Take a Swig! Real Estate Elves Are Shiverin’ This Season
Dana Rubinstein Dec. 16, 2009, 10:51 a.m.
If it’s tough to be Kent Swig—declining real estate fortune, foreclosure auctions, a run-in with a business partner and an ice bucket—it seems even tougher to be one of his employees.
“Everybody’s on edge,” said a source familiar with the operations of both Mr. Swig’s real estate investment firm Swig Equities and his commercial brokerage Helmsley Spears. “Nervous is probably the best word, because in this job market, you can’t get a job so easily.”
Mr. Swig, the dapper surfer dude whose attempted condo conversion at the Sheffield on 57th Street turned into an epic-length catastrophe (culminating in a 2009 auction awarding control to Fortress)—who has been so hounded by creditors ranging from Deutsche Bank and Leh- man Brothers to Square Mile Structured Debt that he’s threatened to declare personal bankruptcy (a dubious threat, given that he’s Harry Macklowe’s son-in-law, and heir to the Fairmont Hotel fortune)—has missed his staff’s Friday payroll more than a few times this year, according to our source. He’s made up the difference within a few days each time, but not before sparking paroxysms of anxiety among his staff.
“There were a number of times when expenses and revenues didn’t match up, but now their payroll is current,” said Y. David Scharf, Mr. Swig’s attorney.
That’s not the only evidence that finances at Swig Equities are in dire straits.
Mr. Swig occupies two floors at his office building at 770 Lexington Avenue: eight and nine, where Swig Equities and Helmsley Spears are housed, respectively, and where construction, ongoing for about a year, remains incomplete. Instead of a grand internal staircase connecting the two floors, there’s a gaping hole, allowing an employee on floor nine to peer through the floor and see into floor eight.
Even worse, Mr. Swig subleases the two floors from Diesel, the jeans company, which has served him with a three-day notice of pending eviction proceedings.
Yet more evidence? Mr. Swig’s inability to service a loan on 140 Williams Street has prompted lender Capital One to put it into special servicing. (Mr. Swig bought the building from the American Numismatic Society in 2007 for $24 million.) Capital One did not respond to multiple requests for comment.
Mr. Swig’s staffers are frantically looking for jobs elsewhere. For his part, Mr. Scharf hit an optimistic note: “I’m meeting with all his creditors and trying to come up with a global restructuring so he can live to fight another day, like many real estate developers have in the past and will in the future, and we’re very hopeful he’ll be one of those.”