"Donate Your Steel!" Village Voice 12/22/6

Donate Your Steel!
By Jarrett Murphy | December 22, 2006

Like a juggler who's finally put all his balls in the air, New York City's development rage hit full-speed this week with the approval of the Atlantic Yards project. The massive arena and residential complex joins Yankee Stadium, the new Mets stadium, all the towers at Ground Zero, and the hundreds of lesser-known construction projects that have tower cranes working in midtown, the Brooklyn and Queens waterfront, and elsewhere. Last night, in a quiet corner of the city, there were hints of a problem that could affect all these projects: a severe increase in cost in the materials to build them.

The battle over whether to build a filtration plant in the southeast section of Van Cortlandt Park in the north Bronx roared for more than a decade before the city decided to forego an alternative site in Westchester and plop the plant under a golf course near the elevated 4 train. (Full disclosure: I live about half a mile from the site. But I hate golf.) Work on the plant—which the city needs in order to comply with federal standards&3151; has been under way for about two years. For several months, community members have been unhappy about the small number of on-site jobs that local residents have received and delays in measures to reduce truck pollution. The amount of park rehabilitation around the borough—the payoff the borough got for taking the plant—has been scaled back. Recently, another worry cropped up: The project's price-tag has soared from the $992 million estimated in 2003 to $1.896 billion now. And most of the contracts still need to be awarded.

The community is pissed about the cost overruns because the city's rationale for picking the Bronx site was that it'd be cheaper than the site in Westchester. The DEP said last night that it had used a generic design when projecting the costs, rather than a specific one that accounted for little difficulties at the site like, say, blasting through 90 feet of bedrock. But the biggest reason for the doubling in price is what's ultimately going to go into that hole.

If you think your Christmas shopping is making too big a dent in your wallet, imagine trying to buy copper (prices up 133 percent over three years), steel rebar (up 48 percent) or concrete, iron pipe, and stainless steel, all up by more than a third. Overall, the DEP says it's been hit with inflation of 35 percent over the past three years. And it's predicting price hikes of 8 percent a year over the next three. If inflation is much worse than that, both the city and the contractors will have to absorb the blow. The initial DEP estimate assumed inflation of 2.75 percent a year. That was, um, wrong.

Local critics of the plan take issue with how the DEP is crunching its numbers. But the rise in costs is undeniable, and that has potential impact on all those other projects around the city. The fact that all those projects (the stadiums, Ratnerland, and Ground Zero) will be going on at basically the same time means that each will increase the costs for every other one, because there are only so many laborers around, and because already scarce construction material will be even harder to come by. Whether those costs hurt the developers or the city depends on how each deal is structured. But if any community goodies are contingent on developers' profits, and inflation was under-estimated when everything got costed out, that pricy copper pipe and rebar might take a bite.

So, please, conserve steel and concrete this holiday season: No unnecessary building!

Wait, is there such a thing?

Posted in Bricks & Mortar