Contractor to Forest City Ratner: It’s not me, it’s you

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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.”

Reach reporter Matthew Perlman at (718) 260–8310. E-mail him at Follow him on Twitter @matthewjperlman.
Updated 10:17 pm, July 9, 2018: Clarity added regarding the distinction between Skanska's contract and its partnership with Forest City Ratner.
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Reasonable discourse

knobody from wherever says:
if they say its costing too much to build, might as well demolish it & replace it with brick & mortar because ultimately in the end, its gonna be another set of ghetto housing projects for the hood anyway.
Sept. 25, 2014, 11:27 am
Norman Oder from Brooklyn says:
You wrote: "But a judge on Tuesday refused to let the builder out of its partnership with Forest City so easily..."

Not quite.

To explain: Skanska has ended the contract it has to build B2 and the purchase order to buy modules for B2.

The judge had nothing to do with that.

Forest City and Skanska had and have an ongoing, if estranged, partnership called FCS Modular to build the modules.

The structure of that relationship--notably the managing member--may change.

The judge didn't refuse to let them out of that partnership. But she did require them to have a board meeting to resolve the management issue.

More here:

Norman Oder
Atlantic Yards Report
Sept. 25, 2014, 7:49 pm
Tal Barzilai from Pleasantville, NY says:
Once again, disputes come to this site. I wonder who is going to be blaming the opposition considering that they had nothing to do with this. Perhaps, there should be eminent domain placed here and have real affordable and public housing rather than housing that's claimed to be affordable when it's really not or having Extell take over and having the UNITY Plan there instead especially since it was more realistic in what was going to go there.
Sept. 25, 2014, 8:59 pm
Raul from Prospect Heights says:
It's amazing to hear Forest City using the word "deplorable" after a judge used it against them in a case revolving around Ratner's trustworthiness.

Back in 2010, Supreme Court Justice Marcy Friedman criticized the ESDC's “deplorable lack of transparency.”

This didn't stop the ESDC/Ratner from anything, and because of their stonewalling, a judge in 2013 forced them to pay legal fees of community groups.

Who's deplorable? The ask state Supreme Court Justice Marcy Friedman.

Sept. 26, 2014, 10:15 am
Maxx from Bayridge says:
Who really cares? You think Rayner does? Skanska? All they care about is getting their money! Ratner will probably start off by asking astronomical rents or insane condo maintenance fees. When that goes by the wayside, he'll just take any low income or government assisted people and then you'll have another "hood" because they'll just destroy everything, cover it with graffiti, and hang out at all hours out front most likely dealing drugs. The writing is on the wall, I'd like to see an affordable middle class community flourish, with contributing members of society, but greed has a way of polluting things. Hope I'm wrong, but only time will tell!
Sept. 26, 2014, 2:36 pm
Tal Barzilai from Pleasantville, NY says:
Ratner will never care about what will happen to him on this, because he knows that he will most likely just get a slap on the wrist for missing a deadline or knows that he isn't paying for this, the taxpayers are, so this won't affect him at all.
Sept. 26, 2014, 6:28 pm
BLR from Queens says:
As one of the 157 employies that got laidoff,some of the statements of unskilled workers and bad management are true but we the workers are not at fault.Not only did the furlough affected 157 employies but it affected 157 famalies.How is speaking for us
Sept. 29, 2014, 7:04 pm

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