News

MTA Resumes RFPs for Bids on $1.6B Metro North Penn Station Access Project

By JOHN JORDAN – May 20, 2021

ALBANY —In another sign of a reopening economy, Gov. Andrew Cuomo reported on May 13 that the delayed Metro North Penn Station Access project will now be resumed with bids going out shortly on the nearly $1.6-billion initiative.

The plan, which was paused last year due to the onset of COVID-19, calls for the construction of four new Metro-North Railroad stations in Hunts Point, Parkchester, Morris Park and Co-op City in the Bronx as well as major track upgrades in that borough. The governor reported that the state, MTA and the federal government had come to an agreement on a $1.58-billion budget for the project.

The MTA will now solicit three consortia to bid on the design-build project through a Request for Proposal (RFP). Back in February 2020 the MTA announced it had selected the teams of Halmar International, LLC/Railworks, JV (Ove Arup & Partners P.C., lead designer); Skanska ECCO III Penn Station Connectors, JV (AECOM USA, Inc., lead designer) and Tutor Perini/O&G, JV (Parsons Transportation Group of New York, Inc., lead designer) as qualified to bid on the Penn Access job. However, the project was put on pause due to the onset of the coronavirus pandemic the following month.

A map of the Metro North Penn Station Access project that calls for the construction of four new Metro North Railroad stations in Hunts Point, Parkchester, Morris Park and Co-op City in the Bronx, as well as major track upgrades in that borough.

The governor also announced that the federal government has given the MTA approval to publish the draft Environmental Assessment for public comment. The project is slated to be completed sometime in 2025.

“As vaccination rates go up and COVID-19 abates, it’s time to refocus our efforts on the critical infrastructure projects we need to deliver for New York’s future and economic recovery from the pandemic,” Gov. Cuomo said. “Connecting Metro-North to Penn Station has long been an important next step not just for New York City’s economic growth and development, but for protecting our environment and providing more equitable access to transit in our communities. This restarted selection process for a firm to build four new stations will expand access to transit in the Bronx and help to create a new corridor between Manhattan and the Mid-Hudson region.”

While the bid for the project is expected to be held soon, no firm date has been established as yet, according to an MTA spokesman. The MTA is preparing for a 45-day comment period that would accompany a formal environmental review of the project. As part of that process, the public will be able to review project documents online and at physical in-person sites in the Bronx, including the Morris Park Community Association and the Bronx Jewish Community Council, the MTA stated.

“The most cost-effective capital projects are those that squeeze more mass transit service out of existing infrastructure, rather than always building something new from scratch,” said Janno Lieber, president of MTA Construction & Development. “By rebuilding this under-utilized Amtrak rail line to accommodate new Metro-North service, this project will give East Bronx residents better access to jobs, education and a full range of opportunities.”

“This is an exciting project that will be as transformative for Metro-North as it is for the Bronx,” added Catherine Rinaldi, president of MTA Metro-North Railroad. “We look forward to doing everything we can to support this project to bring Metro-North service to an entirely new part of the Bronx and give customers on our New Haven Line—historically our busiest—a choice of new destinations as they plan their travel.”

Trains stopping at the four new Bronx stations will serve an extension of the New Haven Line, offering rail commutation options in the east Bronx to midtown Manhattan as well as points in Westchester County and Connecticut. The MTA noted that the commute from Co-op City to Penn Station, currently 75 minutes, will be cut to 25 minutes upon project completion. The commute from Hunts Point to Penn Station, currently 45 minutes, will be cut to 16 minutes.

Metro-North trains will use a rail line owned by Amtrak that has long been used by Amtrak’s Northeast Corridor trains, which travel through the area without stopping. This project will upgrade the line and update its infrastructure systems at the same time that it brings local MTA service to the line for the first time.

The last Metro-North station to be newly built where none had been before was also in the Bronx, at E. 153rd Street, which opened on May 23, 2009.

The restart of the Metro North Penn Station access project was applauded by government and planning leaders.

Bronx Borough President Ruben Diaz, Jr. said, “Ensuring equitable access to mass transit is important to reach underserved communities and reduce our reliance on less efficient means of transportation. Gov. Cuomo has championed this infrastructure improvement for the entire region and I thank him for his dedication to getting it done despite the COVID-19 pandemic. This project is a critical step forward, expanding opportunities to take mass transit in the Bronx and providing an economic conduit between the Mid-Hudson region and New York City.”

Westchester County Executive George Latimer noted the project “is a commonsense step that will bring huge economic benefits to our county. Gov. Cuomo has championed this project and I am heartened to see it move forward, even in the midst of the terrible COVID-19 pandemic. This won’t just help commuters travel from Westchester to Manhattan; it will also help residents, businesses and families move from the Bronx to our county and provide new opportunities for commerce and economic development in the region.”

Regional Plan Association President and CEO Tom Wright said, “Penn Access is a terrific project, repurposing existing rail infrastructure to provide new capacity, connectivity and resiliency, and providing critical transit accessibility to historically under-served communities in the Bronx. RPA looks forward to working with communities and the MTA to make sure we take full advantage of this transformational investment.”

Westchester IDA to Hear Regeneron’s New Plan To Build $480M Pharma Project in Greenburgh

By JOHN JORDAN – May 20, 2021

WHITE PLAINS — The Westchester County Industrial Development Agency will soon be considering one of the largest private investment projects in memory, totaling nearly half a billion dollars.

Representatives of Regeneron Pharmaceuticals, Inc., made a presentation to the Westchester IDA on April 22 on an amended expansion plan for property in the Town of Greenburgh, NY.

Janet Giris, a partner with the law firm DelBello, Donnellan & Weingarten, Wise & Wiederkeher, LLP, who represented Regeneron at the IDA session, noted that the new project is an expansion of its Parcel D project originally

A map of the proposed Parcel D building property in Greenburgh supplied to the Westchester County Industrial Development Agency by Regeneron Pharmaceuticals, Inc.

proposed in 2015 as a building not to exceed 192,000 square feet that secured Westchester IDA approval, but never moved forward.

“Recently, Regeneron has been reevaluating its longterm space needs and determined that the originally approved Building D no longer meets its needs,” she said.

Ms. Giris said that Regeneron plans to submit an amended incentives application with the IDA for its new project that would involve the construction of a new two-story, 207,000-sf building, along with a parking structure and other infrastructure that will increase the development cost of the project (including equipment) by approximately $331 million to $480 million.

In its presentation, Regeneron estimated that construction costs will total $310 million, design costs $21.7 million and FF&E (furniture, fixtures and equipment) $148.9 million. The cost of the original project was estimated at $150 million. The firm estimated the tax savings it will secure will net approximately $7.7 million.

The new building will primarily house Regeneron’s pre-clinical manufacturing and process development operations. She reported that Regeneron recently applied to the Town of Greenburgh for amended land use approval on the Parcel D building.

Alexandra Bowie, a company spokesperson, told CONSTRUCTION NEWS that the original building plan called for 128,000sf of mixed lab/office space.

In addition to the expanded size of the building and six years of inflation, the reason for the significant additional cost of the amended development is due to its usage change to all preclinical manufacturing and process development, which requires specialized space/equipment for producing drug product.

Ms. Bowie said of the company’s expansion, “We’re proud that the Regeneron team continues to grow, as our research and development efforts continue to deliver new medicines for patients in need. We appreciate the support of our local communities in accommodating this growth, and ultimately helping to further this important mission.”

According to a project timeline submitted to the IDA, Regeneron hopes to secure approvals from the Town of Greenburgh and necessary permits that would allow construction to begin sometime in the third or fourth quarter of this year with project completion slated for mid-2024.

“This is an exciting project that fits in line with the mission of the IDA and the mission of economic development here in the county,” said Westchester County IDA Chairman Joan McDonald.

The Westchester IDA was also given a cost benefit analysis presentation of the proposed Gateway II mixed-use project in Downtown White Plains at the April 22 session. The project being proposed by the Alaska Permanent Fund and development partner Greystar Real Estate Partners LLC calls for the construction of 500 high-rise apartment units and 19,000 square feet of ground floor retail at the Gateway II site at 85 N. Lexington Ave. in Downtown White Plains, the current location of a long vacant 3.5-acre parking lot.

