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Edited by: TJVNews.com
In the glitzy realm of Manhattan real estate, where fortunes are made and lost with the capriciousness of a high-stakes poker game, few stories rival the spectacular rise and fall of Ziel Feldman and his firm, HFZ Capital Group. Once hailed as a titan of development, Feldman now finds himself navigating the treacherous waters of foreclosure, lawsuits, and scandal, his empire crumbling around him like a modern-day Icarus, as was reported earlier this month on the Curbed.com web site.
In a rare interview with James D. Walsh, an Intelligencer staff writer, it appears that amidst the wreckage of his once-thriving business, Feldman reflected on the harsh realities of an industry where success and failure walk hand in hand. The Curbed.com report indicated that Feldman spoke candidly of the challenges faced by even the most illustrious of his peers. Names like Stephen Ross, Arthur Zeckendorf Sr., and Harry Macklowe serve as grim reminders that no developer is immune to the whims of fortune.
But while Feldman may find solace in the company of fallen titans, the magnitude of HFZ’s collapse sets it apart from mere setbacks. The firm, once a powerhouse in the world of luxury real estate, now faces a barrage of lawsuits and accusations that threaten to tarnish its reputation beyond repair, according to the Curbed.com report. Allegations of financial impropriety, including claims that Feldman and his partner siphoned funds to fuel their lavish lifestyles, cast a dark shadow over the company’s legacy.
The unraveling of HFZ’s fortunes is compounded by the misdeeds of former allies turned adversaries. A key investor, Beny Steinmetz who was ensnared in a bribery scandal, now languishes in a Swiss prison, leaving behind a trail of legal chaos in his wake, the report added. Meanwhile, John Simonlacaj, a trusted colleague, with whom Feldman shared more than two decades of partnership, stands convicted of colluding with organized crime, further eroding the already fragile foundations of HFZ’s reputation.
Amidst this maelstrom of controversy, the specter of regulatory scrutiny looms large. Investigations by the New York State attorney general into allegations of fraud add another layer of uncertainty to HFZ’s uncertain future. While Feldman maintains his innocence, the outcome of these inquiries remains a looming question mark, threatening to prolong the company’s descent into ignominy.
The allure of Manhattan’s luxury real estate market proved irresistible to developers like HFZ, who seized the opportunity to cater to a global elite hungry for investments that promised both prestige and profit. The report on the Curbed.com web site indicated that with floor-to-ceiling windows and hotel-quality amenities, HFZ’s units became the epitome of urban luxury, attracting a clientele that spanned the globe from Russia to China, Latin America to the Middle East. Behind the facade of sleek facades and glossy brochures lay a web of LLC property ownership, offering anonymity to those seeking to park their wealth in the heart of the city.
As the demand for luxury housing soared, developers raced to capitalize on the frenzy, transforming once-neglected neighborhoods into exclusive enclaves of wealth and privilege. As was reported by Curbed.com, West Chelsea, perched along the High Line, and Billionaires’ Row, a vertical playground for the super-rich, emerged as symbols of Manhattan’s newfound extravagance, crafted by the visionaries of the real estate world.
At the helm of HFZ stood Ziel Feldman and managing director Nir Meir, architects of the firm’s ascension to the upper echelons of Manhattan’s development elite. Their ambitious projects, including the $2 billion megadevelopment known as the XI, promised to redefine the city’s skyline and cement their status as industry titans. Yet, as quickly as they rose, their empire began to crumble.
The implosion of HFZ, insiders reveal, was not the result of a single misstep but a culmination of factors. Poor decision-making, a toxic work culture, and extravagant spending all contributed to the firm’s downfall, while spreadsheets painted rosy pictures that masked underlying realities, according to the information provided in the Curbed.com report. Even from the outside, whispers of unease permeated the industry, with some major developers expressing wariness of Feldman’s relentless pursuit of deals and his penchant for leveraging beyond reason.
The COVID-19 pandemic, initially cited as a catalyst for HFZ’s woes, merely laid bare the underlying weaknesses that had long simmered beneath the surface. Curbed.com reported that amidst layoffs and financial turmoil, Ziel Feldman found himself pointing fingers, laying blame at the feet of his former partner, Nir Meir, for the company’s unraveling.
