Tag Archives: billionaire

Idea Soup

Philanthrophy and Playing God

I would suspect that most of us, as we age and enter the second half of our fleeting existence, dream of leaving something behind, a legacy of some sort. That something may be an invaluable collection of intangibles: thoughts, ideas and values that we pass on to our children, partners, family and friends. For others the legacy may be more physical and yet still intimate: favorite books, old toys, a battered mug, personal photos, jewelry, a treasured car. And, for others still — usually the much more wealthy among us — the legacy usually involves making a grander exit for a community or even a nation: a newly named wing of a hospital or even an entire building; a donation of art to the nation; an endowment to a favored charity or alma mater; a research chair at the local university; a bequest of land for future generations to enjoy.

During last 25-30 years we have seen the continued expansion of this ultra-wealthy class, the multi-billionaires. Despite some rather vulgar and ostentatious displays of excess, many have pledged to give most of their riches away — while still living — to worthy causes. The philanthropic who’s-who includes: Bill and Melinda Gates, Warren Buffett, Larry Ellison, Michael Bloomberg, Zuckerberg/Chan, Paul Allen, to name but a few.

This leads to an interesting question: are our billionaire contemporaries trying to play God?

From the Independent:

Is anyone else left underwhelmed by the unbearable arrogance of Mark Zuckerberg? Not content with saving Africa through his Internet.org project to get “everyone in the continent” online, he’s now decided that his money can eradicate all disease. Not just Alzheimer’s, not just the many variations of cancer, not just HIV, not just the Zika virus, not just rare genetic abnormalities and not just the common cold: all disease, because that’s what $3bn can get you. Why did none of us think of this before?

Following the birth of their first child Max last year, Zuckerberg and his wife Priscilla Chan pledged to give away 99 per cent of their wealth to philanthropic causes. Now I have to admit this is slightly more inspiring than the widespread reports Jay Z had decided to stop using the word “bitch” after the birth of his daughter Blue Ivy (a change of heart that was later denied by his publicists, FYI, so expect the B-word to continue populating Jay’s lyrics for the foreseeable future), but it’s still, at best, hopelessly naïve and incredibly American.

…

It’s a nice idea that if you become rich enough, you can start to play God – but there are clear limits to Zuckerberg’s apparent omnipotence. $3bn is a wonderful gift to medicine, which will undoubtedly be used for some very positive research, facilities and treatments. Zuckerberg and Chan are being wonderfully philanthropic and unselfish in their huge donation of funds. But the Facebook founder’s claim that lots of money can magically render all disease a minor, manageable inconvenience is unnecessarily grandiose. Killer disease will always exist – everybody dies of something – and sometimes accepting your limits is just as important as shooting for the moon.

Read the entire article here.

Idea Soup

The Haves versus the Have-Mores

los-angeles-billionaires

Poverty and wealth are relative terms here in the United States. Certainly those who have amassed millions will seem “poor” to the established and nouveaux-riche billionaires. Yet these is something rather surreal in the spectacle of watching Los Angeles’ lesser-millionaires fight the mega-rich for their excess. As Peter Haldeman says in the following article of Michael Ovitz, founder of Creative Arts Agency, mere millionaire and landlord of a 28,000 square foot mega mansion, “Mr. Ovitz calling out a neighbor for overbuilding is a little like Lady Gaga accusing someone of overdressing. Welcome to the giga-mansion — Roman emperor Caligula, would feel much at home in this Californian circus of excess.

From NYT:

At the end of a narrow, twisting side street not far from the Hotel Bel-Air rises a knoll that until recently was largely covered with scrub brush and Algerian ivy. Now the hilltop is sheared and graded, girded by caissons sprouting exposed rebar. “They took 50- or 60,000 cubic yards of dirt out of the place,” said Fred Rosen, a neighbor, glowering at the site from behind the wheel of his Cadillac Escalade on a sunny October afternoon.

Mr. Rosen, who used to run Ticketmaster, has lately devoted himself to the homeowners alliance he helped form shortly after this construction project was approved. When it is finished, a modern compound of glass and steel will rise two stories, encompass several structures and span — wait for it — some 90,000 square feet.

