I'm all for folks coming to the USA for opportunity and betterment and all, but take a close look at a Chang / McSam worksite and then tell me that a large portion of the workers there are citizens of this great country of ours.
I understand that Chang can use non-union labor if he chooses, but why is it that all his sites seem to be populated by non-NYC / non-local workers? Where do all these folks come from? My understanding is that there are lots of Irish, Polish & Central American workers on these sites. What is the pay scale that Chang and his builder (often Flintrock) offer? And who is watching the store?
ps: If I'm wrong I'll take it all back -- but not until somebody shows me the proof.
^
Not sure I understand this post. Are you a nativist? Speaking as an immigrant, I can't imagine many New Yorkers share your suspicion of newcomers.
If you're referring to the fact that many developers hire NYC immigrants instead of union thugs from Jersey, I think that's a wonderful thing. NYC already has the highest labor construction costs in the nation, and you want to make costs even higher, while giving jobs to mafia-linked suburbanites instead of city residents?
From CURBED today ...
They've Come to Bury Brooklyn, Not to Praise it
Wednesday, October 17, 2007, by Joey
Yesterday, architect Gene Kaufman, developer Sam Chang and Hotel Le Bleu
GM Robert Gaeta sat on a panel to discuss Brooklyn hotel development.
As a preventative measure, Robert Scarano and Karl Fischer were whisked
off to underground bunkers so that if someone from Wired New York tried to
firebomb the building, there would still be people left to ruin the city.
Brownstoner has the full report of the Brooklyn Chamber of Commerce-
sponsored affair, and it's absolutely spectacular. In fact, we're giving it the
numbered list treatment...
1) Sam Chang on Brooklyn: "I don’t like it. It’s enough. I’ve stopped buying
in Brooklyn." That's bad news for Manhattan, where his McSam company is
already building roughly 10,000 new eyesores. Give us more, Sammy!
2) The Le Bleu team expects people to pay $200-$350 per night to stay at
their new Le Jolie Hotel, described as "Williamsburg's first hotel" and located
on Withers Street, gloriously snuggled up next to the BQE.
3) Gaeta on criticism of Le Bleu and its fabulous views: "I think some of the
people writing these blog sites may not be able to afford $400 a night."
4) Gaeta again, this time saying Fourth Avenue “will become a boulevard for
Brooklyn." As opposed to what is not just a boulevard in Brooklyn.
5) Kaufman said the credit crunch will have an effect, and projects "that
don’t make sense won’t get built." Unfortunately, this Kaufman still seems
to make sense, somehow.
· Brooklyn Hotel Buzz: Boom and Doom [Brownstoner]
Don't put words in my mouth. Not all if even a large fraction of NYC construction workers are "mafia-linked suburbanites".Originally Posted by ASchwarz
And how do you iknow these Chang workers are "city residents"?
Bottom line: why does the US Government give work visas given to foreigners for this type of work if there are US citizens willing and able to do the work, especially when there are those in need of employment.
And since you seem to have some knowledge of who Chang employs, what does Chang pay?
I have no connections with Chang nor do I know who he employs or what he pays.
I know the starting going rate for small-time outer-borough construction labor is around $20 an hour, sometimes more (much more depending on skill set). That's pretty good pay for young newcomers to this country.
While I don't have statistics, the union constuction guys I know overwhelmingly live in NJ and Long Island and are white ethnics, while the non-union construction guys live in the Outer Boroughs and are recent immigrants of all shades, but heavily Eastern European, Mexican/Central American and Chinese.
There are many reasons immigrants get these non-union construction jobs. Many of the small-time outer-borough developers are immigrants themselves, and favor the immigrant work ethic. Immigrants are shut out of construction unions, and don't have the education for more lucrative white collar jobs.
These are good jobs, and pay as much or more than basically anywhere on earth. I know an Albanian guy who just moved here from Germany to work as a roofer. Germany is a high-wage place for construction, but non-union pay in NYC is even higher.
Doesn't Chang have a bad reputation for his quality of work and safety practices? Any stories regarding this?
Chang doesnt use Flintlock. In fact, Flintlock wont work with chang anymore after the 2 hotel's theyve built for him in the past (31st st hampton and 45th st holiday inn)
I'm surprised you didnt know that Sam uses Tritel Construction, which is 50% owned by himself, previously he used MikeSam Construction, which he was also part owner.
Lately, Changs been pressured into use of unions, hence, you see CNY working on his 39th street triple hotel.
As for the reason you see a lot of irish guys, its because EMC, the concrete contractors that Chang attempted to strike a deal with to do all his non union jobs, is owned by irish
Thanks for clarification ^^^
Flintrock is building the Lam duo on West 40th, which back up to the McSam trio on West 39th -- hence my confusion.
