Residents of New York’s first luxury spa condominium are upset after discovering that a neighbor received nearly $500,000 from the building for renovations on her expansive multimillion-dollar apartment, according to reports.
Gina Abbandonato Switzer claimed water damage in her 4,300-square-foot unit, prompting the condominium board to allocate about $500,000 from the community fund for repairs, as stated in court documents.
“Many unit owners are very upset that you and Lou paid your employees $492,000 and would like to see proof of that,” a neighbor texted Ms. Switzer, who is married to Lou Switzer, CEO of Switzer Group.
“If you get $492,000 and you don’t have pictures of the damage, no one is going to get away with it,” another frustrated apartment owner exclaimed.
The renovations have led to a lawsuit filed in Manhattan Supreme Court by fellow resident Carl Garnier.
This saga at the lavish 42-story building, known for its 6,000-square-foot spa, 10,000-square-foot fitness center, and Olympic-sized pool, began about two years ago.
Documents filed with the lawsuit indicate that the Switzers’ unit was damaged during facade repairs in 2023, but the board allegedly failed to provide any “invoices, photographs, inspection reports, insurance records, meeting minutes, or voting evidence” concerning the damages or disbursements.
The lawsuit accuses the board of a “breakdown in basic condominium governance” by financing nearly $500,000 for one of its own members without proper documentation.
Residents only became aware of the payments this spring. A report stated that the board admitted to spending $492,000 on flooring and cabinetry replacements only after being questioned repeatedly.
Gina, who purchased the apartment with her husband for $6 million in 2009, described the allegations as a “misunderstanding,” asserting that the damage was caused by a leak inspection during construction. Yet, no evidence has been provided.
“That sounds very bad for you,” one irritated neighbor responded to her.
While Gina and Lou Switzer are not named in the lawsuit, Gina declined to comment when contacted by phone. Meanwhile, the board’s lawyers maintain that the payments were legal, albeit possibly misguided, and were disclosed numerous times to the unit owners.
The board believes self-funding the repairs was more prudent than filing an insurance claim, which would raise premiums.
The building, converted into condos around 2006-2007 and promoted as the city’s first luxury spa condominium, reportedly experienced water and mold issues during a waterproofing test.
The board was advised by its insurance broker to cover the repairs directly to avoid increased premiums from a claim.
“The board of directors has approved the repair transaction,” notes the financial report.
Minutes from a board meeting highlight ongoing resident dissatisfaction with how expenditures are handled.
“It seems like they completely overstepped their bounds. It was a conflict of interest because the person who received the compensation was also a director,” remarked one resident, as cited in court documents.
“That, to me, indicates something really fraudulent here,” added another.
During the same meeting, Gina claimed she and her husband intended to file a $3 million insurance claim but were repeatedly discouraged by board members, who said it could harm the building’s interests.
One attorney for the board noted that Mr. Switzer was trying to improve the building’s conditions.
“She wanted more, but she took the cheaper route,” the lawyer commented.
Another attorney stated the payment decision came from the previous board, but insisted it was completely legitimate despite residents’ objections.
“The current board does not agree with the previous board’s decision to pay for these repairs out of pocket,” attorney Adam Reitman Bailey told the Post. “But that decision is protected by business judgment rules.”
Mr. Bailey contended that all legally required records had been provided and requested a swift dismissal of the case.
“It’s just that easy,” he emphasized.
When asked for comments, Garnier stated that his lawsuit and filings “speak for themselves.”
However, the building’s management company did not respond to inquiries.
