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Development
New York

Shvo no longer co-developer of Crown Building conversion: OKO

Partnership paid $475M for property's office portion in 2015

From left: The Crown Building, Vladislav Doronin and Michael Shvo
From left: The Crown Building, Vladislav Doronin and Michael Shvo

UPDATED: Sept. 20, 3:28 p.m.: Michael Shvo is no longer involved as a co-developer of the Crown Building condominium conversion, according to a spokesperson for OKO Group, the development firm headed by Russian billionaire Vladislav Doronin that is leading the project.

Sources told The Real Deal that going forward, Shvo will not be involved in marketing the project, which is slated to include luxury condos and one of Doronin’s Aman hotels. According to correspondence between OKO and Shvo reviewed by TRD, Shvo will also need written permission from OKO to visit the sales office at the project.

Sources said Shvo will continue to retain a stake in the development. A spokesperson for Shvo said “over the past two and a half years, the company has overseen the development of the Crown Building, including sourcing and securing the purchase of the property and its financing, tenant buyouts and predevelopment. OKO will be assuming the management of the project on behalf of Michael Shvo and Vlad Doronin as it enters the construction phase.”

According to an Aug. 11 termination letter — signed by OKO’s Francis Scola — OKO asked Shvo to hand over all books and records, plans, design drawings, tenant surrender agreements, contracts and unpaid bills related to the development. It also advised the developer that he and his employees will need approval “in writing” to enter the sales office, which shares the 18th floor of 745 Fifth Avenue with Shvo. A Shvo spokesperson said the sales office center is within his office; an OKO spokesperson said it is a separate space and lease.

“Except to the extent hereafter specifically requested, in writing,” the letter continued, “none of the Shvo Personnel, Agents and Affiliates shall take any actions, engage in any discussions with any persons or entities, or otherwise be involved with, the ongoing marketing and sales activities” of the project.

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The change was effective Sept. 13, according to the letter.

This is the second major project Shvo looks to have been sidelined from since being indicted on tax evasion charges last September. At 125 Greenwich Street, a supertall condo project in the Financial District, sources told TRD that Bizzi & Partners would call the shots on 275-unit project, where Chinese firm Cindat is the majority equity. There, too, Shvo was said to retain an equity stake.

Shvo is also a partner at the boutique Getty condo project along the High Line, which is being developed by Victor Group.

Shvo and Doronin bought the office portion of the Crown Building — 290,000 square feet on floors four through 24 — for $475 million in 2015.

The project is now slated to hold an 83-key hotel and 20 condo units, according to OKO. Plans filed last year indicate condos will start on the 15th floor. A five-story penthouse at the “crown of the crown” will span 15,000 square feet. Prices were not included in an offering plan submitted to the state’s Attorney General last year.

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DevelopmentMichael Shvo