From left: 184 Kent Avenue and 235 Gold Street

The battle between one-time industry powerhouse HRH Construction and unions that work in the building trades opened another front this month, adding to a larger clash between developers seeking lower building costs and unions struggling to keep their members employed.

The trustees of the International Brotherhood of Teamsters Local 282 pension fund filed a complaint Dec. 10 in U.S. District Court for the Southern District of New York in White Plains claiming HRH used shell corporations to avoid making payments they say are required through industry-wide collective bargaining agreements.

The complaint does not specify the amount of money allegedly unpaid, but is seeking a judgment from the court ordering HRH and other defendants to make such payments, including interest and damages. [more]

Two New York City construction unions filed a racketeering suit in federal court in White Plains, N.Y., alleging that Manhattan-based JMH Development and Long Island-based Lalezarian Developers colluded with HRH Construction to cheat workers out of $7 million in wages and benefits over the past four years, Crain’s reported.
According to the suit, filed by Metallic Lathers Union Local 46 and Mason Tenders District Council, the developers directed payments that should have gone to HRH Construction, once one of the city’s largest union contractors, to a dummy organization established by the three parties. [more]

Once among the top construction firms in New York City, HRH Construction, the 86-year-old company that built Citigroup’s Midtown headquarters and many of Donald Trump’s metro-area projects, is now mired in bankruptcy court and fighting off allegations of fraud. Crain’s reported that HRH’s downfall began in the early 2000s during the construction of 2 Broadway, a building owned by the Metropolitan Transportation Authority. The project went $300 million over budget, thanks in part to HRH overbilling the construction costs, according to arbitrators who ordered the firm to repay $6.5 million in 2007. [more]

From the February issue: As New York City construction firms get slammed by the downturn, they are turning to more modest projects, in some cases taking on multimillion-dollar renovations rather than the multibillion-dollar skyscrapers. While it’s clear that the collapse of the New York development market has taken a toll on builders and brokers, there may be nobody in the industry hit as hard as construction firms. As banks have largely cut off financing for new projects and cranes have been mothballed, thousands of contractors have lost their jobs. “It’s having a devastating impact on the construction market,” said Lou Coletti, president of the Building Trades Employers’ Association, which represents 1,700 construction management and contractor firms. “There are very few, if any, new projects moving forward.” To combat that lack of work, major New York construction firms are bidding for much smaller projects and diversifying into public-sector work, while other firms have been forced into bankruptcy protection.[more] [more]