Dragon’s Curse

Real-estate magnate and embattled WorldCom director Francesco Galesi has slashed $7 million off the asking price of his 55,000-square-foot Southampton waterfront castle, Elysium. Mr. Galesi-who now finds himself a principal defendant in a gaggle of class-action lawsuits filed against the nation’s second-largest long-distance company-recently lowered the price of his Gothic mansion from $37 million to $29.9 million. From November of 2000 until earlier this summer, the asking price had been a stratospheric $45 million.

Neither Mr. Galesi nor his broker, daughter Christina Galesi of Sotheby’s International Realty, returned calls for comment.

The three-and-a-half-story, 12-bedroom, 18-bathroom castle sits on 10 acres with both ocean and bay frontage. Mr. Galesi, 71, bought what was then known as Dragon’s Head from financier Barry Turpin in 1992 for $2.3 million, after Mr. Turpin went bankrupt. Mr. Turpin, who bought the place in 1984, enraged local residents by converting the once-stately mansion-built in 1929 by Henry DuPont-into a Gothic castle, replete with spires, turrets and an indoor saltwater aquarium. That’s when the property’s misfortunes began. Mr. Turpin was indicted for tax fraud before he could finish the renovations, and for a time the castle’s only inhabitants were wild animals scurrying across the courtyard.

One broker told The Observer that locals had taken to calling it “Dragon’s Breath.”

When Mr. Galesi bought the place in 1992, he told Newsday that “the will of the people in this town is to breathe a sigh of relief that someone has stepped up to tackle that carcass. I’m going to take the curse out of it.”

After months of debate with the Southampton village zoning board, Mr. Galesi was granted the variances he needed to scale the castle back to the dimensions of its first incarnation. He renamed the mansion Elysium.

When he’s not working with WorldCom, Mr. Galesi, a 1953 Princeton grad, is the chief executive of the Galesi Group, an upstate New York real-estate development company. He made his fortune buying abandoned warehouses near Albany and turning them into industrial parks, and he’s now one of the largest landowners in the capital region. In 1990, Forbes ranked Mr. Galesi 205th on its list of the 400 richest Americans, with a net worth estimated at $435 million.

Starting in the mid-80’s, Mr. Galesi began investing in telecommunications companies. In 1989, he merged a consortium of those companies with another consortium headed by Bernard Ebbers. This new company would later become WorldCom. One of the people Mr. Galesi brought on board was a young accountant named Scott Sullivan. Today Mr. Sullivan, WorldCom’s chief financial officer, stands accused of a multibillion-dollar accounting fraud, and he, Mr. Ebbers and Mr. Galesi-a long-standing director of WorldCom’s auditing committee-have been hit by a dizzying volley of lawsuits against the now-bankrupt telecommunications giant.

While his redesigned house won some applause from appreciative neighbors, it hasn’t been able to fetch its original astronomical asking price. And not everyone’s in love: Hamptons scribe Steven Gaines wrote in his 1998 bestseller Philistines at the Hedgerow that the castle “remains an eyesore and a wonder, a remnant of an ugly time.”

Clancy Agent Heads for the Hills

The man who discovered Tom Clancy is now discovering the joys of suburban life. Robert Gottlieb, one of the city’s most powerful book-publishing agents, has put his Lincoln Center condo on the market for $3.25 million.

His office told The Observer that Mr. Gottlieb has moved to Westchester.

The former William Morris star, who started his own agency in September of 2000, is still on top of the game: He now represents big-sellers Dean Koontz, Deepak Chopra, Dale Brown and Janet Evanovich.

His 2,600-square-foot apartment on the 49th floor of 3 Lincoln Center has four bedrooms, three and a half baths, and stunning river and city views. It has a loft-like corner living room and a renovated kitchen that opens into a formal dining room.

The lower 15 floors of the 60-story tower houses offices for the adjacent Lincoln Center for the Performing Arts, making 3 Lincoln Center-built in 1989 and located between Broadway and Amsterdam avenues at 66th Street-one of the Upper West Side’s most visible modern buildings.

upper east side

McGreevey Choice for Port Authority Drops $5.4 Million on Fifth Ave. Co-op

Charles Kushner, the largest political donor to New Jersey Governor James McGreevey and his choice to become chairman of the Port Authority of New York and New Jersey, is days away from signing a contract on a $5.4 million Upper East Side co-op.

Real-estate brokers familiar with Mr. Kushner’s postwar building call it one of Fifth Avenue’s more mediocre addresses.

“It’s not considered one of the top-tier buildings,” said Richard Steinberg of Ashforth Warburg Associates. “It’s a little cheesy-it has low ceilings and no fireplaces.”

But it’s no little pied-à-terre . Mr. Kushner’s apartment takes up the entire 12th floor, covers an estimated 3,300 square feet and has two bedrooms-one of which is a huge master bedroom. The living room, dining room and library have been combined to make one large open space. Mr. Steinberg said the apartment’s park views are spectacular.

Mr. Kushner did not return calls for comment, and his spokesman, Howard Rubenstein, declined comment on the purchase, saying that Mr. Kushner “closely guards his private life.”

The New Jersey real-estate magnate, with holdings of over $1 billion, was unanimously elected-without public debate-to the board of the Port Authority in June, after contributing what The Bergen Record estimated as $1.5 million to political funds benefiting Mr. McGreevey. Mr. Kushner’s spokesman has denied that the appointment came as a result of the donations; in any case, Governor McGreevey has made it clear that Mr. Kushner is his first choice to succeed current Port Authority chairman Jack Sinagra when he steps down-a move that Mr. Sinagra has said he’ll make if Mr. McGreevey asks him to do so.

