The Dream Builder

UNABLE TO PAY for treatment at the hospital he gave millions of dollars to build, a dying Bill Levitt was still hoping for another roll of the dice. Forty-two years after he completed his last house in Levittown and 26 years after he sold his company for $92 million, Levitt teetered on the verge of bankruptcy, amid allegations that he looted family charities and cheated homebuyers. Still, the man who once claimed to be America's biggest homebuilder was sure he could save his business and his family's good name.

``I have a regular organization ready to punch in full time,'' Levitt rasped during his last interview late in 1993. ``I need another six months.''

But at 86, he'd outlived success, a victim of changing economics, questionable business practices, worse luck and a lifestyle that far exceeded his means. Three months later, Levitt was dead.

``Bill was having dreams of this supposed comeback that simply wasn't there,'' said Charles Biederman, nephew and trusted business partner, who visited him at North Shore University Hospital. ``But he believed so intensely, you found yourself believing, too, even though you knew it wasn't true.''

Dreams are what Bill Levitt sold. And his biggest came to pass starting in 1947 on 7.3 square miles of land near what was then called Island Trees in Nassau County. Today, Levittown's 17,447 mass-produced Cape Cod and ranch houses form the core of a still vibrant community that critics once dismissed as an incipient slum.

This original $50 million development -- along with dozens of other mass projects he produced throughout the world over the course of a 64-year-career -- offers testament to Levitt's prowess as a pitchman and financier who grasped the seductive appeal of homeownership for young families.

William J. Levitt did not invent the suburb. However, with his father, Abraham, and younger brother, Alfred, Bill Levitt combined the entrepreneurial spirit of Henry Ford with the self-promotional bluster of P.T. Barnum to change the American landscape. Levitt revolutionized the home construction industry by unsnarling arcane building codes and union rules and employing new technologies to get quality building jobs done fast and cheap. And he did it all with flair in the New York media spotlight.

Until the magic wore off late in life, Levitt displayed a genius for calculating the risk, seizing opportunity, exploiting the forces swirling around him, extemporizing, and amassing fortunes for himself and others. Going through three wives, a couple of yachts and a massive fortune, Levitt lived life with zest.

There was always time for a party. Tapped out after cavorting at the Havana Yacht Club shortly before the Cuban Revolution, Levitt quickly moved to raise capital for yet another gamble. Weaving down the aisle of his corporate plane as it arced northward across the Caribbean, Levitt scraped together about $80 from his lieutenants. Checking his coordinates, Levitt ordered the pilot to divert course and land in Nassau, the Bahamas.

Once on the ground, Levitt moved on to a local casino and boldy parlayed the meager stake into about $2,500 in 10 straight passes at the craps table. Wrangling a loan from the house, Levitt kept rolling until he bankrolled a weeklong vacation for the entire entourage. ``That's Bill,'' said Nelson Kamuf, who was there. ``A good gambler who knew how to play the odds.''

And Levitt knew how to play both sides against the middle.

In public, Levitt derided ``the people of Park Avenue'' and reveled in the adulation heaped on him by middle-class homeowners. And when Hofstra University professor Stuart Bird asked him to state his legacy shortly before he died, Levitt looked into the camera and said he would like to be remembered as ``a guy that, I suppose, gave value for low-cost housing. Not somebody that gave value for half-million-dollar houses. Anybody can do that.'' But in private, close relatives say, Levitt fancied himself part of the jet set and exhibited contempt for the ``masses'' he dismissed as ``asses.''

In business, Levitt could be just as disingenuous. Despite testifying before Congress that it was impossible for him to discrimate because he was Jewish, Levitt wouldn't sell to Jews in his upscale developments and excluded blacks right up through the mid-1960s, well after the adoption of landmark federal civil rights legislation. In politics, Levitt aligned his views with whoever could help him. When anti-Communist Sen. Joseph R. McCarthy (R-Wis.) took control of crucial housing legislation, Levitt railed against the Red Menace. Later, in order to build low-cost housing outside of Paris, Levitt allied himself with the socialist government.

