Are High-Net Worth Foreign Investors Being Targeted?

MIAMI—New York doesn't seem thrilled with Roman Abramovich's plan for an Upper East Side mega mansion. Abramovich, a Russian billionaire, is perhaps best known as the owner of the Chelseas football club and has big plans for some of his assets there but is meeting with resistance.

New York's Department of Building flat out denied Abramovich's permit application seek to turn three townhouses into one residence. The properties are located at 11-15 East 75^th Street.

The billionaire snapped up the trio of townhomes for a total of $78 million. It this denial foreign investor bias? And could that bias trickle down to Miami's foreign investment scene?

International real estate attorney Edward Mermelstein has some insights. For over 20 years, Mermelstein, has represented Russian oligarchs, in private equity, commercial, and residential real estate transactions.

“11-15 East 75th Street involves an application to replace the front façades of the three properties,” Mermelstein tells GlobeSt.com. “As the properties fall within a Historic District, protected by the Landmarks Preservation Commission, the likelihood that any buyer would get permission to tear down the buildings is slim to none.”

So is it a foreign investor bias? Not in this case, necessarily, but Mermelstein says there is a broader issue to consider.

“Foreigners are more of a target with respect to AML laws rather than issues connected to zoning or landmarks,” he says. “It certainly does not help that the buyer is such a high profile purchaser trying to do the impossible in a historic district that is fiercely protected by the old guard.”

MIAMI—New York doesn't seem thrilled with Roman Abramovich's plan for an Upper East Side mega mansion. Abramovich, a Russian billionaire, is perhaps best known as the owner of the Chelseas football club and has big plans for some of his assets there but is meeting with resistance.

New York's Department of Building flat out denied Abramovich's permit application seek to turn three townhouses into one residence. The properties are located at 11-15 East 75^th Street.

The billionaire snapped up the trio of townhomes for a total of $78 million. It this denial foreign investor bias? And could that bias trickle down to Miami's foreign investment scene?

International real estate attorney Edward Mermelstein has some insights. For over 20 years, Mermelstein, has represented Russian oligarchs, in private equity, commercial, and residential real estate transactions.

“11-15 East 75th Street involves an application to replace the front façades of the three properties,” Mermelstein tells GlobeSt.com. “As the properties fall within a Historic District, protected by the Landmarks Preservation Commission, the likelihood that any buyer would get permission to tear down the buildings is slim to none.”

So is it a foreign investor bias? Not in this case, necessarily, but Mermelstein says there is a broader issue to consider.

“Foreigners are more of a target with respect to AML laws rather than issues connected to zoning or landmarks,” he says. “It certainly does not help that the buyer is such a high profile purchaser trying to do the impossible in a historic district that is fiercely protected by the old guard.”