110-598: The Lipstick Building , also known as 885 Third Avenue and 53rd at Third , is a 453-foot-tall (138 m) office building at Third Avenue between 53rd Street and 54th Street in the Midtown Manhattan neighborhood of New York City . It was completed in 1986 and has 34 floors. The building was designed by John Burgee and Philip Johnson for Hines Interests and was developer Gerald D. Hines 's first project in New York City. The building's nickname
220-405: A whistleblower in 2006, 60% of the mortgages were defective. The number of bad mortgages began increasing throughout 2007 and eventually exceeded 80% of the volume. Many of the mortgages were not only defective but were a result of mortgage fraud . Bowen attempted to rouse the board via weekly reports and other communications. On November 3, 2007, Bowen emailed Citigroup chairman Robert Rubin and
330-515: A $ 1.6 billion loss in 2009. Late in 2010, the government sold its remaining stock holding in the company, yielding an overall net profit to taxpayers of $ 12 billion (~$ 16.4 billion in 2023). A special IRS tax exception given to Citi allowed the US Treasury to sell its shares at a profit, while it still owned Citigroup shares, which eventually netted $ 12 billion. According to Treasury spokeswoman Nayyera Haq, "This (IRS tax) rule
440-418: A $ 60 million preferred equity loan from Goldman Sachs . The site acquisition, first mortgage loan, and preferred equity loan amounted to $ 587 million in financing. Wachovia had offered to finance 90 percent of the building's purchase price but ultimately reneged from the deal. Although the majority of the space was already under long-term lease to Latham & Watkins, the new owners expressed confidence that
550-494: A 15-year lease for over half the building, or 319,665 square feet (29,697.9 m), in late 2004 amid growing demand for office space in Midtown Manhattan. TMW Property Funds, a fund managed by Prudential Real Estate Investors , bought a 49 percent interest in the building from Tishman Speyer in mid-2005 for $ 164 million. The sale valued the building at $ 335 million. Prudential represented a group of German investors in
660-443: A Mexican oil services firm. The plaintiffs claimed that Citigroup conspired with Oceanografia to accept falsified work estimates. The courts found in favor of Citigroup. In April 2016, Citigroup announced that it would eliminate its bad bank , Citi Holdings. Citi Capital Advisors (CCA), formerly Citi Alternative Investments, was a hedge fund that offered various investment strategies across multiple asset classes. To comply with
770-636: A Shanghai-based equity and debt brokerage operating in the Chinese market. In January 2019, Citigroup announced that it sold its stake in the business to its Chinese partner. The company failed the Comprehensive Capital Analysis and Review stress tests in 2012 due to Citi's high capital return plan and its international loans, which were rated by the Fed to be at higher risk than its domestic American loans. In 2013, Sanjiv Das
880-550: A group of New York merchants , the bank opened for business on September 14 of that year, and Samuel Osgood was elected as the first President of the company. After the Panic of 1837 , Moses Taylor acquired control of the company. The company's name was changed to The National City Bank of New York in 1865 after it converted its state charter into a federal charter and joined the new U.S. national banking system. After Taylor died in 1882, Percy Rivington Pyne I became president of
990-405: A marketing center on the 31st floor of the nearby Seagram Building , where the firm exhibited scale models of 40 West 53rd Street and 885 Third Avenue. The developers predicted that they could charge $ 45 to $ 60 per square foot ($ 480 to $ 650/m) for the space. Tenants paid a modified net lease , but Hines Interests refunded any overpayments for taxes, utility costs, and operating costs. The building
1100-713: A product pusher. On January 16, 2009, Citigroup announced its intention to reorganize itself into two operating units: Citicorp for its retail and institutional client business, and Citi Holdings for its brokerage and asset management. Citigroup will continue to operate as a single company for the time being, but Citi Holdings managers will be tasked to "take advantage of value-enhancing disposition and combination opportunities as they emerge", and eventual spin-offs or mergers involving either operating unit were not ruled out. Citi Holdings consists of Citi businesses that Citi wants to sell and are not considered part of Citi's core businesses. The majority of its assets are U.S. mortgages. It
1210-646: A record price for land in Midtown Manhattan. This price did not include the cost of a leasehold in the middle of the block, which was acquired separately. At the time, Hines had developed 273 projects across the United States, but he had never before developed a structure in New York City. According to Hines, "We would like to do something that we're proud of and that the city would look favorably on." The site could be developed with an office building of up to 460,000 square feet (43,000 m). That April, Burgee and Johnson presented designs for an elliptical building on
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#17327729526501320-475: A result of the criticism and the U.S. Government's majority holding of Citigroup's common stock , compensation and bonuses were restricted from February 2009 until December 2010. In 2009, Jane Fraser , the CEO of Citi Private Bank, stopped paying its bankers with a commission for selling investment products, in a move to bolster Citi Private Bank's reputation as an independent wealth management adviser, as opposed to
1430-556: A result, structural engineer Irwin Cantor decided to add the central core, which absorbs most of the structural loads. The central core contains the elevators and emergency staircases. Also as a result of the building's unconventional shape, the office space and mechanical equipment had to be adjusted to fit the elliptical form of each story. In January 1981, Gerald Hines bought the site of 885 Third Avenue from Citicorp for $ 28 million. The land had cost over $ 1,000 per square foot ($ 11,000/m),
