Face-to-Face with Harry Macklowe Part 1

October 04, 2018

In the first part of this series of interviews, EisnerAmper Real Estate Services Group Chair Ken Weissenberg speaks with Harry Macklowe, Chairman of Macklowe Properties about the development of 432 Park.


Transcript

Ken Weissenberg: Ken Weissenberg for EisnerAmper here with Harry Macklowe at 432 Park Avenue, a magnificent building. Harry, why don't you tell us about 432 and the project, and how it got started.

Harry Macklowe: I'd be delighted to Ken. I've been building office buildings and apartment houses for many years. I've always admired the 57th Street site here which are really a series of townhouses along 57th Street with luxury retail. When the Drake Hotel was offered to me in 2006, I felt that by combining the townhouses on 57th Street with the development site of the Drake Hotel would be a perfect office building or condominium. We had negotiations with the seller, Host Marriott. It was successfully concluded in March 2006,, just before St. Patrick's Day, I took title to the property. It took about three years to complete the assemblage of all the buildings along 57th Street.

During that period of time, the economy went up and down; there were several swings. Construction started in 2010 and the working relationship with the design architect of record, Rafael Viñoly, has been a wonderful experience. The collaboration with the engineers, Silvi and Marcus, has been extraordinary. The building on the “can it stand upside” side of engineering of it is very, very complicated. Additionally, the actual mechanical systems were extremely complicated because you're in a building so high that is built of concrete. Concrete actually shrinks as it reaches its ultimate hardening strength in a hundred years so the building, one, had to be programmed for a sway, as all buildings do sway, they move in wind. And two, it had to be programmed for compression because it's going to get a little shorter as am I and you as well. So it was a very, very interesting, perhaps the most interesting collaborative effort, that I've ever been involved with.

Before long, the building became known as going to be the tallest building in New York. It started to emerge, and when people could see it, is when we announced it. The comment that I've often gotten is that the building is so beautiful you can see it from everywhere. People ask me how you feel about having changed the skyline, I say well very honestly, I feel terrific. I feel it's wonderful. I'm very lucky to have done it. I'm very lucky to be in the real estate business as opposed to any other. I'm very fortunate to be able to use my imagination, have my curiosity answered.. Everything in life is kind of a negotiation in a sense. So to negotiate with our engineers, to negotiate our architects, with our banks, with our colleagues; it’s all a give-and-take and I'm enormously proud of the result. People also ask me, “Do you have any regrets?” “Is there anything that you would do differently?” “Is there any way that you could improve the building?” And I think the answer there is probably. I'm not too much aware of it though, but I think in a sense because it's an accomplishment it kind of makes me race back. So back to the time when I was a youth and didn't know that I was interested in architecture and design and found my way to it through the real estate business which has become a kind of a crucible of learning. So the regret that I have is that my parents are not alive to see that I've built a building which is taller than the Empire State Building.

KW: I'm sure they're looking down on it, smiling.

HM: Perhaps, I hope so, I hope so. That kind of pride is something that I kind of recognized a little later as the building became so prominent and people were very kind and spoke about it saying, “Hey congratulations, what a wonderful building. I can see it from around the city.” Oftentimes, I will see on the weekend, because I live close by, I'll see a couple of the construction workers come by with their children and point up to it, and with pride tell their children what it is that they're doing and what their task on this building was, whether it was windows, or concrete guys, or electricians.

KW: Or accountants.

HM: Or accountants or my friends. And it’s wonderful to have my peers say such flattering and complimentary words, very generous words, about the building. As I've said, I'm proud of it. I’m delighted with the team that was put together and how we all worked it out. And the building will be completely finished by the beginning of September. We'll be planting the trees over the summer and then probably the last plantings will be in the early fall. When everything is taken down and the plaza is undressed and the building is complete, I think that the favorable comments that we've gotten will continue and I'm enormously proud of it.

KW: It's a magnificent building and congratulations. It’s just fabulous.

HM: Thank you.

KW: Do you have personal plans to move here when it's done?

HM: No, but I had discussed it with my staff and with the EisnerAmper Firm and we're holding two apartments for you.

KW: Okay, but my fees might go up as a result.

HM: As they should.

KW: You've gone through many cycles in real estate and always came out coming back stronger and stronger. You're back on top with this property and then the other projects you have going on. It's just a pleasure to work with you and to see you know how well you've been doing.

HM: Well I’ve been happy to speak to you and I hope the people who are watching it share my enthusiasm for what it is that want to do. So stick to your guns, feel good about your decisions, and make them and move on.

KW: Thank you so much.

About Kenneth Weissenberg

Kenneth Weissenberg CPA, Tax Partner in Real Estate Services, is experienced in tax saving strategies and negotiating sales and acquisitions. He represents owners of some of the most well-known real estate properties in New York City.

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