The Real Deal New York

Javits Center contracts draw concern in light of state, federal probes

Tishman Construction granted more than $8M in contracts

May 18, 2016 04:52PM
By Kathryn Brenzel

Rendering of the Javits Center

Rendering of the Javits Center

Tishman Construction can’t bid on the expansion of the Jacob K. Javits Center — but that doesn’t mean it won’t work on the project.

The Convention Center Development Corporation, a subsidiary of the Empire State Development Corporation, on Wednesday awarded and extended two contracts to Tishman valued at more than $8 million. The construction giant is barred from directly bidding on the $1 billion-plus expansion of the convention center, but was permitted to bid on some consultation and utility work on the site. The company was part of a team that built the original center and worked on an earlier renovation of the convention center from 2005 to 2014. The company has done work in planning the project but is precluded from bidding, since it arguably would have an unfair advantage over companies like Skanska USA, Lend Lease and Gilbane Building Company — who have all expressed interest in the project. The architecture firm FXFowle, which has also been involved with the site for more than a decade and helped create a concept design for the project, is also prohibited from bidding on the design-build contract.

The board meeting became a proxy of sorts for the ongoing conflict between Gov. Andrew Cuomo and Mayor Bill de Blasio, as discussion shifted to federal probes surrounding the governor’s prized upstate New York development projects and the mayor’s campaign fundraising activities. Peter Wertheim, board member and advisor to deputy Mayor Alicia Glen, noted that Daniel Tishman — chair of the construction company, which he sold to AECOM in 2010 — is one of Cuomo’s top political contributors and that the company already has a role in the project.

“To me, it feels interesting to sit here and be asked to vote on an $8 million contract for one of the governor’s largest donors,” he said. “This whole process to me is feeling like there’s a lot of subjectivity in how decisions are being made.”

A representative for ESD said that Daniel Tishman is not involved with the expansion.

“The integrity of the procurement process is paramount, so out of an abundance of caution, and to avoid even the appearance of impropriety, ‎in January 2016 AECOM and ESD memorialized an agreement removing Dan Tishman from any and all communications regarding the Javits Center expansion,” he said.

The notion of a “conflict of interest” — actual or perceived — is a particularly charged one at the moment. U.S. Attorney Preet Bharara is investigating contracts awarded through the governor’s “Buffalo Billion” program, a sprawling redevelopment project in Western New York. The probe involves Cuomo’s former aide turned Madison Square Garden executive, Joseph Percoco, who reported receiving $125,000 in 2014 from two companies with business before the state. At the same time, Mayor Bill de Blasio’s administration is the subject of several investigations, involving his campaign fundraising activities as well as inquiries into a deed restriction on a nursing home on the Lower East Side.

Wertheim, who voted against both contracts awarded to Tishman on Wednesday, referenced the ESD’s recent actions related to the planned residential development at Brooklyn Bridge Park’s Pier 6. The agency pulled its support from the project over conflict of interest concerns, officials announced at a meeting on Tuesday. The project’s developer, RAL Development Services, donated $10,000 to Mayor Bill de Blasio’s Campaign for One New York, the non-profit that is currently the subject of state and federal investigations.

The issue also came up with a $750,000 contract granted to Lehrer LLC, an advisory firm that has done work for the state on the redevelopment of LaGuardia airport. Board member David Emil and Wertheim questioned why the firm was selected, since the contract is considered to be single-source — meaning that while the firm isn’t the only company capable of taking on the job, the state believes the company is particularly qualified to act as a consultant for the project.

“It can’t simply be that we had a positive experience with the firm,” Emil said. “If that were the actual criteria, then having a good experience would always allow you not to conduct the public bid process.”

Eunice Jackson, an attorney with ESD, noted that this is the agency’s first foray with design-build, a project delivery system that the state only this year extended to ESD.

“We’ve never done design build,” she said. “There are not many firms that you will find that have experience with New York State design build projects.”

Wertheim asked whether or not the firm was involved in any of the projects that are currently being investigated in Upstate New York. Ultimately, the contract was approved with the stipulation that if any conflicts were identified, the board would revisit the agreement. The board also agreed at the end of the meeting to obtain a list of all the political contributions made by companies awarded contracts, noting that it wouldn’t necessarily disqualify them.

Tishman declined to comment.

The newest plans for Javits Center will be funded by a $1 billion appropriation, cash on hand and a bond issuance. Previous plans for the expansion included selling two development parcels between 33rd and 34th Street and 11th and 12 Avenues for as much as $900 million to help fill funding gaps. The committee noted on Wednesday that there are still currently no plans to sell those properties. The state issued a request for qualifications in April and plans to choose three finalists by the end of May. The companies selected will then have a chance to bid on the project. The overhaul includes expanding the convention center by 1.2 million square feet and building a roof terrace for outdoor events.

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