Amid the familiar landscape of pandemic-era home renovations that tested the patience of neighbors across the country, a dispute unfolded atop a distinguished co-op building in New York City’s SoHo neighborhood that escalated far beyond typical boundary squabbles. This conflict pits a wealthy financier against one of the world’s most prominent figures in global finance, centering on the structural integrity of a historic loft building and the definition of neighborly respect.
At the heart of this contention is an addition constructed by the family of Ray Dalio, the billionaire founder of Bridgewater Associates, the world’s largest hedge fund. The project was built atop a sixth-floor apartment in the West Broadway Arches building where various members of his family have resided for years. The neighbor raising concerns is Federico Pignatelli della Leonessa, a millionaire and former CEO of Pier 59 Studios, who owns the adjacent loft.
Mr. Pignatelli has initiated legal action against Mr. Dalio, several members of his family, the building’s co-op board, and other parties involved in the construction. He alleges that the rooftop expansion, undertaken during the pandemic, poses a significant risk to the structural stability of his own apartment and potentially the entire 140-year-old building.
The Dalio family maintains that they secured all necessary approvals for their project. They, through their attorney, have expressed confidence that the legal system will appropriately handle the situation. This high-profile clash illuminates the complexities of living in close quarters within New York City’s exclusive real estate market, particularly when vast differences in wealth and conflicting interpretations of property rights collide.
During the period of the pandemic, the Dalio family embarked on a construction project on the roof of Unit 6G, transforming an existing approximately four-foot tall bulkhead covering about 260 square feet. The result of this work is a stucco penthouse featuring a kitchenette and a half-bathroom. Extending from this penthouse is a 2,000-square-foot landscaped deck. A pergola also forms part of the addition, reaching approximately 15 feet in height.
The penthouse itself rises about 13 feet over the midpoint of the building’s roof. When seeking permissions from city agencies, the Dalios’ architect described the original bulkhead structure as an “existing penthouse” during a video meeting with the Landmarks Preservation Commission. Due to the roof not being designed to support the weight of this new construction, the architect explained that the proposed deck platform would rest on a series of steel connectors, which would in turn be supported by the building’s timber columns located beneath the roof.
The plans presented to the Landmarks commission were approved, and the Department of Buildings also initially gave its assent. In December 2020, Kristina Nikolova Dalio, who was then living in the apartment with her husband Paul Dalio, emailed Mr. Pignatelli to inform him of the impending work. She wrote, “We wanted to let you know we plan on renovating our bulkhead and finally doing the roof deck.” She later sent him the plans for the project.
Mr. Pignatelli interpreted the email as downplaying the true scope of the work. He stated that Ms. Dalio was talking about a “‘renovation.'” He contends, “What they actually did was build a whole new seventh floor.” He also mentioned that he was traveling at the time and consequently overlooked the email containing the detailed plans for the expansion.
Upon his return to New York in May 2021, Mr. Pignatelli reported experiencing unbearable construction noise. He said he departed for Italy within a week due to the disruption. While he was away, his assistant regularly visited the apartment and documented signs of damage that Mr. Pignatelli attributes to the construction project next door.
The cataloged issues included a door that no longer properly closed into its frame and crumbling paint on the apartment’s exposed brick walls. Cracks began appearing in the walls, and he noted that the apartment’s wooden columns were tilting. These observations led Mr. Pignatelli to believe the construction was negatively impacting his unit.
Mr. Pignatelli commissioned drone photography, which he said showed that the framing used for the pergola was not constructed of wood, contrary to what the Dalios’ architect had proposed to the Landmarks Preservation Commission. Throughout the latter half of 2021, Mr. Pignatelli communicated his growing concerns about the project to both Kristina Dalio and Ray Dalio through text messages, which he described as ranging from polite to impassioned and exasperated.
The situation escalated significantly in March 2022 when Mr. Pignatelli’s housekeeper arrived at his apartment and discovered that a large mirror panel in the bathroom lay in shards on the floor. Mr. Pignatelli attributed this incident to structural shifts he believed were caused by the ongoing construction activities in the adjacent unit.
It was shortly after this incident with the mirror that Mr. Pignatelli filed his lawsuit in New York Supreme Court. He recounted texting Ray Dalio, saying, “I tried warning you that things were worsening because of the construction,” adding, “And I had no choice left then to sue.” He further emphasized the severity of the mirror incident in the text, stating, “A mirror literally exploded in my bathroom because of the structural shift, and if my daughter or I would have been there we would have been severely injured or even killed.”
In a text message shared by Mr. Pignatelli, Ray Dalio responded, stating that he had previously offered to retain a third-party inspector to evaluate the structure. However, he conveyed that he no longer believed that the neighbors would be able to amicably resolve the differences between them. Mr. Dalio’s text read, “My sincere desire was to be generous with you,” concluding, “It’s clear that what you and I think is reasonable is irreconcilable so those in the legal system will be the judges.”
Seeking an independent assessment, Mr. Pignatelli hired his own structural engineer, Richard Donald, who has worked in New York since 1989. Mr. Donald conducted an investigation within Mr. Pignatelli’s apartment, opening walls to examine the building’s structure. His findings were particularly concerning to Mr. Pignatelli and his legal team.
Mr. Donald discovered that two of the eight steel connectors supporting the Dalios’ deck were resting directly on timber columns located within Mr. Pignatelli’s apartment. This finding corroborated Mr. Pignatelli’s fears that the added weight was being borne by structural elements in his unit, which he contends were not designed for such loads.
Acting on these findings, Mr. Pignatelli’s lawyer contacted 311 to request a city inspection. According to records from the Department of Buildings, an inspector visited the site on May 26, 2022, and made a crucial observation. The inspector wrote in their report: “Job doesn’t follow plans. Plans are not according to code.”
Although most of the construction work was reportedly complete by the time of this inspection, the inspector issued an immediate stop work order. A spokesman for the Department of Buildings declined to specify the inspector’s exact concerns that led to the order. The city agency also issued a notice indicating its intent to revoke the permits that had previously been granted for the project.
To resolve the issues identified by the Department of Buildings, the Dalio family and their design team are required to work with the city to address its concerns. A spokesman for the Department of Buildings stated, “That is the owner’s responsibility to come up with that resolution plan and submit that plan to DOB for our review.” The spokesman also noted, “We continue to be in contact with the owner,” adding, “They need to resolve the issues of the audit. That has not yet been done.”
