By Robert McNatt EMPIRE A Tale of Obsession, Betrayal,
and the Battle for an American Icon
By Mitchell Pacelle
Wiley -- 344pp -- $27.95
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 American 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 châteaus, 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 partnership--ultimately 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 fortunes 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.
Associate Editor McNatt writes about New York.
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Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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