My Big Fat Greek Condo Circus: How a shipping magnate’s family feud brought a luxury project to the verge of disaster

Residents of 40 East 72nd Street are suing to save it from insolvency, as the Milonas clan neglect the property amid a wild family feud
By Kevin Sun | July 01, 2019 07:00AM

Spiros and Antonia Milonas, 40 East 72nd Street, and Ionian Management’s oil tanker, the Ocean Princess (Credit: Getty Images)

Spiros and Antonia Milonas, 40 East 72nd Street, and Ionian Management’s oil tanker, the Ocean Princess (Credit: Getty Images)

40 East 72nd Street

40 East 72nd Street

The owners of three $11 million condominium units on the Upper East Side are trying to write themselves out of a tabloid-style, modern-day Greek epic.

Specifically, the buyers claim that the condo sponsors — shipping magnate Spiros Milonas and wife Antonia, 50-50 partners in Axia Realty LLC — have failed to hand control of the property at 40 East 72nd Street to a new board of managers, failed to pay common charges and property taxes on the units they own, and failed to manage the affairs of the condominium in general, a recent lawsuit alleges.

“The Sponsor’s failure to uphold its obligations has rendered the Condominium nearly insolvent and without adequate funds to operate and maintain the Building,” court documents filed last month state. “Under the current Sponsor-controlled Board of Managers, the Condominium is unable to pay its bills or take necessary action to ensure the safety and habitability of the Condominium.”

The residents say they have already pre-paid two months’ worth of common charges to keep the condominium afloat, but will be unable to pay utility bills or building staff by “mid-to-late June,” resulting in “complete chaos.” And they don’t expect the Milonases to take action any time soon.

A feud between Antonia Milonas and Spiros’ daughters from his first marriage, Claire and Sofia, has been brewing for years, with both sides accusing the other of manipulating the 90-year-old Spiros through bullying and trickery. Potentially at stake are each side’s share in Milonas’ considerable inheritance, built on a $500 million shipping, oil & gas, and real estate empire – which has recently been hit by federal felony charges over shipping violations in the Caribbean.

“The Milonas family infighting has created an intractable logjam for the Condominium and the Milonas domestic disputes have caused operations at the Building to grind to a halt,” the Friday filing notes. “Plaintiffs now find themselves as collateral damage to a family dispute and seek the Court’s assistance to maintain the status quo at the Building so that they may maintain the benefit of the use and enjoyment of their Condominium units.”

Attorneys for the unit owners and Spiros and Antonia Milonas did not respond to requests for comment.

“The wife and the daughters are having a dispute, and he’s caught in the middle,” Red Apple Group CEO John Catsimatidis, a friend of Spiros Milonas for over 30 years, told The Real Deal. Catsimatidis, who appears in several lawsuits as Spiros Milonas’ “attorney-in-fact,” is currently helping manage his friend’s personal finances. “I just want what’s fair for him,” he said.

Townhouse in the sky

The building at 40 East 72nd Street has been owned by Spiros Milonas since the early 1980s, according to property records, and was originally a five-story, 16-unit rental building.

Around 2007, with the property vacant except for four rent-stabilized units, Milonas briefly put it on the market before deciding to convert it into an eight-story, six-unit luxury condo building. He transferred the property to Axia Realty LLC, in which Antonia Milonas was given a 50 percent stake.

The conversion, which stipulated that the building’s 1928 landmarked brick facade be preserved, ended up producing a rather unique new development for the neighborhood. A Bloomberg review in 2017 described it as an “alternative townhouse.”

“It’s probably the longest-running project I’ve ever worked on in the city,” architect Barry Rice told the outlet at the time. “It was like a puzzle, and it’s ended up fairly unique.”

The first sale at the $72 million project closed in May 2017, with an anonymous buyer nabbing the fourth-floor unit for just over $11 million. A few days later, Canadian businessman David Gilmour — founder of Fiji Water — and his wife Jill put down $11.21 million for the third floor.

Two weeks after that, an LLC managed by Greek nutrition entrepreneur Telemaque Lavidas took the fifth floor for $11.16 million, in a deal that was highlighted in Olshan Realty’s weekly luxury market report earlier that year.

The three unsold units in the building, including the triplex penthouse, remain under Axia’s control.

Milonas v. Milonas

Tensions within the Milonas family first made headlines just as closings at the condominium had begun, in the form of a curiously abortive lawsuit.

“Socialite wants to kick out rich hubby since he won’t die: suit,” a New York Post headline in June 2017 proclaimed. The lawsuit, ostensibly filed by Spiros Milonas against Antonia, revolved around the financing of the condo project, and a prenuptial agreement specifying what would happen to the property upon Spiros’ death.

In addition to $25 million worth of bank loans, the conversion of 40 East 72nd Street was further financed by loans from subsidiaries of Milonas’ own shipping conglomerate, Ionian Management, according to the suit.

