Outlook 2017: The Future of Labor in Construction

ZETLIN & DE CHIARA LLP HOSTS THE FUTURE OF LABOR IN CONSTRUCTION

Industry leaders discuss balancing rising construction costs while maintaining a highly-skilled workforce for complex, urban projects.

Zetlin & De Chiara, LLP hosted a panel of New York City’s leading real estate owners and developers, builders and union professionals on Wednesday, May 31, 2017 at the Union League Club to examine the state of union labor in New York and its impact on building.  The breakfast forum was moderated by co-founding partner Michael De Chiara.

Presenters included: Richard T. Anderson, past president of the New York Building Congress; Jay Badame, AECOM Tishman; Sabrina L. Kanner, Brookfield Properties; Gary LaBarbera, Building and Construction Trades Council of Greater New York; Steve McInnis, the New York City District Council of Carpenters; Joseph G.  Mizzi, Sciame Construction; Charles F. Murphy, Turner Construction Company; and Edward V. Piccinich, SL Green Realty Corp.  

De Chiara guided the engaging discussion. “Organized labor is critical for the industry.   We need to make sure workers have the skills and training,  that they have the proper tools to get the job done right. It’s not good for New York and it’s not good for business when the safety and integrity of a complex projects is compromised by cutting corners, even for budgeting purposes. This conversation is about how to address the rising costs of construction in New York, while still maintaining a highly skilled, qualified work force.”

The Rising Costs of Construction and its Impact on Labor 
The panel debated New York’s high construction costs, the current industry trend towards open shop and the ways in which unionized trades are working to become more competitive.  As owners and developers seek for the “best value,” open shop labor has become an accepted business practice in New York in the residential construction sector, and is making inroads in the areas of commercial building and public works projects.

“There is no question that there is a segment of the marketplace, primarily in the residential market sector of the industry, (where) open shop work exists,” said Gary LaBarbera, President of the Building and Construction Trades Council of Greater New York.  “The trades are making significant adjustments for residential work. The trades are making substantive efforts to become more competitive and I believe a lot of people are unaware of these efforts.”

“We are having this conversation today because construction costs have risen 25% in the last five years, “ said Sabrina L. Kanner, Executive Vice President of Design & Construction for Brookfield Properties. “(T)he carpenters have done a great job in recognizing we have to stay competitive. That being said, we recognize training and experience in the workforce is critical because the buildings that we are building today are complex jobs.”

To remain competitive and address the rising costs of construction, the panel discussed how open shop and competition throughout the market is good for business, and the industry at large. “I think competition is good for business,” said Edward V. Piccinich, Executive Vice President of SL Green Realty Corp. “But at the end of the day, it is quality, skill and certainty of finishing the job that we can’t compromise on.  I have sat down with the trades and came to an agreement with both sides compromising.  Everyone has to give the best price, because we need to stay competitive.”

Complex Projects Require a Skilled Workforce 
Yet even as the gap between open and union shops is narrowing, unions still dominate when it comes to providing safety and skills training, particularly for complex construction.  In fact, by necessity, most open shops employ union members of the construction trades, where on some sites they make up as much as 80% of the workforce.

“At AECOM Tishman, it is music to our ears when the work is 100 percent union,” said Jay Badame, President and COO at AECOM Tishman. “But in the cases when our clients are looking for the best value and price, supply and demand in the market drives the ship. However, when you are concerned about your schedule, and the reliability and quality of the work, you make it work with the trades.   We are all coming to the table to deliver the best product for our clients.”

While concessions were spoken of during the panel, Joseph G. Mizzi, President and Chief Operating Officer of Sciame Construction noted that wages and benefits were important to maintaining and attracting a skilled workforce throughout the construction industry.  Mizzi said, “The least effective concession the trades can make are those that directly affect wages and benefits. We are not looking to take money out of hard working people’s pockets, but we have found a way to make it work and we are continuing to negotiate and deliver high-quality, complex projects. We can’t win the job through a Project Labor Agreement if we are not proud of the quality of work we are producing,”

Zetlin & De Chiara LLP provides sophisticated, innovative legal representation and business counsel to domestic and international, real estate owners, commercial and residential developers, architects and engineers on all aspects of complex construction projects and disputes.

PROPOSED DISCUSSION TOPICS

• Return on Investment of using organized labor
• Project labor agreements
• Sophisticated projects completed using skilled labor force
• Innovative projects requiring new skill sets and highly trained work force
• Risk mitigation strategies

This is a serious discussion on how real estate owners, developers and builders can create creative ways to work with unionized construction.

WHO SHOULD ATTEND

• Building Owners
• Developers
• Owner’s Representatives
• Construction Managers
• General Contractors
• Construction Consultants
• Architects, Engineers and Design Consultants

Program

Map & Direction