Crain's Cleveland Business by Crain's Cleveland Business

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12/1/2011

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DECEMBER 5 - 11, 2011

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Ratner sees solution to Tech prevalence helps e-recycler company takes advantage of focus NYC housing shortage in Cleveland on ‘green’ practices, handles old electronics modular construction By THERESA AGOVINO Crain’s New York Business

Developer Bruce Ratner thinks he has found a solution to the city’s vexing housing shortage and wants to showcase the answer at his massive Atlantic Yards Ratner project in Brooklyn, N.Y. The CEO of Forest City Ratner — an arm of Cleveland real estate giant Forest City Enterprises Inc. — wants to construct 15 apartment towers planned for the 22-acre site by using modular construction, claiming it will shave about 20% off the construction costs. He said he hopes to start assembling and constructing the first test case — a 32story, 350-unit residential building stacked on the corner of Flatbush Avenue and Dean Street — this spring. “We could build 20% more housing this way,” Mr. Ratner said. “This could be positive for the city.” Mr. Ratner faces numerous challenges. He must reach a deal with various building trade unions in which they’d agree to the lower labor costs that modular construction promises. His company also still needs to obtain financing. “At this point, we are pursing the prefabricated model,” Mr. Ratner insisted, adding that Forest City has been working on this approach for more than two years.

the soured economy. However, the $4.9 billion project’s signature element, the arena that will be the home of the Nets basketball team of the NBA, is under way and should be completed next fall. The surrounding residential buildings are slated to be built using modular units that are constructed offsite, then fitted into the steel that serves as the tower’s frames. The process has been widely used in a variety of projects, but never on a structure as tall as the one planned by Forest City. Designing a bracing system to protect against wind and other forces has been a challenge. Forest City said it believes it has overcome the problem in collaboration with SHoP Architects, Arup structural engineers and XSite Modular. If Forest City reaches a union deal and finds financing, it intends to make the modules in a factory in the city, said MaryAnne Gilmartin, executive vice president at Forest City. If the idea of building this way takes off, the factory could create modules for other developers, creating even more jobs. In modular building, roughly 60% of the construction is done in a factory. That means less congestion, noise and pollution around the building site, Ms. Gilmartin noted.

New building, more jobs

A naysayer isn’t convinced

Union officials also hope a deal can be struck. “We are in the process of attempting to reach an agreement on modular construction that will work for the building trades and Forest City in an effort to create permanent employment opportunities for our members,” said Gary LaBarbera, president of the Building and Construction Trades Council. Construction of the site has been delayed for years by lawsuits and

A factory also can be a safer environment for construction workers as they toil inside on the ground rather than outside. Still, not everyone is convinced this style of construction will be safe for residents. “Past experience has shown that designing a ‘bracing system’ for prefabricated steel buildings to protect against storms has been challenging,” said City Councilwoman Letitia James, a longtime Atlantic Yards foe. ■

Area Verizon retailer eyes bigger national profile By MICHELLE PARK mpark@crain.com

Determined to become one of Verizon Wireless’ top national agents, an Independence-based chain of Verizon retailers has spent this year expanding aggressively, and expects to do the same next year. The Wireless Center has increased its number of locations to 34 in Northeast Ohio, up from 27 a year ago. Across its five-state footprint, which includes Michigan, Kentucky, Pennsylvania and West Virginia, the chain counts 60 locations, up from 40 a year ago. Eight more locations are slated to open yet this year. “We want to get a national contract,” said Junaid Hasan, one of The Wireless Center’s three founders. “We want to be considered not a regional player, but a national player.” He noted that an advantage

of achieving national status is being one of the first agents to sell Verizon’s newest products. The company, which conservatively expects $40 million in sales companywide this year, expanded quickly during 2011 into new markets, including central Pennsylvania and Detroit, a city where it now operates a handful of locations. By the end of 2012, the company intends to open another 15 to 20 locations in Northeast Ohio, either by acquiring other dealers’ locations or by simple expansion, Mr. Hasan said. Already, The Wireless Center is one of Verizon’s larger premium authorized retailers, according to Tony DePinto, district manager for Verizon Wireless, Northeast Ohio. “There are a few that are growing rapidly, and they are one of them,” he said. “They just do a great job for us. I can’t say enough about them.” ■

By MICHELLE PARK mpark@crain.com

Thanks to the ubiquitous use of electronics and the spread of the green movement, E-Scrap Solutions of Cleveland is logging substantial growth. E-Scrap, a computer and electronics recycling company, said its staff has more than doubled since January to 28 employees from 13. It also has increased its physical space at 7510 Bittern Ave. on the city’s East Side to 65,000 square feet from 43,000, said Craig Silverstein, who founded the company in January 2007. E-Scrap obtains materials, such as cell phones, televisions, computers and monitors, and sells them for scrap or to dealers that refurbish them for reuse. “As you see more and more of the government, the corporations, going green, they are now thinking, ‘Hey, where do we send our computers, our electronics, for recycling?’” Mr. Silverstein said. “I’m definitely not surprised,”

Mr. Silverstein said of E-Scrap’s growth. “I don’t believe we’re slowing down at all.” He anticipates the company will add at least 10 employees in the coming year. Plus, he expects to open a second recycling and processing center in another state by the second quarter of 2012. The entire electronics recycling sector has grown dramatically in recent years. According to a recent report by International Data Corp. of Framingham, Mass., the sector employed more than 30,000 full-time workers in 2010, up from 6,000 in 2002, and collected and processed domestically more than 3.5 million tons of end-of-life electronics last year, up from 600,000 tons in 2002. “It’s clearly an industry that’s growing now and has even more room for additional growth,” said Kevin Lawlor, spokesman for the Institute of Scrap Recycling Industries, which represents recyclers. “People are purchasing and using more electronic products, and given that, they’re recycling them more.”

“(Electronics recycling is) clearly an industry that’s growing now and has even more room for additional growth.” – Kevin Lawlor, spokesman, Institute of Scrap Recycling Industries

E-Scrap’s clients include a couple hundred local schools, companies in Northeast Ohio and nationwide, and government entities. In addition, EScrap hosts roundups where residential users can drop off electronics. Most of the company’s new hires are people who work on the disassembly line, where they take apart computers and other items, Mr. Silverstein said. The volume of materials brought in for recycling or reuse is up 25% to 30% in 2011 from last year, he noted, and revenues are up about 25%. The privately held company does not disclose revenue figures. A good portion of the company’s growth, Mr. Silverstein noted, occurred after E-Scrap attained two industry certifications this year. “Some companies will not deal with you unless you are certified,” he said. ■

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