Core Club sues owner of Transamerica Pyramid

A brewing dispute between Transamerica Pyramid owner Michael Shvo and a private social club set to open in the iconic San Francisco office tower has been brought before the New York State Supreme Court.

New York-based CORE Club, an exclusive members-only venture with dues up to $100,000, accused luxury developer Michael Shvo of “self-dealing” and fraud in connection with the San Francisco project and other planned CORE Club locations in a lawsuit filed Wednesday in New York State Supreme Court.

The lawsuit, which has not yet been reviewed by a court clerk and could still be dismissed, also names the Bayerische Versorgungskammer (BVK), Germany’s largest public pension fund, Universal Investment Gesellschaft mbH, Deutsche Finance Group and several companies affiliated with Shvo.

It is alleged that Shvo and his partners promised $100 million to finance the opening of three clubs in San Francisco, New York City and Milan in exchange for a 50 percent stake in the company. But instead of fulfilling that promise, CORE Club claims it tricked the club into signing leases with “exorbitant rents” and a $1 million loan agreement that resulted in Shvo receiving partial ownership of the CORE Club business for just $1.

The lawsuit further alleges that Shvo does not actually own the pyramid building at 600 Montgomery Street, which he and his partners purchased in 2020 for about $650 million, and that he is “merely a property manager.”

CORE Club is seeking a court ruling declaring its lease for the under-construction space in the Transamerica Pyramid at 600 Montgomery Street “null and void.”

In addition, the company is seeking $100 million in damages for lost profits, expenses and other consequential damages, $500 million in punitive damages and $15 million in special damages, as well as an injunction to prevent Shvo from acquiring a partial interest in the company.

CORE Club is also seeking changes to its New York lease with Shvo to restore its rental obligations “to a level consistent with prevailing market rents in New York City, as opposed to the unreasonable rent” contained in the current agreement.

Shvo was not immediately available for comment Wednesday, and representatives of the CORE Club did not respond to Chronicle requests for comment.

This is a developing story, please check back later for updates.

Reach Laura Waxmann: [email protected]