The Goldman Sachs C.E.O.’s friendship with the controversial property developer Mike Meldman raises questions about his commitment to separating business from pleasure
Some 20 years ago, soon after David Solomon joined Goldman Sachs as a partner, he visited Hawaii with his family. One of the people he was vacationing with knew a fellow named Mike Meldman, who was just then starting to build a private resort, Kukio Golf and Beach Club, on the Kohala coast of the Big Island. It was astoundingly beautiful, with a verdant Tom Fazio–designed golf course hard against the Pacific Ocean. After visiting, Solomon was so impressed he thought about buying a home there. Ultimately, though, he decided it was too far from Manhattan to be practical.
But he just couldn’t shake Mike Meldman, not to mention the tony world of highly curated, exclusive luxury resorts he was building around the world through Discovery Land Company, his privately held real-estate-development business. In the end, Solomon purchased a house on Baker’s Bay, in the Bahamas, and a condominium and a separate plot of land at Silo Ridge, in the Hudson Valley town of Amenia, New York, about two hours north of New York City. Both are Mike Meldman developments.
The two men are now friends in a Wall Street kind of way, which is to say that they see each other a few times a year, play golf together, and occasionally have dinner. And Discovery is a Goldman client.
Goldman was the principal financing partner, with a loan of a little under $100 million on Meldman’s Chileno Bay development in Cabo (since paid off). The company also considered providing financing for a new Meldman development project in Portugal but lost out to a more competitive offer from the powerful Hank family, in Mexico. Solomon and Meldman had further discussed Goldman raising several hundred million dollars of new equity for Discovery, but that deal never materialized.
Instead, in 2021, according to someone familiar with the deal, Meldman raised $300 million in new private equity, valuing Discovery at $2 billion, in a round led by two partners at the private-equity behemoth Silver Lake—co-C.E.O.s Egon Durban and Greg Mondre personally invested $100 million and $50 million respectively—and brokered by Patrick Whitesell, the executive chairman of Endeavor Group Holdings, who personally invested $20 million. That time around, Solomon decided to personally invest too—“single-digit millions” according to Tony Fratto, Goldman’s head of communications—along with a group of other Discovery homeowners, who were asked to pony up $1 million or so each, as part of the overall preferred equity fundraising. Some members obliged, but most didn’t.
Solomon is just one of the many wealthy businessmen and celebrities who have fallen under Meldman’s swanky spell. Among the others are Bill Gates, Tim Cook, Michael Jordan, George Clooney, the Kardashians, Adele, Phil Knight, Ron Burkle, and Tom Brady and Gisele Bündchen back when they were together. John Waldron, Solomon’s No. 2 at Goldman, where Solomon has been C.E.O. since 2018, also owns property at Silo Ridge.
Discovery portrays Meldman’s 31 developments—which span the Bahamas, the Dominican Republic, Portugal, Cabo, Hawaii, Montana, Idaho, the Hamptons, and upstate New York—as havens for the hyper-rich, where they can escape the ugliness and prying eyes of the outside world. “Luxury never felt so laid-back,” Meldman writes on the Web site for Baker’s Bay. “Kick off your shoes and spend your days relaxing however you please.” Meldman flies to his various resorts around the Western Hemisphere in his new Gulfstream G650. According to a recent story in The New York Times, Meldman and Solomon’s jets have been spotted at several of the same locations at the same time.
It’s the kind of value proposition that has made a believer out of Rande Gerber, husband of Cindy Crawford and father to Kaia and Presley Gerber. (Gerber and Meldman—along with Clooney, who has also owned homes in Discovery developments—teamed up in 2013 to create Casamigos tequila, named after homes Gerber and Clooney owned next to each other in Meldman’s Cabo San Lucas location. They sold the brand to Diageo, in 2017, for around $1 billion.)
“Mike understands how to develop private communities in a way that everyone feels comfortable, protected,” Gerber told me. “Building a place that’s so family friendly was something that kind of turned us on.”
Ron Burkle, the buyout billionaire linked to everyone from Jeffrey Epstein to Bill Clinton, invested $100 million in a Discovery subsidiary—in exchange for a one-third stake of that venture—and noticed the same thing at the Yellowstone Club, in Montana, which Meldman manages (but doesn’t own), as he was watching one of the world’s richest men participate in a potato-sack race with his kids.
“What’s the difference between being rich and being poor?,” Burkle asked me. “When you’re poor, you look at it and you say, ‘I wish I could be on the Champs-Élysées.’ When you have more money than you’d imagine, you say, ‘I wish I could go for a nice bicycle ride on the bike path in Santa Monica today.’ Mike gives people the experience of being able to go out and just be normal.”
Undoubtedly that’s why Solomon is a big Meldman fan, too.
