Building owners brace for strike.

New York City building owners are bracing themselves for a potential walk-out by 28,000 service workers after talks on a new contract ended unsuccessfully last week.

Members of Local 32BJ--the local arm of the Service Employees International Union whose contract expires at midnight on April 20--rejected a contract proposal from the Realty Advisory Board on Labor Relations (RAB) at a meeting on March 22.

The two sides are divided on both healthcare and wages. As the RAB proposed a one year pay freeze as well as contributions from workers for their health coverage, Mike Fishman, president of Local 32BJ warned, "Make no mistake, Local 32BJ is prepared to strike if the multibillion dollar real estate industry refuses to provide building services workers the healthcare coverage, wages and pension they need to make ends meet."

In a series of union meetings last week, 3,754 union members voted unanimously to strike if their demands are not met. This would be the first service workers strike since 1991's 12-day strike. If a strike were to occur, it would affect 3,500 residential buildings throughout Brooklyn, Queens and Manhattan, as well as some in Nassau and Suffolk Counties.

Nicholas LaPorte, executive director of the Associated Builders & Owners of Greater New York, said Fishman was a new, and responsible, union leader who was working hard to secure a good deal for his members. But he added, "If they can't come to an agreement, there may be no other choice but for [the service workers] to strike."

Jim Berg, president of the RAB, said, "I think the threat of a strike is very real, as real as it is in any labor negotiation. We have some daunting issues with respect to benefit funds that are here this year that haven't been there in [past] negotiations."

Because of a joint health plan covering both residential and commercial building service workers, the residential workers were given better health benefits in 2005 with the renegotiation of the commercial building workers' contract. According to Paul Salvatore, of Proskauer Rose, the RAB's legal counsel, those benefits have already cost residential owners increased contributions of more than $4,000 per employee per year, for a total contribution of $10,700 over the three years ending in 2007.

Now the RAB is calling for service workers to pay for 15% of their health coverage, which the Local 32BJ considers an outrageous request.

Said Matthew Nerzig, spokesperson for the Local 32BJ, "Our workers, who make $37,000 a year in one of most expensive cities in world, can't afford to pay for health care. [Building owners have] always paid for the cost of health care and we expect them to do so in future.

"Since the $200 billion real estate industry is doing well and the forecast is that it will continue to do well in future, it's not fair for an industry doing so well to expect building workers more modestly paid to take on that expense."

The union also requested a 3.5% wage increase in line with the cost of living in New York City, which the RAB rejected. Service workers make roughly $37,000 a year. The union reported that according to the Economic Policy Institute, a budget for a family of two adults and two children in Manhattan comes to $58,656 a year.

According to Berg, the strong market for co-ops and condominiums that the union keeps referring to is irrelevant. "Owners of co-ops do not reap any benefits from higher prices unless they sell," he said. "Owners of rental properties, especially those under rent controls, get no benefit from the strong market for sales of co-ops. Operating costs are the relevant issue in these negotiations." He pointed out that the cost of taxes, energy, insurance, and healthcare and pension benefits have skyrocketed for all owners, which is why they're asking service workers to step in and contribute to part of their health care coverage.

According to the RAB, a 32BJ porter is the best paid in the country, making $718 a week in wages. The average, annual cost per worker in a residential building, when vacation, sick days, healthcare, pension and other benefits are considered, is $1,138 a week, or $59,198 a year. Since the 1991 strike, 32BJ residential workers have received increases that have exceeded the rate of inflation by almost 50%.

Although several meetings have been scheduled over the next few weeks in a bid to settle the contract, building owners are already preparing for the worst. "We've sent out information to all the owners on how to prepare their buildings and operate them in event a strike does occur," Berg said. "We think owners are responding appropriately, taking the steps necessary so that buildings are set up and able to stand against whatever may occur."

The RAB sent out a checklist of important advance preparations to all of its members. Because contractors and repair workers may not cross a union picket line, RAB suggests that building owners conduct a comprehensive check of building systems now. They also recommend building owners make arrangements for garbage pick-up, security and having an adequate fuel supply on hand.

"There's a strike contingency plan everyone should be putting into effect, ensure essential building services run smoothly and continue to do so," LaPorte said.

The New York Association of Realty Managers held a strike contingency seminar at its monthly meeting on March 22, which over 150 members attended. Several speakers gave advice on different areas that could be a problem if a residential service workers strike were to occur. Tim O'Brien, president of the NYPD Criminal Investigations unit, was a proponent of building owners assessing the security of their neighborhood. Since these assessments should be done periodically anyway, he said, now is a good time to take neighborhood assessments of security needs of buildings.

Reducing the amount of garbage a building produces could be one way to lessen the burden of garbage disposal at residential buildings during the potential strike, said Pat Grayson of the Department of Sanitation. Now is a good time for building owners to educate their tenants on how to reduce garbage, by reducing what they bring into the building as well as reconsidering what they use as packing material.

Al Mailo, president of Dunwell Elevator, advised building owners to check up on all their elevators to make sure phones in elevators, gate switches on manual elevators and locks on motor room doors are working properly. Another topic of the meeting was picket line etiquette. Robert Gosseen, head of the labor and employment law section at Gallagher Gosseen Faller and Crowley, reminded NYARM members that the service workers have the right to picket and they must respect that right.