Debenzer Family Meeting (7)
Henry was momentarily swept up in the dream of building the world's greatest liquor empire, but since it wasn't something to execute right away, he decided to set it aside for now. Later, when I can make a bed out of wads of cash, I'll just sweep them all up through M&A. No rush.
He turned the topic to the next agenda without hesitation.
“Let’s wrap up the Debenzer Liquors discussion here. Next is the recently renamed Debenzer Shield. The core role remains the same, but the scale has grown far too large for Joshua to handle alone.”
Henry cast a sidelong glance at Joshua standing beside him. Joshua still radiated that heavy presence, yet overseeing security, protection, and the intelligence team by himself was clearly an overload no matter how you looked at it.
“Between family office duties and my personal protection, Joshua has too much on his plate. So I plan to recruit a new operations manager to assist him. In other words, I’ll promote Joshua to CEO and bring in a COO to handle the day-to-day management underneath him. Joshua, if you have anyone to recommend, we’ll review them first. If not, we’ll recruit externally.”
“Understood, boss.”
“And I hear security service requests are flooding in lately? Ramp up recruitment and training immediately. Especially, bring in former CIA or FBI agents with plenty of field experience if possible. By reverse-engineering their wiretapping and surveillance techniques, perfectly protecting our clients must become the very identity of Debenzer Shield.”
“Yes, boss! We’re already recruiting former CIA agents to strengthen our counter-surveillance security, but we’ll increase investment to close any remaining gaps.”
Because the matter was directly tied to the family’s safety, the elders nodded without any significant objections. The meeting flowed smoothly into the next item.
“Next is the hotel division. Through this reorganization we’ve brought the hotels under the holding company, but forcing aggressive remodeling in this era of murderous high interest rates would be nothing short of suicidal.”
In 1979, American interest rates had already broken into double digits and were skyrocketing without limit. Henry shuddered, recalling his previous life as a debtor. Borrowing money at these rates for interior construction? That’s basically announcing you’re going to jump into the Hudson River.
“Instead, we’ll start by standardizing our internal systems. Rather than the outdated operating methods of the family council, we’ll appoint professional managers and unify the previously inconsistent service manuals into one standard. The moment a customer opens our hotel door, they should feel absolute confidence that any location bearing the family’s emblem will deliver the very best treatment.”
Henry tapped the logo on the document with his finger.
“We will also completely overhaul the naming. Flagship hotels will carry the family name, while the remaining properties will be unified under ‘Zenith’ and launch as the Debenzer & Zenith Hotel Group. Before we change the shell, we’ll first elevate the substance to the level of a true prestigious house.”
The retainers nodded in satisfaction at this method that maximized efficiency without incurring massive costs. It was another moment in which Henry’s practical approach shone brightly.
“Next agenda. Through this reorganization we’ve placed Debenzer Comprehensive Construction under the holding company, but it is currently in the red due to the brutal recession.”
Henry flipped through the documents and continued calmly.
“But the fact that we—with our history and tradition—are struggling means our competitors are already gasping for breath. This is the perfect time for talent scouting. Abandon the family council’s ways and install professional managers. Then sweep up every genius architect, designer, and master craftsman who has been thrown out onto the street. During the downturn we will stockpile capability and widen our technological gap.”
Henry paused, scanned the room, and dropped the bomb.
“Also, regarding the Battery Park construction participation proposed by the city—renegotiate with city hall.”
“Boss, are you out of your mind?”
The finance officers cried out in alarm.
“Building on that landfill made of garbage and sand is suicidal. With prime Fifth Avenue land available, is there any reason to invest in that wasteland?”
From Henry’s future-knowing perspective it was an absurd statement, but at the time it was common sense. A landfill roughly filled with the dirt and sand excavated while building the World Trade Center. In 1979 New York—where public safety was a disaster and the real estate market was frozen solid—that place was simply abandoned land. The only area seeing active development was the lot right beside the World Trade Center (the Twin Towers); the rest had been left neglected for a long time in his previous life because no contractors would participate.
But when he looked at that land with future knowledge, Fifth Avenue was Cheongdam and Apgujeong, and Battery Park was Yeouido. The price of Yeouido? As a Korean from his past life, he couldn’t stand by.
Later, as long as we don’t build them too high in preparation for when planes crash into the Twin Towers, anything we put here will return hundreds of times over. And on top of that!
Henry raised his voice with conviction.
“Right now New York City Hall is on the brink of bankruptcy and prepared to give away anything. Don’t make the unreasonable demand that they provide construction funds when they don’t have a penny. Instead, demand low-interest loans backed by the city’s payment guarantee, drastic tax reductions for the next several decades, and the 99-year long-term surface rights at a bargain price.”
Henry’s eyes gleamed.
“When others laugh at it as nothing but a sand pit, we will plant New York’s new heart there. The concept is already complete: a luxury yacht marina embracing the Hudson River, private clubs, design hotels and shopping centers containing an art archive for artists. At the center will be the ultra-luxury residential complex that is our family’s specialty.”
Henry pointed at the map and drove the point home.
“We will create a new landmark for New York integrated with green parks. This will be the turning point that changes the fate of our construction company.”
“Boss! That place is not fit for human habitation!” Even Noah Miller stepped forward to dissuade him.
“It’s a landfill where they dumped the leftovers after building the World Trade Center! You want to erect such buildings on a sand castle whose foundation could collapse at any moment?”
