Bonfire of the Verities

Article excerpt

Byline: Michael Gross

Manhattan's fabled 'good buildings' are no longer its best buildings.

after shlomo Ben-Haim, an Israeli scientist-entrepreneur, made millions selling a medical-device company he'd founded with his brother, a London-based lawyer, he agreed to invest $28.9 million of the proceeds in a nine-room, four-bedroom penthouse on the 40th floor of 15 Central Park West, the Robert A.M. Stern-designed luxury condominium in Manhattan--when it was still just a hole in the ground in 2005. But months after closing, in spring 2008, Ben-Haim put it back on the market--priced at a whopping $80 million.

With its private elevator landing, 14-foot ceilings, and sweeping Hudson River and Central Park views, the apartment quickly attracted a buyer, but the threat of a huge tax bite for selling less than a year after buying convinced Ben-Haim to spurn the offer. When Lehman Brothers filed for bankruptcy that fall, Ben-Haim took his penthouse off the market. Finally, in February 2009, it was offered again at the recession-reduced price of $47.5 million, and was soon sold for $37 million to a limited liability company named after the Russian city Novgorod.

LLCs are typically used to shield the identities of condo buyers, so it was easy to assume, as the real-estate blog Curbed did, that the "mysterious buyer" had "Russian overtones" (just like that first tire kicker, the post-Soviet potash oligarch Dmitry Rybolovlev, who would eventually buy Citigroup founder Sanford Weill's penthouse in the same building for a record-setting $88 million early last year).

I'm now finishing a book about 15 CPW, and in the process I have tried to learn who is behind the LLCs and trusts that bought many of the apartments there. Novgorod didn't give up its secret easily. But finally it did. The man behind it isn't Russian; he's an American-born, London-based banker--and was once one of the best paid in the world. According to The Guardian's annual survey of executive compensation at top public companies, he made [pounds sterling]70 million between 2006 and 2008. He also scored a [pounds sterling]10 million profit selling his seven-bedroom London townhouse in 2007, when he decided to move his family to New York.

There, outside of banking circles, he was a relative unknown. Which may explain why his name has never appeared on the oft-published lists of 15 CPW tenants--reports that sealed its status as the moment's ultimate in trophy real estate. Typically included as 15 CPW tenants are Goldman Sachs chairman Lloyd Blankfein; top executives of Lehman Brothers, Morgan Stanley, Credit Suisse, Deutsche Bank, AIG, ING, MetLife, Cantor Fitzgerald, and myriad hedge, private-equity, and alternative-investment funds; their counterparts at huge law and real-estate firms; the heads of leading health-care, biomedical, fashion, infotainment, and technology companies, including Garmin, Google, and Yahoo; celebrities like Sting, Denzel Washington, Bob Costas, Mark Wahlberg, Alex Rodriguez, Kelsey Grammer, Norman Lear, and NASCAR's Jeff Gordon; a member of the ruling al-Qassimi family of Sharjah; a Senegalese cellphone tycoon; and various rich folk from Brazil, China, Israel, India, and Russia.

Only when he entered the rogues' gallery of international finance was the man behind Novgorod LLC unmasked. When Robert Edward "Bob" Diamond III bought Ben-Haim's penthouse, he was the CEO of Barclays Capital, the investment arm of the global bank. Three years and one month later, as CEO of all of Barclays, he quit after becoming the poster child of last summer's LIBOR-fraud scandal.

Flash back to the stock market's last cataclysm in fall 1987. Then, the trophy building of the moment was 740 Park Avenue, and its residents were as well known but well hidden as Diamond in the penthouse where he now licks his wounds. One of 15 CPW's architectural and philosophical models and, until it came along, the richest building in New York, 740 was home to a flock of that era's financial high fliers: Saul Steinberg, Rand Araskog, Steve Ross, Charles Dyson, and Henry Kravis lived there alongside the first Mrs. …