Skip to main content

Union head LaBarbera: “We are negotiating with the market” (and was that the way to look at modular deal?)

There was an interesting quote in the 6/12/15 Wall Street Journal profile of Gary LaBarbera, Growth of Nonunion Construction Tests New York City Labor Leader, subtitled "New reality for unions leads to negotiated compromise on hours, wages":
Even five years ago, it was unimaginable that a developer would defy the city’s powerful construction unions, led by Gary LaBarbera, and try to build a complicated Manhattan building without relying entirely on his members.
...Developers’ increasing willingness to work with nonunion workers has been prompted by rising construction costs, an increase in foreign investment and ownership that has upended long-term loyalties, and a pool of nonunion workers now capable of building high-rises.
In this context, Mr. LaBarbera, 6 foot 2 inches tall with a Long Island accent and a booming voice, would seem on first meeting to fit the stereotype of the union boss knocking heads together.
...But one of Mr. LaBarbera’s frequent sayings—“We are negotiating with the market”—suggests an understanding of business realities that might have seemed anathema to union leaders of old.
That may be a frequent saying, but it was the first time I'd seen it in an article.

What's the "market"?

It sounds reasonable, but, as we've learned with Atlantic Yards, "the market" isn't always free.

Remember MTA Chairman Peter Kalikow's 2005 comment that the $214.5 million appraisal for the Vanderbilt Yard was "just some guy's idea of what it's worth," then adding, as if in some bizarro free-market world, "That was his opinion, and it wasn't borne out by the marketplace.” (Forest City Ratner had the inside track, so only one rival bidder emerged.)

Or the 2009 deal revision, in which the MTA agreed to provide more favorable terms to Forest City Ratner without seeking any other bidders or adding clauses to provide more returns to the public in case the economy turned. 

“Y’know, these railyards have been there for a very long time,” suggested Jeffrey Kay, director of the Mayor’s Office of Operations. “The reality is, it’s only worth what someone’s willing to provide... There is no other market.”

The Atlantic Yards modular deal

Since 2009, LaBarbera has been president of the Building and Construction Trades Council of Greater New York (BCTC), which consists "of local affiliates of 15 national and international unions representing 100,000 working men and women in the New York City."

His "frequent saying" certainly seems to address the BCTC's agreement with Forest City Ratner to agree to a new division, at a lower wage rate, inside the factory in the Brooklyn Navy Yard to build pieces of the B2 modular tower. 

The WSJ reported:
“People told me it would be a cold day in hell or it would be an impossible feat to get the unions’ head around modular construction,” said MaryAnne Gilmartin, president and chief executive officer of Forest City. Ms. Gilmartin said that Mr. LaBarbera was ultimately convinced that modular would open a new avenue of business for unions.
Looking back at the modular deal

That may be true. But it was a little more complicated than that.

As I wrote in November 2012 regarding Forest City's modular deal, the Forest City press release stated:
Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York, said, “Today, we move forward with an innovative approach to development that will allow us to realize the vision of the Atlantic Yards project and create traditional construction jobs that may otherwise have been at risk. And as we bring training, skill, quality and safety to modular construction through a strong labor-management partnership on this project, we see the potential to have this approach improve our competitiveness elsewhere in the local market and expand into an export industry to create even more sustainable union jobs that pay good wages and benefits.”
From the Times:
Under the new agreement, Mr. La Barbera said union factory workers would earn $55,000 a year, 25 percent less than the average union construction worker. But, he said, the trade-off is that the factory worker will work steady hours throughout the year, regardless of the weather.
“We see this as an opportunity to get into markets we’re not in,” Mr. La Barbera said. We can’t ignore an emerging industry. We see it as creating more job opportunities in residential construction.”
From the Daily News:
"It's not a pay cut," said La Barbera. "We're trying to create jobs for our members. I mean this as a 125-person modular jobs and we have 100,000 members. Also, the first six months of this job are no different than a regular job with site excavation and building the steel structure. This whole thing is a win-win for everyone."
Actually, there was a clear pay cut, if you look at the compensation that was originally expected for those working on Atlantic Yards.

The unions, interestingly enough, apparently agreed that they didn't have enough leverage to maintain the original Atlantic Yards promises. However, given that Forest City Ratner promised to build union, it would seem that the unions had significant leverage.

