Real Estate Broker Loses His Job After Hurling Anti-Chelsea E-Mail

Dan Leone was trying to stifle his sobs. It was 10 P.M. on Feb. 7, approximately 80 hours since Mr. Leone, 46, had been fired as a vice president of the Corcoran Group, and he was calling from his apartment on the Upper West Side. “I’m not sending anyone an e-mail again for any reason,” he told The Observer .

That makes the e-mail that Mr. Leone sent to a couple of apartment shoppers at 3:48 P.M. on Feb. 3 his last. Earlier that day, a client, an investment banker, had telephoned the broker at Corcoran’s Upper West Side office and told him that he and his wife, also an investment banker, had decided to purchase a three-bedroom apartment at the Chelsea Mercantile Building, a former Veterans Administration building at 252 Seventh Avenue between 24th and 25th streets, where new condominiums are under construction, rather than any of the apartments that Mr. Leone had shown them on the Upper East Side. In essence, the phone call meant that Mr. Leone was about to lose a client to another broker. Mr. Leone began to question the couple’s decision over the phone, when he fatefully asked for their e-mail addresses and decided to put his argument against their choice into unretrievable, irreversible and instantly forwardable writing.

“I’m sending you this note because I do think it’s a broker’s responsibility to educate a customer not only about the product they are buying, but also about the neighborhood in which it’s located. (After all, you’re not just buying the apartment; you’re buying the neighborhood too),” began Mr. Leone’s e-mail, which was leaked to The Observer by fax from real estate brokerage Douglas Elliman around 3:30 P.M. on Feb. 4. “Now, clearly your Chelsea broker didn’t educate you; and, because I truly believe you are not sufficiently familiar with the Chelsea area, I just thought I’d fill you in.”

Characterizing the neighborhood as a Sodom and Gomorrah filled with drug dealers, prostitutes and an aggressive gay population, Mr. Leone suggested that the couple take a walking tour of Chelsea and judge for themselves, starting by enjoying “S&M torture AND fine cuisine” just one block from their future apartment at a sex-themed restaurant. He also described a nearby “gay dance club that attracts a large, rough and rowdy crowd–and it’s popular with drug dealers. High quality cocaine and other fashionable party drugs are reportedly available here at the best prices in Manhattan.”

Then Mr. Leone addressed another location a block away, “where the city houses mentally ill and homeless men” and a coffee shop where “unless you are male and under 25 years old, you’re not welcome.” Finally, he mentioned the “nice restaurants, but don’t look for any families or kids: the clientele is 85 percent gay and lesbian, and the other 15 percent are tourists.”

“Please don’t think I’m judging the demographic of this neighborhood,” continued the e-mail. “I’m just pointing out that it’s largely an adult community where married couples not only feel uncomfortable, but soon realize they are unwelcome … I’m not saying that all gays and lesbians are unpleasant, irresponsible drug addicts and party animals, but their ‘baggage’ will always be prominent in their neighborhoods because the absence of children cancels out the need to suppress personal behaviors of any kind. This reality also creates a hospitable environment for the proliferation of bars and clubs–and their patrons. The homosexuals and the single ‘party crowd’ … [have] got to live someplace so Chelsea is where they’ll live, and their ‘baggage’ will always be there with them. In fact, Chelsea Mercantile already has the reputation amongst brokers of becoming an upscale gay dormitory. The reason I never took you to Chelsea Mercantile is because I truly thought it would be a mistake.… A neighborhood like the Upper East Side will always retain its value–as it is patronized by a stable and secure demographic.” In two years, Mr. Leone predicts, the building will offer “the most affordable apartments south of 42nd Street. At that point, I’m going to buy five units there as investment properties and rent them out.”

After the couple read Mr. Leone’s e-mail on Thursday, Feb. 3, they forwarded it to two other brokers they were working with: Bill Reid of the competing firm Douglas Elliman, who had brought them to the Chelsea Mercantile, and another Corcoran broker. The husband, who, along with his wife, wished not to be identified, said his first reaction was, “Is Chelsea going to be a Halloween party every day? We weren’t concerned about anything but the drugs and overt prostitution. Everyone replied, ‘That’s all hogwash. The description of the area is wrong.'”

