Real estate is theater in New York City, its players often larger than life. In an excerpt from her new book, “Billionaire’s Row: Tycoons, High Rollers and the Epic Race to Build the World’s Most Exclusive Skyscrapers” (Currency, out now), Wall Street Journal staff reporter Katherine Clarke describes the time that real estate developer Jacob the Jeweler and his celebrity rabbi stood in the way of developer Harry Macklowe’s plans for his new Park Avenue tower.
Harry Macklowe wove his way through a crowded room full of men wearing dark robes and black hats and into a windowless, dimly lit conference room with Formica laminate floors.
It was around 2008, and, holding court in the back room of the ultra-Orthodox Jewish meeting house near the base of the Queensboro Bridge, sat a man with a long grizzled beard and little oval glasses.
He was Rabbi Yoshiyahu Pinto, a kabbalah-espousing mystic, who looked distinctly older than his thirtysomething years.
The great-grandson of a famed Moroccan-born mystic known as the Baba Sali, Pinto had an aura that had attracted acquaintances ranging from LeBron James to [then] Congressman Anthony Weiner, as well as business magnates like Jay Schottenstein of American Eagle and the real estate tycoon Charles Kushner, the father of Jared Kushner.
Some of the rabbi’s devotees considered him as much a business adviser as a spiritual one — seeking him out to bless deals, dispense advice, and even curse their enemies.
They stood in line to kiss his hand and begged his close circle for private audiences.
Israel’s former defense minister claimed the rabbi had helped him wake up from a coma, while others claimed he had saved them from questionable business deals.
Pinto’s fame had come to mean fortune as well.
His charitable organization, Mosdot Shuva Israel, was attracting media attention for renting a mansion on Lily Pond Lane, one of the most exclusive and expensive enclaves in the Hamptons.
The Jewish Daily Forward reported that Pinto’s charity spent $77,000 to rent the house for three weeks in August 2008.
The charity was also known for spending heavily on luxury travel and pricey jewelry.
Pinto reportedly flew first class and had footed a $75,000 bill for a monthlong stay at a luxury hotel in Buenos Aires, Argentina.
Though he was Jewish himself, Macklowe was not overtly religious and was hardly a follower of Rabbi Pinto.
He had come to [the meeting house] house purely on a matter of business — one that had taken a turn for the worse. Weeks earlier, Macklowe thought he had struck a deal with one of Pinto’s devotees, a man who many referred to as “the Godfather of Bling,” to purchase a townhouse adjacent to the Drake Hotel on East 57th Street.
It was part of [Macklowe’s] plan to assemble a dramatic wall of retail at the base of his new tower. Now it looked as though the agreement was already falling apart.
The Pinto devotee was Jacob Arabo, né Yakov Arabov, better known to his clientele as Jacob the Jeweler. Arabo, who had made a name providing diamond-encrusted baubles to athletes and musicians, had connections to hip-hop going back to the legendary Brooklyn rapper Notorious B.I.G. and a client list that included everyone from Mariah Carey, Madonna, Jay-Z and Sean “Diddy” Combs to athletes like David Beckham, Derek Jeter and Shaquille O’Neal.
The Uzbek American jeweler looked the part, wearing three-piece suits, sporting slicked-back jet-black hair and traveling around the city in a Maybach Mercedes. In “Touch the Sky,” Kanye West raps “I went to Jacob an hour after I got my advance,” and in Drake’s music video for the song “When to Say When & Chicago Freestyle,” the rapper and his crew are seen picking out watches and chains in Arabo’s office.
Arabo would bedazzle anything, from hubcaps to video game controllers.
The townhouse, at 48 East 57th Street, was home to his company’s showroom, a gleaming monochromatic retail space with VIP suites on the upper floors for private appointments.
The jeweler was just one of a motley array of mysterious international business people and cranky, prideful New Yorkers standing between the Macklowes and their wall of retail.
Macklowe and his son, Billy, however, were determined to pick them off one by one.
In real estate, the process is known as “assemblage.”
To put together their assemblage, they used every negotiation tool in their arsenal, digging deep in their pockets to offer above-market prices, calling in favors and even promising to find the owners better locations for their businesses, then footing the bill for their move.
Macklowe was relentless.
At one point, after about 14 months of negotiations, he and his son paid close to $20 million to get the luxury watch company Audemars Piguet to move across the street to free up one of the brownstones.
With each deal, he plowed more and more of his own money into the project, but he reasoned that it would be worth the investment.
By 2008, the Macklowes had most of the pieces they wanted for their new tower, with a few notable exceptions, including the Jacob & Co. building, a holdout tenant in another building they had purchased from the late king of Morocco and a townhouse owned by Turnbull & Asser, the British-made bespoke clothing company owned by Ali Fayed, the younger brother of former Harrods boss Mohamed Al-Fayed.
Al-Fayed in particular seemed immune to the Macklowes’ overtures.
(“It’s really hard to compel people with money with money,” Billy Macklowe said later of Al-Fayed.)
The deal with Arabo in particular had gotten under Harry Macklowe’s skin.
Weeks earlier, the elder Macklowe and Arabo had met in one of the VIP sales suites of Arabo’s townhouse and agreed on the terms of a sale: Macklowe would buy the property, which Arabo had acquired for about $12 million in 2004, for $50 million, a number he told the jeweler was more than twice what it would be worth to any buyer but him.
The men had scribbled the terms of the deal on a scrap of paper and both written their initials on it.
The formal contract would be forthcoming.
Two weeks later, when Macklowe still hadn’t received the promised contract from Arabo, he called him.
The jeweler said he had upped his price to $100 million.
“I said, ‘Jacob, how could you do that? We shook hands,’” Macklowe later recalled.
Arabo’s answer: “My rabbi told me I should charge $100 million.”
Macklowe was incensed. He would have to meet this rabbi and set him straight.
He quickly arranged a meeting with the pair at the meeting house.
The meeting would not go as Macklowe had hoped. As the trio settled into the dimly lit back room, there was immediate confusion.
The rabbi didn’t speak English, while Macklowe spoke barely a word of Yiddish or Hebrew.
The three men sat there in a circle holding hands as Macklowe made his case to the rabbi and Arabo — hardly an impartial observer — translated.
The bottom line, Macklowe told the pair, was that he could pay only $50 million.
It didn’t play well.
Rabbi Pinto bounced up from his chair and jumped up and down in rebuke, Macklowe said.
Even if Macklowe couldn’t understand his words, it was clear that the rabbi was saying, in no uncertain terms, that the deal would not be happening at that price.
Arabo would later serve almost two years in prison after pleading guilty to falsifying records and giving false statements to investigators looking into a multistate drug ring.
Authorities had accused the jeweler of conspiring to launder drug profits for the Detroit-based ring, known as the “Black Mafia Family.”
Rabbi Pinto later served time in an Israeli prison after being convicted of bribing a senior police official.
As for Macklowe, he never did get his hands on the townhouse.
From the book BILLIONAIRES’ ROW: Tycoons, High Rollers, and the Epic Race to Build the World’s Most Exclusive Skyscrapers by Katherine Clarke. Copyright 2023 by Katherine Clarke. Published by Currency, an imprint of the Crown Publishing Group, a division of Penguin Random House LLC.
An earlier version of this excerpt incorrectly cited Chabad. Rabbi Yoshiyahu Pinto is not affiliated with the Chabad-Lubavitch movement nor were any of the events described in this excerpt.