Real Estate Developer Profiles
John Raskob and Al Smith - Empire State
shot was fired in the skyscraper wars of the early 1900s: developers announced
the Chrysler Building would reach 925 feet. As a result the real estate developers
of 40 Wall Street announced plans to go to 927 feet. The Chrysler Building announcement
was a ruse, however: a tower constructed inside the Chrysler Building was affixed
to the spire to make it the height champion of the world. For all the fanfare
it caused, its reign was short-lived: in 1931 the Empire State Building was completed,
becoming the tallest building in the world. Its construction changed the business
model for building development and onsite construction and workflow, and in its
time was a model of development planning.
The Empire State Building eventually
rose to 1,250 feet. (Plans to install a gigantic dirigible docking tower were
later abandoned as unfeasible.) Breaking the thousand-foot mark was the construction
equivalent of breaking the sound barrier and produced astonishment among the construction
world. Designed by William Lamb, Bill Starrett was the commercial contractor and
was in charge of its actual construction; he considered it the culmination of
his and the Starrett brothers' careers.
The original development plan for
the Empire State Building was based on ambitious goals: real estate developers
John Raskob and Al Smith simply wanted to create the tallest building in the world.
Raskob bought the land for $16 million. Reportedly he met with William Lamb, the
architect, and held a pencil vertically and asked, "How high can you make
it so it won't fall down?" From that meeting came the design for the building.
created a centralized structure: space in the center, arranged as compactly as
possible, was to contain the vertical circulation, mail chutes, toilets, shafts
and corridors. Surrounding the central chute was a perimeter of office space 28
feet deep. His design created an internal structure of non-rental space surrounded
by rentable space. The goal was to maximize the building's usefulness and convenience
for its tenants while allowing it to be as tall as possible. Other buildings in
New York were based on the same premise: land costs were high and constantly rising,
so creating vertical space rather than horizontal space was critical to keeping
costs low and therefore rents attractive for new tenants. Raskob literally took
that concept to new heights.
Once the design was finalized, commercial contractors
were asked to bid on the job. One of Raskob's requirements was that construction
take place as quickly (and safely) as possible, since major construction projects
had (and have today) a tremendous impact on neighboring businesses. As developer,
Raskob was sensitive to the impact construction would have on traffic and access
to nearby buildings.
Starrett estimated an eighteen month time frame, and
also detailed an unusual proposal. When asked how much equipment and labor resources
he had available, Starrett reportedly said, "Nothing. Not even a pick and
shovel. Gentlemen, this building of yours is going to represent unusual problems.
Ordinary building equipment won't be worth a darn on it. We'll buy new stuff,
fitted for the job, and at the end sell it and credit you with the difference.
That's what we do on every big project. It costs less than hiring secondhand stuff,
and it's more efficient." While an unusual approach, it also made sense due
to the construction challenges presented by the building's design and sheer size.
As the developer, Raskob also appreciated the approach: the more quickly and affordably
the building was constructed, the faster investors could receive a return on investment
and tenants could move in.
Starrett acted both as the commercial contractor
and as the general contractor - he hired more than fifty different contractors
and construction companies to handle different aspects of the job, and he created
a just-in-time materials flow that represented a breakthrough in building construction
(and manufacturing as a whole.) Finished supplies were made on-site, and work
in progress space was limited due to the constraints of the area surrounding the
foundation was dug by over 300 men. On March 17th, 1930 the first steel was erected.
Based on requests by Raskob, the contractors and their associated construction
companies developed a number of innovative construction techniques to save time
and produce greater efficiencies. While the outside of the building was being
constructed, electricians and plumbers began installing the infrastructure of
the building. Starrett's construction team in effect created an assembly line
process of building construction, an innovation that had repercussions for major
construction projects since that time. Components were engineered to be easily
duplicated in quantity with near-perfect accuracy. The steel posts and beams arrived
at the site marked with their place in the framework and with the number of the
derrick that would hoist them. Workers could swing the steel into place and have
it riveted as soon as 80 hours after it had come out of the furnace.
Otis Elevator Company was hired by Raskob to construct and install 58 passenger
elevators and eight service elevators in the Empire State Building. Though these
elevators were rated at up to 1,200 feet per minute, existing building codes restricted
speed to 700 feet per minute. Raskob installed the faster and more expensive elevators
in the hopes that building codes would eventually change. His gamble paid off:
a month after the Empire State Building was opened, the building code was changed
and the elevators were the fastest in the world.
Due to advance planning
by Raskob and excellent execution by Starrett, the Empire State Building was constructed
in just over one year, coming in on time and under budget. The cost of the building,
including the land was slightly over $40 million - almost $10 million below the
$50 million budgeted expense level.
The building weighs approximately 330,000
metric tons. The building has 6,500 windows, 73 elevators, and 1,860 steps to
the top floor. Although the lower floors occupy the entire block, there are various
"setbacks" in the building's design, as required by law at the time,
to prevent the building from casting quite such a large shadow on its neighbors.
(Real estate developers were at the time restricted by building codes long-since
Even before the building reached nearly-full occupancy, operating
expenses were covered by admission fees from visitors riding the elevators to
the observation deck. Even today, over 35,000 people per day ride the elevators
to the top for a few of the city. The Empire State Building stands as a testament
to a developer's willingness to follow his own vision, and to harness new techniques
and concepts to make that vision a reality.