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Gerald Guterman is an international real estate developer and investor. He is credited as one of the largest co-op and condominium converters in the United States. He also served as a Commissioner of the United States Romania Action Commission under the sponsorship of the United States Center for Strategic and International Studies, as well as Chairman of its banking and financing committees. Guterman served as personal financial advisor to the Minister of Privatization, Government of Romania. He is currently the Chairman and CEO of Guterman Partners, LLC and its subsidiary, Hanover Companies, LLC. a real estate investment firm with holdings throughout the United States.

Overview

Guterman began a career in real estate at the age of 18 as a night porter for Fred Trump, father of famed developer Donald Trump. The Brooklyn born son of a beverage wholesaler, Guterman amassed a fortune on scores of condominium and co-ops conversions in New York City.

Beginning in the 1980's, he became one of the largest property managers in the United States, with over 60,000 apartments in over 250 communities nationwide and over 16,000 rental apartments converted to condominium ownership.

As chairman of the publicly owned Hanover Companies, Guterman led a trend of selling occupied apartments to investors who would hold them until their tenants vacated. When the units were vacated, the investors could then sell them at a substantial profit.Hanover's holdings also included, among other things, the Stanhope and Adams hotels, a controlling interest in Roosevelt Island and what was at the time, the only magnetic monorail system in the United States.

In the 1980s Guterman invested in real estate deals but ran into financial troubles. In 1988, thirty-six New York City co-ops were forced to sue to recover records and bank balances after the management division of The Hanover Companies, a real estate development company headed by Gerald Guterman, the financially troubled real estate developer-converter, began falling apart along with a number of his other ventures. Mr. Guterman had other serious financial setbacks. The Stanhope Hotel, an Upper East Side, New York hotel Guterman renovated, filed for reorganization under Chapter 11 of the Federal bankruptcy laws.

The Guterman art collection

Beginning in the 1970's, Gerald Guterman acquired a collection of 17th-century, Dutch and Flemish Old Master paintings. The collection was referred to by experts as one of the very best in America. The paintings were housed in a 3,000 sqft gallery (created in the image of Manhattan’s famous Frick Gallery) in a wing of Guterman's Bedford Estate. Artist's in Guterman's collection included Rembrant, Renoir, Barent Fabritius, Solomon van Ruysdael, Frans Hals, Hendrick Avercamp, Jan Lievens, Govaert Flinck, and Jan van Goyen, to name a few. Further setbacks were created by a divorce decree that forced Guterman to sell his renowned art collection, considered at the time to be the most valuable such selection of Old Master paintings ever auctioned in New York. While the sale of Guterman's paintings brought "the highest total ever for an Old Master sale in America" and set 11 artist's records for price, to some it was disappointing.

Describing the buying as 'very selective,' John L. Marion, Sotheby's chairman, said: 'On the one hand, it is the highest total ever for an Old Master sale in America and there were 11 artist's records set. On the other hand, you could observe the fact that there was little or no bidding from dealers. I think this means these were not the kind of pictures they buy for stock.'

He was forced to sell the collection to help offset massive losses in real estate holdings and the stock market. At Sothebys in 1989 most of paintings failed to sell at the asking or minimum price. Some of the sold paintings were exhibited at the National Gallery in London, The Metropolitan Museum of Art in New York and the Getty Museum in California . However, notes economist Bruno Frey, Guterman realized a profit of only 3.2% per year, worse than an investment in government bonds. Concluded the New York Times "Forty-seven paintings, including works by Frans Hals and Jacob van Ruisdael, went on sale, bringing $10.3 million. But the auction was a disappointment because 17 of the 47 paintings did not sell."

Struggles with finances and the law

In 1988, a new tax law eliminated the tax shelter aspect of the Co-Op Conversion model, making them less desirable and resulting in heavy financial setbacks for Guterman and his Companies. Having already taken financial losses in the "Black Monday" stock market crash of 1987, Guterman placed his Stanhope Hotel (purchased in 1985 for $19,600,000) into Chapter 11 and immediately sold the hotel to Tobishima (a property company from Japan) for over $76,000,000.

