Although the development of a hotel would be a significant leap for us into a new field, development, the prospect was not particularly daunting because of my long experience in the public company, where I had been privy to and part of the decision-making process of developing many other commercial real estate projects. I felt that I knew enough about the development side of the business, and that in erecting a hotel within the fast-expanding Disney World, we would be taking a very reasonable risk. I was also smart enough to recognize that the proj-ect—and our company’s sanity—would be better off if, after construction was completed, we handed off the day-to-day management of the hotel to a hotel operator such as Hilton, with its gigantic customer base and reservation system. With all these elements in hand—devel-opment expertise, financing, and a potential operator for the hotel—and believing that this was a great opportunity, I approached the Rockefeller Center Corporation with the project.
When seminal events occur, often the cause is not one single thing but a concatenation of several. The Rockefeller Center Corporation was leery of its Tishman division getting into development—because
development as a matter of course carried with it substantial risk. At the same time as I proposed this new hotel, change was occurring inside the Rockefeller family as a result of the fourth-generation cousins having doubts about the direction of the various enterprises. Some cousins were environmentalists who didn’t like the idea of constructing anything new, especially in big cities, where most of our jobs took us. Others didn’t like the idea of any risk-taking, whether done by Cushman & Wakefield. Tishman Construction, or any of the wholly owned Rockefeller entities. Still others wanted to take more money out of the family coffers for themselves, and were pushing for the divestiture of certain “non-core” assets such as the Cushman brokerage and the Tishman construction division.
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On my side of the fence, I was ready to have Tishman Construction operate independently, and to own it. Three years earlier that had not been a possibility, so I hadn’t really considered it then. But by 1979, since the division was now owned by a private company, Rockefeller, and not by the public Tishman company, it was a good time for me to buy it, and I wanted to. Moreover, while in 1976-77 the real estate market, especially in New York City, had been quite horrific, by 1979 things had turned around and it was booming. Many developers wanted our Construction Management services—a half-dozen large projects awaited us in Manhattan alone, among them the 520 Madison Avenue building that would be the headquarters for Bob and Jerry’s firm. And I very much wanted to build and own that hotel at Disney World, something that I could not do without permission from the Rockefeller Center Group so long as our construction division continued under its umbrella. I had asked Rockefeller for permission for my division to have an ownership interest in this project and expressed my willingness for the division to assume the risk position for this opportunity. That last suggestions may have been the straw that broke the camel’s back.
Out of a combination of the Rockefeller Group’s unwillingness to be involved in the Disney Hilton hotel real estate deal, and Rockefeller wanting to reduce its construction identity, and my eagerness to buy the company, a deal was struck. The Tishman Construction division of the Rockefeller Center Corporation would be sold to me and a group of eighteen of my top executives. The old, public real estate company was now long gone, and as we purchased ourselves from the Rockefeller Center Corporation, we would essentially be undergoing a new birth— as an independent Construction Management firm. In a sense, we were starting a wholly new tradition that encompassed and surpassed the old one. In the new company, my colleagues would receive shares but they would not need to put up any money to buy the company nor would they need to take on any of the risk—I was personally going to assume all of the risk and would arrange for all of the financing.
But I didn’t have on hand the $6.5 million that Rockefeller Center and I agreed on as the purchase price. So they assented to my paying for the purchase, in part, out of the proceeds of our operations in the coming years. They knew how well we were doing, and that this repayment shouldn’t take very long. But Al Marshall and the other Rockefeller executives needed to have some guarantees that money would continue to come in to the Tishman division, so that they could justify to the Rockefeller family interests the proposed sale of the construction division.