Is Kent Swig Going Broke?
Tom Acitelli June 24, 2011, 12:02 p.m.
The landlord and developer, once flying so high with Lehman Brothers as his co-pilot, should weather his latest financial troubles just fine. He still owns a large stake in Terra Holdings, which controls two of the city’s swankier residential brokerages, Brown Harris Stevens and Halstead Property; and is a principal in Swig Equities (not to be confused with the Swig Company, which owns a lot of commercial property around the country, particularly in San Francisco).
Unless we’re missing something, Mr. Swig should handily avoid debtor’s prison.
But the perception remains that disaster stalks the amiable Mr. Swig (he fixed us coffee early one morning years ago even after we showed up for an interview on the wrong day). Why is this? To wit, from Buckethead in 2008 to 740 Park just yesterday, a timeline to explain the perception:
October 2008 Yair Levy, a business partner of Mr. Swig’s on the Sheffield condo conversion and on an aborted condo plan off Amsterdam Avenue, flies into a rage during a meeting and hits Mr. Swig with an ice bucket. Curbed dubs him Buckethead ever after.
Winter 2009 Ghostly Lehman Brothers moves to foreclose on 45 Broad Street, a failed residential and hotel project that Mr. Swig was undertaking with Robert De Niro, as well as on a condo conversion at 25 Broad Street, where one loan in default totals $231.7 million.
Aug. 6, 2009 Mr. Swig and his partners lose control of the Sheffield condo conversion to creditor Fortress. The Sheffield, in midtown next to the Hearst Tower, was the largest condo conversion in the city and, when Mr. Swig et al bought it for $418 million in 2005, the largest residential building purchase in U.S. history. The conversion, however, proved a mammoth undertaking–the tower contained at least 845 rentals and several tenants none too keen on leaving–and became one of the more colorful debacles of the otherwise peachy real estate boom.
“Kent Swig’s partnership still holds a substantial economic interest in the Sheffield and is fully supportive of the wonderful job that Fortress is doing with the building,” said a spokesperson for Swig Equities. “Under Swig Equities’ management of the property, 49 percent of the units, almost all of them below the 40th floor, were sold which enabled the partnership to payoff the $400 million first mortgage which accounted for 61 percent of the outstanding debt on the property. In addition, the loan on the property was never in financial default of its obligations to its lenders.”
Sept. 15, 2009 Mr. Swig files an affidavit with the Manhattan Supreme Court in which he claims, “I cannot, out of my personal proceeds, satisfy a money judgment of $32,432,288.87 without being subject to extreme financial hardship. I do not have access to $28 million in cash or liquid assets and, if the Judgment is enforced against me at this time, I will likely have to file for personal bankruptcy protection. This will entail severe financial consequences not only for me, but also for my family, my business, and my employees.”
October 2009 Deutsche Bank goes after him legally for $11.7 million.
Dec. 16, 2009 The Observer reports that Mr. Swig has missed his staff’s payroll “more than a few times” in 2009, though he has made up the difference.
Jan. 22, 2010 Mr. Swig shutters the venerable Helmsley-Spear brokerage, apparently fiddling with a PDA while someone else breaks the news to employees.
January 2011 The lender at 80 Broad Street, a struggling condo conversion, announces it will try to sell the $75 million senior loan, potentially costing the developer control. Mr. Swig defaulted on a $12 million mezzanine loan there in 2010.
May 2011 Lehman signs the first 10 tenants at the could-have-been-a-condo 25 Broad. “We are proud of the renovation of 25 Broad Street completed by Swig Equities in June 2008, and are pleased that tenants will be able to enjoy living in this magnificent historic property,” said a spokesperson for Swig Equities.
May 2011 Savanna Investment buys 80 Broad’s senior loan and moves to foreclose on it. “The ownership of 80 Broad Street remains the same as it has been since the acquisition in 2003, and Swig Equities continues to lease and manage the property. Separately, the mortgage has been sold to an affiliate of Savanna Partners,” said a spokesperson for Swig Equities.
June 23, 2011 The Post reports that Bank of America is trying to foreclose on the duplex penthouse at imperial 740 Park once shared by him and now-estranged wife Elizabeth Macklowe, daughter of Harry and brother of Billy. “The apartment at 740 Park Avenue is owned by Liz Swig and has been for over a decade,” said a spokesperson for Swig Equities.