Dive Brief:
- A contentious relationship between Jared Kushner and Jersey City, New Jersey, officials, could mean the end to plans made by President Donald Trump's son-in-law for a 66-story, dual-tower residential project there, according to the Associated Press.
- The Kushner camp reportedly claimed that Steve Fulop, the mayor of Jersey City and a Democrat, is trying to kill the project because of Kushner's ties to the White House. In addition, the project lost a major tenant, could not gain traction with financiers in China on a $150 million loan deal and took another hit when Fulop came out publicly against a potential $30 million city tax-break package, which was subsequently withdrawn.
- The city maintains that the Kushner Cos. and its partner KABR Group had made changes to the original plans, missed critical construction deadlines and neglected a $40,000 city fee, actions which have raised doubts about the venture's ability to follow through on the project.
Dive Insight:
Political connections can either help or hinder construction projects. It has been suggested that Trump's vigorous opposition to funding the $13 billion New York-New Jersey Hudson River train tunnel can be chalked up to his strained relationship with Senate Minority Leader Chuck Schumer (D-NY). The governors of New York and New Jersey, along with the Port Authority of New York and New Jersey, claim they cut a deal with the administration of former President Barack Obama to split the cost of building a replacement tunnel, but U.S. Department of Transportation officials deny there was ever such an arrangement, which the agency spelled out in a letter to project officials late last year in response to a question about funding.
And the politics of construction labor can be just as impactful. A recent article in The New York Times called attention to the fact that the cost of subway construction in the city is higher than anywhere else in the world and laid much of the responsibility for that at the feet of some unions that bill at exorbitant union wage rates, as well as politically-connected consultants that are able to price their services at a premium because of those relationships.
Above ground, tensions are also building between developers and trade unions over work practices and rates, made even more contentious by the inroads non-union contractors have been making in New York City. Taking the battle to court, Related Cos., the developer of the $25 billion Hudson Yards, has filed a lawsuit against the Greater Trades Council of New York claiming that the council wanted to develop a new project labor agreement that included the same unions that allegedly bilked the company out of $100 million on a previous phase of construction at Hudson Yards. Since then, the Trades Council has accused the developer of anti-union activities and filed complaints with the National Labor Relations Board.
