Nir Meir, Ziel Feldman, and Helene Feldman.
Picture-Illustration: Curbed; Images: Shutterstock/Getty Photos
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Ziel Feldman is in good firm. No less than that’s what the real-estate developer on the middle of probably the most spectacular meltdowns in latest reminiscence has been telling himself. The Manhattan real-estate trade is a sport of winners and losers, Feldman says, and even titans lose large generally. Over the previous 18 months, Feldman’s agency, HFZ Capital Group, has been obliterated by foreclosures and investor lawsuits, a collapse that has dredged up unflattering particulars in regards to the firm’s interior workings. Which is why Feldman, on a cloudy afternoon earlier this yr, ticked off the names of outstanding builders who’ve, at one level or one other, stared down the barrel of chapter. Stephen Ross, Arthur Zeckendorf Sr., Harry Macklowe.
“Each single one — bar none — has run into doubtlessly career-ending roadblocks,” Feldman says, sitting at a espresso desk in his nook workplace, which, regardless of the imperiled state of his enterprise, overlooks the Plaza Lodge and Central Park past. “It’s not for the faint of coronary heart,” he says. “Most profitable ones have been bankrupt.”
Although the tabloids and real-estate journals have lined HFZ’s fall with a journalistic fervor often reserved for struggle and the Kardashians, that is the primary time Feldman has spoken to the press about his firm’s implosion. He’s clear shaven and his hair, a jet-black bouffant earlier than the pandemic, is trimmed quick and grey.
That Feldman can so simply string collectively a listing of billionaires who’ve bounced again from monetary destroy in all probability says extra in regards to the ludicrous nature of the Manhattan real-estate enterprise than it does Feldman’s personal circumstances. In fact, it’s laborious to check every other builder’s misfortunes with the large pile of rubble by means of which Feldman is presently wading. Along with dropping its portfolio, HFZ has been sued by a slew of contractors, lenders, and traders. Lawsuits are to be anticipated throughout chapter proceedings, however the allegations of impropriety inside a few of the fits — together with accusations that Feldman and his associate skimmed tens of millions to fund their extravagant life — usually are not.
To make issues worse, final yr, one in every of HFZ’s key traders, an Israeli diamond magnate, was convicted of bribery and sentenced to 5 years in a Swiss jail. And the corporate’s former managing director of growth — somebody Feldman employed for greater than 20 years — was arrested and sentenced to jail for awarding contracts to the Mafia. Final yr, the New York State legal professional normal confirmed her workplace was reviewing a fraud criticism towards HFZ, although to this point, nothing appears to have come of that investigation.
Manhattan has all the time been a playground for the wealthy, and the decade-long all-they-can-eat asset buffet that adopted the Nice Recession nurtured a contemporary crop of luxurious builders together with HFZ, who soaked town with models that marketed floor-to-ceiling home windows and hotel-quality facilities. The growth was fueled partially by abroad patrons — from Russia, China, Latin America, and the Center East — who stashed their cash in these models, investments that provided stability and, due to town’s tolerance of LLC property house owners, anonymity. That inflow of utmost wealth reworked New York. In little greater than a decade, town’s median sale value practically doubled, pushed by luxurious condos in neighborhoods basically invented by property builders and their advertising and marketing groups: West Chelsea alongside the Excessive Line and Billionaires’ Row, a neighborhood with a boundary primarily outlined by its being above everybody else.
Luxurious builders raced to maintain up with demand, and HFZ was among the many splashiest of the bunch. By the mid-2010s, the agency was liable for a big proportion of the posh condos coming to market. By 2015, HFZ’s two prime executives, Feldman and managing director Nir Meir, have been showing on lists of essentially the most highly effective builders within the metropolis. Their rise culminated with HFZ’s announcement that it was constructing the XI, a $2 billion megadevelopment alongside the Excessive Line. The XI, which Feldman referred to as his “shining star” throughout our dialog, ought to have bumped Feldman and Meir into the very best echelon of builders, masters of essentially the most recognizable skyline on the planet. As an alternative, over the course of a single real-estate cycle, their firm went from being the trade’s darling to its largest bust.
Insiders and former workers say there isn’t any one cause HFZ imploded, pointing to an array of points — poor decision-making, a chaotic work tradition, extravagant spending, spreadsheets that stated regardless of the bosses needed to listen to. Even those that didn’t have a entrance seat to the turbulence sensed one thing was awry.
