IBJNews

New Jersey project enriched Simons

Back to TopCommentsE-mailPrintBookmark and Share

The battle over the estate of Melvin Simon has thrown a spotlight on a 24-year-old New Jersey development project that, by itself, has made many Simon family members multi-millionaires.

Members of the Simon family including the children of Simon Property Group Inc. founders Melvin and Herbert Simon hold interests worth more than $215 million in the built-from-scratch, 600-acre community of Newport, which sits across the Hudson River from Manhattan.

The privately held Melvin Simon & Associates partnered with New York-based LeFrak Organization in 1986 to begin development of the $10 billion office, retail, residential and hospitality project in Jersey City, N.J.

NewportToday, more than 20 office, apartment and condo towers offer impressive views of the Manhattan skyline, and developers tout the community, still growing, as “the largest and most successful mixed-use community in the world.”

The project also represents a big chunk of the Simon family fortune—even though Melvin Simon’s disputed $2 billion estate owns only a small portion of it. Details of the family’s investments in Newport and an estimate of what they are worth have emerged in the legal battle over the estate playing out in Hamilton County.

Most of the family’s Newport properties, valued at $144 million, are held in a family holding company called SFG Company LLC, which also controls 6.6 million partnership units convertible into Simon Property Group Inc. common shares.

Melvin’s estate owns just 4 percent of SFG, a stake that was worth about $20 million in January 2009, before a furious rally in Simon Property shares.

Most of the rest is owned by his three children from his first marriage—Deborah Simon, who is challenging her father’s will, and siblings Cynthia Simon-Skjodt and David Simon, the CEO of Simon Property Group.

Deborah claims Melvin was coerced into approving a new estate plan that increased the amount of his fortune going to wife Bren from one-third to one-half, cutting out promised charitable gifts. Bren contends the estate plan reflects his wishes.

Documents in the case suggest Deborah and her siblings are worth at least $100 million each, based solely on their interests in SFG.

As of January 2009, when Simon shares traded at half the level they do today, Deborah personally owned an interest in SFG worth $94 million.

Her sister, Cynthia, held $98 million of equity in the holding company and brother, David, had a stake worth $87 million. Their stakes have grown in value by leaps and bounds as Simon shares jumped from about $43 at the time to more than $90 this month. (David also owns more than 517,000 Simon Property shares directly worth $47 million.)

Documents show each of the siblings holds separate interests in the Newport development under a company called Simon Newport Investors LLC: Those interests add an additional $15 million in equity for David, $8 million for Deborah, and $4 million for Cindy, documents show.

However, cashing out the partnership units would likely result in a huge tax hit for the Simon family members, since the basis is so low.

And it’s possible the value of the Newport stakes was overstated. The figures were provided by attorneys for Bren Simon, who has sought to paint her stepchildren as spoiled and greedy, never happy with their father’s generosity.

The documents did not provide a balance sheet for each project or explain how equity values were determined.

Simon family members could not be reached for comment on this story.

The ambitious Newport vision involved replacing a wasteland of rotting railroad yards, warehouses and piers with a gleaming modern city with millions of square feet of office and retail space and thousands of apartments and condos, all connected by rail to New York City.

The developers spent more than $100 million on roads and other infrastructure and $40 million on environmental cleanup before building construction began.

Melvin Simon signed on to partner on the development a few years after he and Herb bought the Indiana Pacers in 1983. The deal was one of a “slew of partnerships that allowed the company to keep growing at a time when many competitors floundered” amid a real estate slump, according to a report last year by the International Council of Shopping Centers.

The partner in this case was privately held LeFrak, founded by Harry LeFrak in 1901 and today run by grandson Richard LeFrak. The company has developed residential and office properties in New York, Los Angeles and London.

When Simon Property Group staged its initial public offering in 1993, the Simon family held onto its Newport holdings rather than rolling them into the public company.

Simon Property manages the three-level, 1.2-million-square-foot Newport Centre Mall and Newport Centre Market, a lifestyle mall along the waterfront, but the publicly traded company does not own the property, documents show.

Family members own about 47 percent of the mall, which is anchored by Macy’s, Kohl’s, Sears and J.C. Penney. Documents show the stake is worth $85 million.

The family’s ownership stake in Newport includes a 33-percent interest in several apartment buildings, adding up to an estimated value of $86 million.

