Lendlease Americas responds: 1 Java Street

Lendlease’s vision for 1 Java Street is to deliver one of the city’s most sustainable and inclusive multifamily developments. That includes pioneering work in geothermal energy and usage of sustainable materials; creation of significant public waterfront amenities; and creation of jobs that engage many constituencies in New York and particularly locally in Brooklyn.  

A merit-shop site, 1 Java Street is comparable to other mixed-use development sites of similar scale in Brooklyn. Thirty percent of contract value to date has been awarded to union contractors, representing approximately 150 union jobs to date. Because we recognize the importance of creating diverse business opportunities in the communities where we operate, Lendlease established voluntary targets for XBE workers (Minority, Women, Veteran, Service-Disabled and Local businesses). Our self-imposed XBE target is 50% of all on-site workers.

Lendlease has worked with unions in New York City for more than 40 years. In developing an exemplary, 834-unit residential complex including 30% affordable housing, we have sought to collaborate with the New York District Council of Carpenters specifically relating to 1 Java Street since May 2022.  

We are executing our responsibility to achieve a minimum average hourly wage of $47.25/hour mandated by the NYC 421-a program, but to also select a mix of contractors who align with our values of safety, inclusion and value creation. This balance fuels our ability to fund the unique attributes that will make 1 Java Street a benefit to residents, the community and its investors. 

The New York City District Council of Carpenters’ disagreement relates to the fair and legal award of two packages of site work to licensed, active, taxpaying non-union businesses in New York. We invested significant effort to fairly and transparently engage the Union with those contracts.  

In both cases, some of the union shops that were invited to bid on work at 1 Java Street declined to do so. Because the union bids we did receive were prohibitively higher than the lowest bid, we met with the New York City District Council of Carpenters, explained the drastic cost differences, and explored possible concessions to bring the union bids to a point that would make the 1 Java Street project financially feasible -- a mutual goal that we were unfortunately not able to reach. 

Unfortunately, after rounds of extensive negotiations and our earnest efforts to reach an agreement, the New York City District Council of Carpenters have decided to reject Lendlease’s package for a contract with a value of over US$20 million of union work at 1 Java.

During the bidding process, Lendlease performs extensive background checks on all entities that submit actual bids. These background checks include extensive reviews of each subcontractor’s operations including financial, legal, ethical, safety, quality and performance elements. To be considered for an award of any size, every subcontractor must pass this rigorous review process. There are no exceptions. 

Further, Lendlease imposes a rigorous certified payroll process for RNC and Gotham, the contractors awarded the two contracts disputed by the union. These practices are designed to ensure their labor receives fair and timely payment. That oversight has found no deficiencies or discrepancies, and no evidence of wage theft. 

Lendlease conducts regular community outreach related to 1 Java Street, and our most recent update including a full project overview can be found here.