Dive Brief:
- New York City developer Harry Macklowe has brought in a new general contractor to take over for Gilbane on the $1.5 billion One Wall Street project, according to The Real Deal.
- Neither Gilbane nor Macklowe gave a specific reason for the decision, but they issued a joint statement calling the work Gilbane has completed at the project in the last year "safe and high quality construction" and stating that the two had reached a "logical separation point."
- Manhattan-based JT Magen & Company will take over as general contractor for the condominium tower. Gilbane and JT Magen are both listed in The Real Deal's latest top-20 ranking of New York City general contractors.
Dive Insight:
Gilbane has been on the radar of the city's construction trade unions since it began performing work on significant city projects using nonunion labor, but there is no indication that had anything to do with Gilbane leaving the project. JT Magen told The Real Deal that it wasn't sure if it would use 100% union labor on the project like it has on others.
Gilbane's use of open-shop subcontractors on the One Wall Street project was the impetus for a major union protest last year, which saw workers march from Wall Street to Gilbane's office with giant inflatable rats — a nod to the supposed character of companies that hire nonunion workers.
At the time, William Gilbane III told The Wall Street Journal that some costly union work rules can increase project costs. Nevertheless, the company said it hires the best workers for the job, union or nonunion.
Gilbane's relationship with organized labor is reflective of other construction companies in New York and elsewhere that have reduced reliance on union workers. Major contractors in the city like AECOM Tishman and Turner have declined to renew union contracts, indicating they’re planning to use less expensive nonunion workers on future projects and that unions in the city are "losing their grip" on the private market, according to the Journal.
Union membership in 2015 was approximately half of what it was in 1983, according to the Bureau of Labor statistics, and the percentage of construction workers who are union members dropped 4% to 13.2% between 2002 and 2015.