``The end always justified the means -- within the four corners of reason, of course,'' Levitt said in 1948.

Those who knew him say Levitt was generous and never claimed perfection. He was a complex man leading a complex life and like any great salesman, skillfully told people what they wanted to hear.

``I loved my father very much and idolized him,'' summed up his son, James, in a recent interview. ``So did a lot of people. He was good at that.''

Brooklyn Beginnings

BILL LEVITT'S father, Abraham, was born into poverty on July 1, 1880, in the Williamsburg section of Brooklyn, the youngest of five sons of Louis Levitt, a rabbi who emigrated from Russia, and Nellie Levitt, who was born in Austria. Leaving school at 10 to do odd jobs in the neighborhood, Abraham Levitt educated himself, reading avidly and attending meetings at literary clubs. A romantic in a classic sense, he found city life harsh and sought beauty in flowers and gardens. Passing a state Regents exam at 20, Abraham won entrance to New York University Law School, earning his degree in 1902 with a specialty in real estate law.

Admitted to the bar, Levitt started practicing in New York City. He married Pauline A. Biederman on Jan. 9, 1906. The couple had two sons, first William Jaird on Feb. 11, 1907, and then Alfred Stuart five years later. Life in the four-story brownstone on Macon Street was comfortable -- and argumentative.

Abraham, physically compact and quietly philosophical, was a devotee of the German philosopher Ernst Haeckel, who believed there was no such thing as free will, only fate. Abraham grew close to the shy and intense Alfred, who, even at a young age, showed artistic talent. ``Alfred is a genius, and I use that term advisedly,'' Abraham would later say. Bill, boisterous and brimming with self-confidence, held a special spot in his strong-willed mother's heart.

Relatives say that in adulthood Alfred reminisced that his mother would beckon, pull her young son to her breast, and whisper in his ear: ``Where's your brother Bill?''

Even before he was a teenager, Bill would don a suit, bound into the parlor and announce plans to go into Manhattan, make money and live the high life.

Bill attended PS 44 and Boys High School in Bedford-Stuyvesant, playing lacrosse and joining the swim team. At NYU, he majored in mathematics and English. But Bill was later quoted saying that in his third year, at age 19, he quit because, ``I got itchy, I wanted to make a lot of money. I wanted a big car and a lot of clothes.'' Levitt later contradicted himself, saying he graduated in 1927, a claim records can't back up.

During these years, Abraham represented real estate clients, and occasionally dabbled in buying and selling properties. Family lore has it that Abraham used money Pauline made taking in sewing to buy some of his first vacant lots in Brooklyn. Then, around 1925, Abraham accepted 100 plots in Rockville Centre from a bankrupt client. Abraham bankrolled builders who bought the land and began building houses.

But Abraham was forced to take control of some 40 partially finished homes in the late 1920s, when a real estate slump forced their builders out of business. Facing steep losses, Abraham took a chance and encouraged Bill and Alfred to team up and finish the job.

Bill never intended to be a builder, and as Abraham once recalled, ``Alfred loved to draw, but he didn't know what a two-by-four was.'' Yet feeding off each other's enthusiasm, the brothers managed to work with existing crews to quickly complete and then sell the 40 homes. Emboldened by success, Abraham formed Levitt & Sons to develop the rest of the property, adopting the project's existing name, Strathmore.

Abraham established the corporate hierarchy that would later yield Levittown. Bill, 22, served as president, handling advertising, sales and financing, while Alfred -- who was still in his teens and would also drop out of NYU -- became vice president of design. Without benefit of license or formal architectural training, Alfred then drafted plans for the first entirely Levitt house. The half-timbered, six-room, two-bathroom Tudor sold for $14,500 on Aug. 2, 1929, just two months before the onset of the Great Depression.

