Douglas Durst stands 80 floors above the place in Manhattan that is known less and less as Ground Zero and more as One World Trade Center, a 1,776-foot symbol of American pride and the tallest building in the Western Hemisphere. He can see across the length of Manhattan, then over to New Jersey and then east, all the way to Greenwich, Connecticut. One hundred feet below, a helicopter looks like a child’s toy.
The mind-numbing views come with a catch: Precious few people are signing up to enjoy them.
Since the Durst Organisation stepped in three years ago to manage the building and leasing of New York’s symbol of post-9/11 recovery, only six tenants have signed up for space. Come November, when the building opens and magazine publisher Condé Nast moves in, the tower will be just 60 percent leased, Durst says. To boost that dismal figure, the asking price for the tower’s middle floors recently dropped by 10 percent, to $69 per square foot.
For the port authority of New York & New Jersey and the citizens of those two states that ostensibly control it, that’s bad news: By latest count, it’s shelling out nearly $4 billion to build One World Trade and $10.8 billion more to develop the rest of the site. For the Dursts, it doesn’t matter much. They have a 10 percent equity stake in the tower and a 99-year contract to run and lease it—all with little financial risk. Whether the building rents out next week or several years later, they win in the end: One World Trade will provide steady, solid revenue for future generations of their family real estate business, while growing in value at the same time.
Savvy deals like this have made the Dursts one of New York City’s great real estate dynasties, worth a collective $4.4 billion, according to Forbes, thanks to a real estate portfolio that includes 11 Manhattan skyscrapers, such as One Bryant Park, the third-tallest building on the island at 1,200 feet. Douglas’ grandfather created the Durst Organisation nearly 100 years ago; his father, Seymour, built the family’s first skyscraper; Douglas played a major role in reshaping Times Square and now One World Trade. Frequently described as eccentric, some of the 33 family members who control this empire have varied interests: Seymour was obsessed with the national debt, so he built a giant illuminated National Debt Clock near Times Square; Douglas, an environmentalist, owns an organic farm; Anita, his daughter, a former avant-garde actress, provides free studio space in family and other buildings.
The family shares another trait: a professed disdain for wasteful government spending and market intervention—and an uncanny knack for profiting from it. In 2007, when the “Freedom Tower” was still a messy hole in the ground, Durst and Anthony Malkin (whose family controls the Empire State Building), took out a full-page ad in New York newspapers, urging governor Eliot Spitzer to slow construction down. Their argument: The port authority should wait to build the most important tower until the four other towers were complete, so that One World Trade might capitalise on the others’ success. Durst and Malkin also railed against a plan (one that was jettisoned) to house government agencies in One World Trade: “Why, now, is the government planning to pay for the construction of an overly expensive design to be occupied by government agencies at overly expensive rents, all at the expense of taxpayers’ money which could be put to better uses?”
But when politicians plowed ahead, Durst won the contract to run the building. And why not? “I was against it before it was built,” admits Durst. “If there’s going to be subsidies handed out, they should come our way.”
The Durst’s family tale begins with Joseph Durst, a tailor, who travelled from what is now Poland in 1902 and arrived in New York with three dollars. Within a decade, he was a partner at dressmaker Durst & Rubin. The family legacy first took shape in 1915, when he bought his first building, in Manhattan’s Garment District.
Joseph and his wife, Rose, had five children; three followed their father into the family business. Seymour, the eldest, moved the Dursts into skyscrapers, buying up small parcels under assumed names to eventually create blocks of land ripe for major development.
“He had an incredible amount of courage when it came to putting real estate together,” says Jerry Speyer, one of the two founding partners of New York’s Tishman Speyer, the real estate company that controls Rockefeller Center and the Chrysler Building.
Groundbreaking finally took place on April 28, 2006. By November, Silverstein was out as developer. Even with the insurance money, he didn’t have the money to build. The port authority convinced then governor George Pataki it could do a better job and paid Silverstein $21.5 million to go away.
(This story appears in the 08 August, 2014 issue of Forbes India. To visit our Archives, click here.)