When Adam Piore decided to chronicle how New York turned into a playground for the world’s one-percenters, he knew he needed “narrative mules” — characters whose journeys would carry the reader through the city’s operatic transformations. The natural protagonists for such a sweeping tale were, of course, real estate developers, and thus was born “The New Kings of New York: Renegades, Moguls, Gamblers and the Remaking of the World’s Most Famous Skyline,” Piore’s best-selling new book, brought to you by The Real Deal.
Some mules were easy picks. Take Steve Ross, the megadeveloper and multi-billionaire founder of Related Companies and owner of the Miami Dolphins. Obvious.
Piore’s other choices were more interesting: Kent Swig, the former industry golden boy who had a spectacular fall from grace after the subprime crisis; the Zeckendorf brothers, who emerged from under the shadow of their grandfather to develop the most successful condo in New York history; and Dan Doctoroff, the ambitious deputy mayor who oversaw the rezoning of about 40 percent of the city after 9/11.
“I wanted to understand how a city could change so much and what made that happen,” Piore said in an interview with TRD. “I wanted the narrative mules so I could flash back and tell the story of the city through their eyes.”
This interview has been edited and condensed for clarity.
You had a huge roster of developers you could have chosen from to tell this story. Steve Ross, the biggest developer in the city — that’s a clear first-round pick. But you also picked an Icarus-type character in Kent Swig.
Swig, to me, was fascinating. He’s from a real estate family. His father partnered with the Zeckendorfs, who are also characters in the book. He married Harry Macklowe’s daughter. He lived in the most prestigious co-op in the city, 740 Park Avenue. But when the subprime bubble burst, he was the poster child for that calamity. His credit cards were frozen, his creditors came after him. He had these recourse loans.
So I wanted to know what it was like for him. And he’s an articulate guy who speaks from the heart. He came to the city in the ’80s. His earliest deals were with Macklowe around Times Square. So I was able to review the history of the city there, but he also played a role in the revitalization of Downtown in the late ’90s. So I thought he was a good character. I wanted to talk about what it’s like to get wiped out and how that happens.
He probably had the most dramatic reversal of fortunes. At 740 Park, he would say hello in the lobby to David Koch or Steve Schwarzman. He went from that to having his lenders give him a credit card so he could buy groceries from Trader Joe’s — that’s how far he fell. You don’t think of these people as being subject to the same forces as the rest of us, but in some cases they could be.
Kent Swig (Getty, iStock)
He had all these lenders squabbling over his assets and they froze his credit cards. I didn’t know he would share that, but I did know that he had been attacked with an ice bucket by Yair Levy, and that the incident — which had occurred right before Lehman Brothers crashed — was held up in the media as what everybody thought was going on behind closed doors at the time.
You’ve covered the high-flying worlds of both finance and big-ticket real estate. Do you think because real estate is essentially still an industry of cowboys, privately held firms, that the behavior and the ugliness tends to be even worse than some of the stuff we see on Wall Street?
It doesn’t seem like somebody would get clubbed with an ice bucket on Wall Street. But who knows. “The Wolf of Wall Street” was financed by Jho Low, Steve Witkoff’s partner, and it had that guy [Jordan Belfort] on Quaaludes crawling through the middle of the street.
I tried to get the Wall Street angle, too, by talking to Fortress. They don’t usually give interviews, but I got to know a couple of the people at the center of those deals.
One of the ways that you make a lot of money on Wall Street and survive is by protecting your downside. And it doesn’t really seem like people in real estate necessarily do that as much [laughs].
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Fortress would go into distressed situations. [Fortress’] Pete Briger and Steve Stuart came up together at Goldman Sachs and were wading through the wreckage after the S&L crisis, looking for things they could sell. And one of the first things they did was to find out, in a worst case-scenario, how much they could sell it for and who the buyer would be. And that’s what they did with Harry Macklowe. We have that in the book where he calls up and says, “I need to borrow a billion-two, and I need it by next week.”
Steve Stuart hangs up and turns to the guy next to him and says, “You’re not going to believe the deal Harry wants to do.” It was very interesting to me to talk to him and the other people at Fortress about how they then went about doing that. They basically went over to Macklowe’s office and went through his books to identify which assets they could seize if he defaulted on the loan. And they made sure the money was there and which of the assets were already owned by other places. And so their whole approach is, they’re looking for opportunity, but they’re also looking for the downside.
“He had all these lenders squabbling over his assets and they froze his credit cards.”
Love that. You write about when they go to Macklowe and are going through his books, they realize that — and this is one of the broader themes in the book — he was structured very much like a mom-and-pop business.
He bought $7 billion worth of office space. He bit off this huge chunk of real estate that doubled or tripled his portfolio. He hadn’t amped up his office yet.
I also want to talk about Gary Barnett , of Extell Development, who’s credited with kicking off what we now call “Billionaires’ Row,”on 57th Street. This guy is not a swashbuckling, big-living Steve Ross type — he’s an Orthodox Jew who lives in Richmond Hills, Queens, with 10 children. What was he like?
