Last-minute talks seek to avert crippling strike

As Thursday's midnight deadline looms, unionized construction workers are negotiating with contractors to keep work going on $10 billion of major projects across the city. But Ground Zero is safe.

With contracts for operating engineers and other building trades workers set to expire at midnight, talks are continuing Thursday to avert a strike that could shut down the city's unionized construction industry.

Painters, steamfitters and mason tenders have already reached deals, but three other groups—operating engineers, concrete workers and bricklayers—are still negotiating. Unionized carpenters, who are under a federal monitor, are expected to have their current agreement extended beyond the deadline as court proceedings play out.

Talks have been tense between the concrete workers and the Cement League, which is seeking a wage freeze across the three-year contract, a labor source said. The league did not respond to a request for comment. But most of the attention in the run-up to the deadline has been on the operating engineers, who control the heavy machinery—including cranes— that keep construction sites running.

Contractors have sought significant concessions from International Union of Operating Engineers Locals 14 and 15 in an effort to get rid of work rules they deem unproductive. “I don't think anybody wants a strike,” said Richard Wood, president of both Plaza Construction and the Contractors' Association of Greater New York. “But we're prepared to make sure we can be competitive, that people who are being paid to do work have work to do."

The labor source said the operating engineers have put a “substantial offer” on the table in an effort to reach a settlement. “The only question is, 'Will folks on management's side be willing to make any movement towards a compromise, or are they going to take a hard line?'” the source asked. Officials with Locals 14 and 15 have not responded to repeated requests for comment in the run-up to the negotiations. A source close to the unions would only say that leaders are “in negotiations.”

Because the operating engineers are key cogs in the construction process, if they walk off their jobs, it could idle more than 11,000 workers at private-sector projects costing nearly $10 billion, according to the Real Estate Board of New York. “No one wins with a prolonged strike,” the New York Building Congress said in a Thursday statement. “Workers lose paychecks. Contractors lose jobs and developable sites sit idle. Our nascent economic recovery comes to a screeching halt, and the industry is set back by years.”

A strike would likely not affect work at the World Trade Center site, the labor source said, as the operating engineers have indicated to the Port Authority of New York & New Jersey that they will not walk out at Ground Zero. With the 10th anniversary of the 9/11 attacks coming up, a work stoppage there would cost the union support from elected officials and the public. The Port Authority did not return a call for comment.

The last operating engineers strike occurred in 2006, when an attempt by the General Contractors Association to win changes in work rules sparked a weeklong walkout just before the Fourth of July. Thousands of workers were sent packing, and billions of dollars in projects came to a standstill. A settlement included minor concessions and hefty raises. “Everybody is working hard to improve the situation that we're in,” Mr. Wood said. “I'm optimistic that there will be positive change. Will we get everything we want? I don't think you ever get everything. Will we get everything we need in order to stay in business? There's a chance of it.”

By Daniel Massey / Crain's New York Business
June 30, 2011 

Key construction contract ratified as deadline looms

Steamfitters approve a new deal, the first in the industry since painters reached an agreement in the spring. Several more construction union contracts are slated to expire June 30

A second union has completed a new contract in the closely-watched run-up to Thursday's expiration of nearly two-dozen labor agreements spanning the local construction industry.

Members of Enterprise Association of Steamfitters' Local 638 ratified a new three-year deal over the weekend, sources said. Details were not immediately available, and calls to the contractor associations and the union were not returned.

Early on, industry sources expected negotiations with the steamfitters to go down to the wire, as the union has driven a hard bargain in the past. But in recent weeks, progress was made in talks, and industry officials now consider the operating engineers to be the most likely candidate for an impasse. Those workers run the heavy machinery that keep construction sites humming. “It's important,” Louis Coletti, president of the Building Trades Employers' Association, said of the steamfitters' deal. “But what it's really going to come down to is, can an agreement be reached with the operating engineers?"

The steamfitters' pact follows one reached by the painters in the spring that provided for modest raises in exchange for concessions on work rules and benefits. Industry officials hailed that contract as a potential pattern-setter for others.

Deals covering carpenters, concrete workers, mason tenders and bricklayers still need to be reached. The carpenters, who are operating under a federal monitor, are likely to have their current deal extended as court proceedings play out.

