The Real Deal New York

Forest City, contractor at Pacific Park Brooklyn swap lawsuits

Dispute centers around time and cost required to construct modular apartments

September 02, 2014 03:41PM
By E.B. Solomont

  • Print
From left: Bruce Ratner, B2 and Skanska's Michael McNally

From left: Forest City Ratner’s Bruce Ratner, B2 and Skanska CEO Michael McNally

Developer Forest City Ratner and contractor Skanska USA Building traded lawsuits Tuesday over who is responsible for construction delays and cost overruns at the long-stalled Pacific Park Brooklyn, formerly known as Atlantic Yards.

Construction on Pacific Park’s first residential tower, which is being built out of modular units, stopped August 27 after Skanska furloughed workers, citing a conflict with Forest City over scheduling and costs.

In a suit filed Tuesday in New York State Supreme Court, Forest City Ratner is seeking damages and declaratory relief from Skanska, which the developer accuses of “multiple failures and missteps” that have caused delays and cost overruns.

“Simply put, Skanska was in over its head from the outset and lacked the wherewithal or the willingness to invest the time, energy and funds to recover from its delays,” the suit states.

In its own suit, Skanska is seeking $50 million in damages it says it is owed since Forest City changed the construction plans.

“The work at the B2 Project is currently stopped because Forest City Ratner has steadfastly refused over many months to engage in an honest dialogue about the serious commercial and design issues facing the project,” Skanska’s co-chief operating officer, Richard Kennedy, said in a statement. “According to Forest City, they had ‘cracked the code.’ That turned out not to be true.”

In Forest City’s suit, the developer said it entered an agreement with Skanska in late 2012 whereby it agreed to pay Skanska $116.8 million to build the 32-story tower. The original completion date was July 25, 2014. But, citing Skanska’s “gross incompetence,” the suit says that “date has come and gone and, as of today, only 10 floors of the planned 32-stories have been erected at the Project site.”

According to Forest City, the delays began with the initial startup of a factory where the apartment modules would be fabricated. Plans called for the building to be constructed from 930 pre-fabricated steel modules that when stacked together would create completed apartments.

The suit alleges the factory fit-out was delayed by seven months, exacerbated by Skanska’s “revolving door” of managers overseeing the module production. Subsequently, there were delays in procuring materials like doors, frames and flooring.

The tower, named B2, is the first residential building to go up at the long-stalled, $4.9 billion project. When completed, the 346,000-square-foot building will have 363 rental apartments.

In a statement, Forest City Ratner’s President and CEO MaryAnne Gilmartin said the company’s priority is reopening the factory and putting the employees that Skanska furloughed back to work. “Skanska’s unilateral action has barred construction from continuing, and this lawsuit is the first of many steps we intend to take to get this building moving again,” the statement said.

MENU

Subscribe to our email newsletters

New York Real Estate News
South Florida Real Estate News