Robert Mecea/Getty Images The spotlight-shunning owner of Grand Central, Andrew S. Penson, right, in 2002, with a Bank of America executive, Richard M. DeMartini, left, and Senator Charles E. Schumer.There is some confusion over whether Andrew S. Penson had even been invited to the gala celebration of Grand Central Terminal’s centennial on Friday night. Regardless, Mr. Penson says characteristically, he will be the man who didn’t come to dinner.
Ordinarily, the balding 52-year-old Mr. Penson might barely be noticed at such a star-studded event, much less missed. But his absence rom the terminal’s birthday dinner, at the Oyster Bar, will strike New Yorkers in the know as a particularly glaring omission.
After all, Mr. Penson owns Grand Central.
Ask most New Yorkers to identify the terminal’s landlord and they will most likely reply that it must be the state or the Metropolitan Transportation Authority or its Metro-North subsidiary.
As is typical when it comes to complex real estate transactions, though, things are not what they seem to be at first blush. Moreover, Mr. Penson goes out of his way to remain unnoticed.
“I don’t look for publicity,†he says.
He and his wife apparently were not invited to the dinner until Monday, after a reporter asked the centennial committee whether he had been. He will not attend if for no other reason than the dinner falls on the Jewish Sabbath.
The son of a businessman who specialized in converting rental apartments into co-ops, Mr. Penson, who grew up on Manhattanâ€! ™s East Side, is a graduate of New York Law School (he sits on its board of trustees and is a prodigious fund-raiser for the school and for the United Jewish Appeal) and a former lawyer at Jones Day.
He plunged into real estate in earnest in the mid-1990s by buying the debt on distressed properties, especially mortgages owned by Japanese banks. In 1998, he made an unsuccessful $450 million bid for the Washington Redskins football franchise.
He is the managing member of a Delaware-based limited liability company, Midtown Trackage Ventures, which includes his partners in Argent Ventures and two outside institutional investors. Argent once owned an interest in the Chrysler Building and still has a stake in the Capitol Records Tower in Hollywood.
Argent has invested more than $2.5 billion in real estate, primarily in New York, California, Florida and Washington, D.C., with partners that have included Morgan Stanley, Tishman Speyer, Oaktree Capital Management, Millennium Partners, Fortress Invetment Group, Lehman Brothers, LCOR, iStar Financial, RBS Greenwich Capital and HRO. At various times, Argent owned 1,000 apartments in New York City (through ALTA/Park City), as well as an interest in the Starrett Corporation.
In 2006, Argent sold Manhattan Mall, a so-called vertical shopping center in Midtown West, for $689 million.
His interest in buying Grand Central was piqued in 2002 when the Roosevelt Hotel over the terminal’s tracks was put up for sale.
In 2006, Midtown Trackage Ventures, which included two institutional investors that he would not identify, bought Grand Central and 75 miles of track to Poughkeepsie and 82 miles to Wassaic, in Dutchess County, from American Premier Underwriters; American Premier’s parent, American Financial Group (which had acquired the bankrupt Penn Central’s real estate); and the Owasco River Railway (a company that once operated switching facilities upstate and was later acquired by the New York Central Railroad) for about $80 millio! n.
! The sale included about 1.3 million square feet of air rights over Grand Central, which could become more valuable if the Bloomberg administration’s proposed higher-density Midtown East rezoning plan is approved.
The Metropolitan Transportation Authority, which assumed potential environmental cleanup costs, pays $2.24 million in annual rent on a lease that expires Feb. 28, 2274. The authority has an option to buy the terminal and the tracks in 2017, which it is expected to exercise, although the landlord can extend that date to 2032.
Mr. Penson is not a railroad aficionado. As a lifelong Manhattan resident, he has never been a commuter. Nor, as a child, did he play with model trains. Few M.T.A. officials have ever met him. He took a tour of the terminal before he bought it, but his occasional visits to Grand Central, a few blocks from his Fifth Avenue office, are to play at the Vanderbilt Tennis Club (court time rates range up to $225 an hour, or $15,000 annually).
Still, while he has no framed the deed (“It’s just a piece of paperâ€), the thought of owning Grand Central Terminal had instantly appealed to him.
“It was the right time when the opportunity presented itself,†Mr. Penson recalled, “although I immediately thought of the old joke about buying the Brooklyn Bridge.â€
