buhg1b
16 years ago
Follow the Money
With the winning bid for the Hudson Rail Yards announced, the author takes a critical look at the flawed selection process.
By Stephen Zacks
Posted March 31, 2008
If architecture critics have any influence or intend to serve as advocates for public policy decisions or the choice of developers on public land, they pretty seriously missed the boat on the project planned for the Hudson Rail Yards, 26-acre section of the 350-acre Hudson Yards development between Penn Station and Hell’s Kitchen. Like most major projects in New York that involve public land, the development strategy was inevitably going to need to minimize the use of public funds through some kind of private investment. Nobody was suggesting that it was wrong for the MTA to leverage the land to offset the huge cost of a subway extension, a prerequisite to creating a new district in the city that has the added benefit of making the Javits convention center suddenly less remote from public transport. And the developers of the site were happy to kick in for the cost of building a platform over the functioning Long Island Railroad train yard—$2 billion by itself—and adding a gigantic park in the middle that would take up half of the site. The problem with West Side rail yard development, according to the critics, was scale. And by scale, they meant tallness.
Ever since Jane Jacobs valiantly fought off Robert Moses’s highway through Washington Square Park, scale has been the bugbear of the high-minded urban critic. It’s a key complaint about the Atlantic Yards development in Brooklyn; the rezoning of the north Brooklyn waterfront to facilitate a promenade and public parks rather than industrial waste and trash collection; and it even figured—improbably—into discussions of the World Trade Center site. When you hear the word scale, reach for your gun, as Mao might have said.
Not every neighborhood has to look like Greenwich Village. In fact, if they tried to put another Greenwich Village on top of the Hudson Yards, we could reasonably expect critics to complain about historical pastiche. They would be right. But more gravely, the underdevelopment of the site, one of the few areas where enormous buildings would have almost no effect on site lines or quality of life in the surrounding neighborhoods, would be absurd land-use planning, and a major lost opportunity for economic growth and new architectural landmarks in the city.
For all the overheated rhetoric surrounding the few high-rises cropping up on the Lower East Side and the Williamsburg waterfront—and even, improbably again, Times Square—New York is growing slowly relative to Beijing, Moscow, Dubai, and countless other cities. We certainly don’t look forward to a time when historic neighborhoods are razed to create skyscraper cities. But investment is a hugely important part of a thriving city, and New Yorkers are fortunate to be able to pick and choose what kind and size of investment we prefer.
In most places, if anyone wanted to drop some billions of dollars into the expansion of the central business district, you could expect a fair amount of excitement and no end of crowing ceremonies on the part of city leaders. Here we had five teams of banks, developers, architects, and other designers fighting for the chance. And in all likelihood—barring an economic catastrophe far greater than hundreds of billions of dollars in stupid and poorly regulated mortgage loans—the winner will eventually double their money by the time all is said and done. (It’s worth recalling that the size of the U.S. economy was nearly $14 trillion last year.)
Despite the sometimes heady presentations of architecture and planning schemes at Cooper Union and in a gallery across from Grand Central, the MTA always made it clear that they would be voting on a development scheme for the site, not an architectural scheme, though there was very little transparency in terms of what the basis for its evaluation would be. None of the teams were permitted to put a dollar figure on the amount of investment they were proposing, at least publicly. Given the historic infiltration of the construction industry, someone should perhaps look into a conspiracy behind its selection of Tishman Speyer’s proposal with Helmut Jahn and Peter Walker, the only criminally bad architectural plan proposed. During the embarrassing initial presentation I noted to myself its fascistic symmetry and grandiosity, which I don’t mean as a slam against the German-born architect so much as a slam on fascistic symmetry and grandiosity. But, again, architecture was never the point, and the clumsy presentation seemed to acknowledge that.
Presumably the MTA was looking for a developer who actually had the financial resources to pony up for the land and build the project, which automatically excluded the anemic proposal by Extell Development and Steven Holl Architects, in any case a completely rhetorical plan lacking in detail and mostly intended as a kind of finger in the eye of large-scale development. Its gray military bastions huddled at the edges would have had the advantage for Holl of not obscuring his view of the Hudson River from his office on 31st Street but hugely undersold the site’s potential in terms of size and signature buildings. Times critic Nicolai Ouroussoff—posing as the social conscience of a profession that likes to flatter itself by pretending to have a conscience—bought into it hook, line, and sinker, as it were, appearing to recoil against the very idea of profit-taking in real estate. One would have to be a slightly nuanced urban critic to begin from the point of view that profits and public interest are not necessarily in opposition—that the use of the market to promote the public good is how pretty much everything worthwhile gets done—and a somewhat more nuanced architecture critic to do more than celebrate this merely rhetorical proposal in contrast to the genuine corporate trash.
