Much of the structural steel fabricated for the new New York Times Co. headquarters in Manhattan can be sold at auction, a New Jersey Superior Court judge ruled March 17. The court order allows the liquidation trustee for Interstate Iron Works Corp., the fabricator-erector that shut down three days before Christmas, to sell the steel to the highest bidder at an auction scheduled for March 23-24 in Whitehouse, N.J.
|Steel-hungry. New York Times Co. project could face delay if steel is not delivered soon. (Photo by Guy Lawrence for ENR)|
The ruling raises the possibility that AMEC Construction Management Inc., the Times projects prime contractor, will be a bidder, say lawyers involved in the matter. A separate 6,000 tons of steel will be auctioned along with Interstates state-of-the-art fabrication shop, cranes, trailers and real estate, says Randy Fridkis, president of Continental Auction Group, North Palm Beach, Fla.
Exactly what will happen to the Times steel isnt clear. Attorneys for AMEC, whose guaranteed price for the project exceeds $350 million, had been negotiating a possible buyout deal for the steel in the days leading up to the order by Judge Kenneth MacKenzie. He had been sorting through the claims in a courthouse in Morristown, N.J. AMEC has claimed that it needs the steel this month or it will face a 3.5-month delay in the project.
As soon as MacKenzies order was in hand, however, "the price just went up" for the steel made by Interstate, says Stephen Ravin, Interstates trustee.
Attorneys for AMEC could not be reached for comment. Other fabricators have been preparing steel for the job but AMEC still is looking for an erector, the company disclosed in court affidavits.
AMEC had claimed ownership of the steel, saying it had paid all that was due to Interstate. But Interstates main lender, Valley National Bank, claimed ownership as security for its lien and loans to Interstate that reached a total of $17.2 million.
The $75-million steel fabrication and erection contract was the biggest Interstate had ever signed. As the owner delayed starting the project in late 2003 and 2004, steel prices went through the roof. Interstate CEO Robert G. Abramson and his joint venture partner, Havens Steel Co., Kansas City, sought an $8.3-million change order to pay for the steel costs alone.
But when Havens filed for bankruptcy protection and Interstate lost its surety for the work, Abramson thought AMEC could help Interstate get to the erection phase. Instead, Abramson claims, AMEC cut its payments and, as Interstate ran out of cash, terminated the contract and forced him to liquidate the company (ENR 3/21 p. 25). That set the stage for the fight for control of the fabricated steel for the project and the unusual situation where AMEC may bid for steel it feels it has paid for and owns.