Shortly before 10 a.m. on a late-winter Monday, Jed Walentas, the 39-year-old principal of the Two Trees Management Company, took a seat at the wide, U-shaped table in the ornate second-floor conference room at City Hall known as “the Cow,” shorthand left over from its original use as a meeting place of “the Committee of the Whole.” Across the table sat Mayor Bill de Blasio’s top emissaries to the real-estate industry: Carl Weisbrod, the newly appointed planning commissioner, and Alicia Glen, a former Goldman Sachs executive who was de Blasio’s pick to be deputy mayor for housing and economic development.
In a few days, the New York City Planning Commission was set to vote on Walentas’s $1.5 billion proposal to transform the shuttered Domino Sugar refinery on the Williamsburg riverfront into a Xanadu of parks, tech offices, shops, and—controversially—sleek apartment towers rising as high as 600 feet. The 3 million-square-foot project had been a locus of fevered community debate since 2004, when Domino ceased operations there after 148 years.
Walentas paid $185 million for the Domino site in 2012, after the previous owner, the Community Preservation Corporation, defaulted on its loans. It was the biggest deal of his career and one that heralded the next chapter for a New York real-estate clan. David Walentas, Jed’s father, had minted a billion-dollar fortune by transforming Dumbo, once a favored dumping ground for mob hit men, into a postindustrial playground, where a Walentas penthouse listing for $19 million drew interest from Jay Z and Ralph Lauren. Unlike Soho and Tribeca, where the classic city progression from decaying industrial buildings to artists’ lofts to condos for the superrich happened more or less organically, creating many fortunes along the way, Dumbo was the vision of one man. It was a planned community in the heart of Brooklyn, bohemia by the numbers. A self-described dictator, David organized everything, providing free rent to galleries, restaurants, and chic shops like Jacques Torres. And he defended his little enclave fiercely. “If you were with me, we were friends. And if you were against me, you were my enemy,” David tells me. His many feuds over the years with city officials, community groups, rival developers, and even his buildings’ tenants were legendary. In 2006, he threatened to erect a steel barrier blocking windows in a condo building owned by Shaya Boymelgreen if Boymelgreen went forward with the purchase of a building Walentas coveted. Perhaps David Walentas’s most notorious eruption occurred at a public meeting at Borough Hall, where he called Marianna Koval, then-president of the Brooklyn Bridge Park Conservancy, “a cunt” to her face. “Truth is my best defense: I did call her a cunt!” he tells me.
“He is a gross, rude man who’s used to having a lot of power,” Koval says. “His nasty personality has worked to his detriment.”
It was Jed, rather than David, who was at the table at City Hall, which was a blessing, even in his father’s eyes. “Jed is much more personable; he schmoozes with people. I hate ’em all,” David says. Jed’s political instincts became crucial assets in the Walentas’s drive to develop Domino. When they bought the site, the land-review board had already approved the previous owner’s master plan, designed by Uruguayan architect Rafael Viñoly. But Jed pressed ahead with his own vision, a politically risky move that would require city approval. He hired architects from SHoP, the Manhattan firm, to do a redesign, adding green space and improving access to the waterfront esplanade. He answered hundreds of questions at community meetings and vowed to set aside 660 out of 2,300 apartments for affordable housing, more than the 460 the existing zoning required. “He took the time to show the respect of the community,” says Rob Solano, executive director of Churches United for Fair Housing, a Williamsburg advocacy group. “When we bought the thing, I didn’t know a fucking thing about the neighborhood,” Jed says. “Those folks have lived there their whole life. We’re arrogant, but we’re not that arrogant.”
But there was one crucial constituency that Jed hadn’t converted: Bill de Blasio. Which is why Weisbrod and Glen had summoned him to City Hall that morning. From the moment the meeting opened, the de Blasio officials made it clear that the mayor intended to act on his campaign pledge to hit RESET on the city’s relationship with developers. Domino would be the first public test of the mayor’s campaign promise to build or preserve 200,000 units of affordable housing. “They were like, ‘The landscape has totally changed, the rules have changed,’ ” Jed recalls. If he hoped to secure the necessary approvals to build 50-story towers on the site, he would need to add more affordable housing to the plan. A lot more.
