Fear and Grouting In New York

“I don’t know if any one thing is going to make any difference,” said Steven Spinola, president of REBNY. “But I do want to be prepared in case the world changes again and people have the ability to start investing and doing projects.”

Specifically, developers and contractors are pushing to streamline onerous labor requirements in union contracts. The management side, represented by the contractors, views many work rules as archaic: For electrical subcontractors, among others, labor contracts require whole sets of “standby” workers to be paid full time in case of equipment failure—a position that managers say is outdated and unnecessary.

“There are absolutely rules that are tantamount to featherbedding,” said Jeffrey Levine, chairman of Douglaston Development and Levine Builders, adding that the unions have shown willingness to remove some of those rules. A citywide agreement to lower costs, Mr. Levine said, “is so much needed from the perspective of us as developers.”

There is also a push to standardize working hours as each trade group—unions representing electrical workers or steamfitters, for example—has its own set of working hours that do not always match up. Changes to wages and benefits do not appear to be under discussion.

Both labor, represented by the Building and Construction Trades Council’s new president, Gary LaBarbera, and contractors, represented by Lou Coletti of the Building Trades Employers Association of New York, say they are united in their desire to see costs come down. But an accord on a citywide pact has proved elusive since discussions started in November, a testament to the tremendously complex nature of the rules and labor structure in New York. On the union side, there are the local trades unions such as the Carpenters, Roofers, Masons and Bricklayers—each of which have their own multiyear labor agreements with a corresponding contractors’ association.

While some individual unions might agree to provisions that differ from their existing labor agreements—such as eight-hour workdays or double time on weekends—the agreement sought by labor and management leaders would require consensus across the board. Different unions and contractors have varied amounts of work right now, which would influence their willingness to give concessions.

Most of the cuts have been targeted on the labor side, though there seems to be a desire on that side to see greater concessions from contractors.

“They got lazy, fat and daisy, too,” over the past few years, one labor official said of contractors. “They’ve got to really tighten up and look at their business practices as well.”

For labor and contractor leaders, the Westin Diplomat in Florida was dominated by heated meetings on the issue, and now those involved in discussions say there is an effort to create a cost-cutting “project labor agreement” for a handful of commercial and residential projects that have been delayed by the economy.

The few individual projects, said Mr. Coletti of the contractors’ group, ideally would create a template for a broader cost-cutting agreement on public and private projects citywide—the initial goal all along.

“We need to get started,” he said Tuesday. “We’re looking for this handful of projects that we could get started so we could prove that these changes had an impact.” Broad cost cutting, he added, “would start so many projects that have been delayed.”

Those involved in discussions have said about $5 billion in projects have been stalled or stopped amid the economic crisis, far more than the federal stimulus would bring to the construction industry locally, for instance.

As for timing, Mr. Coletti and others are striving for the end of February to reach an accord on the labor agreements for the individual projects.

Fear and Grouting In New York