Michael Grella of Grella Partnership Strategies gave the cost benefit analysis presentation on the project that he said is valued at approximately $275 million.

He estimated the hoped for incentives would involve approximately $640,000 in sales tax exemptions, $1.5 million in mortgage recording tax exemptions and approximately $23 million in savings to be negotiated with the City of White Plains in a Payment in Lieu of Taxes agreement.

The IDA Board took no action on either project at its session. Both the Regeneron and Gateway II projects are expected to be on the IDA Board’s agenda for its next meeting on May 27 or at subsequent meetings this summer.

NYC Construction Falls to Near Historic Lows

By JOHN JORDAN – May 20, 2021

NEW YORK — A newly released analysis of city building construction data by the Real Estate Board of New York found that total square footage and new multiple dwelling filings for proposed construction in New York City are both at lows not seen in a decade.

The proposed 5.4 million sf in construction in the first quarter of 2021 was the lowest such figure since the fourth quarter of 2010, while first quarter filings for new multiple dwelling buildings reached their lowest point since the third quarter of 2011, the report stated on May 10.

SOURCE: REAL ESTATE BOARD OF NEW YORK

Other alarming data from the report includes that the first quarter of this year saw only two major proposed construction projects (greater than 300,000 sf) the lowest figure since the first quarter of 2012.

One newly proposed project is a 70-story mixed-use building with a proposed 98 residential dwelling units and 353,196sf for commercial use at 520 Fifth Ave. The other is a 436,188-sf, mixed-use development proposed to include 431 residential units as well commercial and community space at 480 and 490 Kent Ave. in Brooklyn.

Together, the two new filings account for 888,322 sf or 16.54% of the quarter’s total construction square feet, which represents a 9.24% decrease in construction square feet from major projects year-over-year.

The report shows that the total number of new building filings for the first quarter of this year was 407, marking a 25% decline from the fourth quarter of 2020. While REBNY noted that there is traditionally less activity in the first quarter (and first-quarter new building filings actually increased compared to the first quarter of 2020), the underperformance of proposed square footage and multiple dwelling construction highlights the need for local and federal action to meet New York’s post-COVID economic and housing needs, REBNY officials stated.

Queens continued to experience the largest number of overall filings of any borough with 129. Though this represented a

23.67% drop in the volume of filings from previous quarter, it was a 38.71% increase year over-year. Manhattan continued to account for the least number of filings with only 22. The figure, however, represents an increase in filings both from the fourth quarter of 2020 and year-over-year at 4.76% and 37.50% respectively.

The multifamily development sector in New York City is also struggling. The total number of projected multiple dwelling units on job filings in the first quarter of 2021 was 3,336, a 54.3% decrease in units from the fourth quarter of last year and a 49% drop year-over-year.

The volume of applications for new multiple dwelling buildings saw a similar decline. With the total number of filings for new multiple dwelling buildings at 98, the first quarter of 2021 registered a 31.94% drop from the previous quarter and a 40.24% drop year-over-year. The first quarter of 2021 was the lowest number of filings for new multiple dwelling buildings since the third quarter of 2011.

The Bronx saw the largest proposed number of multifamily housing units at 1,119, spread over 26 properties. Brooklyn, however, had the largest volume of job filings for new residential buildings with 39, which will comprise a proposed 924 multiple dwelling units.

Following the latest report, REBNY called on Congress to pass President Biden’s historic infrastructure plan, which would put approximately $2 trillion into the nation’s construction industry and has the overwhelming support of Americans.

“Congress must act swiftly to pass President Biden’s infrastructure plan, which will play a critical role in advancing a strong economic recovery for New York and create thousands of good jobs. We applaud Majority Leader Chuck Schumer for embracing this much-needed plan and leading the fight for its passage,” said REBNY President James Whelan. “It is also more important than ever for city and state elected officials to step up and play their part in advancing policies and legislation that will kickstart the economic engine of the construction and development industries and address the city’s increasingly urgent housing needs.”

Leaders at REBNY, along with the Building and Construction Trades Council, Building Trades Employers Association and the New York Building Congress, also continue to press public officials to support a package of reforms to address the industry’s serious challenges and reinvigorate the economy. All four groups agree that implementing these measures will play a significant role in encouraging construction activity, creating good jobs, producing much-needed housing and supporting a strong economic recovery for New York City.

“It’s clear that investment in large-scale infrastructure and public works projects is needed now more than ever to jumpstart the city’s economic recovery. Fortunately, there is a thoughtful, timely, and robust plan introduced by the Biden administration that invests in New York and in our working people that Congress must pass immediately,” said Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York. “From day one of the pandemic, our members went above and beyond to ensure that essential construction work never stopped, and these

hardworking tradesmen and tradeswomen are now poised to not only rebuild our economy but build the infrastructure that will lead New York City into the future.”

“The best and fastest way for New York City to improve its economy is to build its way back to prosperity.” Said Building Trades Employers Association President Lou Coletti. “Rebuilding public infrastructure, while creating incentives to rebuild the private real estate market, will increase tax revenue and improve New York’s social infrastructure.”

“The only way out of this crisis is to build, which is why it is so important we pass the American Jobs Plan as soon as possible,” said Carlo A. Scissura, president and CEO of the New York Building Congress. “Building Congress members are ready to design and build the projects of the future, both here in New York City and across the nation. Building new schools, subway stations, affordable housing, offices and other infrastructure is key to our recovery and our longterm prosperity.”

The four organizations said they will continue to work on areas of common interest and advocate for smart policies that help the industry and the city’s recovery. These include:

Addressing Critical Needs for Jobs and Housing: With this latest report showing construction activity hitting its lowest points since the wake of the recession, we need to focus on a growing pipeline—not a stagnant one—that will create more housing opportunities while simultaneously creating good jobs. Since the end of the 2008 recession, New York City has added more than 858,000 jobs, but only 125,000 newly constructed housing units—a rate of just 0.15 new homes per new job.

The organizations noted that the current economic crisis required the public and private sectors collaborate and rely on programs that encourage the production of below market-rate housing. According to New York Building Congress’ “Construction Outlook Update: Workforce Snapshot 2021,” 82.7% percent of the city’s construction industry workers were employed in the private sector. The private sector’s involvement in housing production, utilizing incentive programs and property tax benefits to address the immense construction costs, can reignite the construction pipeline, thus creating good jobs and affordable housing in steps critical to the city’s overall recovery.

Opposing the Proposed After-Hours Variances (AHV) Changes: Not only is it essential the real estate and construction industries find ways to keep the pipeline from drying up completely, they also need to protect the current jobs within the construction industry. New York City Council’s proposed legislation (Intro 1737) to amend aspects of the AHV process with the goal to improve safety and quality of life—would delay projects, lengthen their time to completion and add cost that would jeopardize jobs, the organizations contend. Instead, New York needs policies that spur economic development and job growth, they said.

NYS Grants $94M for Wastewater, Drinking Water Infrastructure Work

By JOHN JORDAN – May 20, 2021

ALBANY — The New York State Environmental Facilities Corporation Board of Directors approved on May 13 $94 million in grants, interest-free loans, and low-cost loans to support vital drinking water and wastewater infrastructure projects across New York State.

The FY 2022 Enacted Budget adds a $500-million appropriation to support clean water, raising the state’s total investment to $4 billion and continuing to fulfill the state’s $5-billion clean water commitment.

“Clean water is essential to not only the public health but also present and future prosperity,” Gov. Cuomo said. “The State of New York will continue to commit our efforts and resources to these water treatment projects for the long-term benefits of our families, communities and future generations.”

Wastewater treatment plant - pumping station and drinking water supply.

Environmental Facilities Corporation President and CEO Joseph Rabito said, “Helping our partners make substantial investments to improve water infrastructure in communities statewide is core to the health and well-being of those we serve. The grants and low-cost financing for wastewater treatment and public water systems approved today will further the state’s commitment to projects that improve water quality today and far into the future.”

The Board’s approval included financing through the Clean and Drinking Water State Revolving Funds and grants that are part of the Water Infrastructure Improvement Act and Emerging Contaminants grant programs.