That would be no small coup for Mr. Kushner, who would be in a bargaining position on one of the city’s biggest redevelopment projects: the World Trade Center, currently owned by the Port Authority. Now that’s no mediocre address.

upper east side

17 East 77th Street

Five-story townhouse.

Asking: $5.3 million. Selling: $4.5 million.

Taxes: $33,230.

Time on the market: six months.

MINI-MOGULS MAKE A DEAL A retired couple based in Washington, D.C., bought this townhouse as an investment in 1994 for $680,000, and rented out the top three floors while the property appreciated in value. Eight years later, they got an unsolicited call from Matthew Pravda, a broker at the townhouse specialty firm Leslie J. Garfield & Co. Mr. Pravda convinced them to take their house for a little spin. “They were just interested in exploring the market,” he said, “to see if they could get a decent offer.” The house stands a full five stories tall and has a backyard garden and greenhouse, but its main selling point is its address off Fifth Avenue. That said, the place needed a lot of work-especially the duplex unit on the first two floors. “The building was in absolutely horrendous condition,” said Jed Garfield, who worked with Mr. Pravda on the deal. The owners gave the first two floors a gut renovation and found their buyers through Larry Kaiser of Key Ventures Realty. The new owners are also out-of-towners: The couple splits their time between London and Greenwich, Conn., and made their fortune in private investments-like the Upper East Side townhouse they recently sold for a huge profit. The sellers of the 77th Street townhouse, for their part, are happy with their near–$4 million profit.

“They didn’t think we could get an offer this big,” said Mr. Pravda.

upper west side

65 Central Park West

Two-bedroom, two-bathroom co-op.

Asking: $1.3 million. Selling: $1.27 million.

Maintenance: $1,412; 42 percent tax-deductible.

Time on the market: three days.

NOBODY’SFOOL They say that a lawyer who represents himself has a fool for a client. But the adage doesn’t seem to apply to real-estate brokers. With less than a year on the job, Insignia Douglas Elliman sales agent Betsy Matthes not only sold her own 15th-floor, 1,200-square-foot apartment at 98 percent of her asking price, but she wrapped up the entire transaction in seven weeks. “It was the fastest thing I’ve ever seen in my whole life,” said Ms. Matthes. Her husband is a composer and musical arranger who wanted to relocate to Shelter Island; some of his better-known work includes the theme to As the World Turns , Toyota jingles and music for Tony Award specials. Ready to sell, Ms. Matthes called her building’s managing agent to get the paperwork. “He said there was an engaged couple who lived in the building and were looking for a bigger apartment,” said Ms. Matthes. “They were getting married quickly and wanted to come and see the place immediately.” The bride-to-be is an obstetrician at the Mount Sinai Hospital. Her fiancé, a director at Bank of America, is president of the building’s co-op board. They made their offer 20 minutes after seeing Ms. Matthes’ apartment; they signed the contract a few days later, just days before their wedding. “It was the most romantic closing I’ve ever been to,” said Ms. Matthes. “They held hands through the whole thing.” Their new apartment has north, south and west exposures, partial park views, inlaid parquet floors, and a renovated eat-in kitchen with Sub Zero appliances.

sutton place

440 East 57th Street

One-bedroom, one-and-a-half-bathroom co-op.

Asking: $650,000. Selling: $625,000.

Maintenance: $1,000; 50 percent tax-deductible.

Time on the market: seven months.

SUTTON PLACE: START SEEING TRADERS This Wall Street trader drives a 1,200-c.c. Ducati motorcycle, so when he learned that his department might relocate to Westchester, he figured it would make sense to relocate near the F.D.R. Drive for an easy reverse-commute each day. His broker, Michael Misisco of the Corcoran Group, pushed him toward Sutton Place because, well, you can’t get closer to the F.D.R. than that. And even though it’s a good four long blocks to the nearest subway, that didn’t faze this 35-year-old bachelor. “People that are spending 600 grand on rent, they’re not taking subways,” said Mr. Misisco. “They’re taking cabs.” The Wall Street trader’s new apartment has 1,110 square feet and was in triple-mint condition.

sag harbor

16 Widgeon Lane

Four-bedroom, two-bathroom house.

Asking: $439,000. Selling: $425,000.

Taxes: $3,000.

Time on the market: 60 days.

EAST END, ALOHA! A builder from Hawaii who was looking to establish himself as a Hamptons developer caught sight of this Sag Harbor salt-box house on the Internet and flew out to New York to take a look. The owners of the place-who just got married and were consolidating-are both high-school teachers (math and science) during the school year, and run Seven Ponds Orchards during the summer (it’s a 30-acre pick-’em-yourself apple, pear and melon farm stand). This house has high ceilings in a living room overlooked by an indoor balcony, and the Hawaiian developer plans on expanding the house, putting in a pool and maybe offering it up for rent. “What sold them on the neighborhood,” said Simon Harrison of Harbor Cove Realty, “is when they were looking, a golden Labrador came over to say hello.” One of the sellers is looking to reestablish herself, too. “At the closing, while the lawyers and brokers were doing the paperwork, she was studying for a calculus exam to get her master’s degree,” said Mr. Harrison.

Dragon’s Curse