1540-536: A retail bank, the third largest issuer of credit cards , as well as its wealth management business. Citigroup was formed on October 8, 1998, following the merger of Citicorp, the bank holding company for Citibank , and Travelers to create the world's largest financial services organization. Citibank , (formerly City Bank of New York) was chartered by the State of New York on June 16, 1812, with $ 2 million (~$ 43.4 million in 2023) of capital. Serving
1650-520: A single company in December 1993. With the acquisition, the group became Travelers Inc. Property & casualty and life & annuities underwriting capabilities were added to the business. Meanwhile, the distinctive Travelers red umbrella logo, which was also acquired in the deal, was applied to all the businesses within the newly named organization. During this period, Travelers acquired Shearson Lehman —a retail brokerage and asset management firm that
1760-417: A two-story mechanical space atop the roof, which is clad in granite and shaped like an ellipse. The northeastern part of the site contains a rectangular nine-story annex, the base of which contains a restaurant space. At the base, the building is supported by 28 double-height stainless steel and granite columns, each 28 feet (8.5 m) high. The columns protrude in front of the glass-walled lobby. The tops of
1870-402: Is a mixed bag, its primary objective is to wind down some non-core businesses and reduce assets, and strategically "breaking even" in 2015. On February 27, 2009, Citigroup announced that the U.S. government would take a 36% equity stake in the company by converting US$ 25 billion in emergency aid into common stock with a United States Treasury credit line of $ 45 billion to prevent
1980-716: Is again two-way. However, the Third Avenue Bridge carries vehicular traffic in the opposite direction, allowing only southbound vehicular traffic, rendering the avenue essentially non-continuous to motor vehicles between the boroughs. The street leaves Manhattan and continues into the Bronx across the Harlem River over the Third Avenue Bridge north of East 129th Street to East Fordham Road at Fordham Center, where it intersects with U.S. 1 . It
2090-492: Is an American multinational investment bank and financial services company based in New York City . The company was formed in 1998 by the merger of Citicorp, the bank holding company for Citibank , and Travelers ; Travelers was spun off from the company in 2002. Citigroup is the third-largest banking institution in the United States by assets; alongside JPMorgan Chase , Bank of America , and Wells Fargo , it
2200-672: Is covered by the Third and Lexington (or Amsterdam) Avenues buses , which are the M103 , running it south of East 126th Street but terminating at East 125th Street, and the M101 and M102 , running it from Astor Place to Dr. Martin Luther King Jr. Boulevard and East 116th Street, respectively. The M98 Limited also joins in north of East 65th Street, originates service at East 67th Street, and continues until East 127th Street. Where Third Avenue
2310-449: Is derived from its shape and color, which resembles a tube of lipstick . The building has a nearly elliptical massing , with setbacks above the 19th and 27th stories, as well as a two-story granite penthouse. The structure is actually polygonal; both the base and the setback sections have over a hundred sides. The building stands on double-height columns at the base, and the facade is made of red Imperial granite and stainless steel. On
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#17327729526502420-1015: Is one of the Big Four banking institutions of the United States. It is considered a systemically important bank by the Financial Stability Board , and is commonly cited as being " too big to fail ". It is one of the eight global investment banks in the Bulge Bracket . Citigroup is ranked 36th on the Fortune 500 , and was ranked #24 in Forbes Global 2000 in 2023. Citigroup operates with two major divisions: Institutional Clients Group (ICG), which offers investment banking and corporate banking services, as well as treasury and trade solutions (TTS) and securities services such as custodian banking ; and Personal Banking and Wealth Management (PBWM), which includes Citibank ,
2530-633: Is one of the four streets that form The Hub , a site of both maximum traffic and architectural density in the South Bronx . Third Avenue was unpaved like most urban streets until the late 19th century. In May 1861, according to a letter to the editor of The New York Times , the street was the scene of practice marching for the poorly equipped troops in the 7th New York Volunteer Infantry Regiment : "The men were not in uniform, but very poorly dressed, — in many cases with flip-flap shoes. The business-like air with which they marched rapidly through
2640-550: Is one-way uptown, downtown buses use the parallel Lexington Avenue. Several bus routes also run on Third Avenue in the Bronx: The Manhattanville-bound M125 runs on three portions: from Westchester to Willis Avenues, from East 138th to East 137th Streets, and from Lincoln Avenue in the Bronx to East 128th Street in Manhattan, via the Third Avenue Bridge . Third Avenue was the location of
2750-458: The Midtown Manhattan neighborhood of New York City . It takes up the western part of a city block bounded by Third Avenue to the west, 54th Street to the north, Second Avenue to the east, and 53rd Street to the south. The L-shaped land lot covers 26,108 sq ft (2,425.5 m) with a frontage of 200 ft (61 m) on Third Avenue and a depth of 160 ft (49 m). Other nearby buildings include 599 Lexington Avenue to
2860-503: The Nathan Cummings Foundation . John Burgee and Philip Johnson relocated their firm's architectural offices to the tower, which Hines officials considered a "strong endorsement". By the end of the year, three-quarters of the building was occupied. Due to declining demand for office space, Hines Interests no longer expected to lease space to a few large tenants. An Italian restaurant named Toscana Ristorante opened on
2970-484: The New York City Department of City Planning was considering rezoning Midtown Manhattan. The massing contrasted with those of older buildings, which were typically designed with rectangular forms. The elliptical shape allows pedestrians on 53rd and 54th Street to cut across the corners, and it permits additional light and air into the building. Burgee said the design created "a memorable landmark along
