The coalition includes the New York City-based General Contractors Association, the Construction Industry Council of Westchester and Hudson Valley, the Long Island Contractors' Association and the Albany-based Associated General Contractors of New York State. Representing the coalition is Al DelBello, formerly lieutenant governor and now a partner with White Plains-based law firm DelBello Donnellan Weingarten Wise & Wiederkehr.
Earlier this month, when Paterson issued the order affecting 506 projects statewide, GCA managing director Denise Richardson told GlobeSt.com the industry was assessing the likelihood of the freeze extending past the April 14 expiration of an emergency spending appropriation. Should the budget battle be protracted, as it has been in previous years, there will be projects shut down and workers laid off, Richardson said.
"If the state had said it was freezing payments to all vendors across all industries, we would have accepted that," Richardson said on April 1. "What bothers us is that we were the industry that was singled out for this."
In a news release announcing the lawsuit, LICA's executive director, Marc Herbst, warns that general contractors are having difficulty securing loans from banks to make payroll because the collateral is based on the state's non-guarantee of payments. "Suppliers and subcontractors are threatened with bankruptcy, since the cash flow of general contractors is being constrained and payroll payments will wind up taking precedent over subcontractor/supplier payments," Herbst says. "In addition, general contractors havehad their bonding limits constrained because amounts are designated to non-awarded bids at the state level, prohibiting them to seek other municipal projects. The damage being done by this pay freeze is nothing less than staggering."
In the New York City metro area alone, the freeze affects more than $2 billion worth of projects. Largest of the suspended projects statewide is the $470-million rehabilitation of the Alexander Hamilton Bridge in the Bronx.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
