The Barnes & Noble Review
In September 1930, when the last piece of its steel structure was riveted into place and an American flag unfurled at its apex, the Empire State Building assumed its position as a symbol of New York's economic might, an emblem of the promise of the modern age, and an embodiment of the human ability to rival the wonders of the natural world. Here is how Mitchell Pacelle, an award-winning journalist with The Wall Street Journal, describes the building in his outstanding first book: "Its profile -- the soaring limestone tower with its streamlined crown that glowed in the twilight like a dream -- was etched into the mind's eye of nearly everyone who had ever laid eyes on it. Was there another structure in the world with more iconic heft?" Yet, that very quality of "iconic heft" that led filmmakers Merian C. Cooper and Ernest B. Schoedsack to place King Kong atop the building in their classic 1933 film also drew the attention of some other notorious inhabitants of the urban jungle -- aggressive and covetous real-estate moguls like Hideki Yokoi, the Helmsleys, and Donald Trump.
The centerpiece of Pacelle's narrative is his masterful recounting of the struggle among these famously rich and infamously ambitious tycoons for ownership and control of the Empire State Building: Each tycoon desires the building as the ultimate trophy, "the jewel in the crown" of their personal empire, and yet each ends up being thwarted to some degree. The result is a story rich in overlapping betrayals, desperate backstabbing, and familial strife -- all of the small human circumstances that inevitably seem to envelope even the loftiest and most inspiring of achievements. Scrupulously reported and skillfully told, Empire is a book that manages both to educate and to entertain; it is a book sure to delight readers of nonfiction as well as the many admirers of New York's landmark building. (Sunil Sharma)
a recounting of the story of the Empire State Bulding, which has now reclaimed its status as New York City's highest peak. A-
It's a compelling read...Empire is memorable and has all the pieces of a riveting film: sex, divorce, money scams, even some jailbirds.
New York Daily News
...there's such huge entertainment to be had.
...It says much for Pacelle's forensic and narrative skills that he manages to tell this labyrinthine, fascinating tale with admirable clarity and fairness...
Mitchell Pacelle delivers a thrilling history of the mythic building.
Pacelle...keeps the pace up in this convoluted tale of pride, prejudice and property.
Empire is a finely wrought narrative that embodies the styleand hysteriaof New York real estate.
TimeOut New York
...one of the best newcomers...[a] page-turner
...it is a book - and a very good one...
...This story is full of colour and rattles along at the pace of a thriller...Empire is a fascinating insight into an American icon.
If you thought King Kong was the only monster who has laid claim to the Empire State Building, guess again. This highly entertaining, well-researched volume about the all-out, high-stakes battle in the 1980s and '90s over ownership and control of one of Manhattan's premier edifices is a cross between great business writing and even greater gossip. Built in 1929, the Empire State Building was bought in 1961 by Henry Helmsley and Lawrence Wein, who quickly resold it but retained a 114-year lease. When the Helmsley empire began to crack in the late 1980s (wife Leona went to jail for tax fraud), the building was nearly bought by jailed Japanese investor Hideki Yokoi, who used his illegitimate daughter, Kiiko Nakahara, and her husband, Jean-Paul Renoir, as fronts. When that deal fell through, Nakahara and Renoir secretly bought the building themselves, entering a deal with Donald Trump to try to shake the Helmsley lease. After Nakahara and Renoir were jailed in France in 1996 for the alleged theft of real estate, Trump and Leona Helmsley entered into a gigantic legal and public relations battle for control of the building. Pacelle, who writes for the Wall Street Journal, is scrupulous in detailing the legal angles and how shifts in world economy and U.S. business both affected and were affected by all this skullduggery. He also has great fun with the bizarre cast of characters, who plot and connive against one another in what reads like a cross between film noir and a Harold Robbins novel. In the end, though, the Empire State Building remains a beauty, not destroyed by these beasts. (Nov.) Forecast: Expect solid sales in the Empire State and among real estate mavens, boosted by an excerpt inthe Wall St. Journal. Copyright 2001 Cahners Business Information.
Although New York City's Empire State Building is no longer the tallest building in the world, it unquestionably stands tall in the hearts and minds of the legions of tourists who flock to it each day. How did this building enter the realm of pop-culture iconography? Empire, a much-needed chronicle of the most famous skyscraper in the world, answers that question and more. Pacelle, who covered the recent ownership struggle for the building in the Wall Street Journal, describes its allure, indicating how it has become the ultimate prize in the commercial real estate ownership sweepstakes, possibly in the world. An eccentric Japanese billionaire, Hideki Yokoi, and various members of his extended family feature prominently in the scenario, but the cast of characters also includes such real estate tycoons as Donald Trump and Leona Helmsley. Although the story (and litigation trail) can get a bit complicated, it's vividly told and often gripping, evoking the best and worst in all of the participants. More history of the building and a clearer ownership schematic would have been helpful, but Pacelle clearly delivers the goods. Highly recommended for larger public libraries. Richard Drezen, Washington Post, New York City Bureau Copyright 2001 Cahners Business Information.
Soundview Executive Book Summaries
The Extraordinary Saga of the Empire State Building
On May 1, 1931, one year and 45 days after construction began, the Empire State Building was complete. At a cost of $42 million, the 102-story skyscraper changed more than the skyline of New York City: It changed the lives of the many people who created it and eventually changed the fortunes of the many people who would fight to control it. In Empire, Mitchell Pacelle, an award-winning journalist for the Wall Street Journal and master storyteller, weaves a fascinating tale of greed, revenge, betrayal and family rivalry around the people who dreamed of possessing it as their ultimate trophy.
