Ground Zero Risks
Strike highlights lingering woes
THIS week's strike by Gotham's crane operators' union reminded New Yorkers that for the Freedom Tower and for the rest of the office towers planned for Ground Zero, it's still a long way from now until 2014.
Sure, the Freedom Tower's looking much better, on paper, at least, now that the role of Gov. Pataki's hand-picked architect for the site, Daniel Libeskind, has faded to a strange memory. Last week, David Childs, private-sector developer Larry Silverstein's competent architect, unveiled a detailed design for the tower that would do Downtown proud: a blueprint for a soaring tapered building whose facade features a delicate safety-glass overlay that will both camouflage the tower's bomb-resistant concrete base and complement the recessed memorial nearby.
Further, the Port Authority, which owns Ground Zero, and Silverstein, whose company owns the right to build on it, seem to have finally hammered out the outline of a workable financial agreement for the whole site, except for a few "minor details" glossed over by the press.
Under the preliminary deal announced in April, Silverstein will build the Freedom Tower for a fee and hand it over to the Port Authority to rent out once it's done in 2011, and he'll build Ground Zero's other three buildings by 2014 and rent them out to tenants himself.
But Silverstein's contractors had barely begun work on the tower's foundation when the crane operators reminded New York that the fate of Ground Zero doesn't rest only with Silverstein, the Port Authority and Pataki. It's also in the hands of New York's powerful construction unions, whose members will ensure that they get an ample share of Ground Zero's $7 billion (and climbing) price tag.
The city's 3,200 crane operators, for example, earn $150,000 to $170,000 a year (including benefits). But the workers weren't happy that general contractors wanted them to train for other jobs to avoid periods of paid idleness at sites. So they walked off their jobs for nearly a week, halting heavy-equipment work at about 1,000 projects around the city, including Ground Zero, until they hammered out a deal late yesterday.
The strike reminded New Yorkers that quasi-public projects like Ground Zero are essentially hostages to the New York pols' union politics.
Strikes, of course, waste time — which can mean a lot of money. Construction costs in the city here are increasing at twice the rate of inflation, notes corporate construction attorney Barry LePatner of LePatner & Associates, due in part to global demand for materials like steel and cement as well as to high local labor costs (evidenced by the crane workers).
At Ground Zero, such increased costs total as much as $1 billion, thanks to repeated delays over the two years since workers placed the Freedom Tower's cornerstone (now removed, since it doesn't fit yet in the new design). The project can't afford more stalls.
But the strike also reminded New Yorkers- of another nagging reality: Those "minor details" to be worked out between Silverstein and the PA aren't quite so minor, after all.
For one thing, we still don't know who, exactly is responsible for cost overruns at the Freedom Tower itself, the Port Authority or Silverstein; that's still to be worked out.
This detail is important: If the Port Authority decides to shoulder all such overruns, construction unions will know they can easily pass the cost of their future demands to the PA's tollpayers and, perhaps, to New York state's always-compliant taxpayers.
Second, and just as important, the Port Authority outÂ¬lined as part of the April deal that if Silverstein runs into construction delays at any of the four towers at Ground Zero, for any reason at all, from an oil embargo to a strike, he could potentially face a loss of the whole site back to the Port Authority.
The crane strike showed this isn't a theoretical issue —workers will strike periodically, especially if they know that this draconian clause has Silverstein over a barrel. Thus, Silverstein's unlikely to take a final deal that doesn't improve these terms.
Silverstein and the Port Authority have agreed to a deadline of Sept. 20 to figure out these issues — so a September surprise just nine days after the fifth anniversary of 9/11 isn't out of the question.