That November, as financial panic swept the nation, Bill married Rhoda Kirshner, his teenage sweetheart, who blossomed into a patron of the arts. Bill Levitt was 26 when his first son, William Jr., was born in 1933.

Abraham's risky bet selling upper-middle-class housing into the teeth of the Depression paid off. He sold another 18 upscale Strathmore houses before pressing ahead for a total of 600 in four years.

``Bill wouldn't be a success without Alfred, and Alfred wouldn't be a success without Bill,'' Abraham liked to say in his later years. ``Together they are terrific.''

Bill Levitt won a reputation as the young man to see for high-end housing along Long Island's North Shore -- the Gold Coast. Indeed, by the fall of 1933, the Levitts were growing rich building the 200-house North Strathmore development in Manhasset -- priced between $9,100 and $18,500. Through 1941, the Levitts built another 1,200 homes in Manhasset, Great Neck and Westchester County.

Network radio stars, big-time newspapermen, surgeons, Madison Avenue types, $10,000-a-year lawyers and a brace of Manhattan celebrities flocked to Levitt homes. But before laws and mores changed, Bill Levitt -- grandson of a rabbi -- also restricted Jews from his North Shore ``pride of the company'' developments, said Yale Univeristy historian John Thomas Liell.

In recent interviews, relatives said Levitt opposed what he called ``institutionalized religion.'' But his relatives and contemporaries say it is ludicrous to brand Levitt an anti-Semite. They point out how Levitt made large contributions to Israel starting in 1947, when he handed a $1 million check to future Jerusalem Mayor Teddy Kollek, as a loan for weapons. Throughout his life, Levitt gave millions of dollars more to Jewish charities.

Nevertheless, Levitt rationalized the policy as an unfortunate cost of doing business, said Paul Townsend, Levitt's former public relations man, who now publishes the Long Island Business News.

``Sure, he went along with the local practice of real-estate agents not selling to Jews,'' Townsend said. ``History should show that Levitt was part of the ugly gentlemen's agreement.''

The Navy Years

AS THE NEW Deal expanded and the nation lurched into World War II, the Levitts took their first tentative steps away from custom, upscale homes toward cheaper housing backed by federal credit. While far from successful, Bill and Alfred later said they learned valuable lessons mass producing Navy housing near Norfolk, Va., in 1942. In fact, Bill Levitt would say that experience proved far more valuable than his days as a lieutenant in the Navy Seabees in wartime Hawaii.

Levitt was 36 with a wife, a 10-year-old son and a baby boy, James, when he shipped out to Oahu in 1944 with the famed Navy construciton unit, serving as a personnel manager for 260 men. If anything, Levitt later recalled, the Seabees didn't give him experience, he helped the Seabees. ``What experience?'' Levitt once said. ``It was the other way around.''

The only thing Levitt built in Hawaii was a reputation as an officer who cared for his men and knew how to have a good time, said Kamuf, an engineer who roomed with Levitt in the officers' barracks and later became president of the Levitt organization.

In bearing, Lt. Levitt more resembled Ensign Pulver than John Wayne, Kamuf said, recalling that his future boss spent much of the war shooting craps, playing jazz piano and drinking. ``Johnny Walker Red,'' Kamuf said. ``And martinis -- dry, straight up.''

Even though he was in the Pacific, Levitt's thoughts were back on the Atlantic Coast, where Abraham and Alfred were drawing up a detailed building plan of grandiose proportions. Naval buddies recalled Levitt saying, ``Beg, borrow or steal the money and then build and build,'' because whoever developed immense tracts of low-cost housing after the war was going to become extremely wealthy.

``The dice were loaded,'' Levitt, the inveterate gambler, later recalled thinking. ``The market was there, and the government was ready with backing. How could we lose?''

As World War II drew to a close, Abraham and Alfred Levitt were convinced they had the right idea for the right place at the perfect time -- a Levitt town on the farm fields of the Hempstead Plains.

