NEW YORK CITY—Forest City Ratner Cos. has fired another salvo inits ongoing battle with Skanska USA Building concerning theconstruction of B2, the first residential tower with modularconstruction at the Pacific Park Brooklyn project. FCRC presidentand CEO MaryAnne Gilmartin has sent Skanska co-COO Richard Kennedya letter—dated Sept. 4th—requesting that the developerassume operating control and responsibility for the factory that isproducing the modules for the multifamily building. In a preparedstatement, Kennedy has made clear he sees the letter as fuel tothis raging fire.

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The fight became public when the two sides were unable to settlesome disagreements and Skanska issued a cease-and-desist stoppage order to its workers at thesite. The contractor subsequently filed a lawsuit against FCRC, charging that thedeveloper “has steadfastly refused over many months to engage in anhonest dialogue about the serious commercial and design issuesfacing the project.” FCRC brought a counter suit—which initially was positioned asthe first of the two legal actions—charing that Skanska had“multiple failures and missteps as the construction manager.

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Gilmartin's letter says, in part, “FCRC Modular is preparedtoday to take over as managing member of the partnership and thefactory and assume operating control and responsibility for thefactory so we can resume production of the modules needed for theB2 project. We hope and assume that you share our belief that thisis the fastest and best way to reopen the factory and bring backthe workers you wrongfully furloughed while the B2 owner andSkanska USA Building seek to resolve the broader business dispute.As you know, as of now Skanska Modular has prohibited FCRCModular's access to the factory.

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“As a 50% partner is FC+S Modular, and in light of B2 Owner'scommitment (as evidenced by various completion guarantees) to fundcash needs to complete the project until the court determinesfinancial responsibility, we are hopeful that you will provide usimmediate access to work toward the completion of the B2 projectand mitigate the damage caused to our joint venture business byyour actions.

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In response to the letter, Kennedy says, “By issuing this letterto the press prior to even sending it to its partner, SkanskaModular, Forest City has proven it is more interested in engagingin a propaganda exercise to take the public's eye off the seriousconsequences of its failures at the B2 Project instead of simplyfixing the commercial and design issues that led to the unfortunateneed to shut-down the project and factory on August 27. Asfor the letter itself, it is completely devoid of substance andSkanska Modular will address it consistent with the parties'partnership agreement. Again, Skanska remains hopefulcommercial and economic sensibilities will prevail and that ForestCity will resolve its problems at the B2 Project so we can get backto building and get the factory workers back to work. But Skanska simply will not be coerced into surrendering itscontractual rights by Forest City's inappropriatetactics.”

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Rayna Katz

Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.