Atlantic Yards/Pacific Park Report

After five-and-a-half years of legal jousting over the ill-fated Brooklyn tower once said to revolutionize modular construction, Forest City Ratner Companies and Skanska USA Building in April agreed to settle their three lawsuits, state court records show . B2 under construction, 2015. Photo: Norman Oder The  confidential  settlement leaves murky the degrees of fault, and financial responsibility, for tens of millions of dollars in damages and losses over 461 Dean (B2), the first tower in the 15-tower project originally called Atlantic Yards. Launched in 2012 with ambitious, ultimately unfounded, claims about saving time and money, the 363-unit tower flanking the Barclays Center suffered leaks and delays before finally opening in 2016. Skanska, which served as general contractor for the building and also ran the jointly owned modular factory at the Brooklyn Navy Yard, blamed Forest City for inadequate design for the world’s tallest (as of then) modular tower. Fo...

The long-running legal battle between Skanska USA Building and Forest City New York (and affiliates) over responsibility of cost overruns in the ill-fated modular project recently saw a partial win for the latter in the New York Court of Appeals. In a decision  dated 4/26/18 (but only recently made public), the court agreed that lower courts properly dismissed part of Skanska's claim, which alleged that Atlantic Yards B2 Owner, the special purpose entity that owned the building now known as 461 Dean, had breached the Construction Management and Fabrication Services Agreement (CM Agreement) by allegedly failing to comply with a state law. Skanksa noted that Forest City's lease with Empire State Development (ESD), which formally owns the project site, requires that it to "satisfy all requirements of Section 5 of the New York State Lien Law . . . as such requirements and law are interpreted from time to time by [ESD]." Skanska alleged that B2 Owner breached the CM ...

In a decision yesterday, the state Court of Appeals backed Forest City New York (formally, its affiliate Atlantic Yards B2 Owner) in one stage of a long-running dispute with former partner Skanska USA Building over the ill-fated modular apartment tower, 461 Dean, aka B2. Skanska was hired to build the tower and also formed a joint venture with Forest City to operate the modular factory at the Brooklyn Navy Yard. The parties dispute the cause of delays, with Skanska blaming Forest City's design, and Forest City blaming Skanska's execution. The building, for which ground was broken in December 2012, didn't start accepting residents for nearly four years . Forest City gave up ambitious plans to build more towers via modular technology and wound up selling the factory and selling the building --the only tower it owned in full. (The other three are owned by the joint venture Greenland Forest City Partners.) The  ruling  bolstered Forest City but did not resolve the overa...

A letter (modified slightly when submitted) to the editor of the Wall Street Journal.... The 7/2/17 article, Why You’d Want to Build a Skyscraper Like an iPhone , by tech columnist Christopher Mims, suggests that modular construction might help solve the world’s housing crisis and contains this passage: The tallest modular high-rise ever built was completed in the Prospect Heights section of Brooklyn in November 2016 by Forest City Ratner Cos. A conventional builder that has explored prefab methods, the company created a factory in the Brooklyn Navy Yard. At the project’s busiest, upward of 200 people were constructing and finishing individual “mods”—three for every one-bedroom apartment, says Bob Sanna, executive vice president of construction at Forest City. Though successful, the project illustrates some growing pains of the new methods. Forest City had joined with construction giant Skanska on the modular factory, but that relationship ended, after delays in completing the h...

From my article in the environmental publication TreeHugger, The World's Tallest Modular Building and the Phantom 20 Percent Savings , "Astoundingly, some recent press accounts claim that the use of modular techniques purportedly allowed Forest City to save 20 percent on the 32-story, 363-unit tower, which contains half market-rate units and half "affordable" ones. @TreeHugger @bruteforceblog this is a much needed dose of reality — Mark Hogan (@markasaurus) February 22, 2017 Innovation welcomed A commenter on the article: L'audace, l'audace, toujours l'audace. I am very grateful for builders who take risk to pioneer new and better ways to do things. If they did not realize any savings, it is more likely that the successors will learn from their mistakes and eventually achieve savings (and enhancement in quality that comes from factory construction). Well, OK, innovations can in fact face bumps in the road, and succeeding projects can build on them. ...

On 12/10/16, I  noted  that FastCo.Design's  Prefab's Moment of Reckoning  article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage. Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says. Skanska jabs back Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, w...

So, reports the New York Times's Charles Bagli,  Developer That ‘Cracked the Code’ on Modular Building Exits the Business . And while the article does point out the distance between Forest City Ratner's hubris and the results, the developer still does its best to spin. (Given that the article appeared before a press release was issued, I assume it was placed as an exclusive.) The lead: Five years after announcing that it had “cracked the code” on modular building technology and would open a factory in Brooklyn to construct modules, the developer Forest City Ratner is getting out of the prefab construction business. The firm said on Wednesday that it would sell its factory at the Brooklyn Navy Yard along with the associated technology to a former Forest City executive, Roger Krulak. The decision came as the developer completed construction of the tallest prefabricated steel structure in the world, a 32-story tower at 461 Dean St reet in the Pacific Park complex in Broo...

