The sale of two large Alexandria properties could settle millions owed to the government by real estate developer and former Connection Newspapers CEO Peter Labovitz, according to a report from the Washington Business Journal.
Similarly, if ALXNow hears anything from the DOJ or other governmental entities pursuing a case against Mr. Labovitz, and they happen to mention 1700 Diagonal, please inform them that he has no interests in that building and tell them to contact me at any of the contact methods in my below signature. I am more than happy to clear up any confusion.
Labovitz owes the U.S. more than $3 million in unpaid federal taxes, according to a complaint filed in federal court in January. Labovitz filed for Chapter 11 bankruptcy and told WBJ that the proceeds from the sales of his home at 510 Wolfe Street in Old Town and the Kings Row Development (1604-1610 King Street) could satisfy the U.S. Department of Justice in the Eastern District of Virginia.
DOJ contends in its filing that Labovitz has “orchestrated a series of fraudulent conveyances and nominee transactions to obstruct, hinder, and delay the collection of his tax liabilities” in an effort to prevent foreclosure on his properties.
In 2011, Labovitz pleaded guilty to failing to pay the IRS $940,000 in unpaid employment taxes for the period 2002 to 2008, when he was publisher of Connection Newspapers, a local chain of more than a dozen newspapers. He was sentenced to six months in prison.
The 14,000-square-foot home at 510 Wolfe Street is the largest in Old Town and was initially listed for sale by Corcoran McEnearney for $10.5 million, then reduced to $8.5 million.
In July, Labovitz’s bankruptcy lawyers filed a reorganization plan to use proceeds from the home’s sale to appease the Internal Revenue Service, according to WBJ.
Labovitz is also a principal of Dechantal Associates LLC, which owns Kings Row. Last week, broker Feldman Ruel was hired by the company to sell the property, which has an assessed value of $4.4 million, although Labovitz told WBJ that the sale is not related to his bankruptcy filing.
Dechantal Associates LLC got city approval earlier this year to convert five townhouse properties at 1604-1614 King Street into 10 residential row houses and an eight-story, 44-unit apartment building with two levels of underground parking. Additionally, an exterior courtyard is planned to separate the renovated row houses and the new building.
“(A)lthough we greatly regret any disruption caused to the Court and the other litigants, the Government hereby moves for a stay of the in this case until Department of Justice attorneys are permitted to resume their usual civil litigation functions,” according to an Oct. 7 motion from DOJ.
A previous version of this story incorrectly stated that Labovitz has ownership in a property on Diagonal Road. The owner of that property reached out to ALXnow to state that he does not, in fact, have any current interest in the property since it was purchased in 2019.