Guterman was investigated by the Federal Bureau of Investigation for possibly paying bribes to mafia figures. However the charges were dismissed. Noted the New York Times,

The report was critical of Resolution Trust for negotiating with Gerald Guterman, a leading figure in New York real estate and a consultant to Patriot. Mr. Guterman had previously been convicted of a felony, and while negotiating for Patriot with the Government he was under indictment on tax fraud charges, which were later dropped, the report noted. Resolution Trust barred Mr. Guterman, but only after publicity about the Patriot deal in October prompted the subcommittee inquiry.

The 1990s

In the early 1990's, Guterman rebounded from his financial troubles {{citation}}: Empty citation (help) and founded Patriot American Investors. Guterman negotiated and directed the largest direct purchase of office buildings and hotels in the history of the Resolution Trust Corporation and its successor, the Federal Deposit Insurance Corporation (FDIC). The Patriot deal drew criticism from congress in a report that called the RTC model for disposing of savings and loan properties in bulk "wasteful" and "uncompetitive." Further, the report criticized the RTC for negotiating with Guterman while he was under investigation, though it was also noted that Guterman had been falsely accused and that all charges had been dismissed. Guterman's active support of some New York politicians, such as Ed Koch brought repeated scrutiny from the New York newsmedia. In particular, Guterman's financial support for the campaign of Comptroller Harrison J. Goldin, was widely criticized. From 21 different sources, Guterman funneled $100,000 in a single month to Goldin's campaign, even though the campaign was running a wide surplus.

In the 1990s Guterman's company purchased the largest portfolio of office buildings and hotels in the history of the Resolution Trust Corporation and its successor, the Federal Deposit Insurance Corporation (FDIC). He was Chairman of Hanover Companies, Incorporated, The Titan Group and Sovereign Construction Corp. Beginning in the 1980s and through the 1990s, he became one of the largest property managers in the United States, with over 60,000 apartments in over 250 communities. He is one of the largest condominium converters in the United States, converting over 11,000 rental apartments to condominium ownership. Today, his firm, Hanover Companies, LLC, is one of the largest condominium companies in America with properties from Florida to California and his mortgage company, Patriot Mortgage Fund, LLC provides mortgage loans in seven states.

Trusteeships cand charitable participation

Gerald Guterman served as a trustee of The Metropolitan Museum of Art, Adelphi University, New York City Opera, Dallas Opera, Young Men's Philanthropic League, Ripowam Cisqua School, and Harvey School. He also served as a Commissioner of the United States Romania Action Commission under the sponsorship of the United States Center for Strategic and International Studies, as well as Chairman of its banking and financing committees. Guterman served as personal financial advisor to the Minister of Privatization, Government of Romania.

Gerald Guterman is a founder of Albert Einstein College of Medicine. He was awarded "Humanitarian of the Year" by the Juvenile Diabetes Foundation. Guterman is a Founding Benefactor of Research Lab, Study of Tumor Cell Biology and Research Lab, Study of Immunodeficiency Disease at the National Asthma Center He is also a member Society of University Founders, Miami University..

A bar mitzvah aboard the QE2

In September of 1986, Guterman drew media attention when he chartered the famed ocean liner RMS Queen Elizabeth 2 along with a crew of over 1,000, for his 13yr old son's Bar Mitzvah party. Although the QE2 had been chartered for cruises by corporations, the Guterman family party was a first of its kind, said a spokesman for the Cunard line. The guests were mostly relatives, friends and neighbors of Gutermans who live in Bedford, N.Y., in Westchester County, or friends of the children from camp or school. In attendance were numerous politicians and real estate figures including New York City Council, President Andrew J. Stein, Comptroller Harrison J. Goldin. The ship set sail at 6p.m. though helicopters continued to touch down on the sports deck to drop off late-comers, including Ivan Boesky, the stock and investment speculator. When asked about the cruise in a recent interview for his upcoming biography, Guterman remarks that he maintains mixed feelings about the event. "On the one hand, it was a fantastic and extraordinary celebration for my family. As a father, I was proud of my children and wanted to give them the things I never had growing up as a poor kid in Brooklyn. On the other hand, when you wind up on the front page Leisure Section of New York Times, you leave yourself open for backlash, especially in those rare times of financial struggle."

