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Category ArchiveLouis Coletti

Construction Experts Nervous About Trump’s Steel and Aluminum Tariffs

Construction experts were troubled by President Donald Trump’s announcement last Thursday for a 25 percent tariff on steel and a 10 percent tax on aluminum imported to the United States.

The policy will increase the costs of construction, which in New York City are already at dizzying heights, they said. Ultimately, it will affect the overall project costs and could make it harder for future projects to get completed.

“Rising construction costs, along with labor costs and bank financing constraints, have been a significant factor in limiting property development over the course of this [economic] expansion,” Sam Chandan, the associate dean at the New York University’s Schack Institute of Real Estate, said in a statement to Commercial Observer. “Policies that add to cost pressures exacerbate drags on new supply.”

While the the details on the tariffs are murky, foreign countries have already pledged to retaliate, with European Commission President Jean-Claude Juncker saying, “We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,” according to CNN.

The announcement comes just less than a month after the White House revealed an infrastructure plan in which the federal government would spend just $200 billion fixing public infrastructure over the next decade and expect states, localities and private companies to generate $1.5 trillion to fund projects. That plan also had its critics within the construction industry, as CO previously reported.

Companies that heavily rely on steel and aluminum have issued statements in opposition to the president’s plan to increase duties on steel and aluminum, while Trump generally responded that it was necessary because the country was losing jobs and money to others.

“The United States has an $800 billion dollar yearly trade deficit because of our ‘very stupid’ trade deals and policies,” Trump tweeted on March 3. “Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!”

However, leaders of construction companies and trade organizations weren’t pleased.

While making foreign steel more expensive via taxes could mean companies may further use domestic steel, the U.S. industry will not have the supply to keep up with the demand, said Louis Coletti, the president and CEO of the Building Trades Employers’ Association.

“The U.S. steel manufacturers cannot produce the quantity of steel needed. Steel manufacturers are already telling contractors to expect price increases,” Coletti said. “The lack of steel availability will also cause scheduling delays that will add to additional cost increases. This policy will have a detrimental impact on the economic growth of [New York] and the nation.”

And in the case of the 10 percent tariff on aluminum, which is heavily used for curtain wall systems in glassy high-rises, the uptick may not even be enough to help domestic manufacturers.

“A 10 percent tariff as a stand alone probably won’t move the needle to where it would make it less expensive to buy domestic [aluminum],” said Richard Wood, the president of Plaza Construction. “[But] it’s a problem, because we are trying to make projects more affordable.”

Source: commercial

Construction Pros Disappointed With Trump’s Infrastructure Plan

The Trump administration has proposed a plan to repair the nation’s “failing infrastructure” that calls for $200 billion in federal spending over the next decade, according to a press release from the White House.

The president hopes the spending will foster $1.5 trillion in funding from states, cities and private companies for infrastructure projects, practically pushing the bulk of the country’s capital expenditure outlay onto local governments and private companies.

Of the federal money, $100 billion would be set aside for an “incentives program,” in which states, local governments and private companies would compete for funds for their infrastructure projects. Fifty billion dollars would be dedicated to build and modernize rural areas.

Twenty billion dollars would be allocated for the “transformative projects program,” and focus on giving federal aid to projects that could have positive impacts on states, cities and localities “but may not attract private sector investment,” the release says. Another $20 billion would be earmarked for existing federal infrastructure financing programs for rail, water and utilities. Finally, $10 billion would go toward purchasing property for federal government use and reducing “inefficient” leasing of properties.

Many construction experts responded that it was unreasonable that cities, states and private companies would have to shell out $1.5 trillion while the federal government would only provide $200 million.

“While we believe $200 billion is a good starting point, our national infrastructure systems will need a much larger investment from the federal government just to bring them up to a state of good repair and accommodate for future growth, let alone begin the transformative projects our country desperately needs,” Carlo Scissura, the president and CEO of the New York Building Congress, said in a statement.  

Moreover, there is a fear that without enough federal funds, the president would end up assigning more public work projects to private companies, which may not utilize union workers or serve the best interests of the public.

