Court Rules That FiDi Condo Buyers Can Recover Damages from Developer for Shoddy Construction
The Be@William condominium at 90 William Street, where apartment buyers allege shoddy workmanship cost them $3 million to repair, which they now seek to recover from the developer.
More than a decade ago, real estate developers in Lower Manhattan were performing a feat that seemed akin to alchemy. Buying up unglamorous office buildings (abandoned by financial firms that had decamped for Midtown after the terrorist attacks of September 11, 2001) and converting them into high-priced residential towers, such developers rode the wave that was transforming Downtown into a chic residential district.
One example among many in this narrative was 90 William Street, a 17-story back-office facility constructed in 1967, that was rebranded as “Be@William,” a 113-unit condominium in 2008.
But residents began to notice problems with the building within weeks of plunking down a million dollars or more per apartment. According to papers filed with the New York State Supreme Court, the building had insufficient insulation of exterior walls; deficient hot-water heating systems; inadequate soundproofing, and doorways non-compliant with the Americans with Disabilities Act, as well as fire-proofing and fire-stopping systems that didn’t comply with applicable codes. The residents also alleged (and the developer later acknowledged) that the builders did not obtain a permanent certificate of occupancy for the condominium, as required by law and promised in the offering plan through which apartments were offered for sale.
Remedying these issues cost the condo buyers some $3 million dollars, which they sought to recover from the developers—a partnership between Louis Greco and Mario Procida. But that lawsuit quickly ran into the procedural equivalent of a brick wall. Developers typically create a holding company to handle a project such as the conversion of an office building to a condominium. Once the project is completed, this corporate shell disburses to investors the funds it has accrued, and is then dissolved, leaving anybody who feels they have been financially wronged with nobody to sue.
Indeed, according to the same court papers, the Be@William condominium offering plan specifically promised that the developers of the project would, “appoint financially responsible entities to assume Sponsor’s obligations.” But they never did. This led the residents of 90 William to allege that the funds disbursed by the holding company to its investors were “fraudulent conveyances.”
But the State Supreme Court ruled in 2013 that the condominium’s board had no standing to sue Mr. Greco and Mr. Procida, because the board could not document any financial relationship with them as individuals, as opposed to their capacity as investors in a corporation that no longer existed.
This decision was reversed by the Court’s Appellate Division on October 29, in a ruling that found that, “the sponsor’s conceded failure to obtain a permanent certificate of occupancy within two years from the first closing as required by the offering plan establishes its breach of the offering plan.” The same decision held that, “plaintiff established the existence of the defects through several expert reports. To the extent the sponsor defendants maintain that the defects identified in the reports were not material breaches, they will have an opportunity to demonstrate as much at a hearing on damages.”
This ruling has implications that may reverberate far beyond 90 William Street. Steven Sladkus, an attorney representing the Be@William condo board calls it, “a critical decision,” because it pierces the corporate veil that formerly shielded the assets (and in some cases, the identities) of investors who fund condominium projects. Mr. Sladkus adds that, “investors must now be extremely cautious about the quality of the developers with whom they work, as the investors are liable for shoddy construction.”
A Victim’s Vengeance
New Sculpture on Centre Street Inverts Myth to Send a Feminist Message
In a caustic counterpoint to the “Fearless Girl” statue that attracted worldwide attention after it was unveiled at Bowling Green in 2017, a new feminist icon is calling Lower Manhattan’s streetscape home.
Standing in the center of Collect Pond Park (bounded by Centre, Lafayette, and White Streets), “Medusa with the Head of Perseus” makes a stark statement about violence against women. The bronze depicts the Medusa of Greek myth holding aloft the head of the hero who is said to have slain her.
Sculptor Luciano Garbati’s “Medusa with the Head of Perseus”
Decrying the Decree
CB1 Backs Stringer on Rescinding Mayor’s Emergency Authority
Community Board 1 is taking the unusual step of demanding that the administration of Mayor Bill de Blasio alter a policy that is citywide in its breadth, and does not specifically apply to Lower Manhattan.
