One of the largest and most controversial developers in Santa Monica's history passed away this past week. According to a statement from the family of Neil Shekhter, the prominent landlord died on November 23.
Shekhter’s family stated that he filled their lives “with love, humor, curiosity and never-ending energy.” The cause of death was unknown as of Tuesday, and a representative from the Los Angeles County Medical Examiner told The Real Deal that there was no current record of his death.
Shekhter, aged 62, emigrated to the United States from the former Soviet Union and went on to start WS Communities and NMS Properties. He founded NMS in 1988 with a focus on multifamily assets. At his peak in Santa Monica, his portfolio was noted as worth more than $18 million an acre.
The developer and his companies faced a litany of legal setbacks in past years, and had fought with the city over accusations of illegal evictions, improper rental practices and construction standards.
Shekhter was the primary developer to capitalize on the city’s failure to adopt rules compliant with state standards, resulting in developers bypassing local zoning rules. He withdrew a vast majority of supersized projects in the city, settling in exchange for enhancements to a few specific buildings.
SPI Holdings took control of nine local properties in 2018, once part of a joint venture between Shekhter and NMS Capital Partners and a subsidiary hedge fund AEW. The two sides disagreed on terms involving a monetary investment by AEW that would allow Shekhter to repay that investment and buyout AEW. Shekhter attempted to repay AEW its $60 million investment plus interest and take sole ownership of the properties, an offer refused by AEW causing NMS to file a lawsuit over ownership of the properties.
In December 2016, a judge stated that Shekhter forged contracts, lied and destroyed evidence in the lawsuit over the buyout, and the judge gave AEW full control of the properties. AEW sold the properties to SPI Holdings for about $430 million.
This year, The Real Deal reported that Shekhter lost ownership of 1007 Lincoln Boulevard, 1038 10th Street and 1516 Stanford Street to Bank of Southern California as part of foreclosure proceedings. The transfer of property is a result of a lawsuit filed by Bank of Southern California over a $16.2 million loan covering the three parcels, which according to the bank, was never repaid.
Outside of Santa Monica, Shekhter had lost about half of his total holdings, totaling about 1,000 housing units. About one-fifth of the holdings were sold to other companies, while the majority were transferred to various investors to avoid foreclosure and wipe out about a billion dollars worth of debt.
thomas@smdp.com