3080-509: The New York Stock Exchange . As a result, late in the evening on November 23, 2008, Citigroup and Federal regulators approved a plan to stabilize the company and forestall a further deterioration in the company's value. On November 24, 2008, the U.S. government announced a massive bailout for Citigroup designed to rescue the company from bankruptcy while giving the government a major say in its operations. A joint statement by
3190-668: The Third Avenue Railroad , a horsecar line established in 1853 that evolved into one of the most extensive streetcar systems in Manhattan, the Bronx, and Westchester County. Later, it was served by the Third Avenue elevated line, which operated from 1878 until 1955 in Manhattan and 1973 in the Bronx. The Bx55 replaced the Third Avenue Line in the Bronx in 1973. When the El was being torn down in Manhattan, there
3300-640: The US Treasury Department , the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) announced: "With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy." Citi received the largest amount of TARP funding, "a larger bailout than any other U.S. bank." The bailout called for
3410-552: The " Everything card " and later to become MasterCard —in 1967. Also in 1967, First National City Bank was reorganized as a one-bank holding company, First National City Corporation, or "Citicorp" for short. The bank had been nicknamed "Citibank" since the 1860s when it began using this as an eight-letter wire code address. In 1974, under the leadership of CEO Walter B. Wriston , First National City Corporation changed its formal name to "Citicorp", with First National City Bank being formally renamed Citibank in 1976. Shortly afterwards,
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3520-408: The 54th Street side of the building in 1987, while a cafe opened on the 53rd Street side in 1999. By the early 1990s, Johnson said of the building: "When you say you work in the lipstick building, people know exactly where you are." The Lipstick Cafe opened in the lobby in 1992. The next year, Toscana Ristorante was replaced with a restaurant called Vong , designed by David Rockwell and Jay Haverson. By
3630-597: The Americas , vacating a majority of 885 Third Avenue's office space. Amid a weakening Argentine economy, IRSA and Marciano opted not to exercise their option to buy the land under 885 Third Avenue in 2019. Instead, Ceruzzi placed the land for sale the same year. Due to the global COVID-19 pandemic in 2020, IRSA failed to make payments on the ground-lease loan, which was sent to a special servicer in June 2020. Further disputes arose when 3 Company LLC, which owned 21 percent of
3740-611: The Cuban sugar industry, since the mid-19th century. The purchase of U.S. overseas bank International Banking Corporation in 1918 helped it become the first American bank to surpass $ 1 billion in assets. During the United States occupation of Haiti and the bank's income from Haiti's loan debt related to the Haiti indemnity controversy , the bank earned some of its largest gains in the 1920s due to debt payments from Haiti, becoming
3850-625: The FDIC after the collapse of IndyMac Bank , with the goal of keeping as many homeowners as possible in their houses. Executive salaries would be capped. As a condition of the federal assistance, Citigroup's dividend payment was reduced to $ 0.01 per share. In a New York Times op-ed, Michael Lewis and David Einhorn described the November 2008 $ 306 billion (~$ 425 billion in 2023) guarantee as "an undisguised gift" without any real crisis motivating it. According to The Wall Street Journal ,
3960-580: The First National City Bank of New York in 1955. The "New York" was dropped in 1962 on the 150th anniversary of the company's foundation. The company organically entered the leasing and credit card sectors, and its introduction of U.S. dollar-denominated certificates of deposit in London marked the first new negotiable instrument in the market since 1888. The bank introduced its First National City Charge Service credit card—popularly known as
4070-597: The Great Depression—forbade banks to merge with insurance underwriters, and meant Citigroup had between two and five years to divest any prohibited assets. Weill stated at the time of the merger that they believed "that over that time the legislation will change ... we have had enough discussions to believe this will not be a problem". Indeed, the passing of the Gramm-Leach-Bliley Act in November 1999 vindicated Reed and Weill's views, opening
4180-514: The Primerica name, and employed a " cross-selling " strategy such that each of the entities within the parent company aimed to sell each other's services. Its non-financial businesses were spun off . In September 1992, Travelers Insurance , which had suffered from poor real estate investments and sustained significant losses in the aftermath of Hurricane Andrew , formed a strategic alliance with Primerica that would lead to its amalgamation into
4290-637: The U.S. It also has Latin America partnership cards with Colombia-based airline Avianca and with Banamex and AeroMexico; and a merchant loyalty program in Europe. Citibank is also the first and currently the only international bank to be approved by Chinese regulators to issue credit cards under its own brand without cooperating with Chinese state-owned domestic banks. In 2012, the Global Markets division and Orient Securities formed Citi Orient Securities,
4400-512: The amount of space in the building. Under normal zoning regulations, the maximum floor area ratio (FAR) for any building on the tower's site was 15. The developers received a bonus of 20 percent for improving the subway entrance, bringing the FAR to 18. The entrance consists of a staircase and escalator. There is also a landscaped planter next to the subway entrance, adjacent to the building's curved promenade. Prior to 885 Third Avenue's construction,
4510-602: The bank launched the Citicard, which pioneered the use of 24-hour ATMs . John S. Reed was elected CEO in 1984, and Citi became a founding member of the CHAPS clearing house in London. Under his leadership, the next 14 years would see Citibank become the largest bank in the United States and the largest issuer of credit cards and charge cards in the world, and expand its global reach to over 90 countries. Travelers Group, at
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4620-485: The bank's chief financial officer , head auditor, and the chief risk management officer to again expose the risk and potential losses, claiming that the group's internal controls had broken down and requesting an outside investigation of his business unit. The subsequent investigation revealed that the Consumer Lending Group had suffered a breakdown of internal controls since 2005. Despite the findings of
