of connected stories, starting with the story of the West Side, specifically the massive farm that used to surround today’s 15 Central Park West, and progresses until the time Lincoln Center was developed. Then I told the story of the Zeckendorf family because they did a lot of development; it’s a three-generation real estate saga, with father working for grandfather, and sons working for father. Then the third story I had to tell was that of luxury condos in New York, which is not as recent as people think.

Most assume Time Warner, 15 Central Park West and the towers of 57th Street are the first ones. But, in fact, the story of luxury condos of New York begins in the ’70s with Aristotle Onassis, the Olympic Tower and almost immediately afterwards, Donald Trump. Now we are up to story number four, the development of Columbus Circle, which has been continuously redeveloped over hundreds of years. The first person to think he could transform it into something great was William Randolph Hearst, in the late 1800s; so, there is another story.

Someone I interviewed likened the process to building a bird’s nest. You take a piece of string, a twig, a bead, another twig and a little bit of newspaper. Eventually it becomes a beautiful bird’s nest, or in this case, a very expensive bird’s nest.

 

Why do you think the people who live in 15 Central Park West were more amenable than the Met board members? I think with those residents who came from very little, there’s a real sense of pride in their accomplishments. In particular, stories of the foreigners who came to America in the 1970s and now live at 15 Central Park West make you “well–up” with American pride. In the case of the people who didn’t want to talk, they were like the people at 740 Park who didn’t want to talk. At the time I was reporting this book, Occupy Wall Street had an encampment across the street. There was clearly a growing alternate reality that many of the people who live at 15 Central Park West might have found threatening. Dan Och didn’t talk to me; Dan Loeb didn’t talk to me; Barry Rosenstein didn’t talk to me; Lloyd Blankfein didn’t talk to me. To their credit, it took months and months, but most of the other Goldman Sachs people finally talked to me. But just within the cadre of the dozen or so Goldman Sachs people who live in the building, there was one guy who never returned a phone call and one guy who yelled at me, and said he didn’t want his name in my book . . . too bad.

 

Was there anything you learned in particular that surprised you? What surprised me was that I was allowed to put together, to learn and to describe the series of business deals that led to the creation of this building. I was surprised and delighted that most of the people involved were willing to talk; I think I was probably most surprised by the way that petty personal tensions affected deals. The relationship between Goldman Sachs and the Zeckendorf brothers, who were partners in this, was contentious right from the beginning—that kind of thing was amazing to me. And the tale of how the fellow who controlled the property on behalf of a wealthy family played a game of decades’-long chess, the intricacies of the sale of the building—that was the stuff that captivated me the most.

 

Was there anyone you really enjoyed getting to work with on this project? I already knew Will and Arthur Zeckendorf because their grandfather had briefly owned 740 Park, but spending hours with them, I learned how proud they are of what they did here—a lifetime achievement. The billionaire businessman who helped back them was fabulous, a charming and delightful guy. I loved Tyler Ellis, Perry Ellis’ daughter, and John Avlon, the man who sold the property; he is someone who doesn’t talk to the press. I don’t want to spoil the end of the book, but there is a group of immigrants to New York who were just amazing and really inspiring. There is one guy who repaired air conditioners in the former Soviet Union and ended up inventing the DVD.

Did you get to see anything inside the building that was really
“insider”?
I ate at the restaurant one day for lunch. I got a tour of the health club, screening room, billiard room and conference rooms, and I visited a lot of the apartments. The funniest moment was, I was in a “D”-line apartment doing an interview when an envelope came under the front door. The owner of the apartment picked up the envelope and said, “Oh, look! It’s Brown Harris Stevens.” An hour later he called me to tell me the letter said there was this guy named Michael Gross running  around the building and that this book was not sanctioned; they could talk to me or not. I thought that was so diplomatic of the condo board, I called the president of the co-op board to thank him.

 

Why would people who liked your other books like this one? It’s the same blend of social history and exposé of the rich and famous that I’ve tried to do in every book. These are people who have a massive and often unaccountable effect on the day-to-day lives of everyone in this country. If you care about how the world works today, then I think you really need to understand how hedge fund people operate. That doesn’t necessarily mean what they tell their investors in their biannual letters; it means how they behave.

What I think this book does better than any book I’ve written before is that it’s a much more integrated story, not as episodic. I think I’ve also appreciated the fact that it’s a hundred pages shorter than any of my last four books! By the way, I apologize to the people who got left out. Some of them will think that’s a blessing, and some of them will probably gnash their teeth and wish I’d revealed their names; but you can’t win them all.

 This interview also appears in the March issue of AVENUE
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