Luxury litigation: Adam America, Slate sue over delays and shabby construction at Dumbo condo project

The developers are seeking damages upwards of $8M

TRD New York /
Jan.January 31, 2019 06:30 PM

51 Jay Street

UPDATED, Feb. 1, 1:29 p.m.: A year ago, in the midst of disputes between the developers and contractors, new owners began to move in to the condos at 51 Jay Street in Dumbo. Hoping to quickly resolve the issues, the developers turned to mediation — to no avail.

Now, Slate Property Group and Adam America are taking the contractors to court.

In a legal complaint filed Jan. 30, the developers accused DCHM — a joint venture between Danya Cebus Construction and Hudson Meridian Construction Group — of project delays, overbilling and defective work. And they’re seeking damages upwards of $8 million.

“As the Project progressed, 201 Water and DCHM had many disputes regarding DCHM’s management of the Project including, without limitation, the resulting delays and DCHM’s overcharging of fees,” the plaintiff said in the court filing.

The suit alleged that the delays were caused by DCHM’s mismanagement and being unable to fully staff the project. The developers did not respond to request for comment. A spokesperson for Hudson Meridian said any allegations that DCHM mismanaged the project or overcharged “are categorically false.”

“DCHM fulfilled all of its contractual obligations and is owed substantial monies for the work it performed at the Project,” the spokesperson said.

In May 2018, following mediation, the developers and DCHM agreed to terminate their deal, under which DCHM was contracted to provide all labor, equipment and materials necessary to build the project — but “various obligations” would be ongoing, the complaint states. But the developers said they later found defects in DCHM’s work.

“These defects included, without limitation, DCHM’s failure to insulate HVAC ductwork throughout the building resulting in excessive condensation and damages to many of the units and common areas, leaking windows and incorrect installation of the hot water heater flue for the building,” according to the complaint.

The developers further alleged that DCHM breached its duties “by failing to supervise, manage and construct the Project in a reasonable, competent and safe manner resulting in water and condensation issues throughout the building and damages to the condominium and to unit owners.”

When it hit the market in 2015, 51 Jay Street was one of Brooklyn’s priciest new condo projects — and was 50 percent sold in less than five months. At the time, pricing at the 74-unit warehouse conversion started at $750,000 for a studio. Currently, a penthouse in the building is asking $4.85 million. Amenities include a rooftop fireplace, children’s playroom and a landscaped central courtyard.

Slate and Adam America paid $45 million in 2013 for the site, or about $300 per buildable square foot. Eran Chen’s ODA Architecture designed the conversion.

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