They own stakes in a 187-room Courtyard by Marriott and a 429-room Westin hotel worth almost $51 million, along with parking garages and undeveloped land.•

ADVERTISEMENT

  • Seriously
    A digusting story of greed and jealousy over other people's money.
  • About Bren Simon
    I've known Mrs. Simon for many years and I hate reading all of these lies about her. She is one of the kindest, most charitable women in the world. She has started many many charities all over the world. She started an orphanage in the Dominican Republic and she visited frequently. When the kids would see her they ran to her and jumped up for hugs. She also started a vocational school for girls who lived in abject poverty and has educated 100's of girls into the work force there. She has continued to support 100's of underprivledged kids by putting them through college. There is no way Mrs. Simon will ever stop being chartible with her money. No need to worry about the charities...pledges will be honored and more. Also, most of her giving has been done anonymously.

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Good Day I am Mr (Victoria Wright) from United state of America, i stayed in NEW YORK, and i have a broke up business, until i found this company email who help me to gain a loan for business,, and now i want to used this short medium to congratulate the below company for the fast and safe money they loan to me without any form of collateral, i loan 500,000USD from the company to save my business and lots more, i saw their mail on the internet, everyone always give testimony for what they did, so i quickly contacted them and they all did everything for me without stress and my money was sent to my account just 3 days later, i was surprise and i feel so glad, now i have a standard business control agent who help me, now i will advice those who need urgent loan to contact him at the bellow email:zenithfirm12@gmail.com

  2. NOTICE:This is to inform the general public that Vampires are real. My name is James Franklyn.,am an agent of vampire,am here to introduce our new world trend to you,a world of vampire where life get easier,we have made so many persons vampires and have turned them rich,you will be assured long life and prosperity,you shall be made to be very sensitive to mental alertness,stronger and also very fast,you will not be restricted to walking at night only even at the very middle of broad day light you will be made to walk.In case you are wildly oppressed by some unscrupulous persons we can still help you fight them.Your protection is assured immediately you join.Just contact the bellow email if you are interested we are here to attend to you anytime you want us. Contact the bellow email for more details. Email:vampirescreed@hotmail.com Sincerely: James Franklyn.

  3. Bravo! Someone else that is willing to speak the truth! Bravo!_____NBCSN is available in almost 2 MILLION more homes than just a few years ago, but Indycar STILL gets less total viewers than it did just a few years ago when NBC took over Versus. Attendance and ratings cratered with the end of season races (just when the title battle got "interesting" HAH!__________And now...new race in Basilia, where Miles celebrated the "rich history" of Indycar racing there. Rich history? What, 7 events in the 100 years of AOW? Yep, some history. Well, at least its an oval. It's not??? Are you kidding me??? Gosh darn road racin furriners.

  4. PURITY RAY LOAN OFFER........ Have you been denied by your banks,or are you in need of of an urgent loan to pay of your bills we are capable of giving loans @ cheaper rate to interested individuals, student, companies and members of the public in need of finance to settle bills, we do offer considerable loans which you can count on. For more information on our various types of loan,then you will have to contact PURITY RAY LOAN FIRM, to help you achieve your desire LOAN APPLICATION FORM TO BE FILLED BORROWERS INFORMATION * Full name:………………………. * SEX * ……………………………. * Country………………………….. * State:……………………………. * Land:…………………………….. * Occupation:…………………….. * phone number:…………………. * Telephone: ………………………….. * Age:………………………………. * Amount needed as loan:……… * Loan Duration:………………….. * Propose of Loan:……………….. * Annual revenue:………………… * Monthly Income:……………….. * Guarantee:………………………. * Payment: monthly or annually Email.....purityrayloanfirm@gmail.com Thank you and God bless Mr Purity Ray PURITY RAY LOAN FIRM we tend to serve you better

  5. Problem: most of the people responding to this article don't know about this service AT ALL! Why? Lack of awareness. This isn't IndyGo. This is CIRTA: might as well be the mattress company because they are asleep at the wheel - something like 3 directors over the last year? Playing with federal grant money is great! This "region" wants commuter rail service, has spent MILLIONS on Transportation studies yet can't even support a commuter bus line? This is largely for suburban riders to get to downtown - not for "service people to work in our hotels and restaurants" ! Get your head out of your backside!! These are professionals, students etc. that don't want to fight traffic, save some money on parking, gas, stress.... if CIRTA would put their federal money into widely promoting the sevive to Greenwood, Fishers & Carmel instead of finding directors and studies - this would be a successful service. Our family uses(d) it daily for the last several years - but the recent uncertainty & now unreliability due to cuts from Carmel has been a problem. Now, costs us an additional $350/month for gas & parking ( $4200/year) plus vehicle wear, service, environmental impact ... YES - this REGION needs this this type of service in order to keep growing and getting the people it needs to fill skilled positions in downtown Indianapolis. Think outside of your own car !!!

ADVERTISEMENT