John Beerbower, Lawyerly Lairs, Money, Nauseating Things, Real Estate, Tax Law

Lawyerly Lairs: Tax Breaks for Cravath Partners?

720 Park Avenue New York.jpegThis super-luxurious, prewar building — 720 Park Avenue, one of New York’s most prestigious addresses — is the former home of Cravath partner John Beerbower, and his wife, Cynthia Beerbower. In case you’re wondering, they lived in apartment 7A.
According to Steven Gaines in The Sky’s the Limit (2005), winning admission to this exclusive coop requires a net worth of at least $50 million. Financier Henry Grunwald and Revlon exec Michael Bergerac call it home.
But despite the vast wealth of its residents, 720 Park receives highly favorable tax treatment from New York City:

The New York Times looked at the vagaries of the tax laws — a result of several decades of political compromises — through the uncommonly low taxes paid at 720 Park, which is at 70th Street, and other Upper East Side co-ops. It found that some owners of small two-family brick and shingle houses near Kennedy International Airport paid three times the effective tax rate as their Park Avenue peers.

In the last year, while property tax assessments across the city rose by more than 9 percent, the assessors reviewed 720 Park. But rather than raising taxes on the building, they reduced them. City records show the official market value of the building and the tax burden on it were cut by 12 percent.

Property taxes on 720 Park went DOWN? How on earth did that happen?
Find out the answer, plus information about the Beerbowers’ new home, after the jump.

On the tax assessment issue, the Times got comment from Mr. Beerbower:

Last December, John E. Beerbower, a partner in Cravath, Swaine & Moore who was then the co-op board’s president, said that the board routinely appealed its tax assessment on the advice of the building’s professional managers.

Then in June, riding the wave of rising Park Avenue property values, Mr. Beerbower and wife, Cynthia, decided it was time to downsize. They sold their 14-room apartment on the seventh floor for $20 million, nearly the same value placed on the entire building by the city’s Finance Department.

The apartment, with its fireplaces and warren of maids’ rooms that were combined into larger spaces — about 5,780 square feet in all — was sold to Carl Spielvogel, the former advertising executive and former ambassador to the Slovak Republic, and his wife, Barbaralee Diamonstein-Spielvogel, a preservationist and Democratic fund-raiser.

WOW. That’s one helluva pad. The sale price works out to approximately $3,400 per square foot — almost three-and-a-half-times the breathtakingly high Manhattan average of $1,000 a square foot.
Some years ago, we heard about a Cravath summer associate event held at the unbelievably magnificent home of a partner. It was described as a New York apartment so large and luxurious that it reflected wealth “beyond even Cravath-partner levels.” The rumor was that the Cravath partner who hosted the gathering had a very wealthy wife. Perhaps this fantastic apartment was John and Cynthia Beerbower’s?
Here’s a little history about 720 Park Avenue:

One of the city’s most exclusive and prestigious buildings, 720 Park Avenue was designed by Rosario Candela and Cross & Cross, who also collaborated on the design of One Sutton Place South, another of the city’s grandest residences. Candela is widely considered to have been the country’s greatest designer of luxury apartment buildings and he collaborated with many of the city’s most famous architectural firms….

[Noted architects] quoted T-Square, an architectural journal, as commenting upon the completion of 720 Park Avenue that is was “quite a disturbing pile of architectural motives….It beings its upward career in an orderly enough fashion, starting from a prim base and reaching a main cornice at the twelfth story. However, this altitude is not attained without the interruption of several band courses which confuse the simplicity of the shaft. Above this main cornice, the building breaks out into a jumble of setbacks, stick-outs, bays, battlements, and buttresses. Doubtless these create numerous amusing roof spaces, but as a design they are rather incoherent.”

Incoherent and disturbing? We disagree. Based on the photo, it looks like an urban castle. Very elegant.
Alas, as the Times notes, John and Cynthia Beerbower are FORMER residents of this awe-inspiring building. Beerbower has been replaced as board president by Leonard Riggio — the founder, chairman and CEO of Barnes & Noble.
So where does the couple reside today, after being exiled, a la Adam and Eve, from their Prewar Paradise? The Times reports: “The Beerbowers spent close to $5.1 million for a smaller apartment on East 72nd Street.”
An apartment with a street rather than an avenue address (e.g., Fifth or Park)? Oh, the ignominy! How can the Beerbowers endure it? Did they put their return address on their holiday cards this year, or was it just too humiliating?
But don’t shed tears for John and Cynthia just yet. New York City property records — which are publicly available online, so don’t accuse us of violating their privacy — reveal that the Beerbowers now reside at 160 East 72nd Street. And just like 720 Park Avenue, 160 East 72nd Street is on the list of “Good Buildings”: the 42 co-op apartment houses identified in Tom Wolfe’s legendary Esquire article as exclusive and elite.
Thank God. What a relief!
Earlier: Prior ATL coverage of Lawyerly Lairs (scroll down)
The Condo and Co-op Tax Bargain [New York Times]
720 Park Avenue [The Upper East Side Book]
720 Park Avenue, Apartment 7A [ACRIS /]
160 East 72nd Street, Apartment 5 [ACRIS /]
The Sky’s the Limit: Passion and Property in Manhattan [Amazon]

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