Created by visionaries, jumped from by the distraught, battled over by moguls, memorialized by artists, visited by millions and gawked at by countless admirers, the Empire State Building becomes the main character in Pacelle's book.
Conceived in the moments prior to The Great Depression and built while the stock market crashed around it, the building was the brainchild of GM executives John Raskob and Pierre S. Du Pont. These wealthy men hired Alfred E. Smith, the former governor of New York who had recently lost his run for presidency to Herbert Hoover, to head their venture into the new world of skyscraper erection.
Pacelle's tale travels the timeline between the early days of the monolith's existence to the controversial battles that have raged around the building's ownership in recent years. More than simply an enormous office building, the Empire State Building is a symbol of power that has been coveted by powerful men and women since it was built. Although its first ten years werean economic disaster - it remained only 25 percent occupied with little hope for prosperity - the postwar economic boom ended its slump, making it the most coveted building in New York in the 1950s. After changing hands a couple of times after the death of John Raskob in 1951, the building spent several years being overshadowed by newer skyscrapers, but remained a fixation for real-estate tycoons who aspired to adding the building to their collections of acquisitions.
Over the last decade, the fight for possession of this American icon has heated up.
In August, 1991, a controversial Japanese businessman, Hideki Yokoi, tried to buy the building but was turned down by the sellers. They called off the deal when they learned Yokoi had been arrested and convicted for gross negligence after a fire killed 33 guests in a Tokyo hotel that he owned.
Not to be thwarted, Yokoi ended up owning the Empire State Building three months later after using an American businessman to front his purchase. Soon, the building's owner was accusing his daughter and son-in-law of stealing the building from him.
Meanwhile, the building's long-term lease, controlled by real estate moguls Leona Helmsley and Peter Malkin, set the stage for Donald Trump to enter the battle on behalf of the Japanese family to wrest control of the lease from them.
Lives Shaped and Destroyed
Although the book spends ample time poring over the details of the money that changes hands and the fine print of the real estate deals surrounding the building, its highlights lie in the richly conveyed lives that have been shaped and destroyed by the mammoth proportions of the building and its rich history. No detail - from Tokoi's clip-on ties to the contents of the pockets of the building's first suicides - is left uncovered in this exhaustive, extraordinary story of an extraordinary building. Copyright (c) 2002 Soundview Executive Book Summaries
From the Publisher
If you thought King Kong was the only monster who laid claim to the Empire State Building, guess again. This highly entertaining, well-researched volume about the all-out, high-stakes battle in the 1980s and '90s over ownership and control of one of Manhattan's premier edifices is a cross between great business writing and even greater gossip. Built in 1929, the Empire State Building was bought in 1961 by Henry Helmsley and Lawrence Wein, who quickly resold it but retained a 114-year lease. When the Helmsley empire began to crack in the late 1980s (wife Leone went to jail for tax fraud), the building was nearly bought by jailed Japanese investor Hideki Yokoi, who used his illegitimate daughter, Kiiko Nakahara, and her husband, Jean-Paul Renoir, as fronts. When that deal fell through, Nakahara and Renoir secretly bought the building themselves, entering a deal with Donald Trump to try to shake the Helmsley lease. After Nakahara and Renoir were jailed in France in 1996 for the alleged theft of real estate, Trump and Leona Helmsley entered into a gigantic legal and public relations battle for control of the building. Pacelle, who writes for the Wall Street Journal, is scrupulous in detailing the legal angles and how shifts in the world economy and U.S. business both affected and were affected by all this skullduggery. He also has great fun with the bizarre cast of characters, who plot and connive against one another in what reads like a cross between film noir and a Harold Robbins novel. In the end, though, the Empire State Building remains a beauty, not destroyed by these beasts. (Nov.)
Forecast: Expect solid sales in the Empire State and among real estate mavens, boosted by an excerpt in the Wall Street Journal. (Publishers Weekly, July 23, 2001)
Although New York City's Empire State Building is no longer the tallest building in the world, it unquestionable stands tall in the hearts and minds of the legions of tourists who flock to it each day. How did this building enter the realm of pop-culture iconography? Empire, a much-needed chronicle of the most famous skyscraper in the world, answers that question and more. Pacelle, who covered the recent ownership struggle for the building in the Wall Street Journal, describes its allure, indicating how it has become the ultimate prize in the commercial real estate ownership sweepstakes, possibly in the world. An eccentric Japanese billionaire, Hideki Yokoi, and various members of his extended family feature prominently in the scenario, but the cast of characters also includes such real estate tycoons as Donald Trump and Leona Helmsley. Although the story (and litigation trail) can get a bit complicated, it's vividly told and often gripping, evoking the best and worst in all of the participants. More history of the building and a clearer ownership schematic would have been helpful, but Pacelle clearly delivers the goods. Highly recommended for larger public libraries. -Richard Drezen, Washington Post, New York City Bureau. (Library Journal, September 1, 2001)
By tragic default, the Empire State Building has regained its rank as the tallest building in New York City. The restored status, of course, results form the cataclysmic terrorist attack that obliterated the World Trade Center in September. The earth's tallest structure from 1931 until the 1972 opening of the first of the World Trade Center's twin towers, the Empire State Building not only altered but defined New York City's skyline.
