CRAIN'S
STAFF GAP PUMP UP EXPENSES
KEY WORKERS, SUBCONTRACTORS MIA DURING BOOM; PROJECTS DELAYED

NEW YORK BUSINESS April 16-22, 2007 (continued)
A field supervisor applied for a job at Aragon Construction in 2004, requesting a salary of
$65,000. Alex Getelman, president of the Manhattan-based firm, was convinced that $50,000
was the appropriate salary. So he passed on the applicant, who would have handled the
day-to-day oversight of a project.

The supervisor recently reapplied for the same job at Aragon, this time seeking $110,000.
There is a shortage of experienced supervisors, and the best ones can demand big raises,
says Mr. Getelman. We are seeing top people making more than $150,000.

With the boom in building projects all over New York, construction companies face a shortage
of skilled employees and subcontractors which, along with increases in prices for materials,
is driving up costs. Real estate company Jones Lanf LaSalle estimate that construction costs
climbed 1% a month in 2006. "Four years ago, you could build quality residential projects for
$300 a square foot," says Mitchel Maidman, president of Townhouse Management Co., a
Manhattan developer. "Now, it costs at least $400."

When construction activity slowed after the Sept. 11 terrorist attacks, subcontractors eager
to find work lowered their bids. As business picked up-especially work on residential towers
throughout the city-subcontractors began raising prices.

Now they often are unavailable. The situation is expected to get worse as momentum builds on
a number of giant projects, including work on Ground Zero, a new subway in lower Manhattan,
and stadiums for the Yankees, the Mets and the Nets.

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