BUSINESS

A rising media and real estate star

MARCI MCDONALD January 27 1986
BUSINESS

A rising media and real estate star

MARCI MCDONALD January 27 1986

A rising media and real estate star

BUSINESS

The bulletin swept through the Washington head office of U.S. News & World Report with the speed of a late-breaking scoop. The newsmagazine’s owner, Montreal-born real estate multimillionaire Mortimer Zuckerman, was flying in from his New York headquarters with his personal public relations agent for a hastily called editorial meeting. As more than 100 staff members jammed into an eighth-floor conference room last week, Zuckerman’s announcement in fact came as no surprise: after barely nine months editor Shelby Coffey III, 39, had resigned to take over the helm of the Dallas Times Herald. In speeches from a dais, Zuckerman and Coffey thanked each other lavishly. But as one witness later noted, if there had been a hypocrisy meter in the room “it would have registered a perfect 10.” Indeed, rumors of the two men’s deteriorating relationship surfaced last April when—only three weeks after hiring Coffey away from The Washington Post—new owner Zuckerman named himself editor-in-chief, taking over the top spot on the masthead. Still, the report that, with Coffey’s departure, America’s third-largest newsmagazine lacked a hands-on editor likely would have rated only scant attention in the U.S. press. But the incident marked yet another turbulent chapter in Zuckerman’s stormy progress toward establishing himself as a major force in

American real estate and publishing.

For Zuckerman, 48, whose most frequent female companion is writer-editor Gloria Steinern, 51, life as a celebrity has proved to be a double-edged sword. Six months ago Boston Properties Co.—of which he is chairman and half-owner—won out over 14 other bidders to develop one of the most valuable parcels of prime real estate still left in New York City: the fouracre site of the seedy New York Coliseum on Columbus Circle. With a plan for two prism-studded towers to house offices, luxury condominiums and a 225-room hotel designed by Bostonbased architect Moshe Safdie, Zuckerman’s $456.1-million bid set a per-acre record for centre-city turf. But the coup led to a New York Times profile to which he strongly objected, saying it portrayed him as a Duddy Kravitzstyle wheeler-dealer who relished rubbing shoulders with America’s glitterati.

Zuckerman’s protest to Times executive editor A.M. Rosenthal —with whom he had lunched only two days earlier—won him a controversial apology for the article’s “snide tone.” But in the ensuing media outcry Zuckerman (as well as the Times) was cast in an even more critical light. Many critics predict that Zuckerman’s ambivalence about his own press coverage could be harmful for U.S. News, where he has recently sought a greater share

of the spotlight as an increasingly involved editor. He has even taken over the prestigious back page for a twicemonthly personal opinion column.

Zuckerman has chosen to make his mark in the two fields in which Canadians have traditionally excelled abroad—but never both at the same time. As he told Maclean's, both real estate and publishing involve “an interesting exchange of commerce and art” and “the ability to live with risk.” Still, his involvement in each has never been smooth. The brilliant son of a tobacco wholesaler who died when Mortimer was 17, he graduated in economics and political science from McGill University at 19 and took a master of business administration from Pennsylvania’s Wharton School of Finance and law degrees from both McGill and Harvard. But despite his reliance on attorneys in the series of lawsuits that have swirled around his career, he concluded that “lawyers help only rich people get richer.” Instead, joining the struggling blueblood Boston development firm of Cabot, Cabot and Forbes, Zuckerman rose to become its chief financial officer within three years.

There he demonstrated an undisputed deftness at deal-making that earned him his first $5 million by 30. But he ended up suing the firm to recover the full value of his shares in its developments. With the settlement,

which included 12 California properties, he and partner Edward Linde started Boston Properties in 1970. But their first major project, a complex overlooking Boston Common, swiftly ran into what some observers say was an act of organized revenge. Said Robert Healy, who was executive editor of The Boston Globe at the time: “He took a hosing because he was an outsider—a Jewish boy from Montreal who had dared to take on the WASP establishment.”

