Is time up for NYC’s construction expeditors?

The DOB is waging a war against the paper-pushers as part of a larger crackdown — but critics say the agency doesn’t have what it takes to properly regulate the industry

Sep.September 01, 2017 11:00 AM

(Illustration by Andre Da Loba)

Expeditors have long been the ubiquitous, yet invisible, force guiding developers through the building  process in New York City. The independent contractors navigate the labyrinth of paperwork within the Department of Buildings and decipher the city’s byzantine zoning and construction laws on behalf of developers big and small.   

Yet it’s long been the city’s “fantasy” to get rid of the profession, said longtime expeditor Mark Brotter, who has been filing permits with the DOB for more than 30 years. Indeed, several mayoral administrations and the Manhattan district attorney’s office —  galvanized by bribery scandals and complaints over the years — have called for an end to the occupation.

The most recent effort was put forth by the Red Tape Commission, a group of small-business owners, regulation experts and other professionals assembled by Comptroller Scott Stringer. The commission released a report last year calling for the DOB to create in-house advisory positions to replace expeditors as a whole.   

Since Rick Chandler assumed his post as DOB commissioner in July 2014, the agency has made its intolerance for graft clear. In that time, the agency has taken disciplinary action against at least 82 construction professionals. A notable case is that of Scott Schnall, one of the most active expeditors in Brooklyn, who was banned from ever working with the agency again. The penalty is considered not only the most extreme but the most rare — having been imposed just five times in the last decade.

As the DOB moves to modernize the permitting process, and as officials call for the expediting industry’s demise, the very existence of the profession is at stake. But the agency still has other priorities — it’s waging war against developers with dangerous construction sites and working through a deluge of permit applications and day-to-day compliance issues — leaving limited resources to police the city’s 3,358 registered expeditors.

Still, critics are adamant that the paper-pushers must go. “New Yorkers shouldn’t have to resort to outside ‘fixers’ just to interact with the agencies that are supposed to serve them,” Stringer told The Real Deal. “City government should not be so arcane, cumbersome and complex that businesses need to shell out huge dollars to people with ‘expertise’ in how to navigate the bureaucracy.”

Bad apples

Several expeditors interviewed for this story acknowledged the stigma surrounding their profession. Not only is there confusion among clients and the general public about what expeditors do and why their job is necessary, but a slew of scandals over the years have cast a dark cloud over the industry.

“It is a strange job,” Brotter said. “It sounds like something that’s negative — like we’re trying to pull wool over people’s eyes and create a job that isn’t necessary.”

The head of Brooklyn-based S&M Expediting, Mercedes Hernandez-Lata, attributed the trade’s bad reputation to “a few bad apples.”

“Half of this happened over 20 years ago. It’s unfortunate that a lot of people still see expeditors as being corrupt,” she said. “It’s the exception, not the rule.”

In September 2000, five DOB officials were hit with bribery charges linked to expeditors. In response, then-Manhattan District Attorney Robert Morgenthau called for the position to be eliminated. But the filing representatives ultimately weren’t banished from the city, and punishment for getting entangled in graft has remained minimal since then.

Nearly 15 years later, 50 city inspectors, property owners, contractors and expeditors were arrested in one of the largest construction corruption stings in the city’s history. Among those arrested were Gordon Holder, the DOB’s chief of development for Brooklyn; building inspector Artan Mujko; and expeditor David Weiszer — who was accused of paying Holder $200,000 to cover his mortgage and a Caribbean cruise. Weiszer fled after police showed up with a search warrant at his house in November 2014, and authorities haven’t found him since. But most of those indicted in 2015 were ultimately sentenced to little more than community service.

“There is such pressure to get applications approved,” said Robert Jacobs, a land use attorney with Belkin Burden Wenig & Goldman. “There’s big money at stake, and when there’s big money at stake and pressure, some expeditors have unfortunately sought to get approval by bribing the plan examiners.”

The job, he said, ultimately boils down to getting “disinterested bureaucrats to say yes.”

But according to the DOB’s Chandler, “the days are long behind us where you thought you needed to provide an envelope with something in it to get things processed from A to Z.”

