Condo owners sue over New York skyscraper they say is riddled with ‘thousands of severe cracks'
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 $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.
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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.
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Source: CNN As protestors have taken to the streets across Spain, disrupted a billionaire's wedding in Venice, and even caused a shutdown of the Louvre in the shape of a staff mutiny about overcrowding, Noel Josephides has been watching with one phrase on his mind: I told you so . 'I could have told you that would happen 10 years ago,' he says. 'And I said so. I said, 'This is going to get out of control.'' Josephides is the longstanding chairman of Sunvil, a UK-based tour operator that has been sending comfortably-off Brits on vacation since 1970. He's also a former chairman of ABTA and AITO, both UK travel industry bodies, which makes him one of the big beasts of European tourism. And he says he saw Europe's current overtourism meltdown coming. 'I said there'll be enormous problems going forward,' he recalls of a speech he delivered to the ABTA annual convention, held in Dubrovnik, in 2013. He delivered that warning as the sharing economy — spearheaded in travel by Airbnb — was mushrooming across Europe. His concern, however, was not just short-term rentals. What he saw coming was a perfect storm: rapidly expanding budget airlines working in tandem with proliferating short-term rentals to create vast new vacation capacity, driving down prices and ushering in a new era of large-scale budget travel. Of course, as a tour operator, Josephides works in direct competition with short-term rentals and the independent travel-planning that budget airlines encourage. Yet today, he seems like a Cassandra figure — he foresaw the chaos, but no one acted. Now his worst fears have come to pass. 'The local populations are quite right,' he says about the spiraling protests. 'It's out of control. I'm on the side of the protestors, even though it affects my business.' The situation in Europe this summer is a far cry from the empty streets and clear waters of the summer of 2020. During the pandemic, many destinations vowed to reinvent tourism for the better. But once travel restrictions were lifted, things quickly reverted to the old ways — and in many cases got worse, thanks to what came to be known as 'revenge travel.' For some locals, the memory of lockdown has taken on a halcyon glow. 'I remember walking in the streets very close to Las Ramblas and hearing birds singing and church bells,' says Maite Domingo Alegre, who lives in Barcelona. 'I'd never realized the bells tolled. But I never get to hear them anymore. Tourism has brought so much noise it's unbelievable.' An English teacher and associate professor at the Universitat Pompeu Fabra, Domingo Alegre lives in the city's historic center near the cathedral and works near Las Ramblas. She says her city has changed beyond recognition. 'We've always had tourism, and mass tourism, but over the last 10 to 15 years this has changed dramatically,' she says. 'It's not seasonal anymore, it's 365 days a year. And the visitors are much more than the number of inhabitants.' Crowded streets are one thing; the knock-on effects, she says, are worse. 'Most of the shops — even food shops, clothes shops, restaurants, everything in the center — is basically addressed to tourists,' she says. 'Prices have gone up. Airbnb basically evicted many locals. Most of my friends have fled the neighborhood because they can't afford to live there anymore.' The pandemic, she adds, intensified the problem, attracting remote workers from across Europe. 'They don't really mingle with the locals. They're not interested in Catalan or even Spanish culture. They think it's cheaper, and they have nice food and cheap drinks, so most bars and restaurants are also thought of for them.' In Venice, it's the same story. The local pop musician Ornello's latest video shows him dressed as an astronaut, wading through the summer crowds. In his real-life identity, Alessio Centenaro, he feels equally out of place in his hometown. 'I'm a cyclist and on Sundays I take my bike from Piazzale Roma (Venice's road terminus). I'm going out and I'm going against all the tourists arriving on the island and I feel like I'm a salmon going against the flow. Sometimes when you're surrounded by tourists, with hundreds all around you, you feel like you're the foreigner.' Venice has always been a city of tourists, he adds, but it also once had a sizable resident population. 