The policy at issue is Emergency Executive Order 101, proclaimed by the Mayor in March of this year as the pandemic coronavirus was beginning to threaten New York. The original rationale for this order was to suspend temporarily the cumbersome regulations that usually apply to purchases of goods and services by the City government. The Mayor argued that this discretion was necessary, in order to facilitate the rapid procurement of medical supplies, such as personal protective equipment (PPE) and ventilators. To read more…
Downtown Traffic May Ease with Split Verrazzano Toll
The Metropolitan Transportation Authority (MTA) is poised to implement federal legislation (enacted in 2019) that will modify the tolling regimen on a bridge barely visible on the horizon from Lower Manhattan, but this may nonetheless reduce traffic congestion Downtown. To read more…
Since the Global Financial Crisis, a surge of interest in the use of finance as a tool to address social and economic problems suggests the potential for a generational shift in how the finance industry operates and is perceived. In Seeking Virtue in Finance: Contributing to Society in a Conflicted Industry, JC de Swaan seeks to channel the forces of well-intentioned finance professionals to improve finance from within and help restore its focus on serving society. Drawing from inspiring individuals in the field, de Swaan proposes a framework for pursuing a viable career in finance while benefiting society and upholding humanistic values. In doing so, he challenges traditional concepts of success in the industry.
Environmental Protection Committee & Land Use, Zoning & Environmental
1) Brooklyn Bridge Banks and Dugout Space along Robert F. Wagner Pl. and community desire to re-open and activate these spaces for community recreation – Discussion (Rodney Rosado, NYPD-5th Precinct attending & NYC Dept of Transportation invited)
2) Encouraging the formation of “Friends of” groups for parks in Community District 1 – Discussion with Kyle Kelly, Partnership for Parks Outreach Coordinator
3) Hudson River Park Advisory Council recent meeting regarding Pier 76 – Update by Andrew Zelter, Manhattan Community Board 1 member
4) Proposal for nearly 2-acre park in the Holland Tunnel Rotary – Presentation by Dasha Khapalova and Peter Ballman, Ballman Khapalova Architecture (postponed until December)
Local Electoral Patterns Show Varying Levels of Enthusiasm for Presidential Contenders
The City’s Board of Elections (BOE) has released unofficial local results for last week’s presidential election, which offer some insights into voting patterns at the community level. The portion of the 65th Assembly District served by the Broadsheet (a jagged line running from west to east, roughly connecting Vesey Street, Fulton Street, Park Row, and the Brooklyn Bridge), is divided into 25 election districts, or neighborhood-level precincts.
The total for all of these polling places was 9,191 votes cast. The ticket of Joe Biden and Kamala Harris (running on the Democratic Party and Working Family Party lines) took a total of 7,059 of these ballots (or approximately 76.8 percent). The incumbents—President Donald Trump and Vice President Mike Pence, running under the Republican Party and Conservative Party banners—tallied 1,939 votes (or roughly 21 percent). To read more…
Local Small Business Swims Against the Tide by Reopening
In Italian, the word “inatteso” means “unexpected”—which is an apt adjective to describe what a small business in Battery Park City is doing. At a time when large enterprises, from the Century 21 department store to the restaurant, bar, and catering facility at Pier A, are shuttering, a spunky upstart is voicing optimism by reopening.
The Tale of the Ticker Tape, or How Adversity and Spontaneity Hatched a New York Tradition
What was Planned as a Grand Affair became a Comedy of Errors
New York’s first ticker-tape parade erupted spontaneously from bad weather
and an over-zealous stockbroker.
While the festivities in New York Harbor didn’t go as scripted that afternoon, the spontaneous gesture it generated from the brokerage houses lining Broadway famously lives on more than a century later.
On October 28, 1886, Liberty Enlightening the World was to be unveiled to New York City and the world as it stood atop its tall base on Bedloe’s Island. But the morning mist had turned to afternoon fog, blurring the view of the statue from revelers on the Manhattan shore and the long parade of three hundred ships on the Hudson River.
What was planned as a grand affair-with President Grover Cleveland as the main speaker-became a comedy of errors. The fog prevented efficient communication between the dignitaries on the island and the ships awaiting orders to fire their salutes and blast their horns at the given signal.
