The city addresses the woes of stalled projects by taking measures to ensure safety

In sharp contrast to the construction boom of only a few years ago, the current economic downturn has taken a toll on private construction in New York City. The New York City Department of Buildings' November 8, 2009 weekly report of "stalled construction sites" lists a total of 531 street addresses in the five boroughs, up from 402 reported on July 26, 2009 (http://www.nyc.gov/html/dob/html/guides/snapshot_report.shtml) Inactive or abandoned construction sites have raised health and safety concerns throughout the city. These often poorly maintained sites can be eyesores that also adversely affect neighboring property values, further exacerbating the financial woes of local residents. Where financing has completely dried up or the projects are embroiled in foreclosures or other litigation, the future of these projects can be uncertain. Extensive project delays can also adversely impact owners/developers/lenders once they are able to resume construction. While effective as of July 1, 2008, the new New York City Construction Codes did not become mandatory until July 1, 2009. Therefore, with limited exceptions, owners seeking permits between July 1, 2008 and July 1, 2009 had the option to design in accordance with either the 1968 Code or the more stringent requirements of the 2008 Code. However, once permits were issued, if the work did not commence within twelve months, or once started was halted for twelve months, the permit could not be reinstated without compliance with the 2008 Code. Enter Introductory Number 1015-A, passed by the City Council on October 14, and signed into law by Mayor Bloomberg on October 28. This measure amends Section 28-105.9 of the New York City Administrative Code to authorize the DOB Commissioner to establish a program that will enable the owners of stalled or abandoned construction sites to renew for up to four years an existing permit that might otherwise expire in exchange for documenting that certain measures are in place to ensure the safety of adjoining property owners and the public during the suspension period. While the DOB has yet to formalize program requirements, participants must notify the DOB when work is suspended and submit for the commissioner's approval a detailed plan for maintaining the site during a lull in construction activities. At a minimum, the plan must include proposed measures for: (1) preventing unauthorized access to the site; (2) installation of proper shoring of excavated sites or backfilling; (3) removal of construction debris, rubbish, stagnant water, volatile gases and liquids, excess vegetation and graffiti; (4) maintaining installed fire suppression and detection systems and scheduling of inspections for equipment remaining at the site; (5) correction of any outstanding violations and payment of fines; (6) maintenance of appropriate construction fencing; (7) monitoring of all measures during the suspension of work; and (8) where appropriate, restoring safe access to affected public sidewalks. The legislation requires the DOB to post and regularly update a list of all program participants on its website. The DOB posting will also indicate whether a site has been removed from the program either because of non-compliance with the program or because work has commenced or resumed. The benefits to the surrounding community are obvious: assurances that the site will be properly and safely maintained even while inactive. However, the benefit to an owner/developer, a lender or any party acquiring a troubled project, cannot be understated. This new legislation will apply whether permitted work has been temporarily suspended or was never commenced. Upon entering the DOB program, the permit will remain in effect until the end of the term for which it was issued. So long as the site remains in good standing in the program, the permit can be renewed for up to two additional terms of two years each. Once permitted, even under the 1968 Code, the approved plans will not have to be re-designed. As a result, once an owner is ready to move forward again with the construction, there will not be additional delays occasioned by re-design of projects and re-filing of permit applications. And as noted by the mayor's office, construction workers will be able to get back to work in a matter of days rather than months, further boosting the local economy. How many stalled construction projects will enter this new program remains to be seen. If the cost of participation in the program is onerous, financially strapped owners may be unable to avail themselves of its benefits. Lori Samet Schwarz is a partner with Zetlin & De Chiara, LLP, New York, N.Y.