On June 26, CNBC reporter Mike Huckman had no trouble finding ousted Salomon Smith Barney telecom analyst Jack Grubman outside his Upper East Side townhouse to ask him whether his downgrade of WorldCom stock had anything to do with rumors of fraud at the company.
Mr. Grubman said it was purely a coincidence, and then accused Mr. Huckman of harassing him when the reporter pressed for more details.
But Mr. Grubman, The Observer has learned, doesn’t actually own the place anymore. Four days after his confrontation with Mr. Huckman-amid a swirl of accusations and investigations of Mr. Grubman’s behavior at Salomon Smith Barney-he transferred the deed to the house into his wife’s name.
City records show that Mr. Grubman and his wife, Luann, had jointly held title to the townhouse on East 81st Street since March 1999, when they bought the building for $6.2 million in a reportedly all-cash transaction.
Mr. Grubman signed over the deed to his wife exclusively with no money changing hands, city records show.
About a month before the transfer, New York Attorney General Eliot Spitzer subpoenaed Salomon Smith Barney to obtain documents relating to research by Mr. Grubman, in an investigation that is still underway. Mr. Grubman had also been named as a defendant in two different lawsuits filed by investors in WorldCom and Global Crossing.
Last week, investigators released e-mails that suggest Mr. Grubman upgraded his rating on AT&T stock in order to help his twin daughters gain admission into the elite preschool at the 92nd Street Y.
Mr. Grubman could not be reached for comment, and his lawyer, Lee Richards, did not return repeated calls for comment.
Husbands and wives frequently transfer property titles to one another, most often to lower tax burdens in estate-planning arrangements or in cases of divorce.
But several lawyers for disgruntled customers who have filed suit against the former telecom analyst said they’re worried Mr. Grubman is attempting to unload assets that could be recoverable as part of a civil award.
“If he’s trying to remove assets off his docket [to guard against] people trying to go after him personally, this is definitely a concern,” said Eric J. Belfi, an associate at the firm Rabin & Peckel, which has filed several class-action lawsuits against Mr. Grubman, Salomon Smith Barney and other related parties.
Mr. Spitzer’s office declined to comment on the transaction, as did the National Association of Securities Dealers, the industry regulator that is suing Mr. Grubman, charging he misled investors in Winstar Communications, a now-bankrupt telecom.
Whittle Slashes Georgica Price by $6 M.; Hilfiger in the Hamptons? ‘Never.’
Chris Whittle, founder and chief executive of the controversial and cash-starved charter-school company Edison Schools, slashed $6 million from the asking price of his 11-acre Georgica Pond estate. The property, which had been on the market for $45 million, was reported sold to fashion mogul Tommy Hilfiger-but local brokers are telling The Observer that that’s not the case.
“Tommy Hilfiger has never, ever seen the property,” said the property’s exclusive listing agent, Peter Turino, co-owner of Dunemere Associates. “It’s still available, and we welcome serious interest.”
Of course, many brokers would say that right up to the moment the deed changes hands, but a spokesperson for Mr. Hilfiger concurred, saying: “He hasn’t seen the property; he’s not in the market to buy; it’s not true.
“[Mr. Hilfiger] made one phone call to inquire about a summer-rental property in general, and somehow it turned into this,” the spokesperson continued. “He hasn’t been out to the Hamptons in a couple of years, and he wasn’t calling about any particular property.”
Mr. Hilfiger is better known in resort spots like Nantucket and Mustique, and owns a house in Greenwich, Conn.
Mr. Whittle put his property on the market in early September-less than a week after Nasdaq threatened to delist Edison School’s stock. One of the East End’s top brokers said that there have been a fair number of showings since the property came on the market, but few experts deem it worthy of the record-high price tag.
“A lot of people have turned it down because they don’t think it’s worth anywhere near $45 million,” the broker said. Whether $39 million is still too high remains to be seen.
Mr. Turino, the property’s listing agent, defended the high price. “[It's] the finest property listed out here in many years,” Mr. Turino said. “The house is a masterpiece, and it’s completely renovated.”
upper west side
253 West 73rd Street (the Level Club)
Two-bedroom, two-bathroom condo.
Charges: $550. Taxes: $320.
Time on the market: two weeks.
MAMA KNOWS BEST If your lawyer’s mother has to undergo heart-transplant surgery on the closing day of your condo sale, you might expect to postpone the paperwork. So when the seller of this condo-working in London as an executive at a Europe-based U.S. TV station-heard about his lawyer’s predicament, he naturally inquired as to when they should reschedule the closing. “No,” his lawyer’s assistant told him, “they did closing this morning.” Apparently the lawyer’s mother told him to go ahead with the closing; he kept his cell phone turned off the entire time so as not to get any bad news in the middle of it. Only on the way back home, after having dropped off all the checks at Citibank, did he get the call from his wife and learn that the operation had gone smoothly. “I told his assistant that he was absolutely insane and out of his mind,” said the Londoner. “And I sort of felt bad, because had I been in New York, I’m sure he would have postponed it.” The new owners already lived in the building-the Level Club, a former Masonic temple-and had been waiting for a unit with outdoor space for years. The Level Club’s in-house broker, Corcoran vice president Lawrence Schier, said he took his hat off to the lawyer. “Some brokers fear bad attorneys, because they break up deals,” he said. “This one was a deal-maker.”