“The American people need investment in our crumbling roads and bridges, schools, public transit and affordable housing but President [Donald] Trump’s plan does little to address this need and is a giant privatization scheme to line the pockets of the wealthy,” Héctor Figueroa, the president of property service workers union 32BJ SEIU, said in prepared remarks. “It could also roll back decades of progress on labor standards and may open the door to wages and benefits being slashed.”

The plan was also concerning to some because it doesn’t detail how private companies would benefit from partnerships with local governments (such as giving them tax credits). And private dollars are likely to become harder to obtain in the future due to rising interest rates.

Heidi Learner, the chief economist at Savills Studley, told CO that private companies are not going to be jumping at the chance to contribute toward the $1.5 trillion for infrastructure with rising interest rates and a lack of clarity in the president’s proposal.

“This [plan] is already on the backdrop of rising interest rates, so the cost of any funding that any private sector is putting forth to be invested in these projects is likely to increase, so the return on projects would have to likely increase,” Learner said.

Louis Coletti, the president and CEO of the Building Trades Employers’ Association of New York City, who welcomed spending for infrastructure was also displeased by the amount the administration has pledged. He suggested the infrastructure spending could have been tied with the recent tax reform legislation. The new tax change dropped corporate tax rates and rates on individuals, as CO previously reported.  

“We support the president’s proposal and focus on infrastructure but are disappointed in the lack of federal dollars to support these efforts,” Coletti said in an email to CO. “An opportunity to provide that funding was missed in not including [it] in the tax bill provisions that would have committed some of the funds companies were getting to bring their overseas profits back to the United States as a basis for an infrastructure bank.”

Source: commercial

Construction Starts in the Bronx Projected to Top $2B—Again

The Bronx is still burning.

Led by strong housing development, the value of construction starts in the Bronx is expected to be more than $2 billion for the third consecutive year, according to a just-released New York Building Congress Bronx study of Dodge Data & Analytics data covering the first nine months of 2017.

The Building Congress forecasts that about $2.3 billion worth in projects will have commenced construction this year in the Boogie Down, roughly the same amount as in 2016, and slightly outperforming 2015’s $2.2 billion.

Projects that started this year in the borough by September were collectively worth $1.7 billion, according to the analysis. (New York City overall saw around $31.2 billion of construction project starts through the first three quarters of 2017.)

The Bronx has seen increasing interest from developers over the last 10 years in response to the demand for more affordable housing citywide as well as the availability and affordability of the land in the borough.

“The Bronx is experiencing positive momentum and benefitting from continued strong investment from both the public and private sectors,” Building Congress President and Chief Executive Officer Carlo Scissura said in a prepared statement. “With the value of annual construction starts more than doubling since the beginning of this decade, it’s obvious that the development community now views the Bronx in a whole new light.  And I would be surprised if that percentage doesn’t continue to rise in the coming years.”

As of September, the top costliest developments in the Bronx this year are a $232 million project to replace Unionport Bridge and a $133 million 12-story, 305-unit apartment building at 443 East 162nd Street in Melrose, which is being developed by New York City’s Department of Housing Preservation and Development, the Women’s Housing and Economic Development Corp. and BFC Partners

Housing account for the largest asset class—53 percent—for which new projects began construction through the first three quarters of 2017 in the Bronx, according to the report. That was followed by public works at 20 percent, institutions (schools and health care facilities etc.) at 15 percent and commercial properties with 11 percent.

“The Bronx possesses the most opportunities for new residential development, and the ability to produce new housing for residents at all income levels,” Scissura said. “As the de Blasio administration further ramps up its affordable housing program and as private developers increasingly look to the north, the future looks bright for the Bronx.”

Excluding the final quarter, the Bronx saw 3,190 residential units begin construction in 2017. The report indicates that the total is on track to outperform last year’s 3,918 units and 2015’s 4,240 units, which was the most in the last decade.

“The Bronx has land, which the other boroughs don’t,” Louis Coletti, the president and CEO of the contractor association umbrella Building Trades Employers’ Association told Commercial Observer. “And the land is obviously less costly than in Manhattan or Brooklyn.”

