Andrew Allentuck

Monday, December 3, 2001

Empire: A Tale of Obsession, Betrayal, and the Battle for an American Icon
by Mitchell Pacelle, Mitch Pacelle
John Wiley & Sons, 2001, 344 pages

It would be reasonable to assume that a landmark like the Empire State Building, which started going up as the U.S. economy tumbled into the Great Depression, would be as transparently owned and as well managed as its scale befits. Yet in this wonderfully rich story of the ownership, deals, politics and prosecutions of its owners, Wall Street Journal reporter Mitchell Pacelle reveals tangled webs of deceit.

In the cast of characters are a thoroughly nasty Japanese landlord, Hideki Yokoi, born 1913 and now deceased, his illegitimate daughter Kiiki Nakahara and her husband Jean-Paul Renoir, Leona Helmsley - "the queen of mean," as New York tabloids styled her, and Donald Trump,who played the antagonists for a small piece of the pie.

Hideki Yokoi is the centrepiece of the story, as Mr. Pacelle weaves it. He bought the Empire State Building for $40 million, getting a shell of a structure leased entire to Harry and Leona Helmsley. Hideki's return would only be 5 per cent, a trifle for the capital involved.

The building he got was run down with rats and fungus and the homeless sleeping in its corridors, said a tenant lawsuit, and Trump was called in to turf out the small tenants and to do for the art deco masterpiece what he was accustomed to doing: turn it into a classy building with costly condos and high rents.

In the end, as Mr. Pacelle makes clear, Hideki went bust, his empire, which once included castles in England and chateaux in France, evaporated, and he and his daughter and son in law were in jail on charges ranging from constructive murder to fraud. In the end,when workmen opened coffins containing his and his family's ashes to see if maybe he tried to take his riches with him, they found no money.

The litigation continues, however, with many parties going to court to sort out the continuing question of who should get what. The moral of this story is that one must know what is in a deal, only negotiate with people of honour, and avoid buying monuments for glamour. Hideki broke all the rules and went from being a billionaire to being a modest millionaire. Or less.

Empire may be one of the best business books of the year. Mitchell Pacelle's skill is to make the whole, complicated tangle of purchase and ownership of the building understandable and its cast of characters clear enough at least to have motives. The story is spellbinding. For a great read over the holidays or for advice on how not to do real estate deals, get Empire. It's a book you won't be able to put down.