The Only Man Who Could Build Oz

How Stephen Ross outmaneuvered, outspent, out-leveraged, and out-sweet-talked his way into the Hudson Yards deal.

Stephen Ross standing on the highest outdoor observation deckin the Western Hemisphere at 30 Hudson Yards. Photo: Pari Dukovic
Stephen Ross standing on the highest outdoor observation deckin the Western Hemisphere at 30 Hudson Yards. Photo: Pari Dukovic
Stephen Ross standing on the highest outdoor observation deckin the Western Hemisphere at 30 Hudson Yards. Photo: Pari Dukovic

“How do you get people to move to this wasteland?” asks Stephen Ross, speaking rhetorically in what I would come to think of as his PowerPoint mode. We’re on the 24th-floor sales office of 10 Hudson Yards, and I’m trying to not be too distractedly beguiled by the floor-to-ceiling view of this soon-to-open pop-up metropolis he’s building all around us in what was, not so long ago, a blustery infrastructural trainscape, a place you’d probably go only if you needed to catch a Bolt Bus to Boston.

Ross, the 78-year-old founder and chairman of the real-estate-development firm the Related Companies, is the man behind the curtain in this Oz. Hudson Yards is the largest and most expensive real-estate project in America — 28 acres, at almost a billion dollars an acre. A strenuously engineered and resourcefully financed marvel, it was set in motion by the Bloomberg administration, which saw the northern terminus of the High Line as a good place for residential high-rises and office towers. But it was Ross who built it into what my colleague Justin Davidson refers to as a veritable nation-state, making Ross, just possibly and for this moment, the most powerful man in New York, a Robert Moses for our age of concierge mega-urbanism.

“Ross and Related were the only ones who could pull this off,” says Dan Doctoroff, the former deputy mayor for economic development under Mayor Bloomberg, who helped negotiate the deal for the site. (Doctoroff now runs the Google-owned techno-urbanism venture Sidewalk Labs, which happens to have its offices in 10 Hudson Yards.) He has his Ross theories. “Steve is a relentless optimist. He’s just building a new house for himself. He’s 78 years old. And he’ll enjoy it until he can’t.”

As far as billionaire Manhattan real-estate developers go, Ross is no Donald Trump, no dissembling, gold-plated media-hog princeling putting his name on things he doesn’t own and watching his company totter in and out of bankruptcy. (The two know each other, of course, though Ross declines to discuss him. “I don’t like Donald, okay, we can stop there. We’d be here all day.”) Rather, he’s what Trump used to play on TV: a vastly wealthy — he’s worth $7.7 billion, according to Forbes — notoriously obstreperous — one former city official I spoke with called him “the toughest developer I’ve ever had to deal with” and didn’t mean that admiringly — and obsessive real-estate deal-maker.

He got here in part by building things that other developers found unglamorous, like affordable housing and big-box retailers. He has also, by many accounts, created a development machine unlike any the city has ever seen: highly competitive, vertically integrated, and international. He modeled his corporate culture on Wall Street, where he worked for two years without much success. (He was quickly fired, twice.) “They were able to introduce investment-banking-level human capital into the real-estate business,” says Jed Walentas, CEO of Two Trees, which is developing its own not-quite-as-mega megaproject on Williamsburg’s waterfront at the Domino Sugar site. “They recognized the talent. Before that it was a couple people in an office. They give a shit about what they are doing, and they’re in it for the long term.” Ross incentivizes his top people with partnerships.

He has a banker’s knack for financing, whether it’s from working the various government tax subsidies for affordable housing or seeking overseas cash. (Related has raised over $600 million for Hudson Yards through the controversial EB-5 visa program, which gives foreign investors residency status.) He’s also a lawyer and as meticulous about contractual details as he is about what wood is used in the lobby trim.

Even his seeming vanity projects are strategic. Take the ultimate billionaire’s sandbox, owning an NFL team: To hear Ross describe it, buying the Miami Dolphins, as he did in 2009, is a kind of business entertainment expense. “I mean, you’re a member of a 32-exclusive club, but it does open up tons of business opportunities, so I thought it would work very well. As long as I’m investing in Florida …”

Or take the “Vessel,” that much-talked-about stairway to nowhere, designed by the celebrated urban-bauble-maker Thomas Heatherwick, that Ross plunked down in the middle of the Hudson Yards plaza like an enormous flowerpot. “The public doesn’t have any idea what Hudson Yards is,” Ross explained to me in 2016, shortly before the Escher-like selfie-platform was unveiled. “Nobody has a real idea of what it really means.” Ross had commissioned the Vessel, which has no function per se, to stoke people’s curiosity.

