Danger & ripoffs are on the rise
How hot construction biz brings a black market, scams & death
BY BRIAN KATES
DAILY NEWS STAFF WRITER
Posted Sunday, May 27th 2007, 4:00 AM
The biggest building boom in more than 30 years has spawned a cadre of scofflaw developers in every borough who routinely violate building codes, flout zoning regulations and ignore basic construction safety, a Daily News investigation shows.
As a result, entire neighborhoods are being placed in danger, workers are being killed and injured in record numbers and the city is losing millions to a growing off-the-books construction economy.
The News investigation has uncovered:
Low-rise middle class neighborhoods battered and overwhelmed by the construction of high-rise condos for the wealthy.
Residents forced to flee their homes or pay massive repair bills because of shoddy and dangerous construction - often performed by contractors working on projects next door or nearby.
Abuses by architects and engineers in the self-certification program, where they attest that regulations have been met without an independent inspection.
Developers who ignore fines and penalties, or treat them as the cost of doing business.
Workers forced to work in unsafe conditions while being cheated of their rightful wages.
With permits for residential units more than doubling between 2000 and 2006, to 30,927, The News found sloppy oversight, regulations that encourage developers to sacrifice safety for speed and a seeming disregard for the legitimate complaints of ordinary New Yorkers.
The city's building boondoggle is being fed by a massive off-the-books construction industry that underpays workers and robs the city, state and federal governments of tens of millions in taxes.
Interviews with dozens of workers, union officials and industry experts reveal that much of the city's new housing is being built by nonunion workers, many of them undocumented immigrants paid in cash, well below the legal prevailing wage.
About 30,000 workers are illegally employed in the city's burgeoning residential housing sector, according to estimates by the Fiscal Policy Institute, a New York-based research group.
Nowhere is this shadow workforce more active than in city-subsidized housing, where only 5% of the workforce is unionized and most jobs go to the lowest bidder, encouraging contractors to shave wages and cut costs.
Hiring workers off the books shifts costs to taxpayers and law-abiding contractors and gives unscrupulous builders an unfair competitive advantage, especially in contracts awarded to the lowest bidder.
The underground construction economy cheats the government of no less than $85.3 million in payroll and personal income taxes, health insurance premiums and Medicaid costs each year, the Fiscal Policy Institute estimates.
The situation promises to worsen as the city Department of Housing Preservation and Development works to meet Mayor Bloomberg's goal of creating 92,000 affordable housing units in the next 10 years.
Enforcement of prevailing wage standards is spotty, and fines minuscule. In 2006, penalties for contractors caught underpaying workers amounted to only 14% of the underpayment, according to Public Interest Economics, a New York-based consulting group.
In December, the city controller's office investigated 20 buildings in the HPD's Tenant Interim Lease subsidy program. "The results were troubling to say the least," a high-ranking official said in a confidential e-mail obtained by The News.
"A large majority of the workers who were willing to talk to us said they were being paid substantially less than prevailing wages," the e-mail continued. "Only a few [sites] had sign-in sheets for the workers and none of the contractors would make payroll records available to our investigators."
The official also reported that "few of the workers had hardhats or other safety equipment."
In a rare prosecution, a contractor and the management company that hired it were penalized in March for cheating workers at an HPD-subsidized project out of almost $190,000 in wages.
But justice was not swift.
The work at 536-538 W. 163rd St. in upper Manhattan was done in the winter of 2003-04. None of the seven workers was owed less than $6,000, and two carpenters were owed nearly $48,000 each.
The contractor, Integrity Construction, was barred from doing business with the city or state for five years after an administrative law judge determined it had cooked its books to avoid paying prevailing wages.
The management company, Melcara Corp., which has been awarded more than $93 million in HPD contracts since 1990, was ordered to pay $350,000 in back wages, fines and penalties.
The job, which went to the lowest bidder, was worth $1.1 million, according to the controller's office. It was part of a $12 million contract Melcara won to supervise jobs at numerous subsidized housing sites, city records show.
Conditions were horrendous, according to workers.
