Category Archives: New York

Economy Brings More Construction Work, Industry Struggles to Find Workers

A strong economy is giving the construction industry so much work it’s having trouble finding enough workers. According to an article on CNBC.com, a boost in spending from consumers and businesses who have more cash on hand for expansions and improvements is exacerbating the industry’s growing inability to fill jobs.

 

In New York City, the coming of Amazon is pushing the industry even harder to fill the existing vacancies, says Bisnow.com. But the Amazon to Long Island City issue is not an isolated case created by the corporate giant.

The Associated General Contractors of America 2018 Workforce Survey revealed that 79 percent of New York firms reported having difficulty finding hourly workers. As part of its recommendations to reduce the labor shortage the AGC of NY suggested that educational reform is part of the process. That includes a proposal to expand federal work-study programs and apprenticeship opportunities, as well as better educate students about employment outcomes, according to a story in the Albany Times Union.

The story continued: The report noted immigration reform as a key issue. With millions of undocumented, able-bodied immigrants who can’t legally work, the AGC says a visa program would alleviate the labor shortage and recommended expanding seasonal worker visas, as well as market-based visas to mitigate the current and future worker shortages.

Amazon’s HQ2 Could Mean Construction Boom in Long Island City

When Amazon announced it chose Long Island City as one of its two, new HQ2 locations, New York officials emphasized the new construction projects and infrastructure improvements that will come with Jeff Bezos’ multi-billion dollar company. According to the press release from NYC mayor Bill de Blasio’s office, the pending projects include:

  • Four million square feet of commercial space on Long Island City’s waterfront over the next 10 years, with expansion opportunities for up to eight million square feet over the next 15 years.
  • A 10,000 square-foot on site employment center
  • A new approximately 600-seat intermediate public school
  • A 3.5-acre waterfront esplanade and park

The construction is expected to create an average of 1300 direct construction jobs annually through 2033, according to city officials. Read the complete press release here.

According to Curbed New York, to fund local infrastructure—streets, sidewalks, open space, etc.—Amazon will utilize the city’s PILOT (payment in lieu of taxes) program, estimated to be $600 to $650 million over four decades. The details of how those funds will be allocated will be decided upon via community engagement, the ny.curbed.com article said.

Phelps Construction Group Named GC of the Year by NJ Subcontractors Association

Congratulations to CIS client Phelps Construction Group. The Boonton-based company was named General Contractor of the Year by the New Jersey Subcontractors Association.

“Could not be prouder of our team,” Phelps Construction Group president Douglas Phelps wrote on LinkedIn after celebrating the award at a dinner at The Brownstone in Paterson, NJ.

It has been a big year for the company, which has gotten the most attention for its Statue of Liberty Museum project. The 26,000-square-foot museum, which is scheduled to open in May, is being built with its first floor about the 500-year flood level and to be able to withstand hurricane-force winds. It will also house the original Statue of Liberty torch. Phelps Construction Group is moving from its current location in the Statue’s base to the new museum today November 15. The museum website plans to show the torch journey across Liberty Island on top of a remote-controlled transporter.

But the company has been busy beyond Liberty Island, too. It’s 74,000-square-foot NYSCO warehouse in Hawthorne, NY, won an Award of Merit from the Metal Building Contractors & Erectors Association.

They have been busy with the 132,000 square foot Subaru Distribution Center in Orangeburg, NY, a project that will also include part of the current 150,000-square-foot warehouse being converted into a training center. It aims to complete this project in the first quarter of 2019.

There was also Hanover Crossroads in Cedar Knolls, NJ, and the recently opened the 4,500-square-foot community home, The Smile of Hopatcong in Hopatcong, NJ. And now the company will be working on a new “marquee premium club” at the Prudential Center in Newark. “The Lofts” will be a 14,560-square-foot space with vaulted 30-foot ceilings.

NY’s MWBE Program Is Problematic, But What Is the Solution?

The current Minority and Women-Owned Business Enterprise (MWBE) program in New York State isn’t working as it was intended. It has created obstacles and difficulties for both general contractors and MWBEs. Proponents and critics can often agree on that. There is debate, however, about which part of the program is most problematic and to whom.

Are the 30 percent MWBE goals a burden on general contractors who say they can’t find qualified MWBEs to meet the quota and end up forced to hire a company that ends up too small or inexperienced to properly do the work or must file a waiver and delay the process?

Or is it more onerous on women and minority owned businesses who can’t get certification to qualify, saying the process is too difficult and the state needs to provide assistance to businesses trying to apply?

In 2014, Governor Andrew Cuomo increased the goal for using MWBE businesses on state contracts from 20 to 30 percent. That is the highest percentage in the nation. Under that current state law, MWBE goals only apply to state-funded contracts issued by state agencies and authorities. Cuomo pushed for expansion for 2019 that would have expanded the program to local contracts or any funded by the state. It also would have provided annual goals for specific minority groups. But those changes were not in the approved budget. As a matter of fact, the MWBE Article 15 program, scheduled to expire at the end of this year, was only extended for one year, instead of the previously expected five. That has some proponents of the program fearing it might be gone altogether soon.

The N.Y. State Senate is holding hearings “to examine the Minority and Women-Owned Business Enterprises program, and consider potential legislative solutions to create a more effective and efficient program to enhance New York’s business climate.”

People from both side of the issues have attended the hearings and testified to the difficulties with the program and proposed their ideas for a solution. Some suggest adjusting the goals by region, pointing out that demographic disparities from one area to another make a statewide mandate impractical.  Or as one person said at the hearing in Watertown, “Brooklyn and Watertown are not the same.”

Another issue creating problems, according to Crain’s New York Business, is that “unlike the largely white-owned incumbent construction firms, MWBEs are rarely unionized though they must pay prevailing wages on state-subsidized work.”

One area contractor says he doesn’t think MWBEs can find or know where to look for the jobs in many cases. He proposes general contractors find a way to help them know about projects out to bid, even if it costs them a little money to do it. Regular events designed to have GCs meet MWBEs rarely result in working relationships, he says.

The New York State Contract System (https://ny.newnycontracts.com/) website has a directory of certified businesses. It also has information to help businesses apply for certification, and on trainings and grant opportunities.

As the debate continues and 30 percent statewide goal remains—at least through the 2019 budget—the state senate will continue to listen to the industry’s issues with the program. The remaining hearings are:

September 26 at 2 p.m. Stage 14, Finger Lakes Community College, 3325 Marvin Sands Drive, Canandaigua. For more information, contact Kristin Frank at (518) 455-2366

October 16 at 11 a.m. Senate Hearing Room, 250 Broadway, 19th Floor, New York. For more information, contact Graham Wise at (518) 455-1765 or Anthony Capozzi (607) 773-8771.

Oral testimony is given by invitation only.

By Chris Colabella and Kara Yorio