'There are 48,000 people officially, but nobody says what's the percentage of old people. I'd say it's perhaps 70% over 70. If they will live another 15 years, what will happen then?' For the past five decades, Josephides has watched destinations go from charming to overcrowded. The trajectory, he says, is nearly always the same. First a boutique tour operator like Sunvil identifies a little-visited destination that seems perfect for its clients — people in search of a vacation where they won't be surrounded by other vacationers. It'll add that destination to its books, usually chartering a weekly flight to get clients there initially. And so the first few seasons will be a halcyon period of relatively few visitors. They enjoy the peace and quiet; the residents enjoy the money they inject into the local economy. But then word will spread. A budget airline — because it's low-cost carriers, not legacy ones, who invest in lesser-known places — will start operating to the destination. The following year, its rivals follow suit, eager not to miss out. What if Jet2 knows something we don't? Suddenly, there's a surfeit of planes going to the destination, and to fill them airlines slash fares, meaning that the budget market becomes the 'volume market,' as Josephides puts it. Accommodation strains to keep pace with the growing number of visitors, prompting locals to invest in short-term rentals. Soon, that 'secret' destination is swamped — not just by the early, more affluent pioneers, but by that volume market, who fly in on the budget airlines, stay in an Airbnb and generally spend less locally. So the first wave moves on to a new place, and the cycle begins again. Josephides earmarks the Greek island of Samos as one of the next destinations to go through this cycle. This year there is one direct weekly flight from the UK, he says. 'Next year TUI (a German travel company) have Thursday and Sunday. Jet2 have put on four flights: two Manchester, one Birmingham and one Stansted. So wait to see Ryanair and easyJet pile in.' The mass market players, he says, 'move in like a vacuum cleaner. The nature of the island will change but local governments do not understand what will happen until it is too late.' Even established hot spots can be victims of their own popularity. Airports on the Greek islands of Corfu and Crete, Josephides notes, are inundated with flights. 'The volume market won't go to destinations that aren't known, so you get this bottleneck of cheap flights fueling the likes of Airbnb. The local population are quite right — it's out of control.' An Airbnb spokesperson said in a statement: 'Airbnb offers a different way to travel that better spreads guests and benefits to more communities. The fact is that overtourism is getting worse in cities where Airbnb is heavily restricted: in Amsterdam or Barcelona, the introduction of stringent restrictions on short term rentals have coincided with a steep increase in guest nights driven by hotels, and a surge in accommodation prices for travelers. Cities that want to have a significant impact on overtourism should embrace tourism that supports families and communities.' They added that 59% of 'guest nights' sold in the EU on Airbnb in 2024 are in destinations outside cities, while their research published in June shows that the majority of tourists still choose hotels. VRBO, another major short-term rental provider, did not respond to a request for comment. Pedro Homar knows this pressure well. As tourism director for Visit Palma, he's caught between visitors behaving badly in the Spanish city, and residents demanding action. 'We need to ensure that tourism is a sustainable industry, not just from an environmental point of view but also from a social and economic point of view,' he says. 'Our economy depends on tourism, so we either make sure we're physically sustainable or we will not have a future.' Since the pandemic, Palma has stopped promoting itself outright. Instead, it runs 'image campaigns' to shape perceptions — even running ads to call out antisocial behavior in certain resorts. In 2022, the city capped cruise ship arrivals at three a day, even though the port can handle six (Barcelona has followed suit, announcing in July that it will close two of its seven cruise terminals from 2026). It banned short-term rental apartments and Airbnbs in city-center residential buildings and has set a cap of 12,000 hotel beds: for a new hotel to open, another must close. Palma has also built up a 50-million-euro ($58 million) fund to buy and remove outdated hotels from circulation — typically cheaper properties that tend to attract budget tourists. 