Super-rich residents sue developers of NYC skyscraper on ‘Billionaires’ Row’ for $250 MILLION


Ultra-rich Manhattanites who paid as much as $88 million to live in a 102-story skyscraper in ‘Billionaire’s Row’ are suing developers for shoddy construction which has led to water leaks, elevator failures and at least one electrical explosion that threw a contractor ‘several feet through the air.’

The super-thin commercial and residential building at 432 Park Avenue, completed in 2015, was the tallest residential building in the Western Hemisphere for a while. 

Members of the condo and commercial board are now demanding $250 million dollars from developers and calling the building one of ‘the worst examples of sponsor malfeasance in the development of a luxury condominium in the history of New York City,’ according to a lawsuit filed Thursday in New York Supreme Court.

Residents had to be rescued after becoming trapped in elevators for hours because they were programmed to slow down when high winds hit the 1,400 ft building, according to the lawsuit. They also allege ‘severe flooding and widespread water damage.’

Recently, a contractor who was trying a ‘band-aid’ fix for water filtration issues drilled through the building’s concrete foundation. Residents say the developers didn’t provide the contractor with proper drawings to identify where it was safe to drill.

‘This resulted in an arc flash explosion, which threw the contractor backward, several feet through the air,’ the lawsuit states.

‘Incredibly, this was the second arc-flash explosion to occur at the Building in the past three years under the Sponsor’s watch.’

On top of $250 million, the boards are also asking for attorney’s fees and punitive damages. 

Residents of 432 Park Avenue in New York City, once the tallest residential skyscraper in the world, have complained of faulty maintenance issues that have caused leaks, flooding, and noise

They're now suing the building's sponsor, which includes its developer CIM, for $250 million in New York Supreme Court

They’re now suing the building’s sponsor, which includes its developer CIM, for $250 million in New York Supreme Court

Developers CIM Group and Macklowe Properties refused to pay the $1.5 million in 'urgent' repairs needed after the incident an electrical explosion. The building's 'sponsor,' 56th and Park (NY) Owner, LLC., includes both developers

Developers CIM Group and Macklowe Properties refused to pay the $1.5 million in ‘urgent’ repairs needed after the incident an electrical explosion. The building’s ‘sponsor,’ 56th and Park (NY) Owner, LLC., includes both developers

Developers CIM Group and Macklowe Properties refused to pay the $1.5 million in ‘urgent’ repairs needed after the incident, residents say. 

The building’s ‘sponsor,’ 56th and Park (NY) Owner, LLC., includes both developers.

In a statement provided to DailyMail.com on Thursday, the sponsor said: 

‘Virtually all new construction has maintenance and close-out items during the building’s initial period of occupancy. Sponsor has been and remains committed to working collaboratively with the HOA to resolve these matters.’

‘Each and every commitment and term contained in the 432 Park Offering Plan and Declaration has been honored by Sponsor. However, the HOA has restricted access to the property for the performance of remediation, which has delayed completion of certain work. 

‘In addition, the HOA and certain vocal residents misunderstand Sponsor’s obligations. This includes demanding modifications to the building and its operations that, while preferred by the HOA, are clearly not the responsibility of Sponsor.’

The building was designed by star architect Rafael Viñoly’s firm. 

Located on Billionaires’ Row, a cluster of residential skyscrapers mostly on 57th Street that overlook Central Park, the tower attracted buyers like Jennifer Lopez and Alex Rodriguez, among others.

It has taken cutting-edge technology and engineering breakthroughs to allow the construction of 1000-ft tall super-skyscrapers that are now beginning to shoot up in Manhattan.

But one of the key selling points of the new building – its height – also appears to be causing problems.

Strong wind gusts at higher altitude are causing the structure to sway, affecting elevators and cables, while the free flow of air into garbage chutes, doorways, and hallways creates an orchestra of loud, spooky noises that reportedly dampen quality of life.

The sway of the building is also wreaking havoc on piping and plumbing as residents continue to complain of leaks and floods,  The New York Times reported back in February.

‘Unit Owners were sold a building plagued by breakdowns and failures that have endangered and inconvenienced residents, guests, and workers, and repeatedly been the subject of highly critical accounts in the press and social media,’ according to Thursday’s lawsuit.

Residents took over control of the building’s condo board last year. They allege the developers have ‘withheld material information’ from residents and ‘siphoned off’ payments to distribute them to investors as ‘profits’ while the building decays.

One potential buyer, billionaire tequila mogul Juan Beckmann Vidal, was in contract for a $46.25million apartment on the 86th floor in 2016 when a ‘catastrophic water flood’ caused major damage to units on the 83rd, 84th, 85th, and 86th floors. 

