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April 1, 2009

Deal to Cut Costs Is Close For Builders and Unions

The NY Times
By Charles V. Bagli

Reeling from the real estate downturn in the city, construction unions and builders are edging closer to an agreement that they say will reduce labor costs and enable at least some of their projects in Manhattan to proceed despite the weak economy.
Bruce Ratner, a developer who traditionally builds with union contractors, recently stopped at the 38th floor of his planned 76-story Beekman Tower in Lower Manhattan, threatening to cap the building at 40 stories if construction unions did not accept concessions on wages and work rules.

Mr. Ratner, who is not involved in the current negotiations, stopped work for three months early last year while he scrambled to obtain $680 million in construction financing. At that time, he decided to switch from condominiums to rentals. In another cost-cutting move, he modified the design by the architect Frank Gehry, using a standard curtain wall instead of one that would seem to be undulating, on one of the tower’s eight sides.


Atlantic Yards Report, Brinksmanship with unions behind stall at the Beekman Tower

Yesterday, during a conference call with investment analysts, Forest City Enterprises CEO Chuck Ratner explained the stall at the Frank Gehry-designed Beekman Tower in Lower Manhattan.

"We have put additional vertical development on hold while we assess overall costs," he said. "Given falling construction costs, we have an opportunity to achieve savings on construction." Meanwhile, he said, work continues on the lower floors at the site, and the school and ambulatory care center will open as planned.
Ratner, [NY Times reporter Charles V.] Bagli writes, was not involved in current negotiations among developers and unions to modify work rules, wages and benefits to cut labor costs by 15 to 20 percent--less than the 25 percent sought be the real estate industry.

Was that because others took precedence? You'd think that if he's serious about beginning construction this year on the Atlantic Yards arena, Ratner would want concessions.

Posted by lumi at April 1, 2009 6:00 AM