Regarding the future of development projects in the Bronx, Coletti added: “The only thing that could impede the growth of the Bronx is the natural economics of real estate—if interest rates start to get too high and people decide they aren’t going to borrow money or if [the economy] starts to slow down. Then you will see things slow down in the Bronx.”

Source: commercial

The Construction Industry Should Brace Itself for a Rollercoaster 2018: Experts

Coming off a few booming years, New York City’s real estate industry—including the construction sector—has been suffering a bit of a setback this year.

The New York Building Congress forecasts at year end, $45.3 billion will have been spent on construction in 2017, the second-highest-ever total dollar amount committed to construction in the city’s history, according to the organization.

But it would mark a 13 percent decline from last year’s record $52.2 billion. At the same time, the number of jobs in the industry increased to 149,800 in 2017 from 146,200 in 2016. And the organization expects it to rise to 151,200 jobs next year.

Construction permits, which indicate the level of future work in the city, meanwhile are up slightly this year, although the pace is slowing. The New York City Department of Buildings issued 109,724 permits in fiscal year 2017, ending in July, a 0.4 percent increase from 109,277 in 2016, according to the city’s annual Mayor’s Management Report released in September.

What does all of this mean for the construction business in 2018?

Commercial Observer spoke with five experts about what to watch for. Overall, they forecast a decline in housing construction, but an increase in work in the public sector and the office market. The jury is out on construction costs. And then there is the elephant in the room: tax reform, which has been passed by the Senate but not the House of Representatives. Republicans cheer it as a win for jobs (and big Wall Street businesses are chomping at the bit as it would cut the corporate tax rate by nearly a half). Democrats are against it, claiming it serves wealthy individuals and corporations. As for New York City construction experts, they are split on the impact to their segment of the industry.


Over the past few years, there has been a surge in housing development, which many experts say has led to an oversupply. And in turn, construction of new homes slowed down this year by 41.2 percent and that is expected to continue for the foreseeable future. There were 37,700 new housing units added in 2016, just 26,700 this year, and the Building Congress expects 24,000 new housing units in 2018.

In terms of dollars and cents, $11 billion will be spent on residential construction this year, the Building Congress forecasts, a 31.3 percent drop from $16 billion last year. In 2018, the figure will rise to $11.6 billion.

“I think on the residential end—apartment complexes and condominiums—I think that it’s is a little overheated,” said Richard Lambeck, the chair of the construction management program at New York University’s Schack Institute of Real Estate. “There will be a slow down. The products that have been produced have surpassed the absorption rate. The amount of apartments that are going to be purchased is going to be slowed and it will have an impact on the industry.”

In addition to the oversupply problem, there are a lot of people crying “Not in my backyard,” a.k.a. NIMBY. Community organizations are rallying against large skyscrapers such as SJP Properties’ 200 Amsterdam Avenue on the Upper West Side, Gamma Real Estate’s planned 67-story building at East 58th Street between First Avenue and Sutton Place, and Extell Development Company’s 69-story tower at 50 West 66th Street.

The fear is that these projects could be forced to scale back or canceled altogether due to community opposition, which will lead to less work for construction companies and subcontractors.

“I worry about community to reaction to projects,” Louis Coletti, the president and chief executive officer of contractor association umbrella Building Trades Employers’ Association. “We are going to go back into the 1990s where NIMBYism just takes over and stops the city. You see this opposition to as-of-right projects, that’s crazy. You see the general direction of the city becoming progressive. You just wonder if it is the natural course of things as people become more politically active.”

Public works

Government spending for public infrastructure projects climbed this year for projects of note around the five boroughs, such as the redevelopment of LaGuardia Airport and the expansion of the Jacob K. Javits Convention Center and the new Kosciuszko Bridge.

Spending on similar projects is expected to reach about $16.9 billion in 2017, according to the Building Congress report—a 16 percent increase from 2016’s $14.6 billion. And the organization expects a further increase to $18.8 billion next year.

“Our infrastructure and transportation systems are the key,” Coletti said. “They are the real foundation to continued growth in the city. Those systems have lacked appropriate level of investment for many, many years. That’s the reason why the governor has to move billions of dollars for the [John F. Kennedy International Airport] and LaGuardia [Airport] [redevelopment projects].”

