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Unions save Bruce with big pay cut to get Yards going

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Union workers are coming to Bruce Ratner’s rescue — again! — agreeing to take massive pay cuts to pave the way for the first residential building at Atlantic Yards, a cut-rate, pre-fabricated tower to rise next to the Barclays Center.

Labor unions provided crucial support for Ratner when his controversial, $5-billion project was moving through the approval process five years ago in exchange for a promise of high-paying jobs. But the agreement currently being negotiated between union leaders and Ratner, workers would give up millions of dollars in pay to allow the developer to move forward with the cheaper, modular building.

It is unclear how much money will be lost to laborers, but carpenters make as much as $90 an hour in wages and benefits at real construction sites, but only $30 per hour when working inside the kind of factory where Ratner will build the pre-fabricated units.

Many union leaders merely shrugged when asked about the pay cuts, suggesting that if the workers don’t give back, the project might not go ahead, leaving laborers with no work at all.

“We are attempting to reach an agreement … that will work for the building trades,” said Gary LaBarbera, president of the Building and Construction Trades Council.

A labor union source translated LaBarbera for those who don’t speak the language of press releases.

“The unions are going to do what it takes to preserve jobs for their members,” said the source. “The wage scale is ultimately going to be [the deciding factor]. This is going to be a long process.”

Ratner released renderings last week of a 32-story modular building rising at the corner of Dean Street and Flatbush Avenue, just south of his under-construction $1-billion basketball arena. The building would be the tallest pre-fab structure on the planet.

Two identical-looking pre-fab building would come later — and one of them would be 50-plus stories, which would break its predecessor’s height record for Lego–style towers.

Ratner says he will begin construction early next year, with ground-breakings for the others following at six to nine-month intervals after that — the first of three residential buildings in the long stalled, 16-tower development.

The first tower would be constructed using 930 pre-fabricated steel boxes known as modules that would be built in a factory and transported to Dean Street, where they would be bolted into place.

Ratner hailed the method, which he said would cut costs by up to 25 percent, but union members would face far bigger pay cuts.

Unions had supported the project from the outset because of its promise of thousands of jobs. Those same union supporters are already angered by a shortfall of positions on the project.

The pre-fab design would also save money because it would take less time to build: the world’s tallest modular building, a 25-story dormitory in Wolverhampton, England, was built in less than one year.

But the project faces significant design challenges, according to architects who reviewed the renderings.

“The modules would have to be built on an assembly line basis and that capacity doesn’t really exist [on this size],” said Jim Garrison, whose modular design firm in DUMBO declined an offer from Ratner last year to help produce the plan. “The rational thing to do is build a 20-story building and test these things out before building a 30-story tower.”

Longtime critics of Atlantic Yards slammed the plan.

“It’s another despicable slight to the community surrounding the project by eliminating more crucial jobs for residents,” said Councilwoman Letitia James (D–Fort Greene).

James and others felt similarly slighted by the notion that a project that was once meant to be an architectural showcase by legendary designer Frank Gehry will now comprise far more mundane pre-fab buildings.

Gehry was fired in 2009 in a cost-saving move.

Ratner’s spokesman Joe DePlasco said that the developer will begin to seek financing for the first building, but declined to comment further.

Reach reporter Daniel Bush at dbush@cnglocal.com or by calling (718) 260-2531.

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Reader Feedback

Daniel Goldstein from Park Slope says:
Why should the union accept concessions, Forest City has no choice but to use union labor. The unions have the upper hand.

Also, IF the residential construction is going to cost anywhere from 15 to 25% less, surely this means the "affordable" housing and income eligibility bands will decrease accordingly. Right?
Nov. 23, 2011, 8:56 am
Frank from Ft Greene says:
Really? The union agreed to this? Did they put it to a member vote, or are there going to be some outrageous gifts under Union Leaders' trees this year?

This is a safety disaster waiting to happen! There has never been anything built modular on this scale and they haven't even done any scale model testing, only computer simulations! We just had an earthquake and a hurricane this past year: were THOSE in the models? This guy is experimenting with the lives of thousands, and the State is letting him get away with it!
Nov. 23, 2011, 10:13 am
Crawford from Park Slope says:
Great news, and super for Brooklyn! Bring on the jobs and development!