4730-473: The bank's reputation. On April 6, 1998, Citicorp and Travelers announced a merger. The deal would enable Travelers and Citicorp to access each other's customer base for the marketing of financial products. In the transaction, Travelers Group acquired all Citicorp shares; existing shareholders of each company owned about half of the new firm. While the new company maintained Citicorp's "Citi" brand in its name, it adopted Travelers' distinctive "red umbrella" as
4840-574: The bank. He died nine years later and was replaced by James Stillman . The bank became the largest bank in New York City after the Panic of 1893 and the largest bank in the U.S. by 1895. It became the first contributor to the Federal Reserve Bank of New York in 1913, and the following year it inaugurated the first overseas branch of a U.S. bank in Buenos Aires , although the bank had been active in plantation economies, such as
4950-406: The bankruptcy of the company. The government guaranteed losses on more than $ 300 billion of troubled assets and injected $ 20 billion immediately into the company. The salary of the CEO was set at $ 1 per year and the highest salary of employees was restricted to $ 500,000. Any compensation amount above $ 500,000 had to be paid with restricted stock that could not be sold by the employee until
5060-473: The blandness of Third Avenue", while Johnson said the shape was "appropriate for quirky Third Avenue but not for the more serious Park Avenue ". Critics compared the building's massing to a tube of lipstick and to a luxury liner. The building is divided vertically into three sections. To comply with zoning laws, the Lipstick Building contains setbacks above the 19th and 27th stories, above which
5170-412: The building "isn't just an intriguing structure; it's a perfect example of modernist architecture". Curbed wrote in 2023 that the structure "has long served as a counterpoint to the blandness of the rest of Third Avenue". Carter Wiseman described the building as "campy absurd" in an American Heritage article in which he criticized Johnson as the "most overrated architect". Michael Sorkin criticized
5280-416: The building in 2007 under a complex financing agreement in which the underlying land was sold separately to SL Green . After Metropolitan went bankrupt in 2010, Inversiones y Representaciones Sociedad Anónima and Marciano Investment Group assumed ownership. Ceruzzi Properties and SMI USA acquired the land in 2015, and SL Green took over the building in 2021. The Lipstick Building is at 885 Third Avenue in
5390-482: The building was occupied by just one tenant, Latham & Watkins. Bernard L. Madoff Investment Securities, which occupied three stories, folded in 2008 after its chairman Bernie Madoff was found to have operated a $ 65 billion Ponzi scheme . Afterward, the Federal Bureau of Investigation took over part of Madoff's space while it was investigating charges of fraud against Madoff. Brokers expressed concerns that
5500-518: The building's connection with Madoff would drive away tenants. Rental income at 885 Third Avenue declined in subsequent years, partly as a result of the Madoff scandal, but also because of increased vacancy rates caused by the financial crisis of 2007–2008 . Wolfgang's Steakhouse took over Vong's former space in the building in late 2009. Metropolitan 885 Third Avenue LLC defaulted on its first mortgage loan in 2010, and RBC sued that June to foreclose on
5610-413: The building's development. It is 34 stories tall and measures 453 feet (138 m) to its roof. Though the building was officially known as Fifty-third at Third, its unusual massing and the facade 's color led to its popular name, the Lipstick Building. It is one of several buildings in New York City that were nicknamed based on their appearance. As of 2020, due to a legal technicality, the building and
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#17327729526505720-423: The building's floor area ratio by 20 percent in exchange for improving the adjacent subway stations. This would allow the developers to add 75,000 square feet (7,000 m), for a maximum area of 580,000 square feet (54,000 m). The bonus was ultimately approved. The project architect was Ronnette Riley of Burgee Johnson Architects, who oversaw the building's development. To attract tenants, Hines Interests opened
5830-484: The building. Metropolitan filed for bankruptcy that November. Argentine group Inversiones y Representaciones Sociedad Anónima (IRSA) and the Marciano Investment Group acquired majority ownership of the building in a deal that valued the building at $ 395 million. SL Green consolidated its ownership of the underlying land, which was valued at $ 352 million. Despite the Madoff controversy, the building
5940-462: The center portion of the Bronx . Its southern end is at Astor Place and St. Mark's Place . It transitions into Cooper Square , and further south, the Bowery , Chatham Square , and Park Row . The Manhattan side ends at East 128th Street . Third Avenue is two-way from Cooper Square to 24th Street , but carries only northbound (uptown) traffic while in Manhattan above 24th Street; in the Bronx , it
6050-431: The chief underwriter of Citigroup's Consumer Lending Group, began warning the board of directors about the extreme risks being taken on by the mortgage operation that could potentially result in massive losses. The group bought and sold $ 90 billion of residential mortgages annually. Bowen's responsibility was essential to serve as the quality control supervisor ensuring the unit's creditworthiness. When Bowen first became
6160-630: The columns contain steel bands. Behind the columns is an arcade that wraps around a 300-degree section of the building's perimeter. There are plantings adjacent to the arcade on both 53rd and 54th Streets. The exterior of the building is a continuous wall of red Imperial granite and stainless steel. The ribbon windows are surrounded by gray frames. There are red spandrel panels between floors, which are framed by strips of stainless steel. The building has 580,000 square feet (54,000 m) of space. The site could accommodate 500,000 square feet of usable floor area without any zoning bonuses, but Hines Interests
