ANGE — August 2010
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The Radar People

Surreal Estate Developer

All the outrageous plans dreamed up by Los Angeles real estate developers three or four years ago—in the days when a $10 million mortgage was easier to get than a table reservation at Mozza—Mohamed Hadid’s quest to build a mega-château named Le Belvédère in the hills of Bel Air was the one to beat.

Here was a Nouveau Palace of Versailles that would be constructed essentially on thin air, thanks to a near-vertical plot of hillside, a $12 million retaining wall and enough backfill to plug a black hole. As for the client who was expected to pay the $85 million asking price for this monument to infinite means: He (or she) existed nowhere but in the imagination of its creator. But no matter… Hadid, a former owner and/or developer of some 20 Ritz-Carlton hotels—who infamously out-ego’d Donald Trump over a plot of land in Aspen—never seemed to doubt for a second that such a buyer would come.

“Mohamed takes risks,” says his close friend Lisa Vanderpump- Todd, the British restaurateur and designer behind Villa Blanca on Brighton Way (she is also rumored to be one of the stars of Bravo’s forthcoming Real Housewives of Beverly Hills). “But he has great foresight as to what people want—in business and as a friend. It’s all a part of his huge passion for life.”

The almost comically opulent result of Hadid’s extreme confidence can now be found at 630 Nimes Rd., behind gates big enough to make St. Peter blush. Le Belvédère—nicknamed by real estate insiders as “Te Mother of All Spec Homes,” or simply “Te Beast”—features a 130-foot private gallery, a Turkish hammam, a 200-seat ballroom, a 70-foot infinity pool and a 20-car motor court, along with such humdrum billionaire conveniences as a walk-in fridge, a 60-seat movie theater, a poker room and a 5,000-bottle wine cellar. All of which is arranged over three floors (each one covered in imported Bavarian walnut) and an epic 48,000 square feet. Indeed, the place is so vast, a single broker’s tour could take a week. Not that Hadid’s brokers were ever lacking in motivation: Te standard commission on an $85 million price tag is in the region of $5.1 million.

Alas, things didn’t work out quite that way.

Te main problem: Between the breaking of ground at Le Belvédère in August 2006 and the completion of the property a mere 18 months later, Wall Street tossed a nuclear bomb down the mineshaft of the American housing market, and the resulting firestorm almost sent the entire country, not to mention the rest of the world, back to the Stone Age. And so, as the pitchforkwielding masses descended on the mansions of ex-Lehman Brothers executives in the summer of 2008, Hadid wisely concluded that this might not be the most opportune of moments to begin marketing a 10-bedroom property with 19 fireplaces, eight rose gardens and a ‘Moroccan room,’ shipped via airmail from Marrakech. So he decided to spend awhile living in his colossus instead. 8is can’t have been much of a hardship—although you can only imagine the horror of Hadid’s first property tax bill, which came in at $800,000, or thereabouts.

But the most astonishing twist in this saga of real estate machismo was yet to come. After a year of calling Le Belvédère home—Hadid’s guests included Michael Jackson (more on him later)—he finally hired the Coldwell Banker veterans Stacy Gottula and Joyce Rey to put the place on the market. 8e date was February 2009, and few expected a happy outcome. “A lot of people told us, ‘You’ll never sell this house,’” recalls Gottula, who advertised Le Belvédère in every glossy overseas publication imaginable, from Europe to Asia. “But we just kept doing the work.”

And then, only 10 months after its debut on the Multiple Listings Service (MLS), the impossible! After a showing around Christmas Eve, a buyer—rumored to be from Indonesia—opened up his gilded checkbook and made an offer. By the time the transaction closed several months later, Le Belvédère had broken the record for the most expensive residential U.S. property of 2010. 8e doubters, it seemed, had been wrong. Hadid, who will celebrate his 62nd birthday in November, had known exactly what he was doing. Either that, or he was the luckiest man in America.

“This is a one-of-a-kind house,” says Hadid, looking every bit the international playboy, with his ripped jeans, open black shirt, espresso tan and luxurious, monochrome hair when I meet him at Le Belvédère on an overcast Monday for a personal tour. Although the place is no longer his, Hadid is still living here while overseeing some finishing touches, such as fixing a leak in the gym, and enclosing the 20-car motor court (a last-minute request of the buyer).

“If you have a one-of-a-kind piece of property, you can hold on to your price, because others can never build it for the amount you’re offering it for,” he says. “What I can build in 18 months, with 300 or 400 people working for me, most other people can’t build in five years.”