By Daniel Massey / Crain's New York Business
June 28, 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 

T12 Fluorescent Bulb Phase Out: How Much Time Do I Have Left?

Are you still installing T12 fluorescent lamps? If so, time is running out on the opportunity for your customers to take advantage of rebates and tax incentives for upgrading to more energy-efficient alternatives.

The National Lighting Bureau has estimated that more than 500 million T12 lamps are still in use. However, recent regulations by the Department of Energy have initiated a plan to phase out traditional T12 lamps and ballasts by July 2012.

T12s were originally designed to respond to demand for more energy-efficient fluorescent lamps back in the 1970s during the energy crisis. Unfortunately, for a number of technical reasons, T12s have proved to have shorter lamp life, poor color and low lighting output.

Despite continued use, T12s are widely known as inefficient, dead technology that is easily replaced by T8 or T5 fluorescents, which are more energy-efficient, longer lasting and have better quality light.

“With available rebates and tax incentives, plus the monthly energy cost savings that occur when retrofitting to energy-efficient T8s or T5s, the upgrade virtually pays for itself within a year,” said Sean Neman, director of operations at ReGreen Inc., an energy conservation company. “People need to act fast to cash in on the available rebates and incentives while they are still available. With recent regulations virtually eliminating traditional T12s by 2012, these incentives will not be available for long."

The simplest retrofit for T12 lamp and magnetic ballast is a T8 lamp and electronic ballast. This switch-out can save 30 to 40 percent on energy costs. In qualifying areas, rebates from utilities can subsidize the cost for upgrades anywhere from 60 to 100 percent. Additionally, using the Commercial Building Tax Deduction, owners and managers can receive tax benefits up to 60 cents per square foot.

If you'd like to know more about this tax deduction, go here: http://www.lightingtaxdeduction.org

Central Labor Council Nominates New President

Vincent Alvarez resigned his position as chief of staff last year in protestation of ethics violations he saw in the group's former president, Jack Ahern. Now, the Council is rallying for his hire.

Vincent Alvarez, who resigned last year as chief of staff of the Central Labor Council after raising questions about the ethics of its president, was the sole nominee Thursday night to be the next leader of the organization.

A 21-year member of Local 3 International Brotherhood of Electrical Workers and a native of Staten Island, Mr. Alvarez won the esteem of union leaders over two decades of volunteer work with the Council. And his move to stand up to former Central Labor Council President Jack Ahern—and ultimately resign over Mr. Ahern's use of a limousine and other questionable leadership decisions—helped cement his reputation within labor circles.

“He is the most honest and decent guy you’ll ever meet,” said Ed Ott, a former executive director of the Council who is now a distinguished lecturer in labor studies at the City University of New York’s Murphy Institute. “This is what the Council needs. It will reassure the members that the place is now in good hands."

Some 200 delegates turned out for the meeting. They proposed a constitution amendment allowing the umbrella organization representing the city’s unions to have a full-time president and nominated Mr. Alvarez to be that leader. Previous presidents also held leadership positions with other unions and two—Brian McLaughlin and Mr. Ahern—ended up embroiling the organization in scandal.

Mr. McLaughlin was sentenced in 2009 to 10 years in prison for racketeering and Mr. Ahern resigned his position in March under pressure after concerns emerged about his leadership, including a report from his own international union that questioned his expenses, which topped $200,000 a year.

On June 30, delegates will vote on the change to the constitution and on Mr. Alvarez’s nomination.

Mr. Alvarez, 42, would be the first Hispanic president of the Council since it merged with the AFL-CIO in 1959. His father emigrated from Cuba, and his mother is Irish-American.

For years, he volunteered to coordinate the annual Labor Day parade. Central Labor Council insiders often joked that his salary, which was $0, should be doubled because of all his work. About four years ago, he was finally hired by the Council to serve as its chief of staff, a position he resigned in November. He remains a dues-paying member of Local 3 and had been working at the state AFL-CIO since he quit the labor council.

Other Central Labor Council staffers followed him out the door, putting in motion a process that prompted state AFL-CIO President Denis Hughes to temporarily take the reins of the organization. For several months, Mr. Hughes has been working to put a process into place that would help the Council regain its footing and ensure problems that plagued it in the past are not repeated. Labor insiders say that Mr. Hughes, who also comes out of Local 3, pushed Mr. Alvarez’s candidacy.

