According to NBA legend Earvin “Magic” Johnson, Canyon-Johnson Urban Funds was aiming to redevelop urban neighborhoods and provide jobs and business opportunities. Perhaps those neighborhoods excluded Brooklyn.
The real-estate development company is negotiating with two unions to avoid being named in a civil suit, charging that it was part of a plot to dodge union contracts at a condo site in Brooklyn, according to the New York Daily News.
While cheating labor unions out of their pay is not a good look, it’s exactly what Metallic Lathers Union Local 46 and the Mason Tenders District Council are proposing. Supposedly, Long Island-based Lalezarian Developers and Manhattan-based JMH Development combined with HRH Construction to swindle workers out of $7 million in wages and benefits from 2007 through 2011.
To avoid paying contractual wages and fringe benefits, chief of HRH Construction Brad Singer has allegedly created a front company called Leviathan. The suit alleges that the developers diverted payments that should have been made to HRH Construction—a unionized general contractor—to the non-union front, to help skirt expensive union contracts. According to Local 157, in the projects at the center of the legal action, workers were paid $12 an hour without benefits, instead of the going union rate of about $55 an hour with benefits. In August of 2010 Canyon-Johnson is suspected to have cut a deal with HRH to use the bogus company.
Though the labor’s committee lawyer Thomas Kennedy has said that “Canyon Johnson is not in this suit at present”, Canyon-Johnson and its CJUF III investment fund were to be named with 20 defendants in a civil RICO suit filed Tuesday. A spokeswoman from their company declined to comment.
In previous statements Canyon-Johnson has made it known that they are “proud of their track record with organized labor.”