Three New York City developers and one landlord will cough up a combined $615,500 in a settlement with New York Attorney General Eric Schneiderman, after they were found to have benefited from 421-a tax incentives and then failed to follow through on their promises to pay building workers higher wages and provide rent-stabilized housing.
These are the first settlements to come out of an ongoing investigation into the 421-a tax incentive program, which was enacted to encourage development and affordable housing construction. But critics have argued that it’s been unfairly used by developers of ultra-luxury housing.
The biggest culprit in this round of settlements is 150 Fourth Ave LLC, which owns 95-unit luxury condominium the Arias at 150-158 Fourth Avenue in Park Slope. The building owner will pay $500,000, of which $454,082 will go to about a dozen building workers who were paid between $8.50 and $11.00 an hour. The company had agreed to pay wages starting at $16.00, or to offer half of its units at affordable rates.
Queens developer Tuhsur Development will hand over $100,000 to settle similar violations, including underpaying staff and failing to offer stabilized leases. Montgomery Development Associates of Staten Island and B&S Management of Queens will pay smaller settlements.
“Tax breaks offered to developers and landlords are not freebies… My office is dedicated to ensuring that everyone plays by the rules. In this case that means holding accountable those who accept lucrative tax exemptions and then ignore their responsibilities,” Schneiderman said in a news release. — TRD