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Developer Takes Money From Unions & Taxpayers, Hires Non-Union

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NYS Assemblymember Emily Gallagher speaks at a rally outside of LendLease HQ in Manhattan.

By Mark Colangelo

Australia-based real estate developer Lendlease recently broke ground on a new residential development at 1 Java Street in Greenpoint, Brooklyn. The massive project, which consists of 5 separate buildings occupying an entire city block, was initially hailed for its plans to integrate sustainable building practices. However, it has quickly drawn attention for a different reason. New York City’s construction unions and politicians are accusing it of using union pension and state agency money to higher notorious anti-union subcontractors and non-union workers.

Who’s Footing The Bill?

The 1 Java Street project received taxpayer dollars from multiple programs, including massive tax breaks via the 421-a program. This controversial subsidy allows developers to pocket billions in tax breaks each year when they include ‘affordable’ housing units in their residential developments. Many, including New York’s construction unions, have lambasted the program. They argue that the term 'affordable' as defined by the program still prices out individuals earning less than six-figure incomes. Additionally, they criticize the lack of a minimum wage requirement for construction workers on projects that qualify for these tax breaks.

Taking a $4M State Grant

Lendlease also received $4 million dollars in aid from the New York State Energy Research and Development Authority, a program aimed at accelerating green construction projects, in order to construct a geothermal heat-exchange system. These systems increase heating and cooling efficiency by pumping air from deep underground where the ambient temperature is a steady 50-60 degrees all year round.

Lendlease allegedly has hired one non-union contractor that has been convicted of wage theft and another whose owner has done jail time for tax evasion.

Taking From Union Pension Fund

In addition to taxpayer dollars, Lendlease is being funded by money from a union pension fund. They secured a $360 million loan for the project from Aware Super, a superannuation fund. Established in 1992, Aware Super was created to manage pension funds for public-sector employees in New South Wales, Australia. It currently has over 1.1 million members and manages approximately $100 billion in investments.

And Then Slapping New Yorkers and Unions In The Face

Despite being bankrolled by taxpayer and union money, Lendlease is being accused of using non-union workers on the project. What’s worse, they have hired two of the most infamous anti-union contractors in the industry: RNC Industries and Gotham Drywall. These two contractors have long histories of anti-labor practices. RNC, the concrete contractor for the 1 Java Street project, is notorious for wage theft and safety violations. Notably, one of its principal owners was imprisoned for evading taxes related to nonunion worker pay. Gotham Drywall is a well known union buster, infamous for using a complex network of shell companies to obscure worker records and evade proper tax reporting. Its web of shell companies has been implicated in wage theft, and was the target of a class-action lawsuit.

The practices of RNC and Gotham Drywall are fundamentally at odds with fair labor practices and worker’s rights. So the fact that union and state agency money is being funneled to line their pockets does not sit well with many. Joseph Geiger, head of the New York City District Council of Carpenters summed the collective frustration with this situation: “Stealing union jobs while using union pension and state agency money is truly despicable. Every worker deserves to have access to good union jobs with family-sustaining wages, hard-earned pensions, quality benefits, and life-saving training.”

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Mark Colangelo is a writer and blogger.

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