Although other construction projects in this country and abroad subsequently stretched higher into the sky, the Empire State Building remains in the company of the Great Wall of China and the Eiffel Tower as one of the most recognizable structures on the planet. In Empire, completed before September's attack, author Mitchell Pacelle delivers a thrilling history of the mythic building, which has drawn its share of suicidal souls and was the site of a 1997 shooting rampage by a Palestinian visitor.
The leveling of the World Trade Center by two aircraft recalled the day in 1945 when the Empire State Building itself was struck by an Army Air Corps B-25 bomber lost in dense fog. Fourteen lives were lost, the fire was extinguished in four hours, and the building opened for business two days later, thus erasing any questions about its structural integrity.
Pacelle recounts these and other sensational moments in the life of the building, but the real strength of his book lies in the story of the infighting and negotiating for ownership of the skyscraper—the stuff that might land on a newspaper's business pages rather than on the front page. In much more than a simple story about ambitious architecture, Pacelle, a Wall Street Journal reporter, describes what the Empire State Building's 3.8 million annual visitors cannot see from its observation deck, and some of his disclosures are bewildering. For instance, real estate tycoon Donald Trump finagled half-interest in the partnership that owns the building without putting up a nickel. The owners have no clout in operating the building and receive only a puny percent of its income, most of which goes to a lease-holding group controlled by Trump rival Leona Helmsley. For most of the last decade, nobody knew who really owned the skyscraper.
Trump's involvement traces to Hideki Yokoi, an entrepreneur with an unsavory background who built a multi-billion dollar empire in Japan's post-war boom. In a day when cramped, two-bedroom apartments in Tokyo were selling for $1 million, Yokoi went on an international buying binge and acquired the Manhattan colossus—the ultimate architectural trophy—for $42 million. Kiiko, his illegitimate daughter, scouted and nailed down properties for Yokoi around the world, but a series of acquisitions ended in a feud in which he accused her of stealing the 102-story structure for him.
Yokoi, who ordered his trousers sewn with the wallet pocket in the front to foil pickpockets, saw his dynasty collapse in Japan's financial tailspin before he died in 1998 at age 85. But the animosity between Helmsley and Trump, who had been enlisted by Kiiko in a failed attempt to break Helmsley's lease, continues to this day. Few principals emerged unscathed—some were jailed—from what Empire carefully documents as a story of greed, ego and vengeance in "the world's largest Monopoly game."
In the hands of another writer, the financial and legal maneuverings—a complicated but critical part of the building's history—might confuse the reader, but Pacelle, mercifully, has made it easy for those of us without accounting and law degrees to understand. Some day the story will demand a sequel, and Pacelle, winner of the New York Press Club's Business Reporting Award in 1999, is the one who ought to write it. (Bookpage, November 2001)
STREET FIGHT FOR A SKYSCRAPER
Real estate can be a sleazy business-as many reporters who cover it will attest. And it seems that the bigger the building and the bigger the city, the sleazier it gets. This may explain the plethora of family feuds, legal wrangling, political posturing, financial high jinks, and lost fortunes that are so expertly and enjoyably described in Empire: A Tale of Obsession, Betrayal, and the Battle for an Ammcan Icon, a biography of the Empire State Building by Wall Street Journal reporter Mitchell Pacelle.
The book appears at a time of morbid fascination with big buildings, following the attack that leveled the World Trade Center. Giants such as the Twin Towers or the Empire State are not attractive just to terrorists, however. Their size, visibility, and prestige make them targets also for some of the most ruthless and driven business people in the world. If Pacelle's prose does not always rise to the heights of the skyscraper whose history it describes the book nonetheless manages to bring alive in great detail the vivid characters who built it, bought it, and battled for its control. In doing so, Empire also gives the reader an overview of one of the greatest urban generators of wealth: real estate. What oil is to Texas, real estate is to New York, and the city's real estate pooh-bahs, such as Donald Trump, Leona Helmsley, and Peter Malkin, all play a part in the story of the Empire State Building.
Readers may feel they already know enough about some of these people. We've all heard how the tabloids dubbed Leona Helmsley the "Queen of Mean," and that at her 1989 trial for tax evasion, her housekeeper quoted her as saying that paying taxes was just for "the little people." It's common knowledge that Donald Trump has an outsize ego and outlandish ideas: He considered remaking the upper floors of the Empire State into luxury condos. So, wisely, Pacelle shapes his story around a less well-known figure: Hideki Yokoi, a Japanese businessman with a penchant for collecting trophy properties, including French chateaus, English castles, and, of course, the Empire State Building. According to the author, Yokoi used a front man to buy the property from Prudential Insurance Co. in 1991 for only $42 million. His illegitimate daughter, Kiiko Nakahara, would later say that he bought it for her. The low price was the result of a 1961 decision by Prudential to lease the entire building to a partnershipultimately controlled by Harry and Leona Helmsley and Peter Malkin—for a period of 114 years. Annual rent for that lease is currently, only $1.9 million. Unencumbered by that lease, the building could be worth $1 billion.
Yokoi's fortune worsened in the early 1990s, however, when the Japanese economic bubble burst. That resulted in an alliance with Trump, who Yokoi hoped would be able to raise cash from the Empire State by devising a way to break the lease—and thus save Yokoi's remaining properties in Japan and Europe.
