Frederick P. Rose dies at 75.
His sons Adam, president of Rose Associates, and Jonathan F.P., who now heads a Katonah, NY-based real estate firm that consults on the development of community facilities, explained that their father never wanted to be called a "developer," but instead considered himself a "builder."
"A developer was the one with the money who didn't know how to do the work," Adam said. "He was the construction, engineering and architectural expertise, and he leveraged the money. He would go to the site and be demanding, yet supportive. He had high standards for himself and he wanted other people to be the same."
Added Jonathan, "He really knew how to build a building. From the time I was a little child, I would walk through with him. He not only knew the process at every level, but he knew all the workmen by their first names."
Frederick Phineas Rose is also survived by a daughter, Deborah Rose, and three grandchildren, Ariel, Rachel and Sarah. While they raised their children in Scarsdale, NY, where he eventually was elected to the school board, most recently, he and his wife of 51 years, Sandra, lived in Rye, NY, where Rose passed away after an illness. He was very active until about two weeks earlier, Adam said, even playing rounds of golf.
Like others of his extended family, which constructs and manages real estate under Rose Associates, their energetic chairman never left philanthropy far from his thoughts, even when he made tightly structured development deals.
"He was the closest thing to a saint," said Charles Benchson, a deal partner and friend for several decades. "Everybody feels the same. He will be greatly missed. He was so charitable, not only with money, but with time."
Invited to speak last October at developer Larry A. Silverstein's annual workshop at the New York University Real Estate Institute, where Rose was a member of the advisory board, he talked about many of his deals, his development philosophy, and the company's history.
"What was so staggering and so exquisite about that lecture is that he spent a third of the time talking about ethics and principles and business scruples," said Silverstein, recalling that evening last week. "And I remember the reaction of the class, which was so overwhelmed by the intensity of his focus, and the quality of it, and that he was so dedicated to the principles of life and the fundamentals of business and how he conducted himself."
Adam Rose said his father grew "a corps" of former senior Rose employees to whom he continued to act as a mentor, long after they changed jobs, and enjoyed his time as counselor.
During the lecture, Rose described purchasing the site of their most recent luxury rental, the 50-story Madison Belvedere at 10 East 29th Street, which lies next to the Church of the Transfiguration at Madison Avenue.
Rose called up the then parking lot owner, and although another well-publicized deal with a development wannabe was in the making, declared "I want to buy your site, all-cash, tomorrow. That got his attention," Rose recalled, but it still took a long time.
The day they closed, he walked over to introduce himself to the Episcopal priest. Rose said, "I can't help noticing that your vestibule needs work." The priest explained, "We're as poor as church mice," and Rose asked, "Can I send over a crew?"
"But our community room is worse," the priest suggested, and they walked in to look at it. There, among other problems, Rose noticed that each fluorescent bulb was different, and offered to re-lamp the fixtures.
"We spent $25,000, and I made a friend," he recalled.
It was that benevolent spirit, which sometimes brought along a multi-million dollar gift, that opened doors to the board meetings and friendship of the leaders of some 35 companies, hospitals, banks, charities, schools, civic and cultural institutions, ranging from Con Ed to the Met. But it was his smile, charm and quick wit that made him a welcome addition.
He would play the piano after some Lincoln Center meetings, delighting the board while pursuing a love of music shared by a family that spreads its support to many institutions.
It is his brother Elihu and sister-in-law Susan P. Rose who take the lead at Carnegie Hall, for instance, where she is now a trustee, and they founded the Rose Museum and the Real Estate Club of Carnegie Hail, to which the entire family belongs.
Rose was an avid chess, tennis and golf player - even if he wasn't that good at the latter - and also skied, which Jonathan said was "a family thing," traveled, created Origami figures learned from a chemistry lab partner at Yale, and worked at friendships, many grown at the Real Estate Board of New York, where he was a governor for 11 scattered years beginning with a two-year term in 1971, alternating with his two brothers.
