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The Champagne City

ARTICLES

 

 

The Champagne City

holden steinberg

A frantic year on Wall Street and a robust economy have powered unfathomable riches into New York’s bloodstream, making the brash consumption of the 1980s look like the Depression. In SoHo restaurants, Madison Avenue boutiques, and East Side real-estate offices, no price is too high for the lords of luxury.

From across Spring Street in downtown Manhattan, the restaurant Balthazar glows like a Manet painting of the Folies-Bergère. The banquettes in the big, high-ceilinged room are spilling over, the bar all but hidden by a milling throng aglint with champagne glasses. Open the door and a raucous, almost deafening roar hits you like a gust. It’s the sound of Manhattan in full, giddy swing, of a city embarked on a new golden era: confident, powerful, exuberant, and flush with cash.

At Balthazar, notables such as Calvin Klein, Spike Lee, Robert De Niro, Jerry Seinfeld, Steve Martin, and Isaac Mizrahi mingle with a stylish supporting cast. On this night, despite the fact that the stock market dropped an astonishing 554 points during the day, it is business as usual. If the party’s over, no one is admitting it yet. Young Wall Streeters, in suits and Hermès ties, sit in happy packs beside artists dressed in black, while older foursomes feast on the $98 three-tier seafood sampler, as high as a wedding cake. The eclecticism is part of what makes the place fun, as it did, in another era, at El Morocco, the Stork Club, or Toots Shor’s. It’s what makes Balthazar, in the fall of 1997, a set piece for Manhattan itself.

The last time the champagne flowed so freely in New York was the mid-1980s, and now, as then, Wall Street is paying the tab. But this era feels different. The 80s were about outsiders storming the Street, making overnight fortunes and flaunting them by giving huge, absurd parties and inviting the press. The biggest players this time are more restrained, more mature, morepatrician. They’ve been seasoned by the Crash of ’87, though at the same time emboldened by it (“just a blip, after all”). They know how foolish the excesses of the 80s looked, and how all that boisterousness in certain corners of the room finally brought on the police. So the moneyed of the new golden age do what the rich in America always did until the 80s: spend quietly, preferably with style, and avoid the press like the plague. As a result, one tends not to notice the two most profound ways in which the 90s differ from the so-called Decade of Greed.

One is that a lot more people are at the party.

The other is that they have a great deal more money.

This is bonus season at the investment banks that form Wall Street’s power elite. Even with the October stock-market correction, the bonuses this year are likely to be staggering. Not only the biggest ever, but the biggest after a year that was itself the biggest year ever. Overall, the securities industry will have earned in 1997 nearly $12 billion—more than twice the profit of its strongest year in the 1980s.

At Goldman, Sachs, the Street’s largest private partnership, third-quarter profits before taxes rose 58 percent over those for the same period a year ago. With its fourth-quarter docket already fat with deals, Goldman stands to earn $3 billion in fiscal 1997. The majority of that will be split among the firm’s 190 most senior directors (who then pay taxes individually). In “current compensation”—take-home pay—the best-paid may earn merely $3 million or $4 million. This year they each could make as much as $15 million more in “paper,” shares representing the rest of that profit, which gets put back into the business.

Augmenting their rich diet of merger-and-acquisition deals and initial public offerings, certain banks have done particularly well this year by merging with each other. When Morgan Stanley merged with sprawling Dean Witter, the senior executives of both saw the value of their “paper” rise dramatically. A mid-level Morgan banker who’d been with the firm since it went public in 1986 probably had $25 million to $30 million in stock at the start of this year. With the merger and the market’s own rise, that stock is now worth 65 percent more. Travelers Group’s September agreement to purchase Salomon Inc. for $9 billion brought a bonanza to senior Salomon executives who own stock, such as Deryck Maughan, chairman and C.E.O. of Salomon Brothers. As one Salomon banker observes, “The share price at the end of 1995 was 33; after the [announcement of the] merger, it’s 76 and five-eighths. That’s 150 percent in two years. And now chances are it’ll go up because Travelers is hugely profitable.”

If investment bankers are swimming in cash this year, so are their colleagues the traders, who get a percentage of the profits of all their trades. In a year like 1997, that can mean $20 million or $30 million. Still, that’s chump change compared with the take of the real kings of Wall Street, the leveraged-buyout financiers and the hedge-fund operators.

