What Recession, Darling?

By Gross, Michael | Newsweek, December 5, 2011 | Go to article overview

What Recession, Darling?


Gross, Michael, Newsweek


Byline: Michael Gross

People are pissed at the 1 percent. Will the super-rich learn to restrain their excesses? Don't bet on it.

Sandy Weill is a lucky man. When the financier who built Citigroup decided to sell his penthouse at 15 Central Park West, one of the most lavish and exclusive buildings in Manhattan, The Wall Street Journal wrote a story about how he was listing it for a record sum--and planned to give the proceeds to charity. There should be plenty to go around. Back before 15 opened for business, Weill and his wife paid $43.7 million for the four-bedroom, six-and-a-half-bathroom floor-through condominium. Lately, the recession notwithstanding, similar apartments in the building across from Central Park's southwest corner have sold for more than $10,000 per square foot. The Weills are asking $88 million.

The article calls it Adownsizing,A but the Weills will still own several other homes and a yacht, and will even keep a toehold in 15, with its private restaurant, screening room, health club, and 75-foot lap pool. Ten floors below the penthouse, they'll hold onto a 1,084-square-foot one-bedroom apartment that cost a mere $979,000. Should we take this as a sign that, as the Journal would have it, the wealthy are beginning to curb their excesses in the face of America's new populist rage? Don't believe it. Just like when the auto executives left their private jets at home to avoid a congressional scolding, it's all for show. The rich may not want to talk about it, but they're richer than ever.

The falling economic tide of the past few years hasn't lowered all boats. And 15 Central Park West is Exhibit A. It also offers compelling evidence of how financial types favor their friends. As the real-estate bubble was bursting, a group of bankers, insurance executives, and CEOs--many of them employed by the Wall Street brand names (Lehman Brothers, Morgan Stanley, AIG, Goldman Sachs) that were the poster children of the financial meltdown--bet huge on the building's success and have seen those wagers pay off bigger than a hedge fund in 2006. Apartments at 15 have done nothing but appreciate in value since it opened in 2007.

What's 15 got that your place doesn't? Besides all those amenities, its location--the last big piece of buildable land bordering Central Park below 96th Street, at least for the foreseeable future--couldn't be better. The building's starchitect, Robert A.M. Stern, the classicist and former Yale architecture-school dean, is excellent, too. He consciously mimicked the style of the greatest Manhattan apartment houses like 820 Fifth and 740 Park to the east, and the Majestic, Beresford, and San Remo to 15's north. But inside, it's all luxury and convenience.

Downstairs, there are two separate lobbies--one detailed in English oak and three colors of marble--each staffed with several doormen, underlings, and a concierge; a walnut-paneled library; a game room; a conference room; and a waiting room for chauffeurs near the private garage. Upstairs, the rooms are big, the ceilings high, and big windows offer vast views of Central Park, the skyline, and across the river to the land of the 99 percent. On a clear day, 15's residents can see their neighbors' Gulfstreams taking off from Teterboro Airport in New Jersey 12 miles to the west. But the main value of living in such a building, and the primary justification for the staggering price of its apartments, is surely (to update Fitzgerald's Gatsby) the consoling proximity of other billionaires. The halo effect of the right address isn't priceless, but it comes close.

Yes, the rich got worried after the Great Recession's arrival, but you can't keep a good fortune down for long. AThe very wealthy are spending,A says Richard J. Kurtz, a New Jersey developer of estates for the rich. AEveryone below that is holding back.A But the rich-rich-rich? AThey're so wealthy it doesn't change their lifestyle.

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