special report

NYCHA’s Post-Sandy Rebuild Mired in Delays and Dubious Contracts

A senior center in the Red Hook Houses remains shuttered while repairs are made to the building, seven years after Superstorm Sandy.
A senior center in the Red Hook Houses remains shuttered while repairs are made to the building, seven years after Superstorm Sandy. Photo: Ben Fractenberg/THE CITY

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In March 2015, Mayor Bill de Blasio trekked to Brooklyn’s Red Hook Houses to announce what he dubbed the biggest single Federal Emergency Management Agency grant in history: $3 billion to rebuild and upgrade city public housing developments slammed by Superstorm Sandy in 2012.

He declared construction would begin right away in NYCHA complexes still reeling from the storm that left more than 80,000 tenants without electricity, heat and elevators for weeks — making some residents virtual prisoners in their homes.

But a review by THE CITY found that seven years after Sandy damaged 200 buildings in 35 developments along waterfronts from Red Hook to the Rockaways to the Lower East Side, work has been completed in just two complexes, with a third development nearly done.

And while the mayor pledged that the federal money would be used to stormproof entire NYCHA developments slammed by Sandy, his promise proved premature: FEMA ultimately agreed to pay only for specific buildings battered when the superstorm hit on Oct. 29, 2012.

In 2015, Mayor Bill de Blasio and Senator Chuck Schumer announced at the Red Hook Houses the allocation of $3 billion in federal aid to repair and protect public housing post-Superstorm Sandy.
In 2015, Mayor Bill de Blasio and Senator Chuck Schumer announced at the Red Hook Houses the allocation of $3 billion in federal aid to repair and protect public housing post-Superstorm Sandy. Photo: Demetrius Freeman/Mayoral Photography Office

Meanwhile, records show city investigators flagged an alarming spike in costs at one NYCHA Sandy rebuild project at the very site where the mayor announced the FEMA grant: the Red Hook Houses.

A vendor’s project proposal jumped from $89,000 to more than $500,000 — and a manager told investigators this happened because de Blasio was pressuring them to get the job done faster, according to a city Department of Investigation report.

Among the findings of THE CITY’s review:

• Construction projects at 31 of the 35 damaged developments missed their original start dates, in some cases by a few months, but in most instances by a year or more. Work at the Lower East Side’s Riis Houses, for example, was scheduled to begin in the fall of 2015 but didn’t start until six months ago.

• The FEMA-funded fixup has been completed at only two NYCHA developments: Lower East Side Rehab and Ocean Bay (Oceanside) in the Rockaways. Work at Harlem’s Rangel Houses is 99% complete, while NYCHA just awarded a contract for the Lincoln Houses in East Harlem. The rest are now under construction, including seven that NYCHA promised will wrap up by year’s end.

• Records show NYCHA hired one contractor later caught cheating workers on wages, another that ended up barred from doing city school construction, and another arrested on charges of stealing heating oil from a competitor when he had an emergency Sandy contract selling heating oil to NYCHA.

A Slow Start

The Sandy rehab projects inched along from 2015 through 2017. Last year, NYCHA forecasted spending $825 million, but wound up spending only $556 million. This year, officials forecast spending the most of any year so far — nearly $850 million.

Barbara Brancaccio, a NYCHA spokeswoman, noted in an emailed statement that FEMA took until December 2015 to begin sending money. She described the work that has taken place since as unparalleled in NYCHA history in its scale and complexity.

“This precedent-setting work is the most substantial federal investment in public housing since its inception and flood-proofing buildings that are 50, 60 or 70 years old required iterative design and engineering efforts that were new to FEMA, New York City and NYCHA,” she wrote.

Brancaccio emphasized that NYCHA is striving to get the most bang for its one-time infusion of FEMA bucks — pushing for building rehabilitation that meets flood-protection requirements to elevate boilers and other infrastructure above anticipated flood levels.

Issues between FEMA and City Hall, as THE CITY reported Monday, also are contributing to some 250,000 homes going without flood insurance in areas the feds say are one storm away from the next disaster.

‘It Looks Like Rikers Island’

After Sandy flooded developments in Red Hook, Coney Island, the Rockaways, the Lower East Side and Astoria, NYCHA scrambled to restart basement boilers and electrical rooms wrecked by the storm surge.

The authority trucked in temporary boilers, many of which faltered when the temperature later dropped below 30 degrees. Some of those boilers are still in place.

One of the developments where temporary boilers remain is where de Blasio first announced the FEMA bucks: the Red Hook Houses.

Red Hook Houses residents say that construction to repair damage sustained during Superstorm Sandy has created unsafe blind spots near building entrances.
Red Hook Houses residents say that construction to repair damage sustained during Superstorm Sandy has created unsafe blind spots near building entrances. Photo: Ben Fractenberg/THE CITY

Sandy deluged the complex, located in a sea-level neighborhood next to Brooklyn’s Buttermilk Channel. Senior citizens and people with disabilities were trapped in upper floors for three weeks, unable to get out of their dark, cold apartments because every elevator was out of service.

With FEMA money, NYCHA plans to install new boilers and electrical equipment on roofs or in waterproof rooms. Housing officials also intend to add stand-by generators, fix up playgrounds and sidewalks, restore basements, install new roofing and even put in new door locks.

But Red Hook’s Sandy rehab — scheduled to begin in April 2016 — didn’t start until August 2017, more than two years after FEMA funding announcement.

And last week, the development’s green space was dominated by fenced-off storage areas for equipment and supplies. The fencing, omnipresent scaffolding and boilers in front of some buildings have created a warren of tunnels that tenants call a security hazard.