"It was like working in Siberia, the gulag, bitterly cold," testified mason tender Dedan Kimanthi. "The contractor never provided heat [and] there was no bathroom on the site."
Kimanthi was paid $10 an hour. The prevailing wage for mason tenders is $29.85 an hour in straight pay plus $18.99 in benefits. Kimanthi was cheated of $17,299, investigators concluded.
"This set me back tremendously," said a carpenter who asked not to be identified. "I was no better off than those people in the street. I got in trouble for nonpayment of rent." Investigators determined the worker was owed $47,588.
Because off-the-books workers go uncounted, the vast army of shadow workers appears nowhere in official statistics.
However, "given the large increase in housing starts, it strains credibility to believe that Labor Department numbers accurately reflect construction employment," said Fiscal Policy Institute economist James Parrott.
Between 2000 and 2005, the number of new residential construction permits issued in the city increased by 110%. That should have triggered at least an 88% increase in construction employment, Parrott reported, citing industry standards. Yet official government sources put the job increase at only 48%.
"The employment increase should have been a projected 38,140 instead of the reported increase of 21,088," Parrott said. "That means about 17,000 workers are being paid off the books."
An additional 13,000 of the 26,500 workers reported in 2005 as being independent contractors are suspected of being full-time workers misclassified by employers to avoid paying them benefits, according to the institute.
bkates@nydailynews.com
Fatal gaps in the safety system
--------------------------------------------------------------------------------
BY BRIAN KATES
DAILY NEWS STAFF WRITER
Sunday, May 27th 2007, 4:00 AM
Thirty-one New York City construction workers were killed in 2006, the most in five years and nearly twice as many as in 2000, according to the federal Occupational Safety and Health Administration.
Five workers have died on the job so far this year.
Virtually all the deaths occurred in buildings where city building codes were violated or federal safety regulations ignored.
Yet the number of inspectors for OSHA and the city Buildings Department, the first lines of defense for worker safety, remains woefully inadequate.
Since 2003, the number of OSHA compliance officers in the five boroughs has dropped from 51 to 44, according to spokesman John Chavez.
"OSHA is underfunded and understaffed," said Bill Kojola of the AFL-CIO's department of occupational safety and health. "With more and more sites to inspect, they are falling farther and farther behind."
And last fiscal year, the Buildings Department's 350-person inspection force was called upon to conduct a whopping 413,844 inspections and respond to nearly 118,000 complaints.
This year, the department has added 34 more inspectors. But the workload continues to grow.
Buildings Commissioner Patricia Lancaster has conceded that the workload puts "strains on the department and on the communities its serves."
41 violations and $628,000 later...
--------------------------------------------------------------------------------
BY ROBERT GEARTY and BRIAN KATES
DAILY NEWS STAFF WRITERS
Sunday, May 27th 2007, 4:00 AM
"Every piece of property he develops turns into a nightmare," city Councilman Tony Avella (D-Queens) said of rogue builder Thomas Huang.
Nowhere is this more apparent than in a series of stores and apartments Huang is building along Broadway and 51st Ave. in Elmhurst.
Area residents have filed 55 complaints against the project, and Huang has racked up 41 serious building violations. The city has slapped him with $54,050 in fines, but so far he has paid only $10,150, city records show.
One tangled piece of the project is an eight-story, 28-unit apartment house at 85-23 Broadway, where Huang told investors he was building three three-family houses. When they learned of the switch, the investors sued.
In court papers, Huang said he changed plans after miscalculating the amount of space needed to get permits.
Last December, Huang settled with the investors, agreeing to return $328,000 in deposits and an added $300,000. But that didn't solve his problems at the site.
Last May, as construction of the troubled apartment house continued, Huang was issued two violations for excavation that allegedly caused the driveway of the neighboring Reformed Church of Newtown to sink.
Additionally, at least two stop-work orders have been issued.
Elsewhere on the block, Huang was denied a certificate of occupancy for a new three-family home at 86-09 51st Ave. after he failed to obtain necessary permits. Faulty excavation there allegedly cracked the foundation of the house next door.