For what it’s worth, I was always somewhat a fan of the eclectic proposal by Brookfield Properties with its hit list of contemporary architects, urban designers, and landscape architects, a truly spectacular assortment of inventive practices that included Thomas Phifer, SHoP, Diller Scofidio, SANAA, Field Operations, and Handel Architects, anchored by the skyscraper specialists at SOM, with Buro Happold on board for engineering. It had a thoughtful approach to the integration of the High Line, which extends into the site, in a way that fluidly merged the two districts, with smart planning along the border as a transition to a cultural center by the Japanese wizards at SANAA, and the ingenious landscapes of James Corner and the bolder meat-and-potatoes architecture in the middle. Clearly Brookfield too lacked the financial wherewithal to compete with the big banks, however, dropping out before a decision was announced, reportedly to focus on one of the adjacent sites that will be developed in a separate bid.
But I was also not totally apoplectic about the similarly eclectic but squarely middle-brow plan—mishmash is probably the word—by Kohn Pedersen Fox, Arquitectonica, Robert A.M. Stern, and West 8 for Goldman Sachs and the Related Companies, despite the latter’s history of defacing major public squares with clunky buildings like One Union Square South, the Astor Place condos, and the Time Warner Center. It would have turned the park into an instrument of branding for News Corp, but I don’t have that much of a problem with corporations per se and Rubert Murdoch owns a lot of classic movies that they were planning on showing on a big screen. FxFowle’s project with Pelli Clarke Pelli for Durst Vornado could have reliably been expected to more than fulfill the sustainable building promises made by all bidders—in accordance with the new PlaNYC guidelines— with a workman-like but pretty generic and inoffensive office-park architecture. In any case, all of this is moot, since the bottom line was always the bidding process taking place behind closed doors. Follow the money, as someone supposedly once said. Instead of architecture critics and tastemakers parsing aesthetics, we needed real estate and city room reporters to dig a little. The high-rise haters would have done much better to look for a rat behind the scenes (maybe a hooker scandal among the board members).
But so what if the MTA did in fact choose the developer based on how much they were willing to pay for the land? That’s the purpose of a competitive bidding process, greatly preferable to politicians handing out deals to connected insiders, as the Times noted on its editorial page. How do you quantify the value of a better urban design scheme, more sustainable features, better integration of the High-Line, more inspiring skyscrapers? A hundred twelve million dollars for a skyscraper aiming for LEED Platinum, as the outbid Durst Vornado partnership proposed? Five hundred million for city control of the site, as it offered? How much of a fare hike would New Yorkers be willing to pay for each improvement—in an area that most of us have never set foot and are unlikely ever to go? And how much profit or potential loss is publicly acceptable on an investment of untold billion dollars over the course of maybe 20 years?
Without a more transparent process it’s almost impossible to judge, but the World Trade Center competition suggests that more public involvement is not necessarily the answer. What seems clear is that shadowy agencies like the MTA and Port Authority, originally established to balance the competing interests of various states and cities in the metro region—there are at least five Pataki appointees still on the MTA Board—are ill-equipped to deal with these kinds of projects. I personally would have hoped that the critics, if their opinions mattered, had pushed for more ambition not only in terms of style but also size, something to compete with the gigantic carbon-neutral cities breaking ground in Abu Dhabi and the supertall buildings under construction in Dubai, even if that meant having to come to terms with the shocking prospect of somebody making a profit from real estate in New York.
http://www.metropolismag.com/cda/story.php?artid=3244
buhg1b
17 years ago
Net income
As a result of all the items above, the Company reported net income of $3,662,000, or $.59 per share-basic and diluted, for the year ended December 31, 2007.
As a result of all the items above, the Company reported net income of $3,108,000, or $.52 per share-basic and $.51 per share-diluted, for the year ended December 31, 2006.