He said it’s frustrating to hear that some expeditors bill themselves as insiders who are able to “negotiate the system because they know someone or have relationships.” He said that “couldn’t be further from the truth.”

Still, expeditors are very much engrained in the fabric of the building process and have proven most crucial during times when the city is seeing a high volume of construction. Last year, the DOB received 165,000 permit applications, a significant increase from the downturn in 2009, when only 114,000 were filed, according to the DOB. Expeditors who spoke to TRD said they tend to handle 30 to 40 jobs at a time, sometimes more.

While pushing paper isn’t glamorous, the work is lucrative: A single-family home renovation might run anywhere from $2,000 to $4,000, while permitting involved with a new building can net tens of thousands of dollars, developers and expeditors told TRD. One expeditor said he also typically charges $75 to $150 per hour for related research. The job can be as simple filling out paperwork and as complex as interpreting the city’s zoning code to assure that a project will be approved.

“One expeditor told me that the good ones are like procedural gurus,” Jacobs noted. “The bad ones are more like rats running through a maze.”

Even at the price expeditors charge, developers said it’s quite common to use them, especially because having an in-house architect or engineer file the same paperwork costs more.

Slate Property Group’s David Schwartz said expeditors are essential to getting the hundreds of permissions needed to embark on new construction in the city.

“The zoning and code stuff is very, very complicated,” he said. “The amount of paperwork and documents is just overwhelming, so it’s nice to have someone who specializes in specifically that.”

Industry crackdown

Expeditors aren’t new to the construction game — and neither is the public’s perception of the trade. The first documented account of the profession that TRD could trace is in a 1931 New York Times article: A self-described “expediter” testified at a corruption hearing that his occupation was “entirely legitimate” and that he never bribed anyone in the buildings department.

The profession became more mainstream in the 1970s, with expeditors messengering paperwork between property owners and the city, according to Robert LiMandri, a former DOB commissioner who now works for architectural consulting firm Vidaris (which has its own in-house expeditors). “Expeditors became the glue that the city needed to get things done,” he said.

But even then, expeditors weren’t required to have any formal training and weren’t licensed with the city. It was also around that time that larger scandals surfaced. In 1975, 95 building inspectors and expeditors were indicted on corruption charges.

It wasn’t until 16 years later that the industry became subject to oversight. The City Council passed a law in 1991 requiring expeditors to officially register with the DOB, and in May 2014, prerequisite training became mandatory. There are two classes of certification for expeditors, the first of which requires a 16-hour training course. For the higher tier, an individual must be either be trained as an architect or engineer, or have worked on at least 50 projects as a level-one expeditor over the course of two years.

Some expeditors are “self-certified” or have Directive 14 privileges, alleviating them from extra bureaucratic oversight — and it’s those individuals who have been at the heart of the DOB’s recent crackdown. Since the start of the year, the agency has suspended privileges for 12 such professionals.

Schnall had both designations and logged roughly 10,000 applications with the DOB over his 27-year career. But after the agency found that he lied on at least six building applications in Brooklyn, Chandler revoked Schnall’s filing privileges indefinitely, a departure from a judge’s recommendation that Schnall be suspended for 12 months. The commissioner said that the agency can “no longer rely on [him] to submit honest applications or documents,” according to a letter filed with the city’s Office of Administrative Trials and Hearings.

In his lawsuit against Chandler and the city, Schnall referred to the decision as “draconian” and “shockingly severe,” especially considering it was his first offense. He also claims the city retaliated against him because in 2014 he told a newspaper that the DOB is “screwed up” — a claim that the DOB has denied.

Schnall isn’t alone. Last year, the DOB revoked privileges from two engineers. One engineer, Ashraf Ali, failed to file a certificate of no harassment for a multifamily project in Harlem, which assures that tenants weren’t coerced to leave the building. The other, Yaakov Stern, excluded details on how a building would be kept safe and stable during construction.

