- The Washington Times - Friday, February 13, 2009

NEW YORK

Blue plywood covers a block on all sides where a 1-million-square-foot skyscraper was to rise in Midtown Manhattan. Orange and white barriers push pedestrians off the sidewalk into the street. Workers left the site last week.

In Lower Manhattan, construction has been halted on two office-tower conversions that had been financed by bankrupt Lehman Brothers Holdings Inc., including a planned luxury condo tower and a Robert De Niro-backed Nobu restaurant. A similar fate has befallen a planned 57-story boxy glass tower a few blocks away in Tribeca.

The half-built sites are powerful examples of how the global economic meltdown has infected the New York construction industry, wiping out thousands of jobs and cutting off billions of dollars in funding. As a result, boarded, empty sites are surfacing across the city as developers lose financing midway through projects.

Analysts say the interrupted plans for the city skyline could knock down real estate values, create nuisances for pedestrians and indefinitely depress thriving neighborhoods.

“It’s not good for the psyche,” said Catherine McVay Hughes, a downtown community board leader. “Instead of having a vibrant corner, now we have a hole in the ground.”

A New York City contractors group has tracked more than 100 projects in the city either stalled or canceled since last fall’s credit crisis dried up developers’ financing. The city’s Department of Buildings said more than 30 construction sites have been idled during recent inspections, and “we suspect that there are more,” spokeswoman Kate Lindquist said.

One of the biggest is Atlantic Yards in Brooklyn, a 22-acre development where a new arena for the New Jersey Nets and up to 16 towers are planned. Construction activity stopped in December and won’t resume until a lawsuit filed by residents is resolved. The developer, Forest City Ratner Cos., has delayed closing on a deal to purchase all the land until enough financing is available for the $4 billion project.

Boston Properties last week suspended construction on a $980 million office tower just south of Columbus Circle in Manhattan because a law firm canceled plans to lease space there, “thereby rendering the project economically infeasible in today’s environment.”

The normally busy site was boarded up and idle this week, although traffic barriers still surrounded it.

Developer Kent Swig suspended work on converting office towers into condominiums, including the luxury hotel and restaurant with Mr. De Niro, after his main lender, Lehman Brothers, filed for bankruptcy. Lehman has sought to foreclose on the project, now shrouded in construction netting.

The foundation was completed on an 830-foot tower of stacked glass cubes planned by the Alexico Group, next to a New York University building in Tribeca. But work stopped more than a month ago on the $600 million project. In the Bronx, financing problems suspended a $55 million parking garage for the New York Botanical Garden.

When construction is suspended on projects in progress, contractors have to secure the sites, often by filling half-built foundations with sand to ensure they remain stable, along with boarding up the sites and leaving locked trailers and idle equipment.

“There are a number of jobs that have just had the foundation built, where they’re filling the hole,” said Louis Coletti, head of the Building Trades Employers Association.

It’s unclear how long an unfinished site can legally stand. The Department of Buildings issues permits that typically are active for six months to a year, and expire when contractors’ insurance for the property does. But permits can be extended indefinitely if developers cover the property.

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