With red flag raised, developer claims lesson learned

A multifamily developer that works closely with Prosper Portland to build affordable housing is facing criticism from a trade union after a subcontractor delayed paying workers on an apartment building project.

Prosper Portland nevertheless approved selling another property to the same developer. The agency’s board on March 13 green-lit the sale of a city-owned Southeast Portland parcel to Palindrome Communities , a local developer led by Chad Rennaker, after stinging public testimony from Western States Regional Council of Carpenters (WSRCC) workers.

“I have heard from workers that have gone six to seven weeks without pay,” said Tino Juarez, a local carpenter.

Another carpenter, Michael Coughlin, added, “Palindrome Communities has past practices of hiring irresponsible general contractors and in turn hiring irresponsible subcontractors.”

Construction workers are often exploited, Coughlin said.

“Immigrant labor abuse, tax fraud, wage theft, extortion are things that we fight every single day,” he said.

Palindrome Communities’ construction arm, PacifiCap Construction Services , is the general contractor for the Southeast Portland project that elicited workers’ complaints. PacifiCap Construction Services shares Chad Rennaker, Jason Rennaker and Robert Gibson as executives.

Gibson, Palindrome Communities’ vice president of development, said he fired the subcontractor, JP Pro Framing Construction Inc. , after learning of workers’ complaints that they had not been paid.

“We learned our lesson,” Gibson told the Prosper Portland board. “It wasn’t it’s not part of our practice. It was a mistake, and we’ll do better to protect the workers of our subcontractors going forward in terms of whether they’ve been paid.”

JP Pro, based in Banks, was formed in 2020. Owner Juan Jimenez Gutierrez, reached April 17, said workers “have been paid.” Gutierrez spoke in Spanish, while his wife, Sandra Martinez, translated for him.

“I have nothing to hide,” he said.

The DJC was not able to verify that JP Pro workers had been paid. A WSRCC official did not respond to multiple requests for comment.

Martinez said that the company has been unfairly targeted.

“A lot of people want to drag JP Pro’s name through the mud,” she said. “It’s very tiring. It’s very upsetting. It’s a small business. We’re trying to keep it afloat.”

The project at issue is a 47-unit apartment building in Lents at 5802 S.E. 92nd Ave., on a property known as the Bakery Blocks. It’s part of Prosper Portland’s long-term goal to remake Lents, an outlying neighborhood bisected by Interstate 205 that has historically struggled to attract real estate development.

Gibson pledged that Palindrome Communities would increase its preconstruction due diligence of subcontractors. He said it can be difficult to find good contractors for projects that are too large for small contractors and not lucrative enough to attract bids from large contractors.

“The project that we had a problem on was 47 (multifamily) units, so we don’t get the luxury of using larger contractors. So, we thought we picked the best one,” Gibson said.

At the March meeting, Prosper Portland officials discussed ways to ensure subcontractors on projects the agency backs pay their workers appropriately. Prosper Portland has sets of policies dedicated to boosting diversity and preventing hate incidents, but little to make sure tradespeople often people of color, immigrants and Spanish speakers are paid for their work.

Prosper Portland Executive Director Kimberly Branam said the Oregon Bureau of Labor and Industries , which investigates wage and hour violations and issues fines, is best suited to keep subcontractors in line.

“It’s really important to be aware of when BOLI does issue fines, because they have such a thorough process, and those findings,” she said.

BOLI has issued no recent final orders regarding JP Pro Framing or Palindrome Communities. It’s not clear if BOLI has opened investigations into either company. The bureau did not respond to messages seeking comment.

Commissioner Serena Stoudamire Wesley said it was “very concerning” to learn that workers hadn’t been paid.

Commissioners nevertheless approved the sale of a 33,071-square-foot parcel at 9231 S.E. Foster Road to Palindrome Communities for $1.755 million. Palindrome expressed interest in building a mixed-use, mixed-income project with market-rate rental housing, commercial and hospitality uses, according to Prosper Portland documents.

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