Gary Barnett, founder and chairman, Extell Development (Extell Development, LoopNet)
He was more reserved, not as bombastic as Steve Ross. He didn’t try and sell me on things. Swig was wearing a nice suit and is very sunny and polished. The Zeckendorf brothers were also pretty polished, if understated. Barnett, though, his office was kind of drab. I mean, considering how expensive his buildings are, he was just kind of subdued and not as much of a schmoozer, you know, unlike Steve Witkoff, where you could tell that his charisma was part of what got him ahead.
Gary Barnett didn’t really have any of that. He was just sort of this understated guy in a black turtleneck. I can’t remember if he was wearing it that day, but that’s what I picture him in. When I asked him about One57, he said he had no idea that it was going to be that valuable when he first bought it. He thought maybe he would build like a little 20-story thing or whatever.
I recently worked with you on this story that we did on Joe Chetrit. He didn’t talk for it, but what people close to him said to me is that he didn’t want to talk to the press because he felt it would be unseemly to brag. Like it’s almost against his religion as a serious, practicing Jew. And then I think of people like Rubie Schron, who’s the same way.
Schron has a saying he’s fond of: “If you run away from honor, the honor will chase you.” One interesting nugget was that I believe Barnett bought the One57 site from a guy called Ziel Feldman.
Yeah. Ziel sold him his first piece there.
Ziel is not a primary character in your book, but let’s talk a little bit about him because he recently had a big project in West Chelsea, the XI, go belly-up.
HFZ’s Ziel Feldman (The XI)
I actually did talk to him at length for the book. He was somebody I considered putting in as a main character, but I thought of the book “Skyscraper Dreams,” which we looked to when I wrote “The New Kings of New York,” because I wanted my book to be equally ambitious. But I did find that with “Skyscraper Dreams” — even though it was great — it made my eyes glaze over just because there were too many characters.
What happened with Ziel Feldman this cycle really reminds me of what happened to Swig the cycle before. When Swig was making some of his later buys, everybody thought that the music was going to stop soon, yet he would announce another really ambitious project. When I had asked him about it back in the day, he said, “Oh no, everybody’s missing it — it’s the perfect opportunity.” Same with Ziel: Everybody’s saying that the music’s going to stop soon and you overpaid and he’s like, “No, no, no, no.” And so it was similar in that it was late in the cycle and they paid an outrageous amount of money.
And that project has now been taken over by Steve Witkoff. This is what I love about New York real estate — there’s this rotating cast of protagonists.
Right. Meanwhile, Witkoff is giving up properties that he got screwed on during Covid, like the hotel-casino in Las Vegas and this project with Ian Schrager.
I’d be remiss if I didn’t ask you about the political and sociological forces that shaped the events in this book. You get at those by telling the story of Dan Doctoroff, former CEO of Bloomberg LP and first deputy mayor in the Bloomberg administration.
When New York went into near-bankruptcy in the ‘70s, Lew Rudin and a lot of people talked about this “vicious cycle.” Which is, people left, tax revenue went down, crime went up, more people left, they had to cut services more, and so on. And there was a related idea that you could have a “virtuous cycle,” which is what Mayor Bloomberg and Dan Doctoroff wanted to create. But then, flash forward and it was hypergentrification. It went much faster than anybody thought it would. And everybody got priced out and there was a huge backlash.
Dan Doctoroff was not really a man of the people. I mean, this is a guy who hated New York when he first came and was a finance guy. He was the 1 percent. The way he talked about New York in the battle days — which I thought were pretty cool because it was creative anarchy and it was an exciting place to be — he was somewhat disgusted with it. And then he got this idea to bring the Olympics to New York, thinking that if you brought them here, you had to provide the space and do rezonings and you could push through all these things that had been politically gridlocked ever since the days of Robert Moses.
Your blockquote here…
It’s kind of like sending a man to the moon. Put out an audacious goal, and the momentum helps you realize many things along the way, even if you don’t reach the moon.
[The Bloomberg administration] came up with this blueprint of how you would rezone the city to make space for the Olympics. And there was a deadline of when they had to do these rezonings, but it was really almost just a Trojan horse to rezone manufacturing spaces and cut through the gridlock. And so, we didn’t win the Olympics, but they rezoned 40 percent of the city.
They worked a lot with developers and really believed in this virtuous cycle, that if you could do these tax breaks that would benefit developers, it would make the city a more pleasant place and everybody would benefit. And they did, but then it got… I noticed it because I was in New York at the time, everybody was like, “Wow, look at the High Line and all these new parks, it’s so great.” And then the next thing they know they’re priced out of their apartments, and there’s no incentive to build affordable housing. I don’t know what the solution is — land prices have gone up so much and to get your money back you target the 1 percent.
In your journalism career, you’ve covered everything from human biohacking to New York real estate. What are the common threads that get your juices flowing?
My first book was about reverse engineering the human body and mind, and about what we’re learning about neuroscience and regenerative medicine. But it was also about these scientists and the people who were benefiting from this. And both books were about resilience — untapped human resilience in the first book and then the resilience of New York City in the second book. In the first book, the stakes were about saving somebody’s life. And here, the stakes are billion-dollar deals.
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Write to Hiten at hs@therealdeal.com