Atlantic Yards SHOP

Rendering: SHoP Architects

There’s trouble at mega-project Atlantic Yards, recently renamed Pacific Park, where construction on the first residential tower has stopped after a dispute over unexpected costs.

Skanska USA Building, the contractor for modular tower B2, halted the assembly of the building after a conflict with developer Forest City Ratner over added costs, Crain’s and the Wall Street Journal reported. Located beside the Barclays Center at 461 Dean Street on the corner of Flatbush Avenue, 32-story B2 was originally slated for completion by the end of this year. When finished, the structure will be the tallest modular building in the world.

Richard Kennedy, co-chief operating officer for Skanska USA, told Crain’s that the firm issued a stop-work notice earlier this week, because of issues with schedules and costs: “We have run into some significant commercial disputes that we have been working hard to resolve, but have been unable to do so.”

Workers at FCS Modular, the company making the units in the factory, received a notice Wednesday that they were being furloughed until further notice. If an agreement is not reached, the workers would be laid off, starting September 23rd.

The extra costs are coming from the fabrication and stacking of the modules, trailer-size blocks that are manufactured off-site in a Brooklyn Navy Yard factory and then installed, Lego-style, on the tower. The cost overruns number in the tens of millions of dollars, a source told the Wall Street Journal.

Both sides are casting blame on the other; Skanska claims that the manufacturing delays are a result of the modules’ faulty design, which would mean that Forest City is responsible for the added costs.

The development firm argues the the extra costs were caused by Skanska’s own “failures and missteps as the construction manager for B2 modular,” Forest City spokesperson Jonathan Rosen said in an email to Crain’s. “Skanska entered into a construction management agreement based on a fixed price which they guaranteed. Now faced with overruns, they are employing a typical strategy to try to weasel out of that obligation” to absorb the costs.

Back in 2003, Forest City first announced the enormous project, which would encompass 16 towers and the current Barclays Center over 22 acres in Brooklyn. Earlier this month, the developer swapped out the original “Atlantic Yards” name for the new “Pacific Park” moniker. This summer, Forest City also partnered up with Greenland USA, a subsidiary of Shanghai-based Greenland Holding Group, to build out the rest of the $4.9 billion project, which will contain a total of 6,430 residential units over 6 million square feet, Curbed reported. The development will also have 247,000 square feet of retail and at least 336,000 square feet of commercial space. Forest City must deliver 2,250 units of affordable housing by 2025, or face a $5 million fine. Forest City and Greenland say that Pacific Park will be finished by 2025.

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