Luxury developer Michael Shvo, who helped create the top-selling, Aman-hotel-branded condo at 730 Fifth Ave., on Billionaires Row, is facing some disgruntled customers at a similar building down the street.
John and Diane Goodman have sued Shvo for alleged construction defects in their one-bedroom unit at Mandarin Oriental Residences, New York, a new, 69-unit development at 685 Fifth Ave. Home for years to Gucci’s New York flagship store, 685 Fifth, at East 54th Street, has converted upper floors once used for offices into high-end apartments, sales of which are expected to pull in $343 million, according to the project’s offering plan.
The Goodmans, who are among the first buyers to move into the building after closing on their $6.1 million unit in December, claim that millwork in their home is warped, stone counters are missing, and bedroom closets are much bigger than advertised, blocking ceiling lights, according to court filings.
Filed Monday in Manhattan Supreme Court, the suit also names the shell company that officially developed the building, an entity that includes the Turkish firm Bilgili Group. But Shvo is also called out specifically, and in somewhat harsh terms for a suit of this type, for apparently reneging on promises made in text messages that some problems would be fixed.
“Defendant Shvo’s interactions with plaintiff were characterized by unprofessionalism to an alarming degree, including the use of foul language, refusal to acknowledge errors and outright toxic conduct,” says the suit, which is seeking around $1 million in damages, costs and fees, including for money the Goodmans allegedly lost in the stock market because they spent it on a new home instead.
For his part, Shvo told Crain’s the Goodmans are acting in bad faith and escalating what should be a routine matter.
“We went above and beyond our obligations to accommodate a buyer who raised minor issues,” a Shvo spokesman said in a statement. “After agreeing to make the requested changes— which they admit were not required and not addressed at closing—we never heard back from the buyer. We remain committed to taking any reasonable steps to ensure they are satisfied.”
The Goodmans bought their unit, No. 18A, which has a combined living and dining room, two terraces and about 1,000 interior square feet, off plans in November 2022 before it was completed.
It’s one of a dozen apartments that have sold and closed at the 69-unit, 29-story building, or slightly more than 15% of the total in three years, according to the city register. Amid high interest rates, home sales have struggled in the city in recent months, depressing activity and prices. The median sale price for co-ops and condos in Manhattan in 2023 was $1.15 million, according to Douglas Elliman, versus $1.19 million in 2022.
Prices at 685 Fifth, a prewar site with new floors added on the roof level, start at $2.5 million or around $5,000 per square foot, around the price Shvo achieved at Aman New York Residences, a conversion of the Crown Building at West 57th Street.
Shvo and Bilgili, which is headed by Serdar Bilgili, bought the upstairs portion of 685 Fifth in 2018 for $135 million. The following year CIM Group provided a $120 million construction loan for the property, which despite its name does not have an onsite hotel, though there is a Mandarin Oriental hotel at Columbus Circle.
Amenities at No. 685 include a private restaurant from star chef Daniel Boulud and an outdoor pool, plus 24-hour, hotel-style concierge service, according to marketing materials. The building’s ground-level retail space, which is owned by Brookfield, meanwhile, includes an outpost of Coach and other stores.
Adam Glassman, the Goodmans’ lawyer, did not return a call for comment.
C. J. Hughes , 2024-03-05 18:50:46
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