Unions and developer continue to spar over wages and workers from the local community
By Stephen Witt
The New York City Housing Development Corporation (HDC) on Wednesday approved a $70 million bond issuance and two loans not to exceed $19 million from the agency’s own unrestricted reserves to finance the construction of the 19-story mixed-income residential building portion of the massive City Point project in Downtown Brooklyn.
Under the financing plan, HDC, which the state legislature created in 1971 as a supplementary and alternative means of supplying financing for affordable housing that was independent from the City’s capital budget, the bond issuance will be tax exempt to the lender, which in this case is Wells Fargo Bank, who in turn will allow for a lower interest rate to City Point developer, Acadia Realty Trust. The two loans will have a nominal interest rate.
The building will contain 250 rental units (76 studios, 105 one-bedrooms, 69 two-bedrooms), with 50% of the units being reserved as affordable to low- and moderate-income households.
“The City Point team is very pleased to help provide desperately needed low- and moderate-income housing in Downtown Brooklyn. We are grateful to HPD and HDC for all their work in advancing this critically important component of City Point,” said City Point spokesperson Tom Montvel-Cohen.
The financing came amid a pitched battle between Acadia and construction unions led by the Ironworkers Union. City Point is on the site of the former Albee Square Mall and is an open shop, meaning it allows for both union and non-union workers.
HDC board member Denise Scott noted before the unanimous vote that it is a shame that the unions and the developer were never able to reach a Project Labor Agreement (PLA) that included community-based hiring for the affordable housing units portion of the construction.
Terry Moore, the business manager for Local 46 Metallic Lathers Union and Reinforcing Ironworkers, said the PLA talks broke down because Acadia wanted the open shop, which would allow the developer to not pay prevailing wages.
The developer countered that unions hire based on seniority and that workers from the local community would be locked out of jobs on the project. Thus far, about $35 million in contracts have been let out to minority and women owned businesses (WMBE) in the community. About 80 percent of the people working on the job today are either people of color, women or Brooklyn residents with nobody making less than $20 an hour.
The HDC decision came a day after State Supreme Court Judge Cynthia Kern heard arguments concerning an Ironworker union-led lawsuit to stop construction on the project.
Under the Article 78 proceeding, the union argued that the project must be halted because it violates the 2004 Downtown Brooklyn Environmental Impact Statement which assumed all construction in Downtown Brooklyn would be built under prevailing union wages.
But Attorney David Paget, representing Acadia, the lead developer in the project, argued the case had no merit because a second EIS was completed in August 2013. The bond issuance could not move forward without a completed EIS.
Also signing onto the lawsuit is Assemblyman Walter Mosley and the non-profit organization Families United for Racial and Economic Equality. “The City Point project is just one more example in a pattern of unchecked developments being irresponsibly rushed through by the
Bloomberg administration before a new mayor takes office” said Mosley. “Brooklyn’s working families have a right to know the truth about what is happening in their communities, and I am proud to set a precedent of demanding transparency and honesty from any developer moving into our neighborhood,” he concluded. Previously, City Councilwoman Letitia James signed onto the lawsuit, but she dropped out recently, saying she was satisfied that City Point was committed to WMBE contacting, hiring locally and including affordable housing.