Homeowner Alvin Toy said he has spent more than $130,000 in legal fees fighting Huang. "We're at our wit's end," he said.
Huang did not respond to requests for comment.
To city, Karen Lieberman is the invisible woman
--------------------------------------------------------------------------------
BY BRIAN KATES
DAILY NEWS STAFF WRITER
Sunday, May 27th 2007, 4:00 AM
Karen Lieberman has lived in the same apartment for more than 25 years. But when the building's new owner began converting it to a single-family home, it was as if she did not exist.
Last May, developer Warren Malone received a permit to demolish the inside of his brownstone at 30 W. 85th St. The plans, certified by the architect but not confirmed by inspection, failed to show that Lieberman, the sole tenant, was living there.
Lieberman, who lives on Supplemental Security Income, has a lease for the first-foor rent-stabilized flat through Nov. 30, 2008.
Her plight underscores problems with the Buildings Department's much-criticized self-certification program.
In court papers, Lieberman charged that demolition caused damage to her ceiling and walls and sent water streaming through a light fixture. Workers slathered paint remover on the facade, filling her apartment with noxious fumes, she charged.
"I developed a cough and my eyes were red and swollen," Lieberman said. She had to be treated for allergic conjunctivitis, medical records show.
On Oct. 30, six days after granting him a single-family use permit, the Buildings Department cited Malone for "hazardous conditions" throughout the apartment.
Malone created a four-point tenant protection plan and signed an agreement to put Lieberman in a hotel and pay her $1,000 while he made repairs.
When she returned, cracks were still there and her sturdy wooden door had been replaced by "an improperly fitted metal door with a poor quality lock," according to court papers.
Malone's attorney, Joshua Price, charged that Lieberman is disgruntled because her prior landlord, a friend, had waived the rent for six years. Malone has sued Lieberman for nonpayment.
Lieberman's suit, meanwhile, was blocked in Manhattan Supreme Court after a judge agreed with the Buildings Department that she failed to take her fight first to the Board of Standards and Appeals.
While Lieberman ponders her next step, she continues to live in the middle of a construction site.
"The problem of self-certification is that it keeps the Buildings Department ignorant of potential safety problems," said Lieberman's attorney, Allega Chapman of MFY Legal Services. "Had the agency asked point-blank if a tenant lived in the building and if it had inspected, she might have been protected."
bkates@nydailynews.com
Queens developer is like one-man wrecking crew
--------------------------------------------------------------------------------
BY ROBERT GEARTY and BRIAN KATES
DAILY NEWS STAFF WRITERS
Sunday, May 27th 2007, 12:08 PM
Nothing seem to stop developer Thomas Huang. Not his long record of violations of the city's building and zoning codes. Not numerous lawsuits. Not dozens of formal complaints.
His shoddy construction practices have wreaked havoc in Queens and even forced the evacuation of a city firehouse - not once but twice.
Huang's problems go back nearly two decades. Yet, like many dubious developers cashing in on the city's record construction surge, Huang continues to obtain permits to build.
In 1986, he acquired the RKO Keith's Theater in Flushing for $3.4 million and announced plans to build a movie complex, shopping mall and hotel.
But the city revoked the building permits in 1990 after parts of the theater's landmarked grand staircase were bulldozed. Later, the theater was torched in an arson fire that remains unsolved.
In 1997, Huang pleaded guilty to allowing some 10,000 gallons of heating oil to leak into the building. He was ordered to serve five years' probation, pay a $5,000 fine and clean up the spill. Five years ago, he sold the theater for $12.1 million.
In 1999, after he was sued by the state attorney general for irregularities at a Flushing housing complex he built, Huang was permanently barred from selling co-ops and condos in New York.
But he was not barred from putting up houses or apartment buildings.
Take Huang's since-abandoned project at 86-57 Grand Ave. in Elmhurst, Queens. Structural problems caused by faulty excavation forced the evacuation of the adjacent Ladder Co. 136 firehouse in December 2005 and January 2006.
After the second evacuation, the project manager, Thomas Cottone, 85, was arrested and charged with reckless endangerment for ignoring a stop-work order at the site and possession of a forged instrument for altering a building permit.
