By Steve Wishnia

More than 200 Carpenters Union members picketed the Manhattan offices of an Australian real-estate developer Jan. 11, demanding that it stop using nonunion labor on a massive luxury development on the Brooklyn waterfront.

“It’s not only that it’s a nonunion contractor,” Michael Piccirillo, area standards manager for the New York City & Vicinity District Council of Carpenters, told Work-Bites. “It’s someone who in the past defrauded a union pension fund.”

The developer, Lendlease, began constructing a five-building, 834-apartment complex called 1 Java Street in Greenpoint last April. It will take up a full city block, with the tallest building 37 stories high. Its concrete contractor, RNC Industries, has a long history of wage theft and safety violations, according to building-trades unions. One of RNC’s principal owners, Richard Tonyes, served 11 months in prison after pleading guilty in 2014 to federal tax-evasion charges stemming from a scheme to avoid paying Social Security taxes for nonunion workers.

The Carpenters have been negotiating with Lendlease, but “hit a stalemate” on using union labor on the upper structure and drywall, says Piccirillo. It is using union workers for the flooring, and has offered to do so for the benches in a waterfront park that will be part of the development.

The drywall contractor is Gotham Drywall, “known unionbusters,” says Assemblymember Emily Gallagher, who represents Greenpoint.

Gotham Drywall uses a network of at least 18 shell companies, Eddie McWilliams, then the Carpenters’ executive director, said in 2021. Its workers sign in to jobs as Gotham Drywall employees, but “the payroll is spread out over multiple corporations, which further obfuscates worker records and tax information.” Most of those companies were registered at residential addresses, according to papers filed in a 2019 class-action suit for wage theft against Gotham Drywall and a subcontractor.

In 2014, the Carpenters and Ironworkers Local 46 won a $6 million out-of-court settlement from RNC. They had accused the company’s union-labor parent, River Avenue Contracting, of using RNC as a nonunion “alter ego” to avoid paying workers’ health and pension benefits. The Cement & Concrete Workers’ benefit fund settled a similar suit in 2015.

“We are creating jobs for both union and nonunion trades, including ambitious targets for XBE workers (XBE – Minority, Women, Veteran, Service-Disabled, Local),” a Lendlease spokesperson responded. “To date, approximately 150 union jobs have been created at the project site.”

The company did not provide more specific details.

Tax breaks for ‘affordable housing’

Because the project is getting tax breaks under the state’s now-expired 421-a program and is being built in an expensive neighborhood in Brooklyn — what the state calls an “Enhanced Affordability Area” — the contractor is required to pay workers “a minimum average hourly wage of at least $47.25 an hour, including the value of benefits,” the Lendlease spokesperson said.

That’s an average wage, not a minimum. The company could pay skilled union workers more than $100 an hour for some jobs and nonunion workers minimum wage and still satisfy the requirement, Piccirillo says. The Carpenters oppose reviving the 421-a program without a fixed minimum wage, he adds.

The developer is also required to have 30% of the apartments be “affordable.” But in the option it chose under the Affordable New York Housing Program, two-thirds of those 251 apartments will be designated for households making up to 130% of the metropolitan area’s “area median income”: $128,570 for a single person or $183,560 for a family of four. The rest would be slated for people making 80% of area minimum income.

That would mean rents for the more expensive affordable apartments could be as high as $2,756 a month for a studio and $4,130 for a two-bedroom unit. The lower-income studios could cost almost $1,700.

The project is being financed by an Australian union pension fund. The Aware Super “superannuation fund” and Lendlease obtained a $360 million loan for their joint venture. It’s the sixth project the fund has done with Lendlease in the U.S.

Aware Super, founded in 1992 to provide pensions for public-sector workers in the Australian state of New South Wales, says it now has more than 1.1 million members and about A$150 billion (US$100 billion) under investment.

“You’ve got a developer that’s taking union money, but not paying prevailing wage,” Assemblymember Alex Bores (D-Manhattan) told the crowd. “They’ve got a web of subcontractors, hoping that people lose the plot.”

The Carpenters were “major supporters” of a bill enacted last year to create a searchable database listing the owners of limited liability companies and their business addresses, said Gallagher, its Assembly sponsor. However, when Gov. Kathy Hochul signed it last month, she insisted on an amendment to deny access to the general public, limiting it to law enforcement.

Nonunion green jobs?

Lendlease says the development will be the largest residential project in New York State with a geothermal heat-exchange system. These use heat pumps to cool and heat the building, taking advantage of that the earth below ground is cooler in the summer and warmer in the winter than the air. It says the system, which will be built with $4 million in aid from the New York State Energy Research and Development Authority, will reduce the development’s carbon emissions from heating and cooling by more than half.

But the company has said that it can’t use union labor to build that system, says state Sen. Kristen Gonzalez (D-Queens) whose district includes Greenpoint. “A green future includes union jobs,” she told the crowd.

Near the end of the rally, a dragonfly-shaped drone with colored lights hovered over the edge of the crowd. It flew away after Piccirillo shouted into a bullhorn, “Take that fuckin’ drone down right now.”

The Carpenters “have always demonstrated an ability to sit down,” but Lendlease has shown “no ability” to negotiate in good faith, Kevin Elkins, the union’s political director, told Work-Bites. “We’re not going to take scraps on a job this size. People deserve to earn a good wage. This is a new age in New York.

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