The city has halted the redevelopment of the long-defunct Greenpoint Hospital after the project’s subcontractor was charged with underpaying workers at another site in the Bronx.
“We are taking the allegations very seriously,” said Eric Bederman, a spokesman for the Department of Housing Preservation and Development. “When that investigation is complete, we will consider its findings in determining whether to continue negotiations with [the developer].”
Last April, Queens-based Great American Construction fended off three rivals to win the contract to convert the former hospital site on Maspeth and Kingsland avenues into 240 units of below-market-rate housing.
But one of the losing bidders sued the city in February for “unfairly” awarding development rights of the $52-million project to the outer-borough company.
And last month, federal agents arrested Wendell Walters, a key city housing official who helped steer the contract to Great American, for allegedly accepting $600,000 in unrelated bribes from a handful of developers.
Two weeks later, the city and the US Department of Labor launched an investigation into Great American’s subcontractor, Bayport Construction, after several of its construction workers complained the developer underpaid them nearly 20 percent of hourly wages owed for work at a city-owned Bronx site, according to the Daily News.
In response, the city is withholding $575,000 in funding to Great American pending the outcome of those investigations.
Great American’s Samuel Gaccione said the project is “at a standstill” because of the litigation, but was confident he would be breaking ground soon.
“We’re still looking forward to developing affordable housing in Greenpoint,” said Gaccione.
But neighborhood residents say the scandal should disqualify Great American from developing the site.
“The city needs to back down from this bad decision,” said Jan Peterson of the Greenpoint Renaissance Enterprise Coalition, a losing bidder. “This whole thing is just a travesty. This is the kind of things that cause whole communities to have a lack of faith in the public sector and the private sector.”
Reach reporter Aaron Short at email@example.com or by calling (718) 260-2547.