Currently, the DOB monitors self-certified expeditors through random audits — a tactic the agency’s former commissioner Patricia Lancaster is confident works. “The professionals know that someone is looking or could look,” she said. “They don’t want to lose their livelihood.”

Uphill battle

Different administrations have taken different steps over the years to try and tackle the problems posed by expeditors.

In response to the expediting bribery scandal in 2000, then-Mayor Rudy Giuliani launched a task force to monitor and limit the role of the paper-pushers as part of a larger overhaul of the DOB. He even went as far to suggest the agency merge its operations with the Fire Department.

Under Mayor Michael Bloomberg, the DOB instead sought to modernize. In 2011, it created NYC Development Hub, an online platform where architects and engineers could upload construction plans for plan examiners to review. Mayor Bill de Blasio’s administration took it a step further with the launch of DOB Now in August 2016. The program allows building and construction permits to be filed online and allows the public to track the status of applications in real time. The added transparency means expeditors can’t blame the city for every slowdown in the application process.

Representatives for the comptroller’s office told TRD that the need for expeditors is an indictment of the DOB’s processes. The Red Tape Commission’s 2016 report found that the fact that expeditors are “engrained into the fabric of the DOB” hurts small businesses most, due to the extra fees the filing representatives tack onto a project. The commission recommended that expeditors be replaced by in-house “business advocates” who could help — free of charge — the uninitiated property owners through the building process.

But doing so would certainly wreak havoc on the DOB’s $184 million budget. The agency couldn’t afford to add enough business advocates to replace the 3,000-plus registered filing representatives in the city. That would mean tripling the agency’s current staff of 1,500 (which is expected to rise to 1,664 during fiscal year 2018).

The DOB has added 10 “project advocates” in the last two years to help property owners. They are not, however, intended to replace expeditors.

And now, the underfunded agency may potentially be burdened with even more regulatory oversight of the construction industry. Following more than 30 construction worker deaths over a two-year period, the City Council put forward a bill that will require more safety training for the city’s laborers —the enforcement of which would likely fall on the Buildings Department. Chandler opposed an earlier version of the bill, which required workers to go through a state-run apprenticeship program, telling Commercial Observer in May that it would require considerable time and resources from the agency to enforce such a mandate. 

“The city needs to put more money into the Department of Buildings,” said Malgorzata Gojlik, who heads her own small expediting business, MAG Building Expediters, which specializes in getting construction violations removed from a project. “This a billion-dollar industry. You don’t have [enough] people to handle it. It shouldn’t be like that.”

Deeply embedded

Many of those who spoke to TRD said they don’t anticipate the demand for expeditors to ever fully die off: Building in the city is too complex, and few property owners are keen on taking on the grunt work themselves.

Benjamin Stavrach, the director of leasing and property management at real estate investment firm Triangle Assets, said it’s a pipe dream to think that expeditors will ever be replaced by DOB employees. He said too many people would be abruptly out of a job. He also doesn’t expect the permitting process to be simplified to the point that expeditors aren’t needed.

“In my opinion, the DOB makes it so complicated. The expeditors ease that process. They navigate the waters for you,” he said. “If you don’t use them, and you try to do it yourself, you are asking for trouble.”

Hernandez-Lata also said that the new online system isn’t intuitive and sometimes slows down the filing process down. There are still several technical bugs to work out, she said.

As processes are moved online and building and zoning codes change, expeditors are much more useful to developers and the city if they know the ins and outs of regulations, said LiMandri. As a result, the profession has evolved.

“[Developers] need code and zoning professionals to support them,” LiMandri said. “They don’t just need people who bring pieces of paper back and forth.”

Chandler acknowledged that while the agency is working to move nearly all of its business online, “there will always be roles for people with deep expertise who can help their clients navigate changes and remain in compliance with the law.” The agency’s regulations are fluid, regularly being revised by new legislation.

Henry Radusky, who co-founded architecture firm Bricolage Architecture & Designs, which has its own staff of expeditors, said the industry will likely rely less on filing representatives in the future. But he doesn’t think the need for expeditors will dissipate in the near future.

“Not in my lifetime,” he said. “Unless you hire robots.”

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