Volume 23, Number 9 | The Newspaper of Lower Manhattan | July 9 - 15, 2010
The building is almost down, but the trouble is only beginning
By Aline Reynolds
Turmoil is mounting as the old Deutsche Bank Building at 130 Liberty Street is slowly coming down, floor by floor.
The building, currently 12 stories tall, was once 41 floors high before it was badly damaged by the falling of the Twin Towers on 9/11. The Lower Manhattan Development Corporation hired construction manager Bovis Lend Lease to demolish it in 2005. Bovis was granted $81 million to decontaminate the building, which contained asbestos, and to take it down. The total cost of the project will amount to $300 million.
But Bovis feels that it’s now getting more work than it originally bargained for. The company filed a law suit to the State Supreme Court last month, demanding another $80 million, minimum, from L.M.D.C., the state agency that hired it, for completing the project. The complaint charges government regulators with “interference” that has made the demolition project more taxing and costly than previously anticipated. The cost of abatement, for example, which involved ridding the building of potentially hazardous materials, spiked to more than $155 million from $33.5 million. Consequently, Bovis is asking for “a reasonable markup for overhead and profit.”
But L.M.D.C. won’t have it. In a June 23 court filing, it decried Bovis for “engag[ing] in a pattern of behavior designed to hold the public hostage and to increase its payments and claimed lost profits from L.M.D.C.,” according to the memorandum, it also says that, in pleading financial stress, Bovis has delayed the project and threatened L.M.D.C. that it will walk off the job.
Community Board 1 chair and L.M.D.C. Board member Julie Menin said, “I think it’s really shocking. Bovis has been paid an enormous sum of money and now they’re claiming that they’re owed $80 million for additional fees when they have delayed the project by years. Bovis was the one who hire the unqualified contractor John Gault, who had never taken down a building before.”
The additional money requested by Bovis, L.M.D.C. contends, would otherwise be spent on under funded public programs in Lower Manhattan. L.M.D.C. said Bovis would owe over $100 million in payments and damages.
“Bovis Lend Lease is looking forward to the completion of the project and to resolving any open issues with L.M.D.C.,” said Bovis spokesperson Mary Costello. Costello declined to directly comment on the pending litigation case.
As the monetary legal battle festers, the city and Downtown community is debating the use of the site, which will be known as Tower 5.
Deputy Mayor Robert Lieber said at a L.M.D.C. board meeting last month that the site should be left alone for ten years, the estimated time it will take for the real estate and office markets to revive.
“Site 5 will undoubtedly be a prime development site in the heart of Lower Manhattan.,” said Andrew Brent, a spokesperson for the Mayor’s office. “We recognize it may take time before it’s developed, but no one is more optimistic about its promise or eager to see it put to use than we are.”
But the Port Authority, the site’s future owner, is against this proposition. Executive director Chris Ward envisages a mixed-use tower with offices, apartment units and retail shops, similar to the Time Warner Center. “We will keep our options open for the highest and best use of the Tower 5 while each of the other projects on the site continue to move forward,” said Steve Coleman, a Port Authority spokesperson, in a statement sent to the Downtown Express on Wednesday.
Menin is backing the Port Authority’s position, stressing the need for affordable housing in addition to office and retail space.
We want a mixed-use tower which would have residential, hotel and retail,” said Menin. “Part of the residential should be 80/20. I have spoken to people who would be interested in building that tower.”
She continued and said, “I was gratified to see that Chris Ward [of the Port Authority] did take my side on this and that is very important. Why on earth would we not develop a plan? The market is not for office space and we need more affordable housing in our community.”
— additional reporting
by John Bayles