The Real Deal New York

Forest City Ratner offers to take the reins from Skanska

Developer seeks to take over modular unit operations for Pacific Park tower
September 04, 2014 04:00PM

Forest City Ratner has moved to take over operations at the factory producing modular units for its Pacific Park residential development, following a dispute with financial partner Skanska USA that stopped work at the construction site.

In a letter to Skanska, Forest City Ratner executive MaryAnne Gilmartin told the contractor the company is prepared to take responsibility for running the factory while the two parties settle their dispute in court. Forest City Ratner and Skanska partnered to create FCS Modular, the Brooklyn Navy Yards venture that is turning out prefabricated housing units for the B2 tower that will rise above the Barclays Center in Downtown Brooklyn.

Both parties have filed lawsuits alleging their counterparty is responsible for cost overruns associated with the project. Skanska, which is responsible for managing the FCS Modular factory, furloughed 157 workers last week after attempts to resolve the monetary dispute with Forest City Ratner failed to yield a result.

“In particular, we strongly believe as a joint venture we have an obligation to the 157 workers who have lost their jobs because of the unauthorized, forced furlough that you, as managing member, have imposed on them,” wrote Gilmartin in the letter.

In response, Richard Kenney, co-chief operating officer from Skanska USA Building, issued a statement saying “that by issuing this letter to the press prior to even sending it to its partner, Skanska Modular, Forest City has proven it is more interested in engaging in a propaganda exercise to take the public’s eye off the serious consequences of its failures at the B2 Project … “

Kenney also claimed Forest City’s letter was “devoid of substance.” – Tom DiChristopher