If elected, Mr. Alvarez would become president at a time when the city’s unions are facing stiff battles over pensions, layoffs and Wal-Mart Stores Inc.’s attempt to open stores here, among other contentious issues. He could be elected the same day some two dozen construction union contracts are set to expire.

A Council spokesman confirmed Mr. Alvarez’s nomination, but said neither he nor Mr. Alvarez could comment further until the final vote was taken.

George Reilly, business manager at Plumbers Local 1, who nominated Mr. Alvarez Thursday night, called him a “principled man” who stood up for what was right in confronting Mr. Ahern.

“Sometimes he has worked behind the scenes, and at other times he has been right out in front, but no matter where he worked, he always conducted himself with dignity and integrity,” Mr. Reilly said in his nomination speech Thursday night. “I know this firsthand. I’ve worked with him, and I’ve witnessed it over and over, especially during the past 18 months, a difficult period now in the rear view mirror."

IRS Postponement of 3% Withholding Tax on Contractors

Washington, D.C. – SBA Chief Counsel for Advocacy Winslow Sargeant applauded the recent decision by Internal Revenue Service (IRS) to postpone the starting date for the three percent contractor withholding rule and continued to call for its elimination. The rule - which had been scheduled to take effect on January 1st, 2012 - requires governments to withhold three percent of nearly all payments made to contractors. With the postponement, the rule now applies to contracts awarded after December 21st, 2012. The Office of Advocacy has consistently worked with small businesses for the elimination of this unfair tax.

“The decision by the IRS to postpone the three percent withholding tax will help small businesses who are involved in government contracting,” said Sargeant. “And while I applaud the postponement, the Office of Advocacy is committed to supporting its elimination, because small businesses continue to face challenging conditions."

The three percent withholding requirement will adversely affect all small businesses that provide services to government entities. Most small businesses that provide services to government entities will have to increase their debt level in order to ensure sufficient cash flows and will be forced to pass these additional expenses on to their government customers. If small firms are unable to secure additional debt, the three percent withholding requirement may force them out of the Federal contracting market.

The law mandates that federal state and local governments with expenditures of more than $100 million withhold three percent of payments for products and services worth more than $10,000, including non-confidential or classified contracts, grants to for-profit companies, and farm and Medicare payments. The requirement was scheduled to take effect on January 1, 2011, but was delayed a year in the 2009 American Recovery and Reinvestment Act.

The three percent provision was included in the 2005 Tax Increase Prevention and Reconciliation Act in an effort to ensure that individuals and companies that receive new payments from the federal government do not accrue tax debt.

The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policymakers. Regional advocates and an office in Washington, D.C., support the Chief Counsel’s efforts.

For more information, visit http://www.sba.gov/advocacy, or call (202) 205-6533.

 

Construction job losses continue in New York

New York suffered 16,100 (-5.1%) construction job losses over the past year according to an Associated General Contractors of America (AGC) analysis of state employment data released by the Labor Department.

New York experienced the second largest loss in the nation after Florida, which lost 20,400 jobs over the past year.

AGC cautioned that the fragile construction employment recovery some states are experiencing could be undermined by a pending federal rule that requires many local governments as well as state and federal governments to withhold 3 percent of contractors’ earning for publicly funded work. Combined with federal state and local budget costs, the “Three Percent Rule” is likely to undermine the recover before it starts, association officials warned.

“Forcing contractors to do less work and earn less for that work isn’t a good way to boost construction employment,” said Stephen E. Sandherr, the association’s chief executive officer.

 

Bloomberg administration trying to force grocery stores to make costly electrical upgrades

The Bloomberg administration is trying to force grocery stores to make costly electrical upgrades so they can stay open in a blackout, the Daily News has learned.

Legislation introduced in Albany at Bloomberg's request would require the stores and big gas stations to rewire their buildings so they could quickly switch to an "alternative power source" when main electrical service fails.

City officials estimate the work could cost as much as $20,000 - all of which would be picked up by the store owner."It would be an expense that would certainly hurt," said Ralph Bombardiere, executive director of the state Association of Service Stations and Repair Shops."It is just an unfunded mandate," Bombardiere added.

