The Real Deal New York

Michael Shvo benched at 125 Greenwich: sources

But he will retain an equity stake in the project
By Katherine Clarke | February 01, 2017 06:39PM

Rendering of 125 Greenwich Street and Michael Shvo (Credit: Bizzi & Partners Development and Getty Images)

Michael Shvo has been sidelined from his flagship project, an 88-story condominium tower at 125 Greenwich Street, The Real Deal has learned.

Shvo TRData LogoTINY no longer has any control over the direction of the nearly $900 million project in Lower Manhattan, according to sources close to the deal. Once the unofficial face of the development, with his name emblazoned on marketing materials, he will now take a backseat to Bizzi & Partners.

The name of his company no longer appears on the project website alongside Bizzi’s. Douglas Elliman, whose parent company Vector Group also heads New Valley, will market the project.

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Shvo will, however, retain his equity stake, which sources said is less than 10 percent.

“At the end of the day he’ll get a check, and that’s it,” said one source familiar with the partnership dynamic, which includes managing partner Bizzi & Partners and Howard Lorber’s New Valley. Chinese firm Cindat has put up the majority of the equity at the 275-unit condo project.

The move to sideline Shvo from 125 Greenwich comes nearly five months after he was indicted on tax evasion charges related to his extensive art collection.

Shvo was indicted by Manhattan District Attorney Cyrus Vance Jr. for allegedly scheming to evade the payment of more than $1 million in taxes related to the purchase of fine art, furniture, jewelry and a Ferrari. The charges are criminal tax fraud in the second, third and fourth degrees, repeated failure to file taxes and offering a false instrument for filing in the first degree, among other charges.

Shvo declined to comment on Wednesday.

A spokesperson for Bizzi did not immediately return a request for comment.

Shvo once featured prominently on the project’s marketing materials, but now there’s no trace of his name on the project website.

Sources told TRD that the indictment had been a source of concern for lenders on the Rafael Vinoly-designed project. The developers are currently in late-stage negotiations to secure a construction loan from United Overseas Bank for the project, sources said.

The charges against Shvo carry a maximum prison sentence of up to 15 years.

Meanwhile, the New York State Attorney General’s Office has approved Bizzi’s offering plan for the project, which comprises 275 condo units across 360,000 square feet. The total projected sellout is $875.35 million.

Units at the project are slated to be small, ranging in size from about 400 square feet for studios to 2,500 square feet for three-bedroom units.

Shvo, who is also involved in the development of condo projects such as 565 Broome Street and the Getty at 239 Tenth Avenue, is due back in court on March 29.