But the purchase is only the beginning of what turns into a lengthy, globe-spanning soap opera. Harry Helmsley dies, leaving his controlling interest in the Empire State lease to Leona, who proceeds to fight with Peter Malkin about almost everything-and to snub him by not inviting him to Harry's funeral. Yokoi is convicted of negligent homicide for a fire at a hotel he owned in Tokyo and is consigned to a Japanese prison, where he suffers a stroke. Yokoi's most trusted business aide was daughter Kiiko, who, without his explicit consent, allegedly transfers the Empire State and several French chateaus to entities controlled by her and her tough-talking French investment-banker husband. In due course, French authorities begin to question the transfers of the French properties. And back in New York, a disaffected office worker begins generating media coverage of tales of muggings and vermin infestations in the Empire State—all of which plays into Trump's plan to break the lease. Then, for $6,000 a month and a piece of the action, this Paris art student related to Yokoi decides to....
Well, you get the idea. Real estate can be seamy. And the battle goes on. Although many legal issues have been settled, some principals are still making news. Leona Helmsley, for instance, was recently reported to be hot and heavy with a Florida doctor who everyone, except her it seems, knew was gay. The poor lady was crushed. While Pacelle's narrative is engrossing, one is left with the big question: What does it all mean? Somewhere amid the stories about extradited Frenchmen and foul-mouthed real estate heiresses lurks a larger story of how one of New York's premier industries works-and how it is evolving. But Pacelle doesn't quite get to it.
By the 1950s, Helmsley and his partners had revolutionized the real estate business by making the syndication of large properties standard practice. But ownership remained dominated by a few large family dynasties. Pacelle's story seems to mark the decline of that way of doing business-as does the emergence of real estate investment trusts, which are public rather than private ownership vehicles. The old ways are dying, but the new ones have not fully taken hold yet. Writes Pacelle: "In many ways...the real estate sector remains a world unto itself, as far from the cutting edge as Harry Helmsley was from Silicon Valley."
It would have been lovely if the author had considered what refusing to change means for the industry and New York. Even with that omission, however, Empire is a finely wrought narrative that embodies the style—and hysteria—of New York real estate. (BusinessWeek, November 19, 2001)
"Empire is not about the vulnerability of skyscrapers (though Mitchell Pacelle does remind us of one incident, when a bomber accidentally crashed into the building in 1945, that underscores the point) or, for that matter, about most other important questions raised by the destruction of the World Trade Center. Instead it is a book and a very good one about the huge egos that often are behind the construction and operation of these buildings, about the extremes to which men and women will go in hopes of owning them, and about the symbolic import that becomes attached to them. This last does have some bearing on the World Trade Center, for those who attacked it clearly despised it as a symbol of globalization, American economic might and other such matters. But the Twin Towers were cookie-cutter modern architecture essentially indistinguishable in design, if not in height, from all the other glass boxes erected all over the world in the past few decades. The Empire State Building, by contrast, is distinctively American and distinctively New York.... It is, in the end, a story with no last chapter, another way of saying that the only real winners are the lawyers. It is certainly, Lord knows, a story with no heroes. But it is a grand human comedy, and Mitchell Pacelle has a fine time with it." (The Washington Post, Sunday, November 11, 2001)
A veteran Wall Street Journal reporter recounts the timely story of the Empire State Building, which has sadly reclaimed its status as New York City's highest peak. After a recap of the icon's Depression-era construction (and early failure as an investment), Pacelle's focus shifts to recent skirmishes over its ownership. Who'd have thought that real estate dealings could read like a gossipy novel of intrigue? Though he occasionally bogs things down with fine print, the author assembles a memorable cast of characters, including Leona Helmsely and Donald Trump. But even those tabloid staples are overshadowed by the bickering family of building owner Hideki Yokoi, a Japanese billionaire with a shady past and a shopaholic's appetite for trophies. Grade A Review — Thom Geier (Entertainment Weekly, November 16, 2001)
"...as both a history of a landmark building and as a window into the ego- driven world of big-bucks real estate, 'Empire' amply illustrates the economic misfortunes that have plagued the tower. It earns a place among the solidly reported business books of the last 15 years.... Readers with a taste for glittery, backbiting soaps will also find plenty to savor here." (Newark Star-Ledger, November 18, 2001)
"...As New Yorkers discovered firsthand on Sept. 11, even the mightiest skyscrapers can fall.... Knowing about the fragility of 'an American icon,' as Pacelle describes the Empire State Building, only improves the view." (USA Today, November 23, 2001)
"It's a compelling read...Empire is memorable and has all the pieces of a riveting film: sex, divorce, money scams, even some jailbirds." (USA TODAY, MONEY BOOKSHELF, Monday, November 26, 2001)
"...there's such huge entertainment to be had." (New York Daily News, Sunday, November 25, 2001)
"an engaging behind-the-scenes business history of what is once more the city's tallest skyscraper: the Empire State Building. The book treats real estate schemes as dramatic as anything on Broadway." (USA TODAY, November 29, 2001)
"There's more social criticism, and humor, to be found in Empire...[Pacelle's] tale of the battle for the Empire State features legal wrangling, political posturing, family feuds, financial high jinks, and lost fortunes. No wonder reviewer Robert McNatt called the book a 'finely wrought narrative that embodies the styleand hysteriaof New York real estate.'" (BusinessWeek, December 10, 2001)