“I thought, wow, he’s sort of trying to shock me because it must be really bad,” the husband said. “I thought this was just a culture of the real estate business. I was shocked, in a strange way. For someone to write something like this, I must be about to make a big mistake.”

The husband also forwarded the e-mail to a representative from Cantor & Pecorella Inc., the exclusive sales agent for the Chelsea Mercantile. “I was hoping they would say that a lot of families were buying in the building and that [Mr. Leone’s] comment about it being an upscale gay dormitory wasn’t true … I want my children to grow up playing with other children. We are immigrants and minorities and are against any kind of prejudice. We were a little concerned. I didn’t want to live in a building that’s labeled.”

Daniel Forster, a senior sales agent from Cantor & Pecorella, told The Observer , “Thirty percent of the [Chelsea Mercantile] apartments have been sold to young families.” The apartments, which range in price from approximately $400,000 to $3 million, have been for sale for eight months; the building is supposed to open at the end of the summer. Mr. Forster also pointed out that the “family-friendly” building’s gym will be separated from an adjoining children’s playroom by a glass wall so exercising parents can keep an eye on their kids, and that there will be a full-time doorman, a 16-hour concierge and a 40,000-square-foot organic food store on the first floor.

By Friday morning, Feb. 4, Mr. Reid had forwarded Mr. Leone’s e-mail to Mr. Reid’s boss, Douglas Elliman executive vice president Ken Malin, who acts as sales manager of the downtown office. And Mr. Malin forwarded it to Elaine Dean, the managing director of the Corcoran branch where Mr. Leone had worked since he started selling real estate in 1995.

“It is the most offensive thing I’ve ever read in over 15 years of business,” said Mr. Malin.

A few hours later, Elliman’s chief operating officer, Paul Purcell, had printed out the e-mail, attached a hand-written note to it and forwarded it to all of the company’s sales managers. After identifying the author of the e-mail and the relationship of an Elliman broker to the clients, he wrote, “I send it to you as an example of what we’ll never tolerate here at Douglas Elliman! I think we’re lucky in that I truly cannot imagine this occurring here. However, if it were to happen, I believe brokers and managers alike would insist on dismissal.”

When Corcoran’s Ms. Dean arrived at work Friday, Feb. 4, she read Mr. Leone’s e-mail and was bombarded with phone calls about the broker. As of that morning, Corcoran brokers had been banned from selling any more apartments in the Chelsea Mercantile building.

“I was appalled. My jaw kept dropping lower and lower,” said Steven Kleigerman, a broker at Halstead Properties, who called Ms. Dean as soon as he read the e-mail. “I wanted to be able to grab him and say, ‘Shut up!'”

Mr. Kleigerman called it steering, “when you try to get somebody to buy in a different neighborhood because the profile of their neighborhood where they’re looking is not for their demographic. It’s typically used along racial lines and not along sexual orientation lines.”

“Friday was kind of a crazy day,” said Ms. Dean, who fired Mr. Leone around 1 P.M. after conferring with one other manager at Corcoran. “I quickly made a decision. I don’t think there was much of a choice,” she said. “I called him into my office. It didn’t go on for hours. He left right away.”

Mr. Leone told The Observer that when he was confronted about the e-mail and its potential to hurt the firm and his colleagues’ business, he fell on his sword. “I told Corcoran, ‘Do whatever you need to do to get out of harm’s way,’ Brokers are getting back into the building,'” he said. “Corcoran needed to fire me.”

“Who am I to tell the Chelsea Mercantile who can and can’t buy there? I was wrong,” he continued. “I shouldn’t have said that. But I was saying my opinion to a customer. It wasn’t a blanket opinion about Chelsea. It was an opinion, tailored to their particular needs. They told me they were planning a family, they asked for an opinion. I should have expressed my opinion verbally, with the buyer. I spent a lot of time with them, and we got really close.”

“He is a class act, a great guy, a wonderful broker and whatever has happened in this whole event, I can just stand behind Dan as a person and a broker,” said a Corcoran broker. “He’s very well liked, he treats other brokers very fairly, he looks out for other brokers. I’m distressed by the whole situation, it seems that it’s gotten terribly out of hand. This is an emotional … He’s a good human being, and he’s worked very hard to be where he is. I feel he’s gotten a really bum rap here.”

