Forest City Ratner and its contractor for the development formerly known as Atlantic Yards are separated, but a judge won’t let them get divorced just yet.
The fallout between the developer and Swedish construction giant Skanska over the modular B2 tower, which has been stalled since early this month when Skanska halted work, reached a new low on Tuesday when the builder terminated its contract, saying that Forest City’s designs for the Lego-like boxes that make up the structure are flawed and are costing way more than agreed to.
“We could not continue to incur millions of dollars in extra costs with little hope that Forest City would take responsibility for fixing the significant commercial and design issues on the project,” said Skanska honcho Richard Kennedy in a statement.
But a judge on Tuesday refused to let the builder out of a formal partnership it created with Forest City for the project, ordering the two to go back to the negotiating table to work out settlement terms in the face of dueling lawsuits.
Skanska first sought to back out of the complex construction project in August with a letter to Forest City demanding $50 million in costs it said were the developer’s fault. The letter includes an ominous charge that design flaws could mean B2 will leak along the many lines where the modular boxes meet on the building’s exterior, as first reported by the Atlantic Yards Report blog.
“It is producing a building for which there can be no certainty as to whether it will experience leaking at the thousands of joints between module facade elements,” Kennedy wrote in the Aug. 8 letter.
Skanska declined to further explain the claim, citing the ongoing legal dispute. A Forest City spokesman called the charge baseless, and the company’s head said it stands by the modular design.
“We believe in modular and have worked tirelessly to get B2 back on track,” said MaryAnne Gilmartin in a statement.
The developer is also criticizing Skanska for the ongoing work stoppage, which shuttered the Navy Yard plant where the apartment boxes were being fabricated and idled the work site on the corner of Flatbush Avenue and Dean Street, putting 157 employees out of work. Forest City says Skanska’s attempt to walk off the job is really a form of extortion.
“Skanska has responded with inaction and inertia, trying to leverage us financially by stonewalling B2’s progress,” Gilmartin said. “These are deplorable and disappointing tactics that show remarkable indifference to the wellbeing of these workers and the project.”
B2 currently stands 10 stories tall, 22 stories shy of its planned height.
The detente could affect the timeline of the larger 16-tower mega-development, which Forest City and its Chinese-government-owned partner Greenland have said will be completed by 2035. The latest projected deadline is nearly two decades later than Forest City’s original claim that it would be done by 2016.
The two companies agreed in June to finish all the promised below-market dwellings by 2025 or face fines from the state.
A Greenland spokesman broke the company’s silence in early September to deny that the feud will affect the rest of the project. Another building is on track for a December ground-breaking, he said.
Greenland owns a 70-percent stake in the un-built portion of the project, but does not have a say in what goes on with the Barclays Center or B2.
Forest City and Greenland have asked the public to refer to the development as “Pacific Park.”
