Landlord has woes but lives in luxury Schlesinger faces legal, financial trouble here and elsewhere

September 07, 1997|By Joe Nawrozki and Larry Carson | Joe Nawrozki and Larry Carson,SUN STAFF

PALM BEACH, FLA. — An article Sunday about the condemned Riverdale Apartments in Essex-Middle River incorrectly described the status of the property. The U.S. Department of Housing and Urban Development has foreclosed on half of the complex; Chemical Bank, now part of Chase Manhattan Bank, holds a mortgage on the other half and has not foreclosed.

The Sun regrets the errors.

PALM BEACH, Fla. -- Richard M. Schlesinger lives a life of controversy -- and contrast.

Here on Florida's Gold Coast, he lives among the moneyed elite -- Donald Trump, Rod Stewart and the Ford family -- behind the walls of a $13 million oceanfront mansion.

He and his wife are active in local charities, playing host to catered parties on the gated grounds and driving around this tropical playground in a fleet of cars that includes a Cadillac, a Porsche and a vintage red Ferrari.


But on Baltimore County's east side -- and elsewhere on the East Coast -- he has legal troubles.

Even as the investor, 54, extends his real estate holdings -- he bought apartments and a commercial building for $39 million this spring in Florida -- he and his companies face a spate of legal troubles, including judgments totaling more than $50 million. The problems range from a failed New Hampshire condominium deal to unpaid loans from a New York bank.

In Baltimore County, he's the scourge of residents and officials angered by the condemnation of his Riverdale apartment complex in June. About 400 residents were driven from their apartments after Schlesinger failed to pay $600,000 in utility bills, leading the county executive to charge that Schlesinger was motivated by "pure greed" and leaving taxpayers with a multimillion-dollar cleanup.

The county has fined Schlesinger $1.5 million for hundreds of housing-code violations. Federal prosecutors in Baltimore are investigating the possibility that he committed civil or criminal violations in profiting from Riverdale while defaulting on a federally insured mortgage.

Those who know Schlesinger in Florida are surprised.

"Nobody, I mean nobody, in Palm Beach ever dreamed he was a slumlord," said Kyle Zimmer, a Palm Beach public relations consultant. "Now everybody wonders how he sleeps at night."

If lawsuits against him are any indication, -- one alleges he sheltered assets by faking the prospect of a divorce -- Baltimore County might never collect a dime.

'A legal cocoon'

"On a cash-flow analysis Schlesinger is worth a lot, but on a balance sheet he's worthless," said attorney Thomas D. DeCarlo, who represents a New England company attempting to collect a $13,400 judgment against Schlesinger.

"He has wrapped a legal cocoon around him and his assets. Florida law exempts him from debtors going after his mansion. Everything is in a trust. He has no assets lying around."

In past interviews, Schlesinger, has said the federal government's rejection of a requested $45 million renovation loan left no way to keep Riverdale marketable. He has denied profiting from Riverdale, where the last days were marked by tenant complaints of missing doors, broken toilets and raw sewage.

Schlesinger has denied responsibility. "It's a business," he said soon after the tenants, mostly working poor and elderly, were forced to move.

He has declined recent requests for interviews and wrote in a letter to The Sun: "Each and every time you were given a statement it was not reported accurately. Do not call my home or office. Do not come to my home. I have no comment?

Since 1901, when oilman and developer Henry M. Flagler built his wife a Palm Beach mansion the New York Herald proclaimed "the Taj Mahal of North America," the wealthy have tried to keep up.

Here, opulence is hailed. Residents once sought to erect toll plazas for outsiders, a proposal that was dropped after opponents suggested that residents be charged a toll to leave the island on which Palm Beach is situated.

Real estate agents list homes with indoor pools and helicopter garages. Residents shop at Worth Avenue boutiques that include Chanel, Armani and Van Cleef & Arpels.

Schlesinger, the son of a Long Island real estate tycoon, and his wife, Leslie, live in an 18,000-square-foot Spanish-style mansion with 11 functioning bathrooms, overlooking a private beach on the Atlantic.

Charitable activities

The Schlesingers are active in charities. For the Children's Home Society, they were hosts of a $150-a-ticket dinner gala, paying for the catering, wine and flowers. Proceeds went to the charity. Leslie Schlesinger, an interior designer, has outfitted show homes in which the American Red Cross has raised more than $100,000.

In May, the Schlesingers threw a different kind of soiree, an extravaganza to celebrate son Bobby's bar mitzvah.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.