The Man Who Built New York City With No Money | Larry Silverstein

Harley Finkelstein (00:00:00):
So you can't talk about US history without talking about something that happened literally right there, right next door to where we are, the Twin Towers. September 11, 2001 terrorist attack, two planes hit the towers. One of the worst terrorist attacks globally ever. What you probably don't know, however, is that six weeks before 9/11, a poor Jewish entrepreneur who built an empire ended up purchasing the Twin Towers. He was not the highest bidder. He shouldn't have won the bid-

David Segal (00:00:29):
But he did.

Harley Finkelstein (00:00:29):
... but he was able [00:00:30] to figure out a way to do so.

David Segal (00:00:31):
Yeah. That's right.

Harley Finkelstein (00:00:32):
And that is really the story of our next guest, Larry Silverstein. He is the most unlikely person to build a real estate empire. When you look back on Manhattan right behind us, this entire city, this landscape here was built by Larry Silverstein.

David Segal (00:00:46):
Larry Silverstein truly started from the bottom and now he's here. Larry was broke. And Larry Silverstein, he reads about this incredible deal for the Empire State Building that is so creative and he turns to his father and they have nothing [00:01:00] and he says, "Dad, we need to buy real estate." And they find a way to buy a building with no money.

Harley Finkelstein (00:01:04):
Yeah. Don't share that yet.

David Segal (00:01:05):
With no money. Larry is unbelievable.

Harley Finkelstein (00:01:05):
You will hear his story of how he did that, but also, one thing that's so compelling is when you hear the way he's done business over the years, he's turned competitors into partners, he's turned rivals into collaborators.

David Segal (00:01:17):
Yeah. Yeah. And he's lived through some of the worst times in American history. The 1970s with 20% plus interest rates, the savings and loan crisis, 2001, 2008. And one of the lines Larry has that I love is that he's like, "I came [00:01:30] into this world with nothing. It's important that I make an impact and I make a difference." And the impact Larry has had not just in business, in creating jobs and creating landmark icons in his philanthropic work, both in the medical center and beyond, it's impacted so many lives.

Harley Finkelstein (00:01:45):
Yeah. He epitomizes what is called tikkun olam. Leave this world with more than you brought into it and Larry is truly someone who started from the bottom and now he's here. Hey, everyone. Big Shot is not just a passion project to us where we archive [00:02:00] Jewish entrepreneurial history.

David Segal (00:02:02):
It's a way to fight hate speech and anti-Semitism by telling memorable stories that allow people to connect and understand one another better.

Harley Finkelstein (00:02:09):
We know stories can bring people together and these are the stories that have never been told before and this is a chance to see people like you've never seen them before.

David Segal (00:02:17):
Think about David Rubenstein, who started as the son of a postman, but built a 400 billion business. Or Issy Sharp, who started with one hotel more than 50 years ago and today, has built one of the greatest hotel chains in the world in the Four Seasons.

Harley Finkelstein (00:02:29):
Telling these stories [00:02:30] and archiving Jewish entrepreneurial history is not just a job for two people.

David Segal (00:02:34):
We're looking for others who want to help preserve the lessons of Jewish icons.

Harley Finkelstein (00:02:38):
We're looking for people who want to help us build this archive and can be part of the Big Shot family.

David Segal (00:02:43):
If you want to be an executive producer and you want to help fund Big Shot, please fill out the form below on this video. We're chasing a dream and we're looking for others who feel the same obligation as us,

Harley Finkelstein (00:02:52):
Who feel the same passion and responsibility as we do to archive our history, to fight hate and to bring people [00:03:00] together.

(00:03:18):
I want to go back to the Silverstein dinner table when you were growing up, talking with your parents and this is well before real estate. There's this great line and we did a lot [00:03:30] of research on you, Larry. One of the lines we love is one point, you tell your father, "Dad, we should go into real estate."

Larry Silverstein (00:03:35):
Yeah. "We have no money."

Harley Finkelstein (00:03:36):
And your dad says, "How? We have no money." And you say, "Well, look what Harry did." And I think the guy's name I wrote-

David Segal (00:03:42):
Harry Helmsley.

Larry Silverstein (00:03:42):
Harry Helmsley.

Harley Finkelstein (00:03:43):
... Harry Helmsley, bought the-

David Segal (00:03:44):
Yeah. 5,000 investors.

Harley Finkelstein (00:03:44):
... Empire State Building with 5,000 investors each putting in $5,000 each. And you said, "Dad, look at what Harry did." Was that the topic of conversation around the dining room table, the Shabbos dinner table growing up? Was it business? What was it?

Larry Silverstein (00:03:59):
I was [00:04:00] working with my father trying to lease space, trying to sell buildings and I realized that we were starving to death. We weren't making enough money to survive, so I finally said to him, "Dad, I'm getting married. I want to have a family. I can't do it this way. We're not making any money. We got to become owners." He said, "But we have no money. How do we buy a building without any money, with no resources?" [00:04:30] I said, "Harry Helmsley just bought the Empire State Building. None of his money. Everybody else's money." So he said, "Can you figure it out?" I said, "I don't know, but I'll try."

(00:04:42):
So I got the pamphlets, analyzed it, figured out most of it. Okay. I think I know what to do. Let's find a building to buy and we'll see if we can get people to invest with us and we did and it's exactly what we did. Remember going out, finding a building [00:05:00] to buy and the seller wanted a contract deposit of $15,000. We didn't have 15,000. Didn't have a car. Didn't have anything. So we went to the banks. We started asking banks, "We need to borrow $15,000." They said, "What's your collateral?" I said, "If we had collateral, we wouldn't be here." And it's bank after bank after bank. We couldn't find a bank to lend us a dime, because we had nothing.

(00:05:30):
[00:05:30] My father and I had lunch one day in Ratner's restaurant, a dairy restaurant on Lower East Side. We're walking back from the restaurant and there's a bank across the street at I think it was 85 and 95 Delancey Street on Lower East Side. I said, "Dad, there's a bank we haven't tried yet." So I went across the street, went to the bank and started talking to a guy named Phil Green, who managed the bank. He said, "How can I help you?" I said, "We'd [00:06:00] like to borrow $15,000 with which to sign a contract to buy a building." He said, "Okay. Do you have any collateral?" I said, "If we had collateral, we wouldn't be here."

(00:06:13):
So he said, "Yeah. What's the deal?" So I had some papers with me. I always carried them. I took out the papers and I said, "Okay. Like to buy this building, yeah, because I think it's good opportunity. There's good upside. The building's in terrible condition. A lot of vacant space. It looks like hell. [00:06:30] It really is down and I think with some fixing up, it would do better." So he listens and he said, "Okay." Opens a drawer, takes out a piece of paper, puts it in front of me and says, "Sign it." I said, "What is it?" He said, "It's a promissory note." I said, "You're going to give us the money?" He said, "Isn't that what you want?"

(00:06:59):
I was [00:07:00] so shocked. Finally, a bank was going to give us the money. He said, "Okay. Here's what we're going to do. I'll lend you the $15,000. You're going to use it to sign the contract. You're going to assign the contract to the bank. That's your collateral." I said, "That's fantastic. Okay." So I remember doing exactly that. We got to sign the contract, brought the contract to the bank. I said, "Here's the collateral I promised you and so forth. Fine." He said, "Okay. [00:07:30] What are you going to do for the rest of the money?" He said, "I don't know. I haven't thought-"

Harley Finkelstein (00:07:34):
I didn't think I'd get the money.

David Segal (00:07:35):
Right. Because you've been to, I'm sure, tens if not hundreds of banks at this point that all said, "Buzz off."

Larry Silverstein (00:07:41):
Oh, every one of them. It was amazing. So I said, "Look." I showed him the article, Empire State Building. I said, "I want to do it." "Have you ever done this before?" I said, "No." "Do you know what you're doing?" I said, "Maybe. I hope so. [00:08:00] We're going to find out." I said, "But failure's not an option, so we have to succeed." "Okay." I said, "By the way, if you have any recommendations, don't hesitate." He said, "Okay. First thing you need to do, $600,000 is the price of the building. Get yourself a mortgage." I said, "Well, can you give us a mortgage?" He said, "No. We're not that kind of bank. You've got to go a savings bank for that." I said, "Okay. Who? Which one?" He said, "Well, [00:08:30] the building's on 23rd Street. Go to a bank on 23rd Street. Savings bank." So okay, so I went to 23rd Street, looked at a savings bank, Broadway Savings Bank. Walked into the Broadway Savings Bank. Guy by the name of Norman Ramsey.

Harley Finkelstein (00:08:43):
Wow. You know all their names. You still remember them.

Larry Silverstein (00:08:45):
Yeah.

Harley Finkelstein (00:08:45):
[inaudible 00:08:46].

Larry Silverstein (00:08:45):
I couldn't [inaudible 00:08:46].

David Segal (00:08:46):
And this is 75 years ago?

Larry Silverstein (00:08:50):
This is-

David Segal (00:08:50):
70 years ago.