In an article titled “Here Comes L.A.’s Biggest Residence,” The Los Angeles Business Journal announced in June that the house, conceived by Nile Niami, a film producer turned developer, with an estimated sale price “in the $150 million range,” will feature a cantilevered tennis court and five swimming pools. “We’re talking 200 construction trucks a day,” fumed Mr. Rosen. “Then multiply that by all the other giant projects. More than a million cubic yards of this hillside have been taken out. What happens when the next earthquake comes? How nuts is all this?”

By “all this,” he means not just the house with five swimming pools but the ever-expanding number of houses the size of Hyatt resorts rising in the most expensive precincts of Los Angeles. Built for the most part on spec, bestowed with names as assuming as their dimensions, these behemoths are transforming once leafy and placid neighborhoods into dusty enclaves carved by retaining walls and overrun by dirt haulers and cement mixers. “Twenty-thousand-square-foot homes have become teardowns for people who want to build 70-, 80-, and 90,000-square-foot homes,” Los Angeles City Councilman Paul Koretz said. So long, megamansion. Say hello to the gigamansion.

In Mr. Rosen’s neighborhood, ground was recently broken on a 70,000- to 80,000-square-foot Mediterranean manse for a citizen of Qatar, while Chateau des Fleurs, a 60,000-square-foot pile with a 40-car underground garage, is nearing completion. Not long ago, Anthony Pritzker, an heir to the Hyatt hotel fortune, built a boxy contemporary residence for himself in Beverly Hills that covers just shy of 50,000 square feet. And Mohamed Hadid, a prolific and high-profile developer (he has appeared on “The Shahs of Sunset” and “The Real Housewives of Beverly Hills”), is known for two palaces that measure 48,000 square feet each: Le Palais in Beverly Hills, which has a swan pond and a Jacuzzi that seats 20 people, and Le Belvédère in Bel Air, which features a Turkish hammam and a ballroom for 250.

Why are people building houses the size of shopping malls? Because they can. “Why do you see a yacht 500 feet long when you could easily have the same fun in one half the size?” asked Jeffrey Hyland, a partner in the Beverly Hills real estate firm Hilton & Hyland, who is developing five 50,000-square-foot properties on the site of the old Merv Griffin estate in Beverly Hills.

Le Belvédère was reportedly purchased by an Indonesian buyer, and Le Palais sold to a daughter of President Islam Karimov of Uzbekistan. According to Mr. Hyland, the market for these Versailles knockoffs is “flight capital.” “It’s oligarchs, oilgarchs, people from Asia, people who came up with the next app for the iPhone,” he said. While global wealth is pouring into other American cities as well, Los Angeles is still a relative bargain, Mr. Hyland said, adding: “Here you can buy the best house for $3,000 a square foot. In Manhattan, you’re looking at $11,000 a square foot and you get a skybox.”

Speculators are tapping the demand, snapping up the best lots, bulldozing whatever is on them and building not only domiciles but also West Coast “lifestyles.” The particulars can seem a little puzzling to the uninitiated. The very busy Mr. Niami (he also built the Winklevoss twins’ perch above the Sunset Strip) constructed a 30,000-square-foot Mediterranean-style house in Holmby Hills that locals have called the Fendi Casa because it was filled with furniture and accessories from the Italian fashion house.

The residence also offered indoor and outdoor pools, commissioned artwork by the graffiti artist Retna, and an operating room in the basement. “It’s not like it’s set up to take out your gallbladder,” said Mark David, a real estate columnist for Variety, who has toured the house. “It’s for cosmetic procedures — fillers, dermabrasion, that kind of thing.” The house sold, with all its furnishings, to an unidentified Saudi buyer for $44 million.

Read the entire article here.

Image: Satellite view of the 70,000 square foot giga-mansion development in Bel Air. Los Angeles. Courtesy of Google Maps.

Environs, Idea Soup

Millionaires are So Yesterday

Not far from London’s beautiful Hampstead Heath lies The Bishops Avenue. From the 1930s until the mid-1970s this mile-long street became the archetypal symbol for new wealth; the nouveau riche millionaires made this the most sought after — and well-known — address for residential property in the nation (of course “old money” still preferred its stately mansions and castles). But since then, The Bishops Avenue has changed, with many properties now in the hands of billionaires, hedge fund investors and oil rich plutocrats.

