The MTA’s extravagant renovation of 2 Broadway, which ran $300 million over its original budget, just got a little cheaper. The MTA confirmed that an arbitration panel last week ordered HRH Construction to pay the transit agency $6,457,481 because the company, which served as construction manager for the renovation, permitted the agency to be billed for no-show labor and for inflated rates. The settlement also covers attorney fees and the cost of expert witnesses.
“There was a perception out there that the MTA was an architect of its own demise,” said Jeremy Soffin, spokesman for the MTA. “But what you see here was that the MTA was poorly served by its own watchdog, which was the role of this company.”
The panel penalized HRH Construction LLC, the sucessor company to HRH Construction Corp., which served as the construction manager on 2 Broadway.
“The substantive issues are absolutely incorrect,” Janine Getler, the LLC’s general counsel told The Real Estate. “We find no rational basis for the award as presented and on that basis we intend to appeal it.”
She said the New York Supreme Court had not yet certified the award. She added that the MTA award represented just fraction of the $27 million that the agency had originally sought.
– Matthew Schuerman