Thursday, April 09, 2015

Forest City portrayed as pro-union in simmering dispute with partner over East Harlem project; record suggests more question marks

In 1,100-unit Harlem project promises affordable housing but not union jobs, yet, Capital New York's Ryan Hutchins reports on a "plan to build three, roughly 50-foot-tall towers on top of East River Plaza, a large shopping mall close to the river," with partners Forest City Ratner and Blumenfeld Development Group proposing to "set aside 25 percent of its units to lease at significantly below market rate." 

While that would seemingly meet the de Blasio administration goals, writes Hutchins, it remains undecided "whether the East River Plaza development will use union labor—and according to one source close to Forest City, that’s quickly becoming a point of contention between Forest City and Blumenfeld, leaving the project 'deeply troubled.'"

Hutchins quotes a union source as saying he'd be stunned at a Forest City project without union labor, but also quotes Blumenfeld as saying it's undecided. Forest City had no comment (except, I'd bet, that "source close to Forest City").

Complicating all this are countersuits between Forest City and Blumenfeld over the Nassau Coliseum project.

How friendly is FCR to labor?

Hutchins writes:
Forest City has been seen, for the most part, as a friend to organized labor. Founder Bruce Ratner, a close ally to Mayor Bill de Blasio, has often championed the liberal cause and given extensively to Democratic candidates. There was one dispute over plumbing work for a modular building at Atlantic Yards in Brooklyn, but even that did not involve an accusation of using non-union workers—just one trade instead of another.
That "one dispute" concerns a significant change--the swapping of high-paid plumbers and mechanical contractors for cross-trained union laborers, part of a court case still under appeal and subject to a contentious City Council hearing during which Forest City was accused of getting the city to bend its rules.

And Forest City is not necessarily a friend to organized labor when it comes to its suppliers. At that same hearing, a top Forest City executive lied to Council Member Letitia James when she asked whether the company's Virginia-based steel fabricator was a union shop. See the video.

The switch regarding workers at the modular factory was partly responsible for flaws in the modular building, contends Forest City's estranged ex-partner Skanska USA Building. A Skanska letter said “it was, and still is, completely unrealistic to expect the factory workers”—which it says were underpaid at a blended average of $36/hour—to “possess the skills necessary to perform all of the various tasks.”

And let's not forget Forest City's willingness to muscle unions. During an April 2009 conference call with investment analysts, Chuck Ratner--then CEO of parent Forest City Enterprises--explained the stall at Frank Gehry’s Beekman Tower in Lower Manhattan, which the developer had halted halfway up, at the 38th floor before completing it.

"Given falling construction costs, we have an opportunity to achieve savings on construction,” he declared coolly. They can have it both ways: if construction costs go down, they renegotiate with workers. But if costs rise, well, they renegotiate public subsidies.

Then there was an intra-union dispute about who would represent workers who convert the building from a basketball court to other configurations--a decertification vote that failed in early 2013, but left significant bitterness.

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