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Suits Halt Modular Record Breaker

Tuesday, October 28, 2014

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Work on what would be the world’s tallest modular building has ceased amid bitter litigation between its contractor and developer.

The planned 32-story residential project—known as B2, in Brooklyn, NY—has reached only 10 stories after nearly two years of construction, while a dispute over costs, delays and its design has surfaced.

SHoP Architects
SHoP Architects

A dispute over costs and delays has pitted the contractor of B2 in Brooklyn, NY, against its developer. The project's architects, SHoP Architects, say the legal issues surrounding B2, which is set to be the world's tallest modular building, are not a "referendum on modular or its future."

B2 is one of a handful of high-profile projects designed as part of the $4.9 billion Atlantic Yards redevelopment. The ambitious modular construction project was billed as a time and money saver.

Now, the fate of the project and its ultimate height remain uncertain as the legal dispute rages.

Work Halted

The fireworks started Aug. 26 when Skanska USA, the project’s contractor, unilaterally shut down construction at the property and closed the factory being used to build the modular units.

The Stockholm, Sweden-based contractor had a $117 million contract with developer Forest City Ratner Companies to supply 930 modules for the tower. Skanska had also signed a contract with a separate entity, which included Forest City, to erect the tower, according to reports.

More than 150 workers had been working to assemble each of the steel-framed components at the factory.

Following the cessation of work, the companies filed a pair of lawsuits in New York State Supreme Court, alleging breaches of contract.

Design Blamed

The contractor claims the design of the 346,000-square-foot, 363-unit, high-rise modular apartment building is flawed. SHoP Architects and engineer Ove Arup & Partners developed the modular construction technology for the project, reports said.

SHoP Architects

B2 is one of a handful of high-profile projects designed as part of the $4.9 billion Atlantic Yards redevelopment. With 363 rental apartments, 50 percent of all units will be affordable to low- and middle-income households, according to the developers.

In a statement, Richard A. Kennedy, co-chief operating officer at Skanska, said the design did not “work the way it was sold to work,” according to a New York Times report.

“We’ve had real challenges with it that’ve delayed the project and led to cost increases," Kennedy said. "We finally came to the decision to stop work on the project until our significant commercial issues are resolved.”

Skanska estimates that the project overruns may be as much as $50 million, according to the lawsuit.

Agreement Terminated

On Sept. 23, Skanska officially terminated its contract to build the tower, saying it was “disappointed” that it could not make progress on the project.

“While the B2 project certainly has its issues, we were hopeful that our client and partner would address them so we could move forward with building much-needed affordable housing in Brooklyn,” Kennedy told news media.

Developer: 'Blindsided'

Meanwhile, Forest City said Skanska “blindsided” it when the company stopped construction. The developer has also repeatedly told news outlets that Skanska has been unwillingness to resolve issues.

In a statement, Forest City’s president and CEO said the contractor had "stonewalled B2’s progress" with "inaction and inertia."

“These are deplorable and disappointing tactics that show remarkable indifference to the well-being of these workers and the project," said MaryAnne Gilmartin.

"We will continue to rigorously pursue our options through the courts to get B2 built,”

Construction Method at Issue

Forest City maintains that the modular design and technology are workable. The problems, the developer said,  lie with Skanska’s construction methods.

New York State Supreme Court

A New York State judge has urged the parties to resolve their issue through mediation and has denied Forest City’s request to reopen the factory.

The company claims that Skanska’s workforce was not properly trained and that the company is responsible for not delivering the project within original budget and timeline.

B2 was supposed to open in 2014. It is now scheduled to open in the fourth quarter of 2015, according to the Forest City's website.

Project in Limbo

According to reports, a judge hearing the case has urged the parties resolve their issues through mediation and has denied Forest City’s request to re-open the shuttered factory.

Neither party responded to requests for comment Monday (Oct. 27).


Tagged categories: Building design; Color + Design; Construction; Developers; Laws and litigation; Lawsuits; North America; Residential Construction

Comment from john lienert, (10/28/2014, 9:49 AM)

the lawyers are involved now......nothing will ever be settled....the bldg. will sit, unfinished, ....for years

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