In spite of Hadid’s obvious pride in his work—“not one single tree was here!” he says, waving at the garden outside, “and now there are 120,000 trees and shrubs”—there is also a sense that he recognizes the absurdity, never mind the garishness, that others might see in it. Perhaps this is why he declines to reveal how much was paid for Le Belvédère… or because it’s common knowledge that the property fetched considerably less than its final discounted price of $72,000,000 (while still beating a previous record of $46,000,000 paid in April by the Texas energy tycoon Kelcy Warren for Boot Jack Ranch in Colorado). Stacy Gottula and Joyce Rey won’t clarify matters. In fact, like many brokers, they’re willing to risk a fine from the MLS for the sake of honoring their client’s privacy—although the mystery will eventually be solved in public records.

Such reticence isn’t surprising, given that Hadid—who has five children from two marriages and is currently dating 25-year-old Latvian model Julia Lescova—was responsible for Le Belvédère’s every last detail. “I’m a one-man show,” he admits. “Which means I don’t sleep at night. Most of the time, I won’t even have the interiors drawn when I start a property. I’ll do them as I’m building. When I’m making a bedroom, for example, I might decide how it’s going to look only after the walls are up.”

Of course not everyone is a fan of Hadid’s aesthetic. “For me, personally, it’s not my taste,” says John Finton, a fellow builder of mega-jumbo mansions and a founder of Finton Construction, whose clients include the ex-American Idol host Simon Cowell. “I’d call it ‘ostentatious and eclectic’—a style that appeals mostly to offshore clients. 8e kind of end-users we build for are looking for something more sophisticated, and I’m not sure that what he’s doing is sophisticated.”

Hadid is clearly sensitive to such criticism. “I build for the needs of others, not my own,” he says, pointing to his other, almost unrecognizably different projects. 8ese include 912 North Hillcrest in Beverly Hills, a sleek, midcentury-inspired pleasure palace (complete with indoors water feature, atrium and a “private pyramid”), currently in escrow for close to its asking price of $18,900,000, as well as his “rustic” 11-bedroom villa in Punta Mita, Mexico, named Casa Amore. “On one hand, he’ll do something modern and simple, and on the other he’ll do something exotic and elaborate,” says Vanderpump-Todd. “He is a master of design, whatever he does.” Nevertheless, Hadid’s brokers typically sell his properties as a “lifestyle package”—the lifestyle being that of the Bentley convertibledriving, supermodel-dating, Villa Blanca-dining real estate developer himself. As Joyce Rey says of Le Belvédère, “It’s not a neutral home. Typically, a speculator will build a more ‘vanilla’ property, but this was Mohamed’s private residence, so we were looking for a specialty buyer.”

It’s doubtful that Hadid would approve of being termed a “speculator” himself. Money, he insists, is only a byproduct of what he does. Hadid, said to be a descendant of the 18th-century Syrian ruler Daher el-Omar, is the son of Palestinian refugees. His father worked at various Middle Eastern bureaus of Voice of America before emigrating to Washington D. C. Hadid says he “wanted to be an artist, but my dad told me that if I was an artist, I’d be hungry for the rest of my life—so I thought, right, I’ll mix art with engineering.”

After studying at North Carolina State and then dropping out of MIT, Hadid’s first venture was a nightclub on the Greek island of Rhodes. After that, he went into business restoring and importing classic cars to Washington D.C. Ten, seeing an opportunity abroad, he began to sell heavy equipment to oil-booming Middle Eastern states, including Saudi Arabia and Qatar. It was only when he returned to the U.S., with an overstuffed Rolodex full of wealthy Arab friends, that he began to invest in real estate, and proved to be extremely good at it.

Before long, Hadid had amassed a fortune estimated at $100 million. But the deal that made him famous came in 1987 when he tussled with Donald Trump by snatching 88 acres of foreclosed Aspen real estate from under his nose, not by outbidding him, but by reportedly purchasing some overlooked priority debt, which gave him pre-emption rights over the New York mogul’s offer. As deal-making went, it was opportunistic genius. Hadid claims that he has since made up with Te Apprentice creator. “We’ve had our ups and downs,” he says. “But we’ve become good friends. He stayed with me in Naples and a couple of times in Aspen.”

“I find Mohamed to be a nice guy, very personable,” says Trump, in return. “But I don’t know him well. Te Aspen thing... I had no interest in it. I put in a bid, but then I thought the market wasn’t very good. Everyone likes to say they outbid Donald Trump, but it’s just their way of getting publicity.”