Long recovered from the RJR Nabisco debacle of 1988, Henry Kravis, 53, like other LBO-ers, buys undervalued companies and hopes to sell them at a profit. His company, Kohlberg Kravis Roberts & Co., now has a war chest of $5.8 billion. To start with, K.K.R. gets at least a 1 percent advisory fee on money under management—more than $50 million, of which Kravis probably gets $15 million to $20 million. That’s just for showing up at the office. In addition, when K.K.R. sells a company, it makes 20 percent of the profit. In 1996, Kravis himself earned at least $265 million, as did his partner George Roberts, 54. Tom Lee, 53, who heads his own LBO firm, Thomas H. Lee Company, made $130 million in 1996; Ted Forstmann, 57, of Forstmann Little & Co., made $100 million. Almost certainly all will do better this year.

At the pinnacle are the hedge-fund operators. Up in that rarefied air reside George Soros, 67, and his right-hand man, Stanley Druckenmiller, 44, Julian Robertson Jr., 64, of Tiger Management Corp., John Meriwether, 50, Paul Tudor Jones II, 43, Martin Zweig, 53, Joseph DiMenna, 37, Mark Kingdon, 48, and a few others who manage billions in capital to bet on stocks, bonds, and such high-risk trades as international currencies. Like the LBO-ers, hedgers typically get a 1 percent advisory fee and 20 percent of the profits they produce. Robertson has generated more than 40 percent profits this year on the $13.5 billion he manages. His take could approach $500 million. Soros farms out some of his $20 billion pot to other managers, but ought to earn at least as much as Robertson.

In the Eisenhower era, when earnings over $400,000 were subject to 91 percent taxes and the world was a smaller place, you could count the truly wealthy on one hand: Getty, Dupont, Mellon, Rockefeller, though even those fortunes were being dispersed to children as the old robber barons died off. In 1982 the Forbes Four Hundred included 13 billionaires. On this year’s list are 170, many of whom either reside or maintain apartments in Manhattan.

Overheard at a recent New York cocktail party: “Oh, he’s worth only 30 or 40.” As in million.

At 7:15 on a crisp autumn morning, the chauffeured car that idles outside financier Ronald Perelman’s mansion in the East 60s is not a Rolls-Royce or a Bentley, not a stretch limousine, but a small, black Mercedes-Benz station wagon. In the new golden era of Manhattan, the cars are unostentatious, the clothes subdued. The new money of the 80s is old money now—so fast does it turn in New York—and has learned to discern, to appreciate understatement, to be discreet. But if the consumption is less conspicuous, it’s no less avid. And more often than not, one lifts the curtain to find what might best be called the practice of faux restraint.

So it is at Patroon, the midtown saloon that evokes New York between the wars, where one recent night three young Wall Streeters study the wine list and, fresh from a financial coup, order a magnum of 1953 Haut Brion for $2,325. A diner at the next table has no clue that such extravagance is being exercised beside him. He doesn’t raise an eyebrow when the magnum is followed by a bottle of 1953 Château Margaux, at $1,725. And while the imbibers may have begun to talk more animatedly, their neighbor hardly notices when a bottle of 1961 Château Pétrus arrives—a single bottle, not a magnum—for $5,800.

Most of the wine Patroon sells is far cheaper than that. But not cheap. Patroon’s owner, Ken Aretsky, says the average bottle is about $70 to $90—the cost of a dinner for two in New York not long ago—with frequent “three-figure” sales and not infrequent “four-figure” sales. A short walk away at the ‘21’ Club, wine director Christopher Shipley has seen the trend, too. Until this fall, the most expensive bottle at New York’s most famous restaurant for the wealthy went for $1,295, but Shipley has just introduced a handful of new ones that push the $2,000 mark. “Actually, I priced the most expensive one”—a 1982 Château Cheval Blanc—“at $1,975 to keep it under $2,000,” Shipley says.

At Manhattan restaurants this year, extremes tell one story, but the median is the message. Near Balthazar in SoHo and Tribeca are a half-dozen other new places that fill every night with diners eager to pay upwards of $250 for two with wine and tip. Among them: Pravda, the Independent, and the Bouley Bakery, where a bistro standard of roasted chicken and potatoes goes for $28, and a round loaf of sourdough bread costs $8. Uptown, elegant landmarks such as Aureole are full; so are new high-end arrivals such as Jean Georges, Restaurant Daniel, and Sirio Maccioni’s Le Cirque 2000. Even before its recent four-star New York Times review, Le Cirque 2000 reported logging 5,000 reservation requests aday. At Daniel, reservations are taken up to a month in advance. By noon of each month’s first day, the prime-time blocks are booked.

These days many New York restaurants sell cigars, offering their customers a way to spend more money after they’ve finished eating. At the Oak Room and Bar in the Plaza Hotel, it’s the $30 Montecristo; at Patroon, it’s the $28 Dominico Avo, of which Aretsky sells enough, along with other brands, to take in as much as $5,000 a day just in cigars. Cost, for most new smokers, is the point—that and exclusivity. For years one venerable London cigar store made a tidy profit importing Cohiba cigars from Cuba and sending them, with the labels cut off, in other boxes to grateful American customers. As the current stogie craze took off, a new kind of customer began demanding that the shop send the labels separately so the smokers could put them back on. The new arrangement worked until U.S. Customs happened on a Manhattan-bound box of 150 labels. Agents duly appeared at the recipient’s office and confiscated his cigars. The smoker called the shop in a huff and demanded his money back.

