Zeckendorf

by William Zeckendorf

  Some years later I did acquire the site of the British American Hospital in the center of Mexico City. Marion and I were on our way to Acapulco and had stopped in Mexico City for a few days. Sam Katz, a leader of the American community in Mexico, gave a dinner party for us, and before dinner he and I took a stroll near his home. We walked past the nearby British American Hospital, which consisted of some ten beautifully landscaped acres in the heart of town, just one block north of the Avenida de la Reforma. Katz asked me why I didn't buy the property.

  "Why, is it for sale?"

  "As a matter of fact, it is. The association is planning to build a new hospital. If you want to buy the property, I think you can, maybe even tonight. Three of the trustees of the hospital are going to be at dinner." These trustees were the most influential on the board and could persuade the other members. Sam thought they might be willing to accept $750,000.

  The price seemed quite low to me, and I told him I'd buy it for that price.

  After dinner Sam mentioned my interest in the property. The trustees said they would sell for $750,000. That was fine with me. I didn't try to bargain. I hate to bargain. If, in my judgment, a property is worth the asking price, I see no reason to try for less. A lot of shrewd dealers think this foolish, but I notice that others tend to lose more business, and to poison relationships, by trying to refine an already good bargain beyond a reasonable point. There is a much better flavor left in everybody's mouth when such haggling is avoided. I wanted the property, their price seemed reasonable to me, and so we were in business.

  Rather than be a lone, vulnerable gringo, it seemed like a good idea to have reliable native partners in the deal, and my Mexico City lawyer, Rafael Oriomuno, recommended Sacristán, a prominent Mexico City banker, who agreed to join me as equal partner. Later, Sacristán offered to buy us out. I agreed to sell our half for almost $750,000 profit, which gain made a handsome return on expenses for any and all of my previous trips to Mexico.

  A common Wall street myth had it that I wandered into Webb & Knapp one day during the early war years to use the phone. The partners of the firm then went off to war, and when they returned, found I was in charge and that they had become millionaires. This is not precisely accurate. It is true that during the war years Eliot Cross, then an elderly man, was not well, and had assumed a relatively passive role in the firm. My three other partners, whom I kept on full salary throughout, were called to active duty in the armed forces. But on return they were not quite millionaires.

  Jim Landauer received only one-half million dollars as his share in the partnership when he resigned from the firm in late 1945. When Eliot Cross resigned in 1946, he received $800,000. Because the one hundred or more transactions which multiplied Webb & Knapp's fortunes were of my devising, my partners of course returned to a situation in which I was in charge. Naturally, the other partners were free to generate as many separate transactions as they wished when they returned, but I had an enormous head start. Once having established a base, I continued to work under the impetus of increasingly exciting projects.

  I was beginning to be caught up with the idea of moving the United Nations headquarters to New York City.

  ▪ 6 ▪"X City" Becomes the United Nations

  SINCE I now live on Beekman Place overlooking the East River, I occasionally pass the United Nations headquarters. Every time I do, I feel a certain pride, as well as the sharp bite of frustration. The pride is for having the United Nations in New York, because if it were not for Webb & Knapp the UN would not grace New York City at all. The frustration is over the unmistakable fact that the UN's setting and approach vis-à-vis midtown New York are totally inadequate. The UN is separated from the rest of town by a Chinese wall of old and second-rate buildings.

  The city now has plans for creating a new UN approachway, but twenty years have passed since our first efforts to do something in this area, and it is difficult to guess how much longer it will take to actually get something done. I fought a major battle with the City of New York over this issue. I had hoped to give both the UN and the city vital breathing space and added luster—but I lost. Nevertheless, the basic UN transaction remains one of my proudest achievements, for we are not all granted the opportunity and thrill of moving the capital of the world on a few days' notice. In addition, the development of the UN site gave me ideas that paid off handsomely for other cities. And yet, every time I go by the so-called approachway the city gave to the UN, I feel the old and righteous anger start to stir.

  Originally the present site of the UN was a wooded, riverside hollow commanded on the north and west by abrupt, low-lying hills. As the city grew, trolley lines, then a series of wharves and tightly packed warehouses, were built by the river's edge. Sometime after the Civil War this nest of buildings was turned into a string of slaughterhouses. Time froze, and that's what remained there through 1946. One result was that New York's famous midtown area, "with everything for the tourist," could even boast it had an 1890 Chicago-in-miniature complete with cattle pens, packing plants, and an all-pervasive, stomach-turning stench! Theatergoers thronging out of Wednesday matinees on Forty-sixth Street had to scuttle out of the way of open trucks hauling cattle from the West Side docks to the East River charnel houses. On days when the wind blew from the east, the smells from the slaughterhouses reached to Third Avenue and beyond. This is why the section of Tudor City backing on First Avenue has no windows. Luckily, the prevailing winds in New York are westerly, but in 1946, when land prices in midtown Manhattan ran at $100 to $150 per square foot, prices in the immediate odor zone around the slaughterhouses ranged from two to five dollars per square foot—with few buyers in sight.