Larry Silverstein (00:08:51):
Yeah. It was 1957.

David Segal (00:08:53):
Wow.

Harley Finkelstein (00:08:53):
Wow.

David Segal (00:08:56):
And all because you read an article that Harry Helmsley got 5,000 investors [00:09:00] for 1,000 bucks a piece-

Harley Finkelstein (00:09:01):
And bought the Empire State Building.

David Segal (00:09:02):
... to buy the Empire State Building.

Harley Finkelstein (00:09:03):
So you got the mortgage?

Larry Silverstein (00:09:06):
He said, "How much do you want?" I said, "How much can I get? So he said, "First thing you need and you got to get an appraisal." "Okay. Who do I go to for an appraisal?" He said, "I would recommend Leon Spear." "Who's Leon Spear?" "He's an appraiser. [00:09:30] A guy by the name of Leon Spear. He's with Helmsley-Spear." I said, "Okay." Well, the appraiser calls me back one day. He said, "I'll give you the appraisal." He said, "You got a $350,000 mortgage. The appraisal will qualify for you. Don't worry about it." He said, "But I'd like to offer you a profit for your contract." [00:10:00] I said, "A profit?"

(00:10:02):
He said, "Yeah. We want to buy your contract." I said, "For how much?" He said, "100 million." No. "$100,000."

David Segal (00:10:12):
Which at the time, must have felt like 100 million.

Larry Silverstein (00:10:15):
I said, "100,000?" I said, "Let me call you back." Ran to my father, said, "Dad, we've just been offered $100,000 profit."

David Segal (00:10:24):
And you haven't done anything yet.

Larry Silverstein (00:10:26):
Right. I said, "They're going to give us back [00:10:30] the 15,000 we borrowed and 100,000 profit. I said, "Dad, we got to sell this." He looked at me and he said, "If I was by myself, I'd say sell it and take the money." I said, "But this could be something great for you, for your future." He said, "Let's stay with it." He said, "Find out who the [00:11:00] purchaser was or is. Call the appraiser." And I said, "Who's the buyer?" He tells me, "The guy, he buys and sells contracts." So I said to my father, I said, "Dad, this is a very prominent purchaser. We should sell it to him." He said, "Son."

(00:11:25):
He said, "This is a guy who buys and sells contracts for a profit. If he pays us 100,000 on [00:11:30] profit, he's going to resell it, so the building's obviously worth significantly more than what we paid for it." He said, "Let's keep it." I said, "Dad." He said, "Let's keep it. Let's find the investors." So I said, "Okay. How do we find investors?" So he said, "I've spent the last 20 years of my life with people leasing [00:12:00] space from leasing lofts, leasing stores and so forth." He said, "Let's go to them." So we started going to each of those people and we found 25 people who each invested $10,000 with us to become a limited partner in the ownership of 21224 East 23rd Street.

David Segal (00:12:24):
Wow. And that was your first building?

Harley Finkelstein (00:12:26):
That was your first building.

Larry Silverstein (00:12:26):
That was our first building.

Harley Finkelstein (00:12:27):
One of the things that we loved hearing [00:12:30] about also was as you continued to build your empire, one of the things that is clear to me is that you had a particular way of doing business, a particular way of if there was a building that you thought was important, that needed to be there, we'll talk about World Trade and that little bit later, but what was your philosophy as you got bigger and had more real estate? Was there a particular strategy that you used that made you so much more successful than others?

Larry Silverstein (00:13:00):
[00:13:00] I think we grew. Every time we bought a building, we found another group of investors and sometimes the same people would give us money to do it. So we went from a $10,000 investor to a $25,000 investor to a 50,000 to $100,000 investor. And after acquiring 5 or 6 buildings in this fashion, each one's a little bigger than the last one. [00:13:30] So now we're finally in the couple of million dollar category. We got a call from the banks that wouldn't lend us $15,000 and they said, "We're watching what you're doing and we just want to tell you forget about the investors you're going to. We'll give you whatever you need."

David Segal (00:13:52):
[inaudible 00:13:52]. Wow. And what were you doing? Was it that you executed so well on taking buildings [00:14:00] that were undermanaged, that had high vacancy, were [inaudible 00:14:04]?

Larry Silverstein (00:14:03):
Needed reconditioning, replenishment, refurbishing.

David Segal (00:14:06):
And you were able to do that cost effectively and yeah.

Larry Silverstein (00:14:08):
Yeah. And in the beginning, we didn't know what the hell we were doing. We had no experience. None. So at 21224 East 23rd Street, we looked at the floors. They were filthy. Filthy. Vacant floors. Hadn't been occupied for years. So I remember my [00:14:30] father saying, "Let's get a spray paint to spray everything here white." So got a spray paint, came in, sprayed everything white. You couldn't do that today, of course. Then we got a guy who ground floors, scrapes floors.

Harley Finkelstein (00:14:53):
Polishing. Yeah.

Larry Silverstein (00:14:54):
Yeah. A polisher. A grinder. A scraper. And he started [00:15:00] scraping the floors' filth. A couple of inches of filth. The floors were magnificent wood hardwood floors.

Harley Finkelstein (00:15:11):
Wow. You didn't know.

Larry Silverstein (00:15:12):
Didn't have a clue. You couldn't know. They're filthy. This hadn't been done in 30 years, 40 years. But the wood hardwood floors, we went down to the Army, Navy surplus stores on Canal Street. We took a cab down. [00:15:30] We bought some surplus fluorescent fixtures, put them in the cab, took the cab up to the building at 23rd Street, got the super. He said to the superintendent, "Hang these lights. Spread them around a little bit, so you could look at the floors." And he put up these fluorescent lights, the hardwood floors, the white paint, we cleaned the windows and all of a sudden, we were able to rent the space that hadn't been rented in years. We could rent it for, instead of 50 cents a [00:16:00] foot, we got a dollar a foot, which was phenomenal.

David Segal (00:16:03):
[inaudible 00:16:04].

Harley Finkelstein (00:16:03):
Incredible. Incredible.

Larry Silverstein (00:16:05):
So we started paying these people 1% a month for their return. And within a couple of years-

Harley Finkelstein (00:16:14):
Everyone wanted to mess with you. It was unbelievable.

Larry Silverstein (00:16:17):
It was phenomenal.

David Segal (00:16:22):
So Larry, we looked at all your deals in researching you and one of the ones that really jumped out at me is in the 70s when you guys bought on Fifth Avenue, 711. [00:16:30] I think it was 711 Fifth Ave and one of these you did there, just to set the stage, this is New York is effectively bankrupt. The city could not be in worse shape and you buy this iconic building, but you have several competing bids and whereas most people's instincts would be eliminate the competition and try and beat the competition. You brought people in.

Larry Silverstein (00:16:53):
We brought the competitors. I brought the competitors in.

David Segal (00:16:55):
Right. So yeah.

Harley Finkelstein (00:16:55):
Tell us about that. That's fascinating to us, because almost nobody would've done that. [00:17:00] They would've either lost or potentially won with a risk. You hedged your bet.

David Segal (00:17:05):
Yeah. Why?

Harley Finkelstein (00:17:05):
And made it impossible for you to lose.

Larry Silverstein (00:17:07):
Okay. By this time, I began to know a lot of people and young people like myself. And I remember going to Cy [inaudible 00:17:31], [00:17:30] the treasurer of Columbia Pictures, and saying, "I hear you want to sell your building." I said, I think I'd like to-"

Harley Finkelstein (00:17:39):
And this is the famous Columbia Pictures building.

Larry Silverstein (00:17:40):
Yeah. Yeah. 711 Fifth Ave.

Harley Finkelstein (00:17:41):
Yeah. Yeah. 711.

Larry Silverstein (00:17:43):
I said, "I think I'd like to buy it." So we negotiated a price and I think we bought it for, I think it was 11 and a half or 12 and a half million dollars with a couple of million dollars in cash and a purchase-money mortgage from Columbia Pictures. And we [00:18:00] shook hands and he said, "I'll prepare the contract and we'll get together in a couple of days and sign it." So I said, "Fine." By this time, the banks were giving us whatever we needed, so I didn't have to go out and get investors. A couple of days go by, no contract. I called him and I said-

Harley Finkelstein (00:18:22):
"Cy, what's going on?

Larry Silverstein (00:18:23):
... "Where's the contract?" He said, "We have another bidder." I said, "You have another bidder." So I said, "Hmm." [00:18:30] I said, "Let me think about that." The next day, I'm going to a Real Estate Board of New York dinner. By this time, it's gotten involved.

David Segal (00:18:45):
Yeah. You own several properties at this point.

Larry Silverstein (00:18:48):
Yeah.

David Segal (00:18:48):
Yeah.

Harley Finkelstein (00:18:50):
He's a big shot.

David Segal (00:18:50):
He's a big shot. Yeah.

Larry Silverstein (00:18:53):
And as I'm going up the escalator, I look [inaudible 00:19:01].

David Segal (00:19:00):
[00:19:00] It's your competitor. The person who's also bidding.

