A restaurant empire goes global
Similarly, by the mid-1990s the New York branch that Giuseppe the Younger and his father, Arrigo, opened in 1985 had become a high-octane dinner spot for leading businessmen and bankers. (Giuseppe the Elder died in 1980.) Sidney Kimmel, the founder and CEO of Jones Apparel Group, was an early regular at the Fifth Avenue restaurant and became an investor. "I sensed Giuseppe was a hard-working guy who needed more equity to fulfill his plans, so I became a partner in the restaurant chain," says Kimmel.
The deal to turn New York's fabled Rainbow Room into a Cipriani restaurant came through another frequent diner - Daniel Neidich, then a senior director at Goldman Sachs and one of its top real estate bankers. The firm owned 30 Rockefeller Center and wanted to lease the Rainbow Room to a tenant who could bring excitement back to the art deco space. Giuseppe and Arrigo took the space, renovated it and opened for business in January 1999.
Once Cipriani opened a SoHo outpost in 1996 called Downtown, he added models, actors, artists and producers to his burgeoning Rolodex. When he was considering opening a London branch of Cipriani in 2004, it was the movie mogul Harvey Weinstein who stepped up with seed capital.
"One night I was having dinner with him and Flavio Briatore, who runs the Renault Formula One racing team, and Giuseppe said, 'Look, I'm going to open a restaurant in London,' and we all encouraged him," remembers Weinstein. The partnership has proved mutually beneficial. Weinstein always has a table waiting at a white-hot restaurant when he needs to cajole a star to work for less than his going rate, and Cipriani London basks in the glow of being an entertainment industry canteen. (Weinstein is also an investor in the L.A. project.)
After Arrigo and Giuseppe had their New York restaurants up on their feet, they knew they wanted to get into the event business. "Catering is the easiest business, because you can plan how many people are coming," says Cipriani. What they needed was a space.
In the mid-1990s, 55 Wall Street was a building with a remarkable past but not much of a future. The 19th-century Greek Revival edifice had served as the Merchants Exchange and a U.S. Custom House. When Cipriani went to look at the building's 29,000-square-foot rotunda, it was vacant. Staring at the 72-foot-high ceiling, he had a eureka moment that would become the template for his subsequent event spaces at 42nd Street and a smaller one in Chelsea's Toy Building.
"He laid out a plan to take a bank lobby - essentially a glamorous-looking white elephant - and turn it into a valuable asset," remembers Andy Stone, who was then Credit Suisse First Boston's guru of mortgage-backed lending. "He had this plan to use it as a venue for concerts, private parties, catering."
Several years and a few false starts later, Cipriani finally partnered with New York real estate developer Steven Witkoff to buy 55 Wall Street and convert it to a luxury residential building as well as an event space. "When he came to me about 55 Wall Street, I said yes in five minutes. It was a simple handshake. No lawyers - unlike most deals where a guy calls you up on the phone and wants to dice and splice every deal point 14 ways to Sunday," says Witkoff, who owns more than 20 million square feet of office space.
Witkoff and Cipriani split the building into two tax lots: Cipriani bought the rotunda by himself for $20 million, and he and Witkoff went fifty-fifty on the remaining five floors. They paid $40 million and then spent another $80 million converting 55 Wall Street into 106 apartments, ranging in price from $885,000 to $3 million. Witkoff and Cipriani's plan called for owners to have access to a private restaurant, wine cellar, library, billiard room, spa and gym. According to Witkoff, they have sold more than 75 percent of the units since 2005.
Outside New York, Cipriani's motto appears to be "destination, destination, destination," not "location, location, location." The site for his new hotel in Beverly Hills is far from Rodeo Drive, and the Saxony in Miami is ten blocks north of the South Beach hot spots. However, Cipriani believes being at a remove from the hoi polloi is good business for a high-end hotelier, particularly one with a celebrity clientele. "When my grandfather opened the Locanda Cipriani on Torcello [an island near Venice], he had to bring electricity and water to the island," says Giuseppe, "and Queen Elizabeth has been there."
The transition from Bellinis to bricks has come with its share of tough lessons for Cipriani - most notably his ill-fated attempt to transform Pier 57 at the west end of Manhattan's 15th Street into a 350,000-square-foot Italian theme park called the Leonardo.
Cipriani brought the idea to Witkoff in 2003 when a city/state agency requested bid proposals for the property. Witkoff, who knew the hassles of dealing with historic structures from owning the Woolworth Building, was nervous about getting involved with a public works project. "But I indulged Giuseppe," says Witkoff, who partnered with him and a few other investors. "For him it's like cooking veal, but me, I'm seeing community groups, economic impact statements, an in-the-water project, a historic rehabilitation. Does it get any more complicated than that?"
Further complicating matters was the rival bidder for the project, Chelsea Piers Management. That group had already turned a series of piers a few blocks north of Pier 57 into a massive sports complex. In addition, the group was headed by Roland Betts, a well-connected developer who has been close friends with President George W. Bush since the two were in Skull and Bones together at Yale University.
In the spring of 2005 the 13 board members of the Hudson River Park Trust, the government agency managing the riverfront from Lower Manhattan to 59th Street, awarded Pier 57 to Cipriani and Witkoff. The trust liked their plan - which included a catering hall, shops, restaurants, a rooftop pool and a public park - but they also liked their money: They were willing to commit greater capital to the project and pay more rent. Their bid proposed $1.5 million a year to start and rose to $2 million in the sixth year. (Betts's group proposed a rent that would reach $1.5 million in the fifth year.)