“I’d by no means in one million years do a cope with Ziel,” stated one main developer. “He had too many offers, an excessive amount of leverage, an excessive amount of razzle-dazzle.There was all the time a way that issues weren’t what they appeared to be. The pandemic was like that Warren Buffett line: Solely when the tide goes out do you see who’s swimming bare.”
For a time, Feldman additionally blamed the pandemic for HFZ’s woes. In December 2020, HFZ filed a discover with the New York State Division of Labor indicating it had laid off 31 individuals, nearly its whole workers, due to “unforeseeable enterprise circumstances prompted by Covid-19.” However sitting in his workplace, the 63-year-old trains his ire on one particular person: his former associate, Meir.
Feldman and Meir labored collectively for 20 years and, based on former colleagues and buddies, by no means appeared to have any points till all the things got here crashing down. Since then, the 2 have been engaged in an unpleasant, very public divorce.
“We have been like his household. I all the time stated I’ve three youngsters and that I gave them an older brother, Nir,” says Feldman’s spouse, Helene, who’s sitting beside him in his workplace. A former prosecutor within the Brooklyn district legal professional’s workplace, Helene served as HFZ’s “design and inventive” principal. She has blue eyes and platinum-blonde hair and wears black leather-based platform footwear she designed herself. “Ziel actually took him in as a son.”
In August, Feldman filed a lawsuit towards Meir accusing him of engineering a “Machiavellian scheme to counterpoint himself by means of theft, deception and ‘appeal.’” Feldman alleged that Meir diverted tens of millions away from HFZ accounts into his personal pockets. The lawsuit seeks $688 million in damages. (Meir wouldn’t communicate to me on the file for this story.)
“With Nir on the helm, we have been doomed from the start,” Feldman says when he’s performed itemizing previously bankrupt billionaires. “I’m not conscious of every other developer who relied so closely on an individual who turned out to be a really gifted sociopath.”
The XI in April 2022.
Picture: Gary Hershorn/Getty Photos
A Queens native, Feldman began his profession as a real-estate legal professional within the mid-Eighties, a time when, because the journalist Jerry Adler noticed, “actual property changed intercourse because the venue for the on a regular basis fantasies of most Individuals.” Intercourse by no means reclaimed the highest slot, and within the wake of the 1987 stock-market crash, Feldman sensed there was more cash to be made as a developer than as a developer’s legal professional.
Finally, Feldman co-founded a growth agency, Property Markets Group, with a banker named Kevin Maloney. There was no scarcity of alternative within the early ’90s. PMG went after SROs, troubled walk-ups, and uncared for buildings it might afford to purchase and refurbish earlier than elevating rents. As a younger start-up, PMG’s companions prided themselves on preserving overhead low, stuffing workers right into a cramped workplace with area heaters. Everybody besides Feldman labored off low cost folding tables.
“At one finish, there was Ziel along with his leather-topped associate’s desk, and on the different finish, there was me with my card desk,” stated Maloney. “Ziel preferred to have a better lifestyle than I did. That was vital to him.”
In 1994, Maloney and Feldman partnered with Gary Barnett, who right now runs Extell Improvement, probably the most profitable luxury-condo builders within the metropolis, to buy the Belnord, a luxurious Beaux-Arts constructing on the Higher West Facet. The constructing had been uncared for, and its tenants have been locked in a bitter battle with their landlord. Barnett and PMG paid $15 million for the constructing, funded largely by the secretive Israeli diamond supplier Beny Steinmetz, and promised tenants they might spend $5 million on renovations in alternate for the proper to extend rents. The undertaking would function a blueprint for Feldman for 20 years.
Feldman earned a small fortune at PMG. He and Helene constructed a mansion in Englewood impressed by a Fontainebleau chateau they’d toured on their honeymoon. However by the early aughts, Maloney, who continues to run PMG, needed to spend extra time concentrating on offers in Florida, whereas Feldman was desperate to develop in Manhattan.
Individuals who knew and labored with Feldman say he appeared to be pushed by an unstated need to achieve the penthouse of Manhattan actual property: the dynastic households — Durst, Zeckendorf, Speyer, LeFrak, Rose, et al. Feldman preferred to speak about what made a profitable developer, and greater than something, he considered himself as a tastemaker attuned to town’s developments and wishes. In 2005, Feldman began HFZ (Helene, Feldman, Ziel) and introduced with him a couple of PMG workers together with Meir, whom Feldman tapped to be HFZ’s managing principal. In his 20s on the time, Meir was youthful than Feldman. He had quick, darkish hair and the chiseled jaw of an motion determine. He’d grown up between Israel and Paris, and he informed individuals he served within the Israel Protection Forces earlier than shifting to New York within the early aughts.