City officials said the legislation would ensure that residents have access to food and fuel during emergencies.

Stores and gas stations would also benefit because they could stay open during a crisis - and continue to make money, said Emergency Services Commissioner Joseph Bruno. "It helps us deal with the overall emergency, but it helps them do commerce," Bruno said.

The legislation stems from the work of a task force that studies the city's response to the 2003 blackout that struck much of the Northeast.

During that crisis, even stores that obtained backup generators struggled to open because they were not wired to accept the power.

The legislation does not require stores to install backup generators."We are saying get yourself ready," Bruno said.

The legislation affects grocery stores that have 20,000 square feet or more of floor space or 60 or more employees; and fuel stations with tank capacity of at least 25,000 gallons.

Assembly members Carl Heastie and Vanessa Gibson of the Bronx sponsored the legislation in the Assembly. So far, the bills have no backers in the GOP-controlled state Senate.

"We learned a very clear lesson in 2003 - when you are doing emergency preparedness planning for more than 8 million New Yorkers, you can't overlook the basic needs of motorists, and fuel is at the top of that list," Gibson said.

BY Glenn Blain / NY DAILY NEWS
Friday, June 3rd 2011, 7:00 AM 

Contractors escalate war with construction unions

Pulling out of a century-old pact, builders threaten to bring nonunion workers to major projects across the city. Unions call it a ploy.

As testy building trades contract talks near a June 30 deadline, contractors revealed Thursday that they will terminate their participation in a more than 100-year-old agreement that commits them to using only union labor on job sites.

In a letter sent last month to Building and Construction Trades Council President Gary LaBarbera, Building Trades Employers' Association President Louis Coletti wrote that his board of governors voted to terminate the New York Plan for the Resolution of Jurisdictional Disputes between the two groups.

“It's the first step to formally breaking the business model that has existed since 1903 where all contractors jobs are built with 100% building trades members,” Mr. Coletti said. “It's a historic vote that nobody in the BTEA ever wanted to make. We're doing it because we have to position ourselves to survive if we can't get our partners to make the changes to help us and to help them."

The New York Plan expires Dec. 31 but had been expected to roll over as it always had in the past. The contractors' move came six weeks before the June 30 expiration of nearly two dozen contracts that govern unionized construction in the city.

Mr. Coletti said the decision opens the door to open shops, where union and nonunion employees work side by side—unthinkable until now on major projects. “It's not something we want to see happen,” he said, but added that because union workers are performing work on nonunion jobs, it has placed his members at a competitive disadvantage.

The New York Plan provides mediation and arbitration services for resolving disputes between unions over jobs without interrupting work on projects. It requires contractors to be fully union and prohibits work stoppages owing to disputes between unions.

Paul Fernandes, Mr. LaBarbera's chief of staff, said the BTEA's decision to terminate its participation in the deal was a “negotiating ploy” that would have little impact because the New York Plan is embedded in individual collective bargaining agreements.

“I think some contractors are under the painfully mistaken impression that by taking this action they have relieved themselves of their contractual obligations,” he said. “That is simply not the case. This action by the BTEA in and of itself does nothing to alter those contractual relationships."

Mr. Fernandes added that the termination of the plan is a “drop-dead issue” for unions. “That's not something that would be on the table, from our perspective."

Hope Cohen, associate director of the Regional Plan Association's Center for Urban Innovation, said the employers' move and organized labor's response is a sign that both sides are on walking to the edge of the cliff as negotiations enter their final stages.

“We've been hearing for a long time that the two sides are quite angry at each other, but this is potentially the most serious standoff that we've heard about,” she said. “Maybe there is going to be a strike."

In a recent report on the construction industry, Ms. Cohen took aim at the New York Plan, charging that its resolution process has resulted in less productive work rules.

The report cites a dispute between carpenters and electricians over the installation of a light fixture at the Goldman Sachs headquarters in Battery Park City. An arbitration panel ruled that the electricians should drill the holes and the carpenters should install the fixture.

The contractors' decision comes as they are pushing for significant concessions from unions, arguing that the recession has permanently altered the finances of the $24 billion industry.

By Daniel Massey / Crain's New York Business
June 2, 2011 3:45 p.m.