Friday, July 22, 2011

Latest consultant's report: arena still ahead of schedule (but lingering schedule issues?), 320 workers on the job (fewer than FCR's report)

According to the latest Arena Site Observation Report, dated 6/30/11 and based on a 6/1/11 visit, based on cash flow, the Barclays Center remains is one month ahead of schedule and the transit connection remains two months ahead of schedule.

The report is prepared by Merritt &; Harris, the real estate consultant to the arena PILOT Bond Trustee.

There are a few items that should provoke further inquiry, such as a discrepancy between the number of workers reported and the number reported by Forest City Ratner, and a discrepancy regarding the percentages of minority- and women-owned contractors.

Those discrepancies might be explained by a report from the Independent Compliance Monitor (ICM) required by the Community Benefits Agreement, but no ICM has been hired.

Also, there may be a lingering dispute about the schedule.

Workers on site: 320 vs. higher numbers

There seem to be fewer workers on site than Forest City Ratner has reported. From p. 35 of the document:
According to the General Contractor and the Manpower Log, 320 persons have been on the job this month.
It's not clear whether the term "month" regards May or June, though, given that Merritt & Harris had further time to work on the report after the site visit, I'd bet on June.

By contrast, at the Atlantic Yards District Service Cabinet meeting 5/19/11, Forest City Ratner said there were 500 workers on site. At the cabinet meeting 7/14/11, the developer reported 430 workers on site.

MWBE contracting

Similarly, the percentage of contracting seems to differ, though that may depend on work that changes each month. From p. 35 of the document:
Approximately 6.0% and 9.5% of the workforce on the job this month is attributed to MBE [minority-owned business enterprise] and WBE [women-owned business enterprise] companies, respectively, with a projected MBE and WBE participation to account for 13.3% and 9.3% of the workforce.
Forest City this month said that 17% of the work on the arena and transit connection was attributable to MWBE companies, not 15.5%.

It's not clear if Forest City calculated its number by workforce or by contract amount.

Schedule disputes or discrepancies?

For months, Merritt & Harris has hinted at some unresolved, if not necessarily highly contentious, discrepancies over the schedule. From p. 8 of the document:
The original High Level Arena Summary Construction Schedule, dated July 16, 2010, had been provided for our review. We subsequently received the Executive Level Summary for Schedule 12M, dated February 10, 2011, prepared by Hunt, which indicates that substantial completion is anticipated to be by August 27, 2012. The Developer is currently reviewing that schedule and is working with Hunt to reach an agreement. A resolution is expected by July 2011.
In its 4/4/11 report, Merritt & Harris stated similarly:
The original High Level Arena Summary Construction Schedule, dated July 16, 2010, had been provided for our review. We have now received the Executive Level Summary for Schedule 12M, dated February 10, 2011, prepared by Hunt, which indicates that substantial completion is anticipated to be by August 27, 2012. The Developer is currently reviewing that schedule and is working with Hunt to reach an agreement. A resolution is expected by May 2011.
The resolution date has obviously been pushed back. Actually, it's been pushed back a while. The 1/28/11 report used the term "schedule disputes":
A High Level Arena Summary Construction Schedule, dated July 16, 2010, has been provided for our review. The current schedule, prepared by Hunt, indicates that substantial completion is anticipated to be by August 12, 2012. The Developer is currently reviewing that schedule and is working with Hunt to resolve current schedule disputes. A resolution is expected over the next few months.
(Emphases added)

Note that the substantial completion date has since been nudged back 15 days, and that the term "schedule disputes" is no longer used.

The 1/3/11 report also used the term "schedule disputes" and hinted at a much earlier resolution:
A High Level Arena Summary Construction Schedule, dated July 16, 2010, has been provided for our review. The current schedule, prepared by Hunt, indicates that substantial completion is anticipated to be by August 12, 2012. The Developer is currently reviewing that schedule and there is a meeting anticipated for mid-December to resolve current schedule disputes.
Graphics showing cash flow (click to enlage)


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