“I would be a fool to sit here and tell you we didn’t have challenges,” the well-tanned real estate marketing guru Michael Shvo said Sunday, April 19, from Dubai. It was a few days after he had last seen the nearly completed, long-delayed mega-condo 20 Pine: The Collection. “Unfortunately, the problems we faced here were not problems under Shvo’s control.”
Once, long ago, 20 Pine was supposed to be one of the great condos in one of New York’s great neighborhoods. Power, possibility, comfort, captivation, imagination, sophistication and sublimity were name-dropped in just the first two paragraphs of the foreword to the condo’s faux-magazine marketing brochure, illustrated with shots of crocheted Ferrari driving gloves and onyx Bulgari cuff links.
Then, according to pitiless Internet reports and livid lawsuits, 20 Pine was supposed to be one of the great New York condo catastrophes. “All I am telling you is that you’re about to lose a million dollars,” one of the buyers who tried to walk away from his deal was told, according to a phone transcript, “and we’re gonna have a million dollars that you now don’t have anymore.”
But as the building gets closer to its June completion, 20 Pine is shaping up to be something else entirely: Just a building. And it’s actually kind of nice.
AS MR. SHVO tells it, he was talking with Shaya Boymelgreen in Brooklyn in December 2004 when the developer asked what he thought about 20 Pine, the old Chase Manhattan Bank offices. “Shaya,” Mr. Shvo told him, “I don’t want to throw you a quick answer. Once I get out of Brooklyn, I’ll have my driver bring me to the building.”
Mr. Shvo called back 20 minutes later: “Buy the building.” Mr. Boymelgreen and the Israeli diamond billionaire Lev Leviev, who had been introduced to one another by a top-ranking Chabad-Lubavitch rabbi during a kosher cruise, paid $142 million.
Thirteen months later, when Mr. Shvo began selling 20 Pine: The Collection, he had an 8,000-square-foot on-site sales office with a 45-foot replica of Giorgio Armani’s Milan runway. The illuminated glass catwalk, like the building’s subtitle, reminded the world that Armani/Casa had done 20 Pine’s interior design.
“I said, ‘I want a fashion brand to design this building.’ Of course, everyone thought I was crazy, but I’d heard that before,” Mr. Shvo said this week. “I—and this is on the record—fully take credit for real estate and fashion: We were the first ones to do it and it’s a worldwide trend. I’m standing right now in Dubai. … I’m literally standing and looking at the Armani Hotel.”
To be fair, the marketing doyenne Louise Sunshine is widely credited as the first real estate marketer to exploit fashion. But Ms. Sunshine had never hired John Legend, who played 20 Pine’s opening party in March 2006 after winning his first Grammy. “Made us look like true superstars,” Mr. Shvo said. Nor had she ever proposed keeping a condo sales office open 24 hours to suit late-night visits. “Nobody said anything; they didn’t know if I was kidding or if I was serious. And, sure enough, I was serious,” Mr. Shvo recalled. “If I needed to create what would be the landmark residential building in the Financial District, I needed to create something 100 percent sexy.” He is the type of man who speaks about percentiles of sexiness without giggling.
The conversion was the first massive, self-serious project in a neighborhood with gobs of rich young things to lure, even if Mr. Boymelgreen’s kooky Philippe Starck–designed condo on Broad Street had come before, or if Wall Street’s Cipriani Club Residences began sales around the same time. “We know where they shop, where they eat, what cars they drive,” Mr. Shvo said about 20 Pine’s potential buyers this week. “We know everything from the Social Security number to the color of their underwear.”
Except for a Wall Street Journal columnist who sniggered about getting a membership card after visiting the condo for a sales pitch—“as if by merely showing up I had joined an exclusive club”—the press coverage dripped with giddiness. By September 2006, the condo’s 409 units were reportedly almost 70 percent sold. The next year, Page Six wrote that Jennifer Aniston was buying a 20 Pine unit, and had been bribing construction workers to take her up in the elevator.
“Buy into the financial district while (if?) you still can,” Time Out New York said in April 2007.