In Meir, Feldman discovered somebody whose ability and ambition matched Feldman’s personal need to develop HFZ. Meir was excitable, a fast-talking bulldog who dug into the trivialities of each undertaking. Through the day, he pored over spreadsheets, adjusting projections and timetables, and at night time, he’d hit the city to develop relationships with lenders and traders. In that method, Meir complemented Feldman, who more and more loved taking part in the a part of the elder statesman, offering big-picture technique.
After the real-estate bubble burst within the late ’80s, Feldman discovered a irritating fact about postrecession markets: Whereas there was no higher time to purchase actual property, there was additionally no more durable time to search out traders and lenders. To Feldman’s nice satisfaction, Meir proved to be notably adept at elevating cash from each institutional lenders and abroad traders. “JPMorgan beloved him,” Feldman says.
In keeping with Feldman and former colleagues, Meir had a magnetism that drew in rich traders, individuals he would wine and dine at Carbone or La Esquina earlier than taking them to golf equipment. With their backing, HFZ went on a shopping for spree that resembled offers Feldman made within the ’90s with PMG, snatching up distressed buildings different builders wouldn’t contact. The press took discover. “Developer turns flops to gold,” learn a 2013 Crain’s headline that referred to Feldman because the “man of the hour.” The Observer revealed a function on Feldman, saying he’d “emerged out of nowhere” to rescue One Madison Park, the all-glass residential tower with a penthouse that may function Rupert Murdoch’s postdivorce bachelor pad. The Day by day Information referred to as him the “modern-day John Jacob Astor” for his renovation of prewar residences on the Higher West Facet.
“These guys have been magicians about taking part in the capital markets. They knew there was a lot capital on this planet and that banks and bankers have been hungry to place that cash to work,” stated somebody who labored with Feldman and Meir. “However they have been the step-kids making an attempt to get into the world of the massive households controlling actual property. They have been profitable, however they have been doing it in a shady method.”
Traditionally, the households haven’t wanted to depend on international cash to fund their initiatives. They’re so obscenely wealthy that they will, for essentially the most half, afford to play the sport on their very own. But when Feldman’s purpose was to determine a dynasty, he wanted to take action with different individuals’s money.
By the late aughts, Steinmetz’s fortune had ballooned to make him one of many richest individuals in Israel, and he was pumping a whole bunch of tens of millions of {dollars} into real-estate initiatives across the globe. It was an open secret amongst HFZ workers that Steinmetz, who is very non-public about his enterprise and private life, was a serious HFZ backer. However when a reporter from The Actual Deal requested HFZ about its relationship with the diamond supplier in 2016, a spokesperson emphatically denied any private or skilled connection to him.
Emails, textual content messages, and interviews with former HFZ workers present Steinmetz was intimately concerned with HFZ. In reality, at one level, Steinmetz had workers based mostly inside HFZ’s workplace. A number of former HFZ workers recalled Meir taking last-minute journeys to the Mediterranean to satisfy with Steinmetz. In keeping with emails made public in court docket proceedings, Steinmetz would e-mail Meir to debate particulars of offers. As soon as, Steinmetz’s lawyer emailed Meir to ask him to wash the diamond supplier’s title from an funding group chart. Meir dutifully agreed.
Feldman denies ever mendacity about his connection to Steinmetz. He claims Meir erected a firewall between Feldman and the diamond supplier, as he did with most international traders. However HFZ and Steinmetz had good causes to hide their relationship. In 2009, Steinmetz’s firm gained the rights to mine the Simandou mountains in Guinea, probably the most prized mining contracts on this planet. A yr later, Steinmetz offered half of these rights to the Brazilian mining agency Vale for $2.5 billion. Then, in 2014, the Guinean authorities revoked Steinmetz’s rights, alleging his firm had bribed the youngest of the late Guinean president’s 4 wives to safe the deal. In 2021, a Swiss legal court docket discovered Steinmetz responsible of corruption and forgery associated to the Simandou deal, sentencing him to 5 years in jail. (Steinmetz, who lives in Israel, has indicated he intends to attraction the choice. Final yr, Steinmetz was briefly detained in Greece on an Interpol purple discover associated to a 2020 bribery case in Romania through which he was discovered responsible and sentenced to 5 years in jail.)