He added: “There is going to be a real focus on how to finance and really build our infrastructure to allow New York City to have continued growth.”

On the horizon, major infrastructure projects such as the redevelopment of JFK, the next phase of the Second Avenue subway and the Gateway Tunnel project—which would build another tunnel to New Jersey—lay in wait.

And some are questioning the viability of the next phase of Second Avenue subway project in the short term, as the calls to repair and fix the existing subways grow louder, meaning dollars would go to maintenance. While that could be great for commuters, maintenance produces less construction work than new projects.

“I don’t know if the [Metropolitan Transportation Authority] has sufficient funds to start that early,” Lambeck said. “At least from the MTA psperspective, they have been getting a lot of pressure, primarily in maintenance.”


All across the city there has been an abundance of construction on office projects in 2017. Just along the Far West Side alone there is Related Companies and Oxford Property Group’s Hudson Yards, Brookfield Property Partner’s Manhattan West and Moinian Group’s 3 Hudson Boulevard.  

In Brooklyn, Two Trees Management Company is building an 380,000-square-foot office tower at 292 Kent Avenue in Williamsburg; Rubenstein Partners and Heritage Equity Partners is working on the 500,000-square-foot 25 Kent Avenue in Williamsburg; Tishman Speyer and HNA Group is converting the upper floors of the Macy’s at 422 Fulton Street into 620,000 square feet of office space in Downtown Brooklyn; JEMB Realty and Forest City New York are building a 500,000-square-foot building at 1 Willoughby Square; and Thor Equities is working on Red Hoek Point in Red Hook, a nearly 800,000-square-foot office development. And in Queens, Tishman Speyer is building a 1.2-million-square-foot two-building office and retail project called The Jacx in Long Island City.

Construction work on all of these projects, as well as others, will continue into next year, keeping contractors busy.

“You have a lot happening with Midtown West products. You have a lot of activity in Lower Manhattan and upgrades to office buildings [across Manhattan],” said Carlo Scissura, the president and CEO of the Building Congress. “Office is a strong part of the market. And you are seeing [large office developments] happen in Brooklyn and in Queens.”  

Looking forward, the demand for office space in Manhattan is high (as CO recently reported), and there is a need to renovate a crumbling older stock of buildings. Redevelopments of towers and expansions are an area that could see growth next year. Midtown East—thanks to its new rezoning—will allow for larger projects and developers could look to redevelopment projects in the area, which would create more work for construction companies.

“Hudson Yards has proven that there is a tremendous need for new space and much of the city’s current product needs to be replaced,” said Kenneth Colao, the founder and CEO of CNY Group. “If you had another large sector of town that was wide open for development, I think it would be in play. The [Midtown East] rezoning I think will support more redevelopment.”

Construction costs

In May, Turner & Townsend released its annual construction market survey that pegged New York City as the world’s most expensive city for construction. The average cost of a building was at $354 per square foot, surpassing Zurich, Switzerland which came in at $328 per square foot.

Rising costs has become a problem in the industry due to a variety of factors, including the cost of labor. Construction companies have blamed union’s high hourly wages and an abundance of regulations.

On the latter point, unions have been making compromises in contract negotiations and lowering hourly wages as more developers demand general contractors take bids from nonunion companies in order to increase profit margins. Some construction leaders expect this trend to continue as the competition between organized labor and other subcontractors heats up further.

“I think the unions have to recognize that in order to be viable they need to work with their development clients and figure out ways to reduce costs,” said Richard Wood, the CEO of Plaza Construction.

Another reason for inflated construction costs is high insurance rates. New York is the only state with a law that allows a worker injured on a construction site to sue everyone—construction companies and individual superiors. This increased liability raises insurance premiums.

But regulations for the industry have increased towards the end of the year, as the City Council tried to improve safety on construction sites. The council passed a number of bills this year targeting construction safety, including one polarizing one: Intro-1447-C. The legislation will require workers to have at least 40 hours of safety training. Opponents to the bill claimed that it will force contractors to fund courses for their workers, increasing the bottom line. And the council also passed yesterday Intro-1399, which gives most industry employees, including construction workers, the right to “flextime” or two days off from their regular schedules.  

