Wednesday, August 19, 2020

Some Super Rich Are Reduced To Barter By Covid-19

Hey, it's Lifeboat Ethics, man. You do what you have to do to survive.

From Business Insider:

The super rich are hoarding cash — instead bartering yachts, $30 million mansions, and caviar to ride out the pandemic
  • Because of the pandemic, wealthy Americans are holding on tight to their cash and instead opting for luxury barters.
  • One NYC lawyer waived his $20,000 fee in exchange for a two-week visit to his client's Montauk estate so he and his family could escape the city.
  • In order to escape lockdown in NYC, one artist traded his $30,000 painting for a Labor Day weekend stay at a collector's Adirondack home.
  • This summer, a top Fifth Avenue dermatologist was given $5,000 worth of caviar to make a Sunday Hamptons house call. 
  • The owner of celeb-favorite catering company, Elegant Affairs, waived her $20,000 party fee for six chartered rides on a client's yacht so she and her family could get out on the water during Covid.
When Covid-19 struck New York, some fled, others stocked up and one 40 year-old Hamptonite called his lawyer.
"He saw what was happening with the pandemic and he said to me, 'It's time to make a plan for my estate,'" said NYC attorney Sal Strazzullo.

"He needed a trust, powers of attorney, a will, a lot of documentation. At the same time, he had just been furloughed. He was moving to a new home in Beacon, N.Y. The liquidity wasn't there."
That's when Strazzullo, who had been quarantined with his wife and children in Tribeca, proposed an elegant solution. He would wave his $20,000 fee in exchange for a two week stay at his client's oceanfront home in Montauk.

"I thought, 'Why not just trade?" said Stazzullo, who has been trying to get his family out of the city on the weekends since the virus hit.
"I loved the house because wear-and-tear is included. I have three kids all under five and you can see a scratch on the floor a mile away in some of these mansions."

With people less willing to part with cash during the pandemic, high-end barters are on the rise
Even before Covid disrupted the lives of the rich and powerful, high-end bartering was already commonplace. Looking to gain admission to a private school? Woo the board members with Knicks tickets. Want a facelift without the five-figure price tag? Trade it for a splashy piece of art.

Nowadays, with the pandemic in full swing, people want to hold on a little tighter to their cash.
"There is a tremendous uncertainty and virus fear that is lingering, and that is restraining people's desire to go out and spend as they normally would," Gregory Daco, chief U.S. economist at Oxford Economics, told CNBC in May. Which means upscale trades are being made like never before. Especially if there's a second (or third or fourth home) to work with.

When the owner of a $30 million modern estate in Southampton got a little stir crazy this summer, he reached out to his friend, Paulo Wei.
Wei, who has been quarantined in Manhattan, is the owner of Our Kitchen, an East Village restaurant and 43-acre farm-to-table concept in upstate New York.

They brokered a deal.
In exchange for a weekend stay at the six-bedroom oceanfront house in Southampton, Wei, 25, let his friend stay at his fully staffed farm, where the pal received gardening and cooking lessons with the resident chef.

"He got to learn everything," says Wei. "What vegetables are in season; how to season and ferment…traditional techniques. It's an incredible cultural experience for my friend…it's sort of like Blue Hill for Asian food. And I absolutely love being by the water in Southampton."

Artists have been trading five and six-figure artworks for everything from water-front homes to private jets
Artist Linjie Deng had spent 150 days in his New York apartment when he traded his way up to a  luxury waterfront escape.

"A collector at the Hamptons Virtual Art Fair reached out to purchase one of my paintings," said Deng, who was asking $20,000 for the artwork titled, "News."
Instead of charging his $20,000 fee, attorney Sal Strazzullo, took payment in the form of a two-week stay at his client's Montauk mansion....
.... One Fifth Avenue dermatologist made a special Covid Hamptons house call after she was paid in caviar....

Okay, maybe it's not Lifeboat Ethics, maybe it's just some fancy tax evasion.
And besides, the full title of ecologist Garrett Hardin's article was:
Lifeboat Ethics: the Case Against Helping the Poor