“Colossal failures” Plague 1 Park Row Development Project

The developer of 1 Park Row is suing its construction manager, alleging a subcontractor’s mistakes led to “colossal” issues and delays with the project.

1 Park Row Development claims construction manager MJM Associates Construction “utterly failed” to supervise JNR Flooring, which defied the project contract, triggered millions of dollars in damages and forced the owner to redesign the project to fit JNR’s “subpar” capabilities, according to a lawsuit filed in New York Supreme Court.

JNR also issued several subcontracts that 1 Park Row Development was unaware of, resulting in tens of thousands of dollars in liens against the property after JNR abandoned the project, the suit alleges. The owner is seeking at least $15 million in damages from MJM and JNR.

New Yorkers remember the project site as the former home of electronics store J&R Music and Computer World, which shut down in 2014. Owners Joe and Rachelle Friedman said then that the plan was to rebuild the storefront into an “unprecedented retailing concept and social mecca.”

Plans were eventually filed for a building with 63 apartments, three floors of office space and ground-floor retail. The deed was transferred in 2019 to 1 Park Row Development from 1 Park Row LLC, with Rachelle signing for both entities. Circle F Capital emerged as the developer and Parkview Financial provided a $90 million construction loan in 2021.

The lawsuit lays out small-potatoes billing disputes that foreshadowed larger problems. The site owner alleges MJM never reimbursed it for several payouts in the project’s early stages, including $40,000 in exchange for a lien release from a supplier and $45,000 for subcontractor services. MJM subcontractor JNR also “frequently” left the owner to foot bills, including a $37,000 fee to remove a drilling rig for an excavation pit in 2022.

MJM also racked up city violations and did not reimburse the owner. The 1 Park Row site has had more than 50 building violations since 2019 ranging from unsafe site conditions to failure to file energy-use benchmarking reports. The property also has 21 Environmental Control Board violations listed, 10 of which were issued to MJM, involving construction safety issues.

The relationship with MJM soured further when JNR was hired as a subcontractor for $9.5M last year to perform excavation, foundation, waterproofing and concrete superstructure work. During the first phase of construction, JNR pulled several “bait and switch” maneuvers in which approved machinery was not actually used on-site, according to the complaint.

In one instance, JNR brought a “massive, antiquated drill that clearly would not be able to reach certain pile locations or the required depth of the piles given its inability to maneuver around the site.”

In another, JNR brought a hydraulic crawler drill that was too big for the site and then requested design changes to accommodate it, the lawsuit said. The redesigns were not minor, the owner said, and included more beams.

“The additional transfer beams diminished the usable space in the office units, which negatively impacted the value of those units,” the lawsuit reads. “Neither MJM nor JNR ever reimbursed [the owner] for the additional structural work, either.”

The problems resulted in five months of delays, the lawsuit alleges.

JNR stayed on the project in December for the second phase and insisted that MJM stay on as construction manager and that 1 Park Row Development kick in another $1 million for completed work.

The owner said it reluctantly handed over the money to keep the troubled project moving.

During the second phase of construction work in February 2023, the owner’s architect inspected JNR’s work and found it was “plagued” by defects. In April, “every single item” on an inspector’s list failed to meet the building code, according to the lawsuit.

Errors found included JNR pouring concrete for the ground floor without approval from the design team; incorrectly placing slab edges and mechanical, electrical and fire protection items; and pouring columns to incorrect elevations and inconsistent with project plans.

“In another imprudent attempt to cut costs, JNR decided to chop the foundation wall—rather than saw cut it as specified in the project plans,” the complaint reads. “In so doing, JNR chopped into an existing Con Edison vault.”

Remediation efforts were performed between February and April, but JNR abandoned the effort by April 11, the lawsuit said.

Representatives for MJM and JNR could not be immediately reached for comment.