CW sues insurer over Sandy claims

 

Workers in the repair and cleanup effort in Peter Cooper Village in November, 2012

Workers in the repair and cleanup effort in Peter Cooper Village in November, 2012

 

By Sabina Mollot
It was 28 months ago when the wrath of Hurricane Sandy caused the East River to rise 14 feet and barrel its way into Manhattan’s East Side. In Stuyvesant Town and Peter Cooper Village, the gushing water caused unprecedented damage, destroying the management office and flooding basements and garages. But according to CWCapital, its insurance company has still not paid over a third of what the owner believes is owed for the damage.
The suit, filed last Thursday, said Lexington Insurance Co. has only paid $60 million of the repair costs and estimated losses that the owner has claimed were actually over $95 million. Adding insult to injury, the insurance company is also trying to bring the entire amount, including what has already been paid, to appraisal.

In its complaint, which is over 100 pages long, CW said the insurer, despite having its agents examine the damage on site, has “capped what it was willing to pay, regardless of the costs of repair.” Additionally, “Lexington simply ignored PCV/ST’s pleas for payment while at the same time, acknowledging that they were covered.”

The suit, which was first reported by Law360, noted how employees on the property immediately started work on the repairs to minimize the inconvenience to residents, which CW said served to minimize business interruption losses.
CW had hoped to get the insurer to agree on a $100 million settlement but Lexington and agents for Lexington from an insurance industry adjuster called Vericlaim “rebuffed those efforts.”

14th Street between Avenues B and C during Hurricane Sandy in 2012 (Photographer unknown)

East River water buried cars outside of Stuyvesant Town when Hurricane Sandy hit. (Photographer unknown)

CW said it has since refined its estimate to reflect newer information and now believes the actual costs from repairs and losses amount to $95,296,483. The owner said the insurer has been provided with access to the property’s employees as well as the related documentation. “PCV/ST has responded to reasonable, and many unreasonable requests for information by Lexington and Vericlaim,” CW wrote.

CW also wrote that the refusal to pay the full estimate is the result of an “incomplete” inspection that was conducted in 2013 by an insurance industry construction consultant called Wakelee Associates. “Based largely on Wakelee’s results,” Lexington informed CW that the loss and damage amounted to about $60 million. Close to $53 million of that has actually been paid out, which, with the $7,500,000 deductible, reflects Lexington’s $60 million estimate.

CW also said some of its costs have been challenged in cases where equipment had to be replaced rather than just repaired. CW defended its actions though, citing in one example the property’s heat controls. The system had controllers that were destroyed in many buildings when Sandy hit. A different type of system was then installed since the original one was no longer commercially available.

CW gave some other examples of not receiving all it believes the property was owed, including in work relating to replacement of all the buildings’ cast iron drain pipes, which had all gotten clogged with water and debris. When dozens of onsite plumbers couldn’t unclog them, contractors had to be hired to saw through concrete basement floors, which meant additional costs to replace floors, drywall, tile and other property. A year later, Wakelee “took the position they could have been unclogged,” said CW, adding that there were no objections when the work was being done. CW said Lexington also accused the owner of having a “premeditated plan” to replace them.

Workers clean out an Avenue C garage in November, 2012 (Photo by Sabina Mollot)

Workers clean out an Avenue C garage in November, 2012 (Photo by Sabina Mollot)

The document went on to list other things CW was stuck footing all or some of the bill for such as replacement of steel window and door frames that had been exposed to river water and had corroded, work at the old management office, now converted into apartments (specifically installation of equipment and furniture), damaged fire mains, asbestos removal from buildings, reimbursement for employees’ cleanup/repair work (since they were diverted from their regular duties to do it) and income loss from laundry rooms, garages and the fitness center.
CW is also attempting to block Lexington from pursuing appraisal.

A spokesperson for CWCapital said he couldn’t comment on pending litigation, and a spokesperson for Lexington didn’t respond to a request for comment.

Town & Village community getting geared up for annual holiday toy drive

Some of the donated toys from a previous T&V drive

Some of the donated toys from a previous T&V driveBy Sabina Mollot

By Sabina Mollot

With the holiday season around the corner, Town & Village is asking readers and community residents to help spread cheer by participating in our annual holiday toy drive.

This year, the drive will deliver gifts to Mt. Sinai Beth Israel Medical Center. Toys will then be distributed to children of patients of the hospital’s outpatient clinic programas as well as to children who’ll be spending their holidays in hospital rooms while undergoing medical treatment.