From the Telegraph:

You can tell when a property is out of your price bracket if the estate agent’s particulars come not on a sheet of A4 but are presented in a 50-page hardback coffee-table book, with a separate section for the staff quarters.

Other giveaway signs, in case you were in any doubt, are the fact the lift is leather-lined, there are 62 internal CCTV cameras, a private cinema, an indoor swimming pool, sauna, steam room, and a series of dressing rooms – “for both summer and winter”, the estate agent informs me – which are larger than many central London flats.

But then any property on The Bishops Avenue in north London is out of most people’s price bracket – such as number 62, otherwise known as Jersey House, which is on the market for £38 million. I am being shown around by Grant Alexson, from Knight Frank estate agents, both of us in our socks to ensure that we do not grubby the miles of carpets or marble floors in the bathrooms (all of which have televisions set into the walls).

My hopes of picking up a knock-down bargain had been raised after the news this week that one property on The Bishops Avenue, Dryades, had been repossessed. The owners, the family of the former Pakistan privatisation minister Waqar Ahmed Khan, were unable to settle a row with their lender, Deutsche Bank.

It is not the only property in the hands of the receivers on this mile-long stretch. One was tied up in a Lehman Brothers property portfolio and remains boarded up. Meanwhile, the Saudi royal family, which bought 10 properties during the First Gulf War as boltholes in case Saddam Hussein invaded, has offloaded the entire package for a reported £80 million in recent weeks. And the most expensive property on the market, Heath Hall, had £35 million knocked off the asking price (taking it down to a mere £65 million).

This has all thrown the spotlight once again on this strange road, which has been nicknamed “Millionaires’ Row” since the 1930s – when a million meant something. Now, it is called “Billionaires’ Row”. It was designed, from its earliest days, to be home to the very wealthy. One of the first inhabitants was George Sainsbury, son of the supermarket founder; another was William Lyle, who used his sugar fortune to build a vast mansion in the Arts and Crafts style. Stars such as Gracie Fields also lived here.

But between the wars, the road became the butt of Music Hall comedians who joked about it being full of “des-reses” for the nouveaux riches such as Billy Butlin. Evelyn Waugh, the master of social nuance, made sure his swaggering newspaper baron Lord Copper of Scoop resided here. It was the 1970s, however, that saw the road vault from being home to millionaires to a pleasure ground for international plutocrats, who used their shipping or oil wealth to snap up properties, knock them down and build monstrous mansions in “Hollywood Tudor” style. Worse were the pastiches of Classical temples, the most notorious of which was built by the Turkish industrialist Halis Toprak, who decided the bath big enough to fit 20 people was not enough of a statement. So he slapped “Toprak Mansion” on the portico (causing locals to dub it “Top Whack Mansion”). It was sold a couple of years ago to the Kazakhstani billionairess Horelma Peramam, who renamed it Royal Mansion.

Perhaps the most famous of recent inhabitants was Lakshmi Mittal, the steel magnate, and for a long time Britain’s richest man. But he sold Summer Palace, for £38 million in 2011 to move to the much grander Kensington Palace Gardens, in the heart of London. The cast list became even more varied with the arrival of Salman Rushdie who hid behind bullet-proof glass and tycoon Asil Nadir, whose address is now HM Belmarsh Prison.

Of course, you can be hard-pressed to discover who owns these properties or how much anyone paid. These are not run-of-the-mill transactions between families moving home. Official Land Registry records reveal a complex web of deals between offshore companies. Miss Peramam holds Royal Mansion in the name of Hartwood Resources Company, registered in the British Virgin Islands, and the records suggest she paid closer to £40 million than the £50 million reported.

Alexson says the complexity of the deals are not just about avoiding stamp duty (which is now at 7 per cent for properties over £2 million). “Discretion first, tax second,” he argues. “Look, some of the Middle Eastern families own £500 billion. Stamp duty is not an issue for them.” Still, new tax rules this year, which increase stamp duty to 15 per cent if the property is bought through an offshore vehicle, have had an effect, according to Alexson, who says that the last five houses he sold have been bought by an individual, not a company.

