Lawsuit Demands Shut Down of City Point Development Project

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A coalition of labor unions, community activists and elected officials have filed a lawsuit against City Point, a commercial and luxury housing complex rising from the site of the former Albee Square Mall in Downtown Brooklyn. The lawsuit demands that all construction at City Point stop pending a new Environmental Impact Statement (EIS) that would analyze “the negative impact created by the project, which currently pays construction workers poverty-level wages” as low as $7.25 an hour.

Attorney Tom Kennedy sent a letter to Deputy Mayor for Economic Development and Rebuilding Robert Steel detailing how NYC has allowed developers for City Point to pay substandard wages on the project even though the original EIS for City Point assumed developer Acadia Realty Trust would pay the prevailing wage rate. Kennedy’s letter called for the city to shut down construction at the project immediately because the original EIS failed to address the negative socioeconomic impact of paying poverty-level wages in Brooklyn’s communities. Steel never responded to the letter, prompting the lawsuit.

According to Kennedy, the last time the city looked at environmental impacts, including socioeconomic impacts, for projects in Downtown Brooklyn was in 2004. “It’s been 9 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,” said Kennedy.

“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 Point developers have received $40 million in tax subsidies and a 99-year lease on city-owned land.
Assemblyman Walter Mosley called the subsidies “corporate welfare”. City Point “developers are blatantly reneging on promises made and disregarding the most basic needs of the hardworking New Yorkers that make this project possible,” said Mosley, who joined the lawsuit. “Good jobs with fair, prevailing wages and benefits are not too much to ask for when Acadia is receiving tens of millions in taxpayer money. I refuse to allow the working families of the communities I represent to be shortchanged by the greed and entitlement of any corporation.”

“I am not saying that unions don’t have to make concessions,” said Mosley, “but you are talking about a developer who has received $40 million of public money and city-owned land, and is now allowed for construction workers to earn as little as $7.25 per hour.”

“The city should ensure that all megaprojects be built according to prevailing wages and benefits, and further review their impact on the existing community,” said Council member Letitia James, a petitioner on the lawsuit. “I have joined food service and factory workers as they fought for fair wages, and I expect developers to meet the same standard of fairness in the interest of strengthening our community and local economy. I stand with this coalition in holding Acadia to this standard.”

“Going forward, we have to change economic development policies in NYC to mandate that all major publicly funded projects be built safe, consistent with labor standards, on time and by organized labor,” said James.
James Parrott, Deputy Director and Chief Economist at the Fiscal Policy Institute provided detailed written expert testimony as part of the suit. “It’s imperative that public resources are used to support good jobs, providing workers a ladder to the middle class,” said Parrott. “The issue is about class structure, with wage practices like Acadia’s undermining and diminishing the makeup of an already-dwindling middle class. When construction companies pay less than the prevailing wage there is the illusion of cost savings. In reality, costs for health care, unemployment insurance and workers’ compensation often are just shifted to taxpayers and other businesses. On top of that, the workers themselves are denied decent pay and benefits and access to the apprenticeship system that provides the opportunity to move into the middle class. There is nothing that Brooklyn neighborhoods surrounding this project need more than good jobs with career opportunities for workers with limited formal education.”

The Metallic Lathers and Ironworkers Local 46, Ironworkers Local 361, Ironworkers Local 580, Enterprise Association Steamfitters Local 638, Cement League, Inc. and Families United for Racial and Economic Equity (FUREE) are petitioners on the lawsuit.

“We already know that construction workers at City Point are being paid poverty wages and that they are getting absolutely no benefits,” said Terry Moore, Business Manager of Metallic Lathers and Ironworkers Local 46. “When this project got the green light, the assumption was made that workers would be paid the prevailing wage, as detailed by the city’s comptroller. Acadia has steadfastly refused to divulge its wage and benefits package.”
According to the petition, “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 levels will impact on every project built in the future.”

“We are talking about a total and full recovery of our economy on a local, statewide and national level. These public/private partnerships — where we subsidize and give corporate welfare to these developers who don’t have the complete or 100% wherewithal to build and they need our assistance with taxpayers’ money to subsidize — tell the same tax-payers that they are going to take lower wages, fewer benefits to work on it and they should be happy and will publicize such, said Mosley. “It is a disservice to our city, a disservice to our state and it is an insult to elected officials and the people we represent on a daily basis. Enough is enough.”

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