Lunch at The Four Seasons with: Jeffrey Katz
Published by The New York Sun on 2006-01-19
Jeffrey Katz wants people to live in Times Square.
"It's the world's most famous commercial neighborhood - and now we're making it the world's most coveted residential address," said the CEO and principal owner of Sherwood Equities, Inc., a privately held real-estate development company, said yesterday.
Mr. Katz is building a 26-story, glass-sheathed residential tower at 1600 Broadway, at West 48th Street. Scheduled to open in a few months, it will feature 136 luxury condominium apartments, ranging from studios to two-bedroom units.
So who's buying?
Mr. Katz was understandably reticent about giving out the names.
"Who wants to live in Times Square? The world wants to live in Times Square," Mr. Katz said. "Times Square is probably held in higher regard around the world than in New York. But I was surprised how quickly interest rose in the apartments.
"Let's just say some of these people work in the Times Square area and live in the suburbs, but want a pied a terre," he said. "Or they are wealthy individuals from around America and elsewhere - from Dubai, among other places."
They are paying top dollar - the apartments are being sold for between $800,000 and $3 million, and only a few are still available.
And how did Mr. Katz hit on the idea of raising a residential complex amidst glittering hoardings, electronic billboards, hotels, stores and office buildings?
Well, he already owned or managed quite a few of these properties.
For example, Mr. Katz owns 2 Times Square, site of Marriott's Renaissance Hotel. He is a managing partner of 1 Times Square - where the lighted ball descends on December 31 to mark the final 60 seconds of every year before ushering in a new year - with the 25-story building's owner, Jamestown 18, LP.
Dazzlingly lit signs for Budweiser, Coca-Cola, HSBC, Pontiac, Prudential Insurance, Samsung, TDK and Yahoo!, among others, are displayed by Mr. Katz all around Times Square.
"There wasn't any epiphany - any 'Aha!' moment, Mr. Katz said."I'd been toying for some time with the idea of doing something residential. I was always confident that a 5-star luxury residence in the area would fly. I started to connect the dots between a very hot residential market and the possibility of building a luxury complex in Times Square. Then the opportunity to create such a building came along."
To take advantage of the opportunity, and to implement his plans for 1600 Broadway - the site of the 10-story Studebaker brothers building, constructed in 1902 - Mr. Katz needed $100 million. He went to Heleba Bank, which had been founded in Germany in 1832, and which had involved in real-estate development in America earlier.
With his own record of real-estate development dating back more than three decades, Mr. Katz had few problems getting credit.
His involvement with Times Square has encompassed at least two of those decades. Mr. Katz was among the earliest developers who, starting in 1985, embarked on a drive to invest in the neighborhood. He worked with several partners to reinvigorate Duffy Square. He supported Times Square Alliance in an effort to attract more conventional - and also high-profile - businesses.
Mr. Katz learned about the value of such civic engagement from the most influential figure in his life - his father, Ira Katz.
The elder Katz founded Sherwood Equities when his Bronx-born son was still quite young. Jeffrey was encouraged by his father to lend a hand during holidays while he was an economics major at the University of Massachusetts, Amherst. After he'd obtained an MBA from the University of Pennsylvania's Wharton School in real-estate finance, Mr. Katz worked at a construction company in Manhattan, and then formally joined his father's business.
"There was no question that I would go into real estate," he said. "After all, I had apprenticed with someone better than Donald Trump - my own father," Mr. Katz said. "And my mother, Elaine, was also a role model about dealing with people."
His father highlighted a pre-requisite for doing good business.
"My father taught me that being totally honest is an absolute pre-requisite," Mr. Katz said. "He taught me that if you aren't straightforward, people pick up on it immediately. But being straightforward and honest in business is one of the most difficult things - because there's no formula for it. It's hard to make a template because people are different. You almost need an internal radar to guide you, a mechanism within you that tells you what is right and what is wrong."
His internal mechanism told him to disregard skeptical real-estate brokers who warned that a residential project in Times Square would never succeed.
"They said, 'You're crazy!'" Mr. Katz said. "They said that a residential building would simply not fit into Times Square's traditionally garish design."
Mr. Katz knew that it wasn't the garishness but the energy that was a significant element in drawing tourists to the area; last year, a record 41 million tourists came to New York, and virtually all of them coursed through Times Square, long the number 1 tourist attraction of the city.
Mr. Katz also knew that although Times Square was zoned for commercial use, there was nothing in the statutes that prevented a developer from constructing a residential complex.
"I knew that we wouldn't have competition," he said. "There are multiple projects in other neighborhoods. But Times Square had never been marketed for residential purposes."
The absence of such marketing was due primarily to Times Square's longstanding - and deserving - reputation as a cauldron of crime, pornography and prostitution.
With the clean-up that began in 1985, however, physical conditions had changed.
"I felt confident enough to approach an architect," Mr. Katz.
The architect was Jorge Szendiuch of Einhorn Yafee Prescot. Mr. Katz subsequently asked Peter Claman of Schuman Lichtenstein Claman Efron to create the building plans.
Those interiors will feature 10-foot high ceilings, and floor-to-ceiling glass.
"We wanted residents to enjoy the magical views of Times Square," Mr. Katz said.
He also needed to integrate signage - a zoning requirement in Times Square - into the design in such a manner that it would be invisible to residents. And he needed to block space for retail purposes.
The 290-foot-high building will have a two-story retail base with a setback tower whose top five floors are angled outward. The building will also have a 9-story advertising sign in the middle of its southern facade; it has been taken by an international beverage company.
As he watches his project rise these days with his wife Beth, a teacher, Mr. Katz often thinks about what he calls "my personal history with New York."
"I feel very connected to the city because both my grandfathers were born here," he said. "One of them had a goat farm in Harlem. The other one's first job was in the Flatiron building."
"There's one more thing that my father taught me - always be on the lookout for the next idea - the next big thing, as long as you feel sure-footed about it," he said. "So my next project will be that next big thing."
And that would be what?
Mr. Katz wasn't about to give that away.
Senior Writer and Global-Affairs Columnist