NEW YORK CITY—Forest City Ratner Cos. is once again turning to the courts to help the company resolve its dispute with Skanska USA Building. The developer has filed a second lawsuit aginst the contractor after several days of increasingly acrimonious steps taken by both companies, seemingly with an eye toward ending the feud but which seem to only be escalating the squabble. Meanwhile, city officials weighed in on the battle.
The fight concerns the construction by Skanska of B2, the first residential tower with modular construction at FCRC's Pacific Park Brooklyn project. The two firms apparently had some differences of opinions which, after some discussions, they were unable to resolve. As a result, Skanska ordered its workers to stop their efforts at the site and filed suit against FCRC charging that the developer “has steadfastly refused over many months to engage in an honest dialogue about the serious commercial and design issues facing the project.” FCRC brought a counter suit—which initially was positioned as the first of the two legal actions—charging that Skanska had “multiple failures and missteps as the construction manager."
Subsequently, on Thurs. Sept. 4th, SFCRC president and CEO MaryAnne Gilmartin sent a letter to Skanska co-COO Richard Kennedy requesting that the developer assume operating control and responsibility for the factory that is producing the modules for the multifamily building.
But now things are getting more sticky. According to a spokesman for the developer, “representatives of FCRC Modular tried to enter the factory today [Friday, Sept. 5th] and were barred by Skanska. Building on yesterday's letter we are moving forward with efforts to re-open the factory as follows:today, FCRC Modular filed suit against Skanska Modular and Richard Kennedy. FCRC Modular and Skanska Modular are partners in a joint venture called FC+Skanska LLC ("the company") that leases and operates the factory where the modules for the B2 BKLYN project are fabricated.
“The complaint asserts a breach of contract claim against Skanska Modular for issuing furlough and WARN Act notices to the factory's employees,” he continues, “resulting in the mass layoff of over 150 workers and the stoppage of work, without the approval of the company's board of directors, as required under the company's LLC agreement. The complaint also states a claim for tortious interference with contract against Kennedy because he knowingly, wrongfully, intentionally, maliciously, in bad faith and without reasonable justification or excuse induced Skanska Modular to breach the LLC agreement. FCRC Modular is seeking damages to be determined by the court and an injunction to return matters to the status quo as they were prior to Skanska Modular's issuance of the furlough and WARN Act notices and a stoppage of work at the factory."
Says MaryAnne Gilmartin, president and CEO, Forest City Ratner Companies, "FCRC Modular continues to pursue every possible measure to re-open the factory and put more than 150 people back to work. Yesterday, we offered to take full responsibility for the factory, which Skanska rejected after having unilaterally stopped work and furloughed the workers. Today we are asking the Court for an injunction that would allow us to re-open the factory immediately. We remain committed to completing B2 as soon as possible despite Skanska's indifference to the wellbeing of these workers and the project."
Also on Friday, Brooklyn Borough president Eric Adams, City Council Members Laurie Cumbo and Brad Lander issued the following joint statement on the halting of the construction of the B2 tower: “It is unacceptable that a financial dispute has left more than 150 workers unemployed, jeopardizing the economic stability of their families and further delaying the construction of affordable housing units in Fort Greene.
“The completion of the modular apartment tower is vital to the working families who have waited years for promises to become a reality,” they continue. “Forest City Ratner has proposed reopening the factory immediately and assuming responsibility to resume operations, to keep this job on track and individuals employed while the courts hear the broader issue. We urge both parties to work out a fair and amiable agreement for the betterment of our community.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
