The Koch Brothers Are Sitting on a Real Estate Empire Worth Hundreds of Millions

January 23, 2020 https://www.wsj.com/articles/the-koch-brothers-are-sitting-on-a-real-estate-empire-worth-hundreds-of-millions- 11579799474 The Koch Brothers Are Sitting on a Real Estate Empire Worth Hundreds of Millions Charles and his late brother David, as well as two other siblings, have purchased some of the most remarkable homes in the world. A look at their valuable portfolio By Katherine Clarke Billionaire brothers Charles Koch and the late David Koch became known for their financial support of conservative and arts causes. But they, and their two brothers, Bill and Frederick, quietly built another legacy: hundreds of millions of dollars worth of high-end real estate. The four brothers have amassed some of the world’s most spectacular private homes, including a large waterfront compound on Massachusetts’ Cape Cod once owned by Bunny Mellon, sprawling Palm Beach estates, a replica of an old Western town in Colorado and an Austrian castle once owned by Archduke Franz Ferdinand. The estates are a far cry from the roughly 160-acre property on the outskirts of Wichita, Kan., where the brothers grew up. They spent their summers in bunkhouses while working on cattle ranches owned by their father. Father Fred Koch founded the crude-oil-gathering business that grew into Koch Industries, a multibillion-dollar conglomerate whose subsidiaries include interests in manufacturing, software and technology. Frederick and Bill sold their interests in the company in 1983, while Charles and David remained at the helm. A subsequent legal battle between the brothers over the value of Frederick and Bill’s shares was resolved. Charles is still chairman and chief executive of the firm. Charles and David, who died last year at 79, later attracted attention with their efforts to help finance the tea- party movement and forward a conservative agenda geared toward smaller government and loosening regulation. Read on for a closer look at the brothers’ most notable holdings, as determined through public records, the brothers’ spokespeople, local real-estate agents and from several books, including Daniel Schulman’s 2014 “Sons of Wichita: How the Koch Brothers Became America’s Most Powerful and Private Dynasty.” Frederick Koch While Frederick, an 86-year-old art collector and philanthropist, is arguably the least well- known of the four brothers, his real-estate holdings are some of the grandest. Starting around the time he and his brother sold their stakes in the family company, Frederick became a collector of historic homes. In Manhattan, Frederick owns a roughly 13,000-square-foot townhouse on East 80th Street, a French Regency-style mansion that was one of several commissioned by dime store mogul Frank Woolworth for his daughters as wedding gifts. Jessie Woolworth, Mr. Woolworth’s youngest daughter, lived there with her husband, James Donahue, until, in 1931, Mr. Donahue, a gambler and drinker with money woes, died by suicide after taking mercury bichloride pills during a luncheon at the house, according to Mr. Schulman’s book. Frederick bought the property, left, in 1986 for $5 million, and spent a decade restoring it. Changes included moving decorative columns to make space for one of his favorite art works, William-Adolphe Bouguereau’s “The Abduction of Psyche,” according to the book. Frederick filled the property with antiques, including dining-room chairs once owned by J.P. Morgan and a canopy bed that belonged to Marie Antoinette. Frederick owns a Gothic Tudor-style mansion known as Elm Court in Butler, Pa. PHOTO: PICTOMETRY In 2011, one of the other Woolworth homes came on the market seeking $90 million, though listing agent Paula Del Nunzio said that property is considerably larger. That property, which was subsequently taken off the market, was owned by the family of fitness entrepreneur Lucille Roberts, records show. In western Pennsylvania, Frederick owns Elm Court, a Gothic Tudor- style mansion built in the late 1920s for Benjamin Dwight Phillips, president of the Phillips Gas & Oil Co., according to “Moving Rooms,” a book by John Harris. The property has stained glass, gothic detailing and myriad wood and metal craftsmanship. Frederick bought a portion of the property for $1 million in 1984 and then an adjacent parcel for about $900,000 in 1987, according to the Butler County assessor’s office. Frederick’s spokesman said the estate, pictured below left, comprises two homes: a 1929-era main house as well as a more modern structure, which Frederick uses for archival storage. Real-estate agents said the home is an outlier for the area, which is about 30 miles from Pittsburgh, and hard to value. Frederick’s primary residence is in Manhattan, in a co-op building at 825 Fifth Avenue; he has owned