6270-464: The deep mud of Third Avenue was the more remarkable." On July 17, 1960, the section of Third Avenue in Manhattan north of 24th Street was converted into a one-way road. Starting in July 2023, a bus lane and a protected bike lane were installed on Third Avenue between 59th and 96th Streets, and that section of the avenue was narrowed from five to three vehicular travel lanes. In Manhattan, Third Avenue
6380-491: The design, saying: "At the level of shape, the building is just fine, a good shape and distinct. But the project loses it in the details." Eric Nash wrote in 2005 that "discontinuity is emphasized at every level", from the columns at the base to the interior layout of the building. Third Avenue Third Avenue is a north-south thoroughfare on the East Side of the New York City borough of Manhattan , as well as in
6490-399: The door to financial services conglomerates offering a mix of commercial banking, investment banking, insurance underwriting, and brokerage. Joe J. Plumeri worked on the post-merger integration of the two companies and was appointed CEO of Citibank North America by Weill and Reed. He oversaw its network of 450 branches . J. Paul Newsome, an analyst with CIBC Oppenheimer , said: "He's not
6600-465: The early 2000s, the office tenants included law firm Bingham McCutchen , law firm Latham & Watkins , computer company Unisys , and financial firm Morgan Stanley . In January 2004, Tishman Speyer signed a contract to purchase the building. By then, landlords in New York City were buying up buildings in anticipation of rising rental rates. Later that year, Hines Interests sold the building to Tishman Speyer for $ 235 million. Latham & Watkins signed
6710-416: The east (rear) side of the building, allowing the rest of the tower to rise with setbacks. 885 Third Avenue's superstructure is made of reinforced concrete. It includes a tube support system and a central core that tapers at the upper levels. Due to the building's unusual shape and its location on the east side of Third Avenue, winds from the north would cause an extremely large amount of eastward pressure. As
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#17327729526506820-401: The elliptical massing continues. Although the building appears to be elliptical, the base and both setback sections are actually polygonal, as the outer walls are composed of facets measuring 2 feet 7.5 inches (0.800 m) wide. The lowest section contains 180 sides; the midsection above the 19th story has 164 sides; and the top section above the 27th story has 156 sides. There is also
6930-571: The emergency aid in full and the U.S. government had made a $ 12 billion (~$ 16.4 billion in 2023) profit on its investment in the company. Government restrictions on pay and oversight of the senior management were removed after the U.S. government sold its remaining 27% stake in December 2010. On June 1, 2009, it was announced that Citigroup would be removed from the Dow Jones Industrial Average effective June 8, 2009, due to significant government ownership. Citigroup
7040-599: The emergency government aid was repaid in full. The U.S. government also gained control of half the seats in the board of directors, and the senior management was subjected to removal by the US government if there were poor performance. By December 2009, the U.S. government stake was reduced from a 36% stake to a 27% stake, after Citigroup sold $ 21 billion of common shares and equity in the largest single share sale in U.S. history, surpassing Bank of America's $ 19 billion share sale 1 month prior. By December 2010, Citigroup repaid
7150-524: The firm had begun leasing out space in the building by early 2022. In September 2022, Memorial Sloan Kettering Cancer Center paid SL Green $ 300 million for 415,000 to 435,000 square feet (38,600 to 40,400 m), about two-thirds of the building's space. Newsday cited 885 Third Avenue as an example of Johnson's "tangential approach", referencing an interview for PBS 's American Masters television series in 1986, in which Johnson described his approach to architecture: "Sometimes you have to be tangent to
7260-409: The firm's typical approach, where it signed a major tenant before starting construction. At the time, it was erecting an office building for EF Hutton at 40 West 53rd Street, and Hines Interests saw the two projects "as a similar commitment". There was still uncertainty over the building's height as the foundation was being built, as Hines Interests and its partner Sterling Equities wanted to increase
7370-637: The first $ 29 billion in losses. The Treasury would assume the first $ 5 billion in losses; the FDIC would absorb the next $ 10 billion; then the Federal Reserve would assume the rest of the risk. The assets remained on Citigroup's balance sheet; the technical term for this arrangement is ring fencing . In return, the bank gave the U.S. Treasury $ 27 billion of preferred shares and warrants to acquire common stock . The government obtained wide powers over banking operations. Citigroup agreed to try to modify mortgages, using standards set up by
7480-511: The following year, with 500,000 square feet (46,000 m) of space. At the time, a Hines spokesman said to The New York Times : "We have no tenants yet. Do you know any?" Hines Interests paid $ 1 million to relocate one resident on the site, Paul Brine, who was paying $ 90.14 a month for an apartment on the site and had refused to relocate. Hines Interests broke ground for the tower in May 1984, even though there still were no tenants; this contrasted with
7590-462: The form of collateralized debt obligation (CDOs), compounded by poor risk management, led Citigroup into trouble as the subprime mortgage crisis worsened in 2007. The company had used elaborate mathematical risk models which looked at mortgages in particular geographical areas, but never included the possibility of a national housing downturn or the prospect that millions of mortgage holders would default on their mortgages. Trading head Thomas Maheras
7700-887: The government aid provided to Citi in 2008/2009 was provided to prevent a worldwide chaos and panic by the potential collapse of its Global Transactions Services (now TTS) division. According to the article, former CEO Pandit said if Citigroup was allowed to unravel into bankruptcy, "100 governments around the world would be trying to figure out how to pay their employees". According to New York Attorney General Andrew Cuomo , Citigroup paid hundreds of millions of dollars in bonuses to more than 1,038 of its employees after it had received its $ 45 billion (~$ 62.5 billion in 2023) TARP funds in late 2008. This included 738 employees each receiving $ 1 million in bonuses, 176 employees each receiving $ 2 million bonuses, 124 each receiving $ 3 million in bonuses, and 143 each receiving bonuses of $ 4 million to more than $ 10 million. As