During the fourth quarter of 2006, the Company reversed the allowance for doubtful accounts, which increased net income by approximately $107,000 or $.02 per share-basic and diluted.
Year Ended December 31, 2006 compared to Year Ended December 31, 2005
buhg1b
17 years ago
Revenues
Revenues increased $138,000, or .2%, to $77,266,000 for the year ended December 31, 2007, as compared to $77,128,000 for the year ended December 31, 2006. Revenues for the fourth quarter of 2007 were $18,928,000, a decrease of $663,000, or 3.4%, as compared to $19,591,000 in the fourth quarter of 2006.
During 2007, a number of projects experienced general construction delays in the early stages of construction, which reduced revenues for the year.
At December 31, 2007, the Company had backlog of approximately $111,300,000. Approximately $28,000,000 of the December 31, 2007 backlog is not reasonably expected to be completed in the next fiscal year. New contracts secured by the Company during 2008 will also increase 2008 revenues. The amount of backlog not reasonably expected to be completed in the next fiscal year is subject to various uncertainties and risks. The Company is actively seeking new projects to add to its backlog.
During the year ended December 31, 2007, the Company had earned 46%, 20%, and 13% of revenues, respectively, from its three largest customers. The Company bids on large multi-year contracts, which can account for more than 10% of its contract revenue in any given year.
Swick984
17 years ago
KSW Reports Record 2007 Profits and Record Backlog
LONG ISLAND CITY, N.Y.--(BUSINESS WIRE)--KSW, Inc. (NASDAQ: KSW - News) today reported preliminary fourth quarter and year end financial results for 2007.
Net income for 2007 was $3,662,000, or $.59 per share (basic and diluted), compared to 2006 net income of $3,108,000, or $.52 per share (basic) and $.51 per share (diluted).
During the fourth quarter of 2007, the Company’s net income was $940,000, or $.15 per share (basic and diluted), compared to $1,098,000, or $.19 per share (basic) and $.18 per share (diluted), for the fourth quarter of 2006.
Revenues in 2007 increased by $138,000, to $77,266,000, as compared to $77,128,000 in 2006. Revenues for the fourth quarter of 2007 were $18,928,000, a decrease of $663,000, as compared to $19,591,000 in the fourth quarter of 2006.
As of March 1, 2008, the Company’s backlog was approximately $134,000,000, which includes only the pre-construction portion of the Mt. Sinai Center for Science and Medicine project. Included in this backlog is a new $14,000,000 contract for a luxury rental project on Manhattan’s West Side, being developed by Glenwood Management, a long-time KSW client.
Chairman of the Board, Floyd Warkol, commented: “We have yet to see evidence that the national housing slowdown has affected construction in New York. Our reputation, value engineering, and trade management services continue to attract developers and construction managers.”
Swick984
17 years ago
KSW - Here is some more info to chew on. I feel that if earnings come in strong for the 4th quarter, it should't take much volume to really get things going. They have been under some strong accumulation by institutions over the past 6 months.
Consider this for a minute:
-as of June 30, 2007, 24 institutions owned shares of KSW totaling 1,678,629 shares.
-as of December 30, 2007, 22 institutions owned shares totaling 2,907,006 share.
Thats an increase of 1,228,377 shares purchased by institutions out of a current share count of 6,244,324 (based on the 9/30 10-Q)
My question is how can institutions purchase that many shares over 6 months and have the share price decline from $7.50 as of June 28, 2007 to $6.50 or so now???
I understand that the CEO Warkol has been selling shares, but thats a measly 105,000 shares over the last 2 quarters. Where are all of those other shares coming from???
Here is a list of some major buyers from June, 30, 2007 to December 30, 2007:
Morgan Stanley Asset Management reported 0 shares on September 30, 2007. On December 31, 2007, they reported 329,769 shares!!!
Moab Capital Partners LLC reported 0 shares on June 30, 2007. On December 31, 2007, they reported 608,965 shares!!!
Renaissance Technologies Corp. reported 83,585 shares on June 30, 2007. On December 31, 2007 they reported 210,875 shares!!!
The list goes on but I'm sure you get the point...
At this point they are trading at a rediculous 3.5x Enterprise Value to EBITDA multiple!!!
Here is what some of their competitors trade at:
FIX - 6.6x
EME - 6.7x
If KSW traded at 6.0x EBITDA, the share price would be $8.92.