Jed pushed back on the administration’s demands that Domino include 550,000 square feet of below-market units. “That’s a nonstarter,” he said, contending that his firm had made painful affordable-housing concessions already. And it was committing to build parks and office space for internet start-ups, which would vastly improve the surrounding neighborhood, he argued. Jed felt de Blasio’s team had not even brushed up on his design. “Carl had never been briefed on the plan,” he says. “They didn’t have their staff organized, and that made it worse.”
Weisbrod and Glen held firm. The talks got so heated that Glen suggested everyone cool off in the hallway. Within 15 minutes, both sides decided to break off the talks entirely.
It was the biggest crisis of Walentas’s career. If the Planning Commission voted down Two Trees’ proposal, he would be forced to either sell the 11-acre property or build the plan designed by the previous owner. Dumbo was his father’s legacy. Domino was supposed to be his. “These things are not really about money. They’re very personal,” Jed tells me.
Back at Two Trees’ headquarters at 45 Main Street in Dumbo, Jed worked the phones, trying to exert pressure on the city. “I called a bunch of people, horrified, who I knew had a relationship with Carl. I was like, ‘These people are going to ruin this project. What are they doing?’ ”
The night after the talks, Jed cornered de Blasio at a universal-pre-K event at Gracie Mansion, complaining about de Blasio’s emissaries. “They’re overplaying their hand and are going to fuck this up,” he told the mayor. “He just listened,” Walentas recalls.
After 12 years of close relations with City Hall, the shift in tone was dislocating. “We really thought we were on a glide path,” Jed says. It was difficult to gauge de Blasio’s intentions. “There was a question: Are they calculating some political benefit by sacrificing this thing? What we were worried about was whether there could be scenarios where normally rational people behave in ways that are rational to them but where everybody else thinks is irrational,” he adds. “Like North Korea.”
David Walentas has harsher words. “I think de Blasio’s a disaster for the city,” he says. “His whole administration are amateurs and left wing. He’s never run anything and he has no ideas. All he wants to do is get his name in the paper.”
So Jed decided to get his name in the paper, first by leaking details of the stalled Domino talks to Charles Bagli, the New York Times’ veteran commercial-real-estate reporter. But Bagli had gotten wind of the brewing conflict before Walentas made the call. On Thursday, February 27, the Times splashed Bagli’s story on the front page. Headlined “Plan to Redevelop Domino Sugar Factory in Brooklyn Hits Snag: De Blasio,” it portrayed the mayor as putting ideology ahead of a development that had broad community support.
The public posturing brought the administration back to the bargaining table. Over the weekend, the two sides hammered out an accord. Walentas agreed to add 40 additional units of affordable housing, totaling 110,000 square feet, less than the city wanted but enough to put the negotiations back on track. But by Sunday afternoon, things were stalling again. Jed felt Weisbrod was backing away from a verbal deal. “I am worn out,” Jed emailed David Karnovsky, City Planning’s then–general counsel. “I know this is a sport for carl—it is really easy to play with other folks’ livelihoods when you have no idea about the facts and there are no real consequences to you … but i am losing my interest in this—i really am. life is too short for this bullshit. at least mine is.” (Weisbrod declined to comment. A de Blasio spokesperson said: “It’s only natural a developer pressed to provide more for the public than he otherwise intended is going to push back—that’s a sign we did our jobs well and drove a hard bargain on behalf of the city.”)
Finally, on March 3, Two Trees and de Blasio announced an accord. Two days later, the Planning Commission unanimously voted to approve Domino. That left the fate of the project in the hands of the City Council, which gave its approval last month.
“I don’t think we were terribly well treated,” Jed tells me. “That period of time could have been handled better.” He adds, “It doesn’t matter, we’re big boys and girls.”
Domino is the emblem of a borough in the midst of a real-estate gold rush. “There’s so much money coming in,” says Chris Havens, a former Two Trees executive turned commercial broker. Developers are grabbing for their piece of the prize. Last year, Toll Brothers, the national home-building giant, teamed with Starwood Capital to build a $280 million luxury-condo development and hotel in Brooklyn Bridge Park. Jared Kushner and developer Aby Rosen joined forces to pay $375 million for the Jehovah’s Witnesses buildings adjacent to Dumbo, with plans to turn the complex into an office campus. Last month, Etsy signed a deal for 200,000 square feet in the Watchtower.