Rose was born in 1923 and grew up in The Bronx, where his father, Samuel B. Rose, was one of six brothers and sisters, one of whom, he said, was married to "a smart man in the ice cream business." This Uncle Mike invested in purchasing finished buildings from builders and "accumulated quite a portfolio."
"My uncle, David, was fascinated by building and construction, and had a job in the Garment District," Rose recalled. He said to Mike, "Why buy when I can build it and it won't be walk-ups?" With elevators, the upper floors wouldn't be a detriment, and with fire escapes, would be safer.
From that conversation, his father, Samuel, and Uncle David began Rose Associates. By 1928, the brothers put up a six-story, 218-unit building with funds from Metropolitan Life - where they remain one of the largest borrowers - and within two years had constructed 900 apartments, "and kept them through the horrible days of the Depression."
Rose recalled that in 1932, there was a newspaper editorial that said, "Hats off to New York's great benefactors, the builders who created jobs at Rockefeller Center, and to Rose Associates for building the Academy Apartments."
That building, at 1000 Grand Concourse at 164th Street, was the first apartment building constructed of reinforced concrete. It had 500 apartments, a facing of "high class, good brick," and a garden on the roof. "This was the pride of The Bronx, and the rents were 15 percent below West End Avenue," Rose explained.
The brothers went on to create 400 apartments overlooking Baker Field, Park Terrace Gardens in Inwood, and then jumped to Manhattan, working at Second Avenue and 11th Street, and then on 57th Street.
Rose Associates' future success was now secure in a city that was growing taller and more populated.
"In the 1920's, we [the city] were building for the same population, [of 8 million people] 60,000 to 80,000 units a year," Rose observed last fall, calling the current trend of building only 4,000 to 6,000 a units per year "a disgrace."
Rose learned enough from his father and uncle at the family's construction sites, at the prestigious Horace Mann School, and at Yale, where he obtained a Bachelor of Engineering in 1944, that during his brief service in the construction battalions of the U.S.N.R. Seabees in the Pacific Theater, he rose to the rank of lieutenant.
There he learned how to focus on the "critical path" - the items needed "to produce an airplane or a battleship," in the shortest period of time, which he later translated to building construction.
For instance, he explained, the property purchase comes first with the goal of the certificate of occupancy. "Paint is not on the critical path," Rose advised, saving that designation for items needed for construction and permits. Still, "It doesn't matter a damn bit if you're ahead on the masonry if the brick is late," he said.
With this theme ingrained, after the war, the brothers returned to New York and the family firm. Fred led the design and construction piece, while Elihu managed the buildings, and brother Daniel handled planning and finances.
As the company grew, Rose oversaw the family's first office development, creating the two-building, 1 million square-foot 280 Park Avenue around 1961, which he told Larry Silverstein was the commercial building he is most proud of.
Designed by Emory Roth & Sons, it was owned by Bankers Trust as its world headquarters. The quality Class A building sold in 1997 to Boston Properties for $321.15 million.
But the Roses never strayed far from the family's core business, and under the Sixties' popular and government subsidized Mitchell-Lama program, Rose built more than 2,000 middle income units.
The family created larger and more glamorous buildings in the 1970's that included the 50-story Sheffield at 320 West 57th Street, which has its five lower floors dedicated to professional space and street retail. But while other families were co-oping in the 1980's, the Roses kept building, often in neighborhoods and at times leading up to its gentrification.
He told Silverstein he was most proud of 45 East 89th Street, near the Guggenheim Museum, which Adam says was architecturally a step above what they had previously built. Despite lean years, it was among the buildings they successfully converted, and still achieve high prices for the large family apartments.
Rose Associates completed the Key West at 750 Columbus Avenue in 1986, and in a tribute to The Duke, built the Ellington at 260 West 52nd Street in 1987. The latter two remain rentals today.
After the Ellington, the market went into a recession, and Rose said he nixed many projects in New York City, even when other family members would later chide him that this or that competitor was now buying the deal.