Paradoxically, the battle kept Zuckerman preoccupied enough to avoid heavy losses in the 1974 real estate crash. Boston Properties now owns 53 buildings in 15 American cities and controls more than nine million square feet of prime space, including a 50-storey tower on New York’s Lexington Avenue, which he took over when Torontobased Cadillac Fairview forfeited on the project. Boston also owns a development rising around the redbrick arc of the U.S.

News headquarters, with which he first became involved as developer and landlord.

A self-professed “urban alcoholic,” Zuckerman speaks lyrically about raising skyscrapers, and he declared: “You literally do what a writer or a painter does. You take

a design form and freeze it on a city’s skyline.”

His success has enabled him to buy mansions on Boston’s Beacon Hill and in Washington’s Georgetown, a Park Avenue office and an apartment and a beachfront house in Long Island’s tony East Hampton, as well as a place in Fortune’s 500, where his net worth is estimated at $320 million. Unlike most newly wealthy, he has scorned the socialite circuit for a ragtag media band that plays baseball on Saturday mornings at Sag Harbor, Long Island. Zuckerman’s sense of humor once emerged when he bowed out of a real estate project with a singing telegram that warbled, “The deal is off.” Said Zuckerman: “My life has exceeded even my own fantasies.”

One of those fantasies remains to play a role in shaping opinion. “From the time I was 12,” he said, “I have been a media junkie.” In 1980 he finally entered publishing by rescuing the failing Boston-based Atlantic Monthly magazine. In the course of restoring The Atlantic— quadrupling advertising and raising circulation to 440,000 from 340,000—Zuckerman has won high praise from editor William Whitworth, who calls him “a modii el owner.” For observ-

ers fearing a conflict of interest at U.S. News, Whitworth pointed out that even when Apple Computers Inc. and a major defence contractor pulled ads after critical articles, Zuckerman “didn’t give me any grief about it. He really hasn’t interfered.”

But critics note that Zuckerman is following a different pattern at U.S. News, where some longtime employees predict that he is leading the magazine on a disastrous course. One of Coffey’s mistakes may have been to refuse the editorial suggestions and taped interviews that Zuckerman pushed his way. Now Zuckerman has pledged to transfer the bulk of his energies from real estate to U.S. News, especially until he finds a replacement editor. But as even his close friends point out, Zuckerman has little interest in news itself. What he aspires to is a voice in the debate over what he calls “public policy.” Said Healy: “He wants to become a player.” When confronted with questions about the potential for conflict of interest, Zuckerman invokes the name of Time founder Henry Luce, who became an American power in his own right. But in trying to increase the magazine’s circulation by 500,000 from its current 2.1 million, he has to take on both Time itself and Newsweek, whiqh far outstrip U.S. News in subscribers.

That task is delicate because, in trying to attract a younger readership— with, among other actions, a generally acknowledged successful redesign—he cannot afford to alienate the magazine’s loyal, longtime audience of older, affluent middle-Americans who liked the sedate style that, among other journalists, won it the nickname U.S. Snooze. To reassure them, Zuckerman—a onetime supporter of Jimmy Carter and Democratic presidential nominee Gary Hart—says that his views are increasingly conservative. He supports the Reagan administration’s tough line against the Soviet Union and Nicaragua. And despite his Canadian roots, he acknowledged that as a U.S. citizen he is now an unabashed patriot. Said Zuckerman: “As an immigrant, I appreciate this country on levels that a lot of people who grew up here don’t. What I have been able to do here would not have been possible in too many other places.”

It is still unclear whether Zuckerman wants to do still more. He does not rule out eventually expanding his media empire. But for now, although the jury is still out on his journalistic prowess, he already rates himself a success as a columnist. “I knew I had arrived,” Zuckerman said, “when I got a letter from somebody who called me every expletive in the book.”

— MARCI MCDONALD in Washington