Monday, September 8, 2014

Construction Stops on World’s Tallest Modular Building

Work has stopped on the $117 million B2 BKLYN modular tower, and its prefabrication plant at the Brooklyn Navy Yard has been shut down amid allegations of project mismanagement, as the developer and the construction manager sue each other over who's to blame. The 32-story building is the first of 14 planned prefabricated structures to be built next to Brooklyn’s Barclays Center. Design flaws and cost overruns are claimed to have brought construction of the 346,000-square-foot, 363-unit residential high-rise to a screeching halt. 

Skanska USA, which is the contractor for the modular tower known as B2, ordered work to come to a halt after a long-running dispute with developer Forest City Ratner.

Workers at FCS Modular, a company formed by Forest City and Skanska to construct the 363 prefabricated units in a factory at the Brooklyn Navy Yard, have been furloughed until further notice.

Together, the builder and developer had hoped to turn out the housing towers in record time and at a reduced cost, and provide employment to 157 local workers to run the modular fabrication plant.

Forest City placed the blame for the dispute on Skanska USA and issued a statement accusing the firm of mismanagement of the site and violating its contract by failing to deliver the modular units at the agreed-upon time and budget.

"This is a dispute over the costs of delays resulting from Skanska's own failures and missteps as the construction manager for B2 modular,” a spokesman for Forest City Ratner said in a statement.

”Skanska entered into a construction management agreement based on a fixed price which they guaranteed. Now faced with overruns, they are employing a typical strategy to try to weasel out of that obligation"

Skanska USA Building has filed a countersuit in state Supreme Court accusing Forest City of violating its contract by changing the construction plans for the tower. Skanska has said that design flaws and tens of million of dollars in extra cost went into its decision to shut the project down.

The construction management and fabrication agreement states that Forest City would pay Skanska a fixed sum of $116,875,078 for the project, while Skanska believes it is owed $49,757,746 more than the contract price.

Forest City claims that “due to Skanska's mismanagement, the factory fit out was delayed by seven months, significantly delaying the production of modules, and in turn, the entire project." Substantial completion of the project was supposed to be reached by July 25, 2014, and this has not happened.

Ground was broken in December on the B2 tower, which is slated to be the world’s tallest modular building. Rather than traditional construction, where the building is assembled piece-by-piece on site, modules were being built at the Brooklyn Navy Yard.
Forest City recently formed a partnership with Greenland Holding Group, to develop the rest of the $4.9 billion project, which will eventually house 6,430 apartments.

The partnership, known as Greenland Forest City Partners, is set to begin three other buildings in the Pacific Park complex, and is not involved in the B2 dispute.

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