The Real Deal New York

Related reaches off the beaten path for Hudson Yards construction

January 16, 2012 10:00AM

Determined to cut costs at its $4 billion Hudson Yards project, the Related Companies has reached outside the typical pot of New York City contractors and inked a California company. Crain’s said the impact of the unusual selection could reverberate throughout the city’s local construction industry.

Related chose Tutor Perini Corp. for the project because, unlike its New York counterparts, the firm owns subcontractors that can complete all facets of the construction project. The four major construction managers in the city, Lend Lease, Plaza, Tishman Construction and Turner, must commission subcontractors for some work, many of which lack transparency and competition, upping the costs of the project.

“Bringing another significant company like this into the city is positive for competition,” said REBNY President Steven Spinola. Former New York City Buildings Commissioner Patricia Lancaster added that “it’s time-honored that the companies that work here are the companies that work here, and that’s the end of it.” She said: “For Related to change the paradigm is pretty striking.”

Tutor Perini, which has previously worked in New York on infrastructure projects at JFK airport, the Jamaica Station AirTran terminal and the Resorts World Casino, will begin construction on the 1.7 million-square-foot Coach tower sometimes this year.

Related was among the most outspoken developers during the contract talks this summer with various construction unions, as it consistently maintained that the current, unionized construction environment is too costly for development firms. [Crain’s]