Safety Issues and Defects of Troubled Supertall Tower Are ‘Vastly Exaggerated,’ Developer Says

Written by Desmond

December 23, 2021

The sponsor that developed 432 Park Avenue, the supertall condo tower in Midtown Manhattan whose residents have complained about numerous design and construction defects, struck back in court on Wednesday, arguing that the claims are “vastly exaggerated,” and that it will seek damages of its own.

The filing, led by an entity controlled by one of the developers, CIM Group, said that safety issues identified in an engineering report were overstated, and that the building “is, without a doubt, safe.” The filing also said that attempts to fix some of the issues have been impeded by the resident-run condo board, which refused to give the sponsors’ contractors access to the building.

The filing is in response to a September lawsuit by the condo board, which represents some of the wealthiest people in the world. It sued the developers for $125 million to repair some 1,500 construction defects that it called “one of the worst examples of sponsor malfeasance.” The suit cited multiple floods, faulty elevators that had “trapped” residents for hours, “intolerable noise” caused by building sway and a pair of electrical explosions, among other complaints.

The Times revealed many of the complaints at the nearly 1,400-foot tower, built in 2015 and designed by the architect Rafael Viñoly’s firm, in February. The new filing was first reported by The Wall Street Journal.

The sponsor said in response that many of the defects identified by SBI Consultants, the firm hired by the condo board, were either minor or the responsibility of the residents.

“Their public relations campaign has been value destructive for the Building as a whole,” the sponsor said in the suit. It is seeking as-yet-untold damages, likely millions of dollars, and for the complaint to be dismissed.

While the sponsor said that more than 90 percent of the building’s 106 residential units have been sold, sales have slowed since the complaints first emerged. Since January, four residential units have closed, compared with 12 in 2019, before the pandemic, said Donna Olshan, the president of Olshan Realty. Elsewhere in the city, 2021 was a banner year for luxury sales, suggesting that the complaints have had a damaging effect on the building, she said.

The construction issues have also affected the building’s management, the condo board said. In 2019, common charges jumped 39 percent, in part because of a 300 percent increase in insurance premiums while the board was run by the sponsor, the suit said.

Residents were also aggrieved by a sudden increase in the fees they paid for a private restaurant on the premises — $15,000 a year, up from $1,200 a year when the building opened.

The sponsor said that it had paid for the losses at the restaurant — which were partly because of lower than anticipated use — through mid-2019, well beyond its legal obligation, and that residents were now responsible for the increased cost.

It is not uncommon for residents to seek additional work from a developer after they take over a condo board, typically a few years after construction is completed or when a sales threshold is met. And given the complicated nature of this project — briefly the tallest residential building in the city, and still one of its slenderest towers — it is no exception.

In its response to the condo board’s lawsuit, the sponsor accepted responsibility for some of the items identified, noting that “432 Park’s sophisticated symphony of systems needed to be fine-tuned when residents began to move into the building.” But it claimed that the resident board constantly canceled appointments for repair work, and that the residents were now “manufacturing an ever-increasing list of demands.”

The sponsor also said that, during a virtual meeting in October, the residential board president told unit owners that the building was safe, despite claims of life-safety issues.

“The Sponsor’s efforts to completely live up to its obligations have been continuously restricted and inexplicably limited by the Board, against the interests of all the owners,” Jay A. Neveloff, a partner at Kramer Levin Naftalis & Frankel, who represents the sponsor, said in a statement.

“The claims that they arbitrarily blocked access to the building are not based on fact,” Jonathan A. Adelsberg, a partner at Herrick Feinstein and a lawyer for the residential board, said in a statement. “Over a five-year period — despite numerous mistakes and damage caused by its contractors — the Sponsor repeatedly defied the usual and customary safety protocols that apply to repair work in all skyscrapers in New York City.”

The other developer of the project, Macklowe Properties, whose founder, Harry Macklowe, is named as a defendant in the residents’ suit, did not respond to requests for comment.

The tower has been a magnet for celebrities and multimillionaires, many of whom spend much of the year elsewhere. Jennifer Lopez and Alex Rodriguez bought a 4,000-square-foot apartment there for $15.3 million in 2018, and sold it about a year later.

Despite the negative attention, some sellers are still aiming for sky-high prices. The 8,255-square-foot penthouse on the top floor, owned by a shell company connected to Fawaz Alhokair, a Saudi retail magnate, is listed for $169 million — or about $20,500 a square foot, a city record.

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