Controversies

Acadia Realty Trust Speaks Out After Verbal Assault of its City Point Development in Brooklyn

Developers of the City Point project in Brooklyn want to set the record straight following a unionized protest and a fiery letter from the president of the Building & Construction Trades Council of New York claiming that the project exploits the community and burns taxpayer dollars.

In addition, some industry experts agree that less union work is simply a wave of the future that began decades ago.

While a spokesperson for developer Acadia Realty Trust expressed reluctance to get into a full-on spat over the issue, he defended his firm’s stance on the project, countering critics who said the project abuses taxpayer dollars.  He claimed that the project benefits from a single government subsidy — and that it is essential for the affordable housing component.

“City Point will generate thousands of jobs and enhance Downtown Brooklyn’s quality of life,” said Tom Montvel-Cohen, with Acadia Realty Trust.  “We are committed to maximizing local and minority contracting and employment as we create a LEED-certified development with the affordable housing, retail and entertainment options that the neighborhood well deserves.”

City Point Rendering

City Point Rendering

The project will ultimately comprise nearly 2 million square feet of retail and residential development space, but the only government subsidy in the project is that which will help create affordable housing, Mr. Montvel-Cohen said, adding that the $20 million in bond financing that the project is receiving is not a subsidy, as the loan “carries a market rate of interest over seven percent.”

Mr. Montvel-Cohen and some experts say developers are turning to non-union workers because they are able to finish jobs more quickly than in the past, as a laundry list of union rules and regulations bog down the construction process.

The three-phase project’s first installation, the site of the new Armani Exchange store that fueled animosity among some community residents, was built with non-union labor, as will much of the second phase, which includes roughly 690 units, 125 of which will be affordable.  City Point’s developers have also pledged to rely more on minority workers than would be possible if working with a union.

“We’re beginning to really have a good group of highly qualified competitive minority contractors,” Paul Travis of Washington Square Partners, developer of the retail portion at City Point, told The Wall Street Journal, adding that a mix of union and nonunion labor will cut costs, save time and create 3,780 construction jobs during the second phase.  “We’re pretty confident that in the next phase, we’ll be able to continue the hiring record that we have so we will become one of the largest employers of local workers in the neighborhood.”

Despite the outcry from Mr. LaBarbara and a number of local unions, who protested the development today, convening at City Hall to award Arcadia Realty Trust with an “award” for the “Corporate Tax Dodgers Hall of Shame,” some experts agreed that the construction union worker of the past could be on the road to extinction.

Richard Lambeck, chairman of the construction management program at the New York University Schack Institute of Real Estate, told the Journal that 15 years ago 80 to 90 percent of construction work in the city was unionized, but that the number has fallen to roughly 50 percent.  A slightly less glum 2011 report by the Regional Planning Association suggested that the number fell from 85 percent in the ‘70s to 65 percent today.

“If you looked at a job like this 10 years ago, the world has really changed,” Mr. Travis said.

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