  The slaughterhouses had been there for so long that they seemed untouchable. Since the Swift and Wilson meat packing companies, who owned the slaughterhouses, held an irrevocable and presumably profitable franchise to operate in Manhattan, there seemed little hope of ever getting them out.

  Brokers often "offer" a property for which they have no franchise. If they find a willing buyer at a good price, they then go to the property owner with a proposition and the hope of making a bargain. Previously, the slaughterhouses had been peddled on just this basis, so I was skeptical when, late in 1945, John Dunbar, a real-estate broker with Cushman & Wakefield, Inc., offered to sell us this choice property, especially when he offered the property at a steep seventeen dollars per square foot. Considering the two- and five-dollar-per-square-foot values in the area, his price seemed preposterous. I challenged whether he could make delivery at any price. He informed me that his wife was a Swift and that the Swifts and Wilsons had agreed to sell the land jointly, through him.

  Dunbar had approached us first. (Thanks to Webb & Knapp's growing reputation as an active firm, we were getting more and more such first offers.) I asked, "What would you say to an offer of five dollars per square foot? That's well above the going price over there." Under those terms, he answered, he would have no choice but to try elsewhere. He was authorized to sell only at seventeen dollars per square foot. Though I argued and bargained, and eventually suggested a possible twelve-dollar price, he remained adamant. While we discussed a solution, I thought to myself that at seventeen dollars per square foot the property would cost some 6.5 million dollars. But with the slaughterhouses gone, I was sure the price could jump to fifty, possibly to seventy-five, and maybe even as high as one hundred dollars. For a 6.5-million-dollar investment (much of this in the form of mortgages) we might make a gross profit of sixteen million dollars, thirty-two million dollars, or more. Then, there were the value-depressed properties around the slaughterhouses, which would also rise in value from a two- and five-dollar base. So I said, "Well, I'd like to keep this off the market for a while. Let me talk it over with my partners." I left him sitting there while I met with Gould and Sears. They immediately agreed we should accept the seventeen-dollar offer, and I returned to Dunbar and told him he had a deal.

  We arranged that Webb & Knapp would put up one
million dollars for a one-year option against the total 6.5-million-dollar price. At the end of the year we were to pay the remaining 5.5 million dollars. In the meantime, the packing companies would quietly make arrangements to relocate, and the agreement between us would be kept secret so as not to precipitate a price-rise land rush in the area.

  The next problem was where to find one million dollars in cash. I solved that by forming a syndicate consisting of ourselves, a Chicago financier, and two New York real-estate speculators.

  With the slaughterhouse option in hand, we now needed as much of the two- and five-dollar-per-square-foot land surrounding them as possible to bring down our average cost. I hired some three or four brokers to buy different properties in the area as quietly as possible. During the summer, Marion and I took a three-week trip to South America to throw the hounds off the scent, but the rumors of our activity began to spread. In one case a canny fruit peddler and his wife, who had just acquired two five-story buildings on a key corner lot on First Avenue for ten thousand dollars held out against my buyers for months. Everytime we agreed to a price, they would change their minds and raise the ante, till they finally got $100,000, but generally we were able to get the properties we wanted. We bought what we could north of the slaughterhouses to Forty-ninth Street and also acquired a number of lots to the west, between First and Second avenues. In all, we picked up about seventy-five properties totaling eight acres at an average price of nine dollars per square foot. These individual purchases were financed by local banks and insurance companies.

  The next thing to be determined was what to do with the parcel of land we had assembled. Marion and I took to walking over to the edge of Beekman Place after dinner. There we would stare south toward the slaughterhouses, outlined by First Avenue and the welter of east-west cross streets, to the rising bulk of Tudor City. During the fifth or sixth of these visits, an idea came to me. I visualized a great, flat, rectangular platform stretching from the elevation of Tudor City east to the river and then north to where we stood on Beekman Place. This raised platform would stretch over the local streets, where service and parking facilities could easily nestle, and where city traffic would continue to flow as it did now. On the platform itself would rise great modern buildings, with cleanly designed plazas between them.

  The prototype of such a platform had been constructed in 1913 when the city forced the New York Central Railroad to cover the ugly network of open railroad tracks lying to the south and north of Grand Central Station. This roofing created Park Avenue, and a fortune in real-estate values, but what I was proposing was a greater and more unified development.

  That night I could hardly sleep as I chased my own ideas, tied them down with facts and figures, altered them, made compromises, returned to original notions, and finally realized that I was no longer dealing with fantasy but with genuine possibility. Now I needed a top architect to help work these concepts out in concrete form, and I turned to Wallace Harrison, whose work on Rockefeller Center had brought him a deserved and estimable reputation. Harrison agreed to work on the East River, and his completed plan was designated "X City."

