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

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

CTV News15-05-2025
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. (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
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

US-China trade talks: Can China reduce its export dependence?
US-China trade talks: Can China reduce its export dependence?

Globe and Mail

timean hour ago

  • Globe and Mail

US-China trade talks: Can China reduce its export dependence?

BEIJING (AP) — China's high dependence on exports will likely be a key focus of a new round of U.S.-China trade talks this coming week in Stockholm, but a trade deal would not necessarily help Beijing to rebalance its economy. U.S. Treasury Secretary Scott Bessent has said he hopes the negotiations can take up this issue, along with China's purchases of oil from Russia and Iran, which undercut American sanctions on those two countries. Hopes rose for a breakthrough in talks after U.S. President Donald Trump announced deals with Japan, Indonesia and the Philippines this week. The U.S. wants China to do two things: Reduce what both the U.S. and the European Union see as excess production capacity in many industries, including steel and electric vehicles. And secondly, to take steps to increase spending by Chinese consumers so the economy relies more on domestic demand and less on exports. 'We could also discuss the elephant in the room, which is this great rebalancing that the Chinese need to do,' Bessent told financial news network CNBC. He said China's share of global manufacturing exports at nearly 30%, 'can't get any bigger, and it should probably shrink.' China is tackling the same issues — for domestic reasons The issues are not new, and China has been working to address them for years, more for domestic reasons than to reduce its trade surpluses with the U.S. and other countries. Bessent's predecessor as treasury secretary, Janet Yellen, made industrial policy a focus of a trip to China last year. She blamed government subsidies for flooding the global market with 'artificially cheap Chinese products.' The European Union, whose top leaders met their Chinese counterparts in Beijing on Thursday, has cited subsidies to justify EU tariffs on electric vehicles made in China. In the 1980s, the U.S. pressured Japan to boost consumer spending when American manufacturing was overwhelmed by exports from the likes of Toyota and Sony. Economists have long argued that China likewise needs to transform into a more consumer-driven economy. Consumer spending accounts for less than 40% of China's economy, versus close to 70% in the United States and about 54% in Japan. Chinese leaders have spoken about both factory overcapacity and weak consumer spending as long-term problems and have sought over the past 20 years to find ways to rebalance the economy away from export manufacturing and massive investments in dams, roads, railways and other infrastructure. Fierce price wars have prompted critical reports in official media saying that companies are 'racing to the bottom,' skimping on quality and even safety to reduce costs. With strong government support, they've also expanded overseas, where they can charge higher prices but still undercut local competitors, creating a political backlash. Economists say China needs a consumer-driven economy All that competition and price cutting has left China battling deflation, or falling prices. When companies receive less for their products, they tend to invest less. That can lead to job cuts and lower wages, sapping business activity and spending power — contrary to the long-term goal of increasing the share of consumer spending in driving overall growth. To counter that, the government is spending billions on rebates and subsidies for people who trade in their cars or appliances for new ones. But acknowledging a problem and solving it are two different things. Economists say more fundamental changes are needed to boost consumption and rein in overcapacity. Such changes can only come incrementally over time. Private Chinese companies and foreign-invested companies create the most jobs, but they've suffered from swings in policy and pressures from the trade war, especially since the pandemic. Demographic changes are another challenge as China's population shrinks and ages. Many experts advocate expanding China's social safety net, health insurance, pensions and other support systems, so that people would feel freer to spend rather than save for a medical emergency or retirement. Yan Se, an economist at Peking University's Guanghua School of Management, warned at a recent forum that deflation will become a long-term issue if China doesn't step up its welfare benefits. 'Chinese people deserve a better life," he said. Facing external threats, China wants to be more self-reliant One possibility, put forward at the same forum by Liu Qiao, the dean of the business school, would be to change incentives for local government officials, rewarding them for raising consumption or household incomes instead of meeting an economic growth target. He doesn't see that happening nationwide but said it could be tested in a province. 'That would send out a message that China needs a different approach,' he said. Chinese leader Xi Jinping has made transforming the country into a technology superpower a top priority. It's a goal that has gained urgency as the U.S. has tightened restrictions on China's access to high-end semiconductors and other advanced knowhow. Output in high-tech manufacturing is growing quickly, adding to potential overcapacity, just as what happened with the government's encouragement of 'green' technologies such as solar panels and wind turbines. Various industries, including EV makers, have pledged to address the issue, but some local governments are striving to keep money-losing enterprises afloat, reluctant to lose tax revenues and jobs, or to fail to meet economic growth targets. Going forward, the government is calling for more coordination of economic development polices in fields such as artificial intelligence so that not every province champions the same industry. But government moves to counter the impact of higher tariffs tend to support sectors already in overcapacity, and the share of consumption in the economy has fallen in recent years. 'A sustained improvement in household consumption will require greater reform ambition,' the World Bank said in its most recent update on China's economy."

Mirova US LLC Increases Stake in Nvidia Corporation
Mirova US LLC Increases Stake in Nvidia Corporation

Globe and Mail

time3 hours ago

  • Globe and Mail

Mirova US LLC Increases Stake in Nvidia Corporation

Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Mirova US LLC, managed by Philippe Zaouati, recently executed a significant transaction involving Nvidia Corporation ((NVDA)). The hedge fund increased its position by 1,242,633 shares. Spark's Take on NVDA Stock According to Spark, TipRanks' AI Analyst, NVDA is a Outperform. Nvidia's strong financial performance and positive earnings call highlight its leadership in the semiconductor industry, driven by robust growth in AI and data center segments. Technical indicators suggest a strong bullish trend, although valuation concerns due to a high P/E ratio and overbought signals may pose risks. The strategic focus on AI offsets geopolitical challenges, supporting a positive outlook. To see Spark's full report on NVDA stock, click here. More about Nvidia Corporation YTD Price Performance: 27.19% Average Trading Volume: 198,286,173 Current Market Cap: $4167B Disclaimer & Disclosure Report an Issue

Mirova US LLC Increases Stake in Microsoft
Mirova US LLC Increases Stake in Microsoft

Globe and Mail

time4 hours ago

  • Globe and Mail

Mirova US LLC Increases Stake in Microsoft

Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Mirova US LLC, managed by Philippe Zaouati, recently executed a significant transaction involving Microsoft ((MSFT)). The hedge fund increased its position by 361,519 shares. Spark's Take on MSFT Stock According to Spark, TipRanks' AI Analyst, MSFT is a Outperform. Microsoft's overall stock score is driven by its strong financial performance and positive earnings call sentiment. The company benefits from consistent revenue growth and high profitability, supported by effective cash flow management and a solid balance sheet. Technical indicators show positive momentum, although overbought conditions suggest caution. The high P/E ratio reflects market confidence but also hints at potential overvaluation. Continued strength in cloud and AI services positions Microsoft well for future growth. To see Spark's full report on MSFT stock, click here. More about Microsoft YTD Price Performance: 20.48% Average Trading Volume: 19,965,959 Current Market Cap: $3759.9B Disclaimer & Disclosure Report an Issue

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store