Carlton Group sues Bizzi, Shvo over commission at 125 Greenwich
Howard Michaels-led firm claims it’s owed $3.7M plus interest
With the ink barely dry on financing for Bizzi & Partners and Michael Shvo’s planned tower at 125 Greenwich Street, the Carlton Group has filed a lawsuit against the developers and is seeking nearly $4 million worth of unpaid commission.
The Howard Michaels-led firm is alleging that Bizzi and Shvo breached an exclusive agreement made with the company in 2014 to raise acquisition and pre-development financing for the 91-story condominium skyscraper in the Financial District, according to a lawsuit filed Tuesday in New York State Supreme Court.
According to the complaint, Carlton secured $221 million worth of initial financing for the project in August 2014. In January, the developer closed on $174 million worth of financing via EB-5, the controversial program that offers foreign investors a U.S. green card in exchange for kicking in $500,000.
Carlton alleges the developers paid a portion of the commission, but did not come through with $3.66 million — $3.48 million for raising $174 million in EB-5 money, and $180,000 related to a $9 million equity investment from Howard Lorber’s New Valley.
According to the complaint, in order to persuade New Valley to commit funds, Michaels personally invested in 125 Greenwich “to help seal the deal.”
Terms of the 2014 agreement between Bizzi, Shvo and Carlton specify commission fees of 0.8 percent for raising the project’s first mortgage plus 2 percent for lining up mezzanine financing, according to court documents.
The initial $221 million financing included a mortgage loan from Singapore’s United Overseas Bank ($135 million), mezzanine financing from Taro Pharmaceutical Industries ($35 million), equity from limited partner Cindat ($42 million) and the $9 million in equity from New Valley.
In the suit, Carlton also claims it has a separate commission agreement with Bizzi & Partners, which is headed by Davide Bizzi, for arranging a $91.2 million construction loan at 8701 Collins Avenue in Miami. Carlton alleges that Bizzi owes the firm $729,440 related to financing that project, the complaint says.
Neither Bizzi nor Shvo immediately responded to requests for comment.
The developers, however, are reportedly in advanced talks with United Overseas Bank to provide a $500 million construction loan for 125 Greenwich. Bizzi and Shvo paid $185 million for the site from a partnership between Witkoff and Fisher Brothers.
The projected total cost of the project, slated to be completed in 2017, is not clear.
The tower will have 275 residential units and a sales office at One World Trade Center is expected to open this fall. Prices for the condos have not yet been released, but units will range from a 403-square-foot studio to a 3,625-square-foot three-bedroom.