Inside Third & Bond: Week 114

More bureaucratic headaches this week from the Hudson bloggers…

After 20 working days were lost, yesterday the Stop Work Order (SWO) was officially rescinded. For the last four working days, all we needed was the signature of one man and rescission entered into DOB’s system. Four days of waiting outside the office door of one man, wondering when he’d get back from a meeting or lunch or vacation. Meanwhile, a dozen other men are struggling to pay laborers and several times that are struggling to make ends meet for their families.

Take, for example, John Turano, our brick and tile subcontractor. Turano has 13 guys dedicated to the Third + Bond job, or did until the SWO. He can’t afford to pay everyone their usual rate during a SWO and they can’t afford to wait. Problem is, no one knows how long a SWO will last.

Even though we cleared up the paperwork issue that caused the SWO right away, and even though there weren’t ever any safety issues on the jobsite, we have been dealing with bureaucratic hurdles for weeks. For awhile, our contractor Kiska was contacting the subcontractors every morning saying, Tomorrow we resume. Alert your guys. Then, at the end of the day, another frantic email would follow, SWO not rescinded yet. No work tomorrow.

Turano reported that some of his guys felt they were being yanked around and were anxious about their next paycheck. A lot of laborers are living week-to-week, paycheck to paycheck. Subcontractors, too, have bills to pay and families to feed.

Normally, Turano would try to move a few guys from Third + Bond to another job. But the deep freeze over the last couple of weeks has meant that even the guys dedicated to those jobs weren’t working. It’s just not possible to move all of the guys from one site to another when each is already at physical capacity, regardless of financial capacity.

Subcontractors sometimes pay a reduced rate to labor to tide them over and keep them connected to the job during SWOs. For example, a guy who normally makes $1,000 a week might take home $400 instead. But, taking the example of Turano’s 13 guys, it would have cost nearly $16,000 from the sub’s pocket for just the last 3 weeks. Given the expense, subcontractors often limit the reduced pay to the most productive or skilled workers.

Turano lost 4 guys while waiting for the SWO to be lifted. Three of them had been with Turano for six years. They were universals, meaning they were skilled in just about everything from interior tiling to brick laying, concrete and sheetrock. Much of what they knew they learned while working for Turano. But times are tough and even at a reduced rate, the guys had to move on. Turano says, It hurts.

The DOB doesn’t get any additional fees or fines from us for dragging out the process. We don’t get any more money from the bank for being stopped beyond our control. In fact, it costs us in terms of lost time (i.e., interest accrued) and possibly remobilization fees if the subcontractors demand money to bring guys and equipment back to the site. We also lose when our subcontractors lose labor, especially their most skilled labor.

There’s no apparent benefit and plenty of problems, mostly for people who are already bearing the slowdown in construction. We can’t claim to know all of the pressures acting on DOB that result in this sort of thing being commonplace. But shouldn’t we be able to expect more out of DOB especially now that the pace of construction has slackened considerably from recent years?

And we aren’t an isolated case. We read yesterday that over at BKLYN GOLD, people with signed leases are unable to move in because the Certificate of Occupancy hasn’t been issued. Our gut tells us that the problem doesn’t lie exclusively with the developer. Does every single one of our projects turn into a gut-churning race to get a certificate of occupancy issued before our promises to our residents blow up in our faces? Check.

So at a time when we need our governmental agencies to be as successful and efficient as possible, we often get the opposite. In Albany, we just lost out on significant federal funding for charter schools. The City Council just voted down the Kingsbridge Armory and killed 1,100 retail jobs in the Bronx. And at little Third + Bond, we finally get back to work after a one month Christmas present from DOB.

So we’re ready to start the New Year right. Not January 1 but January 21. Peter Finch, can you hear us?

Inside Third & Bond: Weeks 1-113 [Brownstoner]
Our legal fine print: The complete offering terms are in an Offering Plan available from Sponsor. File No. CD080490. Sponsor: Hudson Third LLC, 826 Broadway, New York, NY 10003.