September 2, 2014
By Steven Wishnia
Accusing it of authorizing illegally low wages for construction workers on Roosevelt Island, the New York City District Council of Carpenters has filed a lawsuit against the state Department of Labor.
The suit, filed Aug. 22 in state Supreme Court, alleges that the department wrongly classified the Riverwalk 7 building on the island as a private project where contractors don’t have to pay the prevailing wage. It also names as defendants the developers, the Hudson Companies and the Related Companies; the contractor, Monadnock Construction; and the Roosevelt Island Operating Corporation.
“Traditionally, all the projects that were there before this one were good. They paid prevailing wage,” says Carpenters political director Daniel Walcott. “Every piece of paper that we’ve looked at comes back to the same thing—it should be prevailing wage.”
Riverwalk 7 is a 22-story building, the seventh in a development just north of the tramway and the Queensboro Bridge, and the first of three buildings slated for the Queens side of the island. About two-thirds of its 266 apartments will rent for market rate, and the rest will be reserved for staffers at Sloan-Kettering Memorial Hospital. Construction started last fall, and it’s expected to open in 2015.
In April, Walcott complained to Christopher Alund, director of the Labor Department’s Bureau of Public Work, that the workers weren’t being paid union scale. On Apr. 24, Alund responded that the building was being constructed “by private developers to be owned and operated by private entities.” He wrote that even though the developers got tax breaks and the building was on publicly owned land, that wasn’t enough to make it “a public housing project” that was subject to prevailing- wage laws.
The Carpenters counter that Riverwalk 7 is “an integral part of a massive public-works project,” the state-directed plan to redevelop Roosevelt Island that began in 1969, so the Department of Labor is therefore failing to enforce the law. The building is part of the current phase of that plan, the lawsuit contends. The Roosevelt Island Operating Corporation is a “public benefit” corporation established in 1984, succeeding the state Urban Development Corporation. A 2000 development agreement between it, Related, and Hudson says that all construction workers should get prevailing wage. That agreement exempted the developers from paying property taxes, sales tax on construction materials, and the mortgage-recording tax. The state Department of Taxation approved those exemptions in 2001, because the development was “property utilized in the public interest.” And the 2013 lease to Riverwalk for Building 7 incorporates that development agreement, including the prevailing-wage clause.
Walcott is optimistic that a judge reading this history will wonder what happened that made this building different from previous ones on the island. The workers erecting the planned Cornell Tech campus will get prevailing wage, he notes. Yet the Carpenters fear that letting one developer get away with paying less could “open the way for future attacks on the right of workers to be paid prevailing wages and benefits when employed on public works,” especially in public-private operations such as Brooklyn Bridge Park and so-called affordable housing.
A lot of components go into the “public interest” on a project, Walcott says: It includes buying supplies from local businesses and workers being able to support themselves, “not just the lowest price.