In a plea bargain, he admitted to the forged instrument charge and on April 25 was sentenced to five years' probation.
Owners of two adjacent properties sued Huang last year for causing damage to their buildings. That case is pending.
While building a house at 82-66 51st Ave., Huang's workers ripped off the gutters of the neighboring house, leaving only a foot between them, according to homeowner Luz Rodriquez, a retired Catholic nun.
"This was a detached house, now it's an attached house," she said.
Then there are the 11 houses Huang built at 34th Ave. and Union St. in Flushing.
The Buildings Department approved them as three-family homes in 2002, only to learn that Huang incorrectly listed the top floor as a mezzanine and built them so close together that the Fire Department could not gain access.
After the Board of Standards and Appeals revoked the certificates of occupancy in 2005, eight buyers, who paid between $500,000 and $600,000 for the homes, sued.
They settled last October after Huang promised to make necessary alterations.
Three other buyers sued in Brooklyn Federal Court, claiming they were defrauded of $321,000 down payments in a civil racketeering conspiracy led by Huang.
The case was privately settled in March.
bkates@nydailynews.com
The neighborhood killers
Homeowners rip overdevelopment and lack of city help
BY BRIAN KATES
DAILY NEWS STAFF WRITER
Sunday, June 17th 2007, 4:00 AM
The Daily News investigative series "Building Boom-doggle" prompted scores of e-mails, letters and phone calls from angry New Yorkers with overdevelopment horror stories of their own.
The series also has given a boost to reform legislation and extracted a promise of increased enforcement from the Bloomberg administration.
Many readers said they felt city bureaucrats gave them the brushoff, while others said the Buildings Department duly recorded their complaints and issued violations and imposed fines, but problems persisted.
Typical was an e-mail from Ed Jaworski, vice president of the Madison-Marine-Homecrest Civic Association in Brooklyn.
His group "has generated a construction Dumpster's worth of correspondence [to] Community Board 15, to the Board of Standards and Appeals, even to the mayor's office," Jaworski wrote. "We've spent thousands of hours in meetings and on the phone. But building and zoning regulations are being manipulated to change the character of neighborhoods, house by house, block by block."
Ann Marie Amodeo wrote that an unscrupulous developer undermined the foundation of her mother's house on 70th St. in Dyker Heights, Brooklyn, damaging the wall and ruining the backyard when he demolished a building next door.
"Calls and formal complaints to the Buildings Department had little result," she wrote. "Under threat of a lawsuit, this builder eventually purchased my mother's house, but refused to pay market price."
Buildings Department spokeswoman Kate Lindquist said, "We take our enforcement responsibilities seriously, and will be announcing new enforcement initiatives in the near future."
She added that the department has boosted its inspection staff by 48% since 2002, and is increasing penalties for infractions.
Like homeowners in other city-subsidized buildings featured in The News series, Shanita Wells and about 20 of her Brooklyn neighbors are complaining about roof leaks, bad plumbing and crumbling stoops in front of the two-family houses they bought on Clifton Place in Bedford-Stuyvesant last year through the city Department of Housing Preservation and Development.
Their purchase agreements require them to live in the homes for 30 years or pay back about $160,000 in city subsidies.
"What should have been a dream is a nightmare," Wells said. "We are being ignored and don't know who to turn to."
Many building professionals confirmed The News' findings of widespread code violations and unsafe construction.
Bronx-based carpenter T.J. O'Connor wrote: "If the Department of Buildings exercised their power to not only issue violations but to enforce stop-work orders until fines are paid, the revenue collected from unscrupulous developers could be put toward hiring the needed inspectors."
Several readers added to the litany of complaints about the shoddy practices of architects and engineers who falsely certify that their work complies with building regulations and zoning codes.
But master plumber Robert Mengler mentioned another disturbing wrinkle.
"Master plumbers are also allowed to self-certify their work," he wrote. "There are certain licensed plumbers that have made lots of money by renting out their licenses. . . . The chances of this work being inspected is very, very, very low."
