STAMFORD – It’s a monster of a lawsuit.
Since Gaia Real Estate sued Building and Land Technology over the collapsing Lofts apartment building in November, attorneys have filed nearly 150 actions in state Superior Court in Stamford — pleadings, appearances, judge’s orders, exhibits, stipulations, amended complaints, a cross complaint, objections, motions for extension of time to plead, motions to dismiss, and more.
Gaia bought The Lofts and four other Harbor Point buildings from developer BLT in 2016. By 2018, Gaia had engineers in the building investigating tenant complaints about cracking walls and beams; buckling floors; and doors and windows that wouldn’t open or close.
The engineers found that the 225-unit converted Yale & Towne lock factory, the first and signature building of the Harbor Point development on the city’s South End, is moving horizontally and sinking.
The reason, according to the lawsuit, is that during construction BLT installed an impermeable liner at the once industrial site to contain contaminated soil. But the liner also contained the rain, which caused the groundwater level to drop, exposing the 100-year-old wood pilings that hold up the historic building.
Now air is rotting the wood, and the pilings are shifting in the dry soil.
The last of The Lofts tenants moved out in April 2022, and a Gaia architect deemed the six-story, 800-foot-long building “a disaster.”
These days the dark and silent Lofts is ringed by a chain-link fence posted with “danger” signs. Windows are boarded or stuck open in their crooked frames. Bricks in the facade don’t align, and weeds grow in once-manicured beds. A homeless person’s belongings occupy a bench on the Henry Street side.
At state Superior Court in Stamford, the many defendants are sparring.
‘Dewatering’ not covered
In the lawsuit Gaia names BLT and about 20 of its affiliates as defendants, plus Antares, the original, now-defunct, Harbor Point developer.
The suit names four BLT contractors – Loureiro Engineering Associates, New England Liner Systems, engineering consultant Fuss & O’Neill, and Weidlinger Associates Consulting Engineers, now part of Thornton Tomasetti.
Gaia also names the city, charging that the building department failed to inspect or test the foundation, among other claims.
BLT, Stamford’s largest landowner and developer of Harbor Point, the massive remake of the South End, is fighting Gaia’s claims hard.
Gaia, a New York real estate private equity firm with 83 properties in nine states, is countering BLT’s challenges.
For Gaia, much is at stake.
Executives told members of the Stamford Historic Preservation Commission last year that its insurance carrier will not cover any damage caused by dewatering, the term for what happens when underground water recedes artificially, and what caused foundation pilings exposed to oxygen to rot.
Gaia representatives went before the commission to seek flexibility to would allow the company to build more units if a replacement building includes enough period details. Gaia would have to increase the number of units from 225 to about 300 to recoup its losses and earn a profit, representatives said.
‘Doctrine of unclean hands’
In the suit, Gaia alleges that BLT prevented its surveyor from viewing certain substructures before the purchase; that BLT did not test the capacity of the wood pilings; and that BLT withheld records of soil tests taken in 2010, the year BLT completed construction.
In one court filing, BLT asks the court to dismiss two counts listed in the lawsuit because Gaia has no jurisdiction to sue. BLT says that’s because Gaia Acquisitions later conveyed the property to another Gaia affiliate, Lofts Owner LLC. According to BLT, under their 2016 purchase agreement Gaia was not allowed to switch entities without BLT’s written consent.
In another filing, BLT claims its $395.5 million purchase and sale agreement with Gaia for all five Harbor Point buildings provides that BLT “will not be liable or responsible in any circumstances for any consequential damages or lost profits.”
Last month BLT filed a cross complaint arguing that the purchase and sale agreement includes a covenant precluding Gaia from suing BLT and its affiliates.
On Monday Gaia fired back, saying it cannot address the allegations because BLT did not define the term “conveyed,” and anyway the conveying of property involves “questions of law and assignment of contracts or contractual rights and interests, and GAIA defers all questions of law to the honorable court.”
Gaia contends that it did give BLT written notice it was assigning ownership of The Lofts to an affiliate, in accordance with the purchase and sale agreement, and that other allegations are not answerable because they are “characterizations” of the terms of the agreement.
BLT’s claim that Gaia breached the contract is invalid, according to Gaia lawyers, because state law bars such claims so long after the fact. The breach of contract claim also is barred, according to Gaia lawyers, by the “doctrine of unclean hands,” which prevents a party from benefiting from a situation it created by acting in bad faith.
And so the lawsuit has gone, and will continue to go. Jury selection isn’t scheduled to begin until September 2025.
‘Where are all the people?’
In the meantime, the once sought-after Lofts building, which launched Harbor Point, is looking increasingly unkempt.
In February 2022, Lauren Meyer, spokesperson for Mayor Caroline Simmons, said an engineering firm hired by Gaia has deemed the building “structurally stable.”
Two months later, a Gaia executive told the Historic Preservation Advisory Commission, “Whatever we decide to do, we have to make the decision soon because … the building … won’t be safe for too much more time.”
Gaia has not been before the commission for more than a year. An attorney for Gaia did not respond Tuesday to a question about whether the building will remain as is until the lawsuit is resolved.
Meyer on Tuesday said she needed more time to find out whether the building department and fire marshal consider the building safe.
Walking through the drizzle Tuesday near The Lofts, Lorna Lopez stopped briefly to ask a reporter why it’s surrounded by a fence.
“Where are all the people?” she asked. “The owner can’t be renovating it – it’s a pretty new building.”
Told that it’s collapsing, Lopez hopped across the street.
“Yeah, OK,” she said. “I’m gonna keep walking.”