THAT WAS THE April Mr. Boymelgreen gave a snippy quote to the The Miami Herald about his partner, Mr. Leviev. Their falling-out had begun, and a divorce was confirmed in the Jewish Daily Forward that July: “Whatever we have obligations to finish together, we are finishing together,” one of the billionaire’s associates said. “Wherever we have no obligations to finish together, we will not finish together.”
Money became a problem. A month later, the real estate blog Curbed wrote that 20 Pine’s construction had been halted. At the end of the year, the Daily News reported that Ms. Aniston was buying elsewhere.
Then things got really nasty. Last May, a State Supreme Court judgment reportedly ordered 20 Pine to refund a buyer’s $229,500 deposit (plus interest) after officials didn’t appear at a closing. Three months later, news broke that Mr. Boymelgreen was named in a lawsuit from a Brooklyn-based buyer who wanted to get out of a contract to buy 10 apartments. “You’re playing games with me,” Boymelgreen associate Ari Schwabbel, the president of the 20 Pine condo board, told the buyer last June, according to a phone transcript filed in court records. The two were arguing about handwriting on a contract.
“You know what handwritten means to me?” Mr. Schwabbel said.
“What?” said the buyer.
“Who are you? You are the authority of Pine Street?”
“Yes,” said Mr. Schwabbel. Then later: “Because you know that you’re bullshitting me.”
“Me? Bullshitting you?” said the buyer. “Are you joking?”
“All the best,” Mr. Schwabbel said before the call ended with a dial tone. “All I am telling you is that you’re about to lose a million dollars.”
Mr. Shvo was named in that lawsuit as well. “You’re talking about a country where if they sue somebody, they sue everybody,” he said Sunday. “They sue their broker, they sue their grandmother.”
Yoram Nachimovsky, an attorney who has worked with that buyer, said this week that he has two other clients at 20 Pine who are considering lawsuits. “My feeling is that the building is not up to snuff,” he explained. “I don’t believe that the building is Armani, O.K.? In other words, it’s sort of like if you take a Louis Vuitton in from Chinatown and say it’s a Louis Vuitton—it’s not.”
“It’s coming out very, very close to what was in renderings,” Mr. Shvo said. “I mean, look, if you put things in perspective, the only issue in the building is that there were construction delays. … Of course it pissed me off, but besides me taking a hammer and starting to build—which, unfortunately, even that wouldn’t do at that point—I have to count on someone else to deliver the product.”
But there have been other issues besides construction delays. This January, word spread that a group called Venture Capital Properties was sending letters to potential investors advertising a 51.5 percent discount if the remaining 80 units were bought in bulk. “The price of this property is the exact amount the developer owes the banks, and he will not sell it for less than the remaining debt,” their letter claimed.
“I can say right now, we’re the only ones who represent properties in the building,” Mr. Shvo said this week, his voice low. “We’ve sent several cease-and-desist letters.”
In February, when news broke that another buyer was suing to get back a deposit on her $925,000 condo, the building announced it would halt work on its unfinished amenities space. Money had apparently run out. That month, a cover story in Barron’s (“Manhattan’s luxury real-estate market is rotting”!) opened with an image of Michael Shvo on a rain-drenched afternoon. “20 Pine is starting to look,” the magazine said, “like just another victim of New York’s luxury-housing bust.”
“HERE’S THE THING,” said Deborah DeMaria, a Manhattan real estate broker who spent $3.755 million on units in the building. “I have never lived in a new building that’s been on time. This is my third new construction. Not one was on time.”
Ms. DeMaria, who is on 20 Pine’s condo board, doesn’t have much sympathy for the building’s homeowner association, which has complained about delays, poor communication and, for example, loud air conditioning or bad flooring in their units. In February, the group put an attorney named Adam Leitman Bailey, whose Web site has separate sections for his print and TV appearances, on retainer.
Owners in 73 units have joined the association, according to one tally. Mr. Bailey, whose office happens to overlook 20 Pine, would not comment, although he once told the Post that he’s negotiated price cuts for clients at 20 Pine that were as big as 40 percent.
