The Real Deal New York

Atelier condo board sues Moinian Group over alleged construction defects

Suit claims Moinian diverted funds to adjacent luxury tower
By David Jones | August 30, 2012 06:00PM

The managers of the luxury condominium Atelier is suing the Moinian Group — alleging that the developer used funds from the West Side property to help complete an adjacent West 42nd Street tower.

The Costas Kondylis-designed Atelier, located at 635 West 42nd Street, has 478 residential units, and sits right next to the site of Moinian’s planned luxury tower at 605 West 42nd Street, which will have 970 apartments and 100,000 square feet of retail space.

The Atelier Board of Managers alleged, in an Aug. 22 suit filed in New York State Supreme Court, that the firm, led by developer Joseph Moinian, failed to replace a defective HVAC system, shut down the swimming pool in 2010 and allowed water to leak into a children’s playground. The board claims it replaced the HVAC system and repaired the playroom out of its own funds.

The board is also claiming that the developer failed to get a permanent certificate of occupancy from the city Department of Buildings, that he stopped providing maintenance services at the building’s fitness center and diverted electricity from the condo to operate a construction trailer on the adjacent site.

The suit comes four months after the condo ended a management deal with Cooper Square Realty and the board took over control of maintenance services in house.

River2River Realty, led by company president Dan Neiditch, handles sales and rentals at the building.

The building was expected to save $200,000 a year by becoming a self-managed and -maintained building — one that has operated with some of the lowest common charges among any condo in New York.

The Moinian Group has claimed that the building was sold out in 13 months; however Streeteasy.com has 40 active sales listings at prices ranging from $675,000 for a one-bedroom to $15 million, for a 6,000 square foot, eight-bedroom apartment.

Moinian officials were not immediately available for comment.