To be sure, sitting around smoking a cigar is still cheaper than following dinner with a Broadway show. A new top ticket price for a musical is about to be established by the historical extravaganzaRagtime, which opens this month. The $125 V.I.P. ticket includes access to a private lounge before the performance and at intermission.

In Manhattan today, the hotels are as full as the restaurants. At the Royalton, an inquiry on a Monday in September draws a terse response: the hotel is booked through the week. “It’s like the country is on a tilt and everyone is rolling into New York,” muses hotelier Ian Schrager. When he bought and remodeled the Royalton 10 years ago, he knew only that as a rule Manhattan hotels were drab, and that it might be fun to open a chic one. Now the city abounds with them, brand-new or spankingly refurbished, filled with out-of-towners for whom a dramatically cleaner and safer Manhattan is once again the jewel in the crown.

At the New York Palace, owned by the brother of the Sultan of Brunei, rooms that now average $330 a night went for $134 just three years ago. That’s still a bargain compared with basic rates at the Four Seasons Hotel ($475) and the St. Regis ($515), the first choices for visiting Hollywood stars and executives. Suites are popular, too. When the St. Regis reopened in 1991, it had 35; now, because so many guests prefer them, it has 91, ranging from $750 to $6,000 a night. “The trend is for people to trade up if that’s all that’s available,” explains a St. Regis executive. “We’ll say, ‘There’s nothing available, but we do have a suite,’ and they say without hesitation, ‘O.K., I’ll take it.’ ” At the Four Seasons, guests not only rent suites, they buy the beds. A king-size bed fully appointed with Frette linens, duvet, and down pillows goes for $3,725. The hotel sells about eight a month.

Hotels are finding success even in neighborhoods not traditionally associated with tourist accommodations. The 367 rooms at the SoHo Grand Hotel (basic rate $249 to $349), below Greenwich Village on West Broadway, are generally completely booked. “The depth of the wealth, and the confidence, is far, far deeper now than it was,” says André Balazs, the young owner of Hollywood’s Chateau Marmont, whose long-delayed New York hotel, the Mercer, is finally opening in SoHo this winter. “There’s less of a manic frenzy than there was in the 80s. It’s less fearful, less driven by ‘Oh my God, it might be gone tomorrow.’” Not to be outdone, Brian McNally, who made his Restaurant 44 at the Royalton the lunch spot for publishing-and music-industry mandarins, has plans for two new luxury hotels, one overlooking Bryant Park.

Luxury of the most restrained kind is almost poetically expressed on Madison Avenue from 60th to 72nd Street. So coldly austere are the new designer stores—Giorgio Armani, Polo Sport, Calvin Klein, Prada, Dolce & Gabbana, Valentino—that they seem to eschew the very notion of luxury. If the 80s were about Christian Lacroix ball gowns, the 90s give us wealthy women who either go to work or pretend to, and want office suits or slip dresses they can wear to dinner parties—ergo, the minimalism of Prada, Jil Sander, and others. But this is minimalism that comes at maximal prices. “I went into Dolce & Gabbana,” one proper New York woman confides. “They had cashmere cardigans for $3,200! And they were nearly sold out! In fact, they had only one left.” Did she buy it? The woman hesitates. “Well, yes.”

“It’s about pleasing yourself,” says Noel Estrada, a personal shopper at Barneys New York. “Buying the finest cashmere and feeling it against yourself, feeling the difference.” Estrada will show his customers a private-label suit for $800, then one that’s handmade by Jil Sander for three times the price. They take the Sander. The difference between them and shoppers of a decade ago, Estrada adds, is that they don’t buy the more expensive suit just because it’s more expensive. “Now they want to know why it’s so much money. Then they’ll indulge. They don’t mind that the inside seam of the jacket is what’s made so well and making the suit so expensive. The inside of a jacket is for nobody but themselves, but that’s luxury—to buy finery that nobody knows is fine but yourself.” Again and again, one hears that about the shoppers: how worldly they are, how informed, how discerning.