 The projects approved for work in the Hudson Valley and New York’s Downstate region include:

Clean Water Village of Suffern in Rockland County—$6,750,000 in short-term, low-interest financing, and $2,250,000 in Water Infrastructure Improvement Act (WIIA) grant funding for wastewater treatment plant upgrades, and storm and flood resiliency measures including the construction of a flood wall.

Drinking Water Village of New Paltz in Ulster County—$3,000,000 in WIIA grant funding for the replacement of aged cast-iron water mains and the replacement of fire hydrants, valves and service connections to the project area.

Town of Wallkill in Orange County—$911,351 in long-term, interest-free financing to provide redundancy and emergency preparedness for the Town of Wallkill, the City of Middletown and the Village of Goshen.

Village of South Blooming Grove in Orange County—$660,000 in 2019 WIIA funding for the removal of iron and manganese for an existing well and a new treatment building that includes updated chlorination and iron and manganese filters.

Garden City Park Water District in Nassau County—$3,900,000 in an Emerging Contaminants grant for the design and construction of a new treatment process at the existing water treatment facility to remove PFOA, PFOS and residual Advanced Oxidation Process (AOP) byproducts.

Manhasset-Lakeville Water District in Nassau County—$6,509,100 in 2019 Emerging Contaminants grant funding for the design and construction of a new treatment process at the existing water treatment facility, including the construction of a new AOP treatment system, a new granular activated carbon treatment system to remove PFOA, PFOS and residual AOP byproducts and a new ion exchange system to remove nitrate.

Roslyn Water District in Nassau County—$4,485,000 in 2019 Emerging Contaminants grant funding for the installation of an AOP treatment system for the removal of PFOA and PFOS and AOP byproducts and for upgrades to the existing water treatment plant.

West Hempstead Water District in Nassau County —$3,924,150 in Emerging Contaminants grant funding for the design and construction of a new treatment process at the existing water treatment plant, which will be designed to treat raw water from existing wells.

The financings are subject to the Public Authorities Control Board’s approval and were scheduled for consideration at PACB’s meeting on May 19.

Attorney's Column

Lack of Contractual Notice Dooms Yet Another Valid Claim

By THOMAS H. WELBY, P.E., ESQ. and GREGORY J. SPAUN, ESQ.

Thomas H. Welby, P.E., ESQ. & Gregory J. Spaun, ESQ.

We have written on more than one occasion about how a construction contract is meant to define the relationship between the parties, and that absent a provision, which violates public policy (pay-if-paid, preemptive lien waivers, indemnification of a party for its own negligence, etc.), the contract will be enforced as written. The provisions of these contracts, which seems to be invoked most frequently, are the provisions for delivering notice of claims to the owner for extra, additional, or even delay compensation. In the recent case of APS Contractors, Inc. v New York City Housing Authority, an appellate court again showed us the importance of strict compliance with these contractual notice of claim provisions.

Background

In May 2014, APS Contractors entered into a contract with the New York City Housing Authority where APS was to be NYCHA’s general contractor for a façade and roofing project at the Pink Houses in Brooklyn. The contract contained a provision, at Section 32(a), requiring the contractor to file a notice of intention to file a claim within 20 days after such claim arose, or else such claim was waived.

On April 28, 2017, the Certificate of Final Acceptance was issued, and on May 9, 2017, APS submitted a document that it denominated a “Verified and Itemized Statement and Notice of Claim,” which asserted three claims, as follows: $1,416,543 for additional work for lead abatement and painting at the railings; $512,727.50 for additional work for temporary roofing and $114,020 for additional work in removing certain concrete patching. No payment was made on this claim, and APS commenced its lawsuit to recover on these claims on May 17, 2018.

NYCHA ultimately moved to dismiss APS’s lawsuit, citing to Section 32(a) of the contract. NYCHA argued that APS had knowledge of the lead abatement claim on Apr. 20, 2016, the date on which NYCHA advised that it would be calculating APS’s compensation in a manner different than that proffered by APS. Similarly, NYCHA argued that APS had knowledge of the temporary roofing claim on Jan. 16, 2016, when NYCHA first rejected its request for additional compensation, claiming that temporary roofing was included in the contract. Likewise, as to the concrete repair claim, NYCHA argued that APS had knowledge as early as May 11, 2016, the date on which NYCHA indicated that would not provide APS with additional compensation for this work. APS argued that voluminous e-mail correspondence adequately advised NYCHA of the fact that APS was making claim for these additional monies and that this correspondence otherwise satisfied the requirements of the contract.

Decision

The motion court denied NYCHA’s motion as it related to the lead abatement claim, finding that the significant amount of e-mail correspondence apprized NYCHA of APS’s intent to file a claim within the contractual deadline, and provided the requisite information. However, the court granted NYCHA’s motion as it related to the other two claims, finding that there was no similar chain of correspondence that would have apprized NYCHA that APS would be making a claim for those sums. On appeal, the appellate court reversed the motion court and dismissed the complaint, finding that the motion court had erred in finding the e-mail correspondence satisfied the notice of claim requirement. In doing so, the appellate court held that the contract was specific that the notice of claim had to be denominated as such, had to contain certain specified information, and had to be clear that APS intended to pursue the claim for compensation. The appellate court found that the email correspondence met none of these requirements.

Comment

APS is yet another reminder that in most circumstances, contractual conditions precedent will be strictly enforced. Here, what appeared to be more than $2 million in valid claims for extra and additional work ended up dismissed for a simple failure to follow contractual formalities. While APS’s claims ended up buried in the graveyard of inadequate notice, this did not need to happen. It goes without saying that contractors would be well advised to follow such contractual conditions precedent to the letter so that you are not in the position of having to later argue, like APS, that cobbled together correspondence constitutes the notice required by the contract. Often, and unfortunately, by the time the contractor recognizes that it is up against a deadline to submit a notice of claim, that deadline may have already passed. Your project people must learn to recognize the actions and correspondence from the Owner that trigger the Notice stop watch. In that regard, contractors should examine their contracts with experienced construction counsel so that they can—at the outset of the job—have a checklist of what to submit when a claim arises and the deadline for doing so.

About the author: Thomas H. Welby, an attorney and licensed professional engineer, is General Counsel to the Construction Industry Council of Westchester & Hudson Valley, Inc., and is the Founder of and Senior Counsel to the law firm of Welby, Brady & Greenblatt, LLP, with offices located throughout the Tri-State/Greater Metropolitan Region. Gregory J. Spaun, an attorney and a partner with the firm, co-authors this series with Mr. Welby.

Financial Management

Paycheck Protection Program Loan Factors Contractors and Partners Should Know

By PHILLIP ROSS, CPA, CGMA, PARTNER

Phillip Ross

Many contractors received Paycheck Protection Program loans during 2020 and it will be included in their financial statements for last year. Whether your financial statements are completed or in process, it is an opportune time to review how banks and sureties will evaluate the PPP loans that may be included as liabilities on contractors’ balance sheets at Dec. 31, 2020. How will banks and sureties view PPP loans in light of an entity’s equity value and loan covenants?

Unless they were working on projects deemed essential, many contractors experienced a decrease in 2020 revenue because of the COVID-19 pandemic. For many of these companies, securing PPP loans was crucial to their ability to maintain payroll and cover critical

expenses. To the benefit of their companies, many contractors will be able to have some or all of these PPP loans forgiven—to the extent that they were able to maintain employment levels for a specified period and used loan proceeds for qualified expenses as specified under the law during the covered period. Thanks to recently passed legislation, any potential loan forgiveness will not be taxable and the related expenses paid with loan proceeds will be deductible. To the extent forgiven, the loan is essentially tax-free money from the government.

However, because of the logistics involved in applying for forgiveness and the approval process needed by the banks and the Small Business Administration, many loans extended during 2020 will not be forgiven until 2021. For the most part, generally accepted accounting principles (GAAP) require that the loans remain on the company’s balance sheet until actual forgiveness is deemed to be complete. Many companies will be faced with a situation where their balance sheet as of Dec. 31, 2020, will reflect a liability that will be fully or partially forgiven in 2021.