One construction watchdog said losing workers could disrupt work flow on projects.

“This isn’t a store or a restaurant—this is a construction site,” Coletti said. “We have schedules and budgets we have to make.”

Tax reform

As of publication, Congress’ tax reform bill had not been signed into law. But it looks extremely likely that it will as Republicans in the Senate passed a final version of the bill early today and their counterparts in the House of Representatives will re-vote on the legislation today after approving it yesterday with some errors.

The legislation will cut the corporate tax rate to 21 percent next year from 35 percent, which could mean a boon for companies. With extra money on their balance sheets, companies could reinvest in their offices. And real estate developers may use those funds to upgrade facilities in their assets. This will lead to more construction projects.

“I think indications are that it will be good for the construction industry,” Colao said. “If in fact the tax reform results in corporate tax reductions, corporations may start sprucing up facilities, then there would be an uptick in activity. Corporations—and entities that are tenants in office buildings—if they are looking at an improved bottom line at the same revenue—they might look to increase their capital expenditures.”   

However, as a part of the regulation, individuals will be limited in deducting state and local income taxes, sales taxes and property taxes to $10,000. Homeowners will be able to deduct mortgage interest on debt up to $750,000, down from $1 million. These segments of the bill don’t bode well for real estate interests in New York City, which has an average home sales price at $987,000 as of the third quarter, according to the Real Estate Board of New York. If people can’t reduce their taxes it will add to Gotham’s living expenses and could mean less people wanting to relocate to the city—lowering demand for more housing and impacting construction.  

“New York and especially the New York City area is one of the highest areas for state and local taxes,” Wood said. “I think there is going to be a tendency for people to want to move to states that don’t have high state taxes, and with that, many corporations may think in order to get a good labor pool they’ll want to move their offices to those low-tax states.”

He added: “I personally think that people are going to have to stay focused on solutions to that problem, because it could have long-term adverse effects on the real estate industry and the construction industry in New York.”

Source: commercial

Contractor Groups Slam Legislation Raising DOB Fines

Trade groups that represent both open-shop and union contractors are vocally opposing a package of City Council bills that aim to increase fines and create new ones for serious building code violations. The council passed two of the bills yesterday, but the most controversial of the proposals is still wending its way through the legislative process.

“The level of fines they’re talking about are arbitrary and capricious,” Louis Coletti, the head of the Building Trades Employers’ Association, a contractor group that represents companies using open-shop and unionized labor, told Commercial Observer. He added that the bills will be “ineffective” because there was “no discussion with the experts in the buildings department or the experts in the industry.”

The bills were first introduced among a package of 21 construction safety bills at a hearing in January. But since the focus of that hearing was the controversial “apprenticeship bill” signed into law this on Monday, trade groups didn’t have much opportunity to comment on the New York City Department of Buildings fine proposals at the time. The council only notified contractor groups on Oct. 2 that the bills were scheduled for a vote, giving them two weeks to offer feedback and objections before the full council voted on the bills.

One of the proposals passed Tuesday, Int. 1404-A, would raise the minimum civil penalty for a “major violation” of the site safety plan portion of the building code to $1,000 and the lowest amount for an “immediately hazardous violation” to $2,000 from $1,000. Contractors with major violations can get slapped with a $250 fine for each month that the violation isn’t fixed. And those with immediately hazardous violations can fined $1,000 per day for each day the violation isn’t corrected.

Another bill voted through yesterday, Int. 1437, creates the concept of a “violation ratio,” a term that the DOB refuses to comment on and that doesn’t exist in the current building code. The legislation defines the phrase as the number of major or immediately hazardous violations that have been issued at a site in the last six months (excluding violations going through an appeals process), divided by the square footage of the site’s footprint. It also opens the door for the DOB to develop its own ratio to determine projects that have ongoing, unsafe conditions.  

If a site exceeds the “violation ratio,” the DOB can issue contractors with double the fines for each infraction. Essentially, council members want to punish contractors who are racking up what the bill terms “excessive violations.”

These are just so blatantly a cash grab to bring in money,” said Diane Cahill, a lobbyist who works with the city on behalf of an open-shop group, the Associated Builders and Contractors. “They’re looking to bring in money to support the training initiatives created by 1447 [a newly passed law that requires new safety training for construction workers].”

