Kenneth Buettner, president of York Scaffold Equipment Corp., says this year is going to be a tough one for the scaffolding industry.Developers aren’t the only ones hurting as hundreds of construction sites citywide sit dormant. The scaffolding companies that provide the pipe frames around those stalled projects are facing tough times too, and are expecting things to worsen in the New Year.
“There is less work out there than there was a year ago, and there is less than two years ago,” said Kenneth Buettner, president of the Long Island City-based York Scaffold Equipment Corp. “2009 was a year about which to be concerned, but 2010 is a year of which to be afraid.”
When a project stalls (and according to the city’s Department of Buildings, 500 of them have in the five boroughs), developers typically hurry to remove scaffolding, Buettner said.
Part of the reason they do that is to avoid paying rent. Sidewalk sheds, which protect passersby from falling objects, are legally required to stay up on structures higher than 40 feet. But the rent from those sheds don’t provide much relief in terms of revenue to scaffolding companies, said Buettner, who is also on the board of directors for the Hoisting and Scaffolding Trade Association of New York.
At the Bronx-based Colgate Scaffolding & Equipment Corp., a family-run business whose clients include St. Patrick’s Cathedral, business is “very bad,” said Peter O’Farrell, president of the company.
O’Farrell said revenue is down by a substantial margin and pricing structures for existing projects are at 2004 levels. “From anyone I speak to in the industry, I think everyone’s in the same position as I am in,” he noted.
O’Farrell said he’s found that some developers and contractors leave scaffolding up while they try to renegotiate or refinance projects. But in about one-third of these cases, payment comes late, at a reduced rate, or not at all.
“We bill rent, but collecting is a different story,” O’Farrell said. “A lot of times, you might have to accept 50 cents to the dollar, and consider yourself lucky to get that.”
With business down for both new construction as well as renovations and restorations, scaffolding firms have taken a hit on their two key streams of revenue.
At New York Ladder and Scaffolding Corp., which has just six ongoing new construction projects, business is “fair to moderate,” said president Steve Ecklond. Because scaffolding comes late in the process, after the work of architects, engineers and excavators, Buettner doesn’t expect business to improve until the tail end of an economic recovery.
For now, companies still have work on projects started before the crisis that are lucky enough to have financing in place to continue. But what happens when those finish up is anyone’s guess.