Even the dramatic unveiling moment itself went awry. To read more…
TODAY IN HISTORY
One of George Metesky’s notes
1272 – While travelling during the Ninth Crusade, Prince Edward becomes King of England upon Henry III of England’s death, but he will not return to England for nearly two years to assume the throne.
1793 – French Revolution: Ninety anti-republican Catholic priests are executed by drowning at Nantes.
1805 – Napoleonic Wars: Battle of Schöngrabern: Russian forces under Pyotr Bagration delay the pursuit by French troops under Joachim Murat.
1822 – American Old West: Missouri trader William Becknell arrives in Santa Fe, New Mexico, over a route that became known as the Santa Fe Trail.
1849 – A Russian court sentences writer Fyodor Dostoyevsky to death for anti-government activities linked to a radical intellectual group; his sentence is later commuted to hard labor.
1904 – English engineer John Ambrose Fleming receives a patent for the thermionic valve (vacuum tube).
1907 – Cunard Line’s RMS Mauretania, sister ship of RMS Lusitania, sets sail on her maiden voyage from Liverpool, England, to New York City.
1938 – LSD is first synthesized by Albert Hofmann at the Sandoz Laboratories in Basel.
1940 – Holocaust: In occupied Poland, the Nazis close off the Warsaw Ghetto from the outside world.
1940 – New York City’s “Mad Bomber” George Metesky places his first bomb at a Manhattan office building used by Consolidated Edison.
1973 – President Richard Nixon signs the Trans-Alaska Pipeline Authorization Act into law, authorizing the construction of the Alaska Pipeline.
1989 – A death squad composed of El Salvadoran army troops kills six Jesuit priests and two others at Jose Simeon Canas University.
42 BC – Tiberius, Roman emperor (d. 37)
1892 – Guo Moruo, Chinese historian, author, and poet (d. 1978)
1892 – Tazio Nuvolari, Italian race car driver and motorcycle racer (d. 1953)
1922 – Gene Amdahl, American computer scientist, physicist, and engineer, founded the Amdahl Corporation (d. 2015)
1964 – Dwight Gooden, American baseball player
1773 – John Hawkesworth, English journalist and author (b. 1715)
1779 – Pehr Kalm, Finnish botanist and explorer (b. 1716)
1802 – André Michaux, French botanist and explorer (b. 1746)
1808 – Mustafa IV, Ottoman sultan (b. 1779)
1950 – Bob Smith, American physician and surgeon, co-founded Alcoholics Anonymous (b. 1879)
1960 – Clark Gable, American actor and singer (b. 1901)
1961 – Sam Rayburn, American lawyer and politician, 48th Speaker of the United States House of Representatives (b. 1882)
2013 – Charles Waterhouse, American painter, sculptor, and illustrator (b. 1924)
Downtown Dowager Gets Her Due
First Lady of Lower Manhattan Recognized, Half a Century On
If you live in Lower Manhattan, and are even remotely fond of the community, you owe a debt of gratitude to the woman who saved it from slum clearance and multiple highway schemes. The late Jane Jacobs (she died in 2006) was recognized last week with a plaque outside her longtime home at 555 Hudson Street, in the West Village. To read more…
Contract One, Station One
The Jewel in
Just below the surface of City Hall Park sits one of New York’s architectural gems. Built during the City Beautiful movement, its design sought to uplift the spirits of New Yorkers on their daily commute.
City Hall Loop station—Contract One, Station One—was the flagship of New York’s first subway and the focus of the international press on October 27, 1904, when Mayor George McClellan connected the Tiffany-designed motorman’s handle to propel the first train north to its endpoint on 145th Street and Broadway.
The design of the other twenty-seven stations it stopped at that afternoon was dictated by the practical needs of subway efficiency—the architect’s only role was to choose the tile work that would cover the structural columns and walls. But the station below City Hall Park is different. Here, design and structure are one in the same.
City Hall subway station, was designed to be the showpiece of the new subway system with its elegant platform and mezzanine featured Guastavino tile, skylights, colored glass tilework and brass chandeliers.