Union dispute imperils IDA tax breaks for warehouse
A rendering shows the $55 million, 140,000-square-foot warehouse that Rockefeller Group International Inc. is planning in Woodbury. Credit: Rockefeller Group International Inc.
A dispute between a group of construction unions and the developer of a Woodbury warehouse has imperiled 20 years of tax breaks for the project, officials said.
The Nassau-Suffolk Building and Construction Trades Council, which represents unions with 65,000 members, has called on the Nassau County Industrial Development Agency to reject an application for tax aid from Rockefeller Group International Inc., which wants to build the warehouse where the News 12 studios once stood.
Earlier this month, council officials said Manhattan-based Rockefeller Group did not work with the council to ensure that unionized subcontractors received the necessary information to bid for work on the $55 million warehouse. The officials also said some of the work is being done by contractors and workers from other states.
Rockefeller Group executives countered that its general contractor, Aurora Contractors Inc. in Ronkonkoma, mailed bid information to 395 unionized subcontractors, received back 43 bids and awarded $7.5 million in contracts to unionized subcontractors, or about half of the available work.
WHAT TO KNOW
- The developer of a Woodbury warehouse didn't initially work with the Nassau-Suffolk Building and Construction Trades Council to solicit bids from unionized subcontractors, though 49% of the available work was awarded to them.
- The Nassau County Industrial Development Agency had ordered the developer, Rockefeller Group International, to work with the trades council in mid-2022. The fact that talks only started recently has upset some IDA board members.
- The IDA board could vote on tax breaks for the project on Thursday.
Both sides confirmed that they've recently begun holding talks.
But the IDA board, at a meeting on Feb. 2, expressed displeasure that Rockefeller Group hadn’t complied with the board’s directive that talks commence in mid-2022.
“You have to go to the [trades council] first and then come back to us,” said IDA board member John Coumatos, a Bethpage restaurateur. “That didn’t happen here.”
IDA chairman Richard Kessel agreed, saying the board would give the developer and the trades council until Thursday’s IDA board meeting to resolve their differences.
“The developer has a responsibility to reach out to the building trades [council],” Kessel said. “This should have been done much, much earlier.”
Even if the talks had begun months ago, the amount of work going to unionized subcontractors would be the same, said Peter L. Curry, Rockefeller Group’s real estate attorney. “The fact that we ended up with 49% of the subcontractors being union is a testament to our process,” he said.
Both Curry and Matthew Aracich, president of the trades council, said the council had requested that it be used for all future Rockefeller Group projects in return for the council withdrawing its opposition to tax breaks for the 140,000-square-foot warehouse in Woodbury.
But Aracich said the council isn't stipulating that the developer only use union workers. “If they [Rockefeller Group] had reached out to us, I think the percentage of [unionized subcontractors] would have been greater,” he said.
John Cush, business agent and vice president for Local 361 of the Iron Workers union, said a steel fabrication company from North Carolina has been hired.
Rockefeller Group “is creating jobs for North Carolina residents and not Nassau County residents,” he told the IDA. “That is enough reason to deny this application” for tax breaks.
Executives of three subcontractors hired to do landscaping, fire protection and electrical work, disagreed, saying the warehouse project is providing work for their unionized employees.
“We are in support of this application,” said Patrick Bowe, CEO of ABCO Peerless Sprinkler Corp. in Hicksville.
Barney Reilly, construction vice president at Aurora Contractors, said, “Every effort was made to contact [unionized subcontractors] on this job.”
In 2021, Aurora Contractors hired subcontractors from Alabama, South Carolina and Pennsylvania to do some work on two warehouses in Melville, where the Newsday headquarters once stood.
An ensuing dispute with local unions led the Suffolk County Industrial Development Agency to postpone granting tax breaks for a separate warehouse, also in Melville, for about one year.
All three warehouses, from developer Hartz Mountain Industries Inc. in New Jersey, eventually won tax-aid from the Suffolk IDA.
Rockefeller Group was founded in 1928 by John D. Rockefeller Jr., the only son of oil magnate John D. Rockefeller. The company is best known for developing Manhattan’s Rockefeller Center.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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