For years now, Vale has been making an attempt to recoup its preliminary $1.25 billion fee to Steinmetz. As a part of that motion, Vale’s attorneys have traced cash from the Simandou deal to investments Steinmetz made in HFZ initiatives together with the XI. (HFZ isn’t the one developer Vale’s attorneys are all for; they’ve additionally subpoenaed Aby Rosen’s RFR Holding.)
Helene, the daughter of a Holocaust survivor, and Ziel, whose father ran a household textile enterprise, typically speak about their humble roots in Queens. However as HFZ’s portfolio grew, so did the Feldmans’ presence in watermarked images taken at New York society events. They attended galas from Palm Seaside to Antibes, have been staples at Artwork Basel in Miami, and hosted charity fundraisers at their 8,000-square-foot dwelling on Dune Street in Bridgehampton, the place visitors mingled between an infinity pool and a pool-size infinity scorching tub. They chipped in $25,000 for Donald Trump’s 2016 presidential marketing campaign and sat on the board of administrators of a hospital in Israel. Acknowledging a connection to Steinmetz, a controversial determine by Feldman’s personal admission, might have put his success in a brand new gentle.
“Ziel is a really high-flying man, however he was by no means within the households,” stated a former colleague. “He needed to determine that for his household. He needed a generational enterprise. However Rob Speyer isn’t in mattress with Steinmetz.”
The opening of the XI gallery on April 25, 2018.
Picture: Craig Barritt/Getty Photos for XI Gallery
In 2015, HFZ made its most aggressive transfer but, buying the empty 1.75-acre lot at seventeenth Avenue and eleventh Avenue with a plan to construct a big luxurious condominium and resort. Earlier than the sale, the lot had an unremarkable historical past, internet hosting a couple of homes, a string of gasworks amenities, a rail yard, and Edison Properties parking tons. However in 2009, the neighborhood across the lot began to alter. Due to a Bloomberg-era rezoning and the reinvention of the Excessive Line, West Chelsea in a short time grew to become an Eden for high-profile architects trying to go away a mark on Manhattan. In little greater than a decade, Frank Gehry, Thomas Heatherwick, Renzo Piano, Jean Nouvel, Zaha Hadid, and others planted costly buildings that crisscrossed the Excessive Line with shadows. Property values skyrocketed, and by the point Edison put the lot at 76 eleventh Avenue available on the market in 2014, it was a really worthwhile tract of land. When the mud settled, HFZ had the very best bid: $870 million. It stays one of many largest residential-land gross sales in New York Metropolis historical past.
“Everyone gasped. Nobody might consider the value they paid for the land,” stated Andrew Gerringer, a veteran real-estate marketer who has labored with HFZ on quite a few initiatives. “Everyone thought it was a superb space, however these of us within the growth enterprise have been like, Jeez, this can be a actually excessive quantity.”
Feldman’s willingness to pay stemmed, partially, from his imaginative and prescient for the constructing he deliberate to erect there. Feldman believed the XI (variously pronounced ex-eye, eleven, eleventh, zee, or shee, like the overall secretary of the Chinese language Communist Get together, relying on whom you ask) can be so spectacular that it might woo one-percenters away from the Higher East Facet and Billionaires’ Row. The XI would embody what Feldman believed to be the final word Twenty first-century fantasy: a self-contained urban-resort life with areas and facilities that made residents really feel as in the event that they have been dwelling in a resort — a 75-foot swimming pool, a sauna, a wine-tasting room, and an artwork gallery.
Luxurious-condo gross sales have been booming in 2015, however even essentially the most data-driven builders have been rolling the cube. By spending $870 million only for the land, HFZ was beginning in a really deep gap, and it might have to promote the XI’s 576,551 sq. toes of residential models for roughly $4,000 per sq. foot, a value hardly ever secured in neighborhoods that don’t abut Central Park. And that was assuming the market saved apace.
“Only a few individuals within the workplace thought that the XI was a wise deal,” stated a former worker. “There was no skill for any of us beneath Ziel and Nir to affect this resolution. My guess is that Ziel preferred the thought of it. He preferred the eye it introduced him, and Nir wanted to develop the corporate and get large offers and maintain cash coming within the door.”