In an interview with me, Solomon used Brady and Bündchen, who owned a home in Silo Ridge before selling it for about $12 million and moving to Tampa Bay, as an example: “I like the fact that there are people up here—and you can socialize. The world is complicated for people like [them]. Mike’s created a safe, private place for people. That’s what they really like, and they value. It’s a very, very safe place.”
But interviews with former Discovery employees, and a review of various Discovery documents and lawsuits involving Meldman and Discovery, paint a less idyllic picture.
Soft Landings and Sushi Girls
Meldman, now 64, didn’t always dream of being a high-end developer, but in retrospect it makes sense. He grew up in Arizona, where his family lived in a one-story tract house, his father worked for an insurance company, and his mother was a book reviewer and travel writer.
Meldman went to Stanford and became, as he told The Wall Street Journal, “the epitome of a frat boy.” After graduation—and failing the L.S.A.T.’s—Meldman worked as a blackjack dealer in Lake Tahoe, then as a commercial real-estate broker selling farmland in Fremont, California, across the bay from Palo Alto. When Meldman realized he didn’t like being a broker, because he was too reliant on the whims of the buyers and sellers, he decided to become a real-estate principal instead. For around $5 million, he and some partners bought 300 acres of land in Northern California’s Portola Valley from a Saudi prince. “It was my Ph.D. in development,” he tells me, a phrase he uses often with journalists.
He made money, he says, but the long payback—due to strict zoning laws, it took him 18 years to get the needed approvals to build the development—killed the internal rate of return on the project, initiating a pattern that would frustrate some of his financial backers for years to come.
In 1996, he started his first big development with the now classic Meldman touches in Scottsdale, Arizona: the Estancia Club featured only 263 homes, far fewer than the zoning permitted, to create a sense of exclusivity; a then unknown Tom Fazio designed the golf course; and on that golf course, thanks to the influence of Meldman’s sons, the atmosphere was much more laid back than at traditional country clubs. Collared shirts became optional, and coolers with beer and snacks were placed on the tee boxes—a round of golf at Meldman’s resorts is known as “the five-pound round.”
The project was a hit, but again, as in Portola Valley, the payback was a long time coming, and the internal rate of return was abysmal. “The club was like an albatross around our neck,” says one investor in the Scottsdale development. “No investor ever made such a claim or raised concerns to us,” says a spokesperson for Discovery. “Many financial partners joined and left the project over time. All of them made money.”
Nevertheless, Meldman persisted. First with the “CEO club” of Silicon Valley, as he calls CordeValle, which opened in 1999 in the foothills of the Santa Cruz Mountains. Then with Iron Horse, outside Glacier National Park, in Montana, where he wanted to “appeal to the wife and to the kids” by expanding the activities beyond golf. The culmination of this part of his mission emerged when he built Silo Ridge, about seven years ago. Meldman’s ultra-elite gated community boasts another Fazio golf course, a hockey rink, an abandoned quarry for swimming in the summertime, a world-class equestrian center, a recently completed 11,000-square-foot barn that serves as a dining room for members and their guests, and much, much more.
It is the kind of life that appeals to a certain set, a simulation of a normal, flexible life within the confines of gated exclusivity. Or, as one hedge-funder told me, “He’s created an egalitarian society for rich people. If you can write the check and you’re not an asshole, you’re in.”
Things haven’t always run as smoothly on the management side, however. More than one Discovery employee has had issues with how the business is run. For instance, in 2021, Meldman settled a long-running lawsuit brought against him by Becky Buchan, an interior designer for several Meldman resorts who became Discovery’s chief operating officer in 2019. She had claimed in a lawsuit that the company stiffed her on at least $4.2 million in fees. “We denied all of the allegations,” says a spokesperson for Discovery.
Another issue that came up between Buchan and Meldman, insiders told me, was the behavior of Steve Adelson, one of Meldman’s original equity partners in Discovery, who preceded Buchan as Discovery’s chief operating officer. In July 2017, an outside consultant—hired by Meldman to investigate claims of bullying and sexual harassment—delivered a report based on interviews with six individuals that found Adelson had “created a culture of fear” and that he “manages by dictatorship.”
“He’s created an egalitarian society for rich people. If you can write the check and you’re not an asshole, you’re in.”
Adelson signed a separation agreement with Discovery several months later, in March 2018, in search of what the company’s general counsel called “a soft landing and a new beginning.”
The “soft landing” for Adelson turned out to be very soft indeed. He was rehired as a consultant on a variety of Discovery projects, and he managed to maintain most of his equity interests in Discovery properties, not to mention his “charter memberships” at various Discovery clubs, as long as he kept paying the dues and kept his “conduct” in check. (Neither Adelson nor his attorney responded to several e-mailed requests for comment.)
In response to a question about rehiring Adelson as a consultant, Meldman told me, “I am too loyal. Sometimes I just think you don’t need to hit them over the head with a bat. You just need to sometimes give them a hug. It’s a better approach.”