Larry Silverstein (00:19:08):
I see someone who I know coming down the escalator. I said, "George." I said, "Wait, I want to talk to you." Got upstairs, got the escalator, came down, met him downstairs. I said, "Are you competing [00:19:30] to buy 711 Fifth Avenue? He looked at me, he said, "How'd you know?" [inaudible 00:19:38].

David Segal (00:19:32):
How did you know?

Larry Silverstein (00:19:43):
I remember talking to him. He knew a lot about the movie business. He knew a lot about motion pictures. And I said to myself, "Who else would have an interest in this one?"

Harley Finkelstein (00:19:59):
Real estate [00:20:00] guy, likes the motion picture business, knows a lot about it.

Larry Silverstein (00:20:02):
So I just put it together.

Harley Finkelstein (00:20:02):
The Venn diagram overlaps on George.

Larry Silverstein (00:20:06):
"How'd you know?" I said, "Listen, let's make a deal. Instead of competing with you, let's buy it together." He said, "Larry, that's fantastic. Let's do it." I said, "You or I will drop." He said, "Okay. I'll drop out. You negotiate the contract."

Harley Finkelstein (00:20:20):
I'll be a partner.

Larry Silverstein (00:20:21):
Right. "We'll be a partners." I said, "Great." Shook hands. That was it. Went back to Cy [inaudible 00:20:27]. I said, "How's [00:20:30] the competition going?" He says, "No competition. Guy pulled out. Pulled out." "Okay." I said, "Can we get going?" He said, "Okay. Give me another day." Two days, go back. No call. I said, "What happened?" He said, "Believe it or not, there's another competitor." I said, "You're kidding." He said, "No." So I called [00:21:00] George.

David Segal (00:21:03):
George is the one that you just recently brought in who is [inaudible 00:21:06].

Harley Finkelstein (00:21:06):
That was the first competitor, who's now the partner. Yeah.

Larry Silverstein (00:21:09):
[inaudible 00:21:08] first competitor. I called George. George Kaufman.

Harley Finkelstein (00:21:11):
George Kaufman. Okay.

Larry Silverstein (00:21:12):
Yeah. And lovely guy. Same age and so forth.

Harley Finkelstein (00:21:18):
Jewish real estate guy.

Larry Silverstein (00:21:18):
Yeah. And so I said, "George, there's somebody else out there." [00:21:30] He said, "Well, let's think about who the possible players are." So we started talking about different people, who it might be. I said, "Could this be Richard Bernstein? He's in the market doing the same kind of things we are." He said, Do you know him?" I said, "Yeah." I said, "Okay. I'm going to call him and see if we can..." I called Richard and I said, "You're competing for the [00:22:00] 711 Fifth Avenue, the Columbia Pictures building." He said, "Yes." He said, "I made a deal with Peter Feinberg to join me." I said, "Listen, I made a deal with George Kaufman. You made a deal with Peter Feinberg. Come on, let's put our heads together and buy the goddamn building."

Harley Finkelstein (00:22:20):
So you have Feinberg, Silverstein, Kaufman and-

Larry Silverstein (00:22:23):
And Feinberg.

Harley Finkelstein (00:22:23):
And Feinberg.

David Segal (00:22:25):
And then they started a law firm afterwards. Yeah.

Harley Finkelstein (00:22:28):
So four of you all go [00:22:30] in together.

David Segal (00:22:30):
And the idea being that you're not going to bid it up this way.

Larry Silverstein (00:22:34):
Because everybody suddenly disappeared and I'm still there. Now they're fine, so, "Okay. I'll give you the deal," and we made the deal. I didn't have to pay an extra dime. I think the-

Harley Finkelstein (00:22:46):
Amazing. The original deal. Was the original deal you got.

Larry Silverstein (00:22:47):
That's it. Right.

Harley Finkelstein (00:22:48):
Right. Cy must have been pretty pissed off.

Larry Silverstein (00:22:50):
He was [inaudible 00:22:51].

Harley Finkelstein (00:22:51):
Of course. Here, he thought he had three different bidders or four bidders. Now he's got one.

Larry Silverstein (00:22:56):
And that's signed by George Kaufman. After we signed the contract, it was ours. We got it. The [00:23:00] location, Fifth Avenue and 55th Street. Superb location. Superb. Good building. Had some upside. The rents were moderate, or we could raise rents, but the location was so fantastic. And the thing you learned early on in real estate, location, location, location. The keywords, because [00:23:30] that really makes it-

Harley Finkelstein (00:23:30):
It's all that matters. Yeah.

Larry Silverstein (00:23:32):
End of day, remember George coming to me. George Kaufman. He said, "Larry," he said, "We're going to buy the stock."

David Segal (00:23:42):
Columbia stock?

Larry Silverstein (00:23:43):
Yeah. Columbia Pictures stock.

David Segal (00:23:45):
And Columbia is your tenant at this point?

Larry Silverstein (00:23:46):
Yeah. Right. They're in financial difficulty. That's why they had to sell the building. I really didn't know a thing about the stock market. And I said, "George, do you know anything?" [00:24:00] He said, "No, but Columbia Pictures is good quality [inaudible 00:24:03]."

Harley Finkelstein (00:24:03):
Columbia, that's a tier one organization, brand.

Larry Silverstein (00:24:06):
Yeah.

Harley Finkelstein (00:24:06):
Yeah.

Larry Silverstein (00:24:06):
So I said, "We're doing so well, doing what we're doing. Maybe it's smarter not to branch out into something I don't have a clue about. Just stay with real estate." And that's what we decided to do. Turns out, made a mistake. Should have bought the goddamn stock.

Harley Finkelstein (00:24:26):
It's Coca-Cola who end up buying Columbia.

Larry Silverstein (00:24:29):
Yeah. So Coca-Cola comes [00:24:30] along. They have nothing but syrup and cash.

Harley Finkelstein (00:24:34):
I like that. Coco-Cola's got syrup and cash.

David Segal (00:24:37):
Nothing but syrup.

Harley Finkelstein (00:24:38):
What else do you do?

Larry Silverstein (00:24:40):
They called. "We want to buy it." He said, "We own Columbia Pictures."

Harley Finkelstein (00:24:44):
So Coca-Cola buys Columbia and as part of that, they now want to buy back the famous Columbia building.

Larry Silverstein (00:24:49):
Yes.

Harley Finkelstein (00:24:50):
Okay.

Larry Silverstein (00:24:52):
So they made an offer. I listened to it and I said, "Not for sale." But the offer was one [00:25:00] hell of an offer. Multiple millions of dollars more than we paid for the building. Multiple millions. I remember calling everybody and saying, "Larry, it's a pretty goddamn good offer." I said, "It's not goddamn. It's fantastic." I said, "But I think there's more upside here." He said, "Well, see what you can do."

(00:25:22):
So I'm negotiating now for everybody and we were able to. No, no, no, no, [00:25:30] no. Finally led to a point where my partner said, "Listen, you can't turn this down. It's just too good." I said, "Guys, we're leaving a lot of money on the table if we sell it. Yeah. We'll do fantastically well. No question about it. And you can never lose money by making a profit." I said, "But it's a hell of a building, a hell of a location and the upside is still tremendous." So I said, "Personally, I'd recommend let's keep [00:26:00] it, because there's tons of [inaudible 00:26:03]." So they said, "Come on. Don't be stubborn. Let's sell it." So we're all friends. I said, "Okay. If you guys want to, yes." Okay. So we sold it. We made a bloody fortune. Absolute bloody fortune.

David Segal (00:26:22):
I believe the numbers are you put in about 2 million bucks of cash, sold it. Bought it for around 14 or 12, and then sold it for 57, but [00:26:30] then they sold it for 990-something. A lot of people don't like partners. Why do you like partners so much? You've had so many in your life.

Larry Silverstein (00:26:41):
It was an easy way to make progress, to move along. So if you had competitors, unless you didn't like the competitors, if you couldn't live with them, it's something, but if they're good people, people you know, people you grew up with, people who started with nothing just [00:27:00] like myself, we all started with absolutely nothing and here we were building our so-called Empires. And it was easy, because by this time, we were all social friends. You knew each other. We knew the families. We knew the kids.

Harley Finkelstein (00:27:17):
They were good people. [inaudible 00:27:18].

Larry Silverstein (00:27:18):
They're good people. They're good people. Same synagogues.

Harley Finkelstein (00:27:21):
Right. Yeah. That too. I'm going to jump back and forth a little bit here, but I want to ask you the story that [00:27:30] everyone's so fascinated by it, which is we want to hear the story of the Twin Towers, because it's fascinating. The timing is fascinating. What happened is fascinating. Walk us through that a little bit.

Larry Silverstein (00:27:39):
Years earlier, I saw a piece of land in New Jersey on the Garden State Parkway for sale.

David Segal (00:27:50):
You're driving by?

Larry Silverstein (00:27:52):
And it was Bell Labs was close by with major installations. So [00:28:00] I was in the car with Klara. I said, "Sweetheart, this is a good piece of land. This is the Bell Labs neighborhood."

