No one seems to believe Edward J. Minskoff. Two months ago,
the developer made what could fairly be described as a stunning announcement:
He was planning to build a 36-story speculative office building on Greenwich
Street, near Battery Park City.
It was as if, at a time when other developers were boarding
up their windows and stocking up on milk, Mr. Minskoff was striding confidently
out the front door without an umbrella.
The dour economic outlook aside, no one has completed a
large-scale speculative office building-one built without a major tenant in
mind-in more than a decade. Spec building is too risky, the conventional wisdom
went-and besides, no bank would ever finance it.
“No way,” said one prominent developer, when asked if he
thought Mr. Minskoff’s plans were for real.
Mr. Minskoff was just bluffing, many suggested, gambling that
the economy would soon turn around, bringing tenants to his door. And while he
has signed a letter of intent to buy the 90,000-square-foot lot from the New
York City Economic Development Corporation for an undisclosed sum, he has so
far laid out only a small portion of the purchase price, and he won’t have to
pay the full amount until he receives approvals to build from various city
agencies-a process which has just begun, and one that could take more than a
In a recent interview, Mr. Minskoff himself backed away from
his earlier pronouncement, saying that it would be “prudent” to sign on a major
tenant, while once again vowing to have the building completed by 2004.
Asked how he hopes to pull it off in the face of such
widespread doubt, Mr. Minskoff fixed a reporter with an intense stare. “I
certainly have the credibility,” he said. “I’ve built close to 27 million
square feet [of office space] around the country over the last 17 years,
including the World Financial Center right across the street” from the
development site. “So there isn’t an issue of lack of experience or lack of
credibility that I’m capable of building an office building of this magnitude.”
Indeed, Mr. Minskoff does have a reputation as a master
builder, a man who completes tough projects with architectural flair. He is
also, from the accounts of many former colleagues and people who have done
business with him, arrogant, irascible and single-minded in the pursuit of
self-interest. He’s had bitter fallings-out with business partners. He once
sued his own family members in a dispute over money. Former colleagues at the
development firm Olympia & York, where he was a top executive in the
1980′s, say he routinely took credit for developments he had nothing to do
with, including the World Financial Center.
“He’s a royal pain in the ass,” said James Fitzgerald, the
senior vice president for real-estate investment at Crédit Lyonnais, who
financed Mr. Minskoff’s development of an office building at 101 Avenue of the
Americas. “No kidding, he is. You can quote me on that.”
And Mr. Fitzgerald, a frequent golfing partner, considers
himself Mr. Minskoff’s friend . There
are many others who don’t-though few in the close-knit New York real-estate
world would agree to speak for the record about Mr. Minskoff. “It’s hard to
find someone who really likes him,” said one prominent real-estate executive.
“He’s difficult to deal with and egotistical and a historical revisionist of
All of this matters because in New York, as Mr. Minskoff
himself said, reputation matters-especially when one is trying to build an
office tower costing somewhere between $400 million and $700 million. Or, as
one real-estate executive who had reviewed Mr. Minskoff’s plans put it: “Do people believe Ed Minskoff?
Because that’s in the end what they’re going to rely on. A lot of it’s about
the credibility of the individual.”
In a recent interview conducted in the conference room of
his offices at 1325 Avenue of the Americas (a building he developed), Mr.
Minskoff, his gray hair slicked back, leaned back in a leather chair facing a
pair of Roy Lichtenstein prints and expounded at length on his accomplishments.
“I do have a history of building a lot of office buildings, and I have a
history of building very, very high-quality office buildings,” he said.
Told that some considered him “abrasive,” Mr. Minskoff
leaned forward over the table.
“Abrasive? I’ve never been abrasive in my life. O.K.?” he
said. “Because I’m independent, maybe that’s interpreted as being abrasive, but
never in my life have I been abrasive.”
Mr. Minskoff suggested that some of those who maligned him
were simply jealous, while others, like Mr. Fitzgerald, might think him
difficult because of his relentless bargaining style.
“There’s one thing in my reputation over the past 20-plus
years-I’ve never shaken anyone’s hand and then gone back on my word,” Mr.
Minskoff added. “Because you can’t buy reputation.”
