Real Estate: The Restraining Hand

In return for the $43.7 million that they pumped last year into the real estate empire of Manhattan’s William Zeckendorf, 57, his new British partners extracted one condition: “From now on, anything we don’t like won’t happen.” In response, aggressive Bill Zeckendorf, who had been keeping in fighting trim by agilely staying one step ahead of his creditors, earnestly promised to indulge in “less shooting from the hip.” Longtime students of the Zeckendorf saga wondered just how long Bill Zeckendorf could stay away from grandiose real estate projects.

His restraint has confounded them. Instead of trying to lure his partners into big, risky new realty enterprises, Zeckendorf has manfully sold one property after another to acquire new working capital. Last week he spun off five urban redevelopment projects in Manhattan, Philadelphia and Pittsburgh to Alcoa Urban Development Corp., a newly formed subsidiary of mighty Aluminum Co. of America, which wants to do a little diversifying in a way that will also promote the use of aluminum construction. Alcoa gave Zeckendorf Property Corp. (an equal partnership between the British consortium and Zeckendorf’s Webb & Knapp Inc.) $10 million in cash, a 90% interest in Alcoa Urban Development Corp., and a note for $25.6 million payable within eleven years.

Later in the week, Zeckendorf retrenched still more, sold off one-third of Manhattan’s Savoy Hilton Hotel (which he owns, but which is managed by Hilton) to London Merchant Securities, Ltd., a British investment trust. He has also agreed to sell 850 acres of development land in California.

Behind all this retrenchment, the restraining hand of the British is visible. Says Henry R. Moore, vice chairman of London’s Second Covent Garden Property Co., a director of Britain’s Philip Hill group, and the Englishman in charge of keeping watch on Zeckendorf: “The program is to spend the next three to five years developing the property we now have. We have absolutely no intention of making any further purchases.” Zeckendorf says he feels the same way. With the British holding a veto in Zeckendorf Property, he could hardly say otherwise. Besides, after all those years of borrowing from Peter to pay Paul, Bill Zeckendorf seems to find financial solidity a satisfying new condition.