Part 2: The Cost of Doing Business

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Construction safety has become all the more important over the past five years, as housing production reached numbers never seen since the city began keeping records in the 1960s. Yet so far this year, 27 construction workers have died on the job. Yesterday, WNYC began telling the story of one of those accidents.

The Cost of Doing Business Part 1

Jose Palacios, a Mexican immigrant, fell to his death on January 30th of this year. He was standing on a scaffold on top of the roof of 525 Clinton Avenue, a new condominium tower in Brooklyn. The scaffold collapsed under high winds. According to Richard Mendelson of the Occupational Safety and Health Administration, the scaffold was secured with thin wire, even though the bolts that workers were supposed to use lay nearby.

RICHARD MENDELSON: They had the correct ties, and for whatever reason, they didn’t have the tool —the correct tool to install those ties.

Today, in the second part of “The Cost of Doing Business,” WNYC’s Matthew Schuerman and Cindy Rodriguez explain that earlier this decade, the city’s Department of Buildings instituted several measures. They should have prevented just such an accident. But the rules were not enforced, the policies not fully implemented, and the penalties carry fines that are far lower than those imposed by other departments for far less dangerous situations.

SCHUERMAN: There used to be a large brick house, built a hundred years ago, at 525 Clinton Avenue. It was a group home for mentally disabled adults. In 2005, a small real estate company called Karnusa Equities bought it, tore it down, and began building a condominium tower in its place. Amy Greer lives next door.

GREER: We are seeing a building that is entirely out of proportion from the neighborhood. It is fourteen story glass tower next to my building which is a six story brick building and a lot of three story brown stones.

SCHUERMAN: Greer is not surprised that someone died. In fact she feels a little guilty she hadn’t done more to prevent it, even though, over the past three years, she called 311 eight times. She found some, but not all, of the complaints recorded on DOB’s online database.

GREER: I called in February I called because of the vibrating and shaking they came that day and said there was no shaking and vibrating of the building and no unsafe condition of the building I called at 8:29 in the morning and they came 7 hours later and they probably weren’t doing construction any more at that time

SCHUERMAN: In December 2007, about a month before the fatal accident, she placed another call to 311.

GREER: We woke up in the middle of the night and there was debris just slamming up against our windows and my roommate at the time went out onto the fire escape to try to pull it away from our windows so that our windows wouldn’t break.

SCHUERMAN: But the buildings department didn’t get around to responding to her complaint until mid-February—after Jose Palacios died.

GREER: If someone had come and checked out the building there might have been a chance to find out what was wrong.

SCHUERMAN: Not surprisingly, the inspector didn’t find any debris flying around. By that point, the job had been temporarily shut down because of Palacios’ death.

GREER: I feel that since Bloomberg was elected it’s been just developers gone wild in this city and if they don’t have enough inspectors to come around and look at all these buildings as they are going up to make sure the citizens of this city are safe they need to slow down the permit process.

SCHUERMAN: It’s actually pretty hard to answer the simplest question: did construction safety get worse during the building boom? OSHA data shows that the number of WORKERS WHO DIE EACH YEAR has varied widely, from the low teens EARLIER THIS DECADE to a high of 33 in 2006. Last year, there were 14. So far this year, 27 workers have died. In any case, most people agree the number is too high.

Since Mayor Bloomberg came into office, the DOB has beefed up its staff He’s hired 66 percent more inspectors, for a total of 461. But that still hasn’t kept pace with the building boom: permits in that time period rose by more than 100 percent.

James Brennan, a state Assemblyman from a nearby Brooklyn district, has proposed several bills that would strengthen the power of the Buildings Department and increase its responsibilities.

BRENNAN: The inspection workforce is insufficient or has been throughout the years to get to every site effectively you know if people are calling in concerns about debris flying, Buildings ought to be getting there quickly.

SCHUERMAN: Brennan says the fines the inspectors hand out have been too small and too easy to evade. At the time of the accident, Karnusa, the developer, owed the city 27-thousand dollars in fines. In July, Karnusa convinced the Environmental Control Board, the administrative court that adjudicates DOB violations, to knock ONE OF THOSE FINES DOWN FROM 5 THOUSAND DOLLARS TO ONE THOUSAND DOLLARS. And yet the developer has still has not paid the OTHER 22-THOUSAND DOLLARS IN FINES. Real estate lawyers say the developer will need to pay THEM soon because OVERDUE fines show up on title searches and could hamper sales. But until then, Karnusa has been free to continue constructing its building and has received new building permits to do so.

BRENNAN: The ECB system goes on ad nauseum. The developer ignores the violation notice or the hearings or they request adjournments ad nauseum so the process goes on for a year or two or three with no significant impact.

SCHUERMAN: Brennan does give the Bloomberg administration credit for beginning to reform the Buildings Department. But he thinks the city needs to do a better job enforcing new regulations. In November 2006, the city began requiring every scaffold that reached more than 40 feet above the ground to get a permit certifying it was structurally sound. Nevertheless, the scaffold that collapsed under Jose Palacios did not have a permit. A month after the accident, the DOB began sending a team of inspectors around the city to randomly see if scaffolds have permits. Even the stepped up enforcement was not enough: over the next six months, DOB records show that seven workers got injured on scaffolds that either did not have permits, or were not erected correctly.

The DOB fined Karnusa 1600 dollars for two separate counts of violating the scaffold law. That was the total penalty levied by the city in connection with the death of jose Palacios. The Department of Health, by contrast, can fine restaurants who fail to post calorie counts up to 2,000 dollars.