$8.92!!!
Sure KSW is smaller, but they are more profitable and have more room to grow given the nice jump in backlog.
Currently, I think they are a prime target for a buyout, plain and simple. With this much cash on the BS, it would take nothing for a P/E firm or a competitor such as EME or FIX to just buy them out. We'll see...
Fourth Q earnings should be coming out soon. Maybe it'll be the spark we need. I've been holding KSW for a long time now (2 years) and it is currently my largest position...
Good luck to all...
linuspop
17 years ago
KSW to Trade on the NASDAQ
Monday October 29, 12:00 pm ET
LONG ISLAND CITY, N.Y.--(BUSINESS WIRE)--KSW, Inc. (AMEX: KSW - News) announced today that the NASDAQ Stock Market has approved its common stock for listing on the NASDAQ Global Market. The Company expects to begin trading on the NASDAQ on or about November 12, 2007.
Chairman of the Board, Floyd Warkol, commented: “We expect that our shareholders will benefit from the increased visibility that the NASDAQ offers.”
In accordance with AMEX Rule 18, the Company has notified the American Stock Exchange of its intention to delist from the AMEX.
About KSW
KSW, Inc., through its wholly-owned subsidiary, KSW Mechanical Services, Inc., furnishes and installs heating, ventilating and air conditioning (HVAC) systems and process piping systems for institutional, industrial, commercial, high-rise residential and public works projects. KSW Mechanical Services, Inc. also acts as Trade Manager on larger construction projects, such as the New York Presbyterian Cardiovascular Center.
linuspop
17 years ago
KSW continues to get large contracts in NYC
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KSW Awarded Two Downtown Projects Totaling $14,600,000
Thursday October 4, 4:15 pm ET
LONG ISLAND CITY, N.Y.--(BUSINESS WIRE)--KSW, Inc. (Amex: KSW - News) announced that during this week the Company was awarded two new projects on West Street in downtown Manhattan. The contracts total approximately $14,600,000.
The first project is a 15-story condominium, designed by Robert A. M. Stern, and being developed by Related Properties, LLP. This is the third project where KSW is working with this prestigious developer.
The other project is a rental apartment building being developed by The Jack Parker Corporation, a new KSW client. KSW was recommended to this owner by the construction manager, Gotham Construction Co., Inc., with whom KSW is currently working on three other projects.
KSW's CEO, Floyd Warkol, commented: "We continue to use our value engineering skills to save our clients money and they continue to reward us with their new projects."
About KSW
KSW, Inc., through its totally-owned mechanical subsidiary KSW Mechanical Services, Inc., furnishes and installs heating, ventilating and air conditioning (HVAC) systems and process piping systems for institutional, industrial, commercial, high-rise residential and public works projects. KSW Mechanical Services, Inc. also acts as trade manager on larger construction projects, such as New York Presbyterian Cardiovascular Center.
VG1982
17 years ago
KSW, Inc.'s Second Quarter Profits Grow
Thursday August 2, 8:30 am ET
LONG ISLAND CITY, N.Y.--(BUSINESS WIRE)--KSW, Inc. (AMEX: KSW - News) today reported financial results for the second quarter of 2007.
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Second quarter 2007 net income was $771,000, or $.13 per share basic and $.12 per share diluted, as compared to a net income of $618,000, or $.10 per share (basic and diluted), for the second quarter of 2006. Included in the results for the second quarter of 2007, are stock compensation expenses of $91,000 related to the exercising of stock options and the adoption of the new accounting standard, FAS-123 ®. Excluding the effect of these stock compensation expenses, the Company earned $862,000, or $.14 per share (basic and diluted), for the second quarter of 2007.
Net income was $1,494,000, or $.24 per share (basic and diluted) for the first half of 2007, as compared to net income of $964,000 or $.16 per share (basic and diluted) for the same period in 2006. Included in the results for the first half of 2007 are stock compensation expenses of $273,000 related to the exercising of stock options and the adoption of FAS-123 ®. Excluding the effect of these stock options, the Company would have earned $1,767,000 for the first half of 2007, or $.29 per share (basic) and $.28 per share (diluted).
All references to per share amounts in this release are based on the retroactive effect of the stock dividend declared on May 8, 2007.