"a recounting of the story of the Empire State Bulding, which has now reclaimed its status as New York City's highest peak. A-" (Entertainment Weekly, December 1, 2001)
Regardless of what's happening in the morning headlines, our need for imaginative thrills and adventure never diminishes. These tales of tycoons and literati breezing through extraordinary locations are just the ticket. Oddly, glimpses of historical New York happen to turn up all over the place in this season's nonfiction, a coincidence we find somehow comforting. One of the best newcomers is Empire: A Tale of Obsession, Betrayal, and the Battle for an American Icon (John Wiley; $27.95), by veteran Wall Street Journal reporter Mitchell Pacelle. This page-turner describes the struggle for ownership of the Empire State Building, whose illuminated spire still serves as our nocturnal compass. As Pacelle makes clear, the building has long been a trophy coveted by some of the most powerful real-estate magnates of the 20th century-including Donald Trump, Harry and Leona Helmsley, Peter Malkin and a shadowy Japanese billionaire named Hideki Yokoi. Over the years, the battle for control among these titans has led not only to backstabbing, double-dealing and a mountain of legal paperwork, but also to a fundamental confusion about the building's true ownership. (TimeOut New York, November 29-December 6, 2001)
"...it is a book - and a very good one..." (The Guardian Weekly, 29 November 2001)
"well-researched, engaging book.... Pacelle does an outstanding job of sorting out the mess of trusts, holding companies, partnerships, and paperwork that would leave many a veteran real estate reporter mystified. He also manages to write a cogent narrative that resembles scenes from 'Jerry Springer'." (The Boston Globe, December 13, 2001)
"At first glance, Empire looks as if it may be one of those books that only a New Yorker could love...But Mitchell Pacelle...is canny enough to combine a wealth of local details with a broader narrative flow.... It says much for Pacelle's forensic and narrative skills that he manages to tell this labyrinthine, fascinating tale with admirable clarity and fairness. Parts of the story seem too weird to be true - or, looked the other way, might be too strange for fiction." (Financial Times, December 19, 2001)
"...This story is full of colour and rattles along at the pace of a thriller...Empire is a fascinating insight into an American icon". (Sunday Business, 9 December 2001)
"If 'Empire' had appeared this summer, it simply would have made great beach reading for the business set. What's not to like when the world's most fabled skyscraper meets Leona Helmsley and Donald Trump?.... But the horrific attack of Sept. 11 casts a different light on the various battles to control the Empire State Building.... In the hands of Wall Street Journal reporter Mitchell Pacelle, the many odd twists are handled with just the right balance of business and bile." (The San Francisco Chronicle, Sunday, Dec. 16, 2001)
"...It says much for Pacelle's forensic and narrative skills that he manages to tell this labyrinthine, fascinating tale with admirable clarity and fairness..." (Financial Times, 18 December 2001)
Library Journal - BookSmack!
I caught sight of the Empire State Building, whose history this rudimentarily covers. "The building's skeleton marched upward at a rate of four and a half floors a week" and that the entire building was completed in 16 months (!). The local Mr. Handyman took two weeks to regrout my bathroom! Unfortunately, the book reads like Mario Puzo's fiction. Using the third-person omniscient voice, Pacelle plays fast and loose with the concept of history, ascribing all sorts of motivations and unexpressed thoughts to his subjects, who include Donald Trump and Hideki Yokoi. As gossip, though, this reads like a juicy tabloid. From my vantage point on Varick Street, I could see the glitzy Trump SoHo Tower, and while you'd think that The Donald would be the chief drama queen, he looks like a kitten playing with a feather compared to Leona Helmsley. ." Douglas Lord, "Books for Dudes," Booksmack! 10/7/10
Read an Excerpt
The Deal and the Deception
How many millions might a man be willing to spend to raise his ego a quarter mile high? How much to lay claim to the heart and soul of New York City? What would a
respectable businessman pay? Not a shadowy character looking
for legitimacy or attention. On August 21, 1991, almost six
years before Hideki Yokoi gazed in triumph off the top of the
Empire State Building, Kurt A. Reich turned the questions
over in his head. For the 15 years he had been buying and selling
commercial property for Prudential Insurance Company
of America, Reich had been trying to fathom what drives men
to buy trophy real estate, to pay beyond reason for the opportunity
to affix their names to spectacular buildings. On this
morning, it was not a matter of idle curiosity. As the real estate
gold rush of the 1980s was fading into bust, and financial
pressure on the insurance company mounted, Prudential
had decided to sell the Empire State Building, and Reich was
waiting to meet the mysterious couple who had bid more
than anyone else.
The ego buyers had indeed been out in force, because the
world's most famous skyscraper, curiously enough, was likely to
sell for a price that--in the lofty world of Manhattan real
estate--was little more than a song. Thirty years earlier, Prudential
had gutted the building's profit potential. It had leased
the entire building--for 114 years, an eternity in real estate--to
an investment company controlled by a pair of Manhattan real
estate titans. Each year, the two moguls paid Prudential a paltry
$1.9 million in rent for the 2.5-million-square-foot building, giving
them both a motive to cling to their lease with the tenacity
of Park Avenue millionaires in rent-controlled apartments.
Whoever bought the Empire State Building now would face the
prospect of wrangling with two of Manhattan's most difficult
real estate magnates: Peter Malkin, an iron-willed Harvard-educated
lawyer who was exacting to the point of annoyance,
and Leona Helmsley, a notoriously volatile woman who was sowing
terror through the billion-dollar real estate empire assembled
by her ailing husband, Harry. What Prudential was selling,
in truth, was little more than sizzle: the right to boast, "I own the
Empire State Building."