But there is little sign of these individuals on the road itself. Walking down the main stretch of the Avenue from the beautiful Hampstead Heath to the booming A1, which bisects the road, more than 10 of these 39 houses are either boarded up or in a state of severe disrepair. Behind the high gates and walls, moss and weeds climb over the balustrades. Many others are clearly uninhabited, except for a crew of builders and a security guard. (Barnet council defends all the building work it has sanctioned, with Alexson pointing out that the new developments are invariably rectifying the worst atrocities of the 1980s.)

Read the entire article here.

Image: Toprak Mansion (now known as Royal Mansion), The Bishops Avenue. Courtesy of Daily Mail.

Idea Soup

On Being a Billionare For a Day

New York Times writer Kevin Roose recently lived the life of a billionaire for a day. His report while masquerading as a member of the 0.01 percent of the 0.1 percent of the 1 percent makes for fascinating and disturbing reading.

[div class=attrib]From the New York Times:[end-div]

I HAVE a major problem: I just glanced at my $45,000 Chopard watch, and it’s telling me that my Rolls-Royce may not make it to the airport in time for my private jet flight.

Yes, I know my predicament doesn’t register high on the urgency scale. It’s not exactly up there with malaria outbreaks in the Congo or street riots in Athens. But it’s a serious issue, because my assignment today revolves around that plane ride.

“Step on it, Mike,” I instruct my chauffeur, who nods and guides the $350,000 car into the left lane of the West Side Highway.

Let me back up a bit. As a reporter who writes about Wall Street, I spend a fair amount of time around extreme wealth. But my face is often pressed up against the gilded window. I’ve never eaten at Per Se, or gone boating on the French Riviera. I live in a pint-size Brooklyn apartment, rarely take cabs and feel like sending Time Warner to The Hague every time my cable bill arrives.

But for the next 24 hours, my goal is to live like a billionaire. I want to experience a brief taste of luxury — the chauffeured cars, the private planes, the V.I.P. access and endless privilege — and then go back to my normal life.

The experiment illuminates a paradox. In the era of the Occupy Wall Street movement, when the global financial elite has been accused of immoral and injurious conduct, we are still obsessed with the lives of the ultrarich. We watch them on television shows, follow their exploits in magazines and parse their books and public addresses for advice. In addition to the long-running list by Forbes, Bloomberg now maintains a list of billionaires with rankings that update every day.

Really, I wondered, what’s so great about billionaires? What privileges and perks do a billion dollars confer? And could I tap into the psyches of the ultrawealthy by walking a mile in their Ferragamo loafers?

At 6 a.m., Mike, a chauffeur with Flyte Tyme Worldwide, picked me up at my apartment. He opened the Rolls-Royce’s doors to reveal a spotless white interior, with lamb’s wool floor mats, seatback TVs and a football field’s worth of legroom. The car, like the watch, was lent to me by the manufacturer for the day while The New York Times made payments toward the other services.

Mike took me to my first appointment, a power breakfast at the Core club in Midtown. “Core,” as the cognoscenti call it, is a members-only enclave with hefty dues — $15,000 annually, plus a $50,000 initiation fee — and a membership roll that includes brand-name financiers like Stephen A. Schwarzman of the Blackstone Group and Daniel S. Loeb of Third Point.

Over a spinach omelet, Jennie Enterprise, the club’s founder, told me about the virtues of having a cloistered place for “ultrahigh net worth individuals” to congregate away from the bustle of the boardroom.

“They want someplace that respects their privacy,” she said. “They want a place that they can seamlessly transition from work to play, that optimizes their time.”

After breakfast, I rush back to the car for a high-speed trip to Teterboro Airport in New Jersey, where I’m meeting a real-life billionaire for a trip on his private jet. The billionaire, a hedge fund manager, was scheduled to go down to Georgia and offered to let me interview him during the two-hour jaunt on the condition that I not reveal his identity.

[div class=attrib]Read the entire article after the Learjet.[end-div]

[div class=attrib]Image: Waited On: Mr. Roose exits the Rolls-Royce looking not unlike many movers and shakers in Manhattan. Courtesy of New York Times.[end-div]