B2 from Flatbush Avenue Forest City Ratner has won what seems a significant preliminary victory in one  legal battle over its ill-fated partnership with Skanska USA to build the world's tallest modular tower. The decision does not resolve any of the three pending cases, but does show a judge rejecting some Skanska arguments. Among them: the claims that Forest City had promised to build the first three Atlantic Yards towers using modular techniques and that the Opportunity Brief, a business proposal from Forest City, made binding promises. That judge, state Supreme Court Justice Saliann Scarpulla, is hearing all the cases, which face a 10/19/16 hearing. Both Forest City and Skanska, when queried, declined comment. For the 461 Dean Street tower flanking the Barclays Center, aka B2, Skanska USA agreed to fabricate, deliver, and erect the modules, and perform construction management services. Skanska USA then hired FC+Skanska Modular (now FC Modular) to supply modules a...

The setting of the final modules for the pioneering but troubled modular tower built in the Atlantic Yards (now Pacific Park) project drew much  press coverage , as has the opening  of  the lottery for 181 units of affordable housing inside. (Half the units are market-rate.) The narrative regarding 461 Dean Street, aka B2, has changed from the delays that pushed the timetable back two years, major cost overruns , the buyout of an investment partner , the unusual early payback of a tax-exempt loan, the winding down of the modular factory that was once supposed to build the entire project, and the legal battles that persist between developer Forest City Ratner (FCR) and its former construction and module fabrication partner, Skanska. 5/8/14 mold observation ; click to enlarge But a mystery persists about just how well Forest City--and its New York State overseers--responded to problems at the building, notably the testing for possible mold, which can cause upp...

In case you're wondering about the path of the bitter litigation--three cases combined--between Skanska USA and Forest City Ratner regarding their ill-fated former partnership in a modular construction plant at the Brooklyn Navy Yard, well, it doesn't look to be going away soon. According to an order (below) signed after a conference 2/25/16, the parties are going through depositions and document discovery to try to learn more about each other's case, with the end point of all disclosure set as 3/15/17, more than a year from now. That should be well past the opening this year of the B2 modular tower (aka 461 Dean Street), which was supposed to be constructed by Skanska, assembling modules produced by the joint venture at the Brooklyn Navy Yard. Both sides blame each other for significant cost overruns and seek tens of millions of dollars in damages. Of course at some point they could settle the case. Skanska Forest City Modular Case Order On Timetable 2_25_16

There's actually significant news in  BISNOW EXCLUSIVE: MARYANNE GILMARTIN ON PACIFIC PARK AND THE FUTURE OF MODULAR CONSTRUCTION , a cheerful pre-Bisnow-sponsored conference interview with Forest City Ratner's CEO. Not only does Gilmartin continue to blame former partner Skanska--described incorrectly as the original owner of the modular plant, which was a joint venture--for delays in building the B2 modular tower, 461 Dean Street, Forest City plans to sell the factory it reopened last year after buying out Skanska's share. That means that, not only has Pacific Park joint venture partner/overseer Greenland USA apparently nixed modular construction for the rest of the project, Forest City has been unable to attract new business for apartments or even components . At the end of November, employees were sent a 90-day notice about the plant shutting down; presumably by then the remaining modules for B2 would be finished. Forgetting history And, just as she  claimed ...

The transcript below right, from a 7/30/15 hearing in the endless, unresolved litigation regarding the ill-fated partnership between Forest City Ratner and Skanska USA Building to operate a factory creating pre-fabricated components for the B2 modular tower, quotes Skanska lawyer Bruce Meller: "The original transaction had the modular company doing the construction work for B2," Meller said. "The original concept was that the modular company would take an assignment of the design, accept the design responsibilities, and then construct the work. That price was too high for Forest City." Instead, Forest City hired Skanska to construct the tower, assembling the superstructure, placing the modules, and connecting the building systems, among other things. Skanska blames Forest City for faulty design of the modular plan; Forest City blames Skanska's execution. Meller brought up the issue because he was talking about changes in the various contracts regarding t...

Ruling in the preliminary stages of a bitter legal battle, state Supreme Court Justice Saliann Scarpulla rejected most of Forest City Ratner's efforts to narrow one of the three lawsuits between it and Skanska USA regarding their ill-fated and now dissolved partnership over the delayed modular tower known as B2. Forest City Ratner and its affiliate Atlantic Yards B2 Owner aimed to get most of Skanska's lawsuit dismissed before the case moved further toward trial. The decision (see bottom), dated 7/16/15 and released on 7/20/15, mostly favored Skanska, although it's still early in the process and does not portend an ultimate victory. Forest City did win on a few arguments. Neither side publicized the decision, perhaps because neither could claim unambiguous good news. But I suspect that had Forest City won more, given its aggressive press strategy, it would have pitched the news to a receptive reporter. The background Skanska agreed to lead the fabrication of the m...