Notably, residential developments would be exempt if they were financed with subsidies or loans from the New York City Department of Housing Preservation and Development or the city’s Housing Development Corporation

When CO contacted the DOB for comment on the bills, a spokesman only responded that the agency was “reviewing the legislation.”

During a January council hearing, the Real Estate Board of New York testified that it “generally supported” the bills that introduced higher fines, because “increased civil penalties are [an] effective means to discourage bad behavior.” But the group argued the ratio bill was unnecessary because existing regulations and policies already allowed the DOB to shut down troubled sites.   

Others worried that major, high-rise projects are more likely to be affected by the new violation ratio policy. Building inspectors typically monitor these sites more closely than small projects, meaning that smaller projects may ultimately avoid both the extra violations and safety monitoring.

“The projects that are more visible are going to get more attention and potentially greater impact in this regard,” said Joe Hogan, a vice president for the Associated General Contractors for New York State. “A lot of the problems that need fixing—on projects that are less than 10 stories—we’re not getting where we need to by just administering these fines.”

He also noted that the nebulous categories of immediately hazardous and major fines introduce “a lot of subjectivity and issues of potential abuse” into the code enforcement process.  

However, the piece of legislation that sparked the most controversy hasn’t been voted on yet. The bill known as Int. 1419 would levy fines ranging from $500,000 to $1.5 million for a violation that happens when a worker is seriously injured or dies on a construction site.

Some industry experts worried that the potential fines for construction fatalities would boost the cost of liability insurance, and by extension, the overall cost of construction in New York City.

“This kind of fine—some of that is going to come back to the insurance companies as well,” said Brian Sampson, the head of the Empire State Chapter of the Associated Builders and Contractors. “If you’re a bank, you’re going to make sure you’re getting your loan repaid. If you know there’s going to be all these fines, are you going to loan less? At a higher rate?”

In a legislative memo issued last week, REBNY expressed concern that the bill keeps contractors liable for worker fatalities and injuries, even if a court rules that the accident was caused by a worker’s mistake.

“REBNY reiterates its concern that the bill does not include any relief provision if said injury or death is the result of a worker’s negligence,” the organization notes. “Without such a relief provision, the bill would impose a de facto strict liability standard upon the owner and permit holder that could be used against them in other related litigation.”

Source: commercial

Union Reps, Officials Debate Construction Apprenticeship Programs at CO Safety Conference

As the city struggles to reduce deaths and accidents on construction sites, major players in the enforcement and construction community think owners and contractors have more responsibility for keeping their workers safe than cash-strapped city agencies do.

“If [contractors] can’t invest in safety training for their workers, maybe they shouldn’t be doing work in New York City,” charged Louis Coletti, the president of the Building Trades Employers’ Association (BTEA). Coletti and other panelists at Commercial Observer’s Construction Safety Conference yesterday claimed the city could curb worker fatalities by passing proposed City Council legislation, which would require all workers to undergo safety and apprenticeship training. Unions groups like BTEA back the bill, which would force non-union contractors and construction companies to run two- to three-year long apprenticeship programs for workers on buildings that are 10 stories or taller.


Manhattan District Attorney Diana Florence discusses OSHA card fraud during Thursday's conference.
Manhattan District Attorney Diana Florence discusses OSHA card fraud during Thursday’s conference.

New York City Department of Buildings Commissioner Rick Chandler, on the other hand, opposes the apprenticeship bill, alluding yesterday to the fact that the DOB and other city enforcement agencies don’t have enough resources to monitor such programs. “Apprenticeship programs take significant time to create and register with the [New York] State Department of Labor,” he testified during a council hearing in January. “And since apprenticeship programs are for new entrants into the construction industry, their impact on mid-career workers is limited, even though experienced workers are just as much at risk as new hires.”

Chandler was joined on the panel by Manhattan District Attorney Diana Florence; Steven Kaplan, a deputy regional administrator at the Occupational Safety and Health Administration (OSHA); and Edward Ferrier, the deputy assistant chief of the Bureau of Fire Prevention at the Fire Department of New York (FDNY). Matt Caruso, the president of the Construction & Realty Safety Group, moderated.

