Condo owners sue over New York skyscraper they say is riddled with ‘thousands of severe cracks’

The condo board at 432 Park Avenue claims the skyscraper's developers failed to disclose the extent of damage that has resulted in flooding and impacted the value of their multimillion-dollar properties. (Spencer Platt/Getty Images via CNN Newsource)

Apartment owners at a luxury New York skyscraper are suing the building’s developers over a “far-reaching fraud” in which they allegedly hid structurally significant defects — including “thousands” of severe cracks on the tower’s facade.

The condo board at 432 Park Avenue, a super-skinny high-rise on Manhattan’s Billionaire’s Row, claims that real estate firm CIM Group failed to disclose the extent of damage that has resulted in flooding and impacted the value of their multimillion-dollar properties.

Filed at the state court in New York in late April, the lawsuit also names architecture and engineering companies involved in the project. Condo owners are collectively seeking more than US$165 million in damages, according to the complaint.

Completed in 2015, the slender 1,396-foot-tall skyscraper has a 15:1 height-to-width ratio, putting it among the so-called “pencil towers” now dotting midtown Manhattan’s skyline. To protect against high winds, the building was designed with unoccupied floors that encourage airflow, anchors drilled deep into the bedrock and “tuned mass dampers” that act like pendulums to counteract swaying.

Property developer Harry Macklowe — whose firm McGraw Hudson Construction Corp is also named in the suit — compared the tower to the Empire State Building, telling the New York Times in 2013 that it was “the building of the 21st century.” Pop star Jennifer Lopez and Chinese businessman Ye Jianming are among those reported to have purchased units there for eight-figure sums.

But owners and residents have since complained of numerous construction issues, including more than 20 water leaks since 2017, according to the complaint. In 2021, the condo board filed a lawsuit alleging a range of defects, from malfunctioning elevators and poor energy efficiency to a trash chute that sounds “like a bomb” when used.

The new lawsuit meanwhile claims that the tower’s facade is “plagued with thousands of severe cracks, spalling, and other forms of deterioration,” including a 10-inch-deep crack in the building’s core. As well as causing flooding, the damage has corroded some of the steel in the tower’s reinforced concrete columns, the complaint alleges.

While the 2021 complaint also detailed “substantial cracking,” the condo board said it filed its most recent action after claiming it uncovered evidence that defendants had “conspired” to conceal the extent and seriousness of the defects.

In statements provided to CNN, both CIM Group and SLCE Architects, the project’s architect of record, said they “vehemently” deny the claims and are moving to have the complaint dismissed. Engineering firm WSP declined to comment. McGraw Hudson Construction Corp did not respond to CNN’s inquiries.

The lawsuit attributes cracking to the building’s “experimental” facade, which is made from white concrete. The material is, it says, “typically used for aesthetic purposes” and had to be strengthened to withstand the supertall building’s structural load — especially during high winds.

Among the suit’s allegations are claims that CIM Group ignored concerns raised by various concrete consultants, as well as the project’s late architect Rafael Viñoly about the strength of the concrete mix. The condo board claims that mockup tests showed the material’s use would result in cracking. But CIM Group and its contractors “bulled forward” with “complete disregard for… the inevitable problems it would cause for the building and its future residents,” the suit adds.

The condo board alleges that, despite having knowledge of the facade’s defects, SLCE Architects deceived condo owners by making “materially false” claims in its offering plan, a document disclosing important information to potential buyers. (The lawsuit cites an alleged change in the document’s wording, which went from claiming the concrete “will” prevent water penetration to saying that it was only “designed to” do so.)

Additionally, the lawsuit alleges that McGraw Hudson and WSP misled New York City Department of Buildings in a letter that “misrepresented the nature, extent, and type of cracking.” It claims the letter failed to disclose the full findings of a survey that had discovered 1,893 defects.

The complaint claims that developers then “repeatedly rejected” recommendations on how to address issues that arose. A suggestion that an opaque elastomeric covering could be applied to the facade to prevent air and water infiltration, for instance, was ignored because it would “significantly alter” the building’s appearance and make it less appealing to “the world’s billionaires,” the lawsuit alleges.

Oscar Holland, CNN