What do two lavish new condo towers coming to the Upper West Side and Midtown have in common? Connections to dubious Kazakh cash.
Set to rise 755 feet, 50 W. 66th St. on the Upper West Side will eventually boast 127 glittering residences — including a grand 3,889-square-foot, five-bedroom spread for $11 million, according to the offering plan filed by Extell Development.
Designed by the futuristic Norwegian architecture firm Snøhetta, the building will boast a pool, squash courts and a stunning multi-level outdoor terrace garden.
Down in the Diamond District, at 570 Fifth Ave., Extell has also filed permits to build a 1,100-foot supertall with 468 luxury condo units to join his International Gem Tower and another planned 534-key hotel along West 48th St.
That project is still in its early stages, but expect penthouses reminiscent of Extell’s other supertall feats: One57 (where a penthouse sold for more than $100 million) and Central Park Tower (where a unit is on the market for $65 million).
Applaud or loathe them (as community NIMBYs do), these buildings are the poster children for how dirty money from far-off nations is reshaping NYC neighborhoods.
Both 50 W. 66th St. and 570 Fifth Ave. were financially backed by the mysterious private equity firm Meridian Capital.
Founded in 2002 by Kazakhstan’s former oil and gas minister Sauat Mynbayev, Kazakh billionaire Askar Alshinbayev and top execs of Kazkommertsbank, Kazakhstan’s largest private bank, Meridian held a $127 million equity position in 50 W. 66th St. and a $263.7 million stake in 570 Fifth Ave. (Extell boss Gary Barnett has since bought out that position).
Incorporated in Bermuda, Meridian is an international investment firm headquartered in Hong Kong with interests in everything from oil and mining fields to dairy farms, regional Russian airlines and high-end New York City real estate, according to confidential documents leaked from a Bermuda law firm and shared as part of the “Paradise Papers.”
Mynbayev used his “power, contacts and official position to help Meridian grow,” according to a report from the Organized Crime and Corruption Reporting Project. “[Kazkommertsbank] provided the easy credit that made Meridian an empire … the group used a large portion of the bank’s deposits to fund project after project.”
But that doesn’t bother NYC’s top developers.
“We’ve known [Meridian Capital] for 15 to 20 years,” a person close to Extell (who agreed to speak on the condition of anonymity) told The Post. “They’re just good businessmen who made good investments. What’s wrong with that?”
The source pointed to other Meridian deals — like a Russian dairy farm it sold to Danone, the French company, and a Saint Petersburg shopping mall it sold to Morgan Stanley for $1.1 billion.
“Meridian couldn’t do deals like that if it was dirty,” they said. “Real estate is one of the cleanest industries in the world. If you want to launder money, get diamonds or art that you can transport. You can’t carry a building on your back.”
Meridian did not respond to a request for comment.
Today, Kazakhstan is on fire thanks to the anti-corruption protests that started last week over gas prices.
Some 2,500 Russian troops have now largely quashed the protesters on behalf of president Kassym-Jomart Tokayev, with 12,000 people detained, the Post reported.
Real estate in New York been “a favorite placement vehicle for kleptocrats, corrupt officials and criminals,” said Louise Shelley, director of the Terrorism, Transnational Crime and Corruption Center at George Mason University. “Until very recently, the US government had almost no legal actions it could take against money laundering in real estate.”
But the Kazakh kleptocrats being protested back home aren’t just developing Manhattan, they’re buying it up too.
Bolat Nazarbayev, the brother of the former president of Kazakhstan, Nusurltan Nazarbayev, bought a unit on the 18th floor of the Plaza Hotel in 2008 for $20.1 million. After a divorce, Bolat sold it at a loss for $14 million in 2018, according to property records.
With his former stepson Daniyar Nazarbayev, he also spent more than $7 million on at least four properties at Cipriani Wall Street at 55 Wall St. (Daniyar was also busted cheating his way into Columbia University, the Post reported).
“They came in 29 SUVs with guns behind them during UN week,” according to broker Dolly Lenz, who marketed 55 Wall St. at the time and recalls raucous, celeb-filled parties at the building. “I had never heard of Kazakhstan. I was like, who are these people?”
When it comes to 50 W. 66th St. and 570 Fifth Ave. — and the many other towers already developed using shady cash — it’s time for both buyers and developers to start asking tough questions, Jack Blum, a legendary money laundering and tax evasion expert and former US Senate staff attorney, said.
“Why is Kazakh money moving to New York to build a beautiful tower to benefit very wealthy buyers instead of being invested in Kazakhstan?” he asked. “Can Meridian Capital demonstrate that its source of funds is legitimate? There’s a strong possibility that it isn’t.”