The Real Deal New York

Red flags raised about union report card on Moinian

Build up NYC seen as targeting developer with "F" grade for using nonunion workers
By Hiten Samtani | February 12, 2013 06:00PM

A report card commissioned by a new union advocacy organization that gave the Moinian Group’s operations an “F” has several flaws and seems to unsystematically target the developer for its penchant for hiring nonunion workers.

In its report, Build up NYC, a coalition of labor groups including 32BJ SEIU, the Hotel Trades Union, and the Building and Construction Trades Council of Greater New York, excoriated the Moinian Group for a laundry list of alleged failings at its buildings, as well as a poor record of worker relations.

Though the allegations galvanized a rally last week of union workers and politicians — who took Moinian to task for what City Council Speaker Christine Quinn described as “the race to the bottom” — others are questioning the validity of the union’s efforts.

Two prominent real estate attorneys noted that the report carries a clear conflict of interest, as it was commissioned by a union interest group and targets a developer who is known to hire nonunion workers for his projects.

“It’s like a rat rating the trap,” said Adam Leitman Bailey, the principal at the eponymous law firm Adam Leitman Bailey PC.

Jay Neveloff, a real estate partner at law firm Kramer Levin Naftalis & Frankel, said that “it’s clear to me they already have a bias. They’re jumping to conclusions.”

The report card, first reported by the New York Observer and subsequently covered on The Real Deal, was designed by the New York City-based consulting firm Locker Associates on behalf of Build up NYC. It rates the Moinian Group, which is headed by Joseph Moinian, in five categories, namely tenant relations, safety, financial stability, vendor relations and good jobs. Specifically, the report accused Moinian of diverting funds, improperly maintaining buildings, defaulting on loans, violating safety rules and keeping poor vendor relations.

A key shortcoming of the report, affirmed by the attorneys, is that it suffers from a lack of benchmarks. For example, though the Moinian Group received an “F” on all five categories, there is no indication of what constitutes an “F,” or guidelines for how a developer would receive a particular letter grade.

“We don’t have an A, B or C at this point,” said Dave Hancock, a senior associate at Locker. “We really were focusing on somebody we thought was an especially irresponsible developer.”

“You have to establish criteria,” said Gary LaBarbera, president of Build up NYC and the Building and Construction Trades Council. “You now know what an ‘F’ is, and that’s the Moinian Group.”

The data for the report came from a combination of field research and public records, including building violations and lawsuits, Hancock said, but he was unable to provide numbers on how many people the researchers interviewed. Though this is its first public report card, Locker has previously done several projects on behalf of union groups, including a trends analysis of the construction industry for the Building and Construction Trades Council.

The report card chastised Moinian for work conditions at his development sites, claiming that contractors were underpaid and unskilled, and did not receive affordable health care and other benefits. The report’s release was followed by last Wednesday’s rally that Build up NYC organized outside City Hall.

Along with Speaker Quinn, the rally — which drew crowds in the 100s — attracted several prominent politicians, among them City Comptroller John Liu, State Senators Daniel Squadron and James Sanders, and City Council members Vincent Gentile and Elizabeth Crowley. “The American Dream is not to work your whole life in dangerous conditions with low wages and no benefits,” Liu said, in his address to the rally.

The trend of unsafe and unfair practices, Quinn said, “has got to stop, and it begins with bad actors stepping up to play the game right.”

Joseph Moinian’s failing grade, LaBarbera said, could be partly attributed to his track record of hiring nonunion employees. “We believe that union is the vehicle through which you can achieve health, safety, good wages and retirement security. We make no bones about that.”

Jessica Ramos, a spokeswoman for Build up NYC, said the report’s release and the rally coincided with the launch campaign of Build up NYC, which began operations in December 2012.

Bailey, who admitted he is no fan of Moinian and has sued him for mismanagement of 90 Washington Street, a 397-unit rental building in the Financial District, said he was impressed by “the creative persuasion by which a union forces developers to do things. It’s usually below-the-belt harassment stuff.”

As a result of the report, Joseph Moinian reached out to Speaker Quinn’s office as well as to a third party and indicated that he’d be willing to parley, according to LaBarbera.  “What we want is to have dialogue,” LaBarbera said. “This third party asked me, ‘Would you be willing to sit down with Moinian?’ and I said, ‘Absolutely.’”

Moinian, whose recent projects include a 1,000-foot, 1.7 million-square-foot tower at Hudson Yards, was recently sued by residents of 1 West Street, a 500-unit rental building in the Financial District, for an allegedly inadequate response to damage from Hurricane Sandy. Many other Moinian Group projects have received stop work orders in recent years, as The Real Deal previously reported, though this is certainly not unique to the developer.

Kramer Levin’s Neveloff said that it was a “certainty that most, if not all, buildings have violations,” some of which reflect conditions that have been remediated.

“I’m not minimizing the importance of violations,” he said. “I’m commenting on the notion that it’s a major industry in New York to get violations removed once they have been logged.”

A prominent city developer who declined to be named said that it was impossible to avoid violations on large development sites. What a developer could and should do, he said, is to ensure that these violations are addressed in an adequate and timely manner.

  • Ocean West Resident

    I live in 1 West – one of Moinian’s buildings. It’s run in a negligent, unprofessional and inhumaine manner and Joe Moinian should be ashamed by the way he conducts business. I’m aware of dozens of others in 1 West and other Moinian buildings who consider him to be a shady slumlord style operator. There are dozens of tenants who cannot obtain their security deposits back since having moved out months ago. There are a host of greedy, shady, misrepresentative tactics taken by the building’s management and sales personel, and Moinian’s generally greedy, insensitive practices are reflected in a multitude of day to day policies and experiences at 1 West. None of which is commentary on Hurricane Sandy. That merely exacerbated things and provided greater illustration for Moinian’s poor, inexcusable conduct. This individual Moinian is a blight on New York; he’s making life worse for hundreds if not thousands of people in this city (both residents and vendors) while he walks around enjoying his cushy billionaire lifestyle, either oblivious or indifferent (or both) to the difficulty and cost he’s causing so many others to needlessly accrue. Shame on you Moinian: You are not just the 1% – you are the douchey 1% who maintains his position not by servicing, but exploiting the 99%. How much is enough? At what point will you prioritize doing business in an even modestly reasonable way, rather than prioritizing your own greedy gain at the expense of so many peoples’ quality of life?

  • 1west-resident-apt

    i can only report terrible treatment at the hands of management as a tenant of 1 West Street. i can only report rude management, lack of consideration, lack of follow through, lack of humanity, and having to write countless emails and demands and only when I threatened to file a mechanics lien on the building and a complaint to the Attorney General did I get my security deposit back. Clearly these people that manage and own 1 West Street NY NY 10004 lack the very basic considerations and think that they are dealing with large corporations when dealing with individuals. They have zero empathy and the problems faced in the building – including running on generator power for many months continue and are ongoing.

  • The real working man

    I wrote this on other article as well but worth repeating from my perspective. Very tough but at the end of the day, when all said and done, was decent.

  • natasha

    About he Moinian Group: These people are professional crooks. They lied to a lot of people at 20 West Street in Manhattan, in order to sell apartments in the building. They told me personally (and ALL people who have high ceilings) that we can do anything we want with the space – such as building an additional living space upstairs. I also heard they were telling people that terraces are going to be their personal ones.

    After people purchased the apartments and moved in, the reality hit: NO, we could NOT build “anything we wanted” in our own space, and the terraces were not personal.

    There was a law suit, but it didn’t go anywhere because all the promises were verbal.

    I just wanted the world to know.

    Unit owner at 20 west Street NYC