And yet, the impulse to be conspicuous has a way of breaking through. Hermès can’t stock enough of its Kelly handbags, the ones that cost from $2,650 to $14,000 (the latter in crocodile-skin, making Gucci’s own hot-selling crocodile bag seem modest at $6,050, and Prada’s a bargain at $5,330). Even Launer handbags for the Queen of England never cost that much. “It’s not that two years ago they didn’t want it,” says Estrada. “Two years ago they couldn’t justify a purchase like that—now they can.” And so with the shoes: the pointy-toed, heavy-heeled Pradas for $320, the stiletto heels from Gucci for $395, and the Manolo Blahniks, for $445 a pair.

For men earning big Wall Street money—and the earners are all men; Financial World’s annual list of the top 100 earners includes no women—the patrician look never went out of style; it’s just gotten more subtle and more expensive. A young Goldman, Sachs vice president might choose a dark pin-striped suit from Giorgio Armani’s “Black Label.” Or Purple Label by Ralph Lauren. Or Ermenegildo Zegna, or Calvin Klein. At about $2,000 the suit. London’s Savile Row bespoke tailors have found that their New York customers are on a buying binge. This fall one tailor received an order for 32 suits from a Wall Street client.

Men, unfortunately, can’t indulge in handbags, but they are paying as much for watches as New Yorkers once paid for co-ops. “Ten years ago the achievement would have been to own a gold Rolex, which in those days sold for perhaps $7,000 or $8,000,” says Leon Adams, owner of Cellini Fine Jewelry in the Waldorf-Astoria. “Today they’re spending upwards of $10,000 on leather-strap watches.” They sling around phrases such as “complicated movement,” and invoke Franck Muller, the young Mozart of Swiss watchmaking whose white-gold masterpieces are one of Adams’s hottest sellers at $16,000 to $25,000. Wempe Jewelers on Fifth Avenue has more than a dozen back orders for its Cartier Tank Française, a solid-gold or stainless-steel watch with a rectangular face for $2,700 to $20,500, and five back orders for its Patek Philippe annual calender model, ranging in price from $17,500 to $25,000. Some investment bankers prefer less flashy models for less money—like the Girard Perregaux limited editions, at a mere $10,000, or Blancpains, which start at $6,500. But there’s restraint—and there’s cheapness. “There are people who spend $200 on a tie and wear a plastic watch,” observes Wempe’s Ruediger Albers. “That just doesn’t go.”

The cars of choice illustrate the concept of faux restraint even better than fashion does. It’s true, the Ford Expedition and Mercury Mountaineer cost only $35,000 or so. But sport-utility vehicles guzzle almost as much gas as a stretch limousine. And now they’re more luxurious anyway. At Manhattan Ford Lincoln-Mercury, the top seller is the 1998 Lincoln Navigator. At about $46,000, it’s yachtlike with its captain’s chair and end-table-size consoles, buttery leather seats, and burled-walnut trim. Lexus makes only 7,500 of its LX450 four-by-fours for the U.S. market—starting at about $48,000. The LX450 is back-ordered at many Lexus dealers. At Rallye Motors in Roslyn, Long Island, Peter Terian reports 300 orders—just at his dealership—for the 1998 Mercedes-Benz ML 320 (base price: $33,950). “I’ve never seen anything quite like it,” he says.

The four-by-four is the preferred family car, but not the only car. As a supplemental toy, the Porsche Boxster is so back-ordered that dealers have been tacking on premiums to its $41,000 base price. The Hummer, fully loaded for about $89,000, is too arcane to be anything but a second car, which doubles its status value. “I’ve had a Lotus Esprit Turbo, a Porsche 911, a Lamborghini Diabolo—none are as much fun as a Hummer,” says Todd Eberhard, a 33-year-old portfolio manager. “It’s got double the clearance of a Ford Bronco . . . so you don’t swerve for potholes, you just drive right through them; that’s part of the kick.”

For an acquisitive Wall Streeter, the money saved by choosing a practical car can be put toward the cost of some pricier means of mobility—like a plane. As of July 1997, Gulfstream reported back orders for 98 luxury jets. The fiercest jockeying is over Gulfstream V’s, which sell for $37.5 million each and have the advantage of being able to fly nonstop from New York to Tokyo. Seagram’s Edgar Bronfman Jr. reportedly sold his place on the waiting list at a profit to formerTV Guide owner and U.S. ambassador to Great Britain Walter Annenberg. For those trying to get by on $10 million to $20 million a year, the prudent choice is Gulfstream Shares, a program that enables one to buy air time on a jet. For a mere $7.15 million you get 200 hours a year. A jet will be made available to you within six hours’ notice.

For those still awaiting their own jets, Shoreline Aviation now takes weekenders by seaplane from the East River off 23rd Street to the East Hampton airport and back for $398. Prime times for summer weekends are usually entirely booked.