it for decades, records show. On the same floor is a unit owned by Martin S. Feldstein, the conservative Harvard economist and a former chief economic adviser for the Reagan administration, and his wife Kathleen Feldstein. Mr. Feldstein died last year. Overseas, Frederick owns Schloss Bluhnbach near Salzburg Austria, a château-style property that was once the hunting lodge of Archduke Franz Ferdinand, the onetime presumptive heir to the Austro-Hungarian throne whose assassination helped trigger the start of World War I. Frederick’s spokesman said the home was owned by the archduke at the time of his assassination. The spokesman added that the property has served as Frederick’s summer residence and is close to the location of the famous Salzburg Festival, which he attends each year. Frederick formerly owned Villa Torre Clementina, an estate on the French Riviera built by Parisian society architect Lucien Hesse around 1904. That property was sold in 2015 to a Russian oligarch, according to his spokesman. Designated a French National Monument in 1991, the home’s exterior is a “baroque combination of stone, terra-cotta brick and pebble work with coupled columns and wooden corbeling reminiscent of medieval Byzantine basilica,” according to a description provided by the spokesman, while its interior is “inspired by the Ottomans” with unique mosaics, rare marble and period stained glass throughout. Landscape architect Robert Truskowski oversaw the redesign of gardens in Pennsylvania, France and Austria, according to Frederick’s spokesman, while Charles T. Young, a onetime associate partner at I.M. Pei’s architecture firm, oversaw most of his restoration projects. David Koch and his wife Julia Koch bought this sprawling New York townhouse for $40.25 million in 2018. PHOTO: BRIAN WITTMUSS David Koch As executive vice president of Koch Industries, David Koch was one of the world’s richest men, with assets valued at around $50 billion at the time of his death last year at age 79. He was an arts patron, a key figure in Republican politics and a major shareholder in the company. While Frederick’s homes are heavy on the history, David’s properties lean toward vacation destinations of the jet set. In 1992, David bought a seven-bedroom home on Meadow Lane, an ultraexclusive enclave in Southampton, N.Y., for $7.5 million, records show. These days, properties on Meadow Lane sell in the tens of millions; a teardown on the strip sold for $35 million last year, records show. Before his marriage, the home was the site of “Hugh Hefner- esque bacchanals,” Mr. Schulman wrote. “With the roster of invitees running to a thousand or more...the parties featured six different types of champagne. Scantily clad women danced poolside and gyrated on the tennis court. Some of David’s parties went so late that he served guests two meals, dinner and breakfast.” Years later, when David was supporting Mitt Romney’s run for president in 2012, crowds gathered near the home during a $50,000-a-head fundraiser for the Republican hopeful, according to news reports at the time. Protesters on the beach carried a sign reading Mitt Romney has a “Koch problem.” In Palm Beach, Fla., David owns Villa el Sarmiento, an Addison Mizner-designed estate dating to the 1920s; he paid $10.5 million 1998. Gary Pohrer of Douglas Elliman, an agent in the area, estimated the home would probably sell for between $50 million and $70 million based on recent sales. In Aspen, David bought two neighboring homes near the Roaring Fork River in the 1989 and 1991, paying a total of nearly $4 million. The homes are directly opposite one owned by his brother Charles, records show. Local real-estate agent Joshua Saslove of Douglas Elliman said homes in this area rarely trade but speculated that, if put on the market, they would sell for tens of millions. In August 2018, David and his wife, Julia Koch, bought a $40.25 million New York City townhouse from real- estate investor Joseph Chetrit. People familiar with the deal said the Kochs discovered the house when it was the 2018 Kips Bay Decorator Show House and reached a deal with some of the interior designers who participated in the event to keep some of the pieces. The 36-foot-wide property is about 15,000 square feet with eight bedrooms and has marble, onyx and brass finishes and a rear wall of glass looking onto a limestone courtyard, according to the listing. The home isn’t far from 740 Park Avenue, the co-op once home to John D. Rockefeller, Jr., and which remains the family’s primary residence, a spokesman confirmed. David purchased the unit from the Japanese government for $17 million in 2004, according to the book “740 Park: The Story of the World’s Richest Apartment Building,” by Michael Gross. David then tapped Peter Marino, the leather-clad bad boy of design, to revamp it.

Load more