Fred's Book Club: Empire!

Welcome back to Fred's Book Club, home of the Humpback Writers feature, named so because it falls on Wednesday and we thought "Wednesday Writers" was too silly. We're morons, we know.

This week we bring you a bit of twentieth-century history, a 2001 book by Wall Street Journal editor and writer Mitchell Pacelle. 

Empire: A Tale of Obsession, Betrayal, and the Battle for an American Icon is about the famous and magnificent Empire State Building, as you might have guessed from the cover, but is mainly about the shenanigans of Japanese billionaire Hideki Yokoi and assorted other players vying for control of the landmark tower back in the 1990s. Among them are Yokoi's daughter, her French-Jewish husband Jean-Paul Renoir, Leona and Harry Helmlsley, real estate tycoon Peter L. Malkin, and a certain future president of the United States -- guess who!

After the real estate mania of the Go-Go Eighties had fallen away, Prudential Insurance, which owned the Empire State Building, was eager to unload it. It was and probably still is the most famous skyscraper in the world. But the prestige was not what it once was, having been overshadowed by so many other taller buildings, and its interior space was still mostly set up along typical use plans of the 1930s -- small offices connected on each floor by a common hall, rather than entire floors occupied by businesses surrounding a central elevator shaft. Occupancy was high in 1981, but as Pacelle writes, "the building's occupants -- 850 small businesses -- were hardly the sort coveted by glamour buildings. There were 302 menswear firms, 74 in the shoe business. There were second-tier lawyers, accountants, and travel agents. Most New Yorkers seldom even set foot in the place."

In 1991, the main problem Prudential faced was not the small tenants but the big renters; it was a dumb deal they had made 30 years earlier to rent the entire 102-story building to an investment company that controlled the actual leases to occupants. "Whoever bought the Empire State Building now would face prospect of wrangling with two of Manhattan's most difficult real estate magnates: Peter Malkin, an iron-willed Harvard-educated lawyer who was exacting to the point of annoyance, and Leona Helmsley, a notoriously volatile woman who was sowing terror through the billion-dollar real-estate empire assembled by her ailing husband, Harry. What Prudential was selling, in truth, was little more than sizzle: the right to boast, 'I own the Empire State Building.'"

And then the Japanese enter the picture.

We tend to remember Japanese real-estate deals in the United States as a purely eighties venture, but Mitsubishi Estate's foray into Rockefeller Center came in at the end of the decade, in 1989 (and they slumped right back out, selling in 1996). Billionaire Hideki Yokoi was a different sort. He had grown wealthy making uniforms for the Japanese army, and then after the war went into real estate, "snapping up treasures from Japan's royal family." He liked undervalued stocks. He collected European castles. He was a hardheaded businessman, but he was also a dreamer -- just the kind of man Prudential was looking for. 

The thing was, Yokoi's illegitimate daughter, Kiiko Nakahara, and her financier husband Renoir, also wanted in. Nakahara had spoken with Prudential initially as her father's representative, but while Dad was cooling his heels in prison back in Japan -- a fire at one of his hotels killed 32 people and he was found responsible -- she and her husband led a group of investors and made the deal to buy the building. Nakahara's group included a new partner -- one Mr. Donald Trump.

In all the hijinks going on over this building, it's weird to find Trump a relatively small player, and of course he never talked like one. When the deal was made his people shot out a press release that said "Trump Buys Empire State Building." He said, "It is my intent to take the actions necessary to restore the Empire State Building to its rightful position as a world class real estate asset." This led him into battle with his archenemy, the hated Leona Helmsley, which as we all know now is the kind of thing Trump lives for.

Trump and Renoir were of like minds in wanting to get rid of Helmsley and Malkin. They also intended to renovate the building's interior into a modern space, a job that Renoir estimated would cost hundreds of millions of dollars. Renoir thought Trump was just the man to make it work. "They would bring in classy tenants, like media companies. In the soaring tower, Renoir saw luxury condominiums, good restaurants, and a hotel. Renting a room in the Empire State Hotel, he felt, would be an unbeatable draw. And up top, of course, gold-class condos." Renoir had many such ideas, including exciting exterior elevators. None of them ever came to pass. 

In fact, by 1996 Yokoi was out of jail and back in the hunt. His daughter's actions were widely seen as betrayal, and he was not a man to take that lying down. Nor were Malkin and Helmsley going to let their lease be broken. So off came the gloves.

You'd think a story that involved enough lawyers to land an assault on Omaha Beach might make dry reading, but not here. Probably no story involving Trump could ever be dull, however one feels about the man. Pacelle is wisely dispassionate about all the subjects, letting the story tell itself as it ought to, and it's a fun read. 

Trump doesn't come off all that well -- the fact that no one remembers his boast of owning the building gives you an idea of how the deal worked out for him in the end -- but for all his bluster, he kept his wits and remained afloat while other owners sank. Nakahara and Renoir wound up in a mountain of legal trouble; Yokoi's battle became quixotic, as his life trailed toward its end; Malkin and Helmsley held an ironclad lease but turned on each other; and the tabloids of New York and Tokyo had a wonderful time. 

Pacelle notes that while Trump had the least on the line in the Empire State battle, he found it hardest to let go. With his love of prestige and his boundless optimism, Trump had a lot in common with Yokoi. "The building is magic," Pacelle quotes Trump as saying. "It's got a unique place in people's hearts."

Pacelle's story ends in the middle of 2001, so it takes place entirely in the pre-September 11 world. I got my copy from a friend at Wiley when the book was first published, in early 2002. I had hoped that Pacelle might write a new edition with the eventual fate of all the legal wrangling (largely resolved in 2002), and how the terrorist abomination on September 11 affected the real estate market, especially for skyscrapers. It would seem that Trump's election should interest a publisher in an updated edition as well. Sadly, neither Wiley nor the author have chosen to write one. But the book contains such an interesting story so well told that I endorse it all the same.