In the early 90s, a luxury tax dampened the ardor of prospective yacht buyers in Manhattan. Ever since Congress rescinded the tax in 1993, there’s been money to burn on the greatest indulgence of them all. Last summer, the Surfside 3 Marina at Chelsea Piers, off West 23rd Street, was filled. Microsoft co-founder Paul Allen kept his 200-foot Feadship, the Méduse, at the marina until early autumn; the Méduse has its own helicopter, recording studio, and movie theater, and is valued at $30 million. Bobbing nearby was Mystique,the 162-foot Oceanfast owned by Herb Galen of Ellen Tracy sportswear. At the North Cove Yacht Harbor, adjacent to the World Financial Center, all 20 slips for luxury yachts were filled this summer—at $400 per day per hundred feet of boat. North Cove is where pet-food king andVillage Voice owner Leonard Stern has docked his 126-foot Lady Allison, named after his wife. It’s where Ivana Trump docked her 105-foot My Ivana, former secretary of the Treasury William Simon his 175-foot Itaska, and racecar driver turned auto tycoon Roger Penske his 116-foot Feadship, Detroit Eagle. It’s also where Sony’s Tommy Mottola entertained on one yacht while his soon-to-be-ex-wife Mariah Carey entertained on another. “It was The War of the Roses,” says one marina worker.

Paul Allen’s Méduse has sailed south for the winter, but the 16-room apartment at 4 East 66th Street he bought as a pied-à-terre for $14 million remains the high-water mark of the most extraordinary year in Manhattan real estate that anyone can remember.

Like a pulsating sun, Wall Street has bathed commercial and residential buildings all over the island with its golden glow, starting with its own once dreary environs. A decade ago, the financial district after hours was a ghost town. Now brokers pay high rents to walk home. At 45 Wall Street, three-bedroom apartments start at $3,100. Hotels are sprouting, too. The Cipriani restaurant family, with two investors, just paid $27 million for an Ionic-columned colossus at 55 Wall Street, which they plan to turn into “the most exclusive hotel in America.”

In SoHo, commercial space that rented for $50 to $75 per square foot last year is $150 now. As for residential lofts, they’ve gone up 50 percent or more since the recession of ’91. “A nice loft . . . with light?” asks a downtown broker rhetorically. “A million dollars.” At 166 Duane Street in Tribeca, loft condominiums are going for $2 million to $3 million. “What’s unusual,” adds the broker, “is that you’re seeing people outbid because someone behind them can offer to pay all cash. And many of these buyers are under 30 years old!”

Northward, the glow enhances even the scruffiest streets in the West Village. In 1994, Pam Liebman of the Corcoran Group sold an apartment there for $740,000; it’s now on the market for $1.2 million and the sellers just rejected a bid of $1.1 million. Earlier in the year, a condominium in one marginal loft building sold for $350,000; eight months later, another unit in the same line went for $569,000. Chelsea’s hotter than ever. So, at last, is Times Square, with a huge Planet Hollywood hotel/restaurant currently being negotiated for Broadway and 47th Street, while on the site of the old Nathan’s hotdog emporium on Broadway between 42nd and 43rd a new skyscraper is rising (a complex that will house, as it happens, Condé Nast Publications, which publishes Vanity Fair). Huge projects are erasing Eighth Avenue’s worst blights. At Columbus Circle, Donald Trump’s latest glass condominium tower is filling, and redevelopment plans for the dreary Coliseum are in the works. And on the Upper West Side, the Wall Street “bonus babies,” as broker Andrew Phillips of the Halstead Property Company calls them, have so heated the market for family-size pre-war apartments that a “classic seven [-room]” on Riverside Drive goes for “at least” $1 million, while Central Park West shines with star power (Sting, Harrison Ford, Steven Spielberg, Robin Williams, Bruce Willis and Demi Moore), the wattage of which is diminished only by Madonna’s recent move from her 14-room apartment at 41 Central Park West, reportedly on the market at $6.25 million.

The Upper East Side, however, remains New York’s most exclusive neighborhood, and is still where the most spectacular prices are being paid.

“I had a client take me to breakfast,” relates Edward Lee Cave, the dapper crown prince of high-end East Side co-op brokers, who presides from behind an antique French desk with four fat Rolodexes. “He has a $10 million budget. He kept saying, ‘Why can’t you find me an apartment?’ Well, he wants a certain kind of apartment. Including a terrace, for example. And 6,000 to 7,000 square feet. And pre-war.” For that, in the autumn of 1997, the client will have to spend more.

A million dollars this season might fetch a classic six on Park Avenue, but only one that needs work, and certainly not one in the prime Carnegie Hill blocks between 86th and 96th Streets. Brownstones are more. “There’s a town house on East 87th we’re trying to sell now,” says one broker. “Five years ago it sold for $1.7 million. Now it’s listed at $2.7 million! None of us can price anything, because every assumption we went on is out the window.” One can always rent instead, but at breathtaking cost: a classic six in a pre-war building on barely acceptable East 96th Street recently went for $3,800 a month.

