N.Y.C. and MTA Reach Hudson Yards Deal

The Metropolitan Transportation Authority and New York City officials agreed this fall on a development plan for the Hudson Yards district on the far west side of Manhattan, the site of a failed attempt to build a $2.2 billion stadium for the New York Jets. Mayor Michael Bloomberg had championed the stadium plan before state officials killed it last year by denying it necessary permitting approvals.

The agreement is eventually expected to reap $1.5 billion in sale and lease revenues for the transportation authority, according to its press office. The agency's current $21.2 billion 2005-09 capital program now relies on debt financing for 44 percent of its total, though more than half of the debt service is tied to dedicated state tax revenue streams. Other local, state, and federal funds make up the balance.

The main Hudson Yards site, which stretches from 30th to 33rd streets between 10th and 12th avenues and is split in half by the 11th Avenue viaduct, contains rail yards for trains entering and leaving Pennsylvania Station. The plan anticipates building platforms over the yards that would support high-rise commercial and residential buildings. Areas to the north of the yards are also envisioned for new development.

The agreement calls for the city and MTA to select a developer to oversee the rebuilding program next year. Under the agreement, the MTA will receive all sale or lease revenue from future development over the yards, which it owns. All payments in lieu of property taxes generated by the developments would go to the city.

The agreement also establishes that the city will control planning and design guidelines for the developments. This winter, the city-chartered Hudson Yards Development Corporation will work with community groups, the MTA, and the public to draft guidelines by early next year.

The next steps are expected to take place early in 2007. Following the development corporation's public comment period, the MTA will use the draft guidelines to issue a request-for-proposals for a developer to oversee the redevelopment of the yards. A committee of MTA and city representatives is expected to select a winning proposal next summer.

Among the major points in the Hudson Yards agreement is the establishment of a funding mechanism for the city to pay for the $2 billion, 1.5-mi. extension of the 7 subway line from Times Square to a new terminus at 34th Street and the Jacob K. Javits Convention Center.

The MTA will be building the subway extension, and the agency's leaders told attendees at a fall industry briefing that it expects to issue an RFP before the end of 2006 for a $900 million to $1 billion contract to build tunnels, caverns, and station structures.

The agreement also establishes that the city will spend $200 million for a 50 percent interest in transferable development rights from the eastern half of the rail yards, or approximately 4.5 million sq. ft. The city and MTA expect to sell those rights to developers for projects on eight blocks north of the yards, across from the Javits center.

The entire rail yards site is now also governed by the city's ULURP land use review process. Initially, the mayor's office had exempted the western half because it was to house the stadium, but in October, the mayor and City Council agreed to roll that parcel under ULURP.

The entire district also falls under the city's 2005 rezoning of Hudson Yards, which reserves 28 percent of 14,000 planned residential units for affordable housing and which concentrates commercial development along 11th Avenue.

New Jersey Adopts Prompt Payment Law

A new law in New Jersey will put the onus on owners and contractors to ensure prompt payment of general contractors and subcontractors per their contract terms.

The new law, which Gov. Jon Corzine signed in September, applies to both public and private contracts, and directs its provisions to owners, general contractors, and even subcontractors who have responsibility for payment on construction projects. Several industry groups played critical roles in supporting the legislation, including the Building Contractors Association of New Jersey, the American Subcontractors Association of New Jersey, and various labor councils in the state.

"The new statue merely requires of construction owners what is already expected of all of us in our daily lives - to pay our bills in a timely manner," said Doreen Siegel, executive director of the state's ASA.

The law corrects inequities that existed in state law, which already required contractors and subcontractors that have received payment to pay others under subcontract to them within 10 days, but had no similar provision to require private owners to pay the general contractor. Though public owners already were required to pay contractors within 60 days, the existing law had limited penalties for late payments.

The new law requires both public and private owners to pay contractors within 30 days of billing after the satisfactory completion of work as established by the project contract.

The law allows contractors who have not received required payments within these 30-day and 10-day windows to stop work without facing breach-of-contract claims, though such contractors still must give a seven-day written notice before suspending work.

In addition, the law establishes provisions for interest to accrue on delayed payments at the prime rate plus one percent.

The law also establishes a voluntary alternative dispute resolution process to settle payment conflicts.

LiRo Group Taps Tormenta for Top Job

Luis Tormenta has ascended to the CEO post at LiRo Group, a construction management, engineering, and architectural firm in Syosset, N.Y.

Tormenta, who was the inaugural commissioner of the New York City Department of Design and Construction in 1996, had joined LiRo in 2000 as COO. He now will be in charge of the firm's overall strategic direction and management.

Prior to being the founding head of the city's "super construction agency" created by former Mayor Rudolph Giuliani, Tormenta had served in the city's Department of General Services, which was the new agency's predecessor.

Tormenta replaces Rocco Trotta, who had been CEO and who remains chairman of the board. Tormenta had been vice chairman and retains that title.

Trotta is also the firm's majority owner. Both Trotta and Tormenta are professional engineers.

LiRo will not fill the COO slot, but has promoted Lawrence Blond to be the new head of the construction management group, which Tormenta had previously overseen. Blond is now senior vice president and general manger of that group.

Yale Cancer Center Breaks Ground

Work began in September on a new cancer center for Yale-New Haven Hospital in New Haven, Conn. The $250 million facility is slated to open in 2010.

Designed by Shepley Bulfinch Richardson and Abbott of Boston, the North Pavilion-Cancer Hospital will have 112 beds and 12 operating rooms. Turner Construction of New York is construction manager on the 14-story, 511,000-sq.-ft. facility.

The steel-frame structure will also include three bridges and a tunnel that will connect it to existing underground corridors on the hospital's campus.