Harley Finkelstein (00:28:09):
Did you talk about real estate with your wife often?

Larry Silverstein (00:28:10):
Yeah. Yeah.

Harley Finkelstein (00:28:11):
Okay.

Larry Silverstein (00:28:15):
Suppose the reason for it is when we were first married, 1956, that summer, we acquired the contract for 220 East 23rd [00:28:30] Street.

Harley Finkelstein (00:28:30):
Your first building. So she's been there from the beginning.

Larry Silverstein (00:28:33):
From the beginning.

Harley Finkelstein (00:28:34):
Incredible.

Larry Silverstein (00:28:36):
And she was good at math and she was good at doing mathematical tables. There were no computers at the time.

Harley Finkelstein (00:28:46):
It was all by hand. Right.

Larry Silverstein (00:28:48):
So I said, "Sweetheart, can you do this? Can you figure out this?"

Harley Finkelstein (00:28:51):
So she was your CFO?

David Segal (00:28:53):
Yeah.

Larry Silverstein (00:28:54):
Essentially. Yes.

Harley Finkelstein (00:28:55):
Wow.

David Segal (00:28:55):
When you're busy buying light fixtures and yeah.

Harley Finkelstein (00:28:57):
And she's writing the numbers. Wow. [00:29:00] Okay. So you're in New Jersey and you see this piece of land.

Larry Silverstein (00:29:01):
And we're in New Jersey.

Harley Finkelstein (00:29:02):
Yeah.

David Segal (00:29:02):
Yeah.

Larry Silverstein (00:29:04):
Saw this piece of land. Decided we could build 300,000 feet of office space on this piece of land. But 300,000 feet, it's a lot of space. Small town in New Jersey. Yeah. Holmdel, New Jersey. Bell Labs. Big, big op. Huge operation. [00:29:30] So we put up a sign, build-to-suit, 100,000 feet. Nothing happens. I said, "Got to get some action here." Got an earth mover to start moving dirt around. Nothing. Still nothing happens. Went to the brokers. I said, "No. It's hard for people until they see something real. [00:30:00] They don't-"

Harley Finkelstein (00:30:00):
Yeah. You got the earth movers just to show that there was something going on?

David Segal (00:30:03):
Just shuffling dirt.

Harley Finkelstein (00:30:04):
[inaudible 00:30:04].

Larry Silverstein (00:30:04):
Yeah.

David Segal (00:30:05):
There's no foundation being built. No nothing.

Harley Finkelstein (00:30:07):
Just shuffling dirt. Wow.

David Segal (00:30:10):
That's great. That's a Big Shot story.

Harley Finkelstein (00:30:14):
Yeah.

Larry Silverstein (00:30:14):
But end of story. I said to myself and I said to Klara, I said, "Sweetheart, nothing's going to happen here until we start putting up a building." "So [00:30:30] what are you going to do?" I said, "I think I'm going to go to the bank, get some money, put up some steel." So it's exactly what I did.

David Segal (00:30:42):
But when you say put up some steel, did you go to the architect, draw the plans?

Larry Silverstein (00:30:47):
Yeah. [inaudible 00:30:48].

Harley Finkelstein (00:30:47):
[inaudible 00:30:48].

David Segal (00:30:47):
Okay. So this time, it's for real. It's not just putting steel in. Yeah.

Larry Silverstein (00:30:49):
No. So put the foundation, put up steel. Call comes in. "What are you building?" I said, "We're building 100,000 feet, [00:31:00] three stories." They said, "But it's a big parcel of land. How much can you build?" I said, "Well, we can build 300,000 feet." We signed a 30-year net lease with Bell Labs for 300,000 feet.

David Segal (00:31:21):
Wow. And they could have just bought the land themselves and done it.

Harley Finkelstein (00:31:24):
And they already had a space they bought.

David Segal (00:31:26):
Right. Next door.

Harley Finkelstein (00:31:27):
Wow.

David Segal (00:31:27):
Huh.

Larry Silverstein (00:31:30):
[00:31:30] We then financed the finished buildings with the Bell Labs lease.

Harley Finkelstein (00:31:36):
Which is tier one.

Larry Silverstein (00:31:39):
We financed for several million dollars more than the cost to build the building and land. It was a home run.

David Segal (00:31:50):
That's amazing. All because you were driving on the New Jersey-

Harley Finkelstein (00:31:54):
So you had some extra money now at this point.

Larry Silverstein (00:31:57):
But it also showed me [00:32:00] the potential if you're a developer, what you could do, how you can create much more wealth.

Harley Finkelstein (00:32:09):
As opposed to just buying a existing building, to build yourself to be a developer, you can create far more wealth.

David Segal (00:32:15):
But a lot of risk. At this point, you're very well off. Why do you need it? Why do you need that risk?

Larry Silverstein (00:32:21):
I wanted the challenge. The challenge, the excitement of doing something like this. The fact that we could really do so much [00:32:30] better. It took us all these years to get to this point, but all of a sudden, one swift move and holy smokes.

Harley Finkelstein (00:32:38):
Everything changed.

Larry Silverstein (00:32:38):
Look how our net worth increased.

David Segal (00:32:40):
Hey, Big Shot listeners. We wanted to tell you quickly about one of our favorite podcasts. It's called How To Take Over The World. It's hosted by our friend, Ben Wilson. Here on Big Shot, we help some of the greatest entrepreneurs tell their stories. And what I love about Ben Wilson's show is he does the same thing for some of the greatest leaders ever throughout history. He uncovers their strategies, [00:33:00] tactics, habits, innovations and the sheer will that helped propel them to the top. We really believe that the best way to be successful is to study those that have come before you and that's exactly what How To Take Over The World does. So again, the show is called How To Take Over The World and you can listen to it wherever you get your podcasts.

Larry Silverstein (00:33:17):
One day, Port Authority puts an ad in the paper, New York Times. Million square Foot site [00:33:30] for sale at The Trade Center.

David Segal (00:33:34):
Now, this is 7 World Trade, not the Twin Towers?

Larry Silverstein (00:33:36):
7.

David Segal (00:33:37):
Right.

Larry Silverstein (00:33:38):
Apparently, they decided they didn't want to stay in the business of building buildings anymore. They built the Twin Towers, but the other buildings were up.

Harley Finkelstein (00:33:48):
So sorry, the Twin Towers was developed originally by The Port Authority.

Larry Silverstein (00:33:51):
Oh, yeah. By the Port. They built everything.

David Segal (00:33:53):
And 7 is just down the street.

Larry Silverstein (00:33:54):
And 7 is the site on which [00:34:00] they put a Con Ed substation in place, assuming that above it, they would build a million square foot office building.

David Segal (00:34:12):
And the Con Ed substation is for the subway?

Larry Silverstein (00:34:14):
It's for the Lower Manhattan.

David Segal (00:34:16):
Yeah. Lower Manhattan.

Harley Finkelstein (00:34:16):
[inaudible 00:34:17].

Larry Silverstein (00:34:17):
All the electricity.

David Segal (00:34:18):
Electricity for all of Manhattan. Okay.

Larry Silverstein (00:34:20):
All of Manhattan, including The Trade Center, obviously. All of Manhattan. And so I got the material, got the information. [00:34:30] An opportunity to build a million square foot office building, 40-story building, 25,000 foot floors. What did I know about building a 40-story building?

Harley Finkelstein (00:34:43):
Yeah. You just built something in New Jersey for the first time.

David Segal (00:34:44):
Yeah.

Larry Silverstein (00:34:44):
300,000.

Harley Finkelstein (00:34:47):
300,000. Yeah. Three floors. Three stories.

Larry Silverstein (00:34:54):
Nevertheless, I looked at it, thought about it [00:35:00] and said to myself, "Can I do this?" It excited the hell out of me. Remember coming home and talking to Klara and I said, sweetheart, "This is really a unique opportunity. A million square foot building in Low Man in the Wall Street area. [00:35:30] This thing should rent." So I said to myself, "Let's bid on it." I did. We bid on it. But this time, I have an organization of people. We won the bid. We now have a site.

(00:35:53):
First thing I did was to go down a couple of blocks from [00:36:00] The Trade Center to JPMorgan. Have an old friend there, Jim Boisi, who I've known for years. Good guy. Very senior position at JPMorgan. I said, "Jim, I got a million square foot building. Can you use it?" He said, "What are the floor sizes?" I said, "40-story building, 25,000 feet on a floor." He said, "Can you make the floors any bigger?" [00:36:30] He says, "How large is the site?" I said, "The site is 50,000 feet." He said, "Well, can't you build a 50,000 foot floor?" I said, "No, because there's a substation there." I said, "What do you need?" He said, "I could use a 2 million foot building."

Harley Finkelstein (00:36:49):
This would be JPMorgan head office?