To be honest I don't know the ins and outs of Chang's operations (or the other builders of all these new lower-end hotels) which is why I asked. But one thing is very clear: These projects are built in a manner that is entirely different in time-frame and building style from most other developments in NYC. Most NYC buildings need to go up fast so that there is a short time period from financing to completion when the property starts to generate income. This is NOT the case with these McSams, which often drag on for months. One example: The new ~ 20 story McSam Comfort Inn at 305 W 39th has taken as long to build as the New York Times Tower around the corner. The Comfort Inn has yet to see its first guest, while the NY Times Tower has now been occupied for a number of months.
My concern regarding Chang (and similar) projects is that the prevailing wage is being undercut by a new builder who offers lower wages and fewer benefits to what seems to be a very large influx of new workers. Locals are left out of the ranks of those employed on these jobs -- and those who do work are seemingly compelled to do so at a level far below what is needed to live in and around NYC.
Whether or not the workers on these lower end hotel projects are documented remains a mystery. However our mayor is on record that undocumented workers keep NYC running and the city would fold up without them. Clearly oversight regarding immigration and workers in NYC is not enforced. One could interpret this as an underhanded but organized and sanctioned way of busting the construction unions.
Such is the way of the world, eh?
you are correct in regards to the pace that changs jobs move. being in the business, i could never understand this as well. being that he has close to 2 dozen projects at once, holding them, should kill you on interest costs alone.
Exactly ^^^
So how does Chang manage his financing? Who (or what) is the big & deep pocketbook behind the McSam NYC hotel empire that enables such long term holding of the job site(s) with no generation of cash?
Some info from Chang himself on how he claims to do it (from a FORBES article, June 2006):
His [Chang's] building is done through Tritel Construction, where he is a 50% partner. In his customary suit and tie at a desk in his "second" office at Tritel, Chang punches in a few numbers on a calculator, his diamond-encrusted watch glittering. "I sold a lot of hotels," 22 in all, he says. Unlike many serial hotel entrepreneurs who tend to reinvest 100% of their capital gains under Internal Revenue Code Section 1031, which shields such gains made while trading up on properties, Chang keeps 20% for himself. "That's how I built up my cash," he says. He puts his kitty at about $200 million.
But, he rues, "I made several partners very rich." Hotel operating margins have improved in New York's post-9/11 recovery, so now Chang has changed gears again. He's keeping most of the 20 properties under his wholly owned McSam LLC.
... A tight market is fine for Sam Chang. His secret, he says, is a knack for spotting feasible sites for new, midsize, medium-range hotels in a city like New York, which is considered a saturated and high-barrier-to-entry area. The first Comfort Inn set the mold--it was 25 feet wide in front and only 13 feet in back, and he built it 15 stories high. In the financial district he's now building 20 floors on a plot 20 feet wide.
... he also is willing to buck established labor practices, and that has invited trouble.
Starting in April (NOTE: See Village Voice, "Labor War in Chelsea", June 2006) brewing tension at three Chang hotel construction sites erupted in altercations with picketers protesting Tritel's use of nonunion labor, unusual on major Manhattan jobs. A carpenters union local, trying to organize what it says is a crew inadequately trained in safety measures and unevenly paid, contends its reps were roughed up by a subcontractor's men. (There were arrests on both sides; Tritel says no operations have been cited for labor infractions.)
"We can build a hotel in New York City only if we can get a good rate," says Chang. "The union was quoting a price of $400 per square foot, and we're building with $250 per square foot." He says a larger project ahead might offer the scale to afford a union crew, "but they try to force us to give them these small jobs."
For 2006 Chang estimates gross revenues for McSam and other development arms plus his half of Tritel at $380 million. At the top of his game in New York but still a single man, he figures he will keep up this frenetic pace for five more years and then slow down. That's subject to changing market conditions, of course.
Link to a post in the "Hotel News" thread on Chang's legal issues:
Law Suit filed over work at Sheraton Four Points Hotel:
Chang Named as Defendant
FLINTLOCK CONSTRUCTION vs. TRITEL CONSTRUCTION
Index Number: 117771/2006
***
Update(s) from the Court Website:
New York
117771/2006
Active
FLINTLOCK CONSTRUCTION / HOLLANDER & STRAUSSLLP
TRITEL CONSTRUCTION / EPSTEIN BECKER & GREEN
11/15/2007
GISCHE, JUDITH J.
COMPLIANCE CONFERENCE 10
Court: New York Civil Supreme
Index Number: 117771/2006
Case Name: FLINTLOCK CONSTRUCTION vs. TRITEL CONSTRUCTION
Case Type: Other Torts
Track: Standard
Appearance Information (Upcoming):
11/15/2007 STRIAL
Compliance Conference 10
GISCHE, JUDITH J.
