Skip to main content

Judge, ruling from bench, dismisses lawsuit aiming to block DOB's approval of modular construction

For a little while, it looked like state Supreme Court Justice Eileen Rakower was sympathetic to the argument that construction of modules for Atlantic Yards was less like a building component such as a dishwasher and more like a building itself--and thus would require the presence of licensed plumbing contractors and fire suppression contractors, who had sued the New York City Department of Buildings (DOB).

However, after a 70-minute hearing today at a small courtroom at 80 Centre Street in Lower Manhattan, Rakower swiftly dismissed the suit, ruling from the bench, "I also find that DOB did not exceed its mandate in permitting the manufacture of these systems."

That wasn't precisely on point, since she was using "permitting the manufacture of these systems" as a shorthand for several issues aired in the legal papers and oral argument, and perhaps will be discussed in her forthcoming written opinion.

One of those issues: why, as the judge's ruling indicated, is a several-ton factory manufactured module--one of the 930 components of a 363-unit, 32-story tower--more like a dishwasher than a building?

Brett Jaffe, representing the Plumbing Foundation and the Mechanical Contractors Associations, pointed out at the start that the suit was not just about B2, Forest City Ratner's under-construction Atlantic Yards modular tower, but any future modular construction, including commercial buildings and hospitals.

He added that the petitioners support modular construction, but only as long as it's in compliance with the construction Code. To a developer like Forest City, cross-trained workers in the factory cost much less than licensed specialists.

Petitioners' case

Jaffe first had to argue that the petitioners deserved standing, that they had an interest at stake, and that no one else could sue DOB to ensure a safe process. (The DOB argued no, suggesting that neighbors and future tower residents might have standing, but the judge granted standing to the petitioners moments before she dismissed the suit.)

Jaffe suggested that, because of strict liability, his clients, after they do the hook-ups at the job site, "they'll have no control of anything that went into it," and thus could suffer a severe injury.

"We're going to hear the word 'deference' a lot," Jaffe said regarding the defense strategy, which argued that the court should defer to agency discretion as long as the DOB acted "rationally," a low bar.

"Not here, Your Honor," he continued. "Not when we are talking about a pure question of statutory interpretation." If the DOB prefers a different regulatory scheme, he said, "they could go to City Council."

Rakower asked about a Council hearing this past January in which some of the issues were raised, and whether the hearing produced any result.

"Not a result," Jaffe said, "and nothing can be taken from that." He said some hearing testimony was appended to show it's "not some sort of proprietary issue" and to show how Forest City Ratner and the DOB typically use the term "plumbing" in colloquial discourse. "The only time they stopped calling it plumbing was when we sued."

Rakower asked why the third cohort of licensed trades--electricians--hadn't sued. Jaffe said his understanding is that there were some differences in the Code, but agreed the policy considerations were the same.

He noted that, if the plumbing and fire suppression work were done on site, it would have to be done by licensed contractors. "They say, when you move from the job site to the factory, magically, the requirement falls away."

Language at issue

He took aim at the DOB's interpretation of statutory language regarding plumbing, reading "in connection with" as "to connect to." With a traditional building, he noted, the system isn't connected to the water supply until the end.

The second DOB argument, he noted, is that the module isn't a building.

The judge noted that there's an exception for modular buildings like mobile homes. That, said Jaffe, is a completed structure, while "this is a 32-story building."

He noted that Forest City must comply with technical requirements of the code regarding materials and process, but not who's doing the work.

Rakower asked if there's a way--presumably for Jaffe's clients--to test the modules for quality before they're brought onto the site. "I don't think there is," Jaffe said.

"You make a good point," the judge said. "If they're going to be strictly liable, they want to know it's  good product."

Jaffe added that, as a matter of common sense, a module is not akin to a Jacuzzi, since the latter is among "listed items" that are produced according to national standards.

"What we're talking about here is an entire bespoke plumbing system for a building," he declared.

DOB defense

Mark Muschenheim, representing the DOB, said the petitioners' analysis was faulty, because a licensed plumber "is obviously not responsible for a defective Jacuzzi."

That argument left unresolved the question about whether it was possible to distinguish between defective plumbing work done at the factory and that done at the site, and whether the plumbers at the site would be liable.

"Location matters," he said, noting that the contracting work must be done in a building. And uninstalled items, he said, are not structures.

The applicable provisions are clear, he said, and if not should be entitled to deference.

Rakower asked a practical question: would the systems in the finished building be tested each year?

Muschenheim, after consulting an associate, said fire suppression systems were tested, but was unsure of the frequency.

Forest City's case

Bradley Ruskin, representing Forest City affiliates--the modular factory and the owners of B2--pointed to "unproved and unprovable allegations" of Forest City's intervention into the process after meeting with DOB.

Rakower said that played no role.

(No one made a big deal about how DOB issued a draft Bulletin requiring licensed plumbing and fire suppression work at the modular factory, then withdrew it.)

The issue, the judge said, is whether modules should be considered the same way as if constructed on site.

DOB's role, Ruskin said, is not to regulate construction of components in places like "Kansas" but rather "where it gets put together" and "connected to the water system," at the building site.

Rebuttal, response, and ruling

In rebuttal, Jaffe said the latter interpretation doesn't make sense: "It means plumbing work isn't plumbing work until its connected to the water supply. That's never been the approach before."

He said terms used by the DOB regarding a building--"stand on its own" and "viable for use and occupancy"--were not found in the Code.

Given a chance to respond, Ruskin said the Code didn't cover a range of systems constructed offsite, including water reclamation systems and firepumps.

But those, said Rakower, were built to a particular standard.

"As is the case here," replied Ruskin.

"The interesting thing about a modular building," mused Rakower, "is you're manufacturing a system."

At that point, she ruled that the petitioners had standing and, in once more sentence, dismissed the case: "I also find that DOB did not exceed its mandate in permitting the manufacture of these systems."

It's unclear whether the petitioners will appeal.

Comments

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…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…