NEW YORK—In his Midtown Manhattan office building, James LeFrak, 34, pointed to a nondescript shack in the photograph. The shack was surrounded by a desolate landscape and old cars parked in no particular order.
“This is the PATH station,” said LeFrak, referring to the Port Authority Trans-Hudson rapid transit system that now carries nearly 250,000 passengers 24 hours a day to and from Manhattan. “Of course at that time, in 1983, they weren’t running trains there regularly, the train only stopped there twice a day. Once in the morning and once at night. The passenger count was only seven passengers at a time.”
Now that shack has been transformed into a spacious glass-walled station, with four escalators and neatly manicured grounds outside. The transformation is one that has swept through the 400-acre area of Jersey City nestled on the Hudson River since the LeFrak’s grandfather, Samuel LeFrak, began building on it.
The area, renamed Newport, went from unused rail yards of the Erie Railroad in the 1980s to one of the largest planned communities in the country—valued now in the billions. Newport has become a city unto itself, with nine high-rise rental apartment buildings, condominiums, eight office buildings, a private school, and slew of retail shops.
James recalled his grandfather’s vision for the odd plot of land. “He loved the opportunity of having such a big site … he realized that by adding all these new things he could completely re-identify a location since it wasn’t starting with the preconditions of existing buildings.”
With so much power over Newport, Samuel LeFrak and his son Richard were able to help in turning around the economically dreary Jersey City and imbue the area with its own personality, which residents have described as clean, safe, and convenient.
“It’s quite peaceful … It’s nice being away from the city, but you’re still very close, it seems completely different,” said one Newport resident of three months, who works in New York City.
“I like the fact that everything you need is here, there’s shops and restaurants, and the waterfront, and a new grocery store, and there’s a mall near by, and its nice and kind of clean and there’s security everywhere, I kind of like that,” said Stella Spanos, a Newport resident for one and a half years.
Compared to Manhattan, prices at Newport are also more affordable.
Spanos said she pays $2,200 a month for a one bedroom. “It’s a high rise building with a doorman and all of that, and that’s going to be quite a bit more in Manhattan,” she said.
Royal Blood
In America, where no monarch reigns supreme, billionaire families like the LeFrak’s are the closest thing there is to royalty. Their real estate holdings include approximately 35 million square feet of property, mostly in the New York and New Jersey area—more than twice that of Donald Trump.
The difference in America is that the monarchs earned it. James’s great grandfather began building in New York City 107 years ago, and his grandfather Samuel, who passed away in 2003, is credited with making the LeFrak Organization Inc. what it is today through his own sweat and blood.
“He built and built and built and built and never slowed down; he worked up until the day he had a stroke. He came into the office every single day,” said James.
Samuel is also known for building affordable and safe buildings for middle class New Yorkers. He is often quoted as saying, “We serve the mass, not the class.”
“He had a huge personality and tremendous force of will, he was not intimidated by anyone. He was outspoken on behalf of his customers, many of whom were middle class New Yorkers,” said James.
Today, James’ father Richard LeFrak is the Chief Executive, and James and his brother Harrison are heirs to the LeFrak throne, continuing the business into the next millennium. For James, that means overseeing the leasing of Newport property and the continuing construction there, which still includes around 15 sites.
“My grandfather really wished that he could have seen [Newport] completed, but there was really no physical way to do all that, he started the project when he was in his 60s,” said James. “In some way, I think we have a moral obligation to complete it on his behalf, even if he’s not here to see it.”
Beyond New York
Seeing the danger of having too many eggs in one basket, the LeFrak Organization has begun looking beyond the New York—New Jersey area for real estate development. James said that immediately after the terrorist attacks on the World TradeCenter on September 11, 2001, the PATH train temporarily stopped running to downtown Manhattan, causing many residents to leave. Residency at another LeFrak property in Battery City Park, directly adjacent to the WTC, was affected even worse.
“[It] made us take a pause and say, ‘Boy we should really consider having a business platform outside of one place,’” said James, in an interview with the Los Angeles Business Journal.
Now the LeFrak’s have bought three high-end office buildings in Beverly Hills and Hollywood and are looking at possible assets in London.
Other areas that James said were interesting real estate investment possibilities include Hong Kong and major cities in Canada, like Toronto, Vancouver, and Calgary. James said the company has strict requirements for investment and that Canada’s economy is becoming on par with the U.S.
Is LeFrak moving out of New York City? Not anytime soon, he said. The family has every intention of overseeing the finishing of Newport, which will take at least another 10 years.