COMPLIANCE CONFERENCE 9:30AM
NI DUE 01/04/2008
Appearance Information (History):
11/15/2007 STRIAL
Compliance Conference 10GISCHE, JUDITH J.
COMPLIANCE CONFERENCE 10 9:30AM NI DUE 01/04/2008
06/28/2007 STRIAL
Preliminary Conference 10Preliminary Conference Held GISCHE, JUDITH J.
IAS PRELIMINARY CONFERENCE 10 9:30AM
05/24/2007 STRIAL
Preliminary Conference 10Prelim Conference Adjourned GISCHE, JUDITH J.
IAS PRELIMINARY CONFERENCE 10 9:30AM
05/10/2007 STRIAL
Preliminary Conference 10Prelim Conference Adjourned GISCHE, JUDITH J.
IAS PRELIMINARY CONFERENCE 10 9:30AM
03/29/2007 STRIAL
Preliminary Conference 10Prelim Conference Adjourned GISCHE, JUDITH J.
IAS PRELIMINARY CONFERENCE 10 9:30AM
03/29/2007 MOTION
Motion 10Fully Submitted GISCHE, JUDITH J.
IAS MOTION 10 10M OSC IN PART 002
03/08/2007 STRIAL
Preliminary Conference 10Prelim Conference Adjourned GISCHE, JUDITH J.
IAS PRELIMINARY CONFERENCE 10 9:30AM
02/08/2007 STRIAL
Preliminary Conference 10Prelim Conference Adjourned GISCHE, JUDITH J.
IAS PRELIMINARY CONFERENCE 10 9:30AM
01/04/2007 SINTAL
Preliminary Conference 10Prelim Conference Adjourned GISCHE, JUDITH J.
IAS PRELIMINARY CONFERENCE 10 9:30AM
12/20/2006 MOTION
Motion 10Motion Decided-Open Appearance GISCHE, JUDITH J.
IAS MOTION 10 9:30AM OSC IN PT 001
Chang switched lawyers in March 2007:
Motion Information:
DEF Subst/Relieve/Withdraw Counsel
Decided: 29-MAR-07
MOTION DISPOSED AS INDICATED
Before Justice: GISCHE
Short Form Order 03/29/2007 001
Prel Injunction/Temp Rest Ordr Decided: 20-DEC-06
MOTION DISPOSED AS INDICATED
Before Justice: GISCHE
Gotta remember, a few years ago, around 2001 when he started putting out his hotels again, he had forward contracts on many of them, and he's continually built hotels for the purpose of selling. One of his biggest backers is/was Hersha Group...
So theres definately OPM going on, but im assuming most the equity in the project isnt his, so he doesnt care as much.
Lofter, you seem great at pulling research info-- example of his deep pockets is his Hilton on York Street-- he settled with Winston Hotel for $16 mil to get out of his forward sale which he couldnt deliever 1) on time and 2) quality.
He flips another one...
October 31, 5:08 pm
Chang sells hotel for $55M
Sam Chang has sold the Hilton Garden Inn Chelsea, which he developed at 121 West 28th Street, to Inland American Winston Hotels for $55 million. Chang purchased the sites at 119-121 West 28th Street in 2005 for $5.75 million. The 174-room hotel, which opened on October 16th, was sold after this summer's merger between Winston Hotels and REIT Inland American. TRD
----------------------------------------------------
Winston is the same group that he had a $16million settlement earlier this year for not being able to deliver the York St Hilton Garden.
Did the duane st hotel ever open yet?
Duane Street Hotel Coming To Tribeca
Tuesday, October 30, 2007-8:23:25 AM
NEW YORK— The Duane Street Hotel is scheduled to open in the Tribeca section of New York early next month.
The Hersha Hospitality Management property will have 45 rooms. Designed much like lofts, the rooms will have high ceilings, tall windows that fill the rooms with natural light, hardwood floors and clean, modern décor.
Each of the rooms feature custom-designed residential furniture, natural wood and slate bathrooms with chrome and marble fixtures. Amenities include a work desk, high-speed and WiFi Internet access, 32-inch plasma TV with premium cable and a CD player/clock-radio with MP3 hook-up.
Additional amenities include in-room spa services from Euphoria Spa, floral arrangements from Flora-tech in all 45 rooms, complimentary chocolates from Jacques Torres, and access to in-room dining from local restaurants.
In addition, the Duane Street Hotel will be home to the 40-seat ‘beca Restaurant, which will also provide room service for the hotel.
Located at 130 Duane St. at Church Street, the six-story hotel was designed by the architectural firm Gene Kaufman Associates and interior designer Paul Vega. From: Hotelbusiness.com
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