The Real Deal New York

Trucking exec sues for missing breakfast bar and private elevator at 56 Leonard

Ronald Dana bought $29M penthouse in 2017
By E.B. Solomont | March 12, 2018 02:20PM

A New Jersey trucking mogul has sued the developers of 56 Leonard, alleging he did not get the private elevator access and breakfast bar he was promised in his $29 million penthouse.

Ronald Dana — founder of the Dana Companies — said Alexico Group and Hines failed to deliver on specific features that sold him on the Tribeca condominium, including soaring 14-foot ceilings, a private elevator, a breakfast bar and an integrated curtain system for the apartment’s floor-to-ceiling windows.

In addition, the sponsors attempted to “conceal defects” in the unit — namely poorly-installed wood flooring, which began to crack and warp months after Dana took possession of the pad last year, the complaint said. In the suit, Dana also claimed Corcoran Sunshine Marketing Group “knowingly and purposefully” lied about the state of the apartment during the marketing process.

The March 9 suit was filed by Dana’s Lower Manhattan Inner City Real Estate Associates, LLC, which closed on the 56th-floor pad in April 2017, public records show. The full-floor penthouse — measuring 5,858 square feet — has four bedrooms, a conservatory and 360-degree views, per the listing. It has two balconies, and custom interiors by Herzog & de Meuron feature White Oak flooring, marble baths and a sculptural granite kitchen island.

According to the complaint, Dana put down a $4.275 million deposit for the apartment in July 2013.

However, several months later, the developers amended the project’s offering plan — changing the top penthouse from a simplex into a duplex, according to the complaint. But to do so, they “added additional ceiling height to the newly designed duplex unit by reducing the ceiling height of the other penthouse units,” the suit said. The sponsors allegedly disclosed the new design only after most of the penthouse units were in contract.

In a statement, Alexico and Hines called the suit “meritless.”

“The complaint contains numerous inaccuracies that were identified to the plaintiff before the suit was filed. 56 Leonard has been an exemplary project for design and construction quality and has won several prestigious awards,” the statement said. “We will oppose this lawsuit vigorously.”

Closings began in 2016 at 56 Leonard, a distinctive glass-stacked tower that stalled during the financial crisis.

In 2015, Dana filed racketeering charges against PNC and Wells Fargo, for allegedly cooking up an “insidious scheme” to ruin his trucking business during the 2007 financial crisis. He claimed the banks cost Dana Transport $500 million by undervaluing its assets and forcing it to default on a loan even though it was current on payments. Dana ultimately dropped the case, and in September, a judge said the banks can go after the company for legal fees.

At 56 Leonard, Dana’s suit claims that during a walk-through of the unit in March 2017, his representatives noticed a slew of “defects” and submitted a two-page punch list of repairs to the developers. Some of the problems included chipped floor tiles, a missing shower door, broken bathroom mirror and scratches on the kitchen counters. “None of the bathrooms in the Premises functioned, rendering the Premises uninhabitable,” the complaint stated. Further, the integrated curtain system for the windows did not exist.

According to the complaint, Dana managed to postpone the closing — but only until April 17, 2017 — on the condition that Alexico and Hines would complete the repairs within a “reasonable” amount of time.

The complaint argued that has not yet happened. Further, ongoing construction on the building has caused “excessive noise and falling debris” into the penthouse, damaging the floors and depriving the buyer of “quiet enjoyment” of the home.

Within months of the closing, Dana also noticed the wood flooring was “separating, cracking, squeaking and cupping” as a result of shoddy installation. In the complaint, he alleged that the floor has four layers of wood, and that the top layer was added to “conceal defects” underneath.

Alexico, headed by Izak Senbahar, paid $136.5 million for the site and started construction on 56 Leonard more than a decade ago. In 2013, the developer brought on Hines as a partner, and they launched sales that year. The 60-story tower, which has 145 units, topped out in 2015. In June, a mystery buyer closed on a $48 million penthouse at the tower.