  "X City" was to be a city within a city whose design adapted to the New York areas around it. At the south end of the immense seven-block-long, two-block-wide platform, we planned to build four office buildings which could fit comfortably between Forty-second and Forty-fifth streets. At Forty-fifth Street we allowed room for a combination airlines terminal and office building, a single facility large enough to allow for the growth in air travel: at that time there was nothing supplying that need, and there still isn't. That area of Manhattan also lacked a major modern hotel, and we planned one across from the terminal. This hotel would permit a shift in emphasis away from the office structures and toward the residential section. The north end of the property would be devoted to a series of apartment buildings which would blend in nicely with the expensive residential character of Beekman Place. In the space between the curves of the airline and hotel buildings, I planned a possible new home for the Metropolitan Opera. Adventuring even further, we proposed an adjacent floating nightclub, a marina, and a variety of other attractions in the East River itself.

  Looking back at what has happened since in New York, one can see that "X City" was an economically practical as well as aesthetically pleasing conception. I set up the architects' renderings and a scale model of the project in a side room at the Club Monte Carlo, where at lunch I could display it to prospective clients. My plan was that the four southern office buildings were to be occupied by four large corporations, and that each building bear the name of its tenant. For a starter, we began serious negotiations with the Mutual Benefit Life Insurance Company of New York, with Time Inc., and with the Aluminum Company of America. Arthur Vining Davies, who, as chairman, ran Alcoa as a personal fief, was intrigued by "X City" and promised to take a building if we could call the whole project "Aluminum City." Foolishly, I demurred. At that time, most aluminum building materials were as yet untried, or yet to be conceived. Also, I was afraid the name "Aluminum City" might drive away other potential clients.

  This was a major undertaking for everyone involved, and the project by its nature could not be moved quickly. By December, 1946, I was still lining up clients and backers. The Wilson and Swift people were beginning to wonder where the remaining 5.5 million dollars due to them was to come from. So was I. I was not worried, but I was wondering—and we did have a deadline. Even as raw land, however, the properties we had assembled were so massive and po tentially so choice that backers and buyers would always be available. The challenge was not in selling land but in creating value by using it judiciously. Not since Columbia University turned over its midtown properties for the construction of Rockefeller Center had such a great land parcel as ours become available in New York. What we were proposing in "X City" would rival Rockefeller Center. In fact, by overriding New York's nineteenth-century grid pattern of streets, yet not disturbing it, we would have surpassed Rockefeller Center. Here was a chance for inventive, original, and eminently sensible use of a city's core. All my energies from the time of conception had been directed to the achievement of that specific goal. Suddenly a new, totally unexpected possibility developed.

  During all of 1946, the United Nations had been plagued and perplexed by the problems of finding a permanent home. Robert Moses, New York's commissioner of parks, tried to sell the UN on a permanent location at the site of the World's Fair in Flushing Meadows. Another proposed solution had been a great campuslike development in Westchester County near the town of Greenwich on the periphery of New York. The UN, rejecting Moses' plan, received a rebuff in return from the Westchester-Greenwich area, where the staid property owners, rising up like the minutemen at Concord, organized to keep the foreigners off the sacred soil of exurbia. However, practically every other major city in the United States eagerly offered sites. The most likely contenders were San Francisco and Philadelphia. The Russians objected to San Francisco on the grounds that it was too far from any major diplomatic center. It seemed that, by a matter of elimination, Philadelphia would be selected, and so certain did the choice seem, that in December, 1946, Philadelphia was in process of condemning property for its proposed UN location.

  At breakfast on Friday, December 6, just one day before the special General Assembly meeting called for the approval of Philadelphia as the UN site, I read the report of the debates on the UN site in The New York Times. At that moment it occurred to me that we at Webb & Knapp had an ideal site for the UN right here in Manhattan! Turning to Marion, I said, "I'm going to put those bastards on the platform!"

  "Which bastards on what platform?"

  "The UN—I'm going to put them on the platform over the slaughterhouses."

  "Oh, my God, how are you going to do that?" Marion asked.

  I wasn't sure just how we would pull it off, but as soon as I got into the office I spoke to Gould and Sears. We had a chance, I said, to stop the UN move to Philadelphia: w
e could offer our East Side property as a headquarters site. Somebody would have to see the mayor. I suggested that Gould go, since he was president of the firm. He thought the whole thing a wild idea and declined, saying that in any event he did not know the mayor. When I said I did know the mayor, Gould said, "All right, you go. But," he added wryly, "don't use our names."

  When I called Mayor William O'Dwyer and asked him if he would like to keep the United Nations in New York, he fervently said that he'd give an arm, a leg, and various other parts of his body for the chance, but that none of them was particularly salable, I then asked him to put Miss Holly, his secretary, on the extension phone. I was going to dictate a statement he could take to the United Nations: "We hereby offer to the United Nations approximately seventeen acres on the East River from Forty-second Street and First Avenue north to Forty-ninth Street for any price they wish to pay."

  O'Dwyer, taken aback, interrupted to ask how we could possibly say that.

  I told him that the matter of the UN site was now so close to the deadline there was no time for trading. Unless I said price was no object, they would think this was a trick by a real-estate operator to stop their Philadelphia negotiations, and then hold them up for millions. It had to be a carte blanche. We would either capture their imagination and start them rethinking, or we would not, and one of the critical elements would be the price. Then, with a laugh, I said, "Besides, I hardly think that the United Nations' first move would be to take a man's property away from him and offer nothing. I'll take my chances on that."