And no thanks to the NIMBYs who delayed this project for years. Shame on you.
Nov. 23, 2011, 11:16 am
Big V from Park Slope says:
Great, an eyesore in the making that will be a blight on the neighborhood for decades to come so that Ratner can meet his projected ROE. This project stinks to high heaven and only gets worse as time goes on. Now that its approved, the whole "will create jobs" argument is falling to pieces because, guess what, the developers are too cheap to pay for labor. It's not economical, you say? Really, then why are we doing the project at all? And what new concessions will be needed to "create jobs?" Does anyone actually think Ratner will deliver on low income housing? Not with any kind of building you'd want in your neighborhood, that's for sure.
Nov. 23, 2011, 11:38 am
John from Flatbush says:
I'm thrilled that this is getting built and glad the unions stepped up with concessions. Brooklyn needs jobs and investment.

There is an attitude among some that everything must be exactly as planned in 2005 and 2006, despite the fact that a lot of time has passed and the economy has changed a lot--especially financing for housing! The whole world has changed, and mostly for the worse. I applaud Mr. Rattner for pressing forward despite all the economic challenges and endless political and legal attacks from NIMBYs.
Nov. 23, 2011, 11:49 am
Union Scam from Manhattan says:
Nobody deserves $90 an hour for manual labor. The union is equivalent to the mafia and i'm glad that the unions feel the heat that they need to offer concessions, but I would not use them until they knock their price down to under $40/hour. Unions have a boatload of money in their pool from people who joined unions but quit and didnt have their time vested. That money is in the union pool now. Again, its a scam. Until unions give out semi-annual statements to each member of what they have in their individual funds, dont trust anyone.
Nov. 23, 2011, Noon
Dock Oscar from Puke Slop says:
OK, so Ratner gets a tax break but the Unions have to work for less. Regardless of what you think is a fair wage, it looks like Ratner gets all of the breaks. Promises broken, all the same.

Same old, same old story and everyone falls for it EVERY time.

Can't wait for the traffic jams (I mean the ones after it's all built).
Nov. 23, 2011, 12:25 pm
Charles from Bklyn says:
Another example of the 1% getting the breaks, and the 99% getting less and less. Middle class; wake up!
Nov. 23, 2011, 12:27 pm
Bay Ridger from Bay Ridge says:
To the complainers, take a look at this link and see what one of these pre-fab buildings looks like. Looks pretty good to me.

http://www.modular.org/HtmlPage.aspx?name=19_Story_Dorm_UK

If the alternatives are pre-fab buildings or no new buildings, then it would seem that this approach is a win-win.
Nov. 23, 2011, 1 pm
Danae from Prospect Heights says:
Why isn't the alternative that Forest City Ratner takes home less profit, but keeps union wages and affordable housing that was promised?
Nov. 23, 2011, 1:21 pm
harriet from brooklyn says:
instead of throwing money at ratner, we could have created more jobs by throwing money out of a helicopter. that would have at least given the average brooklynite a chance at getting some of the largesse given to ratner.
Nov. 23, 2011, 1:52 pm
judahspechal from bedstuy says:
Look Brooklynites it's Daniel ($3mil) Goldstein. Wat up homie. I sincerely hope that you were able to afford a decent place for you & the Fam. I did red that you've been doing a Ratner on your neighbors. Good to hear you buddy. I thought you were in an undisclosed location.

Shame on you talking about the Unions that way. Some people do not let the good be the enemy of the whole.

I've always be a fan of prefab. If you are into green & LEED buildings. This is interesting. There will be lots of factory jobs putting these things together. Keep that in BK & a okay.