Reich and a young investment banker from Salomon
Brothers, Gregory White, had worked the numbers time and
again. No sensible investor, they reasoned, would park money
until the year 2076 for anything less than a 7.5 percent return.
Unencumbered by the lease, the building might fetch $600
million to $800 million, they figured. But no matter which
way they looked at it, the Empire State Building, saddled with
that long-term lease, was worth only about $25 million to a
rational buyer. How much more could Prudential squeeze
from the ego factor? White boldly conjectured another $15
million to $25 million. But who was to say? Putting an asking
price on the skyscraper, White advised, would merely stifle
the imaginations of potential buyers. If someone wanted to
overbid, he told Reich, it wasn't Prudential's business to
worry about why.
One Salomon banker had even floated a proposal to organize
a New York State lottery with the Empire State Building
as grand prize. Who wouldn't put down $5 for a crack at owning
the world's most famous skyscraper? The numbers could
be astounding, he had argued. But Prudential had scotched
the proposal as far too risky.
Just before bringing the 102-story landmark to market,
Reich gathered his bankers to ponder the unknowable. Each
of them anted up $10, mulled over what the skyscraper would
fetch, and secretly jotted a number on a slip of paper. A few
guessed in the high twenty millions. Others guessed the low
thirties. Reich wrote down $39 million. Head banker White,
who had been talking up the ego-play strategy, figured he
ought to put his money where his mouth was. White wrote
$39.5 million, and stuffed his guess into the envelope.
Reich wasn't sure what to expect as he waited for the
Japanese woman and French-American man who had bid $41
million. The names Nakahara and Renoir had meant nothing
to him. He punched the numbers into his calculator. The
lease payments from Malkin and Helmsley would give the
couple a scant 4.6 percent annual return on the purchase
price. Reich didn't consider it his job to stop people from
making foolish deals.
Reich could find no one who knew anything about Renoir
and Nakahara. They were an enigma. Ordinarily, when Prudential
was unloading, say, strip malls or suburban office
buildings, it cared about little more than whether a potential
buyer could come up with untainted cash. But the Empire
State Building was a different matter. Prudential feared a
firestorm of negative publicity if it sold the landmark to the
wrong buyer. Under the circumstances, the seemingly ludicrous
economics of the Renoirs' bid bore careful scrutiny,
Reich decided. He wanted to put a question directly to the
When Renoir and his wife arrived at Reich's spacious
office on the twentieth floor of New York's Rockefeller Center,
Reich rose to his feet and introduced himself. Renoir--a
ramrod-erect 44-year-old with close-cropped hair, a boxer's
face, and a penetrating gaze--handed Reich a card identifying
himself as president of Lehman Brothers' asset management
arm in Japan. Renoir told Reich he had come as a
representative of his wife's family. Kiiko, a short, attractive
woman whose dark hair curled around her face like a helmet,
smiled demurely, then sank into a chair. "We understand you
have an interest in the Empire State Building," Reich began.
"Obviously, it's a remarkable asset. Why are you interested?"
Kiiko handed Reich a portfolio of pictures. Reich flipped
through them, incredulous. He saw European castles, lots of
them. "My father collects them," said Kiiko. Her billionaire
father, who wished to remain anonymous, she said, had
assembled a portfolio that included nine French châteaux,
four British castles, a Spanish palace, and the second-largest
private residence in America, a sprawling behemoth on Long
Island. "The Empire State Building is just one of the buildings
he wants," she said matter-of-factly. Renoir picked up the
story. Kiiko's aging father, he told Reich, had made a fortune
by manufacturing uniforms for the Japanese Imperial Army
during World War II and by producing soft goods for American
occupying forces after Japan's defeat. Later, he branched
into real estate, snapping up treasures from Japan's royal family.
Finally, he had been active in the stock market, taking runs
at undervalued companies, not unlike the noted American
raiders T. Boone Pickens and Carl Icahn. Reich, ever alert to
potential controversy, interrupted. Renoir reassured him that
his father-in-law hadn't been tainted by his takeover activities.
The Empire State Building, Renoir concluded, would be
another one of his collectibles.
To Reich, the bizarre story seemed a plausible enough
statement of motive. After all, Prudential was looking for
someone with a world-class ego. And from what little he could
tell from the snapshots, this bidder appreciated grandeur.
But Reich's gut was telling him something else. There was
something unsettling about this couple. Renoir seemed
brash, a little too slick, even shifty. Perhaps, thought Reich, he
was just reacting to Renoir's French accent. Or to Kiiko's
strange disengagement. As he bid the couple good-bye, Reich
couldn't shake the feeling that something wasn't being said.
Was it that Renoir had trouble looking him in the eye? We'll
need to find out more about this family patriarch, Mr. Nakahara,
Reich decided after the meeting.