7810-564: The government to back about $ 306 billion in loans and securities and directly invest about $ 20 billion in the company. The Treasury provided $ 20 billion in Troubled Asset Relief Program (TARP) funds in addition to $ 25 billion given in October. The Treasury Department, the Federal Reserve and the FDIC agreed to cover 90% of the losses on Citigroup's $ 335 billion portfolio after Citigroup absorbed
7920-481: The investigation, Bowen's charges were ignored, even though withholding such information from shareholders violated the Sarbanes–Oxley Act (SOX), which he had pointed out. Citigroup CEO Charles Prince signed a certification that the bank was in compliance with SOX despite Bowen revealing this wasn't so. Citigroup eventually stripped Bowen of most of his responsibilities and informed him that his physical presence
8030-399: The largest commercial bank in the world in 1929. As it grew, the bank became an innovator in financial services, becoming the first major U.S. bank to offer compound interest on savings (1921); unsecured personal loans (1928); customer checking accounts (1936) and the negotiable certificate of deposit (1961). The bank merged with First National Bank of New York in 1955, becoming
8140-523: The life insurance and annuities underwriting businesses until it sold them to MetLife in 2005. In spite of divesting Travelers Insurance, Citigroup retained Travelers' signature red umbrella logo as its own until February 2007, when Citigroup agreed to sell the logo back to St. Paul Travelers, which renamed itself Travelers Companies . Citigroup also decided to adopt the corporate brand "Citi" for itself and virtually all its subsidiaries, except Primerica and Banamex. Heavy exposure to troubled mortgages in
8250-503: The merger of Smith Barney with Morgan Stanley Wealth Management . Citi received $ 2.7 billion and a 49% interest in the joint venture. In June 2013, Citi sold its remaining 49% stake in Smith Barney to Morgan Stanley Wealth Management for $ 13.5 billion following an appraisal by Perella Weinberg. In 2010, Citigroup achieved its first profitable year since 2007. It reported $ 10.6 billion in net profit, compared with
8360-487: The new corporate logo, which was used until 2007. The chairmen of both parent companies, John S. Reed and Sandy Weill respectively, were announced as co-chairmen and co-CEOs of the new company, Citigroup, Inc., although the vast difference in management styles between the two immediately presented question marks over the wisdom of such a setup. The remaining provisions of the Glass–Steagall Act —enacted following
8470-426: The next month. Following the sale, Israeli companies Tao Tsuot and Financial Levers collectively owned a 70 percent stake in the building. The remainder was owned by Metropolitan Real Estate Investments, Marciano Investment Group, and a third investor. The sale included an option for the owners to acquire the underlying land in 2020 or later. As part of the same deal, SL Green acquired a fee interest for 79 percent of
8580-525: The northeast side of the building is a nine-story-tall rectangular annex. The building has 580,000 square feet (54,000 m) of rentable space, some of which was built in exchange for improvements to the Lexington Avenue/51st Street station . To brace the building against winds from the north, structural engineer Irwin Cantor designed a tube support system and a central core for the building's superstructure . Hines Interests bought
8690-536: The office space. The owners then leased out the space as prebuilt offices, each with a few thousand square feet. Herald Square Properties, the building's managing agent, reported in 2014 that there was demand for full stories within the building. By the next year, the building was 97 percent leased, including all of Madoff's old space. SL Green sold a controlling stake in the ground lease to Ceruzzi Properties and SMI USA for $ 453 million in October 2015. The sale, which helped fund SL Green's purchase of 11 Madison Avenue ,
8800-403: The possibility of trouble with its CDOs was so tiny (less than 1/100 of 1%) that they excluded them from their risk analysis. With the crisis worsening, Citigroup announced on January 7, 2008, that it was considering cutting another 5 percent to 10 percent of its 327,000 member-workforce. In 2007, Citigroup acquired 61% of Nikko Asset Management for $ 7.7 billion to take majority control in what
8910-430: The remaining space, which was occupied by a variety of small tenants, could be rented out at high rates. About 42 percent of the building's space was to become available for lease through 2013. Metropolitan refinanced the building in July 2008 with a bridge loan from Goldman Sachs. At the time, the building was 97 percent occupied, with only 13,800 sq ft (1,280 m) of vacant space available. Around two-thirds of
9020-461: The site from Citigroup in 1981 and hired Burgee and Johnson to design an elliptical office building for the site. Construction started in May 1984 and the building was completed two years later. In the first several years of the building's history, the office space was generally profitable. Hines sold the building in 2004 to Tishman Speyer , which resold a partial stake to Prudential Real Estate Investors . Metropolitan 885 Third Avenue LLC then acquired
9130-633: The site had contained low-rise buildings. Citicorp , which occupied 601 Lexington Avenue immediately to the west, bought the site in mid-1980 for over $ 7.2 million. Citicorp had intended to erect a residential building there. Within a year, the bank decided to sell the site due to an increase in real-estate values. The Lipstick Building at 885 Third Avenue was designed by Philip Johnson and John Burgee for developer Gerald D. Hines . Structural engineer Irwin Cantor, mechanical engineer Cosentini Associates , landscape architects Zion and Breen Associates, and lighting consultant Claude Engle were also involved in
