The Real Deal New York

Workers at Dermot Company’s newly-purchased EV rental forced to take big wage cuts: report

Employees at 250 East Houston were reportedly told to accept much lower pay or leave

October 27, 2016 10:39AM

250 East Houston Street

250 East Houston Street

Doormen and maintenance workers at the Red Square rental complex in the East Village have been offered an ultimatum: take a pay cut or be out of a job, according to a report.

Long-serving workers at the building said representatives from Planned Building Services — which is now maintaining the building for new owners the Dermot Company TRData LogoTINY and Rockwood Capital — gave them new contracts with roughly 30 percent pay cuts. Workers were told to sign off on the new terms immediately or to find new positions, DNAinfo reported. Residents in the building received letters last week informing them of the new ownership and that there would soon be renovations and apartment upgrades.

Dermot formed a partnership with Rockwood Capital earlier this year to buy the 130-unit rental building at 250 East Houston Street. The deal went under contract in August. Earlier this week, the partnership received a $57.6 million acquisition loan from Spanish bank Banco Bilbao Vizcaya Argentaria (BVVA) to close on the $100 million purchase.

The property management company is accused of wasting no time in attempting to force out workers.

“They threw us in a room and said ‘sign this or you’re fired,’” one employee said.

News of the letter to residents and the pay cuts was first reported on neighborhood blog EV Grieve.

London-based investment firm Forum Partners acquired a 50 percent stake in the firm last summer and pledged to deploy $750 million in New York City within 18 months. It’s been buying multifamily properties such as 377 East 33rd Street in Kips Bay, which it paid $175 million to acquire last November.

Earlier this year, Rockwood sold a hotel it owned with two other partners at 312 West 37th Street for $167 million. Dermot was also booted from the redevelopment of the Battery Maritime property and subsequently sued by an EB-5 regional center for $77 million.  [DNAinfo]Miriam Hall

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