Harry Macklowe is switching gears on One Wall Street again, this time by bringing on a new construction team to lead the office-to-residential conversion.
JT Magen & Company is taking over the $1.5 billion project from Gilbane Building, a construction firm that’s taken a lot of flak for its use of nonunion labor on the conversion. The reason for the switch wasn’t immediately clear on Tuesday, but in a joint statement, Macklowe Properties and Gilbane said that after completing key parts of the project, the construction firm reached a “logical separation point.”
“We are proud of the safe and high-quality construction work that has been accomplished at One Wall Street over the past year,” the companies stated. “Our two companies maintain a strong and valued relationship with one another as we continue to work on additional projects together.”
In March, Macklowe reportedly changed course on the project, deciding to either convert the building to all or mostly condo units instead of 65 percent rentals, as was originally planned. Macklowe also told Bloomberg that he planned to put more equity into the project and seek less financing. Originally, the developer was seeking a $1 billion construction loan, but that has since been reduced to $850 million. Earlier this year, The Real Deal discovered that Sheikh Hamad Bin Jassim Bin Jaber al-Thani, one of the world’s richest men and the former prime minister of Qatar, was Macklowe’s secret equity partner on the project.
Last year the project became a target of union ire. More than 250 protesters marched from One Wall Street to Gilbane’s downtown offices, flanked by giant inflatable rats. Rhode Island-based Gilbane isn’t alone in its use of nonunion subcontractors. Many companies are increasingly turning to open shop — or the preferred term among those who aren’t exclusively union, “merit shop” — to combat rising construction costs. The shift has been a fairly constant cause for tension between the city’s unions and companies that are embracing the change.
During its 25 years in business, JT Magen, headed by Maurice Regan, has traditionally relied on union labor. Representatives from the company indicated that they have not yet determined if they will exclusively use union labor at One Wall Street. This will be JT Magen’s first project for Macklowe. The company recently handled a similar project nearby, Magnum Real Estate Group’s condo conversion of 100 Barclay Street.
Gilbane and JT Magen both ranked on The Real Deal‘s top 20 general contractor ranking in the May issue of the magazine.