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Obama Appointee At The Center Of LIC Construction Battle

February 5, 2013
By Joe Maniscalco


An already troubled development project in Long Island City, Queens is being lambasted as a construction site “sweatshop” in a controversy over how things get built in New York City that could also prove potentially embarrassing to the Obama administration.

The 12-story, 181-unit condo development at 5-11 47th Avenue is moving forward despite a tangled history involving its proposed dual use as a college dormitory, as well as the need for heavy metal remediation on the site. Community Board 2 has been wrestling with the continuously morphing project since 2008.

But now, the New York City District Council of Carpenters is launching an all-out campaign against the development because on-site contractors hired to carry out the job fail to pay area standards, wages and benefits to workers. The situation is particularly outrageous to labor because one of the chief partners on the project - which also includes O’Connor Capital Partners and McGowan Builders - is TIAA-CREF, the largest retirement fund in the United States, and responsible for investing the pension funds of millions of unionized workers nationwide.

In addition, TIAA-CREF’s President and Chief Executive Officer Roger Ferguson, is a member of President Barack Obama’s Economic Recovery Advisory Board and Council On Jobs and Competitiveness. He also served as the U.S. Federal Reserve System’s Board of Governors vice-chair.

“It’s just a disgrace for this country’s wealthiest retirement system, which takes retirement funds and invests them, not to offer any type of retirement for people that are doing work for them,” NYC District Council of Carpenters Representative Michael Donnelly said.

The Long Island City development has also become uncomfortable for TIAA-CREF and Ferguson for other reasons. Until recently, Degraw Construction Group had been employed as a subcontractor on the job. However, the developers decided to boot the company after the NYC District Council of Carpenters and its ally Ray Rogers of Corporate Campaign, Inc. pointed out in a meeting with TIAA-CREF that the head of Degraw Construction was actually a reputed mobster named Anthony Scibelli.

FBI agents arrested Scibelli last year along with about 126 others in what has been called the largest single-day operation against organized crime in U.S. history.   

“They [TIAA-CREF] were shocked to hear that,” Rogers said. “I think they were really embarrassed.”

TIAA-CREF reportedly told Rogers and the NYC District Council of Carpenters that from now on, the conglomerate would screen its subcontractors much more closely.

But Donnelly maintains that the new subcontractor brought in to replace Degraw Construction - Casino Development Group - is problematic as well, and also fails to meet area standards wages and benefits.

“These people really aren’t the upstanding citizens they make themselves out to be,” Donnelly said.

Although they had originally agreed to curtail their campaign to raise public awareness about TIAA-CREF’s involvement in the Long Island City development, the NYC District Council of Carpenters are no longer willing to be patient, and have instead resumed leafleting and demonstrating outside TIAA-CREF offices at 730 Third avenue, as well as O’Connor Capital Partners headquarters at 535 Madison Avenue, both in Manhattan. 


Other locals are also lending their support, citing unsafe working conditions at the development, and the continued erosion of hard-earned working standards.

In recent years, McGowan Builders has been cited for a series of violations involving high falls at non-union work sites in NYC, while O’Connor Capital Partners was embroiled in a long tenant dispute from 2005 to 2009 when residents of the Manhattan House located on the Upper East Side charged the group with trying to force them out of their homes.

“We’ve compromised our own positions during what was basically the collapse of building in New York City,” Plumbers Local 1 Business Agent Fred Delligatti told LaborPress. “We’ve worked it out with reductions to our members. It’s a project that we’d all like to see re-done with hard-working, middle-class people that pay taxes in this country. Along with our own contractors who pay the right Unemployment Insurance, and Social Security. We don’t feel that we’re getting a fair shot at a level playing field.”

None of the developers involved in the Long Island City project responded to requests for comment, but according to Rogers, TIAA-CREF told the union that it is a limited partner and therefore cannot make any “unilateral decisions” about which subcontractors the developers ultimately hire.

But Donnelly isn’t buying it, and argues that the developers could immediately hire a responsible subcontractor who meets area standards, wages and benefits if they so desired.

“They could do it tomorrow,” Donnelly said. “They have clauses in their contract. They could just decide that they don’t want you there anymore and get rid of you. That’s how easy it is.”

In a December 10, 2012 letter to TIAA-CREF, American Federation of Teachers President Randi Weingarten also urged Ferguson to use general contractors who meet area labor standards, including wages and health care and pension benefits - “even in those building construction projects in which you are a limited partner.”

Rogers is now reaching out to local elected officials for help and support in convincing TIAA-CREF and its investment partners O’Connor Capital Partners and McGowan Builders, to finish the Long Island City project with subcontractors who respect area standards, wages and benefits.

“TIAA-CREF relies on unions to bring in money, but yet they won’t spend any of that money to employ other unions,” Rogers said.

 

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