'It's a way of taking out of the market all these obsolete and old hotels that are no longer competitive and not the kind of product that we want for the destination,' Homar says. Palma's approach raises a question: Who has the 'right' to travel? Some destinations have long used high costs to deter mass tourism. Bhutan charges a $100-a-day 'sustainable development fund' fee. A gorilla-trekking permit in Rwanda costs $1,500 per person. Even Venice's 10-euro day-tripper fee has drawn criticism from locals for selling the city to the wealthy. Homar argues that destinations should have the right to choose their visitors, likening it to deciding whom to invite to dinner. 'I really do believe that as mature destinations, we have the right to choose the tourists that we want, and don't want,' he says. 'We want tourists that respect our personality, our way of living, our traditions. 'If you are thinking of coming over without a respectful point of view, we say, respectfully, we don't need you.' Josephides is blunter. 'They don't want the rabble anymore,' he says. 'It sounds awful to say so, and everyone's entitled to a holiday, but the numbers just keep growing. The whole thing is out of control. I can understand the democratization but it's up to the destination if they want clients without any money,' he adds. 'I'd like to drive a Ferrari, but I can't afford it.' For now, he says, most European destinations seem focused on capping numbers rather than pricing out budget travelers entirely. Restoring the goodwill of residents is just as important as tackling the crowds. 'A city where residents are not satisfied is a city that doesn't work,' says Ruben Santopietro, CEO of Visit Italy, a marketing company for various destinations across the country. 'It loses its identity completely. Residents feel excluded and neighborhoods become touristic.' Born in Naples, which saw protests over lack of housing and growing short-term rental numbers in March, Santopietro has watched his hometown surge in popularity — and housing prices — over the past decade. He warns that if growth continues unchecked, 'in five years, 50% of the città d'arte (Italian cities of culture) will become inaccessible.' Rome, Florence and Naples, he says, are already 'suffocated by tourism' almost to the point of no return. Visitors, he adds, actually want locals around. 'Venice belongs to the Venetians. If locals aren't there, they won't go. Putting residents at the center of tourism models is the only way to preserve our cities from becoming open-air museums.' Homar agrees, echoing the same phrase — 'putting residents at the center of the tourist strategy' — when talking about Palma's new five-year plan, adopted in 2023. Some hotels the city buys will be replaced with green spaces or converted to housing. In November, Palma will launch free cultural activities for locals — organ recitals, children's days in the old atelier of artist Joan Miró, theater concerts organized by Spanish national radio stations, guided architectural walks around the city — to 'uplift the sense of belonging and the pride of being a citizen.' 'All these initiatives will be in spaces that residents for some reason believe are just for tourists,' he says. 'We're seeing that the sense of belonging that residents used to have about being in Palma, they were slowly losing that and we need to change that dynamic.' Redistributing visitors can also help. The problem in Italy, Santopietro says, isn't that the country can't handle the numbers — it's that everyone goes to the same places. This summer, his agency launched a campaign, 'The 99% of Italy,' encouraging travelers to visit lesser-known destinations from Genoa to Tropea (some of which were their clients, but not all). 'We used social media platforms as they have created these imbalances,' he says, adding that they expect tangible results in the long term, as regional marketing campaigns take longer to take effect. Santopietro says that even in the busiest destinations, steps can be taken to disperse visitors. He suggests incentives — for example, discounted tickets to Rome's Colosseum for those who've already visited the ancient coastal town of Ostia Antica. In the short term, protests are likely to spread, says Estrella Diaz Sanchez, associate professor of marketing at Spain's University of Castilla-La Mancha. 'Some locals are frustrated about the number of tourists they receive, but I think the main factor is skyrocketing rents, driven by short-term holiday lets, pushing locals out of the housing markets,' she says. 'The solution isn't to reject tourism; it's to make it more inclusive and respectful.' Even Josephides, the tourism industry doomsayer, thinks recovery is possible. He points to Estoril, on the Lisbon coast, which in the 1970s was a mass-market destination. Authorities decided to push it upmarket, and succeeded. 'You can recover, but it takes time,' he says. 'It's much easier for a destination to control its growth rather than repair it afterwards.' See Full Web Article