Gifts appropriate for children of all ages are welcome with items for older kids (13 and 14-year-olds) being the highest need. Due to hospital policy, the donated items must be new. Partnering with T&V on the drive this year by providing convenient dropoff points are CWCapital/CompassRock, the management of Waterside Plaza and M&T Bank.

Through December 12, toys may be left at:
• The new Stuyvesant Town management office at 276 First Avenue
• M&T Bank at 397 First Avenue near 23rd Street
• Waterside Management Office, 30 Waterside Plaza
• Waterside Swim & Health Club, 35 Waterside Plaza
• Waterside Community Center, 40 Waterside Plaza, Level A
• The Town & Village office at 20 West 22nd Street, 14th floor.
Bonnie Robbins, PhD, co-ordinator at Mt. Sinai Beth Israel, said gifts from drives have made a world of a difference to the children the hospital serves. In many cases, their families would not be able to provide them with any presents .

Residents close to construction site on First Ave. Loop fed up with delays

A view of the  future management office on September 2 (Photo by Michael Alcamo)

A view of the future management office on September 2 (Photo by Michael Alcamo)

By Sabina Mollot

Residents on Stuyvesant Town’s First Avenue Loop, who’ve been dealing with construction noise for months, are now asking if the new management office will ever be finished. Along with the noise, other gripes from residents have included dust and debris blowing into their windows, the walkway between several buaildings being off limits and the continued closure of the nearly Playground 8, which is also getting a facelift. Residents at 272 and 274 First Avenue also recently saw flooding in their storage rooms.

However, “The biggest concern at this point is the timetable,” said Council Member Dan Garodnick, who, in response to the complaints, wrote a letter to CWCapital Managing Director Andrew MacArthur to ask about the holdup. “It looks like there are a bunch of loose ends,” he said.

In the letter, Garodnick mentioned how he’d previously been told by CW that the construction on the office would be complete in August and that the playground would be done in May.

In mid-August, however, a newsletter from CompassRock emailed to tenants said there would be delays, with work on the office building expected to continue through the month of September. An explanation wasn’t given on the delay, but CompassRock said the final phase of construction had begun. The work included infrastructure being put into place and the space being wired. This week, a resident in a surrounding building said skylights were recently installed. In August, CompassRock said the next phase would be work on the green roof. As for the playground delay, management said the reason for that was “abandoned underground infrastructure encountered during excavation.”

But the end of the month deadline now seems unlikely since a photo, snapped by a resident in a building overlooking the construction shows that the project doesn’t look too close to being done.

Garodnick referred to the photo in his letter and also suggested that CW compensate tenants in the affected buildings with a one-month rent abatement for the inconvenience.Garodnick had brought up the possibility of a rent abatement to CW earlier in the year, though apparently, the owner didn’t agree. In the letter, Garodnick said he thought CW should “revisit the issue” due to the extended construction.

“Alternatively, (tenants) may be entitled to a rent reduction claim before the state housing agency,” he said. The letter was dated September 3 and Garodnick said so far there’s been no response. A spokesperson for CW also didn’t respond to T&V’s request for comment.

Still, the resident who’d taken the photo from his apartment on September 2, Michael Alcamo, said he appreciated Garodnick’s quick response to the issue. “All of us who face this construction site have experienced dust, dirt, exceptionally high cleaning costs and noxious construction smells,” he said. “We have not had access to our courtyard for nearly nine months.”

Additionally, said Alcamo, who heads an organization devoted to local tree planting, the work has led to the removal of healthy trees.

“CompassRock destroyed ten mature and healthy pin oak trees, in order to make room for its construction equipment.”

Another neighbor, who’s been having trouble walking, said a big inconvenience for a while had been how the gates put up on different sides of the Loop was confusing to the car service drivers she relies on, with them not knowing they were allowed in.

“I also had the use of benches taken from me for the summer outside Playground 8,” said the resident, who didn’t want her name used. “We were told construction would be completed months ago. The next set of benches are too far for me to walk to. It was a beautiful summer and I missed being out because I don’t feel ill enough to be in nor want to be in a wheelchair yet can’t walk far with or without the help of a person to hold on to.”

Another resident in an impacted building said that she’s been dealing with the noise by keeping the windows closed and the air conditioner on. She’s had to change the unit’s filter pretty frequently though due to all the dirt flying in despite being on a higher floor. The noise from the work was audible as she spoke on the phone.

But, she said, “It’s nowhere near as bad as it was over the summer. I’d say they’re in the last stages, but who knows what that means. They have a tendency to take a Pollyanna approach. You’ve still got a lot of uncovered dirt and a lot of banging and hammers going on.”