Non-Essential Construction Halts Across the State
As the construction industry was exempt from the "New York on Pause" order that non-essential workforces work remotely during the COVID-19 crisis, City construction sites essentially functioned on a business-as-usual basis. However, due to concerns about health risks to site workers, on March 27th the government deemed that the construction industry is no longer an essential workforce, putting a halt on all non-essential construction.
Partner in Herrick's Real Estate Department Brendan Schmitt, who represents owners, developers and lenders in construction law, discussed the matter with Crain’s New York Business. Speaking with Crain’s, Brendan stated, “[t]he decision to deem swaths of construction non-essential will affect players from the top of the construction chain to the bottom…[t]he big lenders who finance construction projects make their deals based on a pre-set timeline that has now been disrupted.”
Some construction projects are still deemed essential including projects critical to first-responders and healthcare professionals, affordable housing and homeless shelters, to which, the article mentions, Brendan said, “but what projects will fall under this designation is not so straightforward…[b]uildings in New York often designate a portion of their units as affordable….There’s a wide swath of Manhattan where you have to have an affordable housing component by zoning. Is it the intent of the exemption that it be extended that far? I’m hopeful that the uncertainty that has been created will be resolved in further guidance being issued.”