New Jersey Voters Face Transportation Funding
Measure on Ballot

by Tom Stabile

Garden State construction and labor groups are campaigning for a constitutional amendment to commit 10.5¢ per gallon of the state gasoline tax to the trust fund, up from 9¢ now.

"We're trying to get the full yield on the gas tax - close the loopholes and fill the potholes," said Rob Lewandowski, spokesman for the Laborers' International Union of North America's eastern region.

The fund generates about $700 million annually, but this year nearly all of it is going to debt service, said Brian Tobin, executive director of both the Associated General Contractors of New Jersey and the New Jersey Asphalt Pavement Association. In an effort to fix the immediate problem earlier this year, New Jersey Gov. Jon Corzine initiated several reforms to add money to the fund in the short term, including a refinancing for a lot of the debt.

The ballot measure is intended to help that effort. The state legislature already approved it, but because it requires a constitutional change, voters must also ratify it.

The extra 1.5 cents will add about $75 million annually to the fund, Tobin said. But while both of his organizations support the ballot measure, it is not a full solution.

"It's a stopgap financially," he added. "They needed to do something."

Tobin said that it is at least in keeping with an effective long-term philosophy.

"We in the contracting industry believe in a user fee, pay as you go, so you're not relying on debt and not have to pay for it in the long run," Tobin added. "It's almost impossible to get taxes passed here."

The proponents are planning a radio buy in the week prior to the election to promote a "Vote Yes on 3" campaign. There is little if any organized opposition to the measure, Lewandowski said.

"We built a coalition that not only includes the construction industry, but also leaders from schools, municipalities, seniors groups," he added. "We've tried to cast the net wide for people who are interested in our roads, our rails, our airports, our ports."

New Jersey voters will also be voting on whether to change the constitution to allow a portion of funds from the Corporation Business Tax currently dedicated to various environmental cleanup and pollution control programs to also fund new development of recreational facilities on state parks and other open space.

Voters had approved a constitutional change several years ago under a "Clean and Green" coalition to dedicate 4 percent of the tax to a variety of measures, said Michael McGuiness, executive director of the New Jersey Chapter of the National Association of Industrial and Office Properties. The funds are divvied between programs to clean up underground storage tanks, private brownfields, water and air pollution, and state-controlled remediation sites.

McGuinness said his group initially worried that the measure would reduce funds available for private developers, but the careful wording of the measure and the complex formula of the fund will largely redirect money from water programs, state cleanups, and the underground tank program into the new recreational projects stream.

"We don't have any problem with this at all," McGuinness said.

The measure is largely supported by environmental groups in an effort to get dedicated funding for an otherwise poorly funded state park system, and McGuinness said he has heard of no organized opposition.

For national coverage of ballot issues on the docket for November 7, go to http://enr.ecnext.com/free-scripts/comsite2.pl?page=enr_document&article=nefiar061023

New York Air Crash Damage Is Confined to Small Area

10/23/2006 By Heather Hatfield with Nadine Post


Silvian Marcus was in a meeting at 7 World Trade Center when he got the call. A plane had struck "his building."

Marcus, CEO of WSP Cantor Seinuk, a large structural engineering firm in New York City, says he looked around. The building he was in was built as the result of a plane crash five years earlier.

On Sept. 11, 2001, 7 World Trade Center was destroyed by fire and falling debris from the twin towers. Was his secretary talking about the new 7 World Trade?

"Here I was in this new building, this strong building that we engineered, and I get this call," Marcus says. "Of course, I was then to find out it was The Belaire."

On Oct. 11 at about 2:30 p.m., New York Yankees pitcher Cory Lidle and his flight instructor, Tyler Stanger, took off from Teterboro Airport, Teterboro, N.J., in a 2002 Cirrus SR20. The single-engine plane rounded the Statue of Liberty before turning up the East River. Just north of 72nd Street, the plane took a 180° turn. At 2:42 p.m., the plane crashed into 524 E. 72nd street, a 50-story building known as The Belaire, killing both Lidle and Stanger.

A New York City Fire Dept. spokesperson says firefighters arrived at the scene at 2:46 p.m. and the fire was out by 4:34 p.m.

The plane penetrated the concrete- framed building with brick facade at the 40th floor, says the New York Dept. of Buildings. The 39th and 41st floor sustained collateral damage, a spokesperson says.

Marcus, who was Cantor Seinuk's principal in charge of The Belaire when it was built in the late 1980s, ran out into the rain to hail a taxi for the Upper East Side. He arrived on the accident scene but the fire department was not allowing access to the building. "The fire chief told me not to worry," Marcus says. "He said there were no structural problems."

The next day, Marcus sent two of his engineers to inspect the damage. The Cirrus SR20 penetrated the brick facade in between two columns, Marcus says. The brick is supported with relief angles on each floor, so the "damage was local," Marcus says.

Inside the building, the engineers looked for visible cracks in the concrete floors but found none. In a serious fire, concrete usually delaminates, but none occurred, Marcus says. The firm recommended further tests on four apartments. The Belaire was re-occupied the night of the crash with the exception of seven apartments, the Buildings Dept. says. A vacate order remains in effect for those apartments.

The Belaire has a concrete frame with concrete core sheer walls to provide lateral support. The building was completed in 1989, 10 years before the New York City Building Code Local Law 10 required sprinklers in residential portions buildings.

There are four below-grade floors for parking, Marcus says. The first 15 above-grade floors are owned by the nearby Hospital for Special Surgery and are used for offices and temporary residences. The upper floors are condominiums.

Because of the variation in usage of the building, the column spacing shifts at different points in the structure. The performance of the building was "excellent," Marcus says.

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