Builders are by nature optimists, and Feldman was no exception. When The Actual Deal’s Hiten Samtani requested Feldman about criticism of the $870 million price ticket, Feldman balked on the query, saying he had an excessive amount of expertise to let naysayers affect him. “It meant nothing to me,” Feldman replied. “It was truly sort of humorous.”
One cause Feldman shrugged off naysayers was as a result of he had bagged Bjarke Ingels, probably the most sought-after architects on this planet, to design the XI. Starchitects can cost as a lot as 25 to 30 p.c greater than their lesser-known colleagues, and Ingels was all however assured to ship an advanced, costly design, however that didn’t matter to Feldman. Partnering with the younger, swaggering Dane would ship a message to the complete trade: HFZ was prepared to depart its mark on the Manhattan skyline. The ultimate plans referred to as for the highest flooring of the XI’s two towers to cantilever over the shared base by 50 toes, so that they appeared to be leaning, unnervingly, just like the Tower of Pisa. Engineering experiences talked of “torsional irregularity” and “gravity load induced lean,” which added to the “inter-story seismic drift.”
By January 2018, some 800 staff have been employed on the website. Rebar shot out of the bottom like fingers poised to tug the remainder of the increase behind it. After the concrete was poured, Ingles’s design took form, and the primary of the constructing’s 11,000 travertine panels, imported from a quarry in Tivoli, was put in place. Somebody referred to as 311 to report “a constructing that’s leaning south.”
From the beginning, some HFZ workers expressed apprehension about bringing Ingels onto the undertaking. They knew Ingels would ship an advanced — and costly — design that may have a better probability of hitting snags than a traditional constructing. And when the XI’s concrete settled, it did so in such an unpredictable method that the preliminary batch of home windows didn’t match into their frames, triggering one in every of quite a few pricey delays that befell the undertaking.
“The true threat to a developer is the time and the price of funds. That’s for the great builders who estimate all the things correctly and don’t take an excessive amount of without any consideration,” stated Barnett, who partnered with Feldman on the Belnord within the early ’90s and whose firm, Extell, is liable for two of the twiglike towers swaying over Billionaires’ Row. “There are cautious builders and there are ultracautious builders, and Ziel has by no means been both.”
Es Devlin’s “Egg” on show within the XI gallery in 2018.
Picture: Johannes Schmitt-Tegge/image alliance by way of Getty Picture
By 2016, HFZ had grown to make use of greater than 100 individuals, and its Madison Avenue workplaces mirrored the corporate’s quick success, trying extra like a modern-art gallery than a real-estate growth agency. Feldman recurrently talked in regards to the connection between artwork and actual property. “Artists are typically pissed off builders,” he informed Artnet in 2018. “Architects suppose they’re artists. Builders, we expect we’re all of these issues.” (He and Helene say some model of this to me once more throughout our interview.) Workers and guests alike rolled their eyes at a few of the over-the-top items from the Feldmans’ assortment on show on the workplace — together with Patricia Piccinini’s The Pupil, a hyperrealistic pig-baby made with precise human hair, a Gimhongsok canine product of stuffed rubbish baggage forged in bronze, and the George Rental portrait Woman With Inexperienced Hair, which was auctioned at Christie’s for $437,500 after HFZ’s downfall.
Former workers’ descriptions of the artwork ranged from “zany” to “so, so, so horrible.” Everybody believed the artwork was an extension of their bosses’ strategy to growth. Feldman’s obsession with artwork, and the standing his proximity to the artwork world conferred upon him, pissed off some. “Ziel was all the time targeted on stuff that didn’t matter,” stated a former worker. “He thought he was an arbiter of design, fashion, and style. He’d sit in structure conferences and convey his spouse in and suppose that that was the vital a part of the enterprise.”
The artwork wasn’t the one disconcerting presence in HFZ’s workplaces. Feldman and Meir, workers say, ran HFZ as a diarchy through which they shared whole energy. Workers who expressed skilled opinions — or, a number of claimed, details that contradicted the leaders’ factors of view — have been disregarded or ridiculed. One former worker, speaking about her expertise on a latest wellness podcast, described HFZ’s environment as “icky,” “Wolf of Wall Avenue-y,” and “Machiavellian.”
