It’s Millionaire vs. Billionaire in the Battle of the SoHo Pergola

Millions of Americans embarked on home-improvement projects during the pandemic. Many of those projects annoyed their neighbors.

But in SoHo, on the top floor of a co-op building filled with multimillion-dollar lofts, an apartment addition is the centerpiece of an only-in-New-York dispute, pitting a wealthy financier named Federico Pignatelli della Leonessa against Ray Dalio, the billionaire founder of Bridgewater Associates, the largest hedge fund in the world.

The Dalio family’s pandemic project was a penthouse rising 13 feet over the midpoint of the roof with a 2,000-square-foot landscaped deck and a pergola that reaches about 15 feet high, atop a sixth-floor apartment that various of Mr. Dalio’s children had been living in for years.

Mr. Pignatelli, who lives in the loft next-door, maintains that the weight of the structure is crushing his own apartment — and perhaps endangering the rest of the building too.

Mr. Dalio is known in the world of finance for his championing of “radical transparency”; it is the bedrock rule of his best-selling book, “Principles.”

But Mr. Pignatelli, who decamped from New York to a home he owns in Los Angeles in the first months of the pandemic, said that his neighbors did not alert him to the expansion until construction was about to begin. Mr. Pignatelli said he returned to New York in May 2021 to find heavy construction materials scattered on his portion of the roof and a penthouse rising from the Dalios’.

After nearly a year of texting the Dalios and the co-op board president about the disruption, Mr. Pignatelli has turned to the courts, filing a lawsuit against Mr. Dalio, one of his sons, two daughters-in-law, two architects, two engineers, a contractor, the board of the building co-op and the president of the board.

“I’m Italian, Ray’s Italian, we’re neighbors!” Mr. Pignatelli said, as he offered a tour of the apartment he no longer sleeps in for fear it will collapse on top of him. “We should be respecting each other and helping each other, but he’s incredibly arrogant.”

In legal filings, Mr. Dalio and the other defendants deny acting improperly.

A lawyer for the Dalio family said in a statement that they obtained all required approvals for the project and endeavored to work with Mr. Pignatelli to address his concerns. “We have confidence that the legal system will handle this situation appropriately,” Tom Sinchak, the lawyer, said.

As his case winds through the courts, Mr. Pignatelli in recent weeks has found new urgency in his cause. After the collapse of a concrete garage in Lower Manhattan killed one person and injured five others in April, one of his lawyers sent a 24-page letter to Mayor Eric Adams and officials in city’s Department of Buildings laying out why his clients believes the Dalio construction poses a similar risk to the apartment building that stretches from West Broadway to Thompson Street.

“The new penthouse, decks and related construction, as occupied — effectively a new 7th floor — impose a load calculated to exceed 200,000 pounds resting on and supported by the building’s 140-year-old timber columns which they were never designed to support,” the letter said.

In an email to The Times, a spokesman for the Department of Buildings said that its inspectors visited the Dalio structure last May. They found it “did not fully comply” with the plans the city approved but “did not observe any structurally hazardous conditions.”

Soon after, the Dalios notified the city that they would “resolve” the issue. “We continue to be in contact with the owner,” the spokesman said. “They need to resolve the issues of the audit. That has not yet been done.”

The chairman of the building’s co-op board and its lawyer declined to comment, but an engineering report commissioned by the board found “cosmetic” damage to Mr. Pignatelli’s apartment that has likely been caused by the Dalio project but “no basis for any conclusion that the newly constructed roof deck and penthouse above Unit 6G jeopardizes the building in any way.”

Special apartments in a special building

It is perhaps difficult for most New Yorkers (and certainly most non-New Yorkers) to relate to a feud between ultrawealthy homeowners atop a historic building in one of the city’s chicest neighborhoods. Couldn’t the Dalios buy a bigger apartment that comes with a roof deck? Couldn’t Mr. Pignatelli ask the Dalios to buy him out?

Mr. Dalio has written at length about how his approach to investing is guided by mantras like: “Don’t pick your battles. Fight them all.”

Mr. Pignatelli noted that these are special apartments in a special building in a special neighborhood.