References

1. Oser, Alan S. 1985, "Managing Those 'Occupied' Apartments" The New York Times, April 7, 1985
2. Guterman Website "www.gutermanpartners.com"
3. Steven Rea "Going Home Again-To A Hotel" Philadelphia Enquirer, March 13th 1988
4. Oser, Alan S. 1985, "Managing Those 'Occupied' Apartments" The New York Times, April 7, 1985
5. Brooks, Andree. 1988. "Guterman's Troubles Jolt Client Co-ops," The New York Times, April 17 1988. pg2
6. Deborah Gimelson "Portrait of a Businessman as a Collector" "Art and Auction Magazine" September 1985
7. Brooks, Andree. 1988. "Guterman's Troubles Jolt Client Co-ops," The New York Times, April 17 1988.
8. Deborah Gimelson "Portrait Of A Businessman As A Collector" "Art And Auction Magazine" October-Novermber, 1986
9. SOTHEBYS: THE LINDA AND GERALD GUTERMAN COLLECTION, NEW YORK, 1/14/88
10. RITA REIF "Old Masters Sale Produces Mixed Results at Sotheby's" "The New York Times" January 15, 1988
11. RITA REIF "Old Masters Sale Produces Mixed Results at Sotheby's" "The New York Times" January 15, 1988
12. RITA REIF "Old Masters Sale Produces Mixed Results at Sotheby's" "The New York Times" January 15, 1988
13. Foderaro, Lisa W. 1988. "A King's Fall: Tax Changes Reverse Rise Of Developer," The New York Times, February 17, 1988.
14. Frey, Bruno S. 1999. Economics as a Science of Human Behaviour, London: Kluwer, pp. 77-8
15. Frey, Bruno S. 1999. Economics as a Science of Human Behaviour, London: Kluwer, pp. 77-8
16. Foderaro, Lisa W. 1988. "A King's Fall: Tax Changes Reverse Rise Of Developer," The New York Times, February 17, 1988.
17. Brooks, Andree. 1988. "Guterman's Troubles Jolt Client Co-ops," The New York Times, April 17 1988. pg2
18. "THE ASSOCIATED PRESS, "Japanese Company Buys Hotel" NY TIMES January 14, 1989
19. Gerth, Jeff. 1991. "Legislator Urges R.T.C. to End Big Property Sale," The New York Times,October 24, 1991.
20. Gerth, Jeff. 1992. "Study Criticizes U.S. Deal On Sale of Bailout Property," The New York Times, January 3, 1992.
21. Gerth, Jeff. 1992. "Study Criticizes U.S. Deal On Sale of Bailout Property," The New York Times, January 3, 1992.
22. Gerth, Jeff. 1992. "Study Criticizes U.S. Deal On Sale of Bailout Property," The New York Times, January 3, 1992.
23. Purdum, Todd S. 1988. "New Campaign Law: No Bar to Old Abuses," The New York Times, April 9, 1988
24. http://gutermanpartners.com/default.asp?pg=press.asp&mi=mainbg Guterman Partners Website
25. http://ecolu-info.unige.ch/archives/ceeman98/0254.html SME Conference
26. Georgia Dullea "COMING OF AGE ON THE OCEAN: A BAR MITZVAH ABOARD THE QE2" September 16, 1986" "The New York Times"
27. Georgia Dullea "COMING OF AGE ON THE OCEAN: A BAR MITZVAH ABOARD THE QE2" September 16, 1986" "The New York Times"

Further reading

Hirschman, Elizabeth C. 1990. "Secular Immortality and the American Ideology of Affluence," The Journal of Consumer Research, Vol. 17, No. 1 (Jun., 1990), pp. 31-42.

External links

• Guterman Partners LLC
• NY Times Article: Managing Those Occupied Apartments
• NY Times Article: A King's Fall: Tax Changes Reverse Rise Of Developer
• NY Times Article: Guterman's Troubles Jolt Client Co-ops

• Real estate and property developers
• Living people
• American Jews
• Jewish businesspeople
• People from New York City
• Businesspeople in real estate