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Last week after a federal jury convicted Leona Helmsley on tax fraud charges, a terse, incongruous statement was issued by Helmsley-Spear Inc., the real estate firm that figured prominently in the scandal.
"This year will be a record year," said Howard J. Rubenstein, a publicist serving as spokesman for the company. "Business is better than ever."
Manhattan-based Helmsley-Spear may well be making money. After all, most of its profits are from leasing and managing the eye-popping property portfolio of Harry Helmsley, Leona's husband, who was also charged with tax evasion but was deemed mentally unfit to stand trial. The scandal has had little direct impact on those lucrative operations.
But Helmsley-Spear clearly faces a gloomy future. The firm's real estate services for tenants and other property owners, which were lagging behind the competition before the scandal, are staggering from the negative publicity. Many of its top brokers and administrators have left, well aware that the firm will never return to the days when it was king of Manhattan deal making.
At the same time, Helmsley-Spear is facing a leadership crisis when many of the properties it manages need major capital infusions. With Mr. Helmsley ill and Mrs. Helmsley battling to stay out of prison, the day-to-day operations of the firm have fallen to Irving Schneider and Alvin Schwartz, who are in their seventies and heavily involved in their own real estate holdings.
"They need a fresh face," says Maurice H. Solomon, senior vice president at Julien J. Studley Inc. "If she's put in jail and Harry retires,...