Larry Silverstein (00:36:51):
Yeah. I said, "You could use a 2 million foot building, 48,000 floor." So I said, "Okay. Let me [00:37:00] see what I can do. I go out of JPMorgan back to [inaudible 00:37:05] and I said, "Guys, we got to convert this million foot building to a 2 million foot building." They said, "Come on. You're crazy. It can't be done." I said, "Why not?" He said, "Because we have an operating Con Ed substation on the site with the pilings in place, the foundations in place to take a 40-story building, 25,000 floors." I said, "But I got [inaudible 00:37:29] [00:37:30] for a 2 million foot building with 50,000 foot floors." He said, "There's no way to do this, because you'd have to remove the existing foundations, replace them and there's an operating substation down there. If the lights go out in Lower Manhattan-

Harley Finkelstein (00:37:48):
No good. Okay.

Larry Silverstein (00:37:48):
... forget it."

David Segal (00:37:51):
Oh, because Larry wants another million square feet.

Larry Silverstein (00:37:53):
Well, JPMorgan does.

David Segal (00:37:54):
And JPMorgan does. That's right. Yeah.

Larry Silverstein (00:37:56):
So I listened, [00:38:00] started analyzing the realities and said to myself, "JPMorgan, 2 million feet. It's twice as good, because we're going to end up paying a ground rent to The Port Authority based on 2 million feet, which is twice the ground rent I would've paid them for 1 million feet. And it's good for them, it's good for me." I said to myself and then I said to the Port, "I want to go up to Con [00:38:30] Ed. I want to talk to the chairman and I want you guys come with me." "You're crazy. I'll never do this." I said, "Maybe not, but let's give it a try."

Harley Finkelstein (00:38:43):
And the chairman of Con Ed, this is a public utility company.

Larry Silverstein (00:38:47):
Yeah. Public utility.

David Segal (00:38:48):
And you don't have a deal with JPMorgan. You guys were just shooting the breeze and he's like, "Yeah. We maybe could take 50,000 square foot floors." Right.

Larry Silverstein (00:38:55):
To JPMorgan. Good name.

Harley Finkelstein (00:38:58):
Good name. Good brand.

David Segal (00:38:59):
And Larry, what's at stake for [00:39:00] you here? You're coming off this big score in New Jersey and did you let it all ride? Are you all in on this project? Have you risked the firm on this basically?

Larry Silverstein (00:39:10):
Not yet.

Harley Finkelstein (00:39:10):
Not yet.

David Segal (00:39:10):
Okay. Not yet.

Larry Silverstein (00:39:10):
Not yet.

Harley Finkelstein (00:39:10):
Okay.

Larry Silverstein (00:39:10):
That was Klara's question.

Harley Finkelstein (00:39:15):
It's a good one though.

Larry Silverstein (00:39:20):
So went to Con Edison and I told him what I wanted to [00:39:30] do. He said, "Mr. Silverstein. Larry Silverstein?" And I said, "Yes." He said, "Aren't we suing you?" I thought for a minute. I said, "Yes."

Harley Finkelstein (00:39:45):
"Actually, you are suing me on a different project." Yeah.

Larry Silverstein (00:39:51):
He said, you're putting in a coal generation plant and you're building at 11 West 42nd Street. [00:40:00] I bought a bankrupt building on 42nd Street.

David Segal (00:40:05):
And a coal generation plant helps you get energy for that building.

Larry Silverstein (00:40:08):
Yeah.

David Segal (00:40:08):
Right.

Larry Silverstein (00:40:08):
Yeah. I said, "The reason for the coal generation system is because it could provide electricity for all of my tenants, number one. Number two, encouraged by the federal government to the United States. Number three, the cost of putting in the plant [00:40:30] is $4 a square foot of space. The net savings resulting from generating your own electricity come to a buck a square foot." And if you can spend $4 a square foot to net out, what, a dollar a square foot savings-

David Segal (00:40:49):
Per year. Right.

Larry Silverstein (00:40:50):
... per year, 25% return.

David Segal (00:40:52):
Right. Not bad.

Larry Silverstein (00:40:53):
Turns out treasury department, we checked everything. 100% [00:41:00] depreciable. 100% financeable.

Harley Finkelstein (00:41:07):
Great deal.

Larry Silverstein (00:41:08):
Huge. So I explained this to Chuckles. He said, "But you're invading my territory." He said, "My job is to provide electricity for the city." He said, "You're taking my responsibilities." I said, "But just for my tenants, not for [inaudible 00:41:26]."

Harley Finkelstein (00:41:25):
Not for the whole city. Just for that one building,

Larry Silverstein (00:41:30):
[00:41:30] Just For me. Nobody else. He said, "Well, we think that's wrong." I said, "My lawyers tell me we're absolutely in right. Otherwise, we wouldn't have done it." So end of deal. He said, "Listen, there's too much exposure to try to do this, because if you turn out the lights for Lower Manhattan, it doesn't work." He said, "Disaster." So I thought about it and I said, "Okay. Let me think about this a little bit." And I came back to him. [00:42:00] We had a series of meetings from an absolute no to finally, an agreement on his part to let me try it, but with complete-

Harley Finkelstein (00:42:15):
Supervision.

Larry Silverstein (00:42:15):
... supervision, so that if anything went wrong, stop and that's it. Finished.

David Segal (00:42:22):
Wow. Which is risky.

Harley Finkelstein (00:42:23):
[inaudible 00:42:23]. Yeah.

Larry Silverstein (00:42:24):
Huge risk.

David Segal (00:42:24):
Right.

Harley Finkelstein (00:42:24):
Yeah.

David Segal (00:42:25):
Because a lot can go wrong.

Larry Silverstein (00:42:27):
Lot go wrong.

Harley Finkelstein (00:42:28):
But you did it and JPMorgan moved in.

David Segal (00:42:30):
[00:42:30] No.

Larry Silverstein (00:42:30):
No.

David Segal (00:42:31):
JPMorgan didn't. Yeah.

Larry Silverstein (00:42:31):
They didn't.

Harley Finkelstein (00:42:32):
Who moved in?

Larry Silverstein (00:42:35):
We were able to remove the piles without affecting electricity. It was a series of engineering feats that-

David Segal (00:42:46):
Why did he let you do this? He has nothing to gain.

Larry Silverstein (00:42:50):
Because for writing this book. I went back to everybody. Everybody's dead [inaudible 00:42:57]. [00:43:00] I can't remember how I convinced him to do this, but somehow, I convinced him. I don't know. I just can't remember.

David Segal (00:43:07):
Right. Because he had no interest in this. He doesn't gain anything. In fact, he's got lots to lose.

Larry Silverstein (00:43:11):
Exactly. I just can't understand. I just don't remember. So when we're finishing the building-

Harley Finkelstein (00:43:22):
When you're finishing 7 World Trade.

Larry Silverstein (00:43:24):
I should tell you a couple of others on the way. I went to Chase Bank. [00:43:30] Len Casey was the mortgage officer at Chase and I said, "Len, I need to finance 7 World Trade. I'm going to build a 2 million foot building." And I said, "Right. I'm going to need $300 million." So he agreed to give us $300 million. I had to sign personally, but [inaudible 00:44:00].

David Segal (00:44:00):
[00:44:00] So now you're all in.

Larry Silverstein (00:44:00):
Now I'm all in.

Harley Finkelstein (00:44:01):
And once again, you don't have to do any of this. You're set.

Larry Silverstein (00:44:06):
I'm all in, but I put a condition. The condition was that as I would build a building, as the floors went up, my guarantee went down, so that when I finished the building-

Harley Finkelstein (00:44:20):
You'd have no personal guarantee left.

Larry Silverstein (00:44:20):
No personal guarantee.

Harley Finkelstein (00:44:22):
So as each floor went up, your personal liability went down.

Larry Silverstein (00:44:25):
Went down.

David Segal (00:44:26):
Not leased, but built.

Harley Finkelstein (00:44:28):
But built. That's right.

Larry Silverstein (00:44:28):
Built. Yeah.

Harley Finkelstein (00:44:29):
Yeah. Yeah.

Larry Silverstein (00:44:29):
Right. So [00:44:30] I had build it. I had to know what I'm doing.

Harley Finkelstein (00:44:32):
Yeah. So full liability if nothing happens.

David Segal (00:44:33):
Right.

Larry Silverstein (00:44:34):
If nothing happens. Right. Exposure, yes. But by that time, I felt I had a good team around me, knew what they were doing, capable of doing this without going over and being on time. Okay. Building's going up. Got a call. John Gutfreund, Salomon Brothers. They said, "It looks like you're building an interesting [00:45:00] building down here. 2 million feet." I said, "2 million feet." Oh, by the way, went back to JPMorgan, told them we can do the 2 million foot deal. It turns out Morgan got into a hassle with Ed Koch, the mayor. They got so upset with the mayor, they decided to pull the whole operation and move it down to Delaware.

Harley Finkelstein (00:45:22):
Oh my gosh.

David Segal (00:45:23):
JPMorgan left New York?

Harley Finkelstein (00:45:24):
So no-

David Segal (00:45:25):
Just for that operation.

Harley Finkelstein (00:45:26):
That particular operation.

David Segal (00:45:27):
[inaudible 00:45:27]. Wow.