419 East 57th Street
One-bedroom, two-bathroom co-op.
Asking: $895,000. Selling: $875,000.
Maintenance: $1,160; 55 percent tax-deductible.
Time on the market: seven months.
fourth time’s a charm The fabric importer who sold this eagle’s-nest apartment has bought and moved into three different apartments in the last five years, and he’s currently buying his fourth. It started humbly enough with a $180,000, 680-square-foot starter apartment; now he’s in a $1.3 million, 2,300-square-foot Prince Street loft. “It’s not that I’m willfully relocating him,” said the importer’s longtime broker, Michel Madie, president of Michel Madie Real Estate Services. “It’s just that new stuff comes up, and every time I knock on his door, he ends up buying a place.” The fabric importer bought this 980-square-foot Sutton Place tower co-op two years ago. The apartment’s bones were great: 20-foot-high ceiling, fireplace, wrought-iron gates outside. But soon after the purchase, he hired architects at Mr. Madie’s firm to perform a $110,000 renovation. Since then, he’s held two banging Fourth of July parties on the 300-square-foot private roof deck. A banker with a big trust fund is the new owner.
107 Greene Avenue
Asking: $959,000. Selling: $942,000.
Time on the market: three-and-a-half weeks.
IF I HAD A MILLION DOLLARS The seller of this Brooklyn brownstone used to work for the Port Authority of New York and New Jersey, and his office was on a high floor of the World Trade Center. A few weeks before Sept. 11, however, he gave notice at work and moved with his family down to Florida to realize his long-held dream of becoming a commercial-airline pilot. Training began, ironically enough, at Vero Beach-the same place where many of the Sept. 11 hijackers learned to fly. “He cheated death by becoming a pilot,” said his broker, Jerry Minsky, a senior vice president at the Corcoran Group. “And a year later, he became a millionaire because he sold his brownstone.” The building he sold was originally a rectory up until the 1950’s. “The old-timers tell me it’s where you hung out when you got punished by Mom and Dad,” said Mr. Minsky. “The balconies on the upper levels are where the nuns hung out.” By the late 1980’s, it had been converted into a two-family house, and the Port Authority employee picked it up for about a quarter of a million dollars. The 20-foot-wide, 3,600-square-foot Gothic-revival building has 12-foot-high ceilings, five bedrooms, two bathrooms and two half-bathrooms in total. It’s right down the street from the Brooklyn Academy of Music. The new owners, a gay couple-one’s an actuary at a law firm, the other is a nurse studying anesthesiology-are renting out half of the space, but have plans to eventually convert it into a single-family residence.
UPPER EAST SIDE
Cantor Chief Howard Lutnick Rents Yellow Townhouse Eyed by Mike Tyson
Cantor Fitzgerald’s chairman, Howard Lutnick, has signed a year-long lease on the lavishly decorated East 64th Street townhouse that ex–heavyweight boxing champion Mike Tyson once tried to buy.
Mr. Lutnick and his family have taken occupation of the four-story, canary-and-cream-colored townhouse while they wait out the renovations on their East 71st Street house. Mr. Lutnick purchased that house in 1998 for $7.6 million, but it was then divided into 10 apartments, and he didn’t obtain a permit to renovate it into a single-family residence until January 2001.
A spokesperson for Cantor Fitzgerald confirmed the arrangement.
New York got to know Mr. Lutnick first as the grieving head of the bond brokerage firm that lost 658 employees in the World Trade Center attacks, more than any other company in New York. But the outspoken chief executive became a lightning rod for criticism later, when families of employees who were killed in the attacks said salary payments to their missing family members had been stopped.
That criticism seems to have died down, and in September of this year, Mr. Lutnick told The New York Times that the move was essential to shore up the company’s rocky finances-and pointed out that as of September 2002, Cantor’s contributions to those employees’ families totaled just under $25 million.
Mr. Lutnick’s rental house belongs to Austrian developer Peter Cervinka, who bought the building in 1993 and then spent $8 million renovating it. He decided to rent it out when none of the suitors for the property, including Mr. Tyson, tendered an acceptable bid.
Mr. Lutnick’s company is also renting out space until its permanent home is ready. Cantor Fitzgerald employees are now reporting to a temporary office at Lexington and 57th Street until the company finalizes its plans to settle into the old J.W. Mays Department Store building on Union Square.