Pact Expected to Jump-Start Idled Projects

NEW YORK CITY-Forest City Ratner Cos.’ Beekman Tower and 11 other stalled development projects will be moving forward under an agreement between construction unions and management. The Economic Recovery Project Labor Agreement between the Building and Construction Trades Council and the Building Trades Employers’ Assoc., announced Friday, is intended to reduce construction costs by an average of 16% to 21% on these projects, according to a joint statement from the two organizations. The PLA entails work rule changes accepted by labor and concessions accepted by contractors.

Work on the Beekman Tower, where construction had been stalled for the past two months with half of its planned 76-stories completed, will now proceed, according to FCRC. Bruce Ratner, chairman and CEO of FCRC, who reportedly threatened to cap the Lower Manhattan residential tower at 40 stories when costs became an issue, says in a statement that “after a thorough review, Forest City’s decision to complete the Beekman project as it was designed by Frank Gehry is the result of achieving our economic goals.”

The company credits the PLA, along with reductions in the cost of materials, in resuming construction on the Downtown property, which is slated for occupancy in summer 2010. It will include 100,000-square-foot public school and a 21,000-square-foot ambulatory care center for neighboring New York Downtown Hospital.

Under terms of the PLA, unions have accepted work rule changes including no strikes or work stoppages; a standard eight-hour workday and 40-hour work week; overtime at time-and-a-half; eight common holidays; flexible starting times and lunch breaks; maximum utilization of apprentices at training wages; and strict adherence to safety rules and a standard of excellence for performance. The BTEA and unionized contractors have agreed to the following terms: no lock-outs; reduced and frozen wages for management personnel; fringe benefits and bonus reductions; reduced profit margins; reduced material and supply costs, to be passed onto owners; and improved project management and efficiency.

The agreement will be made available to private projects at risk from May 29, 2009 through June 30, 2010, and any project approved during this period can be built under these terms and conditions for the full schedule of the project, even if work continues after June 30 of next year. “The BCTC and BTEA will determine if the PLA will be extended and made available to projects starting after June 30, 2010 based on economic performance in the coming year,” according to a release.

Along with Beekman Tower, some of the other projects citywide that will be moving forward under the PLA include 80 Dekalb Ave., Tower 111, 150 Amsterdam Ave., 200 and 300 North End Ave., the Milford Plaza Hotel, a Hunter College project and and St. Mary’s Children’s Hospital, among several others.