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Take 30 Percent Pay Cut or Leave, Red Square's New Management Tells Staff

By Allegra Hobbs | October 26, 2016 4:49pm
 The 21-story residence at 250 E. Houston St. was recently purchased by 250 Houston Investors, LP and is now managed by Dermot Realty Management Co.
The 21-story residence at 250 E. Houston St. was recently purchased by 250 Houston Investors, LP and is now managed by Dermot Realty Management Co.
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DNAinfo/Allegra Hobbs

EAST VILLAGE — The management company taking over the Red Square rental building on East Houston Street slashed the salaries of doormen and maintenance workers by roughly 30 percent — and several staffers said they were given ultimatum to either accept the lower pay on the spot or not come back.

Residents at the 250 E. Houston St. apartment complex received letters on Oct. 20 announcing the purchase by 250 Houston Investors, LP under the management of Dermot Realty Management Co., along with a host of upgrades coming to the building, such as apartment renovations and added amenities pledging to "[elevate] your living experience."

But the change comes at a price for longtime workers at the residence who say reps of Planned Building Services — the group maintaining the building under new management — served them contracts mandating steep pay cuts, telling the workers they had to either sign off on the reduced wages immediately or find a new job.

All the employees spoke to DNAinfo New York on the condition of anonymity for fear of retribution by the new owners. 

A maintenance worker who had been at the building for seven years said he refused to sign, but only because he managed to make a phone call and find another maintenance gig in the roughly 20 minutes he was given to consider the offer, which would have reduced his $19.75 hourly wage to $11.

Like many of his colleagues, he would have been forced to stay to provide for his family if not offered the new job. 

"I said, 'How am I going to survive? I'm paying $1,150 [in rent] per month and if I'm making this much per week, how am I going to take this?'" the father of three recalled.

"I said, 'Can I think about this?' They said, 'No.'"

Another maintenance worker, who did sign the new contract, said he felt he had no choice. He accepted the impromptu demotion, from the position of super to sweeping and mopping floors as a porter, which cut his $18 hourly pay down to $11.

"They threw us in a room and said, 'Sign this or you're fired,'" the employee recounted.

"They said, 'You don't do maintenance no more.' They took the keys off my key chain. They said, 'You just sweep and mop.'"

Two longtime doormen said they received similarly steep pay cuts — from between $17 and $19 per hour down to $12 per hour — which they accepted due to a lack of other options.

One doorman said he felt "stuck," explaining he and his colleagues "had no choice."

"We have families," he said. "How can we take care of them?"

News of the purchase comes more than a year after rumors first surfaced that the 12-story building was contracted to be sold to Dermot Co. for $100 million, as first reported by the New York Post. The letter received by residents stated that the sale became official on Oct. 20.

The letter, along with word from a resident that workers' wages had been sliced, was first reported by EV Grieve.

Dermot Co. declined to comment. A representative for Planned Building Services did not immediately respond to a request for comment.

The iconic statue of Vladimir Lenin that had sat atop the residence for decades was removed on Sept. 20 and is reportedly slated to be installed on a nearby Norfolk Street building.