Harley Finkelstein (00:45:27):
Wow.

Larry Silverstein (00:45:28):
So the 2 million feet-

Harley Finkelstein (00:45:28):
Just to give it to the mayor.

Larry Silverstein (00:45:29):
Yeah.

Harley Finkelstein (00:45:30):
[00:45:30] Wow. Okay.

David Segal (00:45:32):
You're all in, all because they told you they'd do 50,000 foot floors instead of 25,000 foot. Yeah.

Larry Silverstein (00:45:38):
And here we are. $300 million for JPMorgan Chase. So the presentation at Salomon Brothers, they looked at it. They said, "Okay. Interesting. We're going to come back to you." Sure enough, a week later, they called back. They said, "We'll take a million feet."

David Segal (00:45:58):
Great. Fantastic.

Larry Silverstein (00:45:59):
Of course, [00:46:00] Salomon Brothers-

David Segal (00:46:01):
It's a great anchor.

Larry Silverstein (00:46:02):
... fantastic name.

Harley Finkelstein (00:46:05):
Yeah. Yeah. Of course. [inaudible 00:46:06].

Larry Silverstein (00:46:08):
It would be a home run. Come home.

Harley Finkelstein (00:46:10):
Sweetheart.

Larry Silverstein (00:46:10):
Tell Klara I said, "Sweetheart, we got a million foot 10." She said, "I love you." She said, "You're fantastic. Whatever you set your mind to doing, you do and it's phenomenal." She said, "God bless you." Okay.

Harley Finkelstein (00:46:28):
Now you're feeling pretty good.

Larry Silverstein (00:46:29):
Pretty good. [00:46:30] Except that six months goes by. We're busy finishing the lease with Salomon Brothers. Big building. Big lease. Takes a lot of time. Get a call from Gutfreund. He said, "Larry, I have bad news for you." I said, "What's the news?" He said, "We're not going to take your building. We're not going to take your space." I said, "The building, [00:47:00] it's half up." He said, "I know it." I said, "You're going to end up owing me a lot of money." He said, "I know it."

David Segal (00:47:10):
Because there's a breakup fee, right?

Larry Silverstein (00:47:12):
Yeah.

David Segal (00:47:12):
Yeah.

Larry Silverstein (00:47:13):
End of day, he said, "We're moving to Mort Zuckerman. Boston Properties is building on the Coliseum site." [inaudible 00:47:25].

David Segal (00:47:24):
He's in Columbia Circle, right?

Larry Silverstein (00:47:27):
Yeah.

David Segal (00:47:27):
Yeah.

Larry Silverstein (00:47:28):
And his building, designed by [00:47:30] Eli Attia, has got all kinds of bells and whistles and-

David Segal (00:47:33):
Atriums and other things.

Larry Silverstein (00:47:34):
... it looks fantastic. I said, "But your rent up there is going to be twice what your rent is with me." He said, "Larry, we're making so much money, it doesn't make any difference." Now, when you talk to somebody and you hear that, you realize he's lost it.

David Segal (00:47:49):
Definitely.

Larry Silverstein (00:47:50):
He's really lost it and there's no convincing a guy like that. In addition to what he said, I sold ice cream on that corner when I was in high school. Came home. [00:48:00] I said, "Klara, we lost Sally. A million feet." She looks at me and she said, "You know what? Something else is going to come up and it'll be even better." I said, "Better than a million feet with Salomon Brothers?" She said, "I have faith in you and this is going to work out just fine. Don't worry. You're going to make it." I said, "I hope somebody's listening." [00:48:30] So we go about our business, put the space up for lease again. Get a call one day from Drexel Burnham. They said, "Come make a presentation." Made a presentation. Called me back. They said, "We like it. We'll take it." I said, "How much?" He said, "2 million feet."

David Segal (00:48:51):
The whole thing.

Larry Silverstein (00:48:52):
I said, "2 million feet? You're taking the whole building?" He said, "We'll take the whole building. We're going to sign a 30-year lease. It's ours. Finished. [00:49:00] Done." I came home. I said, "Klara."

Harley Finkelstein (00:49:03):
Sweetheart, you're right.

Larry Silverstein (00:49:05):
"You're a genius."

David Segal (00:49:06):
Your prayers were answered. Yeah.

Harley Finkelstein (00:49:07):
That's incredible. So how do we get to-

Larry Silverstein (00:49:10):
Because Mike Milken, who's the brains behind Drexel Burnham, Ivan Boesky turned state's evidence against Mike Milken, the genius behind Drexel. He ended up in jail. [00:49:30] The company ended up in bankruptcy. However, so I remember coming home to Klara and saying, "Now we lost Drexel. What do we do? The building is finished-

David Segal (00:49:41):
It's all Drexel.

Larry Silverstein (00:49:42):
... and 100% empty. 100% empty." And the Chase Bank is sitting there, "Larry, what are you going to do?" Call comes in from John Gutfreund, Salomon Brothers." [00:50:00] He said, "Will you talk to me again?" I said, "I don't know. What do you want to talk about?"

Harley Finkelstein (00:50:06):
You've walked away from this deal.

Larry Silverstein (00:50:07):
He said, "This deal is not going to happen. Jackie Onassis started litigation. It's not going to-"

Harley Finkelstein (00:50:11):
Yeah. We heard. Yeah. Jackie Onassis is suing that building.

David Segal (00:50:14):
They obstructed Hughes.

Larry Silverstein (00:50:15):
He said, "We want to come back to 7 World Trade Center."

David Segal (00:50:19):
Now you know the price doesn't matter too.

Larry Silverstein (00:50:22):
So this time, we got 1,000,300 thousand feet from him out of 2 million feet. [inaudible 00:50:28].

Harley Finkelstein (00:50:27):
Perfect. Great anchor [00:50:30] tenant.

Larry Silverstein (00:50:30):
Huge, huge success.

Harley Finkelstein (00:50:32):
Solomon Brothers made it.

Larry Silverstein (00:50:34):
But you asked me how it all happened. We're at the topping out ceremony for the original 7 World Trade Center. This a 2 million foot building. Huge building right here. I look up and I see the Twin Towers and I said to myself in 1987, I said, "Wouldn't it be incredible to someday own those?"

Harley Finkelstein (00:50:56):
Wow.

David Segal (00:50:56):
Wow.

Harley Finkelstein (00:50:57):
That was something that was meaningful to you. You were [00:51:00] this poor kid that built this real estate empire and those were the Twin Towers.

David Segal (00:51:04):
And you didn't need any of this. You had made it long ago.

Harley Finkelstein (00:51:06):
Of course.

David Segal (00:51:07):
It's challenge after challenge after challenge. Yeah.

Harley Finkelstein (00:51:09):
Yeah. And that was something that was going to be meaningful to you. The Twin Towers.

Larry Silverstein (00:51:12):
So in 1999-

Harley Finkelstein (00:51:15):
99. Yeah.

Larry Silverstein (00:51:17):
... I get a call from Governor Pataki.

Harley Finkelstein (00:51:19):
Okay. The governor of New York.

Larry Silverstein (00:51:22):
And by the way, by this time, I had a terrific relationship with The Port Authority, because the huge success.

David Segal (00:51:29):
Right. They got a lot of tax [00:51:30] dollars.

Larry Silverstein (00:51:31):
2 million feet of ground rent instead of 1 million feet. They were very happy. Very happy and it's a good relationship. So I told the governor, I said, "Whatever you're interested in, the answer's absolutely yes."

Harley Finkelstein (00:51:44):
This is 12 years after you first looked at the Twin Towers and said, "One day, I'd love-

Larry Silverstein (00:51:48):
I'd own those.

Harley Finkelstein (00:51:48):
... to own those buildings."

Larry Silverstein (00:51:49):
Yeah. Yeah. Yeah. That was in 87.

Harley Finkelstein (00:51:51):
87. 12 years later, 99.

Larry Silverstein (00:51:52):
This is 99. So we started getting involved [00:52:00] and three days... No. I'm sorry. Five days before the best and final bids were due and I was one of the three finalists. Two major public companies, both real estate investment trusts.

Harley Finkelstein (00:52:22):
They're REITs. Yeah.

Larry Silverstein (00:52:23):
Yeah. REITs.

David Segal (00:52:24):
Who you can't call and bring in your deal this time. Yeah. Yeah. Exactly.

Harley Finkelstein (00:52:26):
They're a million shareholders.

David Segal (00:52:27):
Yeah.

Larry Silverstein (00:52:28):
So net result of it, [00:52:30] everybody said, "Silverstein-

David Segal (00:52:33):
No way.

Larry Silverstein (00:52:34):
... no way. You're a private company. You don't compete with these massive public companies. Not going to happen." Walking home from a dinner party on the 25th of January, sent my driver home, of course. He has a family. He's got kids. I said, "I'm going to walk home. I'm close to where I live, so go home." [00:53:00] He went home. Wonderful dinner party. Our host gave us a bottle of wine and a special container with glasses and a bottle and all sorts of stuff really. So I said to myself, "Do I leave it here and let him ship it to me, or do I put on my heavy winter coat and put this in the crux of my arm and walk with it?" I said, "Oh, put it in the crux of my arm. I'll walk with it."