Red Hook Houses tenant leader Nahisha McCoy says long-delayed post-Sandy repair work has created security hazards at the Brooklyn complex.
Red Hook Houses tenant leader Nahisha McCoy says long-delayed post-Sandy repair work has created security hazards at the Brooklyn complex. Photo: Ben Fractenberg/THE CITY

“It looks like Rikers Island,” said Nahisha McCoy, 45, who retired on disability after working as a 911 dispatcher.

“I’ve been living here for 21 years. I’ve never been afraid to walk in Red Hook, til they put this up,” she added. “They have these things up on the street but at night, you can’t see around the corners when you’re going into the buildings. So if something happens, the (security) cameras are blocked.”

Contractor’s Proposals Eyed

The mission to rehab the Red Hook Houses also led to a city Department of Investigation probe into bills submitted by one of the contractors NYCHA hired to get the job done.

Jacobs Project Manager was tapped as construction manager to oversee the contractors performing Sandy-related work at multiple NYCHA developments. One project was to supervise the restoration of the Red Hook Houses senior center, which Sandy wiped out.

DOI found two proposals by Jacobs dated the same day in June 2016: one for $89,000 for 15 weeks of work, and another for $512,000 for 40 weeks of work, according to a 2018 DOI report obtained by THE CITY. NYCHA approved the more expensive plan.

While they were looking into the bills, investigators discovered that work at the senior center was not going well. The roof continued to leak; the floor had begun to buckle and would have to be ripped up, DOI’s report said.  As a result, Jacobs was approved to “bring more technical individuals to help resolve these issues,” leading to the $512,000 proposal.

Meanwhile, there was pressure from City Hall to get the Red Hook senior center rehab done faster: A manager NYCHA hired to oversee the entire FEMA-Sandy effort told DOI that he and his team approved the extra funding “due to the immense amount of focus on this project from Mayor de Blasio,” the internal DOI memo stated.

In the process of jacking up the number of hours needed for the work, Jacobs also increased its weekly rate from $5,984 to $12,811, DOI found. NYCHA approved that, too.

Jacobs did not respond to questions about the DOI report.

Asked about the mayor’s interest in the Red Hook senior center, Olivia Lapeyrolerie, a spokesperson for de Blasio, said, “While we were working with NYCHA and the community to reopen this beloved senior center as soon as possible, we were not involved in daily discussions with vendors.”

As of last week, NYCHA had approved payments to Jacobs of more than $23 million in Sandy-related projects across the city, with the latest contract extension okayed by the board in July.

Last week, the senior center remained padlocked, isolated by the network of scaffolding. Trash  piled up at the entrance of the center, which has become a spot for loiterers, tenants said.

Oil Scheme Cited

Investigators with Exiger Associates, a security firm hired by NYCHA to keep an eye on the FEMA work, initiatially red-flagged the Jacobs payments for the senior center, the DOI report indicates. Since being awarded a $10 million contract in late 2015, Exiger has found several contractors involved in a wide variety of dubious incidents during the time they were performing Sandy-related work, DOI records show.

Exiger alleged that a New Jersey contractor, Delric Construction, performing a $22 million job at the Rangel Houses, had been cheating workers on wages, paying heavy equipment operators $42 per hour instead of the $64 to $76 per hour required under a labor agreement with NYCHA.

The DOI report states that Delric acknowledged violating the labor agreement, and agreed to pay $41,900 in back wages, the DOI report states.

Delric owner Robert Ricciardi said Monday he decided to settle the case rather than pay lawyers to fight it, adding, “I certainly did not do anything to cut any corners or to steal anything from my valued workers.”

Another firm, SHRI Construction Corp., was disqualified by the city School Construction Authority and barred from SCA contracts for five years during the time the firm was performing Sandy reconstruction work for NYCHA. The July 2015 disqualification occurred because SCA’s inspector general had determined the firm’s owners had submitted “material misstatements” regarding its ownership in its sworn statement to be pre-qualified to perform SCA work.

SHRI continued to be paid by NYCHA through March 2016. SHRI representatives could not be reached for comment.

The owner of another firm, S.J. Fuel, was indicted in February 2016 on charges of stealing and selling heating oil from a competitor, court records show. Prosecutors accused S.J. Fuel owner Peter D’Arco of participating in the stolen oil scheme through much of 2014, during the time S.J. Fuel was selling heating oil to NYCHA under a Sandy emergency contract that ran through 2016.

In 2017, D’Arco was convicted of grand larceny, a felony, but performed 40 hours of community service that allowed him to re-plead to petit larceny, a misdemeanor, prosecutors said. D’Arco did not return calls seeking comment.

Collapsed Fortification Plan

When the mayor announced the FEMA funding in spring 2015, he said the federal money “won’t simply bring NYCHA developments back to pre-Sandy conditions. It will allow us to fortify buildings and utilities so that they’re resilient — and residents are protected — next time a storm hits.”

De Blasio indicated this was a done deal, but it wasn’t.

At nearly every NYCHA complex flooded by Sandy, the storm trashed many but not all of the buildings within the development. Behind the scenes, NYCHA had asked FEMA to waive its usual policy of paying only for repairs to property actually damaged during the storm — and to fund resiliency for undamaged buildings.

NYCHA spelled out in detail a request to FEMA to pay for stand-by generators, roof upgrades and floodproofing in undamaged buildings within 11 of the 35 developments flooded by Sandy.

It was not to be.

”FEMA determined ultimately that if a building was not directly damaged from Superstorm Sandy, it was not eligible for funds,” NYCHA said in a statement to THE CITY.

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