With Construction Resuming, Licensing Agreements Are Back in Play

As New York City continues its emergence from the coronavirus-induced shutdown, co-op and condo boards are waking up to the reality that capital projects that were put on hold didn’t disappear. Neither did developers who want to demolish old buildings and erect new ones next door. Given those twinned realities, boards are being reminded of the importance of the document that protects them from neighboring construction projects: the licensing agreement, sometimes called the access agreement.

“Nothing stopped,” says Eric Cowley, president of Cowley Engineering, who is frequently called in by co-op and condo boards to advise them on the negotiation of access agreements. “The degradation of buildings didn’t stop and the rules didn’t change. Just because there’s a pandemic doesn’t mean buildings stop leaking or they don’t need facade inspections.”

Developers, meanwhile, kept working. “What co-op and condo boards need to realize is that the development process kept moving along during the shutdown,” Cowley says. “Paperwork kept moving, and the DOB’s (Department of Buildings) online filing process has been streamlined.”

So, after the months-long shutdown, some boards are waking up to another doubly challenging reality: the need to do postponed facade work and deal with a developer who is eager to start building next door.

Case in point: a condo board in Long Island City, Queens, hired Cowley as a third-party consultant to help it navigate a labyrinthine challenge. The most recent Local Law 11 facade inspection had revealed unsafe conditions. The sidewalk shed on one side of the building would have conflicted with the sidewalk shed the developer needed to erect as he prepared to demolish the neighboring building and build a new one. Cowley advised the condo board to complete work on that side of the building first, then let the developer erect protective netting on the condo’s balconies at his own expense.

“That’s one of the biggest hiccups,” Cowley says, “knowing where the building is in the Local Law 11 cycle, and when they’ll be able to do that work.”

On the rear of the condo building, the developer also needs to erect overhead protection on the terraces, which required the board to negotiate a “use and entry” clause in the access agreement, since the developer’s workers need to enter the condo building. In addition, the agreement requires the developer to pay for installing vibration monitors in the basement and additional monitors that will detect any possible shifting or settling of the building during the excavation and construction next door.

“Such access agreements can get quite elaborate,” Cowley says. “My biggest job is managing the expectations of my clients. I’m always telling my guys to stay out in front, anticipate the questions.”

Cowley notes that the March-to-June shutdown of nonessential construction projects created a bottleneck for boards, contractors and developers. In normal times, requests for proposals go out in February, contractors do walk-throughs and submit bids and sign contracts in March, and work begins in April. “April didn’t happen,” Cowley says, adding that when workers did return to job sites, they were regulated by strict DOB safety guidelines, further complicating jobs. During the shutdown, engineers and architects were able to do some preparation work, but orchestrating solo walk-throughs by contractors and collecting bids was, in Cowley’s words, “like herding cats.” That bottleneck is gradually getting unclogged.

“It’s been maybe more intense than a normal summer,” Cowley says. “We’re trying to salvage the construction season, and we’ve had to be creative to get these jobs moving. But because of the late start, some projects that normally would have been done by the end of the year will have to be shut down for the winter. Again, expectations need to be managed.”