Gerald Guterman

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Gerald Guterman is an international real estate developer and investor. He is one of the largest co-op and condominium converters in the United States.[1] He also served as a Commissioner of the United States Romania Action Commission under the sponsorship of the United States Center for Strategic and International Studies, as well as Chairman of its banking and financing committees. Guterman served as personal financial advisor to the Minister of Privatization, Government of Romania.[2] He is currently the Chairman and CEO of Guterman Partners, LLC.

Overview[edit]

Guterman began a career in real estate at the age of 18 as a night porter for Fred Trump, father of famed developer Donald Trump.[3] The Brooklyn born son of a beverage wholesaler, Guterman amassed a fortune on scores of condominium and co-ops conversions in New York City.

Beginning in the 1980s, he became one of the largest property managers in the United States, with over 60,000 apartments in over 250 communities nationwide and over 16,000[4] rental apartments converted to condominium ownership.

As chairman of the publicly owned Hanover Companies, Guterman led a trend of selling occupied apartments to investors who would hold them until their tenants vacated. When the units were vacated, the investors could then sell them at a substantial profit.[5]Hanover's holdings also included, among other things, the Stanhope and Adams hotels, a controlling interest in Roosevelt Island and what was at the time, the only magnetic monorail system in the United States.[6]

A Bar Mitzvah Aboard the QE2[edit]

In September 1986, Guterman drew media attention when he chartered the famed ocean liner RMS Queen Elizabeth 2 along with a crew of over 1,000, for his 13yr old son's Bar Mitzvah party.[7] Although the QE2 had been chartered for cruises by corporations, the Guterman family party was a first of its kind, said a spokesman for the Cunard line. The guests were mostly relatives, friends and neighbors of Gutermans who live in Bedford, N.Y., in Westchester County, or friends of the children from camp or school. In attendance were numerous politicians and real estate figures including New York City Council, President Andrew J. Stein, Comptroller Harrison J. Goldin. The ship set sail at 6p.m. though helicopters continued to touch down on the sports deck to drop off late-comers, including Ivan F. Boesky, the stock and investment speculator.[8] When asked about the cruise in a recent interview for his upcoming biography, Guterman remarks that he maintains mixed feelings about the event. "On the one hand, it was a fantastic and extraordinary celebration for my family. As a father, I was proud of my children and wanted to give them the things I never had growing up as a poor kid in Brooklyn. On the other hand, when you wind up on the front page Leisure Section of New York Times, you leave yourself open for backlash, especially in those rare times of financial struggle."

The Guterman Collection[edit]

Beginning in the 1970s, Gerald Guterman acquired a collection of 17th-century, Dutch and Flemish Old Master paintings. The collection was referred to by experts as one of the very best in America.[9] The paintings were housed in a 3,000 sq ft (280 m2) gallery (created in the image of Manhattan’s famous Frick Gallery) in a wing of Guterman's Bedford Estate. Artists in Guterman's collection included Rembrandt, Renoir, Barent Fabritius, Solomon van Ruysdael, Frans Hals, Hendrick Avercamp, Jan Lievens, Govaert Flinck, and Jan van Goyen, to name a few.[10]

1988 Tax Law Reversal[edit]

In 1988, a new tax law eliminated the tax shelter aspect of the Co-Op Conversion model, making them less desirable and resulting in heavy financial setbacks for Guterman and his Companies.[5] Having already taken financial losses in the "Black Monday" stock market crash of 1987, Guterman placed his Stanhope Hotel (purchased in 1985 for $19,600,000) into Chapter 11 and immediately sold the hotel to Tobishima (a property company from Japan) for over $76,000,000.[11]

Further setbacks were created by a divorce decree that forced Guterman to sell his renowned art collection, considered at the time to be the most valuable such selection of Old Master paintings ever auctioned in New York.[12] While the sale of Guterman's paintings brought "the highest total ever for an Old Master sale in America" and set 11 artist's records for price,[13] to some it was disappointing.