Mr. Minskoff said he was 58 years old, though the Department
of Motor Vehicles says he was born Dec. 31, 1940, making him 60. He is the son and grandson of real-estate
developers. Sam Minskoff, the family patriarch, immigrated from Kiev to New York in 1895. Over the course of the
20th century, Minskoff and his sons built everything from apartment buildings
lining Fifth and Park avenues to the Navarro Hotel, which eventually became the
Ritz-Carlton, and 1515 Broadway, which houses the Minskoff Theater.
Edward Minskoff’s father left the family business after Sam
Minskoff died in 1951. Mr. Minskoff spent much of his childhood in Washington,
D.C., where his father worked in real estate, and went to boarding school in
New Jersey. He attended the University of California at Los Angeles, where he
took graduate courses in finance and real estate. Then, in 1967, he set out for
New York. He says his uncles offered
him a job in the family business, but he turned them down. “I never took a
penny from my family,” he said.
“He really went outside the family influence and went his
own way,” Mr. Fitzgerald said.
Mr. Minskoff started by fashioning a real-estate
apprenticeship for himself, working first as a broker, then in real-estate
banking at Lehman Brothers, before setting out on his own. Then, in 1976, he
came out of nowhere to make the biggest real-estate deal in history.
Paul Reichmann, the Toronto developer who headed Olympia
& York, had hired Mr. Minskoff to advise him on buying opportunities in New
York. In the dark days of the city’s fiscal crisis, there were plenty of
properties up for sale. The biggest prize of them all was the so-called “Uris
Package”-nine buildings, representing 10 million square feet of office space,
that were built by the legendary Uris brothers. Mr. Minskoff got Mr. Reichmann
interested in the deal and snatched it out from under another developer, Sam
Lefrak, for just $46 million in cash. The buildings are worth billions now.
‘I Did It’
Mr. Minskoff took a job as an executive vice president of
the company. There, he says, he oversaw “every single” Olympia & York
development in North America except one, including the World Financial Center
in Battery Park City. “I built that company into the largest developer in
America. I did it. Me,” Mr. Minskoff told Anthony Bianco, author of The Reichmanns . “The genius behind what
Olympia & York did in the U.S. was me, not Paul Reichmann.”
Others strongly dispute this claim . Mr. Bianco’s book, for instance, says the idea for the World
Financial Center originated with John Zuccotti, then Mr. Reichmann’s attorney,
and Olympia & York veterans claim that another executive, Michael Dennis,
oversaw the project.
But Mr. Minskoff stuck to his assertion in the interview.
“There was only one person-me,” he said. “And I’m not a me person.” Then why do
people say such things about him? “People in our business are very jealous
people-jealous of other people’s success,” he said. “By multiples of 1,000, I’m
more successful than they are.”
By 1986, Mr. Minskoff said Olympia & York was adrift
and, frustrated, he set out on his own. Mr. Bianco’s book, and former colleagues,
say he was forced out. What is undisputed, however, is that Mr. Minskoff took a
large payoff with him when he went for his minority interests in Mr.
Reichmann’s properties-$26 million, according to The Reichmanns . Mr. Minskoff said it was “substantially more” than
that, but refused to confirm a number; one associate says the figure rises
every time the developer mentions it. But he was lucky to get out when he did-a
few years later, Olympia & York’s empire collapsed under the weight of debt
from bad speculative development.
Mr. Minskoff sunk his new fortune into an ambitious
speculative office building, 1325 Avenue of the Americas, which he built in
partnership with Sotheby’s tycoon A. Alfred Taubman. The building was completed
in 1990, at the height of a crippling real-estate recession. Like many others,
Mr. Minskoff was forced to renegotiate with his lenders, a consortium led by
Citibank. While many speculate that
he was forced to relinquish all or part of his ownership stake, Mr. Minskoff
says he came through intact. “I was the best commercial-office-building loan
that that bank did over a 10-year period,” he said. “Probably the only one ever
to pay them back.” The building was sold to a group of German investors in 1999
for nearly $300 million.
While others were going bankrupt, Mr. Minskoff kept buying
and building, completing a 23-floor office building at 101 Avenue of the
Americas as headquarters for the Service Employees International Union in 1991,
and purchasing the I.B.M. Building, at 57th Street and Madison Avenue, for $200
million in 1994.
Meanwhile, the other side of the family’s real-estate
portfolio was in bad shape. In 1992, his aging uncle, Jerome Minskoff, hired
him to manage the family’s dwindling assets. But Jerome Minskoff soon died, and
the remaining family members bucked at spending the money Edward Minskoff
thought necessary to improve the buildings. He eventually sued them to recover
the more than $1 million in management fees he said he was owed. The family
members countered with allegations of financial impropriety against Mr.