How will this liability be evaluated by the banks in determining covenant compliance? Many companies may already have issues related to complying with covenants for 2020 due to the adverse impact of COVID-19. How should sureties evaluate this liability when determining bonding capacity for their contractor clients? Will banks and sureties be in the position of having to evaluate the likelihood of the loan being forgiven to determine covenant compliance and bonding capacity? Or will they simply treat the loan as a liability not to be discounted in any way until it is forgiven? Will the banks and sureties’ experience with any particular contractor impact their decision making process?

As you can see, there are many factors to consider and the answers may not be so straight-forward. A good relationship among the contractor, CPA, bank, broker, and surety is critical to ensure that the parties involved can make informed decisions for the benefit of all—particularly for the contractor who is struggling during these trying times. As such, timely communication is key. If you are faced with the aforementioned situation regarding your PPP loan, we recommend meeting with your bank and surety to understand how they plan on evaluating this liability for the purposes of determining covenant compliance and bonding capacity. This could have an impact on the jobs you bid, available cash flow and borrowing capacity.

Please contact your CPA with any questions you may have.

About the author: Phillip Ross, CPA, CGMA is an Accounting and Audit Partner and Chair of the Construction Industry Group at Anchin, Block & Anchin, LLP. For more construction industry thought leadership and content, log on to www.anchin.com.

Construction News Back Issues

January 2021

February 2021

March 2021

April 2021

May 2021

June 2021

July 2021

August 2021

January 2020

February 2020

March 2020

April 2020

May 2020

June 2020

July 2020

August 2020

September 2020

October 2020

November 2020

December 2020

July/August 2019

Labor Issue 2019

October/November 2019

December 2019

Sen. Schumer Implores NY Construction Trades To Get Behind $2.7T ‘American Jobs Plan’

By JOHN JORDAN – April 26, 2021

WASHINGTON—U.S. Senate Majority Leader Chuck Schumer (D-NY) this month detailed the massive funding coming New York’s way from the $2.9-trillion COVID stimulus passed earlier this year and the potential massive infrastructure investment that would be harnessed from President Biden’s proposed $2.7-trillion “American Jobs Plan.”

In a Zoom meeting from his office in Washington, Sen. Schumer on April 14 briefed construction industry executives and members of organized labor who are united under the banner of the New York Roadway & Infrastructure Coalition (NYRIC). Among those attending were NYRIC President Marc Herbst; NYRIC President Emeritus Ross J. Pepe; Executive Director Robert Wessels of the General Contractors Association of New York; President Mike Elmendorf of the Associated General Contractors of New York; and President and CEO Jay Simson of the American Council of Engineering Companies of New York.

Sen. Schumer noted that the three COVID relief plans have delivered more than $250 billion to New York State, including more than $100-billion from

Public officials in the Hudson Valley seek federal help, promised in the $2.7-trillion “American Jobs Plan,” to advance needed infrastructure projects that counties and municipalities cannot afford. The $7-million West Washington Avenue Bridge replacement project over the Pascack Brook in Pearl River, NY in Rockland County is one that’s shovel-worthy.
Photo Credit/MARGARET FOX PHOTOGRAPHY

the “American Rescue Plan” passed under the Biden administration that included massive funding for the state and local governments to close budget gaps caused by the coronavirus. The American Rescue Plan also featured: $10 billion for national capital projects; $15.5 billion for urban transit in New York State, a majority of which was used to stabilize the MTA and allow it to continue its capital program.

“We also made clear that the money we are giving to state and local governments, which is more than enough to equal their deficits so they didn’t have to lay off people or cut back (programs), could be used for water, sewer and other infrastructure projects,” Sen. Schumer said. “So all of you should get to work lobbying the state government and local governments to use some of that money there.”

Other funding allocations under the Rescue Plan include: $935 million for airports in New York State; $417 million for roads and bridges and $3.5 billion for Amtrak.

Sen. Schumer then discussed the urgent need to enact the $2.7-trillion infrastructure plan called the American Jobs Plan. He noted that the nation must not only conquer the pandemic, but also reinvigorate the struggling U.S. economy.

“We want to give faith to the working family, to our union members throughout the country that we are going to move forward and do better,” he said. “The American Jobs Plan is the largest investment in infrastructure and workers in our lifetime, creating millions of new high-paying American jobs in the next couple of years.”

He estimated the plan would fuel $1 trillion in construction over the next decade and create tens of thousands of prevailing wage jobs in New York State.

The Biden administration earlier this month issued infrastructure report cards for each state, including New York, and detailed funding earmarked to the states under the American Jobs Plan.

Sen. Schumer said he had discussed with President Biden the need for funding for some of New York’s critical large projects including the multi-billion dollar I-81 project in Syracuse and others to be included in the infrastructure plan.

“Every city, every major region in our area, whether it is expanding Route 17 (in Orange County), whether it is the interloop in Rochester, whether it is making sure the busways work in the Albany/Capital Region area, Main Street and the elevated highways in Buffalo, we have big infrastructure plans that with the magnitude of this plan could be realizable.”

The senator said he is hopeful that Congress could pass the American Jobs Act by this summer, although he admitted that funding mechanisms for the proposal have yet to be finalized.

Sen. Schumer, who also noted that the Gateway Hudson River Tunnel project is now moving forward, also stressed the importance to New York State of the repeal of the SALT (State and Local Taxes) cap.

Mr. Herbst, who led the questions that followed, said that NYRIC has scheduled a virtual program on May 5 at 2:00 p.m. with members of the New York Congressional delegation who serve on the House Transportation & Infrastructure Committee.

State Budget’s $311B Infrastructure Plan Invests In Roads, Bridges, Mass Transit, Green Economy

By JOHN JORDAN – April 26, 2021

ALBANY—State lawmakers may have come in more than a day late with the annual state budget, but they certainly didn’t come in a dollar short. Gov. Andrew Cuomo and the State Legislature landed on $212-billion for the FY 2022 budget on April 6. Included in the spending plan, signed by the governor  on April 19, is increased capital investment in roads, bridges, mass transit, clean water and a massive public and private commitment to green energy technology that are all part of what is being touted as the nation’s largest infrastructure plan valued at $311 billion.

“Economic recovery, growth and prosperity are not easily won back, so we are encouraged by what the governor and the legislature have done. This is a positive first step in our journey, and it demonstrates the resiliency and moxie that New Yorkers are known for across the globe.”
John Cooney, Jr., CIC executive director

Part of the massive investment includes the authorization of the governor’s $3-billion Restore Mother Nature Bond Act to go before the voters in November 2022.

The state spending plan was aided in large part by the $12.6 billion in COVID aid it will be receiving from the federal government to help offset devastating revenue losses caused entirely by the pandemic. With this federal funding and additional revenues, including $3.5 billion in new tax revenue that rises to $4.3 billion in FY 2023, the Enacted Budget closed the state deficit that threatened to result in significant program spending cuts and reductions in funding to municipal governments.

“New York was ambushed early and hit hardest by COVID, devastating our economy and requiring urgent and unprecedented emergency spending to manage the pandemic,” Gov. Cuomo said. “Thanks to the state’s strong fiscal management and relentless pursuit to secure the federal support that the pandemic demanded, we not only balanced our budget, we are also making historic investments to reimagine, rebuild and renew New York in the aftermath of the worst health and economic crisis in a century. This budget continues funding for the largest-in-the-nation $311-billion infrastructure plan, establishes a groundbreaking program to provide affordable Internet for low-income families and enhances public safety through police reforms, all while continuing to provide relief to New Yorkers and small businesses as we recover from the pandemic.”

Construction industry leaders praised the agreement as a means to improve the state’s infrastructure that will also create thousands of jobs for its struggling economy battered by the coronavirus.

John Cooney, Jr., executive director of the Construction Industry Council of Westchester & Hudson Valley, said, “This budget addresses the infrastructure’s massive needs and is  consistent with the promise to advance bold transportation and development projects that Gov. Cuomo has annunciated earlier this year. Economic recovery, growth and prosperity are not easily won back, so we are encouraged by what the governor and the Legislature have done. This is a positive first step in our journey, and it demonstrates the resiliency and moxie that New Yorkers are known for across the globe.”

