by GREG B. SMITH
State officials were warned that the contractor hired to demolish the toxic Deutsche Bank tower had deep ties to a company that caused previous fires, the Daily News has learned.
One of the fires occurred in August 1996 at B. Altman's department store in midtown Manhattan. It burned out of control for 10 hours, injuring 26 firefighters.
Almost 11 years to the day of the B. Altman fire, two firefighters were killed Aug. 18 while battling a blaze in the Deutsche tower at Ground Zero.
The Lower Manhattan Development Corp., the state agency that owns the contaminated tower at Ground Zero, first hired Safeway Environmental Corp. to raze the Deutsche tower, then replaced it with the John Galt Corp.
Investigators were long concerned that Safeway in effect controlled Galt, which had no experience demolishing towers.
Despite multiple warnings about Safeway, the state allowed five Safeway executives to run the Deutsche job for Galt, and allowed Galt to lease or purchase all its equipment from Safeway, records show.
Safeway's involvement in the job set off alarms at the city Department of Investigation, which discovered Safeway had not disclosed that a company director was a reputed Gambino crime family associate named Harold Greenberg.
The DOI warned the LMDC about Safeway's problems in two letters in January and April 2006, about the time the LMDC was claiming it had "removed" Safeway from the job and hired Galt.
At one point in April 2006, DOI warned LMDC about the connection between Safeway and another tainted company, Rapid Demolition, and its owner, Philip Schwab.
The agency was concerned that Schwab, a convicted felon, would benefit financially from the Deutsche Bank job. His son, Mark Schwab, was on Safeway's payroll working on the Deutsche job, documents show.
Rapid Demolition was barred from bidding on city contracts in July 2002 after multiple problems, including a massive scaffolding collapse at a city Sanitation Department building undergoing demolition on W. 57th St.
Before that collapse, there were four fires at the W. 57th St. site, two of which occurred after work hours, records show. Another issue with Rapid, the DOI said in a July 18, 2002, memo, was the B. Altman's fire on Aug. 23, 1996.
Fire marshals determined embers from a welding torch used during demolition at B. Altman's likely caused the blaze.
The 26 firefighters injured that day suffered heat exhaustion, smoke inhalation and minor burns. Eleven were hospitalized.
DOI's warning in April 2006 was the second red flag regarding Safeway, according to an internal LMDC document.
In a 2005 application for LMDC approval to work at the Deutsche job, a Safeway executive, Mitchel Alvo, admitted the company had been fired from an earlier government contract.
The reason was "due to the intentional provision of false or incomplete information" to that unnamed agency. The LMDC document does not further explain the nature of this "false or incomplete information."
Nevertheless, the LMDC approved the hiring of Safeway in 2005, then allowed its executives - including Alvo - to run the Deutsche Bank job for John Galt. The LMDC declined to respond to written questions.
The Manhattan district attorney is investigating why the LMDC allowed Galt on the job knowing of Safeway's involvement.
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