On July 1, The Real Deal published the article “Building Through the Slump,” ranking the ten biggest developers of the past three miserable years. The list was notable for the near complete absence of the big real estate families whose names adorn not only the towers that stack the city’s skyline, but also its medical buildings, libraries, museums, performance halls, and university additions. Silverstein Properties was there—with Larry’s two children working in the firm, it has become a three-generation franchise—as were some privately-owned firms founded since the 1960s.
But the real estate empires of New York lore, the ones that reach back to the beginning of the last century and tend to refer to themselves collectively as “the families,” were not on the list. And there’s a reason: New York real estate families do things their own way. AN visited Burt Resnick, chairman and CEO of Jack Resnick & Sons, at 110 East 59th Street, a building he put up in 1968. In his office, every surface is layered deep with family photos, and the west- and north-facing windows on the 34th floor take in dozens of skyscrapers—each one’s ownership history easily ticked off by Resnick, 73, or his son Jonathan, 42, and now president of the firm. The two talked about their development philosophy and the special place of family-run real estate companies in the shaping of New York.
The Architect’s Newspaper: Is there a code of behavior that the longstanding developer families in New York adhere to?
Burt Resnick: I don’t think there are any rituals. It’s more a philosophy of where you came from, who you are, and where you see the future. This is where we came from: My father. He started back in 1928. It was perfect timing, because it was before the Depression. He started off renting a five-flight walk-up in Harlem owned by a bank, and he managed it for them. He had intended to be a plumber. His father did some plumbing and so did his grandfather, but my father thought it would be more fun to own property, and he’d make more money. Then the Depression hit, and no one was making any money.
So he went to the banks and took over the management of some of the buildings they took back in Harlem and the South Bronx. Then he bought some of them, using the bank commission as a down payment. That was a pretty standard way to make ends meet in those days. After the war, he built housing up in Groton, Connecticut with a Federal Housing Authority mortgage. But unfortunately, unbeknownst to anybody, the Navy was starting to build the Electric Boat Company and submarine base, and they undercut his price. So his first FHA project was a disaster. There wasn’t enough of a market up there for both. How was growth for developers in those postwar years?
Who were the big players?
BR: Nobody was very big at the end of the Depression, and nobody was a big player, except people like the Rockefellers and the Astors. But when the FHA started to build housing, there was an exponential leap in the number of builders. That’s when LeFrak, Silverstein’s father, and my father all really emerged. The Rose and Rudin families, I think, had money before the Depression. They were all in there buying at that time.
How many booms and busts have you experienced?
BR: I started in business in 1956, and I must have gone through ten busts or more in 50 years. Easy. There was a reset in the late ’50s; the ’60s had two recessions; the early ’70s with the oil crisis; the late ’70s; the early ’80s and the late ’80s; and the ’90s, too. It’s always in flux.
Are families equipped differently than other developers, say an Extell or a Related, to weather downturns?
BR: I know as much about their business as you do. I just see what they’ve built. It doesn’t affect our way of doing business. If you look at the families today, the one that is building is Douglas and Jody Durst. The others aren’t really building.
Is that an intentional strategy?
BR: We have a philosophy of not signing our names to anything and no heavy debt. I don’t know what the other guys do, but I assume most of the families are of the same mind-set. It’s the way I was brought up; it’s the way my son was brought up.
Jonathan Resnick: It’s because we aren’t playing with other people’s money.
What’s your philosophy behind selling buildings?
BR: We do it, but we try not to. The last one we sold was about five or six years ago.
What made you sell?
JR: It was an offer we couldn’t refuse. There was a lot of that going on at that time, just before the peak.
Families can afford to take the long view. Can you talk about your sense of the long horizon?
BR: We’re sitting in a building that I put up in 1968, and that we still own. Jonathan just reclad a building on 3rd Avenue that I built in 1964. There’s a downtown printing house on Hudson that my father bought in 1960 that we just transformed into an office building. Jonathan, here, with FXFowle [and A-Squared Architects with Plant Fantasies] spent about $30 million to put a green roof on 250 Hudson Street that’s unbelievable.
And that’s another thing the families do: They’re constantly putting more money back into their buildings.
I was on 70th Street for a doctor’s appointment, and I drove past a building that the Rudins own between 3rd and 2nd. They just redid the entire plaza and arcade. I know Richard LeFrak and his sons just redid 40 West 57th Street, a building that he and his father did 45 years ago.
What else sets families apart from newer developers?
BR: Well, generally, we don’t like to see our names in print. And we never want to see ourselves on Page Six. Douglas Durst was recently in the news for the WTC deal, but that wasn’t personal, it was just the product.
What’s your stand on making buildings sustainable?
BR: Here at the office, you’ll see all these windows are new primarily because they save on electricity. And if you walk around, people turn the lights off when they are out. We are all trying to do our best; every good citizen whether family or a non-family developer should be doing those things.
It took awhile for New York developers to feel that way. Why?
BR: That’s right. Albanese in Battery Park City was the first with the Solaire. The resistance was because of the cost. Now the costs have come to a position where they make sense.
JR: Or you can look at it backwards. When doing the pro forma, you put green in at the design phase. Then you don’t look at it as an add-on, and you can assume all these green elements not as an added cost but as built-in.
BR: We find it’s a great tenant amenity. Tenants like it. We’re looking at all of our roofs to see what we can do about them. They are a great asset to have.
JR: We are pursuing LEED ratings at two of our buildings—250 Hudson and One Seaport Plaza—and upgrades across the portfolio. It positions the buildings for better efficiency; it costs a little bit more, but it’s good for the buildings.
Do you believe developer families feel they have a bigger stake in the city than other businesses?
BR: If you look back at the oil crisis in the city in the ’70s, it was the real estate industry and primarily the families that bailed the city out. When the call went out to pay a full year’s taxes in advance because the city was running out of cash, most if not all the families did it with all their buildings. I remember Lou Rudin saying, we cannot move our assets out of the city, so we’ve got to do this.
What do you see ahead for development in New York?
BR: The only vacant land around is the Far West Side, but who knows in whose lifetime that’s going to be built? Gary Barnett [president of Extell Development Corporation] has about eight jobs going. He must have the strongest stomach in the world. I am not being negative or nasty; I give him credit for having that much energy. In the ’80s, I did three jobs at once—never again! We could be as busy as we want to be, but the deals just don’t make sense as far as we’re concerned.
I haven’t seen prices come down to a level that I think is economical. And if I can’t add value, there’s no sense in buying. But we’re always looking at deals, good times and bad. I’d like it to be a family business for a long, long time.