RXR sues construction manager, alleging shoddy work in New Rochelle

Developer claims water damage repair at Hudson Meridian project could cost $5M

360 Huguenot, RXR's Scott Rechler and Hudson Meridian’s William Cote (RXR, Getty, Hudson Meridian)
360 Huguenot, RXR's Scott Rechler and Hudson Meridian’s William Cote (RXR, Getty, Hudson Meridian)

RXR Realty has sent a clear message to Hudson Meridian Construction Group: Clean up your mess at our luxury residential property in New Rochelle or fork over the millions necessary to fix it.

Scott Rechler’s firm is suing Hudson Meridian for improper construction of RXR’s 360 Huguenot mixed-use development in the Westchester County town, according to a lawsuit filed Thursday in Manhattan.

The construction manager’s “defective installation” of waterproof membranes in the building caused water damage that could cost up to $5 million to repair, RXR claimed in the suit. The company also accused Hudson Meridian of inadequate supervision.

RXR hired Hudson Meridian in 2017 to oversee the construction of its 392,000-square-foot mixed-use complex at 587 Main Street in New Rochelle, according to the complaint. The 28-story, 280-unit building was completed in 2020 as part of RXR’s revitalization of New Rochelle’s downtown.

The building’s design plans required continuous waterproofing membranes to be installed in order to prevent water and air infiltration at portions of the structure’s exterior, which consists of glass fiber reinforced concrete panels. Hudson Meridian subcontracted parts of the exterior work, including the installation of the waterproofing membranes, according to the lawsuit.

As tenants began moving into the building, RXR claimed it received complaints of water seeping into units. The company notified Hudson Meridian in February 2021 of the water issues, which RXR believed to be caused by how the panels were installed.

RXR claimed that Hudson Meridian failed to take any action and sent the construction company a notice of default in June 2021, according to the lawsuit. The developer asked Hudson Meridian to fix the issues and said it had the right to seek reimbursement for any expenses incurred from trying to address the repairs itself.

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Hudson Meridian initially denied it was responsible for the issue, according to the lawsuit. Last September, RXR and Hudson Meridian approached one of the subcontractors, PG Products of New York, to perform the repairs.

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One month later, Hudson Meridian, the subcontractor and RXR’s consulting group of engineers inspected the panels and adjacent parts of the building’s exterior, according to the lawsuit.

During the examination, water was found to be entering the building between the floor slabs and the bottom track of the structural stud wall. A spot check found a floor slab edge was wet and exposed to concrete with no waterproofing membrane present. RXR’s engineering consultants advised that the panels and floor slab edge covers be disassembled for further inspection.

In March, RXR arranged to have selected panels and floor slab edge covers removed on the exteriors of several units to allow its engineering consultants to review the installation and condition of the waterproofing membranes. The inspection found the air barrier was improperly installed in several spots and included widespread discontinuities, according to the complaint.

A report issued last month by RXR’s engineering consultants concluded water entered the building because of discontinuities in the waterproofing membranes, which it blamed on improper installation and inadequate on-site supervision.

RXR claims it has incurred more than $100,000 in fees related to the water damage and estimates it could cost between $4 million and $5 million for repairs.

”Given the extensive defects in the waterproofing membranes discovered to date, RXR has reason to believe that such defects exist throughout the entire exterior of the building and additional defects will continue to be discovered as time goes on, requiring extensive and costly repairs,” RXR’s lawyers said.

The developer is demanding that Hudson Meridian immediately address the repairs or hand over the millions it needs to fix up the tower. RXR claims in the suit Hudson Meridian has refused to perform the repairs or reimburse the developer for the damages to date.

Hudson Meridian denied the allegations, saying it was “surprised by this development.”

“We have been working with RXR for over one year to manage this situation, most recently with the solicitation of bids to implement a redesign of the select waterproofing details referenced in the claim,” the company said in a statement. “We value our relationships with RXR. We remain hopeful that upon further examination, RXR will realize the claim is without merit and we will have the opportunity to work with RXR going forward.”