Kalikow thought going in that he could make a success of the Post. The newsroom in that era was a raucous, irreverent playground for some of the most talented, dysfunctional characters ever to put out a tabloid. “For no money, we put out a damn good paper,” he says. “They got stories because they went out and got them, not because of big budgets or expense accounts.”
His deep affection for the paper and that part of his life comes up all the time, even now, more than ten years after he walked out of the newsroom for the last time.
Jerry Nachman, the legendary, rotund, egomaniacal newsman whom Kalikow named editor of the Post, died recently. On the way to the memorial service, where Kalikow was one of the speakers, his sadness was palpable in the car.
“I’ve now had to speak at the funerals of three people who I thought would eulogize me. First Eric, then Mike, and now Jerry,” he said, referring to Eric Breindel, who was editorial-page editor at the Post, columnist Mike McAlary, and Nachman.
“Owning the Post was like having a mistress. You knew you shouldn’t go there every day to visit because it would cost you more money. But it was so much fun you just couldn’t stop.”
Kalikow’s problem, however, was not just the paper. He had two other huge losers. He’d borrowed $156 million to build the Millenium Hotel. And he had fourteen small apartment buildings between 78th and 79th streets with $90 million in loans against them. His plan was to relocate the tenants, tear the buildings down, and put up a luxury high-rise. He hadn’t figured the tenants would fight him—and win.
By the time he was forced to file for bankruptcy in the summer of 1991, he owed a dozen banks more than a billion dollars. His assets, with the real-estate market in the tank, were valued somewhere around $500 million. Because he had signed several personal guarantees, his private assets were also at risk. In addition to his Fifth Avenue triplex, he owned his own jet, a twelve-acre estate in Montauk, a car collection worth more than $7 million, and the biggest yacht on the East End.
“Donald Trump had essentially the same problem as Peter, with one critical difference,” says developer David Mack, a lifelong friend of Kalikow’s who has also known Trump since they were kids. “The banks felt they needed Trump’s name, that it added value to the properties. So they didn’t force him into bankruptcy. With Peter, they didn’t care.”
In order to finalize his workout with the banks, Kalikow was helped with a critical infusion of more than $20 million in cash. The money came from his mother and David Mack and another developer friend named Sheldon Solow. He lost the Post, the Millenium Hotel, and the East Side property and was forced to sell most of his other buildings in a depressed market to pay off his debt. And even then, many creditors got less than twenty cents on the dollar.
Though he was out from under the thumb of the banks by the beginning of 1994, Kalikow says it took until 1998 to fully restructure his company, make it “as bulletproof as possible,” and get things back on track. Today, in addition to his Fifth Avenue penthouse and Montauk estate, his primary commercial assets are 101 Park Avenue and 195 Broadway. Because of his significant equity, however, an aide puts Kalikow’s net worth between $500 million and $1 billion.
“I was up as high as you can get, and then I got the shit kicked out of me,” he told me one afternoon recently. “It was personally devastating only when I thought about it. But I never focused on what the ultimate impact of failure would have been. I have this facility for deluding myself, which is a nice thing to have.”
Not surprisingly, Kalikow’s dance along the edge of the abyss was a transforming experience. “I thought business was everything,” he says. “I found out it’s not.”
Ironically, given his strong Republican ties, it was Governor Mario Cuomo who suggested to Kalikow that he get involved in public service, and it was Cuomo who initially appointed him to the MTA board. Nevertheless, ever since Kalikow took up his responsibilities at the agency there has been a strong whiff of Republican cronyism wafting around him.
Much of this, but not all, is the result of his long-standing ties with former senator D’Amato. On the Friday after Thanksgiving in 1979, Kalikow, D’Amato, and David Mack met for breakfast in a Long Island diner. D’Amato surprised the two of them by announcing that he was running for the Senate. (“I asked him from what state,” Kalikow says.)