LaBarbera's history

The Wall Street Journal reported:
Mr. LaBarbera, 55 years old, had been involved with the Teamsters since 1981, starting as a forklift operator. ...During his time as the city’s top Teamsters official, he was credited with cleaning up corruption and getting rid of the influence of the Gambino crime family.
In 2009, he resolved an internal union dispute alleging that he turned a blind eye to an employer that failed to make payments into the union’s benefit fund. Under the resolution, Mr. LaBarbera, who said he had no intention of seeking office in the Teamsters local in the future, agreed not to do so.
The phrasing of the paragraph directly above--"he resolved an internal union dispute"--skates a bit over what actually happened.

LaBarbera did not admit or deny the charges. But the charges, interestingly enough, came from the same investigator who LaBarbera used to clean up the Teamsters. The Village Voice reported in 2008:
Members of LaBarbera's Local 282 haul construction material and debris, and last month, the union's name surfaced in the big Gambino crime-family case in Brooklyn. Some of the schemes charged in the indictment stem from trucking employers who allegedly used mob muscle to scam the union out of benefits owed on behalf of employees.
But unlike the bad old days when John Gotti's gang ruled the roost at the local, LaBarbera helped squelch the scammers. He did so by retaining an independent, court-supervised investigator who helped break the case. The investigator, Robert Machado, was first to spot the schemes, tipping off federal investigators at the Office of Labor Racketeering. "I got nothing but cooperation from LaBarbera," said Machado.
In 2009, the Voice's Tom Robbins reported, TOP CITY LABOR LEADER AGREES TO STAY CLEAR OF TEAMSTERS:
Gary La Barbera, the current president of the city's Building and Construction Trades Council and a top supporter of Mayor Bloomberg's push to overturn term limits, has agreed not to seek to rejoin the Teamsters union where he was once the city's top local official.
The deal follows a complaint filed in June by a special investigator for Teamsters Local 282, the powerful 3,000-member union that represents drivers who haul construction materials at building sites. Investigator Robert Machado had sought La Barbera's ouster from the Teamsters for having allegedly allowed an employer to skip payments to the union's benefit funds. The complaint was reported in June by the New York Times.
The complaint said that La Barbera had purposely looked the other way after being warned by members and others that a contractor, Joseph Sullo, was secretly running a rogue nonunion shop alongside a separate company that had a signed contract with Local 282. La Barbera denied it but Sullo pled guilty in 2005 to federal charges of defrauding Teamster benefit funds.
Bruce Maffeo, La Barbera's attorney, said that the settlement "contains neither admission nor denial of the charges which we believe were completely unfounded."

Comments

  1. Anonymous11:08 PM

    Great as usual. reminds us of Stu Applebaum the unanimously re-elected President of the Retail, Wholesale, and Department Store Union. Supports varied tiers of pay and benefits for workers. Endorsed Quinn despite her clear antipathy to all things labor.

    ReplyDelete

Post a Comment

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Not quite the pattern: Greenland selling development sites, not completed condos

Real Estate Weekly, reporting on trends in Chinese investment in New York City, on 11/18/15 quoted Jim Costello, a senior vice president at research firm Real Capital Analytics:
“They’re typically building high-end condos, build it and sell it. Capital return is in a few years. That’s something that is ingrained in the companies that have been coming here because that’s how they’ve grown in the last 35 years. It’s always been a development game for them. So they’re just repeating their business model here,” he said. When I read that last November, I didn't think it necessarily applied to Atlantic Yards/Pacific Park, now 70% owned (outside of the Barclays Center and B2 modular apartment tower), by the Greenland Group, owned significantly by the Shanghai government.
A majority of the buildings will be rentals, some 100% market, some 100% affordable, and several--the last several built--are supposed to be 50% market/50% subsidized. (See tentative timetable below.)

Selling development …

"There is no alternative": DM Glen on de Blasio's affordable housing strategy

As I've written, Mayor Bill de Blasio sure knows how to steer and spin coverage of his affordable housing initiatives.

Indeed, his latest announcement, claiming significant progress, came with a pre-press release op-ed in the New York Daily News and then a friendly photo-op press conference with an understandably grateful--and very lucky--winner of an affordable housing lottery.

To me, though, the most significant quote came from Deputy Mayor Alicia Glen, who, as the Wall Street Journal reported:
said public housing had been “starved” of federal support for years now, leaving the city with fewer ways of creating affordable housing. “Are we relying too heavily on the private sector?” she said. “There is no alternative.” Though Glen was using what she surely sees as a common-sense phrase, it recalls the slogan of a politician with whom I doubt de Blasio identifies: former British Prime Minister Margaret Thatcher, a Conservative who believed in free markets.

It suggests the limits to …