Soon Peter Malkin received a telephone call from an investment
banker at Salomon. At 57 years old, the gangly six-foot
three-inch Malkin had long ago emerged from the shadow of
his late father-in-law, one of Manhattan's most respected
property kingpins. By dint of inheritance and shrewd investments,
Malkin controlled some 20 million square feet of commercial
property, from Manhattan office buildings and retail
properties to suburban apartment buildings and shopping
centers. In an industry known for the rough edges of its dominant
figures, Malkin was, at least on the surface, a notable
exception. Erudite, civic-minded, and impeccably mannered,
Malkin seemed less the product of his native Brooklyn than of
the exclusive Greenwich, Connecticut, neighborhood where
he had settled. Malkin took old-fashioned shoeshines at his
desk and, when discussing his colleagues, seldom failed to
attach a "Mr." or "Mrs." to their names. But some people in
Malkin's business and social circles also associated him with a
steely determination about matters large and small, a willingness,
for example, to personally reproach people who violate
the restrictions on leaf-blowing machines in his neighborhood
of million-dollar homes. In short, he was not a man to
be easily bullied.
As holders of the Empire State Building's lease, Malkin and
Leona Helmsley were themselves the most logical buyers of
the building. Their lease gave them almost absolute control of
the building for 85 more years. Buying the bricks and mortar
would consolidate their position, remove the potential headache
of a troublesome new owner, make it easier for them to
sell their valuable position outright. But in earlier meetings
with Salomon's White, Malkin had been cagey. "I can be the
best buyer," he had assured White. Nonetheless, he had bid
only $32 million. White had warned him not to assume no one
would bid higher. Malkin simply hadn't believed him.
Malkin was astonished to learn from a Salomon banker
that a $41 million bid had come in from Asia. The banker
assured him the bid was real.
"Well, I can't match that," Malkin replied. He hung up his
phone, crestfallen. He had figured he could afford to bid
more for the building than was economically reasonable, to
protect the lease. But why, he wondered, would anyone else?
With Malkin apparently unwilling to engage in a bidding
war, Prudential's Reich turned his attention back to the
Renoirs. Prudential had a rule against selling buildings to
anonymous buyers. Imagine the embarrassment that would
come from selling the Empire State Building to, say, a blind
trust backed by a Columbia cocaine cartel. Prudential would
need to know exactly where any money for the Empire State
Building was coming from, and Reich felt he hadn't gotten an
adequate explanation from the Renoirs. He told White to
pump his Salomon colleague in Tokyo for more information
on Mr. Nakahara, the family patriarch. White's colleague,
who had a commission riding on the deal, assured him the
family company was solid.
Something else also nagged at Reich: the potential fallout
from selling such a cherished landmark to a Japanese buyer
of any sort. Recent years had seen a tsunami of Japanese purchases
of American trophy properties, many at prices that left
American real estate veterans bewildered. But the Japanese purchases of Rockefeller Center and the Pebble Beach golf
course had sparked a xenophobic backlash, as commentators
fretted that an all-powerful Japan was consuming America's
corporate lunch and then moving on to its cultural treasures.
White played down the concern. The building couldn't be
loaded onto a boat and moved back to Japan, he told Reich.
Reich met with his bosses at Prudential to discuss the
prospects of negative press. If the high bid came from Japan,
the group decided, so be it.
On August 23, 1991, Prudential signed a contract to sell
the Empire State Building to an investment company set up
by Renoir and Nakahara, pending approval of the buyer by
Prudential's board of directors. Both Reich and White
remained uneasy. Getting further information about Nakahara
from Salomon's Tokyo office was like pulling teeth,
White confided to Reich. White didn't want some enterprising
reporter to uncover skeletons after the deal was closed.
Both men pressed for more information from Japan. Finally,
White began to get to the truth about Kiiko's father, the mystery
billionaire. His name wasn't Nakahara, after all. It was
Hideki Yokoi. When White's office punched the name into a
computerized news search, it surfaced like a stink bomb.
White was livid. He phoned Reich immediately. "Now we
know why we're not getting a straight story," he told Reich.
He rushed uptown to Reich's office.
"The guy you're selling to is probably financially credible,"
he informed Reich. "But you might want to think twice about
doing business with him." White showed Reich newspaper
accounts of an inferno that had gutted a massive Tokyo hotel
in 1982, killing 33 guests. Yokoi owned the hotel. He'd been
arrested, convicted of gross negligence, and was facing a jail
term. Hideki Yokoi, the articles suggested, was one of Japan's
most hated businessmen. And that's not all, White told Reich.
Yokoi had long been said to consort with Japan's notorious
criminal underworld, the yakuza, White said. He cautioned
Reich that he had no idea whether the rumors were valid. But
Reich had heard enough. This was hardly the caliber of buyer
he was seeking. He told White he would urge his superiors to
kill the deal. Shortly after White returned to his office, Reich
telephoned. The deal was off.
Reich phoned Renoir's lawyer with the news, offering no
explanation. "If you and your client would like to discuss the
reasons, we can meet in my office to do so," Reich told the
lawyer. To Reich's astonishment, he never again heard from
Jean-Paul Renoir or his wife. Reich couldn't help feeling
that Prudential had avoided catastrophe by the narrowest of
There were those at Prudential who wanted to fire Salomon
over the fiasco. But faced with the time-consuming
process of starting again, Prudential relented, so White set
about salvaging the sales process. He telephoned Peter
Malkin and told him the deal had collapsed. He asked Malkin
if his bid was still on the table.
"Absolutely," said Malkin, his hopes rekindled. When he
hung up, Malkin was convinced the deal would break in his
direction after all.
Within days, however, Salomon unearthed another prospect,
a Wall Street investor named Oliver Grace Jr. Remarkably,
Grace bid $39 million, nearly matching Renoir's bid.
And he had pedigree. Onetime New York mayor William R.