During yesterday’s conference, Chandler emphasized that developers and general contractors have to shoulder the burden of hiring well-trained subcontractors and enforcing safety standards on sites. “What I see with larger contractors is they have a great relationship with safety,” he said. “If you have any smaller projects, engage with the owner. Owners need to realize there are real consequence if someone gets hurt or killed on their site.”

But the city does have the ability to halt construction through a stop-work order, which Chandler called “one the most powerful tools we have,” adding, “it sends a message.”

Kevin Kelly, a business representative for Metallic Lathers & Reinforcing Ironworkers Local 46, stood up at the end of the panel to rail about the need for more thorough safety training. “How many people must die?” he asked, addressing Chandler. “We’re not talking about twisted ankles here. We’re talking about people who won’t have a mother or father because at the end of the day the training and enforcement wasn’t there.”

Coletti acknowledged that the DOB needs more city funding in order to oversee apprenticeship programs for dozens of nonunion construction companies.

“If they are not given the resources to ensure that everyone who is enrolled in a registered apprenticeship program gets a card, this is going to be another OSHA-10 fiasco,” he said, referring to the 10-hour safety course required by OSHA for all workers on major construction projects. City investigators arrested more than 20 workers with bogus OSHA cards in 2015, the New York Daily News reported in October of that year.

However, nonunion firms should have to pay for the programs themselves. “Not a penny of public subsidy should go into that training [for nonunion contractors],” he ranted.

Florence, who heads a construction fraud task force at the district attorney’s office, said the issues with the city distributing OSHA-10 cards had “given birth to a culture of fraud.”

“Contractors are buying 100 [OSHA] cards from trainers and distributing them to their workforce, but it’s not a crime,” she explained. The city and state don’t have laws that penalize fraudulent OSHA cards, she said, so prosecutors cannot charge contractors for engaging in that behavior.

The city saw a spike in construction worker deaths, with 25 killed on job sites in 2015, according to the most recently released report from union-backed advocacy group New York Committee for Occupational Safety and Health. The same report highlighted how the OSHA had cut the number of safety inspections across the state to 1,966 in 2015 from 2,722 in 2011. The number of OSHA inspectors in New York State also dropped by nearly a third, to 66 in 2015 from 82 in 2012.

“Because of diminished resources…and the number of incidents, we weren’t doing as many unplanned inspections,” Kaplan said. “So we started rotating in compliance officers from other regions… and we’ve multiplied the number of inspections by a factor of four,” he explained, noting that the agency had done 460 planned inspections since December 2015.

Marianne Santarelli of Gilbane Building Company.
Marianne Santarelli of Gilbane Building Company.

Similar themes emerged during the second panel of the morning. Commercial Observer reporter Liam La Guerre moderated, and the speakers were Dwayne Carter, a vice president at Tishman Construction; Louis Cenadagorta, the executive director of the suppression and CDA unit at FDNY; Brian Sampson, the president of the Associated Builders & Contractors, and Marianne Santarelli, the safety director at Gilbane Building Company.

The city needs to boost the number of fire enforcement officers who can visit sites after 5 p.m., because many construction projects are extending their work hours into the evening, Cendagorta said. “Contractors are now working 12-, 14-, 16-hour days,” he explained. “The majority of our violations are written at night.” He noted that the number of combustible fires on construction sites had doubled in the past year. And companies engaged in unscrupulous behavior are more likely to try and get away with breaking city laws at night or on the weekends, he added.

The group of construction industry execs said that both city agencies and responsible contractors have to work together to rid New York of unscrupulous construction companies.

“We have constant conversations with our contractors and general contractors that there are owners you just shouldn’t work for,” Sampson said. “When the owner comes to you and asks you to cut a corner, you have to decide whether that extra money is worth it. There’s going to be a future where some owners find themselves without a contractor or GC.”

Carter agreed, wondering why the city hadn’t cracked down more aggressively on companies that are widely considered “bad actors” in the construction industry. “These guys who keep having construction accidents, why should they be issued a buildings permit?” Carter asked.

Source: commercial