9240-461: The site, attempted to raise the annual ground rent for its portion of the site fivefold, based on an appraisal conducted before the onset of the pandemic. SL Green filed a lawsuit claiming that the parcel had not been properly appraised. Ceruzzi narrowly avoided defaulting on the loan, which SL Green acquired in March 2021. Later that year, SL Green announced on Twitter that it would renovate the lobby;
9350-408: The site, but construction was not projected to begin for several years, since existing tenants' leases had yet to expire. By August 1981, the details of the project had still not been finalized. Kenneth Hubbard, who led Hines's New York City office, said the elliptical massing was the only certainty in the design. In 1983, Hines Interests announced it would start constructing a 25- to 30-story building
9460-541: The southwest, the Citigroup Center at 601 Lexington Avenue to the west, and 919 Third Avenue two blocks north. An entrance to the New York City Subway 's Lexington Avenue/51st Street station (served by the 6 , <6> , E , and M trains) is next to the building. The entrance cost the building's developer $ 7 million and was built to increase
9570-745: The spit-and-polish executive many people expected. He's rough on the edges. But Citibank knows the bank as an institution is in trouble—it can't get away anymore with passive selling—and Plumeri has all the passion to throw a glass of cold water on the bank." Plumeri boosted the unit's earnings from $ 108 million to $ 415 million in one year, an increase of nearly 300%. He unexpectedly retired from Citibank in January 2000. In 2000, Citigroup acquired Associates First Capital Corporation for $ 31.1 billion in stock, which, until 1989, had been owned by Gulf+Western (now part of National Amusements ), and later by Ford Motor Credit Company . The Associates
9680-526: The time of the merger, was a diverse group of financial concerns that had been brought together under CEO Sandy Weill . Its roots came from Commercial Credit, a subsidiary of Control Data Corporation that was taken private by Weill in November 1986 after taking charge of the company earlier that year. Two years later, Weill mastered the buyout of Primerica Financial Services —a conglomerate that had already bought life insurance company A L Williams as well as brokerage firm Smith Barney . The new company took
9790-401: The transaction. By then, the building was 95 percent occupied. Tishman Speyer decided to place 885 Third Avenue for sale in March 2007. Prudential had wanted to sell the building, and real estate experts predicted the property could be sold for over $ 500 million. A consortium known as Metropolitan 885 Third Avenue LLC bought the building in July 2007 for $ 648.5 million, finalizing their purchase
9900-403: The underlying land have separate owners, and the land itself is divided into two ownership sections. A 50-by-110-foot (15 by 34 m) plot on Third Avenue, covering about 21 percent of the site, is owned by a limited liability corporation and leased to SL Green, the owner of the rest of the site. 885 Third Avenue has a nearly elliptical massing because, at the time of the building's development,
10010-495: The underlying land, as well as a leasehold for the remaining 21 percent of the site, for $ 317 million. SL Green owned 55 percent of the fee interest and leasehold, while its partner Gramercy Capital Corp. owned the remaining 45 percent. This deal was part of a complicated financing package for the building itself. The building's owners also acquired a $ 210 million first mortgage loan from the Royal Bank of Canada (RBC), as well as
10120-472: The world or you'll go crazy." Vincent Scully wrote for The New York Times Magazine that the building was "whirly Houston type", either honoring the Southwest or referencing Third Avenue's reputation as a "frontier street". The New York Times compared the lobby of the nearby 666 Fifth Avenue , redesigned in the late 1990s, to the design of 885 Third Avenue. The New York Daily News wrote in 2012 that
10230-678: Was a movement to rename the whole of Third Avenue in Manhattan "the Bouwerie" (but not the portion in the Bronx). However, it had never been part of the Bowery . Today, the Third Avenue – 149th Street station ( 2 and 5 trains) and Third Avenue – 138th Street station ( 6 and <6> trains) are served by the New York City Subway . In Manhattan, several crosstown subway routes have entrances on Third Avenue: Notes Bibliography Citicorp Citigroup Inc. or Citi ( stylized as citi )
10340-467: Was allowed to add 71,544 square feet (6,646.7 m) in exchange for improvements to the adjacent subway entrance. The building's lobby contained floor tiles decorated in a checkerboard pattern, as well as a glass-mosaic ceiling. Part of the lobby was converted into a cafe in 1992. When 885 Third Avenue opened, it had four elevators with marble paneling. Each elevator cab used a different color of marble (green, brown, red, or rose). The elevators are placed on
10450-496: Was close friends with senior risk officer David Bushnell, which undermined risk oversight. As Treasury Secretary, Robert Rubin was said to be influential in lifting the Glass–Steagall Act that allowed Travelers and Citicorp to merge in 1998. Then on the board of directors of Citigroup, Rubin and Charles Prince were said to be influential in pushing the company towards MBS and CDOs in the subprime mortgage market. Starting in June 2006, Senior Vice President Richard M. Bowen III ,
10560-493: Was completed in 1986. 885 Third Avenue received mixed criticism in its early years and was nicknamed the "Lipstick Building" for its unusual shape, but the office space was profitable. About 65 percent of the building's space had been leased to a dozen tenants by mid-1986. Early tenants included a telecommunications center operated by Telecom Plus ; First Interstate Bank Limited; ad agency Hill, Holliday, Connors, Cosmopolus; brokerage firm Bernard L. Madoff Investment Securities ; and
10670-701: Was created in the wake of the financial crisis as part of Citi's restructuring plan. It consists of several business entities including remaining interests in local consumer lending such as OneMain Financial, divestitures such as Smith Barney, and a special asset pool. Citi Holdings represents $ 156 billion of GAAP assets, or ~8% of Citigroup; 59% represents North American mortgages, 18% operating businesses, 13% special asset pool, and 10% categorized as other. Operating businesses include OneMain Financial ($ 10B), PrimeRe ($ 7B), MSSB JV ($ 8B) and Spain / Greece retail ($ 4B), less associated loan loss reserves. While Citi Holdings