With Hadid’s success and exposure came questions in the press— some more obviously xenophobic than others—over the sources of his investment dollars. One of his backers, the SAAR Foundation (linked to the Saudi billionaire Suleiman Abdel Aziz al-Rajhi) was raided by federal agents in the early 2000s over its suspected ties to terrorism. “I wouldn’t call myself a ‘devout’ Muslim… but I’m very proud of my heritage,” says Hadid, who doesn’t drink or smoke and fasts during Ramadan. “Te SAAR Foundation was a bank like any other bank, but after 9/11, the Department of Homeland Security looked into every relationship to Islam. Tey never questioned me, never asked me anything. I’ve also done business with the Bank of Scotland, the Rockefellers and the Mormons. But no one has ever accused me of being a Mormon!”

Suggestions that Hadid is somehow connected to Islamic extremists are rendered quite absurd by his circle of eclectic L.A. friends, which includes the Jewish-American fashion designer Paul Marciano, CEO of the Guess? Brand. Te developer describes Marciano as being “like a brother to me.”

Hadid admits that the last big property crash, during the late 1980s, was hard for him—as it was for Trump—with at least one of his ventures filing for bankruptcy protection. But he came back with a vengeance, and he still brandishes the trappings of a wealthy man, keeping a fleet of three jets—a Gulfstream II, a Falcon 20 and Boeing 727—although he has recently allowed his pilot’s license to expire. Hadid plays down reports that he was a daredevil in the air, along with any suggestion that piloting airplanes might have fed the same need for risk he satisfied by building an $85 million house at the peak of the market.

“At the beginning of your flying career you always have, well… I don’t want to say near-misses, but things that happen,” he explains. Like the time, recalled by friends, when he was flying into Maryland and lost power in the cockpit, only to glide the plane to a safe landing while cracking jokes? “A dead battery isn’t a near-miss,” says Hadid. “If the battery goes, the dynamo takes over.”

Now that another power source has failed—the U.S. housing market—the question is whether Hadid has enough in reserve to avoid disaster once more. Some see the sale of Le Belvédère as a sign of recovery; others as evidence of a man with deepening losses. “I was doing OK,” is all Hadid will say of the deal, when asked if he covered his expenses. Tellingly, however, he wasn’t desperate enough to sell Le Belvédère to Michael Jackson in 2008, even though the then-broke singer offered him many promises in return.

“Tings didn’t look very bright for him at the time,” recalls Hadid. “He didn’t have any money, but he was like, ‘I’ll give you this, I’ll give you that.’ I just didn’t feel comfortable, because he was still in negotiations with AEG [promoter of Tis Is It]. I said to him, ‘Michael, it’s a burden to be a friend and a banker.’” Hadid is eager to add that when Jackson stayed with him for two nights, there were no “rock ’n’ roll doctors” present, and he was “a wonderful guy—soft-spoken, caring and loving to his kids.” Not wanting to let a friend down, Hadid suggested that Jackson rent one of his former properties, at 100 North Carolwood Dr. in nearby Holmby Hills, for a reported $100,000 per month. Te address tragically became the site of Jackson’s fatal overdose from an IV drip of anesthetic.

Aside from this act of caution, there are other signs of Hadid’s financial strength: his partnership in the Rockstar Sushi jeans brand, for example, which is currently being expanded to include a line of HADIDbranded leatherwear. Not to mention the sale of 912 North Hillcrest. Ten again… his Balinese-inspired six-bedroom, a few blocks away at 1446 Donhill Dr., was offloaded in January for just $7.5 million— “SHORT SALE! MUST SELL!” read the listing—having once been offered at $16.5 million.

“In real estate, every so often, you get two years of hell,” says Hadid, candidly. “And it’s been tough, it’s been a struggle—as it has for everyone. But I’m doing really, really well… and unlike last time, I don’t have those big commercial developments.”

Such Trump-style projects don’t hold much interest for him anymore, he says. Instead, he seems enamored with the idea of creating the ultimate lifestyle, for the ultimate bon vivant. Speaking of which, work has already begun on his next project, although Hadid declines to give details, apart from the fact that “it’s in Beverly Hills, and it’s going to be very special.”

As usual, funding isn’t a problem.

“I might not be a billionaire,” he says, “but I live very well, and I’m happy—that’s a billionaire in my mind. Money has never been the issue in my life. It’s about my work, my craft. And, of course, I enjoy the game.”