If this works building affordable housing in urban area can be relly cost effective & sustainable.
Nov. 23, 2011, 3:15 pm
William from Manahattan says:
One cannot be honestly dedicated to solving NYC's housing shortage and in favor of a requirement that housing be built using a method that is 25% more expensive than required. If all buildings could be built at a savings of 25%, many projects that are of questionable economic viability would be rendered viable, and maybe we could finally reach the point where supply meets demand and prices come down for everyone. Of course, what we no call "affordable" housing (i.e. subsidized housing) would not be available to politicians like Letitia James, et. al. to be handed out to constituents in exchange for votes, and they also would not be able to take credit for creating the completely unnecessary jobs that out-dated, inefficient construction methods create (hey, how about bucket-brigades for the concrete and water, and just shovels for the excavation - think of all the jobs!!). If prefab can can lower the cost of building (without compromising safety - and I have seen nothing to suggest that modern prefab results in such compromises), we should do it. It's better than giving away my tax dollars to close the viability gap, better than requiring market-rate residents to pay extra for their homes to support the economics of giving away housing to others, and, ultimately, better than having politicians and taxes involved in housing at all.
Nov. 23, 2011, 4:52 pm
Tal Barzilai from Pleasantville, NY says:
Those union workers should be demanding more money, not less. Once again, it was another follow the money here, because they were probably afraid of being fired. My guess is that Ratner claimed that they signed a CBA that they can't complain about, because it doubles as a gag order, and if they do complain, they will lose everything. In other words, it was either except what they got, or just have nothing at all hence the pick your poison. As for the pre fab building, I highly doubt that the rental units will go down especially when this is from a person who has a history of broken promises.
Nov. 23, 2011, 5 pm
jake from brooklyn says:
Build it non-union. There is a massive transition to non-union in NYC so why should this be any different? Unions no longer have a rational to exist when so many able bodied and capable workers want to work for a fair wage with no union overlords.
Nov. 23, 2011, 6:57 pm
judahspechal from bedstuy says:
I like how people are anti union. As a minority UNions have never been welcoming. Trust me I know. I work in the film industry. Take my word for it. If you ain't rich, you need to support unions period.

P
Most anti UNion folks are so mostly for political reasons. Make no mistake about it.
Nov. 23, 2011, 7:20 pm
Tal Barzlial from Pleasantville, NY says:
Maybe Ratner should just hire those Chineese through his shady EB-5 Program to replace them, because they will probably agree to anything and never complain at all.
Nov. 23, 2011, 7:36 pm
budapest from new york says:
The unions are stifling the entire city through their ridiculous payscales and insane work rules that require work to have multiple people standing there observing while getting paid hundreds of hours! Ratner is doing a huge service to everybody in NY by going against them and trying to keep them under control.

Once buildings become affordable to build again, maybe rents will go down and we'll have a functioning economy again.
Nov. 23, 2011, 11:13 pm
Informed Citizen from Brooklyn says:
Saying the unions "saved" Forest City Ratner is like saying a seller with an overpriced property "saved" the buyer by agreeing to sell their property for less. The unions rationally chose to accept something rather than nothing. The discount off their expected wage is about as significant the discount off 2008 real estate prices - it may be large, but that doesn't guarantee it's in line with the current market.

In general, the unions have done little to add value to our regional economy. They are as self-serving as the owners and developers they consistently decry as taking advantage of them. In this case, we have a new means of development that a private firm is interested in experimenting with. It could potentially be revolutionary. If the unions want to complain about it, I suggest that they put up their equity to build. Otherwise, take the job or don't.
Nov. 24, 2011, 1:58 am
Dennis sinneD from Williamsburg says:
I hesitate to comment on this particular situation because I'm physically removed from the site and the proceedings. Nevertheless, the respectful tenor of most of the comments is much appreciated and is a relief from the usual here on BP. Before anything, there are several claims made here as given that require some authentication as they are misleading.

William from Manhattan--on what basis do you claim NYC has a "housing shortage"? As far as I can recall, NYC has been in a perpetual "housing shortage" since WWII, and the term "housing shortage" is a bit of a hysteria employed to rationalize development hypertrophy.

Also, persons on other threads related to this one have made observations about "the inevitability of change" or "change happens" or "the only thing that doesn't change is change." This is axiomatic and is therefore administered in argument as a bromide--it is so given it makes no sense whatsoever to make for argument. It's like saying "the sky is blue" or "water is wet." Of course change happens! The people who are arguing against Ratner are also positioning for change--their change. It's nonsense and misleading and is meant to suggest that somehow DDDB or any of the "anti-Ratner" forces are opposed to change--nonsense. They have a counter-proposal--that is change.
If you don't like the type of change proposed by a plan or plans then argue against that, but to argue as though "your side" is for "change" and is "dynamic" while the "other side" is "static" is doing nothing but making sophistry and nonsense, is really nothing more than cheap sloganeering and is not a legitimate argument.