For twenty years, Feldman and Meir stood side by side, their bond seemingly unbreakable as they navigated the cutthroat world of luxury development. Former colleagues and friends attest to their symbiotic relationship, describing them as more than business partners – they were family. The Curbed.com report said that Helene Feldman, Ziel’s wife and HFZ’s “design and creative” principal, recalls how her husband welcomed Meir into their lives, treating him as a son and fostering a familial atmosphere within the company.
However, the facade of harmony crumbled when HFZ’s fortunes took a nosedive, revealing fractures beneath the surface that would tear the partnership asunder. The Curbed.com report said that in a dramatic turn of events, Feldman filed a lawsuit against Meir, accusing him of orchestrating a “Machiavellian scheme” to enrich himself at the expense of the company. Allegations of theft, deception, and manipulation paint a damning portrait of Meir, whom Feldman describes as a “talented sociopath” who led HFZ astray, the report added.
The rift between the former partners is stark, with Feldman leveling accusations of betrayal and Meir maintaining a stoic silence in the face of scrutiny, as was noted in the Curbed.com report. The lawsuit seeks a staggering $688 million in damages, underscoring the magnitude of the betrayal Feldman perceives.
To understand the genesis of HFZ’s downfall, one must trace Feldman’s journey from real-estate attorney to developer extraordinaire. A native of Queens, Feldman cut his teeth in the industry during the heady days of the 1980s, when real estate eclipsed even sex in the collective imagination of Americans, the Curbed.com report said. Sensing greater opportunity as a developer, Feldman co-founded Property Markets Group (PMG) with banker Kevin Maloney, embarking on a mission to revitalize neglected buildings and unlock their potential.
PMG’s early success set the stage for Feldman’s subsequent ventures, including a landmark partnership with Gary Barnett to acquire the Belnord, a Beaux-Arts gem on the Upper West Side. This transformative project, funded in part by the enigmatic Beny Steinmetz, laid the groundwork for Feldman’s approach to development over the next two decades.
Meanwhile, Feldman, and his wife Helene, crafted a life of luxury befitting their newfound success. Their sprawling mansion in Englewood, inspired by the grandeur of a Fontainebleau chateau, stood as a testament to their wealth and ambition, the Curbed.com report said. But for Feldman, the lure of Manhattan’s real estate arena beckoned with irresistible allure, setting the stage for his next chapter in the annals of development history.
Driven by an unspoken desire to ascend to the penthouse of Manhattan’s real estate hierarchy, Feldman embarked on a journey to carve his name alongside dynastic families like Durst, Zeckendorf, and LeFrak. With a keen eye for trends and an intuitive understanding of the city’s needs, Feldman sought to position himself as a tastemaker and trendsetter, shaping the skyline of the city he called home.
In 2005, Feldman realized his vision with the founding of HFZ (Helene, Feldman, Ziel), a venture that would catapult him into the spotlight of New York’s development scene, as was noted in the Curbed.com report. At his side stood Nir Meir, a young and ambitious protégé whose fervor matched Feldman’s own drive for success. With Meir as HFZ’s managing principal, the duo embarked on a relentless pursuit of growth and expansion, fueled by a combination of ambition, charm, and financial savvy.
Meir’s magnetic personality and uncanny ability to court investors proved instrumental in HFZ’s rapid ascent. Armed with a Rolodex of wealthy contacts, he navigated the complex world of capital markets with ease, securing funding from institutional lenders and overseas investors alike, the report on Curbed.com said. Under his guidance, HFZ embarked on a buying spree, acquiring distressed properties and transforming them into lucrative investments that caught the attention of the press and the public alike.
Yet, beneath the veneer of success lurked whispers of impropriety and shady dealings. Implied in the Curbed.com report, some viewed Feldman and Meir as outsiders, interlopers in a world dominated by established real estate dynasties. While their success was undeniable, questions lingered about the methods they employed to navigate the cutthroat landscape of Manhattan’s development arena.
