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Remembering Harry: Helmsley An Industry Giant

THE PAUL NYC is famous as hotel with empire state view. So we were thinking to write something on our blog page about Harry B. Helmsley.

So we thought to re-publish the Obituary in Real Estate Weekly, January 15, 1997.

The real estate lost its giant last week when Harry B. Helmsley passed away at the age of 87, with his beloved Leona at his side. He was suffering for many years from debilitating strokes and other ailments, died of pneumonia at a Scottsdale hospital. He and his wife also had homes in Greenwich, Connecticut and New York City.

Helmsley was a long-time member of the Real Estate Board of New York,he was a governor from 1968 to 1972 and again from 1982 to 1984. In 1995 he became an honorary lifetime governor.

He was presented by REBNY with its first Distinguished New Yorker award in 1992. REBNY chairman Bernard Mendik said, beginning with this year's presentation to Jerry Speyer at the annual banquet this week, That award will now be named after him.

When that honor was originally bestowed on Helmsley, REBNY chairman Bernard H. Mendik merely stated his name and there was a standing ovation - and then there was quiet. "That's an indication of the real love and respect that the industry had for Harry Helmsley," said REBNY President Steven Spinula, noting that the REBNY dinners are known for their tumultuous networking.

"Harry was everybody's mentor," said Mendik in a sentiment repeated by many others in the industry. "He taught us how to buy, when to lease, and above all, how to negotiate with honor and class. He was as tough as nails, but was such an honorable man."

Born in 1909, Helmsley attended Evander Childs High School in The Bronx and never attended college. That never stopped him, however, from acquiring a fortune from real estate, estimated by Forbes magazine this past fall at about $1.7 billion.

The buildings themselves include hotels, offices, lofts and large residential developments, some in other parts of the country. He owned all or a portion of each property through partnerships which have a total estimated value of $5 billion.

At closings, Helmsley jokingly told developer Larry Silverstein, "he would always defer to the lawyers as they were better educated than he."

Helmsley learned the real estate business from the time he was 16 and joined Dwight Veerhis & Perry as a $12 a week office boy, eventually becoming a broker. The firm specialized in garment center loft buildings and Helmsley began to invest his own commissions to become a partner in the properties.

In 1938, the same year he married Eve Ella Sherpick Green, a widow who he divorced in 1971 and who has since died, he bought the company and changed its name to Dwight Voorhis & Helmsley. He acquired competitor Spear & Company in 1955, which he renamed Helmsley-Spear.

In the 1960's he acquired the "white shoe" residential property management and brokerage, Brown Harris Stevens, but that was finally sold in 1995 in a move to divest non-hotel assets.

With the late-Lawrence Wien, whose son-in-law, attorney Peter L. Malkin, still has a strong hand in operating the family partnerships, Helmsley syndicated and purchased several prominent buildings.

Malkin said, "t was pleasure and privilege to have worked with him for almost 40 years. He was a wonderful mentor, client, partner and friend."

Through partnerships, they own and operate among other properties, the lesse-hold on the Empire State Building, One Penn Plaza, the Toy Center at 200 Fifth and the Lincoln Building at 60 East 42nd Street, where Helmsley-Spear has its main office.

The former 60 East Club, located in that building, had a strong real estate membership, but in the early Nineties real estate slump when many members could not afford to pay dues, it became too heavily subsidized by the building ownership and was closed at the end of 1995.

The club meant so much to Helmsley, however, that the tower express elevator makes an additional stop at the 27th floor club entrance. That way, Helmsley and other company executives could go to and from the club for lunch without other stops.

"Harry used to have lunch there every day," said Spinola.

Among Helmsley's frequent dining and investing partners were his best friend, Alvin Schwartz, and Irving Schneider, both senior executives with Helmsley-Spear.

Schwartz told REW, "I loved the man."

Nevertheless, the two recently felt forced to file a lawsuit over the control of the management of the properties. That suit is now expected to be resolved, as upon Helmsley's death, they have the option to purchase the Helmsley-Spear company or be paid $10 million each. As for the individual building partnerships, the remaining partners may end up purchasing the now re-valued Helmsley shares that have been left entirely to Leona Helmsley.

While the more established brokers often held pieces of properties with Helmsley, not everyone who worked in the company was allowed to become an investor.

Newmark's Vice Chairman Arthur Lerner recalled Helmsley once told him, "The reason I don't want to take all you young guys in as a partner, is if I have to call you on a Monday, and ask you for a capital call of a couple of hundred thousand dollars, I don't want to worry you don't have the money."

A gruff but honorable bargainer, Helmsley nevertheless startled young Lerner when it came time to paying his first commission, which was for a New York magazine deal. Helmsley teased him, "Arthur, you don't need that much money for a commission. What else can I do for you?"

Lerner, who ended his career at Helmsley as a senior vice president in charge of leasing, replied he did in fact need the money and Helmsley paid up, of course.

Helmsley held a "loose rein" in the office, Lerner recalled. "He wanted us to compete, and the bottom line is that you will work harder if you do."

Retail broker Edward A. Friedman, executive managing director of Newmark, called his 29 years with Helmsley handling real estate, hotels and many of the stores that came up for rent in the buildings a "honeymoon." Helmsley would say to him, "Make believe it's your building and make the best deal you can.'"

Some years ago, when William G. Lillis was American Savings Bank's president and chief operating officer, he recalled his time employed by Helmsley from 1970 to 1976 to REW. "He's probably the most impressive man I ever met," Lillis said at that time. "He was terrific to work for and he was so bright in his field."

Lillis also described Helmsley as the greatest negotiator he ever knew. "At times, I felt like you should pay admission just to sit in on a meeting with him. I learned a lot, but I wouldn't tell him that."

Lillis said Helmsley was not a "paper guy. Everything you did with him was verbal," he explained. "But he never came back later and changed his mind or said, 'Gee, you weren't supposed to do that.' When you had a conversation with him, you knew it would hold up. He never looked back. If there was a problem he just said, 'Let's see what we can do to solve the problem.' There was never anything said like, 'Why'd we do that?' or 'How did we do that?' - it just wasn't his style."

Peter Ricker, now president of Peter R. Friedman, worked with Helmsley for 20 years - until 1987 - as the head of commercial leasing and management for the New York metropolitan area.

"He made deals with his handshake and his word was his bond," said Ricker,&