Describing the buying as very selective, John L. Marion, Sotheby's chairman, said: On the one hand, it is the highest total ever for an Old Master sale in America and there were 11 artist's records set. On the other hand, you could observe the fact that there was little or no bidding from dealers. I think this means these were not the kind of pictures they buy for stock.[14]

Criticism[edit]

Guterman's active support of some New York politicians, such as Ed Koch and Comptroller Harrison J. Goldin also brought repeated scrutiny from the New York newsmedia.[15] A new law was past in 1988 that limited private campaign contributions and drew scrutiny to both Donald Trump, and Gerald Guterman. While their contributions were discussed at the hearings, the new law did not prohibit their practices that drew so much attention:

For example, the developer Donald Trump told the commission that in 1985 he spread tens of thousands of dollars in contributions to City Council President Andrew J. Stein among 18 subsidiary companies to skirt the state's limits of $50,000 for individual and $5,000 for corporate contributions. Another developer, Gerald Guterman, contributed $100,000 in one month to Mr. Goldin by parceling the gifts among 21 companies.[16]

Through The Nineties[edit]

In the early 1990s, Guterman rebounded from his financial troubles and founded Patriot American Investors. Guterman negotiated and directed the largest direct purchase of office buildings and hotels in the history of the Resolution Trust Corporation and its successor, the Federal Deposit Insurance Corporation (FDIC). The Patriot deal drew criticism from congress in a report that called the RTC model for disposing of savings and loan properties in bulk "wasteful" and "uncompetitive."[17] Further, the report criticized the RTC for negotiating with Guterman while he was under investigation, though it was also noted that Guterman had been falsely accused and that all charges had been dismissed.[17]

Trusteeships & Charitable Participation[edit]

Gerald Guterman served as a trustee of The Metropolitan Museum of Art, Adelphi University, New York City Opera, Dallas Opera, Young Men's Philanthropic League, Rippowam Cisqua School, and Harvey School.[18] He also served as a Commissioner of the United States Romania Action Commission under the sponsorship of the United States Center for Strategic and International Studies,[19] as well as Chairman of its banking and financing committees. Guterman served as personal financial advisor to the Minister of Privatization, Government of Romania.

Gerald Guterman is a founder of Albert Einstein College of Medicine. He was awarded "Humanitarian of the Year" by the Juvenile Diabetes Foundation. Guterman is a Founding Benefactor of Research Lab, Study of Tumor Cell Biology and Research Lab, Study of Immunodeficiency Disease at the National Asthma Center He is also a member Society of University Founders, Miami University..

References[edit]

  1. ^ Oser, Alan S. 1985, "Managing Those 'Occupied' Apartments" The New York Times, April 7, 1985
  2. ^ Guterman Website "www.gutermanpartners.com"
  3. ^ Steven Rea "Going Home Again-To A Hotel" Philadelphia Enquirer, March 13th 1988
  4. ^ Oser, Alan S. 1985, "Managing Those 'Occupied' Apartments" The New York Times, April 7, 1985
  5. ^ a b Brooks, Andree. 1988. "Guterman's Troubles Jolt Client Co-ops," The New York Times, April 17 1988. pg2
  6. ^ Deborah Gimelson. "Portrait of a Businessman as a Collector." Art+Auction, September 1985
  7. ^ Georgia Dullea "COMING OF AGE ON THE OCEAN: A BAR MITZVAH ABOARD THE QE2" September 16, 1986" "The New York Times"
  8. ^ Georgia Dullea "COMING OF AGE ON THE OCEAN: A BAR MITZVAH ABOARD THE QE2" September 16, 1986" "The New York Times"
  9. ^ Deborah Gimelson "Portrait Of A Businessman As A Collector" Art And Auction Magazine October-November, 1986
  10. ^ SOTHEBYS: THE LINDA AND GERALD GUTERMAN COLLECTION, NEW YORK, 1/14/88
  11. ^ "THE ASSOCIATED PRESS, "Japanese Company Buys Hotel" NY TIMES January 14, 1989
  12. ^ RITA REIF "Old Masters Sale Produces Mixed Results at Sotheby's" "The New York Times" January 15, 1988
  13. ^ RITA REIF "Old Masters Sale Produces Mixed Results at Sotheby's" "The New York Times" January 15, 1988
  14. ^ RITA REIF "Old Masters Sale Produces Mixed Results at Sotheby's" "The New York Times" January 15, 1988
  15. ^ Purdum, Todd S. 1988. "New Campaign Law: No Bar to Old Abuses," The New York Times, April 9, 1988
  16. ^ Purdum, Todd S. 1988. "New Campaign Law: No Bar to Old Abuses," The New York Times, April 9, 1988
  17. ^ a b Gerth, Jeff. 1992. "Study Criticizes U.S. Deal On Sale of Bailout Property," The New York Times, January 3, 1992.
  18. ^ http://gutermanpartners.com/default.asp?pg=press.asp&mi=mainbg Guterman Partners Website
  19. ^ http://ecolu-info.unige.ch/archives/ceeman98/0254.html SME Conference

Further reading[edit]

Hirschman, Elizabeth C. 1990. "Secular Immortality and the American Ideology of Affluence," The Journal of Consumer Research, Vol. 17, No. 1 (Jun., 1990), pp. 31-42.

External links[edit]