Tory Burch and Art Garfunkel vs. Howard Lutnick and the Khashoggis

Tory Burch and Art Garfunkel vs. Howard Lutnick and the Khashoggis: The Fight at the Pierre For more than 50 years, the Pierre has been a place where rich and famous residents rub shoulders with celebrities, debutantes, and fashion designers. Now, residents are duking it out over whether or not they should sell. Photo: Shutterstock The Pierre has been a regular presence in the society pages since it opened in 1930. Coco Chanel and Audrey Hepburn slept there, Elizabeth Taylor and Aristotle Onassis lived there, and Auguste Escoffier, considered the father of modern French cooking, served filets de sole in the walnut-paneled dining room. Numerous debutantes and society brides have waltzed through its Corinthian-columned ballroom. But in the past few years, the elegant mansard-roofed hotel and co-op on Central Park has been making headlines for a less genteel reason: the battle over a potential $2 billion sale of the entire building to a prominent Saudi family, the Khashoggis. The move would fund much-needed repairs and provide a financial windfall for some, possibly most, co-op owners, but it would also force everyone out of the building whether they want to sell or not. While Manhattan co-op board fights are notoriously nasty, especially in buildings where residents wield significant money and power, perhaps none have had such high stakes as the one at the Pierre. A co-op vote on the sale is expected to happen later this fall. But some residents are already jumping ship. Last week, Michael Eisner, the former CEO of Disney, who owns two apartments in the Pierre and clashed with the co-op over a frozen-pipe fiasco in the past, paid $10 million for an apartment at the nearby Sherry Netherland, the New York Post reported. The prospect of handsome payouts has been dangled to get residents to sign on to a sale, a tactic that rankled a number of them. Pierre owners, after all, number among the wealthiest people in the world. As Art Garfunkel, a longtime resident, reportedly said at the annual board meeting last fall: “You’re just talking about money. But this is our home. I love the Pierre just as it is.” Even though the monthly fees paid by shareholders for maintenance are in the tens of thousands, the storied building is now decidedly down at heel with frayed carpets and creaky, often broken, elevators. At this point, everything from the plumbing to the upholstery needs replacing. Taj Hotels, the building’s operator since 2005, invested $100 million in renovations after taking over but has been accused of letting things go in recent years. Taj has reported losing millions running the building, as did its predecessor, the Four Seasons. “The hotel when we moved in 43 years ago was a proud edifice,” Irwin Winker, 95, who co-produced Raging Bull, wrote to the board last year, according to the New York Times. But now the “lobby is shabby” and “the furniture, second rate.” In recent years, residents who hadn’t so much as made their own beds since childhood have been forced to climb their way home. “I, too, have been using the dirty stairs, as the wait for the elevators is so long,” one resident griped to the Times in October 2023, when two elevators went out of service, one with a resident trapped inside. Shortly before selling her triplex penthouse apartment, Barbara Zweig, the widow of Wall Street financier Martin Zweig, complained in a group email obtained by the Times that she’d gone to the lobby to change a $100 bill and found the front desk unmanned. “I can’t imagine booking what I assume to be a luxury hotel and finding often empty front desk/concierge/security areas and broken elevators,” Zweig wrote. She ended up selling her penthouse to then–Cantor Fitzgerald CEO Howard Lutnick, secretary of Commerce. Things came to a head at the shareholders’ meeting in fall 2023 when Lutnick, the largest shareholder, demanded changes. Early the following year, the board told shareholders that it had hired Newmark, a real-estate firm, to meet with Taj about improving the condition and operation of the Pierre. This shifted, at some point later in the year, to exploring a sale of the entire building after the board decided that Taj wasn’t willing to invest the necessary money. In 1958, the hotel’s owner, Jean Paul Getty, decided to convert a portion — or 75 rooms — of the hotel, which was built in 1930, into a co-op. (Hampshire House on Central Park South and the nearby Sherry Netherland, also on Fifth Avenue, had gone the same route a few years earlier.) The plan kept 200 hotel rooms under a leasing agreement between the owner and the co-op and guaranteed shareholders an unprecedented level of service for their apartments: daily housekeeping, room service, and a concierge to arrange things when they wanted to buy tickets or book a shopping appointment. “I haven’t made a bed since I was a kid,” one long-time resident told Vanity Fair this summer. The common charges are, as you might expect, astronomical. Ten years ago, Zweig’s triplex penthouse was paying $48,000 a month, according to the Wall Street