So fierce is the demand that in many cases co-ops in prewar buildings sell for their full asking prices. “We had a two-bedroom on East 95th Street between Fifth and Madison that went on the market two years ago for $500,000— and no one bid,” says one broker. “It just went back on the market again for $750,000. The first person who came to look at it offered full price if the seller would take it off the market that day.” The buyer’s no fool: in this market, apartments sometimes sell for more than their asking price. One apartment in the 1100s on Fifth Avenue was recently put on the market for $5.7 million; it sold for $6.1 million.

In the frenzy, old rules fall away. “We’ll have auctions, with sealed envelopes, and a deadline—the highest bid in by Friday at five P.M., say,” one broker explains. “Twenty-four hours later, someone comes in and offers more—and the sellers take it!” Robby Browne, for seven years the top-selling broker at Douglas Elliman, does what he can to keep his client’s bid secret; other brokers, he knows, are waiting to learn he’s established an offer so they can top it. “My boyfriend and I broke up four weeks ago, and I started going to a psychologist about it. But I find I’m in there just talking about the market and how cutthroat it’s all gotten. It’s so depressing!”

In the 80s, you could buy many East Side co-ops with a mortgage. Now, even if the building allows financing, the market may not: when another bidder offers cash, he tends to get the deal. More often than not, the buyers who meet such standards are not the grizzled captains of industry you’d expect. They’re in their mid-30s. “I just sold one at 740 Park for more than $10 million,” says Cave. “Then I sold the Loeb estate at 730 Park for over $5 million. Then at 834 Fifth, over $10 million.” All to buyers in their 30s. “They have inherited wealth augmented by Wall Street,” Cave explains. “It’s not the people working there, it’s the people who have their money there. They’re the children of the people I dealt with 20 years ago. There’s no hysteria. It’s very pleasant.”

Actually, it’s sometimes very unpleasant. “The co-op boards have gone bananas,” says one broker. “They’re so invasive.” Buyers have to meet insane financial criteria— at some buildings, they have to fork over the full purchase price in cash and show two to three times that much in liquid assets (the country house doesn’t count). In addition, some co-op boards require up to five years’ worth of monthly maintenance payments deposited in an escrow account. At 820 Fifth, where every apartment has more than 6,000 square feet, with most rooms overlooking Central Park, Terry Semel of Warner Bros. reportedly had to fight to buy an apartment for $12 million. “Jayne Wrightsman didn’t want the guy in,” claims one broker of the prominent hostess who was a close friend of Jacqueline Onassis’s. “But Bill Acquavella, the big art dealer, lives in the building and he fought to get [Semel] in.”

Entertainment-world and controversial public figures have always been frowned upon by Waspy co-op boards— the parties they might have! the paparazzi they might attract!—but money in large, liquid amounts now seems to be easing such qualms. Theater producer-director Hal Prince reportedly overcame the stigma by paying close to the asking price of $9.5 million at 834 Fifth, as did Robert Redford at 1030 by paying about $4 million for a penthouse fixer-upper. But earlier this year, merger-and-acquisition banker Bruce Wasserstein was turned down at 834 Fifth and at 2 East 67th. Kent Swig at Brown Harris Stevens, whose father-in-law is developer Harry Macklowe, was turned down at 885 Park but managed to claw his way into 740 Park.

‘The 80s were about sit-down dinners and how much French furniture you can stuff into an apartment,” says Cave. “The clients I see now are trying to get on with their family lives.” Both parents work; they have a child or two—perhaps the second necessitated the move—and no intention of fleeing to the suburbs as the children reach school age. “He has a car and driver—and so does she,” says Cave. “But they don’t head toward Bergdorf. They go to Brearley.” Tuition at the Brearley School starts at $15,400 for kindergarten (and has gone up about $1,000 each of the last two years). After-school sports, such as the ice-hockey league at the new Chelsea Piers Sports and Entertainment Complex on the West Side, can cost another $1,000 per child. Expensive as family life is in Manhattan, however, most of Cave’s clients hope to retire soon—say, by age 40. “I know someone who made $40 million on a bonus last year at my shop,” says one investment banker of a colleague in his 30s. Did the colleague blow it on parties and cocaine? No way. “He has a nice four-bedroom home in East Hampton, drives a Volkswagen Jetta, and is putting the kids’ tuition aside. Then he’ll retire at 40 or 45—that’s a real trend.” Partly it’s fear: bank mergers mean job losses, and the older one is, the more vulnerable. Says the banker with a sigh, “I’m considered old at 33.”