Then there was the story of Lukas Lucas, who began working as a domestic employee at Meldman’s Beverly Hills home in July 2008. Over time, Meldman asked Lucas to meet him at his private jet and drive him home in addition to other duties such as running errands and stocking the fridge.
In October 2013, a month after Meldman allegedly fired him, Lucas filed a wrongful termination lawsuit against Meldman and Discovery. Lucas, who claimed that he was the only Black employee in the L.A. area employed by Meldman and Discovery, wrote that he “experienced extreme harassment and discrimination based on his race” while working for Meldman. He alleged that unnamed Discovery employees “repeatedly” referred to him as “n***a,” both orally and in writing, and as “malt liquor” or “Schlitz malt liquor.” He also said he was called “dumb ass,” “cocksucker,” “you people,” and “motherfucker” on a regular basis.
Meldman says Lucas’s allegations “weren’t accurate or true by any means.” He says he never actually fired Lucas but, rather, that Lucas went home one day and never showed up at work again. In any event, the lawsuit was withdrawn and the two men settled. Meldman’s lawyers say he recanted some of the allegations.
Even when Meldman isn’t involved, Discovery’s properties don’t necessarily live up to the family-friendly image they’re selling—or at least not in the conventional sense. According to a company insider, naked sushi girls—literally, nude women lying horizontally and covered in sushi—have made appearances at El Dorado, in Cabo, during a so-called “Pros and Joes” golf tournament, where golf professionals are paired with weekend duffers. But this person is quick to point out that Meldman was not part of the naked-sushi-girl festivities.
It’s not the first instance of slightly debauched behavior at a Discovery property. The Las Vegas time-share magnate Stephen J. Cloobeck, founder of Diamond Resorts International and one of Meldman’s closest friends, bought a fixer-upper on the beach of another Discovery resort in Cabo for $28 million, four houses away from Meldman’s, that he says is now worth $45 million. Cloobeck had a similar form of entertainment there for his son’s 21st birthday.
“There’s a girl,” Cloobeck told me. “She’s naked. She has sushi on top of her, and the 21-year-old boys were grabbing sushi off of her, period. And she left. It was a prop.” He added, “I’m a Vegas guy. We do crazy things.”
“There’s a girl,” Cloobeck said. “She’s naked. She has sushi on top of her, and the 21-year-old boys were grabbing sushi off of her.”
There are other, long-simmering disputes too, such as those between Meldman and some of the members of the Madison Club about how and when to turn over the club to homeowners who live there. The gist of the disputes between Meldman and some of his homeowners is that, following an early bonanza of spending, after awhile he skimps on capital expenditures, and then the homeowners have to pony up real money—in the form of new capital assessments—to bring the facilities back up to snuff. “This has never been an issue,” says a spokesperson for Discovery. “A recent assessment at Madison passed with 95 percent approval by members.”
Still, it’s enough to make you wonder if Solomon’s ownership of property at Baker’s Bay and Silo Ridge, his equity stake in Discovery, and Goldman’s financing of a Cabo property put him in a conflicted position.
He is well within his rights to invest and own property in the developments—he can do what he wants, as long as it’s not illegal. And Goldman has forever been in the business of managing conflicts, so surely there’s a safe distance between Solomon’s equity position in the Discovery holding company and Goldman’s loan to the Cabo property. But it does call into question Solomon’s judgment, and could be a source of concern for Goldman Sachs’s shareholders. (Fratto said Solomon’s investment in Discovery went through Goldman’s rigorous internal compliance process, and that Solomon’s and Goldman’s various relationships with Meldman and Discovery do not pose conflicts for the C.E.O. or the firm. As for whether Goldman shareholders should be concerned, Fratto said that “everything” Solomon “does is with the consideration of Goldman Sachs first and in compliance with our ethical standards, period.”)
Solomon told me how he was very impressed by the help he got from Meldman and the Baker’s Bay team in facilitating the rebuilding of his house, which was badly damaged by Hurricane Dorian in 2019. In 2020, Solomon made his way to the Bahamas four times to check on its reconstruction. He’d fly to Florida, stay overnight at the airport hotel, and then take a seaplane the rest of the way. Since then, Goldman bought two Gulfstream jets, and Solomon now flies directly to the Bahamas. According to an investigation by Insider, he has made 21 trips there since the start of 2022, most of them personal (for which he reimburses Goldman).
In addition to his personal multi-million-dollar investment in Discovery, Solomon is now also “a passive board observer” at Discovery and spends “less than eight hours per year” in that role, according to his filing with FINRA, Wall Street’s self-regulatory agency.
Regardless of how involved he actually is, Solomon has nothing but nice things to say about Meldman. “Goldman Sachs thinks Mike’s a good businessman,” Solomon told me in January 2021. “We look at his projects and offer to finance them, and if we come to terms, we are delighted to finance them.”
