NYC's One Vanderbilt, Manhattan West Towers Face Union Spat
NY projects - Manhattan West and One Vanderbil are ensnared by $76 million labor dispute.
(Bloomberg) -- Two of New York’s most significant construction projects -- Manhattan West, where Amazon.com Inc. will have offices, and One Vanderbilt, destined to be among the city’s tallest buildings -- are both ensnared by a $76 million labor dispute.
Both projects, managed by AECOM-Tishman, have “numerous issues” due to a union problem, according to a Wednesday bankruptcy filing by one of their contractors. One Vanderbilt, currently a steel skeleton hulking over Grand Central Terminal at the corner of 42nd Street, developed with SL Green Realty, is estimated to have total construction costs of $3.17 billion.
Manhattan West, developed by Brookfield Property Partners LP and the Qatar Investment Authority, where Amazon.com has signed a new lease for its local headquarters, has been valued at $8.6 billion.
The contractor, Navillus Tile Inc., which specializes in high-end concrete and masonry, said it was tipped into bankruptcy by a Sept. 22 judgment that demanded it contribute $76 million to union funds.
Tishman terminated its contract on the two projects in early October, saying the judgment had made Navillus insolvent, but ordered it to continue working with backing from another party, Liberty Mutual Insurance. Navillus and Liberty are negotiating a potential $135 million financing to allow it to keep working on the sites, according to the filing.
“AECOM Tishman has directed Navillus to keep working, and work is continuing uninterrupted,” said John Gallagher, a spokesman for AECOM-Tishman. Representatives for SL Green and Brookfield declined to comment. Amazon.com didn’t immediately return calls for comment.
Navillus is appealing the Sept. 22 judgment and "constests the propriety of the terminations," Chief Executive Officer Donal O’Sullivan said in a court affidavit.
Meanwhile, one of the unions awarded a judgment under the ruling froze Navillus bank accounts, “bringing operations to a halt,” according to the filing. On Nov. 2, the U.S. Marshal took $1.8 million to satisfy some of the judgment, spurring Navillus’ bankruptcy, O’Sullivan said in the filing.
"It is business as normal" O’Sullivan said in a Nov. 7 letter reviewed by Bloomberg News. Navillus will continue on all jobs and bid for new work, he wrote.
The union dispute had its roots in a 2014 lawsuit that said Navillus set up non-union construction companies to evade pension and welfare obligations, according to a related bankruptcy this week by affiliate Advanced Contracting Solutions LLC. A judgment said that two firms were alter-egos of Navillus, but acknowledged that neither company had been established or was operated to evade obligations, according to the filing.
Navillus, founded in 1987 by O’Sullivan and two brothers, is one of New York’s largest general contractors, with 700 employees working on 68 open projects, according to court papers. The company says it is one of the largest contributors to union funds in the New York metropolitan area, paying more than $172 million in the last five years.
The filing is: In re Navillus Tile Inc., DBA Navillus Contracting; 17-13162, U.S. Bankruptcy Court, Southern District of New York. (Manhattan)
To contact the reporters on this story: Tiffany Kary in New York at firstname.lastname@example.org, David M. Levitt in New York at email@example.com.
To contact the editors responsible for this story: Rick Green at firstname.lastname@example.org, Kenneth Pringle
©2017 Bloomberg L.P.