Former workers stated it was Meir, greater than Feldman, who set the tone. By the point HFZ broke floor on the XI, Feldman was hardly concerned in his personal firm’s day-to-day operations. Meir floated across the hallways, popping into individuals’s workplaces to grill them about HFZ initiatives. Along with his expertise for elevating capital, Meir had a present for numbers. At instances, former workers stated, it was as if the corporate’s true ledger existed solely in Meir’s head. HFZ proposals weren’t submitted to traders till Meir regarded over the numbers. Typically, Meir would ask workers to juice spreadsheets so initiatives regarded higher on paper. Often, if an worker refused to change a projection, Meir would ask the worker to ship him the Excel spreadsheet, presumably so he might make the adjustment.
Within the spring of 2018, HFZ opened the XI Visionaries Gallery, a 12,000-square-foot salesroom situated in a storefront a couple of blocks from the XI. The area was not like any gross sales gallery anybody within the trade had ever seen earlier than. At its middle have been “multi-sensory installations” by Es Devlin, a British artist recognized for designing elaborate stage units for Kanye West, Girl Gaga, and the Weeknd. On the gallery’s opening, males in black fits poured complimentary glasses of Macallan 25, which retails at $1,999 a bottle. One former worker estimated the entire value of the gross sales gallery to be no less than $25 million. Items went on sale within the fall of 2018. Jeff Bezos reportedly confirmed curiosity in a penthouse earlier than choosing a Madison Avenue unfold. Graeme Hart, the richest particular person in New Zealand, snatched up one of many XI’s penthouses for $34 million.
Then the luxury-condo market began to pressure below the load of extra stock. A 2019 evaluation by StreetEasy estimated {that a} quarter of all new luxurious residences constructed after 2013 had not discovered patrons, an inauspicious indicator for a developer that had not too long ago introduced 236 glistening models to market. (Filings would later present that simply 38 of these models, or 16 p.c, have been offered by the point HFZ went bust.) Feldman remained optimistic that his model of luxurious was sturdy sufficient to buck market developments. “It’s in regards to the buildings — you may’t broad-stroke a whole market,” he informed the New York Instances.
But HFZ was already displaying indicators of misery. In October 2019, HFZ did not pay an $8.2 million bill to Pioneer Window, which had a $98 million contract for work on the XI. Initially, executives at Omnibuild, the development agency overseeing the XI, weren’t stunned by the unpaid bill. “We knew by means of the trade that they could be just a little little bit of a loopy bunch, however I assume all people’s loopy on this enterprise,” Omnibuild COO John Mingione informed Crain’s. However not all of HFZ’s contractors might afford to be so affected person. “GUYS — CABINETS ARE READY — I NEED ‘my’ MONEY,” Jan Efraimsen wrote in an e-mail in November. Efraimsen’s firm had been producing millwork for an HFZ constructing on the Higher West Facet, and Efraimsen was making an attempt to gather an impressive steadiness of $163,652.90, some huge cash for his small operation. “I’m determined for cash proper now–something will work,” he wrote in a follow-up e-mail. “Sadly we simply don’t have solutions,” David Szczapa, a undertaking supervisor at HFZ, wrote again to Efraimsen, who was later pressured to put off three of his carpenters. Szczapa’s arms have been tied. By the tip of 2019, it appeared as if all funds relied on Meir’s approval. In keeping with three former HFZ workers, undertaking managers would inform Meir that some contractor was complaining as a result of they hadn’t been paid solely to be informed that he would deal with it.
The unpaid invoices have been the primary flutters of HFZ’s tailspin. On the finish of 2019, the FBI arrested John Simonlacaj, HFZ’s managing director of growth, for providing profitable XI contracts to Gambino associates in alternate free of charge work on his Westchester dwelling. (He finally pleaded responsible to submitting a false tax return and was sentenced to 4 months in jail final summer time.) This wasn’t Simonlacaj’s first arrest. In 2015, he had spent three months in jail for tax fraud. Simonlacaj had labored for Feldman going all the best way again to PMG, and when he completed his jail sentence, Feldman allowed him to return to work, a choice Feldman now calls “a giant mistake.”
“They simply let him present again up. It was mind-blowing that they by no means acknowledged it,” one former HFZ worker stated. “Why would they let a convicted legal come again?”
