Developer Icon Co. sues two unions amid project delay

The 623-unit project was unanimously approved in August

(Credit: Icon Co.)
(Credit: Icon Co.)

An L.A.-based developer has filed a lawsuit accusing two construction unions of racketeering and extortion.

Icon Co., which plans to build a 623-unit project in Panorama City, alleges two unions violated federal laws by raising environmental challenges to the development while pressuring the company to only hire union labor, the Los Angeles Times reported.

The lawsuit claims Southwest Regional Council of Carpenters and Local 300 of the Laborers International Union of North America offered to drop their challenges if Icon agreed to hire their workers. Icon refused and the unions sued to stop the Panorama City project in October.

A lawyer for the unions dismissed the developer’s allegations.

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“Unions are allowed to talk about hiring union labor any day of the week. That’s what they do for a living,” the unions’ attorney Richard Drury told the Times. “But they’re also allowed to participate in the [state’s environmental review] process and get projects built clean.”

The $150-million project is planned to be built on a site previously occupied by a Montgomery Ward store, which closed in 2001. The city council unanimously approved the project in August, clearing the way for the seven-building complex with 60,000 square feet of commercial space and a 17,000-square-foot plaza.

Community councils and homeowners associations have long been viewed as one of the larger obstacles in the entitlements process, making it more expensive to build housing. But, according to the report, labor unions are become increasingly aggressive against new development projects. For example, the UNITE HERE Local 11 union, which represents thousands of hotel workers, appealed a 120-key hotel proposal in October. [LAT] – Gregory Cornfield