For this crowd, Bunny Williams is the decorator of choice. A gentle, matronly woman who has worked quietly but with steadily growing stature for 30 years, Williams keeps an airy lair in the East 60s, where English, French, and Italian pieces coexist in a casual mix that looks unplanned— which is the point. Family needs, not entertaining, dictate her work these days. In the library, she’ll put a large TV screen that drops down from the ceiling, so the family can watch videos together. Rather than fill the dining room with a long table that’s used only rarely, she’ll design the space as a recreation room; meals, even formal ones, can be served in the eat-in kitchen. “They don’t want delicate furniture,” Williams says. “And it has to have scale—not little parlor chairs and tea tables that will fall over.”

Just as well, says Mario Buatta, the unbowed Prince of Chintz. “What I see is a lot of young people with money to spend, but less and less good furniture to find. I remember when you could get a Pembroke table for $750; now it’s $27,000. That’s the market. I remember when you could do a living room for $25,000. Now you get a sofa, a couple of chairs, and maybe a table for that much. So a lot of buyers are being sold very ornate pieces that no one would have looked at a decade ago. It’s like when the Arabs came to London and the dealers dusted off all the stuff no one else wanted. Or if they can’t find pieces that are important in themselves, they buy scraps that belonged to famous people—Jacqueline Onassis or Pamela Harriman or Billy Bald-win—and throw them all together.” Hence the wild popularity of Sotheby’s recent celebrity auctions: desirability is defined by who owned the piece, not who made it.

Fine furniture can still be bought, to be sure, if money is no object. Henry Kravis has managed to find enough 18th-century French furniture to fill his new, 10,000-square-foot triplex at 625 Park Avenue by hiring François-Joseph Graf, who worked under the chief curator at Versailles, to ransack Paris’s best dealers on an ongoing basis and commute weekly to New York by Concorde to make his reports. Money can even make your apartment bigger. One well-known financier just extended the bathroom of his new Central Park West co-op by paying his neighbor $200,000 for a walk-in closet’s worth of space between them so he could, in Jim Morrison’s immortal words, break on through to the other side.

Once a city apartment and a house at the beach was all anyone coveted. Now it’s the Hamptons for summer and Bedford for weekends the rest of the year (so the children can play soccer and the parents can ride). George Soros does the Hamptons-Bedford axis. So do Carl Icahn and former Drexel Burnham Lambert partner Leon Black. A western ranch or ski house is a popular option, too: along with the pioneers (Ted Turner and Tom Brokaw in Montana, Ralph Lauren in Colorado), World Bank president James Wolfensohn and investment banker Roger Altman are in Jackson Hole, Rolling Stonepublisher Jann Wenner is in Sun Valley, and Henry Kravis is in Vail. Felix Rohatyn recently became a rancher, too, for respite from his unexpectedly tough assignment as U.S. ambassador to France. To provide that rustic touch, the ranch houses of many of these weekend cowboys are log cabins. Large log cabins, but still . . . very restrained.

At home in the city, wealthy New Yorkers are entertaining more simply these days, and usually just for friends. “People used to have huge dinner parties; now it’s just three courses, and I think that’s better,” philanthropist Brooke Astor says. “I think people are calming down. The women are not overdressed—you don’t see them in great necklaces.” Though a certain decorum has been lost. Once, the men refrained from business talk at dinner, except when they went off to smoke their cigars. “Now they talk about business as soon as they come in for cocktails—and the women smoke cigars!”

Still, the air of restraint can be deceptive. At Restaurant Daniel, so many customers began asking owner Daniel Boulud to cater dinner parties in their homes that he established a service. For $120 per person, his Feast & Fêtes spares “cook” the extra effort of an elaborate dinner for guests. “This week we’ve got five dinners,” says an assistant, perusing Daniel’s appointment book. Of course, that fee doesn’t include caviar, which most hosts request (at $900 for 500 grams, or about a pound, of beluga), and it doesn’t include wine. Average cost for a sedate dinner party for 12: $2,000 to $3,000.

In the Hamptons, where homes are larger and white tents can be pitched on wide lawns, the entertaining tends to get more lavish. At least it did last summer. And as one frequent guest observes, “The days of typical summer parties with bartenders dispensing drinks on the lawn are gone. You’re either Wasp or poor if you do that.” Theme parties are now de rigueur.

