‘No-Nonsense’ and a Sopwith Camel
Tom Acitelli Jan. 19, 2010, 1:11 p.m.
Building tops in downtown Manhattan offer little in the way of eye-catching spectacle—imagine, for a minute, that you’re staring down, not up, at one of those gargantuan fortresses of steel—and 77 Water Street is not a structure that readily distinguishes itself from its Financial District cohorts. It’s an oversize air-conditioner of a building, vents running like industrial gills up its sides, roughly the color of an old computer monitor.
But if you could manage a glimpse from above, you’d see its airplane.
For the past four decades, a World War I Sopwith Camel fighter has sat idling on a long green runway atop the building’s roof. A source of amused curiosity for the denizens of overlooking skyscrapers (as well as some initial trouble with the Federal Aviation Administration), the life-size model airplane has otherwise maintained something of a nonexistent existence. Not open to the public, invisible from the street below, it sits at the edge of its runway eternally poised for flight.
In March of 2008, Goldman Sachs put 77 Water Street on the market. It had leased the entire nearly 600,000-square-foot building in 2000-one of several ancillary office buildings it rented in the neighborhood of its Broad Street headquarters. That was at the height of the 1990s dot-com boom, when projections indicated the firm’s workforce could expand to as many as 30,000 employees within a decade. It was also the year that the boom went bust, and Goldman never moved in.
Now after close to a decade, as the firm relocates its headquarters to the new 200 West Street, Goldman is finally closing several major deals in the building it never actually occupied. AT&T will take the largest plot at 100,000 square feet, followed by law firm Lewis Brisbois Bisgaard & Smith, UnitedHealthcare and OneBeacon Insurance Group. The rents were around $35 a square foot, according to Crain’s, with generous building allowances.
For a firm that trades largely in invisible things, especially if that firm holds secrecy as a governing covenant, real estate can sometimes offer a singularly corporeal history: gambles and doubling-backs, an artful dodge of a broader economic trajectory here, a negotiation of a political one there, all spelled out in concrete and stone. Between a roughly $40 billion government bailout, payout on its AIG debt, prodigious bonuses and the recent revelation that Goldman bet heavily against the very mortgage-related securities it peddled, it’s not surprising that an empty building in the Financial District has received little scrutiny. But the history of Goldman at 77 Water Street—a non-history, really, since it was never actually there—is an odd glimpse into the famously guarded company.
In the 1960s, Melvyn Kaufman, the developer of 77 Water Street, acquired a reputation as something of a maverick, an iconoclast—a rogue developer, if you will. It’s a reputation he earned not so much for his buildings themselves—numbingly banal boxes engorged to block-swallowing hulk—but for his attitude toward them. “Every building is an obscenity,” he once said. “I think every building carries with it an obligation that from the moment you begin to the day you die, you must apologize.”
It’s difficult to imagine many developers today apologizing for their buildings, even when the obscenities of those buildings are markedly apparent to the rest of us. But Mr. Kaufman did more than apologize. He constructed physical incarnations of his apologies from metal and stone. He commissioned art objects and whimsical public spaces in and around his obscenities, as if to cushion the blow. The result was a curious dynamic: mini-carnivals encased in glass-and-travertine tombs. On Third Avenue, Mr. Kaufman installed a giant game of chess. At 127 John Street, he commissioned Rudolph de Harak to create a neon-lit, corrugated-metal tunnel for an entranceway and a three-story digital clock. The American Institute of Architecture called it “a no-nonsense building with a happy nonsense-filled lobby and sidewalk.”
At 26 stories, the bland and economical 77 Water Street was completed in 1970 with Mr. Kaufman and his brother Robert at the helm. The plans were drawn up by the architects at Emery Roth & Sons, a firm better known for its ability to maximize net rentable area than for its commitment to aesthetics. But this building, too, had its swaths of happy nonsense. A series of ponds meandered through the public plaza, traversed by small footbridges and filled with streambed rocks and jumping metal fish. Heat lamps were shaped like trees and seats like mushrooms. Hyper-modern sculptures were installed here and there, and in an unlikely final touch, an old-fashioned candy store was thrown in, too.
Mr. Kaufman, an admirer of Walt Disney, said of his building philosophy, “The Disney policy, simply stated, is to transmit pleasure and well-being to the public.” Critics, meanwhile, were divided on whether Mr. Kaufman’s antics amounted to cartoonish afterthoughts or transformative amalgams of entertainment and urbanism. New 1961 zoning law incentives for including public spaces in new buildings likely deserved some credit also, although it must be said, few other plazas had the Kaufman flair for theater.
