Infuriated residents of supertall, superexpensive New York tower sue developers for $125m

The condo board at 432 Park Avenue, the supertall Manhattan tower that is one of the most expensive addresses in the world, is suing the developers for $125 million in damages, citing multiple floods, faulty elevators, “intolerable” noise caused by building sway, and an electrical explosion in June – the second in three years – that knocked out power to residents, according to a lawsuit filed on Thursday.

The 425m skyscraper, designed by the firm of the star architect Rafael Viñoly, first came under scrutiny in February, when the New York Times revealed many of the claims made in the new suit.

"This case presents one of the worst examples of sponsor malfeasance in the development of a luxury condominium in the history of New York City, " the complaint filed with New York supreme court claims, referring to the building's developers, CIM Group and Macklowe Properties. The damages include the estimated cost to repair about 1,500 construction and design defects in common elements of the building that were identified by an engineering firm hired by the condo board; it does not include potential punitive damages, or separate lawsuits that individual residents might file.

Buyers have included a Saudi retail magnate, who purchased an $88m apartment on the 96th floor, a member of the family that owns Jose Cuervo tequila, and the one-time pairing of Jennifer Lopez and Alex Rodriguez

The damages could rise, according to Jonathan Adelsberg, a partner at the law firm Herrick Feinstein, which is representing the condo board, which residents took over from the sponsor in 2020. "It's almost like peeling an onion," he says, referring to defects that may yet be uncovered. "This is a work in progress in ascertaining what's wrong."

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“Each and every commitment and term contained in the 432 Park Offering Plan and Declaration has been honoured,” a spokesman for the sponsor, which includes CIM Group, says in a statement, adding that some of the remaining “maintenance and close-out items” have been obstructed by the condo board.

Macklowe Properties, the other developer, did not return New York Times requests for comment.

Built in 2015 with a projected sellout value of $3.1 billion, the pencil-like tower marked a pinnacle in luxury condominium development in the city – much of it geared toward part-time residents and investors who hid their identities behind shell companies. Buyers have included the Saudi retail magnate Fawaz Alhokair, who purchased an $88 million apartment on the 96th floor; a member of the Beckmann family that owns the Jose Cuervo Tequila brand; and the one-time pairing of Jennifer Lopez and Alex Rodriguez, who bought a 370sq m (4,000sq ft) apartment for $15.3 million in 2018, and sold it about a year later.

“Far from the ultraluxury spaces that they were promised, however, Unit Owners were sold a building plagued by breakdowns and failures that have endangered and inconvenienced residents,” the complaint says. It cites defects in a number of interrelated systems in the building, many of which present “life safety” issues. Residents have been trapped “on several occasions” for hours in stalled elevators, at least in part because of the building sway that occurs in towers of such immense height, the suit says.

There have been a number of floods and leaks, both on high floors and in the subbasement, which the board attributes to poor plumbing installation. About 35 units and common areas were damaged by water, causing millions in damages, and one flood disabled two residential elevators for weeks.

Noise complaints related to the quality of construction were frequent. The suit claims that even Richard Ressler, a founder of CIM Group and a unit owner, once said the sound and vibration issues were "intolerable", and made it difficult to sleep during inclement weather. Another resident said the trash chute "sounds like a bomb" when garbage is tossed.

The suit says the decision to go public was a result of the developers’ inadequate “band-aid approach” to resolving many of the issues. While attempting to patch a leak on a sublevel of the building in June, a contractor mistakenly drilled into electrical wiring, causing an explosion “which threw the contractor backwards, several feet through the air”, knocked out the power for some residents, and shut down the air-conditioning system. The repairs cost more than $1.5 million.

The 125-unit building is nearly sold out, but since reports of defects emerged in February, resales have been slow, according to Donna Olshan, president of Olshan Realty. Eleven units are listed for sale, she says, ranging from about $7 million for a low-floor two-bedroom to $169 million for the penthouse. Since January, only one sale has closed. – This article originally appeared in The New York Times