The Real Deal New York

Affordable housing contractor sues city for $170M

Artec Construction, accused of violating labor law, says it's been "unjustly" targeted

November 11, 2015 01:49PM
By Kyna Doles

500 West 42nd Street and HPD Commissioner Vicki Been

From left: 500 West 42nd Street and HPD Commissioner Vicki Been

An affordable housing contractor accused of not paying workers $3 million in owed wages is suing two city agencies for $170 million, amid claims it’s been illegally blocked from winning bids on future projects.

Queens-based Artec Construction and Development Corp, led by Chris Tsetsekas, is one of 26 contractors on an HPD list that tracks affordable housing contractors who allegedly violated labor law.

Although contractors on the list — known as the “enhanced review list,” — can still bid on projects, they must receive special clearance from HPD. Artec says it hasn’t received such clearance from HPD, prompting it on Monday to file a lawsuit in New York State Supreme Court.

The suit alleges that the New York City Department of Housing Preservation is withholding millions from the contractor’s earnings and has practiced selective enforcement of contractors on the list.

“Essentially labeling Artec with a scarlet ‘E’, was unjustified and unjustifiable, and significantly jeopardized Artec’s good name, reputation, honor and integrity in the New York City construction industry,” the suit states.

The city’s Department of Investigations, which is also named as a party to the suit, hit Artec with wage violations in 2013. But Artec says it was never given a formal complaint or allowed to dispute the agency’s findings.

When Artec sought the DOI’s permission to work on new projects with the HPD, the DOI “in classic bullying and extortionist fashion” said it would need to pay the back wages without further questioning, the contractor states in the suit. Artec “understood the figures to be over-inflated, inaccurate and based on misguided estimations,” its attorneys added in the legal filings.

This isn’t the first time Artec has pursued legal action against the two agencies. In June, Artec filed a petition seeking $3.7 million in payment from the HPD and DOI, and a judgement declaring that it did not owe the nearly $3 million in back wages to its employees.

The company alleged the agencies were withholding payments from four projects it was contracted to lead, including 500 West 42nd Street in Manhattan, 929 Cortland Avenue, 2701 Kingsbridge Terrace and 2950 Grand Concourse in the Bronx.

“Artec decided to discontinue [the lawsuit] and fight the withholdings through the administrative channels as opposed to through the Supreme Court,” said Jamie Forman, an attorney representing the contractor.

Between June and November, Artec has also sued at least six subcontractors in Queens, Kings County and New York County Supreme Courts in an effort to clear its name over the wage violations. In the those complaints, Artec alleges that the subcontractors failed to comply with the Prevailing Wage Laws, although Artec is being held responsible by the HPD for the alleged back wages it owes its employees..

A city attorney representing the HPD and DOI was not available for comment on Wednesday.