Failures and Rising Costs

Deutsche Bank Building Smoking by ekonon on Flickr.

The New York Times reported last week on two updates in the ongoing debacle that is the demolition of the former Deutsche Bank building near the World Trade Center site. The Occupational Safety and Health Administration has cited and plans to fine both Bovis Lend Lease (the general contractor leading the demolition) and the John Galt Corporation (the nebulous umbrella-group of sub-contractors working on decontamination and demolition) for a variety of safety violations that created that dangerous conditions that ended in the tragic fire and deaths of two firefighters last summer.

The 44 safety violations and almost half-million dollar fines are the result of exposing workers “to death or serious injury from falls, falling objects, electrocution and the inability to exit the tower swiftly and safely in the event of a fire.” The Times also quotes Joel Shufro, the executive director of the New York Committee for Occupational Safety and Health, who asserted, “clearly, there was a systematic failure of oversight.”

As the private contractors deal with the new citations and fines, the public agencies involved in the demolition and the City government have racked up more than $2 million in fees for legal services to defend their position and to fulfill requests from investigators. The City of New York acquired the services of Kramer Levin Naftalis & Frankel and will owe the firm almost $1.4 million (and growing). The Lower Manhattan Development Corporation, who’s got Dechert LLP, has spent about $900,000 so far.

The overall cost for the demolition of the building was originally estimated at $75 million in the summer 2005, but now it’s estimated that the complete cost factoring in the delays, fines, and new legal and deconstruction costs could raise that figure to $170 million in the end.