The lofts are in a building called West Broadway Arches, a building in the city’s designated SoHo-Cast Iron Historic District Extension, with entrances on West Broadway and Thompson Street. The wood structure was designed in a Romanesque Revival style marked by large arches, a brick facade and cast-iron infill, by Oscar S. Teale, an architect and magician who was a friend of Harry Houdini. Constructed in the 1880s, it was a manufacturing center for the Marvin Safe Company before evolving into a residential building, starting in the 1970s.

Mr. Pignatelli’s 2,400-square-foot loft features walls of exposed brick, 140-year-old wooden columns, an arched window overlooking a courtyard and a den atop a staircase. Members of the Dalio family have two large apartments in the building: one next to Mr. Pignatelli’s and one on the floor below.

Mr. Pignatelli bought his apartment, Unit 6H, in 1991 for $650,000 at a time when few SoHo lofts could be purchased for residential use by those who were not artists. It has turned out to be a smart investment (a unit on the second floor sold in 2019 for $3.6 million), but Mr. Pignatelli said he wasn’t drawn by the apartment’s profit potential. He loved SoHo and knew it was special to live amid artists.

“I really wanted it because of the location and the quiet,” he said. “I hate noise, and I like the view.”

Mr. Pignatelli was born and raised in Rome and, amid a career in finance, moved to New York for a job. For a few decades, he divided his time between New York — where he founded Pier 59 Studios in Manhattan, developing the space into an advertising production facility — and Los Angeles, where his daughter was raised, while also spending time in Milan.

He has sued the co-op board twice before, both suits related to the roof. In 2004, a neighbor built a fireplace with a chimney that blocked Mr. Pignatelli’s view. (As part of a settlement, she removed it, according to legal documents.) In 2014, the board declined to reinstall an 140-square-foot flat roof deck with two chairs that it had removed when conducting maintenance, he said. (As part of that settlement, the deck and chairs were put back, the documents said.)

New Neighbors

In April 2013, Unit 6G, which is next-door to Mr. Pignatelli’s loft, was purchased for $4.3 million by a limited liability corporation connected to Bridgewater Associates. Nearly six months later, the L.L.C. also bought Unit 5G, directly beneath it, for $2.87 million.

Bridgewater was founded in 1975 by Mr. Dalio, who retired as chairman last year and whom Forbes named as the 83rd richest person in the world, with an estimated net worth of $19 billion.

The Dalios’ lawyer said the apartment is owned and inhabited by Mr. Dalio’s children. He said Mr. Pignatelli was “improperly including Mr. Dalio as a defendant in an obvious effort to try to embarrass him into a settlement.”

For several years, 6G was inhabited by Mr. Dalio’s son Paul Dalio, a filmmaker, and Paul’s wife, Kristina Nikolova Dalio, a cinematographer.

The neighbors had a mostly friendly rapport. Mr. Pignatelli said that Ms. Dalio asked to see his apartment in 2019: “She said, ‘I want to see your place to get inspired, because I know it’s very beautiful.’”

As her family grew, Mr. Pignatelli said she told him, they needed more space. Would Mr. Pignatelli be willing to sell his apartment to her and her husband?

“I said, ‘No, I’m not interested,’” he recounted. “Then she said, ‘Oh, we’re going to have to move.’ So I said, ‘You know, if you move and you want to sell your place, please let me know.’”

Things devolved. In February 2020, Mr. Pignatelli texted Matthew Dicker, the co-op board chairman, to complain about items the Dalios had left in the building hallway: shoes, umbrellas, toys and packages.

“They keep their door open for hours during the day,” Mr. Pignatelli wrote, “with kids playing and screaming in this space (why not inside their home?) and I have to hear them scream or play piano, like they are my kids.” (Mr. Dicker replied in a text: “Yikes.” Reached by The Times, he declined to comment.)

In March, as the pandemic descended, Mr. Pignatelli took off for Los Angeles, where he spent much of the remainder of the year.

Back in New York, the Dalios, who could not expand horizontally, decided to build up, transforming an approximately four-foot tall, 260-square-foot bulkhead over their loft into a stucco penthouse with a kitchenette, a half-bathroom, and a 2,000-square-foot landscaped deck.