In Bill's absence, Abraham took over as company president and by 1944 exercised options to buy land and began lining up materials to build a community of 6,000 low-priced homes -- dwarfing the nation's largest development.

The mass-production techniques, the niftily designed homes, the layout of the development grew from all the tricks of the trade that Alfred had saved up for years, according to relatives and business associates.

``Alfred was the creator,'' said Ralph Della Ratta, 75, who worked closely with Bill for four decades after the war. ``It was his product that sold.''

Everyone involved in the creation of Levittown agrees, though, that Alfred and Abraham would not have been able to build the project without Bill's strengths as a financier and enthusiastic promoter.

It was Bill who persuaded politicians from the Hempstead Town Board to the U.S. Senate to rewrite the laws that would make Levittown possible.

Abraham, by this time in his late 60s, had ceded control to his sons, dedicating himself to directing the planting of trees, shrubs and flowering plants at the new development. Alfred, a drawing-board idealist, and Bill, a bottom-line realist, clashed.

Biederman and others said Alfred's principles continued to frustrate Bill, who even lost an argument with Alfred over whether a garage should be included with the first Levittown model. (Alfred compromised and later versions included a carport.) ``Until people are decently housed,'' Alfred said, ``I believe we have no moral right to house autos.''

For his part, Bill said he barely had to advertise Levittown because the response to the first offering in 1947 was overwhelming. ``Any damn fool can build homes. What counts is how many can you sell for how little,'' Levitt said. But for years he wouldn't sell or rent to blacks, even after courts struck down racial covenants. Levitt -- whose family, fearing a decline in property value, moved to Long Island from Brooklyn after a black attorney moved next door to them -- said he wouldn't have been able to compete if he didn't follow the discriminatory practices of the time.

In all, Levitt & Sons built 15 other projects throughout the Island.

In 1952, they moved the mass production operation to Bucks County, Pa., near Philadelphia, for another 17,000-home Levittown. Completing that in 1958, Levitt crossed the Delaware and built a 12,000-home Willingboro, N.J., project.

Celebrity Status

MONOGRAMED, pinstriped, bow-tied, and arrogant, Bill Levitt looked and acted every inch the mogul as he worked the two telephone lines and interoffice buzzers atop his massive desk within the oak-paneled offices of Levitt & Sons in Manhasset. By the late 1940s, Levitt was growing richer and gaining national attention as the cheeky guy stamping out houses at a rate of one every 16 minutes.

Newsreel interviewers and congressmen lauded Levitt, who was introduced to America on the July 3, 1950, cover of Time magazine -- the most influential publication of its day -- as the ``cocky rambunctious hustler'' prone to hyberbole and smoking three packs of cigarettes a day.

Rougish with wavy hair and heavy-lidded eyes, Levitt, then 43, lived in a big Manhattan apartment, and warmed to celebrity status as he lectured America on what it needed to stoke the postwar economy.

Yet behind the scenes, tension continued to mount between Bill and the reserved Abraham and Alfred, who were increasingly uncomfortable with Bill's high-profile and voluble style. Bill favored Cadillac convertibles and believed Alfred had grown too impractical. Alfred favored Fords and thought Bill believed too much in his own press.

Relations among the Levitts deteriorated in 1951 after Alfred divorced his wife, Silvia, to marry a 19-year-old fashion model he fell in love with on a shopping trip to Paris. ``It was me,'' Monique, Alfred's widow, who remarried and now lives in Hawaii, said in a recent interview. ``I clashed with Bill.''

Later, she said, Bill offered her $25,000 to not submit a profile she wrote of Alfred to Reader's Digest. ``I was insulted and told him to keep the money.'' She said she decided to withhold the article to avoid further family tension.

``It was Bill who craved all the publicity,''Monique said.

Finally, the brothers, who had so much success as a team, split their business affairs in 1954 and grew estranged, bumping into each other occasionally at their parents' home in Kings Point. Alfred went on to develop Queens apartment complexes and Suffolk housing developments before he died at 54 in 1966.