Mr. Minskoff refused to comment on the dispute, but in a
1996 Daily News interview he said of
his family members, “They’ve always been jealous people.”
Other Minskoff family members declined comment. In 1996, a
judge referred the matter to an independent arbitrator, and the case has since
There are other, similar tales, which Mr. Minskoff dismisses
as “petty things.” He and Jan Hyde, with whom he founded a real-estate banking
and brokerage firm in the 1970′s, had a bitter falling-out after some business
deals went bad between Mr. Hyde and Olympia & York. Mr. Hyde sued, but Mr.
Minskoff prevailed at the end of a six-year court battle.
A former senior vice president at Mr. Minskoff’s development
firm, Jeff Sussman, is said to have threatened to take Mr. Minskoff to court in
order to collect money from his 1 percent ownership stake in several of Mr.
Minskoff’s properties. Mr. Sussman was the son of one of Mr. Minskoff’s best
friends. “At the time that he left here, I was like a relative to Jeff,” Mr.
Minskoff said. But he added that after taxes, there was nothing left to Mr.
Sussman’s share. “He was unhappy, and he shouldn’t have been unhappy.” Mr.
Sussman declined comment.
“I have not a single blemish on my record,” Mr. Minskoff
Over the last half-decade, as prices in Manhattan’s
real-estate market rose to stratospheric heights, Mr. Minskoff has kept a
fairly low profile. But in the last two years he made a triumphant return,
buying a large chunk of a building at 1166 Sixth Avenue and renting it out to
Chase Manhattan bank.
A Beautiful Dream
Then, early this year, Mr. Minskoff began showing brokers
and other real-estate executives sketches of what, if it’s built, would be his
first new building in Manhattan in more than a decade: 270 Greenwich Street.
Even the naysayers agree on one thing about the building: It’s a beaut.
Designed by Skidmore, Owings & Merrill, its south face would be black
granite and gray glass-Mr. Minskoff likens the look to the obelisk in 2001: A Space Odyssey -while its north
side would be a pristine white, with clear glass and views straight uptown to
Central Park. A large public plaza-the fifth biggest in New York, Mr. Minskoff
said-would include trees and sculptures.
Aesthetics are important to Mr. Minskoff, an avid art
collector. “I get involved in the
design elements of the building, from the basement to the roof,” he said.
“Every stone that you saw in the lobby downstairs when you came into the
building [1325 Avenue of the Americas] was hand-picked by me. Individually
hand-picked by me. This is the part of the business I enjoy. I feel that a
building should be beautiful 30 years from today.”
“He is actually a very good developer, because he’s such a
snob,” said one person who knows him well. “The tension between his ego, his
need to go down in history as a great developer, versus being greedy produces
what I would consider a very high-quality product.”
But will 270 Greenwich Street be built? The real-estate
world is a different place from what it was the last time Mr. Minskoff built
speculatively, in the late 1980′s. Bankers are loath to finance anything
without a tenant, fearful of the kind of losses Mr. Minskoff and others endured
in the early 1990′s. “I don’t think any of the major lenders in New York would
finance the deal,” Mr. Fitzgerald said.
Pressed on this point, even Mr. Minskoff conceded that his
professed desire to build speculatively was probably unrealistic: “Will the
capital markets view in a positive way a spec office building? Well, the answer
is probably no.”
So how would he build the building? “Well, if one were
prudent, [one] would probably want to have one or two major users committed
prior to going into the ground,” Mr. Minskoff replied. “We are presently
talking to a number of very, very high-quality large corporations that have
showed a very serious interest in the quality of this building.”
And in the absence of one of those tenants? “We’d slow down
the process,” he said.
Mr. Minskoff beat out several other developers to win the
site from the Economic Development Corporation, and Janel Patterson, a
spokeswoman for the agency, said the E.D.C. could continue to negotiate with
other potential buyers until Mr. Minskoff closes on the deal. “There’s not a
cast-in-stone deadline,” she said, “but one of the criteria we looked at is his
ability to complete it by a reasonable deadline.”
At the close of his interview, Mr. Minskoff, an avid squash
player, spoke about his will to succeed.
“When I go out there to play squash, I want to win,” Mr.
Minskoff said, “because a good loser is still a loser.”