Then COVID-19 hit, and a wave of existential dread swept by means of the real-estate trade. “We have been overleveraged even earlier than COVID,” stated a former HFZ worker within the accounting division. “They have been relying on acquisitions to pay the payroll, insurance coverage, all the things. So there was instantly no cash.” HFZ’s international traders have been getting agitated. Yoav Harlap, an Israeli automobile importer and artwork collector who had given HFZ greater than $20 million for a growth on the Higher East Facet and a $10 million funding within the XI, started pestering Feldman and Meir about reimbursement. In the meantime, the Los Angeles–based mostly hedge fund CIM Group, which had loaned HFZ $90 million to transform 4 prewar buildings on the Higher East Facet, was pestering Meir a few late fee. “What’s the newest? Working out of time,” wrote Adam Gibbons, a managing director at CIM, one afternoon in July. “On it. 2 min,” Meir wrote again. 4 hours later, Meir despatched Gibbons a affirmation code displaying he’d initiated a fee. The code turned out to be pretend, based on CIM, as The Actual Deal would later report.
Within the early days of the pandemic, Meir and his household, like many Manhattanites, decamped to the Hamptons. In 2013, Meir had knocked down a ten-bedroom beachfront “cottage” on Southampton’s Meadow Lane and constructed a contemporary 6,600-square-foot mansion. The house had been a gathering place for buddies, household, and the occasional HFZ worker. Meir and his spouse, Ranee Bartolacci, recurrently hosted omakase nights, bringing a sushi chef from Manhattan for personal dinners. Typically omakase nights can be adopted on Sundays with pizza catered by Nolita’s Pasquale Jones.
“Nir spent more cash than God,” stated a former HFZ worker. “Nobody was clear the place the cash was coming from. What success had the corporate realized that we have been unaware of?” Feldman’s criticism towards Meir alleges that Meir’s month-to-month American Categorical invoice typically exceeded $400,000. Meir spent a whole bunch of 1000’s on wine and saved a steady of luxurious vehicles together with 5 Mercedes G-Class wagons and a 1996 Porsche 911 Turbo valued at $300,000.
Again on the workplace, I ask the Feldmans why they by no means questioned Meir’s spending. On reflection, Feldman says, he knew little or no about Meir’s private life. He and his spouse declare they’d assumed the cash had come from Bartolacci’s grandfather, not from HFZ. That assumption may be believable if Meir had merely been somebody they often ran into at Hamptons events and never somebody with whom Feldman had entrusted his multibillion-dollar enterprise or somebody whom Helene, minutes earlier, referred to as an adopted son.
“It’s laborious to explain,” Helene pleads. “It’s a must to begin with the mind-set that there was no cause to not belief him.”
In keeping with Feldman, a sequence of incidents within the fall of 2020 tipped him off to how unhealthy issues had gotten at his firm. Someday on the workplace, Feldman stated he checked in on a bunch of accountants finishing up an audit for an HFZ investor. When Feldman requested if they’d all the things they wanted, the accountants informed him Meir had instructed them to not trouble Feldman as a result of he’d not too long ago had open-heart surgical procedure. (He had not.) Then Feldman stated he was alerted to paperwork bearing his signature, which he alleges Meir cast. Feldman additionally discovered a few time period sheet that he claims Meir doctored to look as if HFZ had acquired a $900 million mortgage from JPMorgan Chase in 2020. (HFZ had acquired the mortgage in 2019.) The ultimate straw got here when Feldman spoke to an investor who stated Meir had fabricated a Korean investor, even enlisting somebody with a Korean accent to dial right into a cellphone assembly, based on Feldman’s criticism. Feldman fired Meir in December 2020. It was the final time the 2 spoke.
Former HFZ workers have been fast to forged Meir as a rogue, however their descriptions of Feldman have been extra advanced. He was aloof or asleep on the wheel. Nobody might say how a lot Feldman did or didn’t find out about the best way Meir was dealing with HFZ’s enterprise. However they agreed that Feldman reveled within the success Meir delivered to HFZ, and so they blamed him for the corporate’s downfall simply as a lot as they blamed Meir.
“You get complacent. After all I’m guilty,” Feldman says, admitting for the primary time that he made errors past trusting Meir. “However there actually is not any state of affairs, in case you actually examine it, the place it seems to say that Ziel might have recognized, ought to have recognized, or was concerned with it.”
