Friday, June 24, 2011

Strike threatens $10B in construction projects

If operating engineers man picket lines when their contracts expire June 30, construction across the city will halt, idling more than 11,000 workers, according to a survey. It's happened before.

With a contract deadline a week away, a survey of developers has found that a work stoppage by operating engineers could silence construction on private-sector projects worth nearly $10 billion and temporarily idle more than 11,300 workers. With the operating engineers' union contracts set to expire June 30, the Real Estate Board of New York survey shows that work could stop on commercial and retail projects spanning more than 13 million square feet and on residential sites totaling more than 6,300 units.

Projects that could be halted include Forest City Ratner's Barclays Center in Brooklyn, which employs 1,000 construction workers; Silverstein Properties' World Trade Center Tower 4, which employs 800; and Extell Development Co.'s International Gem Tower in midtown, which employs 500. “There's a lot of hard-working men and women that want to continue to work and a lot of projects throwing a lot of money into the economy that we don't need to stop,” said REBNY President Steven Spinola.

The operating engineers also work on public-sector transportation and infrastructure projects, but the contract covering that work is not expiring. Nearly two dozen contracts governing unionized construction in the city expire next week. Sources say Steamfitters Local 638 has reached a tentative deal and other trades are making progress in talks. But contractors and developers remain concerned that International Union of Operating Engineers Locals 14 and 15—whose 6,400 workers are crucial cogs at construction sites because they control the movement of personnel and materials—could walk.

Industry officials have focused on the two locals in recent months, publicly demanding the elimination of costly jobs they say involve little work. Sources said Local 15, which has about 4,800 members, is closer to a deal than Local 14, which has about 1,600. But Local 14's members include crane operators, without whom major construction sites cannot stay open for long.

Builders are stockpiling materials on upper floors and strategizing on how to get workers up to job locations in the event of a strike. The length of time construction could continue without operating engineers is specific to each site, but it's likely not a lengthy period of time. The last time the operating engineers struck was in the summer of 2006, when a weeklong walkout ground construction across the city to a halt.

Bloomberg administration officials are meeting with city agencies, including the Department of Buildings, the Office of Emergency Management and the Police Department, to make sure construction sites are secure if a strike occurs, a spokeswoman for the mayor said.

It's unlikely any strike would affect work at the World Trade Center, as the unions do not want to be seen as responsible for any delays that could affect the upcoming commemoration of the 10th anniversary of the 9/11 attacks. Officials from the operating engineers unions did not respond to requests for comment. A source close to the groups said the unions are negotiating in good faith and hope to reach a deal that helps owners remain competitive with nonunion contractors.

By Daniel Massey / Crain's New York Business
June 24, 2011