One Corcoran executive told The Observer , “We tell our agents not to express themselves like this in an e-mail, in training class. We tell them to use e-mail as an information highway, not as a sounding board.”

“No matter what injustice was done to me, I want to make sure no one was hurt–even to the point of telling Corcoran to put me out on the street,” Mr. Leone continued. “I still don’t want to hurt anybody, but I want the truth to come out.”

Mr. Leone contacted two lawyers on Feb. 4, but he said he is not planning any kind of lawsuit. He is concerned that he may have been set up. “I’m not going to point a finger at anyone. I don’t do that,” he said. But he still wants to know how the e-mail spread so far so fast. “I have a bad habit of leaving my computer on,” he suggested.

“Everyone has an agenda–let’s ruin Corcoran. Let’s not let them into the Chelsea Mercantile, let’s send them a private e-mail,” said Mr. Leone. “There’s fair play and there’s dirty play.”

“In this day and age, what he did was totally unethical. What he said was untrue,” said Mr. Reid. “Chelsea is a hot new area, and to deliberately scare someone–it’s called blockbusting.”

“I was, like everyone else, shocked,” said Barbara Corcoran, the chairman of the Corcoran Group, who was at a real estate conference in California and only learned about the e-mail and the firing on Feb. 8 when she returned to the office. “By the inappropriateness of (a) his writing and (b) his writing what he wrote. We’ve been in business 25 years and never needed to make rules about what’s appropriate and not appropriate.”

Mr. Leone joined the firm in 1995 after a 12-year tenure as an executive at CBS Records and then RCA Records. He made $400,000 in commissions last year and was “Broker of the Month” last September. He has found apartments for Plácido Domingo, Marla Maples and Elton John. He specialized in the uptown market.

“He was one of our top agents in the firm, among the top 50 out of 500 agents. I was saddened by the whole thing,” said Ms. Corcoran. “He was well loved by his fellow peers. I had gotten nothing ever but complimentary letters on Dan. I could almost call them ‘I love Dan’ letters.”

“Someone else will gladly take him,” said one Corcoran broker.

With Mr. Leone’s firing, said Ms. Corcoran, Cantor & Pecorella immediately stopped prohibiting Corcoran brokers from showing apartments in the building. “By end of day we were let back in, and we sold a $1 million place,” said Ms. Corcoran.

“In retrospect, I probably wouldn’t have forwarded the e-mail to anyone,” said the husband. “I think people are entitled to make mistakes.” Added his wife: “I had no idea that this would get scaled up to the way it was.”

At approximately 9:15 P.M. on Feb. 7, the husband called Mr. Leone at home to offer his apologies for the consequences of having forwarded the e-mail. He promised to fax letters in the morning to Ms. Corcoran, Ms. Dean and Esther Kaplan, president of the Corcoran Group, in support of Mr. Leone. He did so at 4:30 P.M. on Feb. 8.

“They had no idea of the ruckus they had created until Monday afternoon when their lawyer, representing them for the deal, called them to say he was refusing to represent them for the deal because of what had happened to me,” said Mr. Leone. “It just so happens that lawyer knows me very well and felt I was very miserably treated and was holding them responsible.” Mr. Leone claims that the lawyer, whom neither he nor the couple would identify, had refused to meet with the couple to sign the contract on the Chelsea Mercantile apartment, scheduled for Feb. 9.

The letter from the couple stated their continued respect for Mr. Leone and their sadness at the outcome of events. In fact, they said they appreciated receiving such an honest opinion from someone they had grown to trust. They characterized Corcoran’s termination of Mr. Leone as an action as out of proportion as the picture painted in the e-mail was. Finally, they reiterated their intent to purchase the apartment at the Chelsea Mercantile.

Also on Feb. 8, a source at Corcoran said, a manager at the Brown Harris Stevens real estate firm had called a senior Corcoran representative to say that Mr. Leone was being considered for employment. The manager decided not to hire Mr. Leone after finding out about the e-mail, said the source. Mr. Leone denied the report, and Hall Wilkie, director of residential sales at Brown Harris Stevens, did not return calls.

“At this point, I want my name cleared. I don’t think it’s fair, what happened,” Mr. Leone said. “I would like to continue being a broker.”

Real Estate Broker Loses His Job After Hurling Anti-Chelsea E-Mail