In August 2020, an architect hired by the Dalios presented a plan to the Landmarks Preservation Commission to renovate what he described in a video meeting as an “existing penthouse” — which referred to the bulkhead — and to add a wooden deck and a pergola.

Because the roof was not built to bear the weight of this type of construction, the architect explained to the Landmarks commission, the proposed deck platform would rest instead on a series of steel connectors supported by the building’s timber columns beneath the roof.

The commission OKed the plans, as did the Department of Buildings.

In December 2020, Ms. Dalio emailed Mr. Pignatelli. “We wanted to let you know we plan on renovating our bulkhead and finally doing the roof deck,” she wrote. She later sent him the plans.

Mr. Pignatelli said her email downplayed the project. “She was talking about a ‘renovation,’” he said. “What they actually did was build a whole new seventh floor.” He said he was traveling and overlooked the email she sent with the plans.

‘I Tried to Warn You’

When he returned to New York in May 2021, Mr. Pignatelli said, the construction noise was unbearable, and he left within a week for Italy. In his absence, his assistant visited the apartment regularly and cataloged what they believe are signs of damage: A door was no longer closing into its door jamb, paint on his brick walls was crumbling, wood columns were tilting and cracks were appearing in walls.

Mr. Pignatelli commissioned drone photography that he said captured images showing that the framing of the pergola was not wood, as the architect had proposed to the Landmarks Preservation Commission.

Throughout the spring, summer and fall of 2021, Mr. Pignatelli sent text messages — some were polite and neighborly, others impassioned and exasperated — to Kristina Dalio and Ray Dalio, about his concerns.

In March 2022, Mr. Pignatelli’s housekeeper arrived at the apartment to find that a large mirror panel lay in shards around the bathroom.

Mr. Pignatelli then filed the lawsuit in New York Supreme Court. “I tried warning you that things were worsening because of the construction,” he texted Mr. Dalio. “And I had no choice left then to sue.”

He continued: “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.”

Mr. Dalio replied, in a text message shared by Mr. Pignatelli, that he had offered to hire a third-party inspector to assess the structure but that he no longer believed the neighbors could resolve the discord themselves.

“My sincere desire was to be generous with you,” the text read. “It’s clear that what you and I think is reasonable is irreconcilable so those in the legal system will be the judges.”

Mr. Pignatelli then hired his own structural engineer, Richard Donald, who has operated in New York since 1989. He opened the walls of Mr. Pignatelli’s apartment and discovered that two of the eight steel connectors holding up the Dalios’ deck were resting on timber columns within Mr. Pignatelli’s apartment.

Mr. Pignatelli’s lawyer called 311 and asked for a city inspection. According to Department of Buildings records, on May 26, 2022, an inspector wrote: “Job doesn’t follow plans. Plans are not according to code.” Most of the work by then was complete, but the inspector issued an immediate stop work order. A spokesman declined to cite the inspector’s specific concerns. The city also issued a notice of intent to revoke permits.

To resolve the issue, the Dalios and their design team are required to work with the city to assuage its concerns. “That is the owner’s responsibility to come up with that resolution plan and submit that plan to DOB for our review,” a Department of Buildings spokesman said.

Earlier this month, an inspector for the city dropped by the Dalio apartment and found no one home and no signs that the stop work order was being violated, according to a report.

Nearly three years after the project began, Mr. Pignatelli’s legal fight continues. This month he sued his insurance company, which denied a claim for the shattered bathroom mirror, saying it believes the mirror broke as a result of “‘overheating’ caused by the skylight,” not the Dalio construction, according to Mr. Pignatelli’s complaint.

Back at West Broadway Arches, Kristina and Paul Dalio moved out of Apartment 6G, and Ray Dalio’s youngest son, Mark Dalio, moved in with his then-girlfriend Maxine Petry. (They were engaged on a submarine and then married last summer on the Spanish island of Mallorca in a multiday extravaganza.)

For now, Mr. Pignatelli is spending most of his time in Los Angeles and Milan, afraid that his SoHo apartment is unsafe. When he needs to work in New York, he stays at Casa Cipriani, a private club. “They do all they can to make me feel at casa,” he said. “but nothing can beat my casa.”

Rob Copeland contributed reporting.