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Treasurer blasts project's officials
Byline: By Nancy Cambria
ST. LOUIS POST-DISPATCH

Mark Schlinkmann of the Post-Dispatch contributed to this report.

In the wake of the arrest and deportation of five illegal immigrants who were heading to work at a housing construction site in O'Fallon last week, state Treasurer Sarah Steelman blasted the project's financiers and developers.
Steelman said Thursday that the use of illegal immigrants was inexcusable and intolerable, particularly on projects subsidized by tax credits and tax-exempt bonds.
"This state will not do business with developers who think they can rip off the taxpayers and workers of Missouri," she said.
Steelman said the Gundaker Commercial Group had misled her and other members of the Missouri Housing Development Commission about the labor being used at O'Fallon Lakes, an affordable housing project off Veterans Memorial Parkway.
Officials at Gundaker said Thursday that they were also appalled to learn illegal workers were being used at the site.
Steelman said Gundaker officials had assured commissioners last May that they would use local labor on the project. Gundaker officials were called before the commission at that time to respond to rumors that contractors were using out-of-state labor and illegal immigrants in both O'Fallon and a similar apartment project in Wentzville, she said.
"I felt we had assurances from Gundaker," Steelman said. "I had asked periodically about this, and the staff of MHDC was not aware of any problems."
Steelman, who heads the housing commission, said Mike Hejna, president and CEO of Gundaker Commercial Group, had also committed to using local contractors on the project. Gov. Matt Blunt is also a member of the nine-person commission, which administers state and federal low income housing tax credits.
The commission awarded $600,000 in low income housing tax credits to the project and distributed an additional $741,000 in federal tax credits to it. The project is also backed by $14.6 million in tax-exempt bonds through the St. Charles County Industrial Development Authority.
In addition to Gundaker Commercial, two other companies are also under fire for their involvement in the project: Related Capital of New York, which is the controlling developer, and NRP Contractors of Cleveland, which is the contractor. NRP employs several out-of-state subcontractors to work on the site. Rick Bailey, a principal with NRP, said Wednesday that the company was not liable for the labor practices of its subcontractors.
Hejna said Friday that Gundaker would not tolerate the use of illegal workers at the construction site.
"It's a grave issue," Hejna said. "If NRP does not correct it, we'll legally petition them and the lender and ask that they be removed."
Hejna said Gundaker is a minority partner in the project and that Related Capital of New York has the ultimate authority to dismiss the contractor. Gundaker and one other local construction group had bid against NRP for the construction project, but Hejna said Gundaker was underbid by $4 million after the commission's May meeting.
Steelman said that officials from Gundaker, NRP and Related Capital have been asked to appear today at the commission's regular meeting.
"In this case, it is wrong for them to be using these tax credits when they're using illegal immigrants and underbidding other businessmen in the area for that public project," she said.
Local labor unions are applauding the scrutiny.
"Finally we are able to get somebody's attention," said Tom Heinsz of the local carpenters union. "Let's hope it changes for the local businessman. He's the one who has to compete with this stuff."
The county's Industrial Development Authority has been under pressure by the County Council to tighten its rules for contractors on projects helped by tax-exempt bonds from the authority.
Greg Prestemon, the authority's executive director, said Thursday that he was deeply disappointed with the contractors at O'Fallon Lakes and that the authority would meet today to discuss enacting new controls on employment practices of contractors on projects it aids.
Date: 2/17/2006
Copyright: 2006

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