In that sense, it might have been nearly as important to getting Hudson Yards built — and financed — as constructing an atrium inside 10 Hudson Yards specifically to seduce Coach into moving there. Or buying Time Warner (now known as Warner Media) out of its office condo on Columbus Circle and then, to secure a blue-chip critical mass, selling it new offices in the 1,300-foot-tall 30 Hudson Yards for a very good price. Or persuading Neiman Marcus to open its first New York City store, in what cannot be considered the golden era of department stores, as an anchor to his seven-story mall. For Ross, there’s always an angle.

Photo: Pari Dukovic

Ross, for now at least, lives in one of his previous developments, the Time Warner Center (in an 8,300-square-foot penthouse). He also works there (in an office overlooking Central Park) and often eats out there (in Per Se, Masa, and Porter House, the last of which he is a part-owner) and, when he’s in the mood, takes in a show there (at Jazz at Lincoln Center). If he needs gluten-free chips, Whole Foods is downstairs. For days on end, “I don’t even go outside sometimes,” he admits. But “I do own a coat.”

Hudson Yards is essentially the Rossian lifestyle at a supersized scale. Related calls Hudson Yards a “city within a city” and “New York’s next great neighborhood.” Ross presents this vision of tomorrowland as solving a series of problems you might have not have known you could buy yourself out of: “When you live in New York, you want everything at your fingertips,” he explains. “Getting around from one part of the city [to another], the subway system, people don’t want to go on it because of all the problems,” he says, an assessment that might come as a surprise to the city government, which paid to extend the 7 train out to Hudson Yards in order to make the site viable to tenants.

Ross will soon reside in 35 Hudson Yards, designed by David Childs, who also designed Time Warner (and got a Porsche from Ross as a reward when the condos sold out). The new building will house, in addition to condos and offices, the world’s first Equinox Hotel (Related owns the high-end fitness-club chain), the website of which promises frictionless exaltation: “This is the complete manifestation of high-performance living. This is a destination where how you move, eat, sleep and live is entirely reimagined. This is your life. Live it exceptionally.”

It is a life and a lifestyle that Ross has spent a very long time constructing. Raised in Detroit and Miami Beach, Ross had been set on going to the University of Michigan. When he didn’t get in on the first try, he transferred in (which is fortunate for the Wolverines, given that he’s since donated $300 million). After law school at Wayne State and a master’s in tax law at NYU, he took his ill-fated turn on Wall Street (at Bear Stearns, where he had an office next to Henry Kravis, whose KKR is now a tenant at Hudson Yards). Ross worried he was “unemployable.” So he decided to be his own boss. He figured out how to use his tax-law know-how to raise money from investors looking for tax credits to finance the building of affordable housing via government programs. With $10,000 from his mother, he started something called the Related Housing Companies — a name he came up with because, he’s said, “everything is related,” and because it was so banal that it was easy to register in every state.

Registering nationwide turned out to be helpful, since Related went on to build tens of thousands of subsidized low- and moderate-income apartments all over the country and, in a related Related business, to sell tax credits to investors. The narrow margins encouraged Ross to build efficiently and exactingly, while doing public-private work gave him a fluency with government bureaucracy. As former city housing commissioner Rafael Cestero told Crain’s New York in 2012, Related’s “lack of fear of public process, bureaucracy and unions is what allows them to be the player they are. Too often, the larger development companies get scared of that.”

By the 1980s, Ross had made a fortune, and he turned toward higher-profile projects. In the early 1990s, he hired the architect Robert A.M. Stern to design what became the Chatham on the corner of 65th Street and Third Avenue. “At that point, Related was still building mostly middle-class apartments in New York and elsewhere, probably,” remembers Stern. He called the project “pathbreaking” because even if Third Avenue wasn’t a wasteland, it wasn’t yet a luxury address.

“Steve became very involved,” recalls Stern. “But many of the people in Related working with him really weren’t yet attuned to what the high end was.” Ross insisted on details like street-level limestone, and the building became a kind of clubhouse for Related executives, including Jeff Blau, the CEO, who will soon move to Hudson Yards.

Related also became deeply involved with some of the thorniest projects in the city: the long-delayed attempt to develop a mall and housing at Willets Point, an industrial area near Citi Field, and, of course, more successfully, the seemingly cursed New York Coliseum, a dreary circa-1959 Robert Moses convention hall on Columbus Circle that had fallen into disuse after the Javits Center opened in the late 1980s.