``Alfred and Bill were brothers, but there was clearly a rivalry,'' said Les Dembitzer, Bill Levitt's longtime personal accountant and investment banker. ``I think it's fair to say that Alfred resented Bill running the show. That Bill would make all the major decisions. They simply came to a parting of the ways.''

Without his brother, Bill Levitt continued thinking big. Levitt's company, which he had taken public in 1960, lost $1.4 million a year later as housing demand fell and huge tracts of land near metropolitan areas grew scarce. Yet Levitt adapted quickly and changed tactics, branching out geogrpahically -- Chicago, Washington, D.C., France -- reducing the scale of projects, dabbling in townhouse projects, delegating authority and decentralizing management.

Hooking up with young homebuilder Dick Bernhard in the bar of the Caribe Hilton in Puerto Rico, Levitt then launched a highly successful 12,000-home development west of San Juan. Completing the transition from heading a family business to running a thoroughly modern corporation, Levitt was back on track, posting a 20 percent average annual increase in sales into the late 1960s.

Bill Levitt was on a roll. Favoring royal-blue sport coats, light slacks and fawn-colored oxfords, he would fly to San Juan during the winter months, hit the hotels and casinos, not bothering to check in at the local office, before departing days later. Levitt bosses in Puerto Rico often found themselves dispatching employees to pick up foreign merchandise and personal gifts Bill routed from points throughout the world through the local airport to save on U.S. taxes.

Financially, Levitt grew even more successful. On the strength of Puerto Rico and his other projects, Levitt cut a deal to sell the company to the International Telephone & Telegraph Corp. for $92 million in July, 1967. At age 60, Levitt went from being very rich to incredibly wealthy, personally netting $62 million in the form of ITT stock.

``If it was for a penny less than $92 million, I'd walk out right now,'' the fanatically punctual Levitt roared when ITT chief executive Harold Geneen, a legendary dealmaker, kept him waiting at the closing.

As part of the deal, ITT changed the name of its new subsiary to Levitt Corp. Levitt agreed not to build in the United States for 10 years. In effect, the man who renamed Island Trees to honor his family sold his right to use his good name, and ``that never stopped bothering him,'' said Dembitzer, Levitt's accountant.

Business associates now say Levitt went into the deal thinking he would play a greater role in ITT affairs. But Geneen -- who later called the merger one of his biggest mistakes -- froze Levitt out. ITT executives felt Levitt was already getting too old to take on more responsibility. In the office, Levitt stewed on the sidelines. But at home and on the road, Levitt lived it up, collecting expensive art and building a chateau.

Friends, family members and business associates said that while he was married, Levitt did little to hide his ongoing love affair with his secretary, Alice Kenny. He married her in 1959, divorcing Rhoda after 29 years of marriage, but not before taking his then-14-year-old son, Jim, to a Manhattan restaurant to break the news. ``Until then,'' Jim recently recalled, ``I had no idea that my parents were not going to be going on together.''

In 1969, Levitt divorced his second wife, Alice, and married Simone Korchin, an art dealer from France more than 20 years his junior, two weeks after she divorced her husband in Rome.

Lavish Living

LIFE WAS GRAND at La Colline, Levitt's $3 million, 26-room, French-provincial mansion on 68 acres in Mill Neck, said Nicole Bernstein, Levitt's eldest stepdaughter by Simone. A parade of Broadway stars, famous politicians and media luminaries made their way up the winding drive, through the ornate courtyard, past outsized birdcages, into Bill Levitt's salon. Despite an attentive household staff, Bill liked to personally tend bar and care for his seven dogs. The family vacationed in Europe and went on African safari.

Several of his two children, three stepchildren and others he helped raise said Levitt proved as distant as he was demanding. But they also expressed their respect, admiration and love for the man who lavished gifts along with admonitions.

``Bill was driven and determined to educate us. To help us become the people he believed we could be,'' Bernstein said. ``I loved Bill. I appreciated him even more in later years.''