Leon Black gave a Mexican party. Plastic surgeon Dan Baker and wife Nina Griscom gave a Moroccan party complete with belly dancers and Moroccan music; everyone sat on the floor at a long table two feet high. Carl Icahn, not to be outdone, gave a Casablanca party. At the gates, 100 very special guests were greeted in French by Algerian border guards. Inside, they found the house stripped of all furniture and paintings—everything carefully wrapped and stored by Home Sweet Home for the night—and recast as Rick’s Café. Humphrey Bogart and Peter Lorre look-alikes strolled among waiters in fezzes and pantaloons; Icahn and his girlfriend, Gail Golden, apparently spent $250,000 on the evening. By comparison, oil billionaire David Koch’s reported $150,000 for fireworks at a Labor Day party seemed almost frugal.

‘Do you suppose we’re in a golden age now?” asks singer Barbara Cook between numbers by Gershwin and Rogers and Kern at the Cafe Carlyle. “Could be! So let’s enjoy it while we’re in it!”

Uptown and down, the wealthy in Manhattan seem to be doing just that. Less clear is how much of the lucre, if any, is being shared with less fortunate citizens. Just how much noblesse oblige do the new patricians possess?

Here and there, at the risk of sounding Pollyannaish, is evidence of a cheering trend. So vastly rich are so many Manhattanites that, among them, status now derives from what money can’tbuy. Discipline. Athletic prowess. An erudite and accomplished spouse. Well-adjusted children getting good grades. Philanthropically, writing checks and buying benefit-dinner tickets is no longer enough. Creative philanthropy is what counts.

The leaders of the pack have started their own foundations, and run them with businesslike rigor, looking for high R.O.I.’s—returns on investment—for the causes they espouse. Donations are out; venture capital for social needs is in. One pioneer was Paul Tudor Jones II, who managed to increase his assets during the 1987 crash by nearly 100 percent, and at 33 began looking for ways to give something back. Today his Robin Hood Foundation dispenses $12 million annually to urban programs for disadvantaged children and teenagers, providing jobs but also bank accounts and career counseling. The foundation helps other charities manage themselves better, too—venture capital at work. The foundation’s donors include Stanley Druckenmiller and Ronald Perelman, among other Wall Streeters and business leaders drawn by the bottom-line approach. “What you find among these financial titans is that they’re not driven by Sally Struthers-like appeals to the heart,” says David Saltzman, Robin Hood’s executive director. “But rather by a dollars-and-cents appeal to the brain. When you show them a philanthropy that’s working like a business, they are extremely generous.”

Steven Klinsky, a 41-year-old partner at Forstmann Little & Co., is another pioneer, focused, like Jones, on education in the city. The Gary Klinsky Children Centers (named after a deceased brother) apply some of his last year’s $35 million earnings to underwriting longer hours at New York public schools in forgotten neighborhoods. “We do it in the form of an after-school clubhouse in the school,” he says. “You’d be amazed at what a high energy level the kids have, because we don’t teach it like school, it’s like a club.” Klinsky has enlisted the Tiger Foundation to sponsor one school’s “club,” and the William and Mary Greve Foundation another. Down in SoHo, former investment banker Henry Buhl founded the SoHo Partnership and the TriBeCa Partnership to employ homeless people and give them job counseling; currently 34 are at work. Last year, Henry Kravis joined the trend by forming the New York City Investment Fund, gathering $60 million from 60 donors to form a business investment fund for what the LBO king calls “civic capitalism.” The only tycoon whose foundations appeal as much to their founder’s heart as to his brain is, ironically, the biggest giver of them all: George Soros, who’s as interested in legalizing marijuana for medical uses as he is in fostering capitalism in Eastern Europe and the former Soviet Union.

In these best of times, however, the givers, creative or not, may be the exceptions rather than the rule. Only 61 of the Forbes Four Hundred made The American Benefactor’s 1997 list of the 100 top lifetime givers. Ten percent of the rich, as Ann Kaplan of Giving USA observes, still give 90 percent of the money. In Wall Street offices last January, giving to Covenant House and WNET-13 remained at the previous year’s levels, despite the market increase. “The rich, for the proportion of the wealth they give, are nowhere near as generous a class as they flatter themselves to be,” says Nelson W. Aldrich Jr., The American Benefactor’s editor. “And the objects of their charity—usually their alma maters—are not such as to thrill the heart of a real fixer of [social] ills.”

In truth, if the rich have changed in exterior ways from the 1980s, they are probably no different, at heart, from how they were a century ago, when Thor-stein Veblen wrote his cynical classic, The Theory of the Leisure Class. The coiner of the phrase “conspicuous consumption” declared that for the rich, all is for show—especially in the city, where “the struggle to outdo one another” is more intense and demands more advertisement. “In order to gain and hold the esteem of men,” Veblen wrote, “it is not sufficient merely to possess wealth or power. The wealth or power must be put in evidence, for esteem is awarded only on evidence.”

Expensive meals, beautiful clothes, connoisseurship, leisure sports, even philanthropy are all such evidence. In Manhattan, right now, they abound.