The City Comptroller is suing Lloyd Goldman’s development company over allegations that it failed to pay the wages required by the 421a tax break.
Brad Lander’s office is suing BLDG Management over 222 East 44th Street, the Commercial Observer reported. The lawsuit was filed with the Office of Administrative Trials and Hearings.
The comptroller alleges BLDG fell $32.3 million short of adequately paying construction workers who built The Summit, a rental building in Midtown East. BLDG was obliged to pay workers an average of $60 per hour to comply with 421a requirements, but allegedly paid an average of $31.88. The project employed hundreds.
Developers of projects with at least 300 units that receive the 421a property tax break — which lapsed in June 2022 but still applies to scores of projects across New York City — must pay an average hourly wage of at least $60 in Manhattan below 59th Street and $45 along the Brooklyn and Queens waterfronts.
In addition to the wage shortfall, the city comptroller is seeking $8 million in penalties. That 25 percent penalty issued by the Bureau of Labor Law is required by rule, according to the comptroller.
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BLDG did not respond to a request for comment from the Observer. A hearing has been set for the end of next month.
Goldman’s project began construction in June 2015 and wrapped four years later. The 42-story property includes 429 units. Twenty percent of the units were available for below-market rates, entitling BLDG to the 35-year tax break. Under 421a, property taxes are frozen at their pre-development level for 25 years. The break is then phased out over 10 years.
Elsewhere on the construction wage front, the laborers union is ramping up its efforts to create a wage floor on some affordable housing projects in the city. The Construction Justice Act would set a minimum for wages and benefits of $40 per hour on some projects that receive public funding.
— Holden Walter-Warner