Michael Capasso and Elizabeth Crowley on the site of the East Side Coastal Resiliency project.
Michael Capasso is the founder and President of C.A.C. Industries, a 100% employee-owned company that is renowned as a leader in heavy civil construction in the New York area. Specializing in complex, high-profile projects, C.A.C. has played important roles in the construction of Hudson Yards, the High Line, and JFK Airport, and is currently involved in massive jobs such as the Second Avenue Subway Extension, Battery Park Resiliency Project, and East Side Coastal Resiliency Project. Capasso is also the Managing Member of Green Asphalt, a hybrid asphalt plant that has supplied nearly 2 million tons of 100% recycled asphalt to the NYC metropolitan area since it opened in 2011.
In 2024 Capasso was honored with the BTEA’s Constructor of the Year award and Crain’s named him a Notable Leader in Sustainability. Earlier this year, he was appointed by Transportation Secretary Sean Duffy to the U.S. DOT’s 12-member national Advisory Board.
BTEA President Elizabeth Crowley spoke with Capasso about the effects of the Scaffold Law on the construction industry and the importance of contractors getting more involved in advocating for themselves in the political arena.
BTEA: How does the Scaffold Law affect your business?
Capasso: I think the Scaffold Law affects everyone in New York, because the insurance market is extremely tight. There are only a few carriers who want to underwrite New York insurance. The competitive marketplace is all aware that no one wants to write it, so the cost of purchasing insurance is extremely high, which then gets passed on to the taxpayers. In private construction, developers are paying more money to CMs, which then goes back into the cost of apartments, whether rent or sale.
I spoke to a competitor of ours who is based in New Jersey, who doesn’t do a lot of work in New York, and they say they only want to bid on OCIP jobs, so they don’t have to purchase New York insurance. Over the last 10 years, our insurance has gone up from like 2% to over 10% of sales with much higher deductibles. We had de minimis deductibles at 2% and I think we’re at $500,000 or $750,000 now. We are always worried when renewal time comes around whether our underwriter will want to renew our policy. Take cost out of it. The question is whether they will even want to still do business in New York.
BTEA: Besides the cost of insurance, what are other challenges you’re facing right now?
Capasso: We get hit a lot with third-party claims and lawsuits that are very hard to defend, because those suits come in sometimes a year or two after we’re finished with a location, which makes it difficult to gather the proper evidence to respond to them, and it seems like the courts, whether it’s the juries or the judges, are very pro-plaintiff.
BTEA: For a lot of folks in the industry who are involved in the current campaign to reform the Scaffold Law, this is the first time that they’ve been actively involved in politics and thinking about how government affects their businesses from a legislative standpoint. Do you think that more contractors should take an interest in politics?
Capasso: Definitely. And I think the message needs to get out, because it seems to me—without being on the inside—that the politicians who stand up and say they want to make New York affordable are also the same politicians who allow these laws to go on, which make the cost of goods, services, and construction much higher, which then gets passed on to the taxpayer. So, it’s a self-fulfilling cycle that doesn’t lower costs for anyone.
BTEA: C.A.C. has played a key role in delivering the $1.3 billion East Side Coastal Resiliency project, which is the NYC Department of Design and Construction’s largest project to date. What is the status of that project?
Capasso: The first section of the park was opened by Memorial Day, and another section was opened right around Labor Day. Now we’re advancing north, and it looks great. What’s interesting about East Side Resiliency, and this goes back to the de Blasio administration, was that there was so much community opposition to the job, especially when we got started cutting down trees, and now people are so happy with the final product.
We’re not involved in the outreach before a job gets bid, but I wish somehow the government could better educate the community—and I don’t mean the community politicians, I mean the actual people who live there—on what the final product will look like, because I know a lot of people don’t go to Community Board meetings or see the outreach that the stakeholders involved do. Now that so much of it is complete, the people who live in that area, they’re so happy, they can’t believe the park they have. And some of those people were the same people who were out there protesting the construction before it got underway. We need to close that outreach gap.
BTEA: Not too long ago, you converted C.A.C. into an ESOP [Employee Stock Ownership Plan], and what was rather unique about your approach is that you brought your union workers into the ownership structure. Does that mean if C.A.C. is hit with a staged accident lawsuit, or some other type of fraudulent claim that exploits the Scaffold Law, that any judgment against your company could directly hurt your union workers?
Capasso: Let me start by saying, and I’m speaking on behalf of the contracting community here, all of us want every worker to go home safe at the end of the day, and none of us wants anyone in the general public to get hurt, injured, or anything else that disrupts their lives.
To answer your question directly, the high cost of insurance and then the cost of paying these claims, decelerates the value of the retirement plans in our ESOP, because there’s less retained earnings that would increase the value of their shares in the ESOP, and that’s how it’s directly correlated to C.A.C.’s retirement plan for union and non-union participants alike.