For the residents of prewar cooperative Chelsea Gardens, the discovery of 5,000 feet of unused basement space seemed like a gold mine.
Now it seems more like fool’s gold.
The co-op’s plan to build four new apartments in the basement has spawned a number of lawsuits from angry residents, who claim the project damaged their apartments and endangered their health. Meanwhile, the city Department of Buildings slapped the project with a stop-work order for almost a year, and required the board to revamp the plans.
Just this week, after months of inactivity, the stop-work order was lifted allowing the project to proceed, according to a buildings department spokesperson.
Built in the 1930s, Chelsea Gardens is a 160-unit co-op housed in two buildings separated by a courtyard, one at 250 West 24th Street and the other at 255 West 23rd Street. As detailed in a splashy 2008 New York Times profile, the additional space in the basement was discovered in 2002, and shareholders voted to convert it into a new superintendent’s apartment and three additional units.
The board anticipated a profit of at least $500,000, plus yearly maintenance income from the residents, after selling the newly built units, according to the lawsuit. They hoped to use the profits to offset the cost of strengthening the building’s wooden framing and its supports.
Residents were told the project “wouldn’t bother anybody,” said Manhattan attorney Joel Lutwin, who represents three first-floor residents who are suing Chelsea Gardens in connection with the project.
The kerfuffle began in August 2008, when the construction caused dust, cigarette smoke and dirt to permeate apartments on the first floor, according to the lawsuit, filed in April 2009 by shareholders Kathryn Bedke, Jack Chen and Richard Slote.
Construction crews started using jackhammers to break up granite, causing the wood floors to pull away from the walls until light from the cellar was visible in the first-floor apartments, the lawsuit says. Residents also complained of vibrations, “deafening” noise, dust, noxious fumes and gas leaks. As a result of these factors, the plaintiffs say their apartments became uninhabitable. Bedke said she was forced to stay in hotels and with friends, while Chen developed “non-stop coughing, blood contained in his phlegm, and other respiratory problems… including bronchitis,” the lawsuit says. Chen even claimed in the suit that his dog “tested positive for lead.”
Listen to the sound of jackhammers one of the tenants recorded in his/her apartment in the video above
In the suit, Bedke and Chen are seeking reimbursement of their maintenance payments from September 2008 until November 2009 and for cleaning products and ruined clothing, as well as legal costs and other damages, according to court papers. Slote is seeking reimbursement of his maintenance payments from September 2008 to May 2009, and costs for rug cleaning and air purifiers.
In court documents, the co-op has contested the idea that the apartments were truly uninhabitable, pointing out that that other first-floor residents did not vacate their apartments during the construction.
A fourth first-floor resident, Leslie Weinberg, sued the board in 2007, before construction started, stating that she has health problems that meant she could not be exposed to dust, smoke and fumes. The board agreed to pay her a relocation allowance of at least $9,500, according to court papers. In their suit, Bedke, Chen and Slote said the board did not give them equal consideration.
Slote, a nurse who works nights, was offered another apartment in Chelsea Gardens to use during the day, but he was not given permission to use it on weekends or evenings, the lawsuit says. The co-op board also offered Bedke and Chen each $2,500 and Slote $900 “as an expression of good faith,” but that was not adequate to meet their costs, Lutwin said.
In 2009, Weinberg sued again, this time claiming damages of $1 million, saying that construction had caused toxic mold growth and other contaminants in her home and resulted in “severe and permanent personal injuries” to her.
Frustrated with the problems, Chen eventually sold his apartment, after taking it on and off the market several times “due to the noise, dust and dirt invading the apartment, making it impossible to prepare the apartment for viewing,” the lawsuit says.
Ultimately, Chen sold the one-bedroom apartment for $650,000 in December 2009, according to Streetasy.com, far less than the $849,000 it was originally listed for in August 2008.
Chen accepted a price “lower than the fair market” because he “just wanted to get out” of the building due to his health problems, Lutwin said.
Another one-bedroom in the building sold in February for $779,000, according to city records. The broker who sold it, Gil Neary, president of the Chelsea-based DG Neary Realty, a resident of the building and a member of the co-op board, also declined to comment.
Chelsea Gardens co-op board president Jason Turken, reached at his office, declined to comment on either of the two lawsuits. Former co-op president Lia Troy, a Halstead Property agent who discovered the empty space in the basement, said the claims of the residents are “somewhat ridiculous” and may be motivated for reasons other than concerns about health and safety, though she wouldn’t say what those motives might be.
“I just think [the residents who filed the lawsuits] have their agenda and the co-op has their agenda, and over the years they became at odds,” she said.
Lutwin said problems at the site went beyond those usually associated with construction projects.
“If there’s construction, there’s going to be noise,” he said. “But not noise to the point where the walls are vibrating and the floor separates from the walls.”
Much of the damage was a result of using jackhammers, which he said are not usually used for internal projects.
The general contractor, “used jackhammers that caused terrible damage to apartments on the first floor,” he said. “There was welding which emitted a noxious gas that affected the people I represent.”
The co-op board “took no or totally inadequate steps to protect the plaintiffs or their apartments from the excessive dust, vibration and noise,” the lawsuit says.
After residents complained, the buildings department raised some objections to the plan before issuing a stop-work order on the site in June 2009, according to the buildings department spokesperson.
On Tuesday — nearly a year later — the stop work order was lifted after the co-op addressed the department’s concerns, revised the plans for the project, and checked each of the apartments in the building for damage, the spokesperson said.
The original architect hired for the job, Alexander Compagno & Associates, was fired in early 2009, the lawsuit says. Alexander Compagno declined to comment. The building has since replaced him with Darius Toraby Architects.
Complaints about noise and dust at the project were also filed with the New York City Department of Environmental Protection, according to a DEP spokesperson, and a violation was issued in March of 2009 because the project lacked a “noise mitigation plan.”
The suit filed by Bedke, Chen and Slote is still pending, but in May 2009 a judge granted a preliminary motion ordering the co-op board to take safety and cleaning measures at the site, including discontinuing the use of jackhammers at the site, hiring a cleaning service for the plaintiffs’ apartments, repairing holes and cracks in the ceilings and floors, and installing air filters.
Lutwin said the board has done a “haphazard job” of adhering to the order.
Troy, the former co-op president, said the project was in “limbo” while the stop-work order was in place, though most of the major structural work is finished.
She said the co-op still has high hopes for the income that can be generated from the project, though market prices have fallen from the peak. While basement apartments can sometimes be harder to sell than other units, the residences planned for the space have “a pretty good window configuration” and are mostly above grade, she said.
“They will be really nice units when they’re finished,” she said.