"I work from my own analysis and my own projections," he explained. "If someone is going to build on an 8 percent yield because the Japanese are capitalizing it at 6 percent, it's crazy."
Instead of buying in New York, they bought at Resolution Trust Corporation sales, and from banks and insurance companies.
Rose scoffed at investing in the stock market, where he would be "trusting other people's expertise," and reported the family hadn't had a loss in 70 years.
"My father said to me, 'Never be sorry about the job you didn't do, but be damned sure you are not sorry about the job you did do,'" he recalled.
He told Silverstein he was proudest of the family's reputation, because outside of landlord/tenant issues, "We have never been sued, and never sued anyone."
The sound borrowing and well-thought out apartments in bigger buildings - "because you amortize the maintenance over more units" - and the family's use of the 421a program, which requires maintaining rent stabilized apartments while enjoying a multi-year and valuable declining real estate tax break, helped keep the Rose's from stumbling into the lending and co-op crisis often blamed on the changes made in the 1986 federal tax code.
The family had understood President Franklin D. Roosevelt's Emergency Price Control Act of 1942, and Federal freezing of New York City rents. By the 1950's, State rent control was instituted, but through lobbying efforts, a series of laws passed throughout the 1950's and 1960's that allowed for gradual decontrol, based first on vacancy and then on high rents.
In 1969, with few vacant apartments and the Vietnam War and inflation raging, the city enacted a Rent Stabilization Law that recontrolled more than 75,000 units and regulated another 325,000 that were in buildings constructed after 1947 and had never before been regulated.
The Roses worked with new owner organizations such as the Rent Stabilization Association, and Associated Builders & Owners, that worked to oppose rent controls.
By the time they were able to begin sending some 3,000 red herrings to their tenants in nine buildings, the capital and real estate markets had adjusted, and the market was on the upswing. The low debts on the buildings enabled the family to offer good insider prices, while their congenial tenant relations smoothed the often contentious conversion process, and led to a business in third-party management. The family manages conversions that include 860 and 870 UN Plaza and River House, among many others.
They still manage the nine buildings the family converted, but now "at the pleasure of the boards," Adam Rose noted.
"Why do we get so much business from co-op boards? We don't steal, we buy at the same rate as we buy for our own buildings, and [the managers] are well paid, and I will put them in jail if they steal," Fred Rose insisted.
The Siena condominium grew on a former church parking lot at 188 East 76th Street in partnership with the Brodskys. The church remained, allowing the sensitively designed condominium to grow taller using its air rights, while protecting the apartments' views.
Its phenomenal success was fueled by the growing need for large family apartments, as then new "law and order" Mayor Rudolph Giuliani had stemmed both crime and the city's middle class flight. A no-nonsense Republican, Giuliani was embraced by the real estate industry and also tapped Joseph Rose, Elihu's son - who had been praised for his leadership of the Citizen's Housing and Planning Council - as his Commissioner of Planning.
The growing need for family-sized apartments prompted a run on church properties by other developers, but Fred Rose was able to outmaneuver them in securing the land for the Madison Belvedere, "which will create a neighborhood," and the most recent purchase for $24 million of the former school building and grounds of St. Agnes Church, which lies mid-block in the Grand Central Terminal area, just off Third Avenue at 150 East 44th Street. Both were made with Benenson Capital as a partner, and the state's Housing Finance Agency for credit enhancing and lower interest rates.
It was the family's sharp pencil, combined with a comprehensive knowledge of planning, zoning and government programs, that led Rose to the historically sensitive conversion of the office building at 21 West Street in Lower Manhattan to Le Rivage.
This was first championed by its seller, Bruce Menin, who was enmeshed in another redevelopment at 25 Broad Street, all under a program designed by Giuliani to take inefficient office buildings from the stalled office market and jump-start a 24-hour residential community.