During these heady days, Simone and Bill gave each other expensive gifts, celebrating their wedding anniversary each month for years. Financial records later showed the presents included some $3 million in jewelry. Levitt's art collection also grew to include paintings by Renoir, Monet, Degas and Chagall. Much later, Levitt actually flaunted his wealth, showing how far he had come from Williamsburg by assembling the New York media corps to view his sumptuous 237-foot yacht, La Belle Simone, moored in front of the Brooklyn Bridge. The license plate on his Rolls Royce parked on the pier read ``WL-1''

It was troubling, Kamuf said, that Levitt never seemed to invest his money to maintain a stream of income. ``Bill always looked for projects to generate money, but didn't really invest,'' Kamuf said.

For Levitt, that made the sting of Wall Street's early-1970s bear market even more painful. To avoid taxes, Levitt had not converted ITT to cash. Instead, he borrowed against it. When ITT shares crashed, Levitt's holdings were worth about 10 percent of their original value. Chase Manhattan Bank seized Levitt's stock as collateral. Bill Levitt's luck started to run out.

Levitt scrambled for a comeback by forming a new real-estate company when his non-compete clause with ITT expired in 1978. But Dembitzer said, ``Bill was never really able to recover.''

Levitt tried and failed to build mass developments in Florida, Iran, Venezuela and Nigeria. Trapped in a financial nightmare, Levitt began siphoning millions of dollars out of what he was able to build to support his lifestyle and prop up new ventures.

Regulators who later barred Levitt from doing business in New York said he diverted homeowners' deposits for the Florida homes and money that should have been used for repairs and maintenance. Investigators said Levitt also took at least $17 million from his family's charities to cover personal expenses. Levitt sold La Colline to make payments.

``Bill did more good for more people than any other businessman in the world,'' said Fred VanderKloot, Levitt's stepson-in-law and Florida business partner, during a recent interview. ``But at the end he was running out of capital and not reinvesting the profits.''

James Levitt said his father did not adjust to changing consumer tastes and increased government controls: ``He just didn't realize how tough things were going to be.''

Desperately hunting for partners, Levitt managed to wrangle a meeting with executives from a major New York investment group, Biederman said. They asked why they should risk the money given that Levitt had not completed a serious project in 15 years. ``At that point, Bill reached into his pocket and pulled out 10 to 15 yellowed articles. `Look what I've done,' he said. It was very awkward,'' Biederman recalled. ``Bill stayed at the party too long.''

In 1985, Levitt then 78, made a last-ditch attempt to save the Florida development by entering into negotiations with Long Island developer Ron Parr. Critical to the deal was Levitt's getting more financing from the troubled Old Court Savings and Loan of Maryland.

``Bill said he was perfectly willing to give up financial control. He just wanted to make sure that his name would be associated with the project. He was just looking for a way to recover his reputation, his family name,'' Parr said.

Finally, a critical meeting was scheduled. Old Court officials were to fly by private plane to a meeting with Levitt and Parr at Brookhaven Airport. When Parr arrived, Levitt was already there, alone. ``Someone gave Bill a ride and dropped him off,'' Parr recalled.

The appointed time came and passed and for 2 1/2 hours Levitt -- a compulsively punctual executive -- poured his heart out to Parr, talking about Levittown, his family, how the business had changed, sketching his hopes for the Florida development. When it became clear that Old Court executives were not going to show, Levitt grew quiet, embarrassed. Parr gave Levitt a lift back to Mill Neck.

``It was the first time I ever saw Bill Levitt dejected,'' Parr said. ``Bill Levitt was beat.''

Still, Della Ratta said, his boss had a great ride.

``No one should ever feel sorry for Bill,'' he said. ``What difference does it make if you die with $100 million in the bank or nothing in the bank if you had Bill Levitt's life? He had a huge estate, a huge yacht, three gorgeous wives, and was generous to boot. What the hell more do you want? It was the American dream.''