Skanska, the Swedish construction giant that previously stopped work on the first housing tower slated to accompany the Brooklyn Nets arena — which, so it happens, is right down the street from the library where I am typing this — has now quit the project altogether, on the grounds that it is a fruitless money suck:
Skanska USA Building canceled its contract Tuesday for the much-anticipated yet long-delayed modular apartment building at Forest City Ratner Cos.’ 22-acre Atlantic Yards project, which was recently rebranded Pacific Park—though the long-running legal dispute is far from over.
“We could not continue to incur millions of dollars in extra costs with little hope that Forest City would take responsibility for fixing the significant commercial and design issues on the project,” Richard Kennedy, co-chief operating officer at Skanska USA Building, a subsidiary of Swedish construction company Skanska, said in a statement.
The timing of the announcement was not accidental: As Atlantic Yards Report reports, Forest City Ratner and Skanska had a court date today to try to resolve the construction contract, which has now officially expired. Instead, Skanska wants FCR to re-bid the work back out to them as a job (enabling them to keep running the custom modular construction unit factory — aka GIANT LEGO FARM — at a price they’re happier with), while FCR wants the judge to order the factory to reopen, and let FCR run it, or something like that. The judge, from the sound of it thoroughly disgusted with the whole matter, ordered the two sides back to the bargaining table, but if all they’re going to say is “Screw you!” “No, screw you!” then this isn’t going to get very far.
And speaking of not getting very far, what likely happens next?
Scarpulla did give Forest City a smaller win, agreeing was a “Major Decision” for the LLC to change its managing member, and forced Skanska to hold a vote it had otherwise avoided.
That vote, presumably ending in a 3-3 tie, would trigger a months-long deadlock process contemplated by contract, leading to potential buyout of one or the other’s interests.
That, over time, also would jeopardize the modular factory’s future, given the need to rehire and/or retrain workers, and further delay the completion of B2.
No wonder Scarpulla several times urged the parties to consider mediation. “I’m not trying to scold anyone,” she said. “I’m just saying that the path you’re going down is just going to cost you more money.”
Yep, this is only going to get uglier from here. Good thing it’s just a private construction dispute, and not something that was being counted on as the payoff for hundreds of millions of dollars in tax breaks and other public subsidies — oh, wait.