“He’s an ambulance chaser. He’s trying to get business, and I don’t begrudge him that,” Ms. DeMaria said. “They have a lot of people stirred up, I guess, thinking they can get out of their contracts or get their money back. But I don’t want to do that. I want to live.”
Michael Lukasek, a vice president at Goldman Sachs who works in hedge funds, and who bought a place in the disastrous Financial District condo 25 Broad before buying at 20 Pine, isn’t a member of the homeowners association. “To me, these are people who are going to bitch and moan,” he said.
But changes have come. Mr. Leviev’s Africa Israel USA and a lender, Richard Mack’s Apollo Real Estate Advisors, both put more money into the project earlier this year, which Mr. Boymelgreen couldn’t or wouldn’t do. “Thank God they did,” Mr. Schwabbel, the Boymelgreen executive from those phone transcripts, conceded this week. “They sort of came across as everyone’s savior.”
In February, The Real Deal reported that Africa Israel USA had taken over control of 20 Pine’s management and sales. Construction on the building’s long-delayed, massive amenities space has begun again, and is scheduled to be finished by June. A tour this Sunday of 20 Pine’s 60-foot-long pool, his-and-hers sauna, juice bar and massage rooms show that they’re well on their way. The 25th-floor terrace already looks suave, with its sparkling reflecting pool and perfect view of AIG’s American International Building a few doors down on Pine Street.
But it was in the gargantuan library off the gleaming lobby that the homeowners association met last month with Africa Israel’s new CEO, Richard Marin, formerly Bear Stearns’ asset management chief. It was a chance to air complaints, and Mr. Marin listened. According to one account, an owner who had invested her savings in a 20 Pine unit and had lost her job cried.
Africa Israel agreed to cede a seat on the condo board to a representative from the homeowners association. “I recently won a special election, and will be formally joining the 20 Pine Board this month,” Robert Karicod told The Observer this week. But buyers won’t be taking over the building quite yet: The sponsor still has a majority on the board.
“I’VE HAD A great experience,” Anthony Berlet, a handsome, sturdy New Jersey plastic surgeon, said this Sunday in his $2.7 million apartment. He’s in the homeowners association, but he’s happy with 20 Pine, especially now that the amenities spaces are almost done. “I can tell you that my home in New Jersey is your traditional Georgian McMansion–type place, and when I went here, it was sleek and different; it fit the idea of having a different personality in the city.”
Dr. Berlet, who specializes in “noses and breasts,” put a massive Roberto Dutesco photograph of horses up in his living room, where the walls are lined in grass cloth. “Grass cloth has an Asian theme,” he said. “Armani has an Asian feel—an Asian-modern-eclectic type thing.”
Mr. Shvo would weep with pride. “The fact that the market changed, we are all aware,” the marketer said. “But that does not say that people are still not interested in lifestyle. Maybe they’re willing to pay less money for it, maybe they’re looking more for value than they were, maybe they’re not as quick to open their wallets, but in every economy, they want lifestyle.”
He shivered when asked if 20 Pine typified a kind of aspiration marketing that no longer exists, not to mention a neighborhood that’s now universally loathed. “We’re the only company out there,” Mr. Shvo said, “that still believes that luxury is still out there.”
And yet 20 Pine has those 80 units left, and only one of its nine penthouses has sold. A second, according to Shvo’s regional sales director, Marc Palermo, is in contract. One source said a bulk deal could still happen, though the price would have to be much higher than those Venture Capital numbers. Africa Israel contemplated holding a one-day sale next month with discounts somewhere between 10 and 50 percent, though that sale will likely be put off.
“There’s not going to be a one-day sale,” Mr. Shvo said. “I’m in Dubai; there are places here that I can tell you people will never go. But this is still Manhattan. Wall Street! Until they shut down the stock market people will still want to live there.” He tends to be brash in interviews, but sometimes his voice gets tender. “I truly believed in the Financial District,” he said. “And, in my mind, this is still one of the largest concentrations of wealth in the world.”
“Now that’s a view, man. That’s a nice thing to look at,” Dr. Berlet said on Sunday, looking out his window in black clogs, black Diesel jeans and a black, long-sleeve shirt. “You own it. You sit right down and you own it.”