“We know that the only path to recovery is to build our way out of this crisis, and the budget enacted by our state leaders ensures we do just that,” said Carlo A. Scissura, president and CEO of the New York Building Congress. He later added, “This bold spending plan not only paves the way for new roads and bridges, green energy projects, clean water infrastructure and affordable housing, but it creates a reimagined Penn Station complex with better MTA and Amtrak service and progresses the Restore Mother Nature Bond Act, which would result in nation-leading investments to benefit the environment. The New York Building Congress applauds our state leadership for this necessary, transformative budget and we look forward to continuing to work with them to build a better New York for all.”

Some of the overall highlights of the budget include: a record $29.5 billion in school aid; $29 billion in public and private green economy investments; $2.4 billion for rent and homeowner relief; $2.4 billion for child care; $2.1 billion for excluded workers; $1 billion for small business recovery; a first-in-the-nation plan to make broadband Internet affordable and legalizing mobile sports betting and recreational marijuana. The budget did not include moving the timeline up for downstate casinos, however.

In terms of transportation and infrastructure spending, the budget includes the following:

The FY 2022 Enacted Budget provides $6.2 billion for the second year of a record $12.3-billion, two-year DOT Capital Plan that will facilitate the improvement of highways, bridges, rail, aviation infrastructure, non-MTA transit and DOT facilities. Compared to the final two years of the last DOT Capital Plan, this is an increase of $3.4 billion, or 38%, state officials noted.

The budget also features a total of $1 billion for strengthening local highways and bridges: Funding for the Consolidated Highway Improvement Program (CHIPS) and the Marchiselli program increases by $100 million to $577.8 million and funding for Extreme Winter Recovery is set at $100 million. The Enacted Budget also provides $100 million of new funding to localities responsible for State Touring Routes, increases highway aid through the PAVE NY program by $50 million to $150 million, and maintains funding of local bridge projects through the BRIDGE NY program at $100 million. This represents an overall year-to-year increase of $285 million.

The FY 2022 Enacted Budget also allocates $110 million in New York Works capital funding for the Office of Parks, Recreation and Historical Preservation. This funding will aid the ongoing transformation of the state’s flagship parks, and support critical infrastructure projects. The budget also includes $75 million for the Department of Environmental Conservation to address a variety of capital needs to improve access to state lands and rehabilitate campgrounds.

In terms of clean water infrastructure, the FY 2022 Enacted Budget adds a $500-million appropriation to support clean water, raising the state’s total investment to $4 billion and continuing to fulfill the governor’s $5-billion clean water commitment.

The budget also renews record funding—$300 million—for the Environmental Protection Fund; the highest level of funding in the program’s history. Appropriations include $40 million for solid waste programs, $90 million for parks and recreation, $151 million for open space programs and $19 million for the climate change mitigation and adaptation program. This investment will provide funding for critical environmental programs such as land acquisition, farmland protection, invasive species prevention and eradication, enhanced recreational access, water quality improvement and an aggressive environmental justice agenda, state officials said.

The budget also authorizes the governor’s $3-billion Restore Mother Nature Bond Act. If approved by voters in the November 2022 general election, this initiative will make significant investments across the state to combat climate change, reduce flood risk, invest in resilient infrastructure and revitalize critical fish and wildlife habitats. It will do this by connecting streams and waterways, right-sizing culverts and dams, restoring freshwater and tidal wetlands, reclaiming natural floodplains, restocking shellfish populations and upgrading fish hatcheries, preserving open space, conserving more forest areas, replanting more trees, reducing contamination from agricultural and storm water runoff and expanding renewable energy.

As part of the governor’s $29-billion green economy program that involves both public and private investment, the state will contract with Equinor Wind US LLC for the development of two new offshore wind farms more than 20 miles off the shore of Long Island, in what is the largest procurement of renewable energy by a state in U.S. history. Upon completion, the two offshore wind farms will yield a combined 2,490 megawatts of carbon-free energy, spurring another $8.9 billion in investment. 

New York has secured commitments from companies to manufacture wind turbine components within the state and build the nation’s largest offshore wind program. Plans to make New York State a global wind energy manufacturing powerhouse include upgrades to create five dedicated port facilities. These projects include: the nation’s first offshore wind tower-manufacturing facility to be built in the Port of Albany; facilities at the South Brooklyn Marine Terminal; greater activity at Port Jefferson and Port of Montauk Harbor in Long Island. Together, the projects will leverage almost $3 of private funding for every $1 of public funding, for a combined $644 million investment in these port facilities. 

New York State will construct a new green energy superhighway of 250 miles. The $2-billion project will create opportunities to maximize the use of renewable energy for the parts of the state that still rely on polluting fossil-fuel plants. Construction has already started on the New York Power Authority’s 86-mile Smart Path project from Massena to Croghan and key projects in Western New York, Mid-Hudson and the Capital Region. 

New York will contract for another 24 large-scale renewable energy generation projects in 2021, to bring the state’s total clean energy build-out to nearly 100 projects. The 23 solar farms and one hydroelectric facility will be the most cost-efficient clean energy construction to date in New York, producing more than 2,200 megawatts of clean power, generating more than $2.9-billion of investment and creating 3,400 jobs in 16 counties upstate.

The FY 2022 Enacted Budget provides non-MTA transit systems with another $20 million of capital aid, for the second installment of a $100-million five-year program to support transit agencies’ transition to electric buses. Under this program, five of the largest upstate and suburban transit authorities will electrify 25% of their fleets by 2025 and 100% by 2035.

The budget also provides funding for several mega-projects in Manhattan. As part of the Transformational Midtown West Development and with the completion of the Moynihan Train Hall, the state will launch a comprehensive $16-billion project to expand and reconstruct the existing Penn Station. The fully renovated Penn Station, including the iconic new Long Island Rail Road entrance on 7th Avenue that opened on Dec. 31, 2020, will comprise a widened and completely reconstructed 33rd Street LIRR concourse and an expanded and completely transformed station.

Additionally, at least eight new tracks will be constructed south of the existing Penn Station to add capacity, cut down on delays, and improve operations. This will be a signature transportation project creating nearly 60,000 direct jobs, and involving the federal government, Empire State Development, the Metropolitan Transportation Authority, New Jersey Transit and Amtrak.

As part of the transformational Midtown West Development, the FY 2022 Enacted Budget includes funding to support the governor’s proposal to extend the High Line in Manhattan to give pedestrians seamless access to the elevated pathway from the recently opened Moynihan Train Hall. As part of a public-private partnership, Brookfield Property Group will partner with Empire State Development, the Port Authority of New York and New Jersey and Friends of the High Line to build an L-shaped connection from the 10th Avenue terminus of the High Line to Brookfield’s Manhattan West public space.

The budget, which includes significant funding for affordable housing and school construction, also includes a provision that New York uses “Buy American” principles in manufacturing of renewable components and requires prevailing wage for construction labor peace agreements for operations and manufacturing.

While the budget includes aid to renters, landlords and middle-class tax cuts, it also comes with revenue raisers targeted to the wealthy.

The Enacted Budget implements a surcharge on high earners through Tax Year 2027 that sets a top rate of 10.9% for all filers earning more than $25 million. The surcharge raises $2.8 billion in FY 2022, rising to $3.3 billion in FY 2023.

It also implements a surcharge on corporate tax rate that increases the business income tax rate from 6.5% to 7.25% for three years through tax year 2023 for taxpayers with business income greater than $5 million. It also increases the capital base method of liability estimation to 0.1875% from the 0.025% rate in effect last year. These changes raise $750 million in FY 2022 and $1 billion in FY 2023.

$100M Filtration Plant in Westchester On Path to Begin Construction in 2022

By JOHN JORDAN – April 26, 2021

HARRISON, NY—A recent ruling by the New York State Department of Environmental Conservation has officials with the Westchester Joint Water Works hopeful that it can break ground in early 2022 on a much-delayed $100-million water filtration plant, which will be built on 13+ acres at Westchester County Airport here.