Unlike the bank loans, these were not secured by the real property itself — and therefore not shown in property records — but by promissory notes that had to be signed by Antonia as co-manager of Axia. After signing two notes, Antonia allegedly refused to sign any more, and bullied Spiros into modifying their prenup so that she could inherit the condominium free of debt.

“Given their 27-year age difference, Antonia is disgracefully just waiting for Spiros to die,” the lawsuit claimed, saying that Antonia was “obsessed with ensuring that Spiros’s two daughters, as well as his three grandchildren, inherit as little as possible from their elderly father.”

(This wasn’t the first time the Milonas family had produced sensational tabloid fodder, by the way: one of those three grandchildren was the “secret love child” of Obama budget director Peter Orszag and Claire Milonas. As the New York Post reported in 2010, the child was born just weeks before Orszag announced his engagement to another woman on national television.)

Just two weeks later, the lawsuit was dropped, and Spiros told the Post that he believed his daughters convinced his attorney to file the suit behind his back. But the legal wrangling was far from over.

Spiros v. Spiros?

A month after the first lawsuit was dropped, Ionian subsidiary Phoenix Capital Finance Ltd. sued Axia over one of the promissory notes that Antonia Milonas did sign, seeking to recover over $2.7 million in unpaid debt. Because of Spiros’ stake in both the lending and borrowing entities, the lawsuit quickly took a bizarre turn.

According to court filings, Spiros — who was in some sense suing himself here — informed his attorney that he did not want Axia to contest the lawsuit. Meanwhile, Antonia sought to have her personal lawyer — who was representing her in a number of other legal disputes — represent Axia in this suit as well.

The deadlock was eventually broken by a third party under the LLC’s operating agreement, and Phoenix and Axia entered into a settlement agreement last August. Antonia and her lawyer are now petitioning to intervene in the suit.

“My husband has said to me, over and over, that he had nothing to do with the filing of the present action against Axia and that he would never do anything against Axia, which is marital property I am supposed to inherit when he dies,” Antonia states in an affidavit, adding that her husband “suffers from short-term memory loss, which has become increasingly severe.”

“He has also said to me that his daughters, who control his business, constantly put documents in front of him to sign, and that he does not know what he is signing.”

Spiros — or at least, documents signed by Spiros — deny this. “Antonia’s contention that I am being ‘manipulated’ by my daughters is utterly false,” a response affidavit states. “I love and respect my daughters, but they do not control me. I alone made the decision to have Axia enter Settlement Agreement.”

Tanker trouble

Amid these disputes, Minolas’ shipping business appears to have received funds from the 40 East 72nd Street condominium on several occasions.

After paying off a Deutsche Bank mortgage using proceeds from the three unit sales, the remaining $4.1 million was given to Ionian Management for the purchase of new ships, Antonia Milonas states in the Phoenix lawsuit. Later, the condo owners allege that Ionian misappropriated a $188,000 insurance check after “serious water leaks” caused damage to several units.

On top of the Minolas family’s domestic disputes, Ionian Management has recently attracted unwanted attention from the federal government as well.

According to charges brought by the U.S. Attorney for the Virgin Islands in April, the crew of one of Ionian’s oil tankers — the Ocean Princess — repeatedly transferred oil from its cargo for its own use over the course of several years, falsified records to claim that the oil had come from a shore-side facility, and then lied to the Coast Guard about it. To make things worse, the oil in question had excessively high sulfur content, violating environmental regulations as well.

Ionian and its related entities have already pleaded guilty on all counts, and are set to be under probation for about four years. Sentencing is set for this August.

Ship registry data shows that Milonas’ Liberia-registered, Athens-headquartered corporation, Ionian Shipping & Trading, manages four oil and chemical tankers in the Caribbean – Ocean Princess, Ocean Moon, Ocean Sun and Ocean Astro.

A representative for Ionian Management declined to comment.

Complete chaos

In November, Spiros resigned from the board of Navigator Holdings Ltd., a major operator of gas transportation vessels headquartered in London. That same month, Antonia and Spiros moved into the triplex penthouse at Axia’s condominium, according to court filings. But the common charges and property taxes remain unpaid.

“Payment of charges and assessments relating to units owned by Axia Realty, LLC is the personal obligation of Spiros N. Milonas, which he has acknowledged, has paid in the past and has attempted to pay currently, but which his daughters have deliberately prevented him from paying,” Antonia’s lawyer said in an email this April to representatives of the other unit owners, who now foresee dire consequences for the building in the near future.

“Without electricity to the common areas, the Building’s fire alarm panels will be non-functioning, the intercom system will be offline, video surveillance will cease operating, and the Building’s elevator will be inoperable,” a recent filing predicts.

“Without a staff, the Building’s common areas will not be attended to and Building-wide trash removal will cease. Without a doorman or operating intercom system, anyone will be able to enter the Building at any day or time, raising serious safety and security concerns.”

Axia and Ionian have yet to respond to the unit owners’ lawsuit. Their time to respond has been extended to early July.