Total revenue for the second quarter of 2007 decreased by 4% to $19,320,000, as compared to $20,132,000, for the second quarter of 2006. Revenue for the second quarter of 2007 would have been higher, but several new projects which were expected to start in the first quarter of 2007 continued to experience delays. Total revenues for the first half of 2007 increased by 4% to $37,311,000, as compared to $35,893,000 for the first half of 2006.
The Company's backlog at the end of the second quarter of 2007 was approximately $90,000,000. In addition, during the first two weeks of July 2007, the Company obtained several new projects totaling approximately $25,000,000.
Chairman of the Board, Floyd Warkol, commented that: "We continue to see strong demand for our value engineering and trade management services."
linuspop
17 years ago
KSW Awarded Prestigious West Side Project
Thursday July 12, 11:13 am ET
LONG ISLAND CITY, N.Y.--(BUSINESS WIRE)--KSW, Inc. (AMEX: KSW - News) announced today that it has been awarded a contract, valued at approximately $9,200,000, to furnish the HVAC systems for a new mixed use project at 808 Columbus Avenue in Manhattan. The project, which extends from 97th to 100th Streets, includes a 359 unit apartment tower situated atop 220,000 square feet of retail space. Construction is scheduled to begin in September, 2007.
KSW's Chairman, Floyd Warkol, commented that "Both the developer and the construction manager are repeat clients. The developer is headed by The Chetrit Group, for whom KSW is currently performing work at an apartment building at 1510 Second Avenue. KSW has worked on several projects for the construction manager, Gotham Construction Company, including the large apartment building at 10 West End Avenue currently near completion."
linuspop
18 years ago
Nice quarter. Minus items, EPS was .18 vs. .10 and year end backlog was $110M vs. $82M. Nice improvements! Foward p/e is under 10. When you consider the $2 of cash on the balance sheet plus the safety of KSW having such a large backlog, I think this looks quite undervalued in the $6's with these earnings.
KSW's Fourth Quarter and Annual Operating Revenues and Profits Continue to RiseLast update: 2/22/2007 9:27:20 AMLONG ISLAND CITY, N.Y., Feb 22, 2007 (BUSINESS WIRE) -- KSW, Inc. (KSW) today reported preliminary fourth quarter and year end financial results for 2006. Total revenues for the fourth quarter of 2006 were $19,591,000 as compared to $17,101,000 for the same period in 2005. Gross profit for the fourth quarter of 2006 was $2,925,000 as compared to $2,694,000 for the fourth quarter of 2005. Net income for the fourth quarter of 2006 was $1,016,000 or $ .18 per share (basic and diluted) as compared to net income of $996,000 or $.19 per share (basic and diluted) during the fourth quarter of 2005. Net income for the fourth quarter of 2006 includes a $107,000 gain resulting from the reversal of the allowance for doubtful accounts, and a $101,000 expense for stock compensation related to the exercising of stock options and the adoption of a new accounting standard, FAS-123R. Net income for the fourth quarter of 2005 was effected by the previously disclosed settlement of the Co-Op City claim of $479,000. Without these adjustments, net income for the fourth quarter of 2006 would be $.18 per share (basic and diluted), as compared to $.10 per share (basic and diluted) for the fourth quarter of 2005. Total revenues for 2006 were $77,128,000 as compared to total revenues in 2005 of $53,378,000. Gross profit for 2006 was $9,973,000 as compared to $6,481,000 for 2005. Net income for 2006 was $2,765,000, or $.49 per share-basic and $.48 per share-diluted, as compared to net income of $2,711,000, or $.50 per share (basic and diluted) for 2005. Net income for 2006 includes a $107,000 gain resulting from the reversal of the allowance for doubtful accounts, and a $374,000 expense for stock compensation related to the exercising of stock options and the adoption of FAS-123R. KSW Inc's financial results for prior periods have not been restated for FAS -123R. Net income for 2005 was increased by the Co-Op City claim settlement and a tax benefit resulting from the previously disclosed reversal of the deferred tax allowance. Without these adjustments, the net income for 2006 would be $3,032,000 or $.54 per share-basic and $.53 per share-diluted, as compared to $.27 per share (basic & diluted) for 2005. As of December 31, 2006, the Company had a backlog of approximately $110,000,000, as compared to a backlog of approximately $82,200,000 as of December 31, 2005.