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Newswatch - March 2007

$1.1 Billion More for Freedom Tower

The Port Authority of New York and New Jersey approved $1.1 billion worth of new contracts for construction of the $2.9 billion Freedom Tower earlier this year in the midst of ongoing debate over whether the project should move forward in its current form on Manhattan’s World Trade Center site.

Meanwhile, the Port Authority was also talking to private developers about possible partnerships involving the Freedom Tower, says Steve Coleman, an agency spokesman. He denied reports, however, that the agency is trying to sell the building outright only months after taking over development responsibilities from Silverstein Properties of New York.

Several of the new contracts went to Tishman Construction of New York, which Silverstein originally had selected to perform construction management work when it was acting as developer of the Freedom Tower, also known as Tower 1, and four other office buildings in the World Trade Center complex. After protracted negotiations over Silverstein’s role last year, the Port Authority took over construction of both the Freedom Tower and Tower 5 in September, with Silverstein retaining its role developing Towers 2, 3 and 4.

Despite the change in developers, the Port Authority reconfirmed Tishman’s role in January, approving a $26.5 million construction management services contract. Tishman will also manage $170 million in general conditions work. The agency is managing development through its 1 World Trade Center LLC affiliate.

Foundation work began last year on the 2.6-million-sq-ft tower, which will have 69 tenant floors, and early steel erection started in December. It is slated for completion in 2012.

In February, the agency announced plans to award another $492 million of contracts immediately and the balance of another $500 million by midyear. The announcement came only days after new Gov. Eliot Spitzer had extended his support for the project in its current form as the “best and wisest alternative,” displacing comments he had made during his campaign that the tower was a “white elephant.”

Meanwhile, current plans for the tower gained new critics in recent months. New York-based architect Rafael Viñoly, who had been one of the finalists to design the World Trade Center redevelopment master plan, suggested eliminating the Freedom Tower at a January meeting hosted by the Alliance for Downtown New York. Viñoly proposed a redistribution of the tower’s square footage among the three towers along the Church Street perimeter. Viñoly’s office did not return calls for comment on the agency’s decision.

Other critics surfaced a month later when Douglas Durst and Anthony Malkin, both New York developers, took out full-page ads in several New York City daily newspapers outlining recommendations of their Continuing Committee for a Reasonable World Trade Center. They called for a full reconsideration of the plans for the Freedom Tower, which they described as poorly planned, though they also recommended continuing work on the foundation of the structure for possible use by a future design. Both developers build office properties that could face competition for tenants from a completed Freedom Tower.

Koolhaas Unveils Jersey City Tower

A new 52-story "vertical city" in Jersey City is under design by Pritzker Architecture Prize-winner Rem Koolhaas of the Holland-based Office for Metropolitan Architecture.

The $400 million mixed-use, high rise at 111 First St. is Koolhaas's first residential project in the United States, where he previously designed the Seattle Public Library and Milstein Hall at Cornell University in Ithaca, N.Y. New York-based BLDG Management Group, which owns the site, and New York-based Athena Group, which is developing a $110 million 33-story condo across the street, are joint developers of the new project.

Demolition is under way on a 137-year-old wood and masonry structure now on the 111 First St. site that had most recently housed artist and performance space until a deal the developers brokered with the municipal leaders last summer. The city agreed to rezone the plot for residential development partly in exchange for the developer including 117 affordable housing units and 120 artist studios in the new building.

The Koolhaas design features three blocks stacked atop one another and rotated 90 degrees to create terraces. The 1.2-million-sq-ft tower is mildly reminiscent of the Santiago Calatrava's design for 80 South Street, an 835-ft-tall tower of individually stacked cubes arranged in a zigzag pattern that Sciame Construction has proposed building in Lower Manhattan, though that project is currently stalled, awaiting sales.

The new Koolhaas tower will include condominium units, a hotel, artist lofts, gallery, and retail spaces, as well as parking. The construction team is being assembled, according to a spokeswoman for the developers, and no date has been set for a groundbreaking. The project is still undergoing other city approvals.

Construction is expected to take three to four years.

New CM Selection Process for DDC

The New York City Department of Design and Construction announced earlier this year that it will use pre-selected firms for all non-infrastructure projects valued at less than $25 million.