Rose bought it for the asking price of $63 a square foot for the land and building, using projected rents of $28 a foot, he said. By agreeing to a National Historic Trust listing and Landmarking, the family was tied into a painstaking historical renovation overseen by noted architect Hugh Hardy, but also benefitted from deeper and longer tax benefits. Riding the rising market, it eventually rented up for a square foot figure in the low-$40s.
Rose said that his "heart breaks" at how poorly architects are paid, observing once, "There is not a person in this room that won't earn less than an architect."
While he was "not interested in innovation," Rose believed "an ugly building that's inappropriate... will be there forever" and not be rented. He simply wanted working plans that conformed to his financial projections.
Rose believed in paying attention to the details, sometimes even when they would "not get paid for it." He worked over decades on the idea of hiding air-conditioning units, and at Randall House on East 9th Street, they created the first in the wall unit, designed by Chrysler, "because they were the only ones who would design it."
By the time they were planning Madison Green on 23rd Street in the early 1980's, which became the first new residential co-op construction that jump-started the Flatiron District neighborhood, as well as Adam's career, he recalled saying, "Let's get rid of the ugly grill," which Birnbaum eventually managed to tuck away.
Rose explained, "I may have a smaller ego, [than other developers] but I had self respect, whatever it is that makes you want to do the right thing."
While acting as a trustee of the Olympia & York bankruptcy, Rose more than briefly considered buying one of the assets, Two Broadway, the 2.1 million square-foot building that eventually sold for $20 million and now has the MTA as a long-term tenant.
"It was no place for a trustee. My brothers and I felt there would always be a cloud over it," Rose explained.
Doing the right thing in the Rose family also meant sharing the wealth, and he and his wife, Sandra Priest Rose, his childhood sweetheart, gave away more than $100 million to numerous charities over the years.
These included a reported $5 million to the Metropolitan Museum of Art; $15 million to the New York Public Library; and more than $30 million to Lincoln Center, where he helped construct the 31-story Rose Building; which is used for rehearsal space and dormitories for the Julliard School of Music, and offices for the School of American Ballet and the New York Philharmonic.
He and his wife provided $20 million of the $150 million cost of the new planetarium, the Frederick Phineas and Sandra Priest Rose Center for Earth and Space at the American Museum of Natural History, and as was his wont with other donations the couple made towards construction projects, was the project leader for the museum trustees.
He was about to perform a similar task for the Asia Society, which was to renovate its Park Avenue headquarters, which he helped create in 1971.
It was after lunch, about 20 years ago, when his friend and sometime development partner Benenson, recalls asking Rose how many boards he was on. "He thought for five minutes and said 30," said Benenson last week. "An hour later he called me. He said, 'I'm on the board of the American Arbitration Society, but they only meet once a year, so make that 29.'"
Silverstein categorized his passing as the "loss of an icon."
"To lose Fred is a terrible loss to our community," said Silverstein. "I'm terribly saddened. This is much too early."
Describing Rose as a benefactor of consequence in a diverse number of philanthropic areas, Silverstein noted, "He gave of his time, to his community, with effort and energy, and was very effective as a result. His imprint is very much on our community and it will be. The Rose name is synonymous with good deeds and principles. He's left a wonderful, wonderful legacy for his success. In the last analysis, I don't know what else a man can accomplish."
Funeral services were held last Sunday at Westchester Reform Temple, which was configured for the Jewish New Year services yet spilled over from the more than 1,000 mourners that came from all walks of life.
Rose was as well-known by the workers at the family construction sites as he was in philanthropic, real estate and political circles.
As his sons recalled, he always visited the sites to carefully follow each stage of the process, as much to ensure the project's critical path was kept as to rejoice in its creation. Adam said he would ask his father not to climb up on the ladders, but "he would do it anyway, and always find something that needed to be fixed."
Rose said last fall, "I love to be on every floor - they can't take me away. And if they don't see me, they will ask, 'Is Mr. Rose all right?'"
This time, he wasn't.
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|Title Annotation:||New York, NY's builder|
|Publication:||Real Estate Weekly|
|Date:||Sep 22, 1999|
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