How to Get Your Landlord to Pay You $17 Million to Move Out

March 4, 2014 - 3:47 PM

Every tenant had moved out of the old Mayflower Hotel in New York City save one: an old, reclusive, bitter, bachelor genius. The new book House of Outrageous Fortune by Michael Grosstells the story of 15 Central Park West, an exclusive building bought by two real estate developer brothers, Arthur and Will Zeckendorf, and the most expensive eviction in New York City history.

The new construction built on the site is one of the most exclusive residential sites in the city, and home to Goldman Sachs CEO Lloyd Blankfein and Alex Rodriguez (known as A-Rod.)

But, before that could happen, after the brothers Zeckendorf bought the building, they were required to buy out all the rent-controlled tenants. The other three hold outs were also old bachelors, and they accepted the relatively "modest" sum of $1 million to move out.

And then there was Herbert Sukenik - the last remaining holdout. He walked away with $17 million.

"Herbert Sukenik's profile was a nightmare," Will Zeckendorf is quoted saying in the book, an excerpt of which appears in the NY Post. "Hugely intelligent, a Ph.D., unmarried, embittered, a loner, disconnected from society, and too smart for his own good. He was not a poor man; he had independent means."

Sukenik knew the precise acreage of his block and how much the Zeckendorfs had paid. He'd calculated the taxes, insurance and carrying costs of the empty properties and recited them all to Grabow. And he wouldn't begin negotiations until his three fellow tenants were gone. "He knew the last man standing was very valuable."

His key demand had been a park view, so a broker took him to Essex House on Central Park South and showed him a 2,200-square-foot, two-bedroom unit on the 16th floor.

"It looks like a bed of green," he rhapsodized, staring out at Central Park beneath him. Grabow sent Sukenik a letter spelling out their agreement: The Zeckendorfs would buy the condo and retain ownership, but he could have it for life and they would even furnish it for him.

The one demand they refused was free meals twice a week at the Essex House restaurant, then run by the world-renowned chef Alain Ducasse.

Sukenik's response to the letter was silence. "Which was not like him," Grabow says.

Then, David Rozenholc, a noted tenants' attorney, called Grabow, and the moment he started talking, it was clear things had changed. Rozenholc told Grabow that Sukenik wanted more than the apartment and moving expenses. A lot more. Grabow hung up and called Sukenik.

"I thought we had a deal," he said.

"We didn't," Sukenik replied, "and now I have a lawyer."

He went on to confirm that he did now want money - even though he had no use for it, no kids, no charitable impulse, and didn't want to leave it to his brother. The Zeckendorfs decided to play hardball. They separated the two halves of the building lobby and began demolishing the southern end.

Sukenik's response? "Oh, I love to watch construction." Jackhammers began pounding away for hours a day. "I love the noise," he said.

The Zeckendorfs served Sukenik with papers setting in motion the multiyear demolition-related eviction process they'd hoped to avoid. "Finally, it had all come down to a simple question: Where's the cash?" Will recalls. "This is just a break-the-phone moment. We've got a 52,000-square-foot property with one tenant."

The Zeckendorfs turned to a third lawyer who knew Rozenholc. "And finally, we get a number, which is enough to break another phone."

But at last they had a deal. Fortunately, during Sukenik's extended silence, they'd bought the Essex House condo, which set them back $2 million. They won't reveal the additional sum they finally paid Sukenik; Will says only that it was "by far the highest price ever paid to [relocate] a single tenant in the city of New York."

It seems that if you'd like to get mega millions upon your eviction, you need to be an octogenarian, reclusive bachelor, who's comfortable with loud construction as background noise. It also helps if you're a genius that knows everything about the developers so that you can hold out until "the price is right."