NEW YORK CITY—Forest City Ratner Cos. has fired another salvo in its ongoing battle with Skanska USA Building concerning the construction of B2, the first residential tower with modular construction at the Pacific Park Brooklyn project. FCRC president and CEO MaryAnne Gilmartin has sent Skanska co-COO Richard Kennedy a letter—dated Sept. 4^th—requesting that the developer assume operating control and responsibility for the factory that is producing the modules for the multifamily building. In a prepared statement, Kennedy has made clear he sees the letter as fuel to this raging fire.

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

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

“As a 50% partner is FC+S Modular, and in light of B2 Owner's commitment (as evidenced by various completion guarantees) to fund cash needs to complete the project until the court determines financial responsibility, we are hopeful that you will provide us immediate access to work toward the completion of the B2 project and mitigate the damage caused to our joint venture business by your actions.

In response to the letter, Kennedy says, “By issuing this letter to the press prior to even sending it to its partner, Skanska Modular, Forest City has proven it is more interested in engaging in a propaganda exercise to take the public's eye off the serious consequences of its failures at the B2 Project instead of simply fixing the commercial and design issues that led to the unfortunate need to shut-down the project and factory on August 27. As for the letter itself, it is completely devoid of substance and Skanska Modular will address it consistent with the parties' partnership agreement. Again, Skanska remains hopeful commercial and economic sensibilities will prevail and that Forest City will resolve its problems at the B2 Project so we can get back to building and get the factory workers back to work. But Skanska simply will not be coerced into surrendering its contractual rights by Forest City's inappropriate tactics.”

Instant Insights /

Gilmartin Seeks Modular Factory Control from Skanska

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