The New York State Department of Environmental Conservation has designated Westchester Joint Water Works, a nonprofit public benefit corporation, as “lead agency” in the SEQRA process for the construction of the 30-million-gallon-per-day (mpg) water filtration plant. “This designation of WJWW to serve as lead agency is based on my findings that WJWW, as project sponsor, has broader jurisdiction than the [Harrison] Planning Board to investigate the environmental impacts,” State DEC Commissioner Basil Seggos wrote in his decision on March 10.

The new filtration plant is necessary because both the New York State Department of Health and U.S. EPA have ordered WJWW to provide filtration for its raw water source at Rye Lake to comply with surface water treatment requirements and control harmful levels of disinfection by-products, including HAA5 (haloacetic acids). Long-term exposure to high levels of HAA5 has been

A map of the proposed site for the new water filtration plant on the grounds of Westchester County Airport in Harrison, NY.

linked to an increased risk for cancer, although WJWW officials note that theconcentrations of HAA5 detected in WJWW’s water system does not constitute an immediate health hazard.

“Westchester Joint Water Works understands the urgency to construct a water filtration plant to protect the health and safety of the approximately 120,000 Westchester County residents that we serve,” said Paul Kutzy, WJWW Manager. “We will ensure that a thorough environmental review is completed for the filtration plant in collaboration with an expert team of environmental engineers, scientists, planners, architects, government agencies and legal specialists.”

He added, “The recent NYSDEC ruling clears the way, without further delay, for WJWW to move forward with the SEQR process and towards construction of the water filtration plant to protect the health and safety of the approximately 120,000 Westchester County residents that we serve.” Mr. Kutzy told CONSTRUCTION NEWS that WJWW hopes construction can begin on the new water filtration plant in early 2022.

The WJWW is under the gun and is now mandated by both New York State and the U.S. Environmental Protection Agency to build the plant. WJWW is currently facing state fines accruing at $13,750 a day that has thus far accrued to a total of $60 million, and risks federal fines of an additional $35,000 per day for noncompliance.

The original project was delayed due to litigation. WJWW sought to build a water filtration plant when the need for one was identified in the early 1990s. In 2004 when the goal could not be accomplished to the satisfaction of New York State, WJWW was ordered by the court to construct a plant. Following the issuance of the court’s order, WJWW eventually decided the construction of a water filtration plant was the best option and purchased approximately 13.4 acres of land in the Town of Harrison on which to build. It also took steps to comply with disinfection treatment requirements, including the use of new and modified water tanks. WJWW completed the water filtration project design in a timely manner and received approvals from the New York State Department of Health. Shovels hit the ground in 2006, but litigation and permitting issues blocked the project, for which the Town/Village of Harrison Planning Board was the Lead Agency.

Site preparation at the original project location began on Aug. 29, 2006, but all construction was halted on Sept. 8, 2006, when, faced with challenge by local parties, the Planning Board rescinded its original approvals and retracted its “negative declaration” determination under SEQRA. The Planning Board then undertook the role of Lead Agency under SEQRA, made a “positive determination” and required preparation of a full Environmental Impact Statement. WJWW issued a final EIS in July 2008. The final EIS was never formally adopted by the Planning Board. Without completion of the SEQRA review process, no further action could be taken to complete the filtration plant, WJWW officials stated.

The revised plan now being pursued by WJWW is a new site closer to the Rye Lake Water supply and its existing infrastructure that it would acquire from Westchester County in what would basically be a land swap of same sized parcels. The initial site, although nearby, is located in a residential zone. The site of the current proposed plant is on 13.4 acres of land at the Westchester County Airport that is zoned for non-residential use.

WJWW is working with the county toward a purchase/sale transaction between the county and WJWW involving an equal exchange of the two parcels.

“This is the most effective method of protection for WJWW to provide safe, clean drinking water,” Mr. Kutzy said. “The plant will not only provide a current solution, but will ensure WJWW’s water supply is well-positioned to meet future demands.”

WJWW has completed a project feasibility study and a detailed project design is underway. Mr. Kutzy said that WJWW is looking to enter into a Project Labor Agreement (PLA) for the project with a single general contractor encompassing all the trades.

“The PLA is expected to provide more efficiencies in the contract procurement process as well as help WJWW save money, and ensure a timely completion of the water filtration plant,” he said. “The PLA is a win-win in that the project will also create hundreds of well-paying construction jobs with benefits.”

Some of the details of the project according to its preliminary design call for a ground-up construction of a three-floor building totaling approximately 80,000 square feet. The building will consist of primarily concrete, masonry and steel and would be built on a site totaling between three to five acres that would include parking, access and storm water controls. The remainder of the site would be left undisturbed, Mr. Kutzy noted.

The WJWW is a nonprofit public benefit corporation formed in 1927 by its three-member municipalities: the Village of Mamaroneck, the Town of Mamaroneck, and the Town/Village of Harrison pursuant to the provisions of Chapter 654, Laws of 1927, State of New York to acquire, construct and provide a joint water works. WJWW supplies water to its member municipalities and to portions of the cities of Rye and New Rochelle, serving 59,629 consumers through 14,682 service connections. WJWW also supplies water on a wholesale basis to the Village of Larchmont and Suez Water Westchester, which supplies water to the City of Rye, Village of Rye Brook and Village of Port Chester, which collectively represent approximately another 60,000 consumers.

To educate the public about the details of the water filtration plant, WJWW has launched a website—wjwwfiltration.org—that includes information about the project and the SEQRA process.

Westchester Supports White House Infrastructure Plan to Fund MTA Penn Station Access, Dam Repair, Yonkers Sewer Plant

WHITE PLAINS—Westchester County Executive George Latimer released the county’s top federal legislative requests on April 12 and tops on the list is the repeal of the State and Local Tax (SALT) cap.

The legislative priorities list sent to the Westchester Congressional delegation also included support for President Biden’s proposed infrastructure spending plan and a list of infrastructure-oriented projects that could be funded by the federal government.

The SALT deduction cap of $10,000 results in double taxation and raised taxes on thousands of middle-class families in Westchester who depended on that deduction. County officials said that the county strongly supports the repeal of the SALT tax cap. The SALT deduction cap was a major source of tax fairness for high-taxed and donor states like New York. Prior to 2017, 70% of

A map of the planned Penn Station Access project.

Westchester’s middle-income families (defined as families making less than$200,000 per year) itemized their federal tax deductions and had an average of $36,263 in SALT deductions.

The legislative priorities were compiled by the Westchester County Department of Intergovernmental Relations under Mr. Latimer’s leadership. Department of Intergovernmental Relations Director Steve Bass led the team along with Deputy Director Ellen Hendrickx and Intergovernmental Relations Aide Kyle McIntyre.

“I want to thank the Intergovernmental Affairs team for their tireless work on making sure that the voices of county residents are heard on the federal level,” Westchester County Executive Latimer said. “There is much we can do at the county level of government, but we do need the federal government to help us on many issues. I applaud the work of our federal delegation thus far, and look forward to continued collaboration for the betterment of Westchester County moving forward.”

Among the priorities, Westchester is urging its federal Congressional delegation that any infrastructure bill include funding for a host of major projects:

Penn Station Access

The Penn Station Access project will have significant benefits for Westchester commuters who travel to the West Side, saving valuable time from their daily commutes. The opening of that project will divert some LIRR trains to Grand Central, thereby opening up slots at Penn Station for Metro-North service. Once completed, Metro-North and the LIRR commuters will have access to both the West Side and the East Side of Manhattan. The project includes the addition of four new stations in the Bronx on the New Haven Line: Co-op City, Morris Park, Parkchester/Van Nest, and Hunts Point.

Lake Isle Dam Repair

At the moment, there is no municipality claiming responsibility for Eastchester’s segment of the dam, the county noted. With costs ranging from $6 million to $20 million, Westchester County is asking, on behalf of the surrounding municipalities, for federal assistance in creating a system to pay for this repair which will have to be processed and managed by the surrounding municipalities, and would include preparing a plan to renovate the dam, and providing the proper allocation of federal funds to go toward the project’s ultimate completion.

Yonkers Wastewater Treatment Plant

Westchester County requests $69.1 million in budgeted federal grants to address long-term infrastructural repairs to the plant’s odor insulation.