(00:53:28):
So [00:53:30] I leave the dinner party walking up Madison Avenue, get to 57th Street and Madison. Green Light across the street with everybody else. And out of nowhere, comes a car, slams into me. A drunk driver slams into me. I'm on the floor, broken pelvis in 11 places and pain like I never had in my life. I thought I was going to die. It was excruciating. It was just horrendous, [00:54:00] because this guy came at me.

Harley Finkelstein (00:54:02):
Drunk driver. Wow.

Larry Silverstein (00:54:03):
Yeah. Drunk driver. End up in the hospital. I said, "Please give me morphine, because the pain is horrible." So they gave me morphine. Put me out. I wake up two days later. Three days. I forget. Two or three days later in the hospital. And I said, "What's today?" "It's [00:54:30] the 28th day of January." I said, "28th day of January. The best and final is due in two days."

Harley Finkelstein (00:54:37):
For the World Trade Center.

Larry Silverstein (00:54:37):
For the World Trade Center. I said, "Cut the morphine. Get me a conference room. I need phones. I need my people. I got to [inaudible 00:54:47]."

Harley Finkelstein (00:54:46):
This is in the hospital. You're saying, "Cut the morphine. I need to be clear-headed."

David Segal (00:54:50):
And you're in your 70s at this point.

Larry Silverstein (00:54:50):
They said, "The pain is going to be terrible" I said, "I can't help it. I got millions of dollars with this."

Harley Finkelstein (00:54:54):
Yeah. And you need a conference room in the hospital and your team needs to come in and cut the morphine. You want to be clear-headed for the negotiation of the World [00:55:00] Trade Center.

David Segal (00:55:01):
With a broken pelvis.

Harley Finkelstein (00:55:02):
With a broken pelvis.

David Segal (00:55:03):
Yeah.

Larry Silverstein (00:55:03):
So that result is they did that. The pain came back and oh, it was horrible. Just horrible. But I couldn't help it. We had millions of dollars invested in this thing by this time.

Harley Finkelstein (00:55:12):
They must have thought you were mashugan at the hospital.

Larry Silverstein (00:55:15):
I probably was.

Harley Finkelstein (00:55:16):
Okay. We all are.

Larry Silverstein (00:55:17):
In any event, driving home a couple of days later, call comes in from JPMorgan, who is then representing The Port Authority [00:55:30] in the sale of The Trade Center. And they said, "Larry, you're the next high bid, but you didn't win. Steve Ross of Vornado." I said, "What was his bid?" "3.25 billion."

Harley Finkelstein (00:55:46):
3.25 billion was the highest.

Larry Silverstein (00:55:48):
Mine was 3.2 and the low bid, Boston Properties and Brookfield, they put in 3.15 billion. So it's 50 million below me, 50 million above [00:56:00] me. 50 million is a rounding error.

Harley Finkelstein (00:56:02):
On a 3-

Larry Silverstein (00:56:03):
On a 3.2.

Harley Finkelstein (00:56:05):
... [inaudible 00:56:06] building for sure.

Larry Silverstein (00:56:06):
Yeah.

Harley Finkelstein (00:56:06):
Yeah.

Larry Silverstein (00:56:08):
But I lost. Okay. So I remember calling Steve Ross. I said, "Steve, mazel tov. You got it."

Harley Finkelstein (00:56:15):
Congratulations. Yeah.

Larry Silverstein (00:56:17):
"Congratulations. I got some fantastic financing. I can't use it now."

Harley Finkelstein (00:56:19):
You should use it.

Larry Silverstein (00:56:21):
"You should take it." He said, "Larry, that's very generous. I really appreciate that." I said, "[inaudible 00:56:27]."

Harley Finkelstein (00:56:27):
You didn't have to do that.

Larry Silverstein (00:56:28):
No, but [00:56:30] why not?

Harley Finkelstein (00:56:31):
Yeah. You didn't win anyway.

David Segal (00:56:32):
[inaudible 00:56:34].

Harley Finkelstein (00:56:32):
It was a good deal.

David Segal (00:56:32):
Yeah.

Larry Silverstein (00:56:35):
It was the proper thing to do.

Harley Finkelstein (00:56:36):
It was right to do.

David Segal (00:56:36):
Right.

Harley Finkelstein (00:56:36):
A mensche thing to do. Whatever you want to call it. Okay. Second of all, I've known Steve for 40 years and he's a good competitor, tough competitor. 19 days go by. I get a call from JPMorgan. "Are you still interested?" I said, "Why?" [00:57:00] He said, "Because we're not going to close the deal with Vornado." He said, "And if you're still interested-

David Segal (00:57:08):
You're the next bidder.

Larry Silverstein (00:57:09):
... you're the next bidder." And I said, "You know something? I don't want to be in a position of being a stalking horse. I'm not going to do that. I'm not going to play that game." So I said, "And I'm telling you this now."

David Segal (00:57:25):
Is to Steve.

Larry Silverstein (00:57:26):
"My next call is to Steve to make sure."

Harley Finkelstein (00:57:27):
Make sure that he's actually out.

David Segal (00:57:29):
Sure.

Larry Silverstein (00:57:30):
[00:57:30] So I call him and he said, "Larry, they don't trust me. I don't trust them. I'm a public company. The things they're asking me to do I can't do." I said, "What are they asking you to do?" He told me what they're asking him to do.

Harley Finkelstein (00:57:45):
You didn't think that was unreasonable?

Larry Silverstein (00:57:47):
No. Why? Because we're a private company.

Harley Finkelstein (00:57:49):
Yeah. [inaudible 00:57:50].

Larry Silverstein (00:57:49):
I can do whatever I want.

David Segal (00:57:50):
Yeah.

Harley Finkelstein (00:57:50):
So you own the company.

David Segal (00:57:51):
Right.

Larry Silverstein (00:57:52):
He couldn't. And I've lived with them for 20-something odd years now at the original 7 World Trade Center.

Harley Finkelstein (00:57:58):
Yeah. You knew how they operated.

Larry Silverstein (00:58:00):
[00:58:00] So I called back and I said, "Okay. I'll take it." I said, "But I want his contract." He's negotiated a contract for it. He's a good negotiator.

Harley Finkelstein (00:58:10):
Yeah.

Larry Silverstein (00:58:11):
I said, "You want me to close in 21 days."

Harley Finkelstein (00:58:12):
"His contract is the one I want for that."

Larry Silverstein (00:58:14):
I said, "The only way we'll close is 21 days."

Harley Finkelstein (00:58:17):
Oh my gosh.

Larry Silverstein (00:58:18):
"Give me his contract." We ended up with his contract, but I remember calling him and I said, "Steve, I want your contract." He said, "Larry, cost me a lot of money." I said, "Are you asking me to pay for your contract?" He said, "Yes." [00:58:30] I said, "I offered my [inaudible 00:58:33]."

Harley Finkelstein (00:58:32):
You're financing him.

Larry Silverstein (00:58:33):
"I didn't ask you for a dime." And he said, "You're a more generous guy than me." That's exactly what he said.

Harley Finkelstein (00:58:39):
You paid for his contract.

Larry Silverstein (00:58:40):
No.

Harley Finkelstein (00:58:40):
You didn't. Good. So you close on the building, August 2001.

Larry Silverstein (00:58:45):
Yeah.

David Segal (00:58:45):
Right.

Harley Finkelstein (00:58:45):
September 11th happens-

Larry Silverstein (00:58:47):
Six weeks later.

Harley Finkelstein (00:58:48):
... six weeks later.

David Segal (00:58:48):
six weeks later. Yeah.

Harley Finkelstein (00:58:49):
You were not in the building, because from what we understand in our research-

Larry Silverstein (00:58:52):
My wife saved my life.

Harley Finkelstein (00:58:53):
... your wife told you to go to a dermatologist for a skin cancer check and now, the [00:59:00] story we understand, correct if it's wrong, you had missed a few appointments already and, "Sweetheart, you better go to this one." And so you went that morning.

Larry Silverstein (00:59:08):
I was prepared to go that morning. I canceled my appointment here with a tenant.

Harley Finkelstein (00:59:13):
To go to the dermatologist. You would've been in the building on September 11th.

Larry Silverstein (00:59:18):
Yeah. Yeah. I wouldn't be here.

Harley Finkelstein (00:59:20):
And you wouldn't be here. The only reason that you're sitting here with us right now is because your wife-

David Segal (00:59:23):
To finally go to the doctor.

Harley Finkelstein (00:59:25):
... made you finally go to the doctor to check your skin.

Larry Silverstein (00:59:26):
At that time, we were married 45 years. You're married to somebody [00:59:30] for 45 years, the last thing you want to do is get her [inaudible 00:59:34].

Harley Finkelstein (00:59:34):
I'm married for 10 years. He's a little bit further along than me and we're also married to Jewish women too, so trust me.