On a related note, some observers here have argued that the developers as landowners should be allowed to "maximize their profits"--again, nonsense and not predicated on reality. Why should the maximization of profits and revenue and money in general be confined solely to developers? On what arbitrary basis are we foisting this fallacious argument on? On that same basis the argument that the unions should maximize their wages is just as legitimate. If the maximization of happiness underlies the maximization of profits, why shouldn't the anti-developers groups thus maximize their opposition?
The truth of the matter is that there is no place in the country by which large-scale developers can do whatever they want and maximize their profits. Developers are absentee entities in the geographic locations they are building upon, and there is also a large likelihood that they will not even reside in those selfsame locations they build upon. The experience of their finished work, which is the most powerful circumstance of all, is fractured, for a developer, by a balance sheet. No such fracture exists for a resident local to the area where development occurs, and it is precisely why developers "make concessions" on developments--they typically live "t/here" whereas the psychological and experiential impact is typically felt by those who live "here."

For example, up in Williamsburg, the developers who slipped into the 2005-rezoning of the waterfront were not "local entities." The community had plans in place, and it was by hook and crook that Toll Brothers eventually developed there--because of that hook and crook, because of their alienness, because of the environmental and aesthetic and historical impact of their work, they make concessions. The idea that developers live in this fanciful laissez-faire state is pernicious, and the idea that laissez-faire economics works was disputed by Alan Greenspan himself.

I'm sorry this post was here and there and all over the place, but again, I can only really comment on the silliness of the sophistry of "change happens, dude, get over it" and on the abstractions held in common between development in North Brooklyn and this particular development project.
Nov. 24, 2011, 9:06 am
Dennis sinneD from Williamsburg says:
Just a personal anecdote to further about the Lockean abuses here: across the street from where I live on Kent Ave and North 7th "the developer" had a dispute about an adjoining property that he wished to build on. His filed plans omitted any mention of this particular parcel, so what did he do? He came one night with a crew of undocumented immigrants and dumped a bed of concrete onto the adjoining property, then re-filed his plans so that his development plans were to be seen as fatally injured if he could not ALSO develop that parcel. He basically followed the line uttered in the sitcom Parks and Recreation, "Don't ask for permission--ask for forgiveness." It is well known among locals in Williamsburg, the same Williamsburg that is perpetually characterized as a "wasteland" [also related to observations here] that the most lawless entities in Williamsburg have been landlords, that the "wasteland" that was supposedly created here post-Korean War was due largely to arson-by-profit by landlords. The reasons for that lawlessness HAS ALWAYS BEEN DUE TO THE DESIRE TO MAXIMIZE PROFITS AND TO HELL WITH EVERYONE ELSE.

So no, "development" in fact does not work best when a developer's overriding concern is the maximization of profits, because, like the "change" that everyone seems to claim "happens," "profits" are ephemeral. What is much more durable and long-lasting are the buildings that are built, who stand long after balance sheets are yellowed with age, and the people who live around them--who give balance sheets meaning.
Nov. 24, 2011, 9:16 am
Dennis sinneD from Williamsburg says:
I highly recommend, for pertinent reading and precise scholarship, Thorstein Veblen's Absentee Ownership and the Business Enterprise in Recent Times. Of course, "recent" for Veblen was the 1920s, but his foresight endures to the present.

Here is a wiki on Veblen if anyone is interested:
http://en.wikipedia.org/wiki/Thorstein_Veblen

The wiki provides several links to free downloadable copies of Veblen's many important works.
Nov. 24, 2011, 9:40 am
Iseewhat ouydidereht from Park Slope says:
Dennis sinneD, perhaps the opposite of internet troll? Veblen seems interesting, thanks for the reference.
Nov. 24, 2011, 3:32 pm
Dennis sinneD from Williamsburg says:
My sincere wish is that his works enrich you the way they did me, and inform you [and I] along with all the manifold works by the world's thinkers while we navigate this morass called "our World."
Nov. 25, 2011, 9:18 am
Tal Barzilai from Pleasantville, NY says:
Some of you are missing the point here. Many who have supported Ratner with this project believed everything he said hook, line, and sinker. In the end, they started to wake up only now and realize that Ratner cheated them and gave them false promised that he paid them to believe at first. Most union workers are hard working, not lazy as those who hate them stereotype them as. Why do they deserve less when they work so hard? My guess is that they were told to pick their poison by either take whatever they are given or just get fired and be replaced by probably either scabs or poor Latinos, who will work for anything. Then again, I told you so when I knew what he was really planning for. As for modular construction, don't count on it for rents to go down, and the affordable housing was never meant for the working class when shown by Ratner's own numbers that they weren't even going to be part of it.
Nov. 25, 2011, 6:07 pm

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