That line of protection hasn’t performed properly in court docket. In March, the Appellate Division of the New York State Supreme Courtroom stated Feldman was totally conscious of Meir’s position and authority at HFZ, ruling that he was accountable for the claims introduced by Harlap, the Israeli automobile importer. “For a number of months, Feldman had discover of all of the underlying transactions, in addition to the default thereunder and negotiations to resolve it,” the court docket wrote. “He then acquired precise copies of the allegedly unauthorized agreements, signed by Meir and one bearing his personal ostensible signature, however performed no investigation and made no objection for 3 months previous to being sued.”
As a result of Feldman provided private ensures on HFZ initiatives — risking his internet price, some $110 million — the corporate’s collapse has come at appreciable private value. A yr in the past, the Feldmans offered their mansion within the Hamptons for $50 million, and so they not too long ago diminished the asking value for his or her 6,100-square-foot, black-marbled penthouse on the Marquand, an HFZ constructing on 68th Avenue and Madison Avenue.* They’ve offered off most of their artwork assortment as properly.
“Folks inform you all of the clichés: ‘Oh, your loved ones might be so a lot better off.’ Yeah, it’s very candy and really good. You learn The Day by day Stoic, it’s great,” Helene says, rolling her blue eyes again. “I believe, for us, it has actually given us an opportunity to reset. It has modified our life drastically, definitely from a way of life perspective. No, we don’t have the home within the Hamptons anymore, and we don’t know what tomorrow’s going to convey. However as a household, and talking as a mom, I’ve seen my household and kids rise to the event after which some.”
When Meir listed his Southampton dwelling final yr, Feldman filed a lawsuit claiming the beachfront mansion had been HFZ’s property all alongside. Feldman accused Meir of forging his signature — once more — to achieve management of the home. In Could, New England Patriots proprietor Robert Kraft purchased the house for practically $43 million. (The overwhelming majority of the proceeds in the end went to Bartolacci, below whose title it was registered. In a deposition, Bartolacci claimed the home was a birthday current however was not sure who had truly put up the cash to buy the property, per The Actual Deal.) In keeping with Feldman’s swimsuit, Meir continues to spend like a Saudi prince, blowing a whole bunch of 1000’s on effective wine, strip golf equipment, non-public jets, and yachts. He and Bartolacci additionally spent $1.5 million on gold cash and bullion.
Meir remains to be on the hook for a $19 million judgment Harlap gained towards him. Harlap has alleged that, to be able to keep away from fee, Meir transferred his belongings to Bartolacci and fled New York. No less than a part of that is true: Final summer time, Meir and his household rented a contemporary bayside dwelling in Miami Seaside for $150,000 a month. In September, the owner sued Bartolacci, whose title is on the lease, saying she had made some unauthorized modifications to the rental, which included the set up of a brand new dock, the substitute of the pure grass with artificial turf, and the development of a cage for the household’s bearded dragon.
Of the half-dozen main builders interviewed for this story and plenty of extra real-estate insiders, none would predict the tip of both Meir’s or Feldman’s careers. That’s as a result of their futures rely upon whether or not they’ll be capable to elevate cash, and as one former HFZ worker put it, the market’s blind starvation for New York actual property is insatiable.
“Persons are so scorching for New York actual property — non-public traders are so keen to place cash into New York actual property — that they don’t even pay a lot consideration to the individuals they’re investing in,” the previous worker stated. “They simply gave HFZ a whole bunch of tens of millions of {dollars} as a result of they trusted Nir or Ziel? All of it sort of made me see how unsophisticated private-lender capital was. Banks have been lending after which turning a blind eye for years. HFZ borrowed billions on what? A private assure? A one-page steadiness sheet Ziel had?”
Within the meantime, the posh real-estate market has moved on with out HFZ — gross sales of high-end models stay greater than 50 p.c greater on a month-to-month foundation than they have been in 2015. As for Feldman’s shining star, the XI, work on the constructing stopped in 2020, and the development website has been eerily quiet for the higher a part of two years. In December, the Witkoff Group partnered with billionaire Len Blavatnik to buy HFZ’s stake within the undertaking for $900 million at a debt public sale. Witkoff discovered a brand new contractor to supervise the location, and up to now few weeks, there have been indicators that development is restarting. Scaffolding has been repositioned, and the cladding is once more creeping up the perimeters of the towers, securing the XI’s place in Manhattan’s skyline one travertine panel at a time.
*A earlier model of this text stated the Marquand, an HFZ constructing on 68th St. and Madison Avenue, is mired in litigation. In reality, HFZ isn’t concerned in litigation over the Marquand and the story has been up to date to replicate that.