Despite the accolades, the partnership between Feldman and Meir would ultimately unravel in a dramatic fashion. Allegations of betrayal and deceit would tear apart the once inseparable duo, leaving behind a legacy marred by scandal and infamy.
Unlike his predecessors, Feldman recognized the necessity of leveraging foreign capital to fuel his ambitions. Enter Beny Steinmetz, a shadowy figure whose immense wealth and penchant for secrecy made him a sought-after investor in global real estate ventures.
By the late 2000s, Steinmetz’s fortune had swelled to astronomical proportions, affording him the means to inject hundreds of millions of dollars into projects across the globe. The Curbed.com report said that while HFZ vehemently denied any association with the enigmatic diamond dealer when pressed by reporters, evidence suggests a much deeper and more intricate relationship existed behind closed doors.
Emails, text messages, and interviews with former HFZ employees reveal a web of connections between Steinmetz and the development firm, with the diamond dealer exerting significant influence over its operations. From having employees stationed within HFZ’s offices to orchestrating last-minute trips to the Mediterranean, Steinmetz’s involvement in HFZ’s affairs was undeniable.
However, the true extent of the partnership between HFZ and Steinmetz was shrouded in secrecy, with both parties having compelling reasons to conceal their association, according to the Curbed.com report. Steinmetz’s involvement in a controversial mining deal in Guinea, which ultimately led to his conviction for corruption and forgery in Switzerland, cast a dark shadow over his business dealings. Despite his intentions to appeal the verdict, Steinmetz’s reputation as a dubious figure loomed large over HFZ’s operations.
The ramifications of Steinmetz’s legal woes reverberated beyond HFZ, with Vale, a Brazilian mining firm, seeking to recoup its losses from the ill-fated Simandou deal. Vale’s attorneys traced funds from the mining venture to investments made in HFZ projects, including the XI megadevelopment. The Curbed report said that as the legal battle ensues, other developers like Aby Rosen’s RFR Holding have also come under scrutiny, highlighting the interconnected nature of Manhattan’s real estate landscape.
Last week, it was reported that Meir and other industry executives were indicted for stealing more than $86 million from investors, subcontractors, and New York City through a series of frauds and schemes that began in 2015. In five separate but related New York State Supreme Court indictments, HFZ, Meir, and others were charged with varying counts of larceny, conspiracy, falsifying business records, tax fraud, money laundering, and more. The indictments are the culmination of a joint investigation by the Manhattan D.A.’s Office’s Rackets Bureau and the New York State Police Special Investigations Unit.
“These indictments depict allegations of widespread fraud within the real estate industry primarily spearheaded by one man: Nir Meir,” said District Attorney Bragg. “In total, we allege these defendants’ conspiracies netted them a total of $86 million stolen from investors, contractors, and the City of New York. My Office’s Rackets Bureau is laser-focused on fraud in the construction and real estate industries and will continue to root out people who steal from investors and corrupt the market.”
Among those charged are individuals associated with Omnibuild, a construction firm involved in HFZ projects, including Omnibuild’s chief executive, John Mingione, the NYT report said. The indictments allege a conspiracy to misappropriate funds from investors by inflating construction costs for the XI development between June 2019 and September 2020.
Prosecutors believe the fraudulent activities persisted until late last year, implicating Meir and his associates in a web of deceit and financial malfeasance.
As was reported by the NYT, a spokesperson for Omnibuild vehemently denied any wrongdoing on the part of the company and its executives. Josh Vlasto, the spokesman, portrayed Omnibuild and its leaders as victims of HFZ’s fraudulent practices, asserting that evidence would demonstrate HFZ’s culpability in the alleged theft.
The unraveling of HFZ Capital Group, that once boasted a staggering portfolio of properties exceeding $10 billion in value, has captivated industry observers as details emerge of a dramatic collapse fueled by allegations of fraud, missed payments, and financial mismanagement.
Yet, amidst the wreckage of HFZ’s collapse, there are lessons to be learned about the capricious nature of Manhattan’s real estate landscape. For every towering success story, there exists a cautionary tale of hubris and downfall. And as Ziel Feldman grapples with the aftermath of his company’s implosion, he serves as a sobering reminder that even the most formidable of titans can be brought low by the merciless tides of fate.