Photo: Pari Dukovic

For years, a more established mogul, Mortimer Zuckerman, had tried to build a Xanadu for Salomon Brothers there, but the 1987 stock-market crash did it in, helped by now-quaint-sounding civic protests about how much of Central Park would be cast in shadow by the enormous towers. Ross could see the Coliseum from his office at the other end of 59th Street, and at first he had the idea of at least temporarily putting big-box stores inside it before deciding to try something that was fairly common in Asia but hadn’t really worked in New York yet: a mixed-use building.

He persuaded Mayor Giuliani to choose Related over competing developers by putting Jazz at Lincoln Center in a prominent spot. “Everybody else would put it in the back, in the basement, and we put it in the best location there was in the whole thing.” He convinced Richard Parsons, then the head of what was for a while called AOL Time Warner, that moving to his proposed Columbus Circle project was the appropriately grand brand statement for his then-ascendant behemoth. And he persuaded GMAC, in the skittish post-dot-com-crash investing climate, to give him the largest construction loan to date, $1.3 billion.

After the success on Columbus Circle, Ross went on to bigger ideas, from West Palm Beach to Abu Dhabi. A mixed-use project designed by Frank Gehry in downtown L.A. is ongoing. Another plan to team up with Vornado to redevelop Madison Square Garden in 2006 didn’t work out, but it set the stage for Hudson Yards.

The Bloomberg administration originally wanted the rail yards used for a stadium for the 2012 Olympics, a bid headed by Doctoroff. Ross and Doctoroff were already friendly. They’d known each other since they were both part-owners of the Islanders hockey team, were both from Detroit, and had both attended the University of Michigan. Neither was beguiled by some bohemian idea of gritty New York City. They thought it should be cleaned up and made more functional.

After the Olympics bid fizzled, the city asked for proposals from developers. Related’s anchor tenant was supposed to be News Corp., but the weekend before Related was to submit its bid, the Murdochs pulled out. The site went instead to Tishman Speyer, but then that company got cold feet. “It was spring 2008 when Tishman Speyer backed out,” notes Doctoroff. Ross wasn’t afraid of the downturn; he “just kept plowing ahead, recognizing that the world is cyclical.”

That’s remained true. When Related was filling in the cells on the spreadsheets for Hudson Yards in the wake of the Great Recession, office space was cheap, so the plan was to make money on the apartments and a million-square-foot mall anchored by Neiman Marcus. But then retail went into a tailspin. Ross was reportedly so worried Neiman might pull out, triggering exit clauses in other retailers’ leases, that he looked into buying the store. The good news for Ross is that office space is in demand again (so much so that Warner Media is seeking to sell the space Ross gave it such a deal on and lease it back, and it hasn’t even moved in yet).

Hudson Yards might also be the last hurrah for Amazon-level government subsidies. Researchers at the New School say the city is spending $5.6 billion of taxpayers’ money on Hudson Yards, including over $2 billion for the 7-train extension and a billion dollars in tax breaks for commercial developers. But Ross didn’t get everything he wanted. At one point, he floated the idea of tearing down the north end of the High Line, offering to rebuild it (“It took nine months of nonstop daily negotiation to finally get the signed agreement to prohibit its demolition,” former city planning commissioner Amanda Burden said in a TED Talk). He’s currently suing New York’s construction union in the hope of lowering labor costs for the second phase of construction on the western Yards.

Meanwhile, Ross still sweats every detail: When I walk in to meet him at Hudson Yards, he’s scrutinizing the carpeting (“It doesn’t look like carpet tiles. It has a little elegance to it, you know what I mean?”). Thomas Woltz, the landscape designer for the plaza upon which the Vessel sits, tells the story of how he and Ross drove around the city looking at various options for the trees they might plant.

And, even at 78, Ross is thinking about the future. Which, unsurprisingly, he is optimistic about, or at least thinks he can pay to control. Construction is a notorious carbon emitter, a fact most developers choose to ignore. But he sits on the board of the World Resources Institute and underwrites the Ross Center for Sustainable Cities, which will give out its first Ross Prize this spring for a project that (however incrementally) transforms urban environments. “We’re dealing with extinction of the world as we know it. And if that’s not important enough to really try and concentrate to make an impact, then nothing is,” Ross tells me. “We really have ten to 12 years that we can do something.” Which, as it happens, is about when phase two of Hudson Yards is scheduled to open.

*This article appears in the February 18, 2019, issue of New York Magazine. Subscribe Now!

How Stephen Ross Became New York’s Modern Robert Moses