The agency issued a Request for Proposals seeking eight construction management firms to handle all projects under that dollar threshold in the agency’s structures division. Most of the projects the agency handles in the structures division

DDC had received 29 responses to the RFP and plans to make a selection in mid-April, according to an agency spokesman. The firms would each negotiate two-year, renewable contracts with the agency.

DDC proposed a quality-based selection process with weight given to the experience of the firm, key personnel, and organizational capability. After a meeting with the Construction Management Association of America in January, DDC further refined the schedule and fee agreements.

The new program allows the agency to reduce the amount of time and resources spent on the selection and assignment process, says David Resnick, the agency’s deputy commissioner of structures.

“The idea underlying all of this is that we are the agency responsible for matchmaking, which is our primary responsibility,” he adds. “I think this process gives us the flexibility to do it successfully.”

Resnick also says the program will include an evaluation of the construction managers at mid-point and end-point of construction projects.

The New York Building Trades Employers’ Association has welcomed the process because it provides contractors with more control over construction progress and avoids the confusing layers of responsibility present in many publicly bid projects, says Lou Coletti, the association’s director.

But those already critical of the DDC’s reliance on construction managers say this is an expansion of an already questionable program. Henry Goldberg, managing partner of Goldberg & Connolly of Rockville Centre, N.Y., a construction and government contracting law firm, says DDC is “relying more extensively on a program that has serious legal concerns,” referring to the city’s existing procurement program that uses “CM-Build” contracts.

Goldberg says that program violates both the state’s Wicks Law, which requires four separate prime contractors on most public projects, and Section 137 of the State Finance Law with regard to project bonding. He says the new DDC program has similar problems regarding advertising of projects that circumvent true competitive bidding.

Projects exceeding $25 million will still go through the agency’s stand-alone procurement process, as will projects in the agency’s infrastructure division, which accounts for half of its work. The eight construction managers locked into the task-order arrangement will also have an opportunity to bid on the infrastructure projects.

New Site Supervision Rules

The New York City Department of Buildings has proposed a new rule that requires registration for all construction site superintendents.

The proposed “Construction Superintendent Rule,” or Rule 48, will require supervisors to have appropriate knowledge of construction and risk prevention, according to the agency.

If Rule 48 goes into effect, superintendents will have to acquire permits that will be valid for three years. Their responsibilities will include making sure that they are always available to the buildings department, cooperating in any investigation, and answering any questions from the department or other city or law enforcement agencies.

The rule would also require superintendents to report any injuries that occur and act in a reasonable and responsible manner to maintain a safe construction site. Failure to meet these guidelines could result in fines, suspensions, or revocation of permits.

The rule will allow superintendents to supervise as many as 25 construction sites at a time as long as they can supervise each sufficiently.

STA Seeks Albany Support

The Subcontractors Trade Association recently rolled out its eight-bill legislative program for the 2007 session of the New York State Legislature, with hopes that this year the elusive “No Damages for Delay” bill will clear both houses.

Seven of the bills had been introduced in both the Assembly and Senate by early spring, but STA officials have one eye cocked at all times toward their top priority in Assembly Bill 1994 and Senate Bill 2153 - the “no-damages-for-delay” measure.

“If we get just one thing passed all year, ‘no damages for delay’ is the one we want,” says Ron Berger, the STA’s executive director. “Without question, that’s the priority.”

Passage of the bill would allow contractors and subcontractors on public projects to recover damages caused by unreasonably long delays that are the responsibility of the owner.

“Right now, the amount of risk on the subcontractors in these situations is unbelievable,” Berger says.

The bill got through the Senate last year with a 59-0 vote before stalling in the Assembly’s Rules Committee.

The other pieces of legislation the STA is supporting in Albany include:

- Assembly Bill 3145/Senate Bill 1660, which would require retainage on private projects valued at more than $250,000 to be placed in an interest-bearing escrow account

- Assembly Bill 2854/Senate Bill 2137, known as the “Retainage Reduction” bill, which would require a 50% reduction in retainage on public works projects after half the project is finished

- Assembly Bill 2687, which would require architects and engineers to review and approve any and all design work that is contracted out.

 

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