"Despite what the administration and the Buildings Department has said about dramatic changes, the DOB is in a perpetual state of chaos," said Councilman Tony Avella (D-Queens), chairman of the zoning committee and a member of the buildings committee. "They are not improving enforcement and insuring that construction is safe."
bkates@nydailynews.com
Anger rises along with bigger home in College Point
--------------------------------------------------------------------------------
BY BRIAN KATES
DAILY NEWS STAFF WRITER
Sunday, June 17th 2007, 4:00 AM
Norman Kara is at his wit's end.
He lives in a two-story attached house at 12-07 115th St. in College Point, Queens, and half of the building - not his half - is being transformed into a 2½ -story duplex by a new owner.
The two homes, mirror images of each other before the work began, share a wall and a walkway.
Since work began in May 2005, the new owner, listed in city records as Sasy Motti, has racked up 12 Environmental Control Board violations, nine of them recorded as "high severity."
Four of the citations were for "failure to provide adequate protection to adjacent property" - that is, Kara's home. Buildings Department records confirm that Kara's house was "damaged by rainwater" due to improper construction practices at the other part of the structure.
"My rear patio has collapsed, and my front walkway is cracked and sinking," said Kara, who has lived in the house with his wife and son for 11 years. "Work goes on in the wee hours of the night. The noise is deafening."
Kara and his neighbors have filed 53 formal complaints with the Buildings Department and rallied support from Councilman Tony Avella (D-Queens) and state Sen. Frank Padavan (R-Queens). But the work continues.
"Mr. Kara's half of the house is totally dwarfed by this," Avella said. "His quality of life is gone, and the economic value of his property is gone, too, unless he sells to a similar developer who will do the same thing, and that creates a domino effect for overscale development in the neighborhood. This is a serious problem throughout Queens and the city."
But Buildings Department spokeswoman Kate Lindquist said, "Inspectors have been to the site numerous times to ensure the builder is complying with the stop-work orders and to make sure construction is compliant."
"My house is ruined," Kara said. "If this is the sign of growth, then you can keep it."
Motti could not be reached for comment.
'Fines galore,' but eyesore lingers in Riverdale
--------------------------------------------------------------------------------
BY BRIAN KATES
DAILY NEWS STAFF WRITER
Sunday, June 17th 2007, 4:00 AM
For the past four years, the view from Irene Olsen's balcony has been the graffiti-covered, cinder-block shell of a house left half-completed next door.
A wall of her home and a side of the uncompleted property at 3190 Cambridge Ave. in Riverdale, the Bronx, are only 3 feet apart.
Rotting timbers frame nonexistent rooms. Warped plywood sheets cover what would be the second floor. Windows have been installed, but are broken. The site is littered with empty beer bottles, broken glass and construction debris.
A well-worn path through adjacent Ewen Park leads to the site, where a broken chain-link fence gives vandals easy access.
"Children of different ages hang out there after school," said Olsen, a widowed 85-year-old retired social worker. "On weekends, they are there until midnight. The kids break windows. You hear girls scream. The police told me not to go out."
Buildings Department records show permits were issued for work on the site in 2003 and 2005, but Olsen said no major construction has been done there for about four years.
She said she has complained via the 311 hotline and has called the 50th Precinct, the public advocate's office and Assemblyman Jeffrey Dinowitz, who wrote a letter of complaint to the Buildings Department.
"Please be advised that one of our inspectors visited the site on 3/23/07 and a violation was issued for defective job site fencing," a department bureaucrat wrote Dinowitz on April 30.
The Buildings Department has slapped $24,000 in fines on the property since 2003, including one for $10,000, levied Nov. 9, for failure to maintain the chain-link fence that is supposed to surround the site.
"There are fines galore," Olsen said. "But what does anybody do about it? I have lived with this for four years."
None of the fines have been paid, Buildings Department records show.
"If the developer continues to neglect his duties to maintain a safe construction site, the city will step in and pursue demolition and bill him," department spokeswoman Kate Lindquist said.
The building owner, Frances O'Brien, could not be reached at phone numbers listed in city records.
No comments:
Post a Comment