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Build It Back subcontractors say they’re still stiffed a decade after Sandy

Millions are still in dispute between builders and the city’s construction agency, after federal funds to fix homes dried up.

November 5, 2022 Tanaz Meghjani, THE CITY
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“It was the first time I worked for a city project,” said Brian Lawrie, a principal at Navesink Prestige LLC. “And my last.”

Navesink Prestige is a construction company that worked as a Build it Back subcontractor, elevating, reconstructing and rehabilitating homes in Brooklyn and Staten Island following Superstorm Sandy.

But 10 years after Sandy tore through the city and several years after Navesink Prestige completed most of its construction projects, the company remains in an ongoing dispute with the city Department of Design and Construction, contending that it was not paid all the money it’s owed.

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Lawrie claims that he is due $4 million for necessary work that went beyond the $93 million his firm was paid. The dispute, first rejected by the DDC — on the basis that requests for additional payment were not filed appropriately, according to Lawrie — now sits with the office of city Comptroller Brad Lander.

The next step of the dispute process will have Navesink Prestige arguing the issue before the city Contract Dispute Resolution Board. If the firm’s argument is rejected there, Lawrie will file a lawsuit, he says.

Regardless of the outcome, he’s not interested in working with DDC again.

“Our biggest beef now is this process the city is putting us through,” said Lawrie, contending that the city’s public works builder is withholding payment based on a technicality. “They drag every contractor through this process. They’re costing me hundreds of thousands in legal fees. Every single contractor who works with the city is tortured.”

A spokesperson for DDC, Ian Michaels, says that Lawrie doesn’t have grounds to demand more money. Navesink Prestige “has been fully compensated for its work,” said Michaels. “We continue to cooperate with the Comptroller and other City agencies as they respond to the firm’s claims.”

The Office of the Comptroller declined to comment.

Flow stopped

Build it Back, which received $2.7 billion in federal grants, is the program the city launched to rebuild, elevate, renovate or acquire homes after Superstorm Sandy hit on Oct. 29, 2012, damaging more than 340,000 homes and apartments in New York and New Jersey.

The first-of-its-kind program was an unprecedented effort to help homeowners, the product of collaboration between the Bloomberg administration and FEMA.

It was overseen by the Housing Recovery Office in coordination with DDC and the Department of Housing Preservation and Development — and came under fire for delays, confusion and mismanaged funds.

Navesink Prestige operated as a subcontractor for The LiRo Group in Brooklyn, where it worked primarily in Gerritsen Beach and Sheepshead Bay, and for Sullivan Land Services in Staten Island, along the South Shore. The firm worked on 284 homes across both boroughs and received $93 million in compensation — but $4 million in payments remains in dispute.

Lawrie alleges that when Navesink Prestige began working for Build it Back, he noticed that “on site conditions differed from conditions presented in the documents.”

This kind of discrepancy is usually resolved with a contract amendment. But by early 2019, DDC stopped accepting amendments, requesting change orders instead, documents viewed by THE CITY indicate.

Navesink filed hundreds of change orders throughout its work with the Build it Back program, trying to resolve differences between the work and payment listed in the contracts and the work that was actually done.

At first, DDC approved change orders relatively quickly, Lawrie said. But as the program began to run out of money, several contractors found that change orders took years to get fully approved and payments were delayed extensively, NY1 reported.

Eventually, towards the end of the program, DDC rejected dozens of Navesink Prestige’s change orders, totaling more than $4 million, according to Lawrie.

A 2015 audit of Build it Back from former Comptroller Scott Stringer found that some contractors were overpaid millions for incomplete work. But in this instance, the question isn’t about whether the work was done, said Lawrie.

Some of Lawrie’s change orders were for work that can’t be seen, such as reinforcing steel used to strengthen concrete. But other change orders were for painting homes and adding trim.

“It’s absurd because you can drive by the house and see that it’s blue. It didn’t come blue,” Lawrie said.

According to Lawrie, the city is withholding his money by arguing he didn’t file his change orders by the “substantial completion” milestone — the stage of a construction project when it’s nearly finished and the owner can use it for its intended purpose.

This is a technicality to avoid paying him the money he is owed, Lawrie asserts. His contract states he needs to notify the DDC of existing claims or disputes by substantial completion — not change orders. Lawrie maintains that he filed the change orders in the same manner that they’d always been filed: after the work was completed. He filed hundreds of change orders this way and there was never an issue, he said.

Other contractors experienced this obstacle as well, according to Lawrie, but most of them walked away, because it’s too hard and expensive to engage in a prolonged legal battle with the city.

‘We’re still owed money’

Lawrie’s firm is not the only one that claims it’s still owed a substantial amount of money. LMD Residential is another firm that worked under DDC as a subcontractor and is currently engaged in a dispute with the agency, according to Lawrie. The firm could not be reached for comment.

Another company, Arverne by the Sea, alleges it is also still due a large sum, in its case by the city housing agency.

“We’re still owed money,” alleged Gerry Romski, who oversees Arverne’s work for Build it Back. “But I fully expect that we will be compensated for the work we did.”

Romski said he had hoped the company would have been paid before the decade anniversary of Sandy’s landfall, which was Oct. 29, but that he believes this administration and Mayor Eric Adams will make sure the company is properly compensated.

Lawrie is not so optimistic. His firm began the contractual resolution dispute process with the DDC after the agency rejected its change orders. Navesink Prestige then took the issue to the office of city Comptroller Brad Lander, which has rejected the vast majority of the change orders and is still reviewing the last few, according to Lawrie.

Lawrie’s firm is preparing to make its case before the contract dispute board and intends to file a lawsuit against the city if Navesink Prestige’s claims are denied again, he says.

“If they believe paying you less than what you earned is being fully compensated, then I guess, yeah, they’re right,” said Lawrie.

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