James, a veteran advisor with twenty years in construction, slammed the documents onto the table and raised his voice.
“Look at Manhattan’s current real estate indicators! Even proven districts like Fifth Avenue or Park Avenue have stagnant prices because of the recession. Yet you want to sink money into the western edge that’s no different from a smoking garbage dump? This isn’t investment—it’s speculation, and very low-quality gambling at that!”
Gilberto also shook his head and joined the opposition.
“Correct. I tried to understand the hotel branding, but this construction project is on an entirely different level. If it goes wrong, the family’s entire cash flow will be poured into that uncertain landfill. The risk is too great! If city hall goes bankrupt, our family will sink with it. I can accept the other items, but I can never approve this landfill development!”
To Henry, who knew the future, their worries were nothing more than outdated fears. Still, he nodded as if he understood and lightly tapped the map on the conference table. It had improved a little lately, but until recently New York City Hall had been on the verge of actual bankruptcy.
“Everyone, you’re missing the diamond hidden behind the sand dust right before your eyes. Do you know why New York City Hall is clinging to us? Not because they have no money, but because they have no hope. This moment when they are most desperate is precisely our greatest opportunity to acquire this land at the lowest price.”
Henry stopped speaking and met every person’s eyes, radiating his conviction. This golden land had to be secured no matter what.
“Fifth Avenue? Fine. But that land is already complete. The profits we could gain there are obvious. In this recession we probably couldn’t even cover the loan interest. From the city’s perspective there would be no benefits either. But this sand pit is different.”
Henry pressed down hard on the Battery Park site on the map.
“We build with bank money under the city’s guarantee, lease the land for 99 years at a bargain, and pay zero business taxes for twenty years. Later, when the Twin Towers here—the World Trade Center—become the new center of global finance, it will already be too late to enter.”
Even now the Twin Towers were enormously popular, so as the opposing voices softened a little, Henry drove the final nail in.
“You called it aggressive expansion? No. This is preemption. While others tremble in the recession and step backward, we are capturing the king on the giant chessboard called New York.”
Henry’s tone went beyond casual and began to carry the cool dignity of the family patriarch.
“My decision will not change. Sit down at the negotiation table with city hall. Use the fact that they cannot support construction costs as leverage and wring out every possible concession. Whether it’s floor-area-ratio incentives or anything else, everything you extract will become our gain.”
At Henry’s confident gaze the conference room fell into a strange, tense silence. Soon a fierce debate erupted. Opposition voices were still loud, but as time passed the balance began to tilt toward approval. They had calculated that if they could secure all the exceptional conditions Henry proposed, it would not be a losing deal as long as city hall did not go bankrupt.
Henry intervened directly throughout the discussion to reinforce the logic. In truth he could have made a unilateral decision with the authority of the family head. But Henry knew: he only set the direction; these were the people who would roll in the mud to execute it. There was no need to break their morale by forcing the issue.
No matter that I’m the boss, when managing people the carrot works best. You have to make them enjoy the work for the results to come out well.
...
After a long debate, a conclusion was finally reached. Low-interest loans through city payment guarantees, tax reductions, long-term surface rights, and floor-area-ratio incentives. They would proceed with the Battery Park project on the premise that these conditions would be met.
“Whew… Bart, contact the city officials and the Battery Park City Development Corporation and secure as many of today’s agreed conditions as possible. I’m counting on you.”
“Understood. Given the city’s current situation, it looks feasible, but the conditions are so extraordinary that I can’t guarantee anything. I’ll mobilize all my connections.”
The media business division remaining in the documents was already operating under professional management, so it was passed without further comment. A far more important matter remained: the actual ammunition—funding.
“Now, let’s talk about the capital to be injected into my investment team. Gilberto, how much available cash does the family trust currently hold?”
“$49.81 million. After subtracting the $3.8 million for June taxes, the expenditures after acquiring the British The Times, the land purchase costs for the think tank and liquor corporation decided today, and the operating expenses for the construction company and Shield…”
Gilberto’s ballpoint pen danced vividly across the paper.
“The maximum we can allocate to the investment team right now is $10 million.”
“Come on, let’s make it a clean $30 million. The The Times acquisition can be handled with the low-interest loan negotiated with the British government anyway, and land costs won’t all come due at once, right? The construction is also backed by city-guaranteed loans, so $30 million in spare cash shouldn’t be a problem. Next month we’ll have dividends and interest coming in, won’t we?”
After tenacious bargaining with Gilberto, Henry ultimately claimed victory.
Even the initial $10 million was probably a safety-net amount that wouldn’t hurt the family even if I lost it all. If I roll it for just a few months and show returns, next time the vault door will open much wider.
Gold and silver, and the brutal high-interest era soon to arrive. The thought of maximizing this seed money before next year was out made Henry’s mouth taste sweet.
Then a forgotten detail suddenly came to mind.
“Oh, right. Gilberto, please distribute $100,000 to me from the trust. And pay the taxes immediately according to the quarterly deadlines. New York City is struggling, so I should show a little patriotism too.”
For a moment Gilberto’s face twisted as if to say Are you sane?, and the other attendees shook their heads in disbelief. But with his characteristic stubbornness, Henry won again.
Why are they reacting like that when I’m just securing my allowance? I need to maintain my dignity, too. And there’s no one scarier than a conglomerate that pays its taxes properly. Of course paying taxes that don’t have to be paid is stupid… but I have my reasons!
And so the stormy family meeting came to an end.