The 1961 zoning laws rung in an era of breakneck, breathless development, encouraging the sort of frenzied tower erecting that the parenthesis about plazas was meant to address, however feebly. New York, it’s often said, is not defined by any coalescing urban vision but by a riot of competing visions, endlessly writing and rewriting each other out of existence. It’s also true, however, that commercial enterprise has always been at the heart of the city’s architectural schemes, all but etched into its blueprints. The 1961 zoning laws just opened the doors a little wider.
At 77 Water Street, with high-roller tenants like IBM, European American Bank and Walston & Co., the Kaufmans fell squarely into the competing visions of their day. The building is a testimony to the calculus of extracting every last square foot of profit from a space, but it also says something about architecture’s potential for whimsy. “You make a zillion dollars from a job and you plunk it down in the middle of a block,” Mr. Kaufman once said. “You owe something to the people for doing that, even if it’s just a place to sit.”
Why did Goldman wait eight years to even put 77 Water Street up for lease? Clearly, it wasn’t waiting for a favorable market. In some ways, the building was always something of an odd choice for Goldman, a firm with famously attention-deflecting preferences in office space. The stultifying brown 85 Broad Street shows no signs of nonsense, happy or otherwise (at least, not in the architecture), and neither, at twice the size and roughly 14 times the cost, does the firm’s new headquarters (though the lobby will contain at least one $5 million painting).
In 2003, as Wall Street was shifting its speculative zeal to the housing market, an article appeared in The Wall Street Journal concerning new regulations on how companies write off their empty office space. It used Goldman’s nearly vacant 77 Water Street as a case study. (Robert Kaufman and a Goldman spokesperson both confirmed that the building has remained largely empty throughout the past decade.) Citing the roughly $75 million charge, or 9 cents a share, Goldman would have been forced to incur for writing off the building, the article speculated that large tenants were refraining from subleasing their space to avoid such a scenario, possibly accounting for millions of square feet of “shadow space” throughout the city. A Goldman spokesperson quoted in the article said the firm was not required to write off the space and that the rules allowed for “management judgment.”
Management judgment turned out to be a source of other debates at 77 Water Street. In 2004, Crain’s reported that the Kaufmans were threatening Goldman with potential litigation for improper maintenance. The public plaza had largely fallen into disrepair: Its trees were dying or dead, an escalator entranceway had been boarded up, pigeons were flying through the light fixtures. To be fair, Goldman said it had proposed renovations, and Melvyn Kaufman was never one to approach litigation timidly (he sued several neighbors in his high-end Westchester enclave as well as Mayor Giuliani). But it’s still unclear what Goldman had in mind for the empty space. In 2000, rather than subleasing from Reliance Insurance, which held a lease for 77 Water Street through 2014, Goldman made a direct, 20-year deal with the Kaufmans. In return, it wanted to manage the entire building. Goldman, it seemed, had serious plans for the real estate. So what changed?
In the wake of Sept. 11, city and state officials forecast a mass commercial migration from Lower Manhattan and dreamed up incentives to convince companies to stay. Never a company to walk away from free government money, Goldman sought $1 billion in tax-free Liberty Bonds and committed early on to build its headquarters cater-cornered to the World Trade Center site. Goldman, after all, understood better than anyone that New York City would remain the sun of the financial solar system, propelled by the millions of invisible transactions that turn the gears of capital enterprise.
Today, with empty real estate something of a national hallmark, Goldman is finally filling its own. Though Robert Kaufman says the parties have settled their differences over the public plaza, the area has the definite look of a shadow space. The ponds have been emptied of water and rocks, stranding their jumping metal fish midair. Gone too are the tree heat lamps, and the mezzanine is boarded up and uninhabited. A sculpture made of several large metal blocks—including one hanging from overhead like a loose chunk of building—looks more convincing than was presumably intended.
The Kaufmans got their zillion dollars, but what did the public get? It’s true that if you really wanted to, you could still sit on one of the plaza’s concrete benches. But you could also sit on the curb if you really wanted to. If the public apologies at 77 Water Street have not fared well, at least the plane, that curious anachronism atop a skyline of high-rises, is still intact. Though for whom exactly it was intended is not altogether clear—certainly not for the public, who never saw it, or for the employees who had no access to the roof. Melvyn Kaufman once said of 77 Water Street that he’d wanted “to make the building disappear. … The scale of any large office building is impossible for a human being to relate to.”
But it was Goldman that really made the building disappear. It’s frequently the things beyond the scale of human imagining—complex financial derivatives, speculative bubbles, shadow real estate—that turn into nothing suddenly. It’s just that most of us aren’t up high enough to catch the vanishing act.