Grace had been his great-great-uncle, and industrial magnate
Peter Grace was his second cousin once removed. White
ordered an exhaustive background check. At one time, White
discovered, Grace had mounted a hostile tender offer for a
closed-end mutual fund. It was a controversial move, but
hardly extreme in the cutthroat 1980s takeover world. Reich
wondered why a man with Grace's savvy and connections
would offer so much for a property with the meager income
stream of the Empire State Building. Was this another ego
trip? Reich told White he wanted to meet Grace directly.
Given the Grace family's stature, Reich was expecting a
man with Wall Street polish. The man who presented himself
to Reich had the slightly unkempt look of an eccentric professor,
a bit overweight, his hair askew. Reich seated him in a
conference room. He asked Grace why he wanted the
Empire State Building. Grace paused for a moment, then
looked Reich in the eye and explained in a soft voice that he
planned to put the building into a trust for his children and
grandchildren. When the lease to Helmsley and Malkin
expired in 2076, the building would soar in value, to the benefit
of his offspring. It struck Reich as a perfectly plausible
motive. Reich invited Grace to join him in his office. Reich
shut the door. "At $40 million, I'll do the deal," Reich told
Grace. Grace agreed. But he warned Reich that he didn't
want his name to surface. "This is the Empire State Building,"
Reich replied. He couldn't make any guarantees, but
he'd do his best. He assumed Grace was embarrassed to be
On November 27, 1991, the deal closed. The Empire
State Building was sold through a web of offshore trusts to
E. G. Holding, a shell company set up by Grace. At a celebratory
party, Salomon Brothers bankers passed out cuff-links
engraved with the building's signature profile, and
the bankers expressed relief about averting disaster. It
would be some time before Reich concluded that underneath
Oliver Grace's soft edges and quiet demeanor had
lain a gifted liar.
Nearly two years, in fact, would pass before Grace's lie began to unravel.
One day, celebrity developer Donald Trump phoned
Malkin at his office. By all appearances, the two real estate
kingpins had practically nothing in common. With the exception
of the Empire State Building, the bulk of the Manhattan portfolio Malkin and his partners controlled was distinguished
primarily by drabness and age, and Malkin himself
seemed stuck in the bygone era when real estate men preferred
that their names be unspoken and their vast fortunes
untold. Trump, on the other hand, had turned attention-getting
into a sort of core business philosophy, and he never
tired of telling people that the Trump name added immense
value to his glass office and condominium towers, which to
some critics resembled gold ingots.
"I wanted you to know, I'm buying the Empire State Building,"
Trump told Malkin.
"Really?" said Malkin, not missing a beat.
"Yeah, it's the most amazing story," continued Trump.
"Marla goes to this exercise class. And one day, the young
Japanese girl on the bicycle next to her tells Marla that her
father had given her the Empire State Building as a birthday
"That is an amazing story," agreed Malkin. "First of all, do
you know that we have a lease on the property until 2076?"
"Oh, I know that," responded Trump. "But I'm talking
about the ownership of the building."
"Well, as far as I know, the building is owned by a corporation
that is the nominee for Oliver Grace Jr.," said Malkin,
who had ferreted out the secret on his own. "E. G. Holding
Company. I don't know of any Japanese owner. I think you
may have something wrong here."
Trump seemed taken aback. "I'll check with my lawyers,"
he said, and hung up. Before long, Trump called back. He
had checked with his lawyers, he told Malkin. It was true. He
was buying the Empire State Building.
Now Malkin didn't know what to believe. Trump plowed
ahead. "It was the greatest deal in the world. I didn't put up a
dime," he said. The skyscraper had great potential, he continued.
The top could be converted into apartment condominiums.
Trump Empire State Building Tower Apartments, said Trump, would be fantastic. They would sell for thousands
of dollars a foot. A huge price. With his name and his promotion,
Trump told Malkin, it would be amazing. Trump
reminded Malkin that New York law wouldn't allow Malkin, as
the building's lessee, to attempt such a condominium conversion
himself. "You and I together could create something
terrific," Trump told him.
"Well, Donald," Malkin said, "I don't think this would
really make too much sense. We have over 3 million people a
year who go up the elevators that are used for those tower
floors, to go to the observatory. These would be tourists of all
kinds and descriptions." Not the kind of people that owners
of deluxe condominiums would want to share elevators with,
Trump told Malkin that if he couldn't do that, he would
do something that would result in an increase in the rent.
The somewhat menacing implication was not lost on Malkin.
"You can't do that, Donald," Malkin said. "The lease goes
to 2076, and it's a fixed rent."
Trump hinted that he could force a change in the lease by
demonstrating that the building had not been properly maintained.
"Donald, that won't work either," continued Malkin,
"because we're in the middle of this huge, almost $60 million
improvement program for the building, which is more than
we paid for it, and it's been going on for almost three years
"We'll see," said Trump. He hung up.
What in the world was going on? Malkin wondered.
Malkin had been under the impression that he had solved the
puzzle of Prudential's anonymous buyer two years earlier
when he ferreted out the name of Oliver Grace. If there was
even a kernel of truth in what Trump had told him, he had
been sorely mistaken. The mystery, it now seemed, had only
deepened. Malkin puzzled over Trump's claims: Trump is
buying the building from someone I didn't even know
existed. Trump isn't putting up a dime. And if we don't cooperate
and convert the building into condominiums, I'm
going to have a problem with the lease. Malkin realized that
he was in the dark on the most basic question of all: Who
really owned the Empire State Building?