The developer had to pay two fines as a result—the only fines the city levies as a result of the death—but together they amounted to 1600 dollars. This summer a new penalty schedule increased fines across the board, but they are still RELATIVELY modest. compared to the price of real estate.

If Palacios’ scaffold collapsed today, the two violations would together would cost 2400 dollars, or 1200 dollars each. By comparison, the Health Department can fine restaurants that fail to post calorie counts up to 2,000 dollars.

Without high fines and strong enforcement, Brennan says, there is no deterrent for sloppy work. Chances are an inspector won’t catch you. And if he does, it won’t cost much.

RODRIGUEZ: In addition to increasing fines, the Bloomberg Administration also took other steps to address worker safety.

In April of 2007, it began requiring buildings 10 stories or higher to be inspected once a week for safety violations. According to a department of building's database, this so called Best Squad visited 525 Clinton once but never went back to check on the job. The city could not say whether weekly inspections had happened there. In November of 2006, the city required anyone working on a scaffold to have 4 or more hours of training Jose Palacios had not gotten around to taking that course.

Gonzalo Mercado from Project Hospitality says that’s not surprising. His group advocates on behalf of day laborers in Staten Island. He says often immigrant workers can't afford the training or are too afraid to go to any programs perceived to be government run. He believes groups such as his own should be given funds to train and educate workers themselves.

MERCADO: …because we are like the safe space for them. Some times its hard for example if the city wants to send out information …because of a lack of language skills will not understand having ongoing workshops, ongoing meetings to let them know what they have to do in case of these situations I think are much more successful than having a pamphlet.

RODRIGUEZ: The pamphlet Mercado refers to was handed out by the Department of Buildings after a series of accidents on scaffolds that hang off the sides of buildings. The uptick was taken seriously by the Bloomberg administration and it prompted them to convene a task force in 2006 to look at the problem. Its final report identified wide-spread non-compliance with federal and city regulations and “extremely uneven training”.

The New York Immigration Coalition, another advocacy group was part of that task force. In August of 2007 – prior to Jose Palacios’ death, the organization wrote a letter to Mayor Bloomberg asking for 4 million dollars to do the training. The request went unanswered. Now with the city in dire financial trouble, chances are slim the money will come. But the immigrant group says it remains hopeful. Gonzalo Mercado believes the training is badly needed. Right now, he says workers only come to him after they’ve already been injured:

MERCADO: It can be because somebody fell from a roof trying to repair a roof….we had a case of a worker who fell…they were doing demolition he fell into the basement and lost a lot of blood.

RODRIGUEZ: And while financial forecasts suggest the building boom is over, Mercado says public officials should not assume that means worker injuries and deaths will decrease. Instead he says during hard times exploitation gets worse and workers are willing to take even bigger risks as jobs grow more scarce.

MERCADO: Many times they perform very dangerous jobs and they just don’want to say anything again because either they don’t know that they have the right to work safely or they just don’t want to get in trouble with their bosses.

SCHUERMAN: In response to this story, Buildings Department spokesman Tony Sclafani emphasized the large number of initiatives the Bloomberg administration has undertaken. “The scaffold was erected illegally,” he said. “If the department’s rules were followed by the contractor, it would have helped to prevent this accident.”

But rules need some way of being enforced. Each time the Buildings Department comes up with a new one, it has taken a long time for officials to figure out how to catch the scofflaws. The random inspections of scaffolds didn’t start for more than a month after Jose Palacios died, more than a year after the scaffold law went into effect, and almost three years after the City Council actually passed the law.

The Bloomberg administration made a commitment a year and a half ago of inspecting mid-rise construction sites every week, but it took two months for inspectors to check out Amy Greer’s complaint.

Buildings department penalties went up across the board in July, but they are still modest compared to the price of real estate. Meanwhile, more and more development is getting done by contractors in over their heads, like Bell Tower, or new inexperienced players. Karnusa Equities is a small company founded by two friends, an accountant and a construction executive, and their adult children. 525 Clinton is one of their first projects.They are expecting to gross 41 million dollars from sales of the condos, according to documents filed with the attorney general. Karnusa would not comment beyond providing a broker to give a tour of the building.

The company was implicated in the OSHA investigation, though to a lesser degree than the stucco subcontractor. Karnusa ended up paying OSHA a 5400-dollar fine and hired another subcontractor to finish up the work.Even if you add up all of the fines, including the OSHA fine that Bell Tower hasn’t paid, and the DOB penalties that are still outstanding, they come to no more than 67,000 dollars. That’s about a tenth the price of the cheapest one-bedroom in the building. The 30 units range IN PRICE from 650 thousand to 3 million dollars.

RODRIGUEZ: Jose Palacios’s niece, Jasmine Solis says losing Palacios has been especially difficult on his wife and child in Mexico. She says her uncle didn’t have much…And the little he did have was used to pay for his funeral in Mexico and to ship back all the things he had bought and was saving for when he returned home.

Originally, the family had wanted to sue the developer but so far a claim has not been filed. Solis says her aunt got confused by the workers compensation claim and has been unable to fulfill the leg work required to move it forward. Jose Palacios remains a presence in the house. His picture, adorned with rosary beads and paper flowers hangs on the wall. And Solis’ kids are quick to remember his good nature and playing hide and seek and soccer in the park.

For WNYC, I'm I'm Cindy Rodriguez.

MATTHEW: And I’m Matthew Schuerman