Environmental Protection and Clean Water

The county is asking its Congressional representatives to reinstate all EPA and environmental funds stripped away by the last administration. Despite strong bipartisan backing, the Drinking Water Infrastructure Act of 2020 failed to pass in the 116th Congress.

If passed in this session, both the Clean Water State Revolving Fund and the Water Infrastructure Finance and Innovation Act will be reauthorized. As this federal funding provides critical support for water and sewer projects, many of which are long overdue, Westchester County stated that it strongly urges the re-introduction and swift passage of S. 3590 and a sufficient allocation of associated federal funding.

The county is also seeking funding for the PFAS/PFO remediation at the Westchester County Airport through the National Defense Authorization Act.

In 2018, the county reinstated the groundwater-testing program at the airport that had been discontinued during the prior administration. Based on the sampling and ground water flow patterns, the county, in cooperation with the New York State Department of Environmental Conservation, is developing a remediation plan for the airport. The county is also working closely with the New York City Department of Environmental Protection due to the proximity of the airport to the reservoir system. The county is seeking financial support from the U.S. Dept. of Defense to assist with remediation costs due to their responsibility for the contamination.

Other federal priorities include having the US DOT implement a host of regulations to prevent bridge strikes on local highways. In Westchester County there were 329 bridge strikes on county and state parkways between 2017 and 2020.

The county is also asking federal lawmakers to develop a safe solution for high level radioactive waste transportation and disposal at Indian Point Energy Center in Buchanan, support for the net neutrality and help fund the development of affordable broadband access, the domestic violence prevention and services efforts, opioid abuse prevention, treatment and enforcement and for the county’s flood hazard mapping and risk analysis program.

Among some of its top federal legislative priorities rejecting any cuts to Medicaid and any shift of costs from the federal to state government and the opposition of the block granting and/or privatization of programs such as Medicaid, Medicare, and Social Security that would result in people losing benefits. Westchester also supports funding for mental health services, and requiring adequate coverage for mental health and substance abuse prevention and treatment. The county noted that COVID-19 has greatly exacerbated the mental health crisis in Westchester and it supports community-based mental health services for youth and young adults.

Westchester County also supports full funding for the HUD Section 8 Program as well as fully funding CDBG, HOME, and ESG programs. County officials noted that within two years of its reinstatement by the Latimer administration, the Westchester County Urban Consortium has grown to 31 communities and is preparing to accept a new slate of infrastructural projects. These communities, along with four entitled cities, currently rely on CDBG funds for these projects and the benefits they provide.

Attorney's Column

Appellate Court Denies Petition to Cancel Mechanic’s Liens Without Address of Lienor

By THOMAS H. WELBY, P.E., ESQ. and GREGORY J. SPAUN, ESQ.

Thomas H. Welby, P.E., ESQ. & Gregory J. Spaun, ESQ.

We have written about how powerful a tool a mechanic’s lien can be for a contractor to secure its payment, and how that tool comes with certain responsibilities (such as providing a verified itemized statement of lien upon proper demand, and being accurate in the assertions made in the lien, among others). Another responsibility is to properly set forth the information required by Sec. 9 of New York’s Lien Law, which sets forth the information that is to be included in the Notice of Lien. However, as a court recently reminded us in the case of Matter of Malbro Construction Services v Straightedge Builders, Inc., such requirement is not a trap for the unwary, and Sec. 9 should be interpreted liberally in accordance with the purpose of the Lien Law—which is to protect the beneficial interests of lienors.

 

Background

Prior to 2017, petitioner Malbro Construction Services, Inc., entered into several contracts with homeowners affected by Hurricane Sandy to perform remedial work to their homes under the auspices of the New York City Build it Back program. Malbro retained the services of Straightedge Builders, Inc., as one of its subcontractors for the required work.

In August of 2017, Straightedge filed mechanic’s liens on five of the properties on which it worked as a subcontractor to Malbro. On the form Notice of Lien, the address used for Straightedge was clearly that of the attorney it used to file the liens, and not the “the business address of such firm, or corporation” that is the lienor, as is required by Sec. 9 of the Lien Law. Malbro commenced a special proceeding to cancel the liens based on what it characterized as the facial defect, arguing that without the lienor’s actual address, it could not serve a Demand to Foreclose under Sec. 59 of the Lien Law (which requires either personal service on the lienor, or service upon someone of suitable age and discretion at the lienor’s last known address). Straightedge opposed the motion, arguing that the listing of the attorney’s address was proper and, in any event, there was no prejudice because Malbro was aware of Straightedge’s address because it was on both the contract and every check sent by Malbro to Straightedge.

Decision

The court denied Malbro’s motion, holding simply that “the alleged defects in the liens [are not] fatal.” Malbro appealed, and the motion court’s order was affirmed. In doing so, the appellate court cited well settled case law that “in determining the validity of a notice of lien, the requirements of the Lien Law are ‘to be construed liberally to secure the beneficial interests and purposes thereof. A substantial compliance with its several provisions shall be sufficient for the validity of a lien and to give jurisdiction to the courts to enforce the same.’” In concluding, the appellate court held that Straightedge’s Notices of Lien complied substantially with the requirements of Sec. 9.

Comment

As we saw here, courts can save a mechanic’s lien with an exercise of discretion in determining that a defect was not prejudicial and the notice nevertheless “substantially complied” with the requirements of Sec. 9 of the Lien Law. However, the better course of action would be to review the requirements of Sec. 9 and, using the statute as a checklist, insert accurate information in response to all seven criteria set forth. While the common sense “it’s the address where you mailed the checks” argument ultimately prevailed here, a lot of time, effort and money could have been saved for the simple want of double checking the information on the lien form as it was being completed. Further, since this holding was made, essentially, as an exercise of the court’s discretion, there is no guarantee that another judge in another courtroom would exercise his or her discretion in the same manner.

About the author: Thomas H. Welby, an attorney and licensed professional engineer, is General Counsel to the Construction Industry Council of Westchester & Hudson Valley, Inc., and is the Founder of and Senior Counsel to the law firm of Welby, Brady & Greenblatt, LLP, with offices located throughout the Tri-State/Greater Metropolitan Region. Gregory J. Spaun, an attorney and a partner with the firm, co-authors this series with Mr. Welby.

Economic Outlook

Economists See COVID Impacts Easing

By MICHAEL PATON

Michael Paton

After an unprecedented economic slowdown caused by the COVID-19 pandemic and associated public health restrictions, the U.S. economy has enjoyed a partial rebound through the second half of 2020. With the passage of the $1.9-trillion COVID aid bill, most economists believe that the economy is set to respond even further.

Moreover, widespread inoculations against COVID-19 should generate faster growth in the latter half of 2021, allowing the economy to accelerate even further. The federal legislation, just passed, contains a substantial (although temporary) expansion of health-care subsidies, extended unemployment benefits, direct checks to American families, increases in child tax credits and budgetary relief to states and localities. Critics of the legislation believe that the size of the bill is too large and may cause increased inflation. It will certainly increase the cumulative federal debt.

With this bill now passed, the administration is gearing up for its next big legislative priority: a multi-trillion-dollar infrastructure package. Although most of the details are not yet available, a sweeping infrastructure bill would include billions of dollars for updating highways, bridges and water and sewer lines, while also expanding broadband networks into rural areas. Spending on infrastructure—and the jobs created by big-ticket projects—enjoys widespread public support. Some Republicans have indicated that they would support a narrower bill focused on roads and broadband. But, they have tempered that support by voicing concerns over how a package will be paid for. During the election campaign, Mr. Biden suggested it could be funded by increasing taxes on corporations and wealthy individuals. There will clearly be opposition to this program as too expensive, once again adding to the nation’s growing debt if passed.

More locally, New York City’s labor markets have been improving. By the end of 2020, about one-third of the jobs lost (or approximately 900,000 jobs) have been recovered and more appear on the way as we moved into 2021. According to the New York City Office of Management and Budget, total employment in the city is expected to rebound 4.6% in 2021, accelerate to 5.8% in 2022, and then slow to 1.4% by the end of the forecast horizon in 2025. However, employment is projected to remain below the prior 2019 peak of about 4.7 million until 2023—lagging the national recovery.