10780-420: Was described as struggling, and by November they were insolvent, despite their receipt of $ 25 billion (~$ 34.7 billion in 2023) in taxpayer-funded federal Troubled Asset Relief Program funds. On November 17, 2008, Citigroup announced plans for about 52,000 new job cuts, on top of 23,000 cuts already made during 2008 in a huge job cull resulting from four-quarters of consecutive losses and reports that it
10890-1100: Was designed to stop corporate raiders from using loss corporations to evade taxes and was never intended to address the unprecedented situation where the government owned shares in banks. And it was certainly not written to prevent the government from selling its shares for a profit." In 2011, Citi was the first bank to introduce digitized Smart Banking branches in Washington, D.C., New York, Tokyo and Busan (South Korea) while it continued renovating its entire branch network. New sales and service centers were also opened in Moscow and St. Petersburg. Citi Express modules, 24-hour service units, were introduced in Colombia. Citi opened additional branches in China, expanding its branch presence to 13 cities in China. Citi Branded Cards introduced several new products in 2011, including: Citi ThankYou, Citi Executive/ AAdvantage and Citi Simplicity cards in
11000-433: Was finalized the next February. Ceruzzi, SMI USA, and SL Green owned 78.9 percent of the site, sharing the remainder with another owner. Ceruzzi leased the land back to IRSA and obtained a $ 272 million, four-year loan from Credit Suisse in 2017. The building continued to attract tenants such as hedge fund Alden Global Capital and law firm Noerr . Latham and Watkins announced in 2018 that it would relocate to 1271 Avenue of
11110-408: Was focused on fixed-income and institutional clients, whereas Smith Barney was strong in equities and retail. Salomon Brothers absorbed Smith Barney into the new securities unit termed Salomon Smith Barney; a year later, the division incorporated Citicorp's former securities operations as well. The Salomon Smith Barney name was abandoned in October 2003 after a series of financial scandals that tarnished
11220-473: Was headed by Weill until 1985 —and merged it with Smith Barney. In November 1997, Travelers Group (which had been renamed again in April 1995 when they merged with Aetna Property and Casualty, Inc.), acquired Salomon Brothers , a major bond dealer and bulge bracket investment bank , in a $ 9 billion (~$ 15.9 billion in 2023) transaction. This deal complemented Travelers/ Smith Barney well as Salomon
11330-645: Was no longer required at the bank. The Financial Crisis Inquiry Commission asked him to testify about Citigroup's role in the mortgage crisis, and he did so, appearing as one of the first witnesses before the Commission in April 2010. As the crisis began to unfold, Citigroup announced on April 11, 2007, that it would eliminate 17,000 jobs, or about 5% of its workforce, in a broad restructuring designed to cut costs and bolster its long underperforming stock. Even after securities and brokerage firm Bear Stearns ran into serious trouble in summer 2007, Citigroup decided
11440-519: Was prompted by the insurance unit's drag on Citigroup stock price because Travelers earnings were more seasonal and vulnerable to large disasters and events such as the September 11 attacks . It was also difficult to sell insurance directly to its customers since most customers were accustomed to purchasing insurance through a broker. Travelers merged with The St. Paul Companies Inc. in 2004 forming The St. Paul Travelers Companies. Citigroup retained
11550-426: Was replaced as head of CitiMortgage with Jane Fraser , former head of Citi Private Bank. The company failed the stress tests again in 2014, this time due to qualitative concerns. However, it passed the stress tests in 2015 and in 2016. In February 2016, the company was subject to a $ 1.1 billion fraud lawsuit filed by lender Rabobank and other investors as a result of the bankruptcy of Oceanografia SA,
11660-419: Was replaced by Travelers Co. Smith Barney, Citi's global private wealth management unit, provided brokerage, investment banking and asset management services to corporations, governments and individuals around the world. With over 800 offices worldwide, Smith Barney held 9.6 million domestic client accounts, representing $ 1.562 trillion in client assets worldwide. On January 13, 2009, Citi announced
11770-507: Was still more than 90 percent occupied after IRSA and Marciano's acquisition. Some vacant office space was used for an art show in 2011, and the lobby hosted an exhibition on Philip Johnson's work the next year. A cafe opened within the building's lobby in 2010; it was replaced in 2014 by the Crimson & Rye restaurant, operated by chef Charlie Palmer . To attract tenants, IRSA and Marciano hired architectural firm Gensler to redesign some of
11880-403: Was then the largest foreign buyout ever of a Japanese company. Citigroup attempted to buy out the remaining shares of Nikko later that year at a cost of $ 4.6 billion to take full control of the company. Two years later, Citigroup sold its stake to Sumitomo Trust and Banking Co, a subsidiary of Sumitomo Mitsui Trust Holdings , for $ 795 million as it retreated from Japan. By July 2008 Citigroup
11990-448: Was unlikely to be in profit again before 2010. The same day on Wall Street markets responded, with shares falling and dropping the company's market capitalization to $ 6 billion, down from $ 300 billion two years prior. Eventually staff cuts totaled over 100,000 employees. Its stock market value dropped to $ 20.5 billion, down from $ 244 billion two years earlier. Shares of Citigroup common stock traded well below $ 1.00 on
12100-753: Was widely criticized for predatory lending practices and Citi eventually settled with the Federal Trade Commission by agreeing to pay $ 240 million to customers who had been victims of a variety of predatory practices, including "flipping" mortgages, "packing" mortgages with optional credit insurance, and deceptive marketing practices. In 2001, Citigroup made additional acquisitions: European American Bank , in July, for $ 1.9 billion, and Banamex in August, for $ 12.5 billion. The company spun off its Travelers Property and Casualty insurance underwriting business in 2002. The spin-off
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