Eduard Slinin, a resident who was elected to the condo board last year, told his neighbors that insurance costs rose by some 300 percent in two years. Slinin wrote a letter to neighbors citing two ‘water related incidents’ from 2018 that cost the building $9.7million to fix. Slinin is seen right with his wife, Gala Slinin, in New York City in this undated file photo

Eduard Slinin, a resident who was elected to the condo board last year, told his neighbors that insurance costs rose by some 300 percent in two years. Slinin wrote a letter to neighbors citing two ‘water related incidents’ from 2018 that cost the building $9.7million to fix. Slinin is seen right with his wife, Gala Slinin, in New York City in this undated file photo

One potential buyer, tequila mogul Juan Beckmann Vidal (pictured), was in contract for a $46.25million on the 86th floor in 2016 when a ‘catastrophic water flood’ caused major damage to units on the 83rd, 84th, 85th, and 86th floors

Harry Macklowe (above), the real estate developer who helped build 432 Park Avenue, refused to return Vidal an $11million deposit, prompting Vidal to file suit. The lawsuit was settled a year later

In 2016, Juan Beckmann Vidal (left), the billionaire chairman of the company behind Jose Cuervo tequila, was in contract for a $46.25million on the 86th floor in 2016 when a ‘catastrophic water flood’ caused major damage to units on the 83rd, 84th, 85th, and 86th floors. When Vidal tried to back out of the deal, he demanded his $11.56million deposit back. Harry Macklowe (right), the real estate developer who helped build 432 Park Avenue, refused, prompting Vidal to file suit. The lawsuit was settled quietly a year later

432 Park Avenue is among several residential skyscrapers located on Billionaires' Row - a cluster of high-end multi-billion dollar development projects on or near West 57th Street and which overlook Central Park

432 Park Avenue is among several residential skyscrapers located on Billionaires’ Row – a cluster of high-end multi-billion dollar development projects on or near West 57th Street and which overlook Central Park

When Vidal, who owns the Jose Cuervo tequila brand, tried to back out of the deal, he demanded his $11.56 million deposit back. 

Harry Macklowe, the real estate developer who helped build 432 Park Avenue, refused, prompting Vidal to file suit, according to Curbed.

The lawsuit was settled quietly a year later. 

Among those who bought units at 432 Park Ave are Jennifer Lopez and Alex Rodriguez, above in New York in 2018

On Thursday, residents also complained of ‘creaking, banging and clicking noises’ that have caused residents to have to move out of their expensive units, sometimes for as long as 19 months.

The building’s trash chute sounds ‘like a bomb’ when it’s used, and ‘intolerable’ vibrations have annoyed even Richard Ressler, a founder of developer CIM Group who has a unit in the building.

In early 2019, residents commissioned and paid for an independent engineering report that returned 1,500 construction and design flaws. 

Residents also point to ‘highly visible cracks in the drywall of many ceilings, highly visible cracks above doorways, highly visible cracks where walls meet ceilings, air and water leaks at windows, baseboard pulling and misaligned joints, malfunctioning sliding doors, grout joint openings and cracking at walls or floors in ceramic and/or stone tiling, excessive fog and window condensation,’ and other failures. 

The building has an energy efficiency rating of D – the lowest possible score for buildings that submit the necessary data, according to the suit. 

The 125-unit building is nearly sold out, but reports of defects at the building have slowed down sales, real estate agent Donna Olshan told The New York Times. Only one sale has closed since January.

There are currently 11 units for sale, ranging from a $7 million low-floor two-bedroom to a $169 million penthouse.

A-Rod and JLo bought a 4,000 square foot unit in 2018 for $15.3million – only to sell about a year later for $17.5million.

They decided to sell the property because they reportedly wanted something bigger for their four children. According to Page Six, the couple did not have any complaints about the building. 

In 2016, the penthouse on the 96th floor was bought by Saudi billionaire Fawaz Alhokair for almost $88 million. 

Despite the glamorous image, however, residents and developers behind the skyscraper that cost $1.5 billion to build are blaming each other for shoddy maintenance issues that are not uncommon in more run-down, older apartments, according to the Times.

One tenant, Sarina Abramovich, told the Times that she and her husband, Mikhail, paid almost $17 million for a 3,500 sq ft apartment on one of the high floors in the building in 2016.

When she arrived at her new residence on the first day, she was shocked to see that both her new apartment and other parts of the building were still under construction.

According to Page Six, A-Rod and JLo decided to unload the property because 'they need something bigger for the family'

According to Page Six, A-Rod and JLo decided to unload the property because ‘they need something bigger for the family’ 

The image above shows a room inside JLo's and ARod's three bedroom, four-and-a-half bathroom condo that they eventually sold in 2019

The image above shows a room inside JLo’s and ARod’s three bedroom, four-and-a-half bathroom condo that they eventually sold in 2019

The image above shows a bathroom at the 86B residence in 432 Park Avenue in New York City in January 2017

The image above shows a bathroom at the 86B residence in 432 Park Avenue in New York City in January 2017

‘They put me in a freight elevator surrounded by steel plates and plywood, with a hard-hat operator,’ she said.

