Key unions in New York City, including laborers and structural trades, agreed to a 20% wage cut yesterday, June 15 for work on Gotham West, a residential development on Manhattan’s West Side that will consist of four buildings and about 1,240 residential units, according to a recent article in Crain’s New York Business.
About 500 of the units, located between West 44th and West 45th streets and 10th and 11th avenues, will be deemed affordable housing. Gotham Organization Inc., the building’s Manhattan-based developer, did not respond for comment by ENR New York press time.
“I’m not surprised by this,” said Richard T. Anderson, president of the New York Building Congress. “For residential and commercial projects, which have suffered the greatest declines, these [project labor] agreements are a sign of that weakness, and the unions realize that these projects need steep concessions in order to maintain union labor.”
Following Gotham’s lead, developer Forest City Ratner Cos. has submitted an application for a labor agreement to build a residential tower, part of the first phase of its mixed-use Atlantic Yards project in Brooklyn.
The first phase also includes Barclays Center arena, which broke ground in March 2010 and is scheduled to open in the summer of 2012. Five buildings, most of which will be residential with market- rate and affordable housing, and an office building are also included in this phase. The developer is also considering adding a hotel. A Forest City spokesperson said it is “too premature” to say why the company applied for the agreement.
It is not a shock to see unions involved in residential projects accept such a cut, Anderson says. However, it would be surprising to see projects in sectors that are thriving, such as civil works and health care, agree to similar cost reductions, he adds.