Journal, which included a dedicated housekeeping staff of two. In May 2024, Lutnick went to Paris to speak with the Arnault family, who own the Cheval Blanc hotel group, about a potential sale, Vanity Fair reported. He also met in London with the Khashoggi family and the Dorchester Hotel group, which is owned by Hassanal Bolkiah, the Sultan of Brunei. About a week later, Motasem Khashoggi, chairman and principal owner of the Khashoggi Holding Company, texted Lutnick to say they were interested. He also asked if Lutnick could arrange an internship for his son. Lutnick said he could. After that, negotiations kicked off between Dorchester, who would manage the building, the Khashoggis, and Newmark, which is owned by Cantor Fitzgerald (something shareholders say they didn’t know when the board contracted with the firm). Since joining the Trump administration, Lutnick has stepped away from Cantor Fitzgerald and the Pierre negotiations. But some residents are suspicious about Lutnick’s motivations in orchestrating the deal: Lutnick bought the triplex penthouse for $44 million in 2017, making him the largest shareholder in the building. But he never actually moved in, and the apartment needs work after sustaining storm damage a few years ago. (Lutnick bought a $25 million mansion in D.C. after becoming Secretary of Commerce; he also owns an Upper West Side townhouse, a house in the Hamptons and a condo north of Miami Beach) If the building sells to the Khashoggis, Lutnick’s cut has been estimated at $90 to $100 million, just a smidge under the $125 million Zweig initially tried, and failed, to sell the penthouse for. That is: far above market value. Decades ago, Adnan Khashoggi was one of the world’s leading arms dealers, with holding companies that owned a number of luxury hotels, but more recently the family has not been involved in any high-profile international businesses, real estate investments, or the hospitality sector. According to a recent Vanity Fair story, the Khashoggis are mostly famous for their wealth. One of their most prominent public deals of late has been a $37 million pharmaceutical investment in Syria. In 2018, a member of the family, the journalist Jamal Khashoggi, was murdered and dismembered in Turkey on orders of the Saudi Crown Prince and prime minister Mohammed bin Salman. According to the Times, MbS would provide funding for this purchase. The Dorchester Collection, however, manages an extensive portfolio of hotels and luxury residences, including the Beverly Hills Hotel, the Meurice in Paris, and its namesake, the Dorchester in London. Shareholders will likely receive a hefty payout (one source told Page Six it could be four or five times some buyers’ initial investment). Everyone will have to move out and the 400 people who work at the Pierre will lose their jobs. The union would negotiate a severance package for employees, but many employees have worked there for decades and won’t easily find comparable jobs. The new owners will most likely convert the building to a hotel condo where former residents could, ostensibly, buy a condo once the renovation is complete. But many shareholders are already in their 80s, have renovated apartments to their own taste, and like the building culture and the staff just as they are. While co-ops were the preferred means of residential conversion in the 1950s, today condos trade for far more than co-ops. Both the Plaza and the Waldorf Astoria, converted in the mid-aughts and 2020s respectively, became condos, with hotels on the lower floors. Some of the notable people who currently have apartments in the building include Disney CEO Michael Eisner, Shari Redstone (heiress and former chairman of Paramount), Larry Ellison (co-founder of Oracle and current owner of Paramount), fashion designer Tory Burch, musician Art Garfunkel, Princess Firyal of Jordan, Hollywood producer Irwin Winkler, secretary of commerce Howard Lutnick, and media heir Austin Hearst. Burch has stepped up as the leader of the opposition, filing a lawsuit to get the board to disclose more information about the sale. “I don’t need a shiny new hotel,” she said at a shareholder meeting this summer, according to VF. But the Pierre is a second, third, or fourth home to many of the people who own there and some are reportedly receptive to the idea of a lucrative sale. If two-thirds of the shares are cast in favor of the deal, the board will sell the building, with residents netting payouts based on how many shares they own. It’s almost unheard of for an entire co-op to sell, though it does happen: in 2019, shareholders at 417 Park Avenue, a prewar Emery Roth co-op, voted to sell for $185 million to a developer, who demolished it. Still, it’s rare enough that when rumors started circulating that the Pierre’s board was exploring a sale, the co-op’s longtime attorneys told a nervous resident not to worry, according to Vanity Fair: “You can’t sell a co-op. Never happening here.” Everything We Know About the Fight Over the Pierre’s Future Your product is saved! You’ll receive emails when your saved products go on sale. Manage preferences.