‘That’s how I went up to my hoity-toity apartment before closing.’

Things just kept getting worse from there, according to Abramovich.

The building has suffered from several leaks and floods, two of which were reported in November 2018, according to the Times.

On November 22, 2018, a flange, which is a ribbed collar that connects piping, burst around a high-pressure water feed on the 60th floor, causing a flood.

Abramovich said that water seeped into her apartment several floors below the leak, causing some $500,000 in damage.

Just four days later, the building general manager reported a ‘water line failure’ in which water leaked into the elevator shafts.

The damage forced two of the four residential elevators to be out of service for weeks. 

DailyMail.com has reached out to the other developer, Macklowe Properties, for comment.

Other residents have also said that their properties suffered severe, costly damage as a result of maintenance issues. 

According to engineers, the problems affecting 432 Park Avenue have become commonplace at other residential skyscrapers where severe wind gusts at higher altitudes cause the buildings to sway.

In October 2019, management at 432 Park told tenants that one of their fellow residents was ‘entrapped’ for nearly 90 minutes after ‘high-wind condition’ forced the elevator to get stuck.

One engineer told the Times that wind-induced sway leads to cables in the elevator shaft shifting around, which can cause slowdowns or shutdowns.

The engineer said that other supertall buildings have reported similar problems.

The strong wind gusts also cause spooky noises as air flows between doorway and elevator shafts and metal partitions between the walls sway from side to side, residents report.

The condo on the 36th floor boasts oak floors, 12.6-foot ceilings, large windows, and views of Central Park

The condo on the 36th floor boasts oak floors, 12.6-foot ceilings, large windows, and views of Central Park

There is even a large gym for the famously in-shape couple. The complex includes free weights, treadmills, benches, and other exercise equipment

There is even a large gym for the famously in-shape couple. The complex includes free weights, treadmills, benches, and other exercise equipment

During an owners’ meeting that took place in 2019, residents reported that garbage tossed about in a trash shut ‘sounds like a bomb’ and that they could frequently hear creaking and banging noises from their apartments.

Residents say that the maintenance issues were compounded by the increasing common charges, which rose some 40 per cent in 2019 due to what management said was rising insurance premiums and repairs.

Eduard Slinin, a resident who was elected to the condo board last year, told his neighbors that insurance costs rose by some 300 per cent in two years.

Slinin wrote a letter to neighbors citing two ‘water related incidents’ from 2018 that cost the building $9.7million to fix.

Slinin declined comment when reached by DailyMail.com. 

Residents were also unhappy that they were forced to pay more money to use the in-house private restaurant run by star chef Shaun Hergatt.

When the building opened, residents had to spend $1,200 per year for the privilege of eating there – though all meals had to be paid for separately with the exception of breakfast, which was free.

This year, however, residents must pay $15,000, even though the restaurant has cut back its operating hours due to the pandemic.

To make matters worse, breakfast is no longer free.

Abramovich told the Times that she has refused to cover the recent increase in common charges. As a result, she has incurred $82,000 in late fees and interest.

She said her decision to speak out was motivated by principle and that she wasn’t concerned that the value of her property might suffer as a result.

‘Everything here was camouflage,’ she said.

‘If I knew then what I know now, I would have never bought.’

The building is seen above during its construction phase in December 2013. At the time its construction was completed, it was the tallest residential skyscraper in the world

The building is seen above during its construction phase in December 2013. At the time its construction was completed, it was the tallest residential skyscraper in the world

A view of New York city to east from the 75th floor of 432 Park Avenue is seen above on October 15, 2014

A view of New York city to east from the 75th floor of 432 Park Avenue is seen above on October 15, 2014

The image above shows a view to the north and Central Park from the 75th floor at 432 Park Avenue in October 2014

The image above shows a view to the north and Central Park from the 75th floor at 432 Park Avenue in October 2014

Some residents have started to point fingers at each other as others have threatened to sue the developers.

One group of residents commissioned an engineering firm, SBI Consultants, to study mechanical and structural flaws.

According to the Times, SBI’s initial findings showed that 73 per cent of the building’s mechanical, electrical, and plumbing components did not conform with the developers’ drawings.

Nearly a quarter of the issues observed even ‘presented actual life safety issues,’ according to Slinin.

Though SBI declined to comment to the Times, Slinin later downplayed the initial findings, telling the Times that the mechanical issues ‘were minor things.’ 

Abramovich added: ‘I was convinced it would be the best building in New York.

‘They’re still billing it as God’s gift to the world, and it’s not.’ 

Read more at DailyMail.co.uk