The city’s housing market slowed considerably in 2020. New York City Department of Finance data indicate that through the first three quarters of 2020, housing sales totaled 24,700—a 30% reduction from the same period of the prior year. All property types suffered a downturn, with sales of condos, co-ops, and single-family homes each falling by over 25%. As the pandemic intensified, large numbers of people fled the city for residential space in the suburbs, where housing sales were robust. The City’s Office of Management and Budget forecasts total sales volume to decline by about 24% for the full year of 2020 and, due to low mortgage rates and pent-up demand, rebound 17.3% in 2021.

Average prices declined four percent through the first three quarters of 2020 from the prior year due to weakness in the luxury market, with condo prices declining 12%. Controlling for price variations due to compositional shifts, repeat-sales index data from StreetEasy—based on activity in Manhattan, Queens and Brooklyn—reveal that prices fell one percent year-to-date (YTD) through November from the prior year.

Douglas Elliman Real Estate reported that for full-year 2020, the average sales price in Manhattan was about one percent higher than the prior year while the sales volume 30% lower. The increase in prices is likely biased upward as a result of the introduction of higher transfer tax on high-valued properties in 2019. In addition, a small share of high-value condo and single-family homes also skewed the average price upward (for example, 10 sales at 220 Central Park South that exceeded $30 million each). The rental market has continued to weaken due to soft demand. The StreetEasy repeat-rent index, also based on activity in Manhattan, Queens and Brooklyn, was down 1.9% through November 2020 relative to the same period in the prior year. The impact was greatest in Manhattan, where rents were down 3.5%.

According to New York City government economists, the predominant forecast risk continues to be the COVID-19 pandemic and the pace of the current efforts to inoculate the U.S. population against the virus. The course of the economic recovery is inexorably linked to the direction of the pandemic and the third wave of infections reveals the inherent difficulty of limiting the spread of the highly contagious disease. The enormous loss of lives, jobs and income, and the widespread disruption of human activity, will likely result in long-lasting changes in consumer behavior and business practices, requiring an indeterminate period of adjustment and recovery.

About the author: Michael J. Paton is a portfolio manager at Tocqueville Asset Management L.P. He joined Tocqueville in 2004. He manages balanced portfolios and is a member of the fixed-income team. He can be reached at (212) 698-0800 or by email at MPaton@tocqueville.com.

Orange County IDA Board of Directors Fires Managing Director, CEO Resigns

By JOHN JORDAN – April 26, 2021

NEW WINDSOR, NY—At a special meeting of the newly constituted Board of Directors of the Orange County Industrial Development Agency on March 30, the IDA Board voted to terminate the contracts of the managing director of the IDA and its Accelerator programs. On April 5, the chief executive officer of the IDA submitted her resignation.

The Orange County Industrial Development Agency is currently operating under a cloud as its operations are being investigated by the Orange County District Attorney, in partnership with the New York State Comptroller’s Office, and the New Windsor Police Department. In early March, the Orange County Legislature, frustrated over attempts to

secure financial documents from the Orange County Industrial Development Agency, voted to remove the entire seven-member IDA Board of Directors.

The newly constituted IDA Board at its March 30 special meeting voted 4-1 with one abstention to terminate contracts for managing director services with Vincent Cozzolino (Orange County IDA Managing Director) and Galileo Technology Group of Kingston on a host of contracts with the agency and its affiliates. According to the resolution, approved by the IDA Board, Cozzolino/Galileo Technology Group Inc. was paid an annual salary of $70,000 a year as managing director of the Orange County Industrial Development Agency.

The IDA also terminated contracts for managing director services that paid Galileo Technology Group: $80,000 for the Orange County Business Accelerator; $72,000 for the Middletown Accelerator campus; $72,000 for the Newburgh and New Windsor Accelerator campuses; $72,000 for the Warwick Accelerator campus; $72,000 for the Highland Falls Accelerator campus and a $125-an-hour fee not to exceed $300,000 for services relating to the Accelerator’s Without Walls program. Not including fees for the Without Walls program, Galileo Technology Group earned a total of $438,000 in annual payments for managing director services for the IDA and the various Accelerator locations.

The IDA Board also approved a resolution by a 5-1 vote to have Orange County Attorney Langdon Chapman coordinate legal services of the various legal counsels engaged by the IDA. The Board, by a 6-0 vote, approved having Orange County Economic Development Director Bill Fioravanti handle economic development responsibilities at the IDA.

On April 5, Orange County IDA Chief Executive Officer Laurie Villasuso resigned from her post after nearly a decade with the organization.

Ms. Villasuso in a statement released to CONSTRUCTION NEWS, stated, “I have enjoyed my nearly 10 years in service to the IDA, and am deeply proud of the work I have done for the economic development of Orange County. However, in light of the recent change of direction at the IDA, and uncertainty surrounding my role within the present makeup of the organization, I have decided to resign from my position as the CEO of the Orange County IDA.”

Justin Rodriguez, spokesman for Orange County Executive Steve Neuhaus, said of the IDA actions in late March, “County staff will serve the IDA on a temporary basis at the request of the new IDA Board. The IDA will work to be a strong and vital partner in support of creating quality jobs for Orange County while having an efficiently run operation. Orange County is ideally situated for companies that want a high quality workforce, great transportation network and far lower costs than the immediate metropolitan area.”

In early March, the Orange County Legislature, frustrated over attempts to secure financial documents from the Orange County Industrial Development Agency, voted to remove the entire seven-member IDA Board of Directors.

The new IDA Board, consists of Dan Bloomer, Director of Operations for Orange County; Mike Torelli, Business Development Director, New York Stewart International Airport; County Legislator Paul Ruszkiewicz; John Douthit, president, Burke Catholic High School; Town of Woodbury Board Member Tyler Etzel; Leslie Pierri, retired New York City Police Dept.; and Orange County Community College Professor Vincent Odock.

Orange County Executive Neuhaus, New York State Senator James Skoufis, who serves as the chairman of the Senate Investigations Committee, and State Senator Michael Martucci released a joint statement concerning the legislature’s action removing the Orange County IDA Board. “The Orange County IDA needs to explain themselves to taxpayers. Shutting down and lawyering up because of a pending investigation tells us there is a big problem,” they stated. “We applaud the Orange County District Attorney for launching an investigation and, if anyone at the IDA is found to have acted inappropriately, taxpayers must be made whole financially.”

The IDA Board at its March 30 session elected Mr. Torelli as its chairman; Mr. Douthit as vice chairman; Mr. Etzel as second vice chairman; Ms. Pierri as secretary and Mr. Odock as assistant secretary.

It’s Time to Apply for College Grants

CAI to Award Up to $50K In Scholarships in 2021

TARRYTOWN, NY – A leading educational advocacy group for the building trade, the Construction Advancement Institute, announced it will start accepting applications for tuition support for undergraduate and graduate studies by students whose families are affiliated with Building Contractors Association of Westchester & Mid-Hudson, Inc., as well as four building trade local unions in the region.

Qualifying students should have their sights set or be enrolled to study Engineering, Architecture, Construction Technology, Construction Management or related subjects as determined by the selection committee.

The announcement was made by BCA Chairman Fred Sciliano, vice president of LeChase Construction Services, LLC, of Armonk, NY. Up to 10 scholarship awards of $5,000 each will be awarded, Mr. Sciliano said.

To be eligible for a college grant, students should be relatives to employees of companies that are members of the BCA, or whose relatives are employees of companies that contribute to the Industry Advancement Program of the BCA.

The children or relatives of affiliated building union locals, including Carpenters Local 279, International Union of Operating Engineers Local 137, Building Construction Laborers Local 235, and Bricklayers Local 1 (formerly Local 5) are also eligible to apply for CAI scholarship aid.

The digital application is now available at www.caiwestchester.org.   For additional information, contact Laurel Brunelle at laurel@bcanys.org or (914) 631-1033 (office) or 914-563-9165 (cell).

The deadline to submit a grant application is June 18, 2021.

Scroll to Top