Since 2008, the spread between the median residential rents of Manhattan and Brooklyn has closed, from more than $1,000 per month to around $200 per month. At this rate, median rents should cross in the next couple of years. “The basic premise for what is happening in Brooklyn is that it’s being transformed from Manhattan’s stepchild that was a more affordable place to live to a competitor,” says Jonathan Miller of Miller Samuel, an appraisal firm.
And no developer in Brooklyn has done more to refine and market the borough’s aesthetic than the Walentases. Since joining the family business in 1997, Jed went to work converting his father’s portfolio of loft buildings in Dumbo into luxury apartments, offices, and galleries. He persuaded West Elm, Barneys, and Trader Joe’s to cross the river to Brooklyn and is pressing ahead with his Dock Street development and the Enrique Norton–designed tower at BAM. He’s also branched into hospitality, converting an early-1900s textile factory in Williamsburg into the hip Wythe Hotel. “If I could buy up all of Brooklyn, I would,” Walentas says. “I’m really bullish on Brooklyn.”
With curly black hair and a wardrobe of dark hoodies, G-Star jeans, and New Balance sneakers, Walentas looks more like the hipsters he markets apartments to than a junior macher such as Rob Speyer or Jared Kushner. “That’s his modus operandi,” a real-estate executive says. “I’ve never seen him in anything other than a hooded sweatshirt. Ever,” says another executive. “I don’t like to be part of a club,” Walentas offers. “My friends are not real-estate people.”
The feeling is mutual. “They are very, very shrewd. But they also have a very big chip on their shoulder,” says a rival developer. The criticism is not surprising given the way Jed speaks about his peers. He is particularly dismissive of the overleveraged deals many developers pursued during the last boom. “The capitalization of real estate has made most people in the real-estate business not in the real-estate business,” he tells me. He says he takes a long-term approach, self-finances all his projects with conservative levels of debt, and oversees every facet of development from construction to selecting which retail tenants to put at street level. “We have no partners,” he says. “We don’t have to answer to anybody.”
Jed imbibed this go-it-alone approach from his father. David Walentas was born in 1938 into an impoverished family in Rochester. When he was 5, his father, a postal worker, suffered a debilitating stroke. His mother worked two jobs to make ends meet, but when David and his older brother became too much, she sent him off to be raised on a farm outside the city. “I was an indentured slave,” he tells me, half-joking. The experience was searing. “I’ve been on my own since I was 5 years old,” he says. “You don’t get too close to anyone. I only spoke to a shrink once in my life—I don’t really believe in shrinks—but I did one time 40 years ago, and he said, ‘David, you’re a classic orphan. You’re a loner, you’re always protecting your back.’ ” Perhaps as a response to the upheavals of those early years, David developed a pair of traits that would shape his career. He was fiercely anti-authoritarian. And he wanted to own real estate. “Some kids want to be a fireman or a doctor. I wanted to be a developer,” he says.
Despite frequent scraps in school, David excelled academically, earning both a B.S. and an M.B.A. from the University of Virginia. In college, he developed an ability to forge friendships with wealthy classmates, a skill that allowed him to jump-start his real-estate ambitions. After paying off his student loans by taking a job as a laborer on an Army base in Greenland and serving as a deckhand on a Danish freighter sailing from Casablanca, he returned to New York in 1966 hungry to hunt for property deals. But he was broke. “I couldn’t borrow $10,000 from Citibank—they threw me out,” he recalls. A college friend had introduced him to Jeff Byers, a scion of a fading Pittsburgh steel fortune and a descendant of W. R. Grace, the first Irish Catholic elected mayor of New York, in 1880. In 1967, Byers, Walentas, and the college friend formed a partnership. They called it Two Trees, taking the name from the Aiken, South Carolina, horse farm owned by Byers’s maternal grandmother. It was an odd-couple pairing, but the arrangement worked: Walentas would manage the properties while Byers raised funds through his society connections.
