New York state and New York City recoup $3M from luxury developer
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Heatherwood Communities LLC received tax exemptions on two of their rental properties in Queens and Brooklyn, but failed to pay the buildings’ service employees wages and benefits for over two years.
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New York State Attorney General Letitia James and New York City Comptroller Brad Lander, in conjunction with Service Employees International Union Local 32BJ (32BJ SEIU), have recovered $3 million from a luxury residential developer who withheld wages from workers, the Attorney General’s Office announced on Thursday.
The developer is Heatherwood Communities LLC, which has developed a number of luxury rental properties, in addition to commercial spaces and golf courses, in Long Island and New York City over the years.
The company received tax exemptions on two of their rental properties in Queens and Brooklyn — 27 on 27th in Long Island City and 568 Union in Williamsburg — via the 421-a program, but then did not pay the buildings’ service employees wages and benefits, as required under the program, for over two years. The 421-a tax break program was established in 1971 in New York City to encourage residential development in order to attract more middle-class residents to the area, and was ultimately adapted in the ’80s for developers to incorporate income-restricted units in their buildings as well.
In accordance with the agreement reached on Thursday, Heatherwood will return to 24 workers their full wages owed plus interest in the amount of $723,324, and pay a penalty to New York City and New York state for violating the conditions under 421-a.
“Workers are the backbone of New York, and they deserve fair pay and benefits for their hard work,” Attorney General James said during a press conference on Thursday. “These individuals worked day and night to make ends meet but were denied their hard-earned money. Paying workers fair wages and benefits is not a luxury, it’s the law and Heatherwood cheated these workers and taxpayers. Today, two dozen workers will get back wages they earned but were unjustly denied. I thank Comptroller Lander and 32BJ SEIU for their collaboration on this effort to hold bad actors accountable and protect everyday New Yorkers.”
The settlement set an important precedent that developers are not above the law, 32BJ SEIU President Kyle Bragg said.
“This $3 million settlement’s importance goes beyond the dollar amount,” Bragg said. “We are sending a clear message to owners and developers like Heatherwood that they cannot enjoy the benefits of our city’s tax exemptions if they can’t meet their basic responsibilities to their workers.”
“I am a working person and I expect my employer to pay me what was promised,” Francisco Giuliano, a worker at a Heatherwood building, said. “Underpaying workers is not just wrong. It throws lives into chaos. The money I am receiving will provide me with financial stability and justice. I want to thank Attorney General James, New York City Comptroller Brad Lander, and 32BJ SEIU for ensuring that companies like Heatherwood can’t act like they are above the law.”
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