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May 5, 2011

Cutting construction costs key to first Atlantic Yards tower; is modular option part of overall effort to get union concessions as contracts expire?

Atlantic Yards Report

There was some useful information in the sycophantic Real Deal profile article headlined Ratner's refute: Developer insists Atlantic Yards is moving forward (and critiqued here): the effort to control construction costs, whether via experimental modular construction or union concessions, is crucial to the developer's profits, and to the timing of the promised housing.

According to the article:

Profits from the planned residential buildings are "going to depend on where construction costs wind up," [Bruce] Ratner said.

[Maryanne] Gilmartin said the company has finished the schematic design phase of the project's first residential tower, a 400-unit building on Dean Street that will be 50 percent affordable units and 50 percent market rate.

The company is in the process of developing two separate possible designs for the building -- one modular, aimed at cutting costs, and one conventional. It expects to send contract documents out to bid on both designs in the "latter part of the year," Gilmartin said.

It's possible that the modular option is aimed as leverage to get unions to make project-specific concessions, as I've suggested. So the conventional design also would be aimed at cutting costs, though in a different way.

After all, Forest City Ratner famously halted work halfway through the construction of the Beekman Tower, then renegotiated union contracts to save money.


Posted by eric at May 5, 2011 10:25 AM