Their first deals were modest: rental apartments on 104th Street and Manhattan Avenue (“The best building on the worst block,” David says), a residential hotel on 57th Street, and a 15-story building on 38th and Park. But more-fashionable deals were in the pipeline. Byers, a node in the city’s burgeoning downtown art scene who counted Klaus Kertess, Chuck Close, and Brice Marden as friends, encouraged Walentas to buy up lofts in Soho just before the market exploded. Two Trees later nabbed the Italian Renaissance–style Silk Building on East 4th Street for $2 million.
But after a string of successful investments, their partnership blew up. On New Year’s Eve 1977, Byers threw himself out the rear window of his duplex on East 79th Street. His suicide note referred to unspecified “business problems.” The problem was actually fairly simple: He was broke. “Everyone thought he was rich, but no one had made any money in a couple of generations,” David says. When the suicide note was discovered, Byers’s wife, Hilary, the adopted daughter of CBS founder William Paley, turned on Walentas. “I was the outsider,” Walentas says. “I wasn’t friends with ’em anyway.”
Walentas retained control of the Two Trees name and struck out on his own. On a ski trip to Snowbird, Utah, he saw a poster in the lodge that caught his eye. It was a photo of a skier launching off a cliff with the caption NO GUTS, NO GLORY. He adopted the motto and had it embroidered onto the left cuff of all his shirts. Determined to expand his portfolio, he scoured the city for the next neighborhood on the verge.
He found it on a mild winter day in March 1981 while hanging around the Silk Building making small talk with some of the artists. “I asked one of the kids, ‘Soho, Noho, what’s next?’ He said, ‘Dumbo.’ I said, ‘What the fuck’s Dumbo?’ ”
Brooklyn barely registered on Manhattan consciousnesses in those days. But Walentas was intrigued. He drove his red Mercedes convertible across the Brooklyn Bridge to see the neighborhood, then called Fulton Landing. Strolling the desolate blocks of Belgian cobblestones, he saw distinct echoes of Soho and Tribeca, then undergoing their renaissance. By this time, he had secured a new source of funding through his wife, Jane, an art director for Estée Lauder. With backing from the Lauders, Walentas spent the next year buying up 11 loft buildings, totaling 2 million square feet, for around $15 million.
The original concept was hardly sexy. He planned to develop the district into back-office operations for Wall Street banks and secure city funds to build an entertainment complex and marina. But the deal nearly swamped his career. In the winter of 1984, Walentas found himself embroiled in a bitter dispute with the Koch administration. Kenneth Lipper, then–deputy mayor for finance and economic development, came out against the plan. Walentas accused Lipper, who had been a close friend of Jeff Byers’s, of seeking to exact revenge for his suicide (Lipper strongly denies this). Walentas, bleeding $150,000 a month, scrambled to find a stopgap. He called it his “Stalingrad phase.” Mario Cuomo came to the rescue. In 1985, the state agreed to sign a ten-year lease to move 1,000 employees in the Department of Labor to offices in Dumbo.
By the early 1990s, David was burned-out. His monomania with developing Dumbo had taken its toll, and he thought about getting out of the game. He sold many of his New York holdings, though not the Dumbo lofts, bought a trucking company in South Carolina, and started spending more and more time at his 115-acre show-horse-and-polo farm in Bridgehampton. “I would have gotten out if Jed hadn’t come along,” he says.
David’s battles with the Koch administration were a fixture of Jed’s childhood. “Everything during his whole life was a fight,” Jed says. “He started with nothing. Literally nothing. So everything for him was a struggle. Sometimes he probably picked fights where he didn’t need to.”
Jed was raised in a Soho loft on the corner of Spring and West Broadway. “I grew up by all accounts a pretty rich kid,” he says. His parents ate dinner out every night of the week at Raoul’s or the Spring Street Bar. The only home-cooked meal was Thanksgiving dinner. Jed, often surrounded by adults, took to calling his parents “David” and “Jane.”
Jed went off to college at the University of Pennsylvania. Though he studied economics, journalism became his calling. He rose to sports editor of the Daily Pennsylvanian, the student paper. “I did it till four in the morning,” he remembers. “Then I’d go to 7-Eleven and buy shit on the way home and wire myself with sugar and watch an hour of SportsCenter from 4:30 to 5:30 a.m. And then I’d sleep through all my classes.” “You could chart a time commitment to the paper and his grades,” says Amish Patel, Jed’s college roommate and now a Two Trees partner. During his senior year, Jed was offered a job at the New York Post sports desk. But as graduation approached, journalism lost its appeal. “It was fun and charming,” he says, “but I had enough of it.”
