While many developers have seen reversals of fortune in the late 2000s, few were as colorful and well-publicized as Kent Swig's.
For most of his career, Swig was considered real estate royalty: a prominent commercial landlord, a principal in Terra Holdings, and Harry Macklowe's son-in-law. Swig's standing suffered, though, as he lost control of development projects, faced an onslaught of litigation and separated from his wife.
Many of Swig's troubles centered around his conversion of Sheffield57 on West 57th Street, which faced numerous lawsuits from tenants after he bought it with other investors for $418 million in 2005. Swig made headlines when one of those partners, Yair Levy, hit him in the head with an ice bucket during a 2008 meeting. The team lost control of the building to a creditor in 2009.
The same year, Lehman Brothers filed to foreclose on 45 Broad Street, where Swig (and partners including Robert De Niro) intended to develop a hotel. In 2010, Swig closed the Helmsley-Spear brokerage, which he'd purchased a few years prior, and defaulted on a $12 million loan at 80 Broad Street.
Swig, a California transplant and a surfer, also faced personal financial woes, with a reported $50 million in personal debt.
In an exclusive interview with The Real Deal in December 2010, however, Swig was sanguine about his future prospects, and said he'd made an agreement with the creditor that took over the Sheffield, Fortress, that gives him a share of potentially "enormous" future profits. He also said that as part of the agreement, he'd agreed to be depicted as "the fall guy" in the press.
The condo building sold at a foreclosure auction last month for $20 million. Fortress, a Manhattan-based hedge fund that previously acquired more than $100 million in defaulted loans at the building, made the lone bid at the auction, giving it total control over the Sheffield57 holding company. After buying the defaulted mortgage loan and senior mezzanine loan, Fortress advanced several million dollars to help pay off common charges and unpaid mechanic's liens that Swig had accumulated. Swig purchased the property for $418 million in 2005 with majority investors Yair Levy and Serge Hoyda.
The 134-unit rental complex sold for $61 million. The property has 125,000 square feet of unused air rights that would allow seven additional stories of condo development. The buildings contain 68 one-bedrooms, 56 two-bedrooms and 10 three-bedrooms. Swig bought the buildings for $54 million in 2005 with plans to convert them into condos. Includes 200 West 93rd Street.
Hearst purchased floors two through six and part of the seventh in the residential tower next door to its headquarters for $95 million. The publishing company also acquired the retail portion of the building and a parking garage.