Feds probe whether Related Urban skipped on its taxes when building Miami project

Workers hired as outside contractors for the Shenandoah project would typically be considered in-house employees, experts say

TRD MIAMI /
Jul.July 06, 2017 01:05 PM

Edificio Pineiro senior housing in Shenandoah. Inset: Jorge Pérez

In the latest step of a federal investigation into the Related Group’s affordable housing arm, the U.S. Attorney’s Office is now looking into whether Related reduced costs on a Miami project by hiring subcontractors who failed to pay their taxes.

The Miami Herald reported that 11 of Related’s 15 subcontractors for Edificio Piñeiro, 34-unit senior apartment complex in Miami’s Shenandoah neighborhood, used independent contractors instead of in-house workers. Doing that would let the companies avoid paying costly employment taxes like Social Security and Medicare because outside contractors pay their own taxes. It can reduce payroll costs by 20 percent, the Herald reported.

Federal authorities have been investigating South Florida’s biggest developer as part of an expanding probe into South Florida’s affordable housing industry that involves at least a dozen publicly subsidized developments by other developers.

The workers hired as outside contractors for the Shenandoah project would typically be considered in-house employees, including laborers, painters and bricklayers, according to the Herald.

Related’s subcontractors stated they treated workers as independent contractors via identical letters to Donna Milo, a supervisor and aunt of Related Urban president Albert Milo. Her company, Donna E. Milo, Inc., was hired to manage construction at Edificio Piñeiro. She told the Herald that she didn’t have much knowledge about the subcontractors’ tax arrangements.

A spokesperson for Related told the newspaper that its subcontractors “paid workers in full compliance with the law,” and that it’s working with prosecutors on a “industry-wide review of the affordable housing sector.” [Miami Herald] – Katherine Kallergis 


Related Articles

arrow_forward_ios
Daily Digest Miami

54-story Turnberry Ocean Club tops off, Flagler streetscape project to break ground: Daily digest

From left: Jon Paul Perez, Alex Karakhanian, Tony Arellano and Devlin Marinoff over the site (Credit: Google Maps)

Related Group, Alex Karakhanian and partners drop $32M on Wynwood site

Rent reform is propelling a new wave of New York and California investors to Miami (Credit: iStock)

Rent reform in New York, California propels new wave of multifamily investors to Miami

Jon Paul Pérez, Jorge Pérez and the downtown Miami skyline (Credit: iStock)

Miami’s biggest condo developer is going micro

Jorge Pérez with renderings of the projects

Related Group, Atlantic Pacific seek approvals for mixed-use apartment projects

233 North Miami Avenue and Jorge Perez

Related Group picks up two lots next to Miami Dade College for $9M

The Gallery on the River and Jorge Perez of Related Group (Credit: Wikipedia)

Related Group moves forward with Gallery on the River project

Daily Digest Miami

Partner at Miami law firm resigns amid conflict of interest allegation tied to zoning issue, Redfin will disclose commissions in this US city: Daily digest

arrow_forward_ios