The family business drew him in. David at first refused to let him in the door. “I said, ‘You can’t work for me. Get a fucking job and an apartment,’ ” David recalls. But he was willing to help, and put in a call to Donald Trump. “Very wealthy people want their sons or daughters to come work for me, and they don’t care if I pay them or not,” Trump says. “Generally, I find it’s a favor for them but not for me. But I can say that in the case of Jed, it was the exception.” In 1997, Jed went to work for the Donald on his residential conversion of 40 Wall Street. “By the time he finished, I actually called David and said, ‘You sure you want him back? I’ll keep him for a lot longer.’ ”
But David needed Jed. In 1997, the Giuliani administration rezoned Dumbo as a residential neighborhood, finally delivering on David’s dream to develop his lofts into condos. That year, Jed left Trump to oversee the conversion of the Clocktower Building at 1 Main Street. He persuaded Patel to work with him on the project. “It was remarkable and perhaps reckless to entrust two inexperienced people like us to execute that development,” recalls Patel. “We didn’t know dick,” Jed adds. “We were running a 250,000-square-foot conversion, and my previous construction experience was putting together a moving box to move myself into college. It was like, ‘Okay, pull flap down!’ We’d sit on the floor with the plans and figure out what the fuck we were doing.”
The inexperience showed. Not long after the first owners moved in, tenants complained about shoddy construction. “There were all these allegations of window leaks, roof leaks, issues of heat and ventilation,” says a tenant. Owners even accused David and Jane, who had moved into a loft one floor below the penthouse triplex, of stealing air conditioning and heating at the building’s expense. (“These allegations were disproven,” a Walentas spokesperson says). Tensions boiled over and a raft of litigation ensued, leading to an out-of-court settlement to fix the problems. “I think we did an excellent job at 1 Main,” Jed says, though he acknowledges that “we were cheaper then. We didn’t even replace the windows. We weren’t dishonest about it, but we did the renovation there for like 80 bucks a foot.”
These were early growing pains. Over the next five years, Jed and Patel led the conversion of ten additional buildings into residential lofts and offices. One of the hallmarks of Dumbo’s success is the way the neighborhood retained a level of authenticity that reflected the borough’s bespoke, small-scale aesthetic. Jed gave away free rents to retailers that met his standards. “We couldn’t go to the subway station and hand out $100 bills and say, ‘Go there!’ ” Jed says. “But we could use those principles to bring in interesting people who would bring their own interesting people.”
They did. But as Dumbo became an emerging destination, not everyone believed in the Walentas vision. As Jed managed the day-to-day construction, David went off to war. His prime adversary was the Brooklyn Heights Association. There was a battle in 1999 over a Walentas proposal to build a Jean Nouvel–designed entertainment complex at the bottom of Old Fulton Street that featured theaters, restaurants, and a hotel that swooped out over the East River. In 2004, Heights residents lobbied fiercely against a Walentas bid to construct a 17-story hotel at the foot of the Brooklyn Bridge. In recent years, both sides tussled over where to locate a 1922 carousel that David and Jane had spent years painstakingly restoring. “When I asked him, ‘Can we talk about where it might be sited?,’ he would say, ‘I’m going to put it where I want,’ ” recalls Marianna Koval. “ ‘My wife wants to see it from my living-room window, and I don’t care what you guys think.’ ”
“They’re just stupid, insulated people,” David says when I ask him about the carousel controversy. “The truth is that the Old Guard up the Heights are racists and anti-Semites, if you really want to know. They don’t want anything to happen to disturb their little community. They don’t want shvartzes walking through the community to get to the park.” Today, he says, “the Heights people love the carousel.”
