Why Do Developers Keep Hiring Non-Union Contractors?
Despite their record of costly mistakes, non-union contractors keep getting hired for big jobs by developers. One insider calls that the definition of insanity.
It’s said that the definition of insanity is doing the same thing over and over again and expecting a different result each time.
“Hey, if that’s true, then we have some insane developers here in New York City,” said a New York construction estimator who spoke to us under the condition of anonymity because, as he told us, “I sometimes have to work with the insane.”
“Just look at the mounting evidence against hiring non-union. Their messed up projects are all over the city,” he said. “But developers keep on hiring these guys and expecting their project to be different. Yeah, pretty insane.”
Here is some of that mounting evidence.
The Money Pit That Is 125 Greenwich Street
This big re-build started in 2014. But an important lender suddenly pulled out of the project so he could deal with charges of art sales and tax fraud (to which he pleaded guilty). The pursuit of new investors and threats of foreclosure caused delays.
A new management team, Fortress Investment Group (FIG), stepped in and landed a huge financing deal to finish the construction. But, FIG hired Time Square Construction, a non-union contractor that had been owned by Navillus, a famously double-breasted and double-crossing contractor who was sued by unions for $76 million, lost and filed for bankruptcy.
So it should be no surprise that on March 20, 2024 a fire broke out on the roof of the building, caused by a non-union welder. “That fire was the result of negligent welding,” our anonymous source told us. “There are rules to follow when welding, which is why the job requires a license. But this is how non-union saves money. They just have any available worker grab the equipment and fire it up.” The NYC Fire Department was able to control and put out the fire.
“If they’d hired union I’m sure that building would be complete by now. It’s been 10 years,” the estimator said.
“Their messed up projects are all over the city, but developers keep on hiring these guys and expecting their project to be different. Yeah, pretty insane.”
The Never Ending Tale of the Tower on Maiden Lane
The luxury tower at the corner of South Street and Maiden Lane on the East River was to offer $7 million units and a private yacht for tenants. But in late 2020 the project ran aground because of financing problems, lawsuits and structural defects.
See, the non-union contractor hired by developer Pizzarotti, had built the foundation on shifting sand, not bedrock, and as a result the 670-foot tower is leaning.
Making matters worse, that non-union contractor was running the site when a construction worker—the father of five—was killed in a ridiculously negligent accident. He fell 29 floors to his death. Further mishaps, like tons of concrete dropping hundreds of feet to the sidewalk below, and a crushing crane mistake that ruptured a newly-completed floor, caused the job site to be repeatedly shut down by the Department of Buildings.
Today, with no affordable solution in site to correct the lean, the building is an empty husk tilting over the East River.
The No-Longer-Glamorous Waldorf Astoria
The Waldorf Astoria hotel was once known as the epitome of New York City elegance. It was bought in 2017 by a Chinese ownership group which planned to convert the iconic building to luxury condos. It was to be a multi-billion dollar project. Opening was set for 2019.
Still not open in 2021, a contractor that had worked on the remodel quit the project in frustration. He called the effort a “rudderless ship,” and said that he’d be surprised if even the show room apartments were open before 2025—the units that will actually be lived in would supposedly take even longer.
The first mistake that Chinese group made was hiring Trident to do the reno. Trident is a non-union contractor also born from the rubble of Navillus mentioned above. Trident has been charged with visa fraud, insurance fraud, and wage theft. At the Waldorf project, Trident has faced allegations of discrimination. One employee described “a discriminatory environment where supervisors frequently used racial and homophobic slurs.” Also, in the span of two months, two different workers suffered gruesome injuries allegedly from faulty, not-to-code equipment.
In this time, the chairman of the original property owner, Anbang Insurance, was sentenced to prison in China for fraud in 2018. The new owner, Dajia Insurance Group, continues to rely on Trident.
The Swaying Mistake at 111 West 57th
The notoriously anti-union developer Michael Stern hired non-union contractors to erect the super-tall, super-thin residential tower at the base of Central Park.
Residents of that high-rise explain a living experience that they may not have expected when they dropped millions to buy a unit. The building, they say, is highly susceptible to swaying—as much as 3 feet—when hit by high winds. Some have complained of severe nausea because of the swaying. The building has also experienced engineering issues that are difficult to repair because of its height. For example, some have said that the tower elevators jam, and strange building noises occur when the wind blows.
When asked to explain why developers keep hiring non-union when their record is so sketchy, the estimator told us, “I believe they think they’re either saving money hiring non-union for these big jobs, or that they’ll somehow have more control of the project. Both those assumptions are wrong,” he said. “There are so many studies now that show the savings builders get when they hire unions over non-union. Are the developers of that Pizzarotti building saving money? Or 125 Greenwich Street?”
“Yeah, insane is exactly how I’d describe it.”
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