It sounds 19th century retro and futuristic at the same time: a giant factory near Boston’s waterfront, literally churning out the city’s next wave of posh rental high-rises and office towers, one modular component at a time.
But if one top local developer has its way, it may be how the next wave of multibillion-dollar Hub mega-projects gets built.
Boston Global Investors, the master developer for the long-planned, multibillion-dollar Seaport Square project near Fan Pier, is exploring the idea with the city’s construction barons and labor union bosses.
So far, it has been tough going. The proposal faces skepticism from local trade unions, which would face a major change in time-honored ways of doing work.
Yet rising construction costs are rightly pushing developers to think outside the box, with everything from steel to labor cost on the rise as the economy picks up and a new development boom taking shape in Boston area.
And the bottom line is that already soaring Boston area apartment rents will go higher if construction prices are allowed to rise unchecked.
“Rents have to be a function of development costs, that’s just the way it is,” warns Charles Reid, executive vice president and director of Boston Global, which is pushing for a modular factory.
New York Shows The Way
OK, it all may sound pie in the sky. And it may turn out to be just in Boston, where old ways die hard.
But it’s anything but fantasy down in New York, where Forest City Ratner has broken ground on the nearly $5 billion Atlantic Yards project in Brooklyn, which will feature 16 different high-rises.
However, these towers won’t be built on site, but produced two miles away at a modular factory two miles away at the old Brooklyn Navy Yard.
First up is a 32-story apartment tower, with later modular towers at the Big Apple development to pass the 50-story mark.
The shift to factory-style modular construction is credited with shaving 10 to 15 percent off the cost of the Big Apple mega development and saving the project from being mothballed.
To Reid at Boston Global, the benefits of doing something similar in Boston are tantalizing.
Rising Costs Force Change
Boston Global is faced with the challenge of getting the multibillion-dollar Seaport Square project into construction.
It’s a huge endeavor – 6.3 million square feet of apartments, offices, stores and restaurants planned for all those old surface parking lots across from Fan Pier once owned by Frank McCourt.
And, like developers across Greater Boston, Boston Global is getting hit right and left with rising costs, from steel to labor.
Several industry indexes are all pointing to a jump, with Turner Construction Co.’s building cost index having risen 3.4 percent during the first quarter compared to the same period in 2012.
NAIOP Massachusetts, which represents developers across the state, is hosting a panel discussion on rising construction costs on May 10.
The rising costs, in turn, leave developers with a stark choice, faced with either cutting costs or jacking up rents and prices in what is already one of the most expensive metro markets in the country to live in.
Boston Global’s Reid would like to try another way – setting up a modular plant somewhere in the Boston area, possibly even in one of remaining warehouses or industrial tracts in the Seaport.
Just shifting construction into a factory setting could shave 5 to 6 percent off a project’s building costs, he told me.
On a billion dollar project, that’s a cool $50 million to $60 million.
The savings come from a speedier, more predictable construction process and lower labor costs.
“Modular has continued to cut costs,” notes Tom Erickson, executive vice president and regional general manager for Tishman Construction in Boston. “It transfers labor to a more controlled environment, with skilled labor just like a factory.”
Union Opposition
Let’s be clear – we are not talking about union busting.
Far from it. The unions supply the factory workers, more of whom are needed, albeit at lower rates, according to Reid.
But unlike New York, where trade unions eventually saw the future and embraced it, labor leaders in Boston have yet to warm up to the idea, he said.
I’m sympathetic to a point – change is never easy.
Yet pushing back against modular construction is a short sighted approach for our local labor bigwigs.
The way we do construction, whether it’s building a skyscraper or a single-family home, is positively medieval.
Yes, we have lots of big equipment, but the breakdown of the trades, and the laborious, on-site construction process would be roughly familiar the cathedral builders of 14th century France.
For a country that pioneered mass production and the assembly-line to churn out everything from cars and jets to Twinkies, why we can’t do the same for office towers and homes is a mystery.
It’s not a question of if it will happen, but rather why it hasn’t happened already.
After all, as workers and professionals in myriad industries have found, including journalism, it’s far better to get ahead of the future than to get run over by it.
Email: sbvanvoorhis@hotmail.com