Jed succeeded where his father had failed. In 2009, Jed steered the failed Dumbo hotel project, which had evolved into a mixed residential-office development, through the City Council by courting local community groups in Vinegar Hill and offering to build a school. David met with then-Councilmember Tish James and did his own kind of diplomacy. “I went and met with Tish James, told her about my black girlfriend [from the ’60s],” he tells me. She was a tenant in his building on Manhattan Avenue. “There was a pretty black girl from the Midwest, she was in law school at Columbia, and couldn’t pay her rent sometimes.”
With the influx of residents and fashionable retailers, rival developers swooped in and snapped up the remaining loft buildings. “The field has gotten a lot more crowded in the past five years,” Patel says. The rocketing prices left the Walentases on the losing end of several bidding wars. Last July, Kushner and Rosen topped the Walentases’ bid by nearly $100 million for the Jehovah’s Witnesses buildings. “Those guys paid a big number,” says Jed. “I wish them luck.” And in August, the father-son team of Joseph and Jack Cayre won the hotly contested competition to redevelop the Empire Stores, the crumbling Civil War–era coffee warehouses along the Dumbo waterfront. David speaks with a certain sadness about changes in the neighborhood. “Everyone is playing with other people’s money,” he says. “They have no idea. They don’t have a feel for it. With us, we lived and breathed every detail.”
For the dynastic New York real-estate families—the Speyers, LeFraks, Dursts, and Rudins—succession is more complicated than any property deal. It is a topic that Jed never raised with his father. “There was never a moment where it was discussed,” Jed tells me. Instead, David handed over the reins gradually. Over the years, the Walentases developed an understanding: Jed and Patel would run the company, while David retained a veto over any new deals. “It was a big transition for me,” says David, who turns 76 in August. “I was a dictator for 30 years, so it was hard to give up.” There has been some friction between father and son. David opposed Jed’s plan to redevelop the former Board of Ed headquarters at 110 Livingston Street and dismissed the Wythe Hotel as a vanity play. “I told him it’s the dumbest fucking idea I’ve ever heard,” David says. “It’s in fucking nowhere. Why do you want to get in the hotel business? It’s not a business.”
These days, David shows up a few days a week at the office and spends the rest of his time in the Hamptons, where he’s building a house on the ocean designed by the architects Tod Williams and Billie Tsien—a “nursing home on the beach,” he calls it. “I’ve had a great trip.”
On a windswept spring afternoon, Jed Walentas is surveying a fleet of smoke-belching excavators plying the Domino site. On May 14, the City Council voted to approve his plan for Domino, ensuring that the project will consume much of his energy for the next decade. “It’s like an archaeological dig,” he says over the clanging chorus of demolition crews at work. The machines kick up swirling dust clouds as the drivers dump hauls from articulated buckets into piles of masonry, metal, and wood, much of which will be repurposed when the new buildings rise. “You want people to understand there was a pretty intense history here. You want them to feel that,” he says. “We’ve spent hundreds of hours saving the more interesting infrastructure.”
The scale of the 11-acre complex is dizzyingly large. The concrete refining tower, topped by its signature canary-yellow Domino Sugar sign, rises ten stories above. Along the river, a row of cranes stand like sentries in front of an airplane-hangar-size warehouse where sugarcane was piled up to be processed. During Domino’s heyday in the late-19th and early-20th centuries, the plant employed 4,000 workers and refined more than half of the sugar in the United States. Today in the warehouse, workers are installing the enormous Kara Walker sugar sphinx that commemorates and skewers its industrial heritage.
“Building a 50-story building is not a monumental occurrence. It’s getting the social and urban conditions right so it’s a fabulous place people want to come to,” Jed tells me as we walk toward his silver Land Rover with dumbo vanity plates. “If we’re good at what we do and you come back in 20 years, you won’t know that these five or six buildings were designed by one developer.
“If it feels like Celebration, Florida, or Walt Disney World, someone should shoot me.”
Update: Statement From Jed and David Walentas
“All of the statements in this story were made in the heat of intense negotiations. We believe the outcome of those negotiations was mutually beneficial and we are grateful for the opportunity to build this great plan. We fully support Mayor de Blasio’s housing plan and vision for supporting mixed-use communities in New York City, which has always been and will always be core to our approach at Two Trees, and have the deepest respect for him, his ambitious goals and his talented team. We look forward to working in support of those goals in the months and years to come at Domino and across the city.”