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Leona Helmsley, Hotelier and Real Estate Icon, Dies

By Shannon D. Harrington
Posted: August 20, 2007
Leona Helmsley, Hotelier and Real Estate Icon, Dies
Leona Helmsley

Leona Helmsley, the real estate developer and hotel operator convicted of tax evasion and dubbed ``The Queen of Mean,'' died today. She was 87.

Helmsley died of heart failure at her summer home in Greenwich, Connecticut, said spokesman Howard Rubenstein. With her husband, Harry, she helped build a property empire that was once valued at $5 billion. It included interests in the Empire State Building, the Park Lane Hotel on Central Park South and the Helmsley Hotel on 42nd Street.

``She was a tough lady,'' said Edward Koch, the former New York City mayor who first met Helmsley in the late 1970s. ``She set standards for hotels and service.''

Her conviction in 1989 on federal tax evasion charges made her a symbol of the excesses of the 1980s and put her on the front pages of the tabloids. She and her husband were charged with writing off renovations to their $11 million Greenwich estate as business expenses.

Helmsley served 18 months in prison after an eight-week trial in which former employees painted her as a cold-hearted boss who fired workers on a whim and told a housekeeper at her estate that ``only the little people pay taxes.''

The case was the basis for a 1990 made-for-television movie ``Leona Helmsley: The Queen of Mean.''

New York Born

In a statement, developer Donald Trump said: ``Leona was definitely one of a kind. Harry loved being with her and the excitement she brought -- and that is all that really matters.''

Helmsley was born Lena Rosenthal on Independence Day in 1920 to a hatmaker and housewife, both Polish immigrants, in Marbletown, New York, wrote Michael Moss, a New York Newsday reporter at the time, in his 1989 book ``Palace Coup: The Inside Story of Harry & Leona Helmsley.''

Her family moved to New York City as the economy in Marbletown, a cement mill hamlet, started to decline, Moss wrote.

Helmsley claimed to have attended Hunter College in Manhattan, although school yearbooks have shed little light on that period. She later claimed to have worked as a Chesterfield cigarette model before taking a job as a secretary at New York real estate company Pease & Elliman.

She rose through the ranks to saleswoman, selling co-ops and condominiums, and worked early in her career for residential real estate broker Brown Harris Stevens, Rubenstein said. She also headed the new co-op unit of Sutton & Towne Residential, the New York Times reported in a 1988 profile.

Meeting Harry

While stories of how she met Harry Helmsley vary, she went to work for a subsidiary of the Helmsley Organization in 1970 and married the real estate mogul two years later.

It was her fourth marriage. The first was to attorney Leo Panzirer, with whom she had her only son, Jay Panzirer, and she married garment industry executive Joseph Lubin twice.

After marrying Harry Helmsley, Leona's responsibilities within the real estate empire grew.

``Her greatest contribution to life would be the very warm, affectionate, comfortable life she gave to her husband,'' said Koch.

She took on day-to-day operations of the 950-room Helmsley Palace when it opened in 1981. The palace, a 51-story gleaming glass tower melded with the Madison Avenue landmark residences, became Leona's signature project.

High Standards

She gained control of the others after a wager, the Times reported. She challenged the hotels' decorator to a competition: she and the professional each designed three rooms. After her husband picked hers, she was named president of the hotels, the Times said.

``The quality and standards that she invoked in her hotels were appreciated by a lot of people, a lot of customers,'' said Kenneth Patton, director of the New York University real estate institute and a former senior vice president of Harry Helmsley's management company, Helmsley Spear Inc. ``Her relationships were not the greatest or the best, but on the other hand her standards were exceptionally high.''

Soon Helmsley became known as queen of the hotel chain, as she was depicted in advertisements ``standing guard'' over the hotel and ensuring nothing but first-class service.

``They had wonderful ads conveying that she was the queen of the hotels that Harry owned and you had the feeling that she made sure that everybody did their job,'' said Koch.

Greenwich Trouble

Her attention to detail became legendary and so did her penchant for tirades, employees would later say.

Those stories culminated in the late 1980s after a group of employees and contractors on the Helmsley's Greenwich estate went to the New York Post with records showing the couple dodged taxes by billing their companies for renovation work on the estate.

In 1988, a Manhattan grand jury indicted the Helmsleys on charges that they evaded more than $4 million in income taxes by charging furnishings and renovations for the 28-acre estate to the real estate business. Prosecutors also alleged Leona Helmsley extorted kickbacks from hotel suppliers and contractors.

Mr. Helmsley, almost 80 at the time of the indictment, was determined not mentally competent to stand trial.

A jury convicted Leona Helmsley of evading $1.2 million in federal income taxes, though it acquitted her of extortion.

Feared Boss

During her trial, Helmsley's reputation as a cruel boss became so well-known that her defense team cited it in arguments, with attorney Gerald Feffer reminding jurors in opening remarks that while his client might be an unpopular woman she wasn't on trial for ``being a tough bitch,'' the New York Times reported.

Former employees testified at the trial about how they feared her, with one recalling how she casually fired him while she was being fitted for a dress. Housekeeper Elizabeth Baum testified that after saying to Helmsley at the Greenwich estate that she must pay a lot in taxes, Helmsley replied: ``We don't pay taxes. Only the little people pay taxes.''

Helmsley's ``Queen of Mean'' image stuck during her later years.

When her husband died in 1997, Leona took over his empire and began selling some holdings. She had an estimated net worth of $2.2 billion, according to Forbes Magazine, which in 2006 ranked her No. 350 on its list of the world's wealthiest people.

Jury Award

A jury in 2003 awarded $11.2 million in damages to a former manager of Helmsley's five-star Park Lane Hotel who claimed Helmsley fired him for being gay. A judge later reduced the award to $554,000, although Helmsley was also ordered to pay more than $638,000 of her former employee's legal expenses.

Helmsley did show hints of a soft side from time to time.

Just before a judge sentenced her to four years in prison for the tax-evasion conviction, a sentence later reduced, she pleaded with him for leniency as she recounted the difficulty of losing her son Jay, who died of a heart attack in 1982 at age 42.

``I beg you. Don't let me lose Harry too,'' she told federal Judge John M. Walker Jr., the Times reported. ``Please don't. Our whole life has been work and each other. We have nothing else.''

More recently, she donated $5 million to the American Red Cross for Hurricane Katrina relief. She also contributed $25 million to New York Presbyterian Hospital and $5 million after Sept. 11 to help the families of firefighters. In the late 1990s, she gave millions to rebuild African-American churches that were set afire in the South, Rubenstein said.

Hospital facilities at New York Presbyterian, New York University Medical Center and Greenwich Hospital in Greenwich, bear the family name in honor of donations.

Helmsley is survived by her brother Alvin Rosenthal and his wife, Susan; four grandchildren, David Panzirer and his wife Karen; Craig Panzirer and his wife Grace; Walter Panzirer and his wife Tina; and Megan Wesolko and her husband Tom Wesolko; and 12 great grandchildren.

Funeral arrangements were not immediately announced.

To contact the reporter for this story: Shannon D. Harrington in New York at sharrington6@bloomberg.net .

Article at: bloomberg.com