Spitzer reaps fortune from dad’s real estate smarts

[Eugenious]

http://www.nydailynews.com/front/sto...p-392369c.html

New York Daily News - http://www.nydailynews.com Empire of the son
By DOUGLAS FEIDEN
DAILY NEWS STAFF WRITER
Sunday, October 29th, 2006

Over half a century, the father of Democratic gubernatorial candidate Eliot Spitzer built an empire of glass and steel - and a fortune worth some $500 million - in the priciest precincts of Manhattan.

Bernard Spitzer, an 82-year-old engineer who changed the New York skyline without the flash of a Donald Trump, owns or holds a stake in at least 10 properties on or near the East Side, most of which he developed.


"They are all magnificent buildings," he told the Daily News. "Five of them are on Central Park."


Three of them have made or saved millions of dollars for his 47-year-old son, the attorney general - through gifts, asset sales and rental income - during his eight years in public office, a News examination found.


In one of those buildings, the politician doubles as a landlord: He's a partner in a family firm that controls six Madison Ave. shops - and he gets rent from the likes of Georg Jensen, the Danish jeweler, and Anne Fontaine, the Parisian designer.
While his state salary paid him $151,150 last year, sky-high retail rents earned him $949,581.


Spitzer has lived rent-free with his family at 985 Fifth Ave. for 13 years. The 25-story tower off 79th St. has just two apartments per floor and terraces that look down at the Metropolitan Museum of Art.
The history: His father bought two townhouses on the site in 1967, razed them and put up the luxury building in 1968. It has been a dependable moneymaker ever since - generating $5.5 million in rent last year alone.


Thanks to his dad's generosity, Spitzer, his wife and three daughters have lived in a home graced with at least three bedrooms, four baths, a balcony, library and sweeping vistas of Central Park.


In a phone interview, Bernard Spitzer confirmed certain facts about his property holdings, but declined to discuss his gifts: "I would ask, respectfully, that any information about Eliot's finances be provided by Eliot's office."


Referring to his son the attorney general and two other children - Daniel, a neurosurgeon, and Emily, a lawyer - he said, "These are not children who sit around availing themselves of the benefits of a comfortable upbringing and lifestyle.
"They all work, and they work very hard. ...And it gives me great pleasure to see them fulfilling themselves and their responsibilities."
Vetted by lawyers and accountants, the living arrangement is both lawful and proper, said Darren Dopp, Spitzer's communications director: The father pays an annual gift tax on the present he gives his son.


"These and other financial matters are handled by professionals who ensure that everything is done in strict accordance with city, state and federal law," Dopp said.
The market value of the gift is reported annually on real estate tax filings and on Bernard Spitzer's tax returns. But citing privacy, Dopp declined to disclose the apartment's rent, the gift's value or the amount of the gift tax paid.
Three real estate brokers familiar with the building say that a spread of comparable size could lease for $16,000 to $20,000 a month. That puts the gift's current value at an estimated $192,000 to $240,000 a year.


"Landlords on Fifth Ave. can ask for almost anything they want, and chances are, they'll get it," said Onik Ovanes, a broker at Prudential Douglas Elliman.
The home at 985 Fifth Ave. is one cornerstone of the family fortune. Others are spelled out in a 2003 letter in which Eliot Spitzer recused himself from dealings his office may have with firms that could pose a potential conflict of interest.
Under the Freedom of Information law, The News sought the document June 8 and received a version June 15 with the names of 18 family real estate companies blacked out.


The newspaper's appeal, on July 14, was denied on Sept. 1 by Spitzer's lawyers, who cited security and privacy concerns. After requesting an opinion from the state's Committee on Open Government, The News was given the names on Oct. 12 by Spitzer's counsel. The 18 firms represent the elder Spitzer's interest in 10 Manhattan residential and commercial buildings, two East Side parking garages and a Washington office building on K St.




Among his properties:

The Retail Strip. The family holds a master lease on six Madison Ave. storefronts below 62nd St. - on a block where first-floor rents can top $1,000 a square foot. Since 1999, the attorney general's share of the partnership generated $5.1 million in rental income from such retail tenants as Ghurka, the luxury leather goods shop.

The Curving Tower. Bernard Spitzer built 200 Central Park South, famous for its dramatically curved corner, in 1963 and transferred partial ownership to his three children. In 1984, the 35-story building went co-op, and Eliot Spitzer's stake became eight apartments, which he rented out. After running up millions in bank debt in his winning campaign in 1998, he sold them back to his father for $6.1 million in 1999 to pay off the loans.

The Gargantuan Tower. Bernard Spitzer built the Corinthian at 330 E. 38th St. in 1988. The 57-story Murray Hill condo, with 865 units, is one of the single largest apartment buildings in America. His son lived on the 49th floor from 1989 to 1993.
The Tower Above the School. Bernard Spitzer built the 28-story rental at 220 E. 72nd St. - with a home for Marymount Manhattan College on the lower six floors. His son lived on the 24th floor from 1984 to 1989. Bernard Spitzer also built 210 Central Park South, 1050 Fifth Ave. and 800 Fifth Ave., all on Central Park. In addition, he built 150 E. 57th St., a luxury rental, and a Washington building on K St. for lawyers and lobbyists.
He also holds a stake in the landmark Crown Building, at 730 Fifth Ave. on 57th St., which was once owned by notorious Philippine dictator Ferdinand Marcos.

[Punzie]

Very interesting, but considering that Election Day is so near, do you want us to comment on this from a real estate viewpoint or a political viewpoint?

[TREPYE]

I didn't know that his old man had built the Corinthian. I'm impressed. That is one great looking residential.