Larry Silverstein (00:59:40):
And the words are, "Yes, Dear."

Harley Finkelstein (00:59:41):
That's exactly right, or sweetheart.

Larry Silverstein (00:59:42):
From you to her.

Harley Finkelstein (00:59:43):
That's exactly right. So you weren't there and actually, your children who also worked in the building, they usually come in at 9 AM and the towers are hit at 8:30.

Larry Silverstein (00:59:54):
8:45.

Harley Finkelstein (00:59:54):
8:45. So 50 minutes later, had the terrorist attack happened then-

Larry Silverstein (00:59:57):
Disaster.

Harley Finkelstein (00:59:58):
... they would've been gone. So you were [01:00:00] saved by the dermatologist. They were saved by 15 minutes.

Larry Silverstein (01:00:03):
By traffic.

Harley Finkelstein (01:00:04):
By traffic. And then actually, what I also find interesting is that Twin Towers come down and you decide, and I believe it was your wife who said, "I know you're going to want to do this and I know you're not going to sleep until you do it," and so you decided to rebuild.

Larry Silverstein (01:00:18):
Actually, it's close.

Harley Finkelstein (01:00:19):
Yeah. Tell us.

Larry Silverstein (01:00:20):
But I remember saying to her, because she was there, she was there my entire life, [01:00:30] part of my entire life and whatever I've done with her access, with her [inaudible 01:00:35] and so forth is complete knowledge of what I was doing. And so I sat down with her one day and I said, "We have to make a decision and I need your help, because the end of the day, if you don't want me to do it, I won't do it." Because I said, "I promised you so many times that we'll go out and build another motor yacht, travel around the world and so [01:01:00] forth." Because once we had The Trade Center, we had enough, finished, done. Everybody was provide for. So I said, "We can if you want now, go off, build another motor yacht, go around the world, do whatever you want. Anything you want we could do, which is what I promised you to do." Alternative to that is rebuilding The Trade Center.

Harley Finkelstein (01:01:23):
Rebuilding.

Larry Silverstein (01:01:23):
And I said, "This is going to be taking at least 10 years of my life, so I can't do this without you. I need you by my side." [01:01:30] And so she looks at me and she said, "You're not going to be happy doing anything else with your life, so let's get on with rebuilding The Trade Center."

Harley Finkelstein (01:01:36):
And you did.

Larry Silverstein (01:01:38):
Just like that.

Harley Finkelstein (01:01:39):
Wow. Yeah. Wow. I know-

David Segal (01:01:41):
It's such a meaningful thing for America. Larry, what is chutzpah?

Harley Finkelstein (01:01:45):
This conversation, this whole project is an exploration of Jewish entrepreneurship and Jewish pride, which frankly, is probably needed now more than ever, I would say, at least in my lifetime. But the question David's asking is there's something about people [01:02:00] like you and who we look up to as role models and there's this element of chutzpah in your story and we're fascinated where it comes from.

David Segal (01:02:09):
You started with nothing and here we are. You've bought the World Trade Center and then rebuilt it. It's an American iconic building. How did that happen? How did you have such chutzpah?

Larry Silverstein (01:02:22):
I can't tell you. I don't know. All I know is that two days after [01:02:30] 9/11, Governor Pataki called me at seven o'clock in the morning and said, "What do you think we ought to do?" I said, "There's not a doubt in my mind it needs to be rebuilt. And the reason it needs to be rebuilt is because The Trade Center was the locomotive for business activity in Lower Manhattan. Without it, forget it. Lower Manhattan [01:03:00] wouldn't be what it is today, but it is the locomotive. Has been for all these years and the reason for it is you got mass transit. You got 11 mass transit lines, plus the PATH trains through New Jersey. It's all here."

(01:03:14):
I said, "You just have to rebuild these buildings, because millions of feet of other buildings down here and people living down here. So maybe they'll move out for a while, but if we put it back and put it back better than what existed initially, [01:03:30] it'll come into its own again." So I said, "I'll spend the next 10 years of my life. If my wife agrees, I'll spend the next 10 years of my life."

David Segal (01:03:42):
And she did agree to it.

Larry Silverstein (01:03:42):
Yeah.

David Segal (01:03:42):
Yeah.

Larry Silverstein (01:03:43):
Yeah.

David Segal (01:03:44):
Is chutzpah uniquely... Does it have to do with our Jewish upbringings?

Larry Silverstein (01:03:53):
Well, I don't know if any other religion has a word that [01:04:00] applies as chutzpah does.

Harley Finkelstein (01:04:01):
Yeah. It's like audacity. But it's interesting, because one of the reasons that this project is so meaningful to us is we're trying to explore what makes the Jewish condition so unique. One question that we ask all our guests is when did you know that you made it?

Larry Silverstein (01:04:17):
There was a time when I said to Klara, "My father had always exposed me [01:04:30] to small boats." And I remember he's taking me to the boat shows every year and I said, "Dad, why are we doing this? We can't afford this." He said, "Because you need to know what's out there. So if you want to work for this, if you want to strive for this, you'll know that it's here. It's your call." And I'll never forget that, because I remember one day [01:05:00] when I was dating Klara, a typical date was 5 cents for the Staten Island Ferry. Great ride. Great ride. Great views and we were together.

(01:05:09):
It cost nothing. 5 cents. Fantastic. So we spent time on the water. We loved the water. And I remember saying once we bought our first boat for $2,500 and we took our first child, Sharon, on the water, [01:05:30] then our second child, Roger and Sharon, then our third, Roger, Sharon, Lisa on the water. The boats had to get bigger, so we kept growing and finally said to Klara one day, I said, "Sweetheart, a friend of ours had just bought a 37-foot Egg Harbor.

Harley Finkelstein (01:05:47):
Beautiful boat.

Larry Silverstein (01:05:48):
I said, "We get to that stage, we can own a boat like that, we don't want anything else. It's enough. Finished. Done."

Harley Finkelstein (01:05:56):
We have enough. Yeah.

David Segal (01:05:58):
And then when you got there, were [01:06:00] you able to turn to her and smile?

Larry Silverstein (01:06:03):
So we have 185 motor [inaudible 01:06:06]-

Harley Finkelstein (01:06:05):
Beautiful.

Larry Silverstein (01:06:06):
... with a 14 crew.

Harley Finkelstein (01:06:07):
And you love it?

Larry Silverstein (01:06:08):
Love it.

Harley Finkelstein (01:06:09):
Every time you walk on it, it's meaningful, because you built that. You did that. What do you tell your grandchildren? What do you tell your children about how to live a life? You seem not only ambitious, but you're deeply in love with your wife of almost 70 years, you have this incredible relationship with your children and you have this amazing business and you have a certain [01:06:30] contentment. What's the secret?

Larry Silverstein (01:06:34):
Yes, but we're on the board at NYU. Then we're on the board of the medical center. Got to know the medical students, understood what their concerns were. And I remember sitting with Klara and saying, "You know what? These kids want to practice family medicine [01:07:00] and they can't, because they have to pay for the cost of tuition and they're going to end up borrowing $250,000. How are they going to pay that off with family if they can't?" So I said, "Let's try something." So we paid for the first. We paid for five kids and covered their medical school education and [inaudible 01:07:25] and we did that for several [01:07:30] years. So that to me, I remember completing that, saying to Klara and having dinner with Ken Langone and his wife and he put $100 million dollars into it. It was really terrific. That to me was more important than anything else we had done, because there, we had a direct impact.

Harley Finkelstein (01:07:55):
Yeah. And you saw the impact of that. It was visible. It was visceral.

Larry Silverstein (01:07:58):
So every year, [01:08:00] they come upstairs, they come put them into our conference room, we spend a couple of hours together.

Harley Finkelstein (01:08:06):
These are all the medical students?

Larry Silverstein (01:08:07):
Yeah. Yeah. And it's just every year they come, we sit there, my wife and I will be in tears just listening to these people.

David Segal (01:08:15):
There's a lot of meaning to it.

Larry Silverstein (01:08:16):
How it's affected them.

David Segal (01:08:17):
It's incredible.

Larry Silverstein (01:08:18):
The things they're about to do, what they're about to accomplish is fantastic.

Harley Finkelstein (01:08:21):
Yeah. Look, David and I have built our entire lives and careers standing on the shoulders of giants and sometimes the giants don't even know it, like you. [01:08:30] We didn't have pictures of athletes or musicians or actors on-

Larry Silverstein (01:08:35):
[inaudible 01:08:37].

Harley Finkelstein (01:08:36):
... posters on our walls. We talked about stories like Larry Silverstein and for us to come full circle and sit down with you here today is not only a great honor, but is incredibly meaningful for us and we hope to have half the impact you've had, Larry, on the world and we're really grateful for this time.

David Segal (01:08:52):
Quite inspirational, Larry, to have started with nothing and gone as far as you have and to have laid it all on the line time and time again when you didn't have to is [01:09:00] just so impressive. And the way you've given back to your community is admirable and something that we should all strive for.