Publicly, there has been no sign of anything amiss among
the Rechlers, Long Island's first family of real estate.
But some noticed the oblique reference deep in one of the dozens of
documents filed with the Securities and Exchange Commission since the
acquisition of Reckson Associates Realty Corp. by SL Green Realty Corp. of
Manhattan was announced in August:
Reckson, it said, had later "received a request by certain former members
of management" for access to bidding materials and had rebuffed it.
Now the family acknowledges those former managers were chairman Scott
Rechler's brother Gregg, 40, cousin Mitchell, 46, and uncle Donald, all of the
family firm Rechler Equity Partners, who were considering a bid for the same
suburban portfolio that Scott had just agreed to buy from SL Green as part of
the deal for $2.1 billion.
This fall, even as the Reckson-SL Green transaction was being repeatedly
delayed by rival bids from corporate raider Carl Icahn and dogged by
accusations of a sweetheart deal, Scott Rechler was privately embroiled in a
tense confrontation with his own kin about the deal, one that has ended with a
corporate family schism.
Here's why: At the heart of the portfolio Scott, 39, is buying are a few of
what might be considered the Rechler family jewels, the portfolio of premium
Long Island office buildings developed by a family business spanning three
generations, buildings such as the Omni Building and Nassau West Corporate
Center in Uniondale, the second of which Rechler plans to sell to pay for his
"Some of those buildings my brother and I built over 25 years ago and had
in the family business for that long," said Donald Rechler, 72, who grew up
with the company started by his father, William, and formed Reckson Associates
in 1968 with his father and brother Roger, 64, Scott's father. Reckson
Associates, now changing hands for about $6 billion, was worth about $300
million when it went public in 1995.
"My father told me never to fall in love with a building," Donald Rechler
said last week, "but you can't help it."
At issue is whether Scott Rechler's private-equity venture was an open
breach of a 2003 family agreement that any Rechler doing office or industrial
business on Long Island had to do it through the family's private company,
Rechler Equity Partners.
But Scott Rechler said he was under no such constraint and chalked up the
conflict to family dynamics. "People who are type-A personalities, who have big
visions and big goals, when you put them all together there is almost always
going to be some level of drama," he said.
Mere jealousy of Scott's success, as some contend? The family's Rechler
Equity, worth an estimated $500 million, was formed in 2003 to resolve the
internal tensions that led to the departure of Gregg, Mitchell, Roger and later
Donald from Reckson Associates, and the liquidation of most of their stock.
There are at least two sides to that story, too, which include shareholder
unhappiness over the number of family members in Reckson's upper management,
and dismay over Scott Rechler's ill-starred detour of Reckson funds and
management energy into a failed dot-com venture. That venture was run by Jon
Halpern, the Marathon Real Estate executive with whom he is now teaming to buy
the suburban portfolio. Reckson's stock has doubled since the family's
Under the parting of ways announced last week, Scott Rechler agreed to give
up the use of both Reckson and the family name and sever business ties with
On Friday, Donald Rechler made clear that Rechler Equity, which until now
has dealt exclusively in the family's industrial portfolio of 6 million square
feet of space on Long Island, also intends to compete head to head with Scott
Rechler in office development, with the expiration of a three-year noncompete
agreement signed when Rechler Equity was formed.
Donald Rechler said it was important for his nephew to relinquish the
business use of the family name "for clarification," because the business
community has too often mixed up Scott's dealings with those of his cousin and
"If your sister won the bowling championship and they kept saying you won
the bowling championship, or your sister was getting a divorce and they said
you were getting a divorce, you wouldn't like it too much," he said.
But the step also seems intended to make clear to all observers who the
real bearers of the Rechler family legacy are. "We're the family. ... We're not
having a ceremony and pulling his buttons off or anything; he is family, but
he isn't representing us in a business sense," Donald Rechler said.
The Rechler family likes to keep a smooth facade, but it has had splits
before. The We'Re Group, a Jericho-based development company, was formed a
half-century ago when William Rechler parted ways with his brother Morton and
brother-in-law Jack Wexler.
Scott Rechler, whose complex negotiations for the redevelopment of the
Nassau hub depend largely on the trust vested in him as a seasoned scion of the
Rechler dynasty, dismisses the idea that with the latest agreement he's given
up his rights to the family legacy. He adds that Gregg and Mitchell have their
own private venture, R Squared, that eschews business use of Rechler or Reckson
under the same agreement that binds him.
"What's the legacy? It's not a name, it's what you do," he said. "This is
what I do because to me the legacy is the values, making your community a
better place to live and work. "
And however loudly money may talk, blood is still thicker than water. Even
as negotiations with his brother Gregg bogged down, Scott attended his niece's
bat mitzvah last month.
That's why their father Roger, who has stayed neutral, prefers to describe
the conflict as simply a "division of real estate."
"I'd hate to see you paint this as a family quarrel," he said. "It's not a
family quarrel, it's getting things straightened out, believe me."
Treasures of two empires
Reckson Associates Realty 10 largest properties, by square feet, before share-
holders voted Thursday to sell to SL Green of Manhattan. Long Island properties
will revert to private ownership by investors led by Scott Rechler.
One Court Square, Long Island City 1,401,630
919 Third Ave., Manhattan 1,400,000
1185 Sixth Ave., Manhattan 1,088,690
Reckson Plaza, Uniondale 1,060,000
810 Seventh Ave., Manhattan 695,000
1350 Sixth Ave., Manhattan 555,000
333 Earle Ovington Blvd., Uniondale 550,000
Giralda Farms, Chatham/Madison, N.J. 500,000
120 W. 45th St., Manhattan 445,000
360 Hamilton Ave., White Plains 384,000
Rechler Equity Partners
10 largest properties in square feet by one of the Island�s largest investors
and owners of commercial real estate, with assets exceeding six million square
19 Nicholas Dr., Yaphank 230,000
2002 Orville Dr., Bohemia 206,005
100 Andrews Rd., Hicksville 167,754
1516 Motor Pkwy., Hauppauge 140,000
2005 Orville Dr., Bohemia 130,010
2004 Orville Dr., Bohemia 106,515
70 Maxess Rd., Melville 78,600
2001 Orville Dr., Bohemia 72,000
360 Motor Pkway., Hauppauge 60,000
100 Engineers Rd., Hauppauge 40,880
Reckson Associates Realty Corp. was founded in 1968 by William, Donald and
Roger Rechler to manage industrial and office properties. In September 2003,
the company split - industrial properties to Rechler Equity Partners, office
properties stayed with Reckson, which went on to establish itself as the
dominant landlord of upscale office space on Long Island in 2005 by buying the
EAB Plaza in Uniondale for $240 million. The 15-story glass towers include 1.1
million square feet of space.