Manhattan Co-op Hotel Sued by Russian Billionaire

New York City's Mark Hotel is caught up in an upper-crust real estate version of the Cold War. Russian billionaire Shalva Chigirinsky, a self-made oil mogul, is suing the Upper East Side boutique hotel. He wants to terminate his contract for the purchase of a $15.75-million luxury penthouse apartment. Included in his demands is the recoup of a $4-million down payment, reports the New York Post.

The 83-year-old Manhattan hotel is considered to be one of the city's best. In 2008, the property revamped its real estate by converting 42 units into co-ops for purchase. Currently the Mark has eight condo apartments available for purchase. The hotel also 100 rooms and 50 suites. The top of the Mark is a piece of real estate fit for a billionaire: a 9,037-square-foot, five-bedroom, eight-bath, duplex penthouse, with a massive terrace. The listed price: $60 million.

Fortunately for Chigirinsky, he didn't agree to buy the $60 million pad.
He did, however, drop a hefty deposit ($15.75 million!) on a 3,183-square-foot, three-bedroom penthouse on the 15th floor of the Mark. His purchase, which closed in April 2008, was of the $5,000-a-square-foot variety. It would have been the highest price per square foot for residential real estate in Manhattan.

But all that record-making fun changed when the hotel failed to sell more than two of the 42 co-ops, including Chigirinsky's. At least four more buyers who went to contract on apartments selling for between $1.9 million and $18.75 million are suing in New York State and federal courts to get their deposits back, The Wall Street Journal reports. Billionaires and millionaires simply didn't buy into the concept.

With only two buyers, the hotel was left with no choice but to convert all but 10 co-ops back into hotel rooms. There are currently eight co-ops vacant and on the market.

In the lawsuit Chigirinsky filed last week in Manhattan Supreme Court, he described his penthouse as "uninhabitable, unsafe and in unfinished condition." Apparently he had been promised "the best building in New York." Reports show that his place instead was host to unmatching oak floor-planks in the master bedroom among other flaws.

He found plenty more lacking in his purchase. "No room service, no meaningful housekeeping, no concierge and no restaurant." (Now there is a Jean Georges restaurant on the property.) Still Chigirinsky finds the co-op "largely vacant." When the hotel tried short-term leasing to encourage movement in the remaining unsold suites, he again was ticked. That kind of desperation doesn't help the resale value.

Meanwhile the hotel's developer, Alexico doesn't seem terribly phased by the lawsuit. They see the disgruntled co-op owner as simply having "buyer's remorse."

Chigirinsky, it turns out, is cash-strapped. Last year he reportedly fled Russia following the seizure of his assets by his creditor. He lost his French Riviera villa and London mansion in the process. There are additional reports that he was involved in a tax-evasion probe and had sought political asylum in England.

Frisky fact: Former New York Gov. Eliot Spitzer reportedly coordinated racy rendezvous with escorts at the boutique hotel.
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