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Massive NY Developer that Secured Stimulus Funding Being Sued by Unions for Underpaying Workers

The controversial City Point Development in downtown Brooklyn, New York, faces increased legal problems stemming from the underpayment of construction workers. Elected officials, construction unions and community groups last week have filed an Article 78 lawsuit against developer Arcadia Trust which aims to shut the project down.

Due to out-of-date standards, the 99-year lease that Arcadia Trust hopes to enjoy on the property, thanks in part to stimulus money, comes with an incredibly low $22,500 yearly construction worker wage. That wage is below the poverty level as determined by the Mayor’s Center for Economic Opportunity:

“The last time the City looked at environmental impacts, including socio-economic impacts, for projects in downtown Brooklyn was in 2004,” said Tom Kennedy, the group’s lawyer, in a statement.

“It’s been [nine] years, and there’s been a lot of development in that time; the real impact on the neighborhoods and the workers on the project has never really gotten a good look by the City, as required by law,” he continued. “This project needs to be shut down and all public financing of the City Point Project has to stop until a proper environmental impact statement can be created and impacts assessed.”

City Councilwoman Letita James represents Brooklyn’s 35th district. She is a member of the Working Families Party and was joined by Assemblyman Walter Mosley, who represents the neighboring 57th District, in filing the lawsuit. The two politicians join FUREE, Metallic Lathers and Reinforcing Ironworkers Local 46, Ironworkers Local 361, Ironworkers Local 580, Enterprise Association Steamfitters Local 638, and Cement League, Inc., as petitioners. Councilwoman James told City & State:

The tipping point for me was when I discovered they were proposing to pay minority workers basically poverty wages, substantially below that of union workers.

Mosley added that the lawsuit was partially due to the unwillingness of Arcadia Trust to negotiate with the construction unions. 

“With any suit you can always call a meeting of the minds and come to an agreement and dismiss the lawsuit, but what I do believe [is] that this lawsuit allows for the developers to see how serious we are about the plight of working class men and women and working class families.”

The lawsuit alleges that by allowing low wages to be paid on this development, wages for workers on all current and future projects in the City of New York will be negatively affected.

“Acadia is the tenth largest Real Estate Investment Trust in New York City. Using public subsidies to permit a major market player to drive down construction wages to poverty level will impact on every project built in the future.”

According to court documents, Laborers on properly paying city projects earn $38.70 per hour in wages and an additional $31.75 in benefits. At a recent rally to oppose City Point, Council Speaker and Mayoral Candidate Christine Quinn announced that she had put a $1 million appropriation for the project on hold until the lawsuit was resolved.

Arcadia Trust has reneged on the community building promises it made in securing stimulus funding. A sense of anger from the community, then, is to be expected and will hopefully force the developer to negotiate new terms.  Richard O’Kane of Ironworkers Local 361, one of the unions involved in the lawsuit, stated his feelings with the famous film Network as the backdrop:

Everyone’s mad as hell, and we’re not going to take it anymore.”


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