City’s top tax dodgers owe $40 million in unpaid taxes

The city’s biggest tax dodgers are two dysfunctional Manhattan real-estate outfits run by the same Japanese parent company that between them owe nearly $ 40 million in unpaid city and state taxes, records show.

But it’ll be tough collecting — parent company Hiro Real Estate has all but pulled out of the Big Apple and has few US assets left.

The two companies — 655 5th Ave. Manhattan Corp. and Hiro Enterprise USA — were part of a Japanese real-estate investment empire that until recently owned some of the city’s trophy retail and office buildings.

Hiro’s investment portfolio included the iconic Mobil Building at 150 42nd St., which Hiro sold for $ 900 million in April, and 650 Madison Ave., home of the Crate & Barrel store, which sold for $ 680 million in 2008.

The firm also owned the American Surety Building at 100 Broadway in the Financial District and 655 Fifth Ave., home of Italian luxury brand Salvatore Ferragamo.

“They were dominant at one time,” said Faith Hope Consolo, chairman of the retail group at Douglas Elliman and broker of Hiro’s high-profile retail tenants.

But now 655 5th Ave. Manhattan Corp. owes $ 12 million in city taxes and $ 10.8 million in state corporate taxes, records show.

Hiro Enterprise USA owes $ 8.9 million to the city, and $ 8 million in state taxes from 2011 to 2014. The day after the Mobil Building was reported sold, the IRS issued a federal tax lien on Hiro Enterprise USA for $ 24 million.

“That [tax debt] may sound like a big number, but . . . it was billions of dollars of property,” said Consolo.

The recession and leadership squabbles destroyed the company. Madison Capital controlled the debt of 100 Broadway and 655 Fifth Ave. and took ownership of both buildings in 2010. By the time the Mobil Building was sold this year, Goldman Sachs owned a decent chunk of it due to a $ 519 million refinancing in 2008.

Hiro’s Japanese parent company, Taraka Gumi, closed on July 31, 2013, according to its Web site. Its owners, Tokyo brothers Mitsuhiro and Hirokuni Honzawa, spent many years suing each other in a bitter struggle for control, with Mitsuhiro paying millions to Hirokuni for kicking him out.

Hirokuni’s two sons, Masahiro and Yukihiro, ran the New York arm for over a decade, until Yukihiro died in 2008 and Masahiro left the business.

Masahiro has not replied to several messages. He now owns the Nashville Sounds baseball team in Tennessee with Frank Ward, a former executive at Hiro.

Ward told The Post that Hiro’s finances were “fine, to my knowledge” when he left the company in 2008. Ward said that owner Hirokuni died a few years ago and he was unsure who was responsible for Hiro now.

And what about money New Yorkers are owed?

“We continue to pursue all means available to us to collect the tax debt owed to New York state,” said a spokesman for the state tax department.

Yahoo Local News – New York Post

http://ift.tt/1ricXFJ

via Great Local News: New York http://ift.tt/1iZiLP1