Urban Peak Loses Wage Theft Appeal, Must Give Millions to Underpaid Workers

Longtime Denver homeless service provider and city partner Urban Peak has just been ordered to pay back construction workers who were underpaid while building its new $38.6 million shelter — known as the "Mothership" — after losing a wage theft appeal hearing.

Christina Carlson, the nonprofit's CEO, had filed an appeal in February in response to a determination by Denver Labor earlier this year that Urban Peak was paying the wrong prevailing wages to its workers. Instead of paying them "building prevailing wages," the organization was paying people "residential prevailing wages."

Residential prevailing wage rates for electricians, for example, are $26.91 an hour. Building prevailing wages for electricians are $39.75 an hour, according to Denver Labor. Plumbers make $23.24 an hour in residential and $39.53 in building; sprinkler fitters make $18.47 and $41.46, respectively.

"For the reasons stated herein, the Appellant’s request for dismissal of any prevailing wage determination — or, in the alternative, for an Order determining that 'residential construction prevailing wages be issued' to the Mothership project — is hereby dismissed for lack of merit, and the Denver Labor wage determination of building classification is affirmed," wrote arbitrator Pilar Vaile, a third-party hearing officer, in her appeals ruling.

In March, Carlson told Westword that she expected the wage determination would cost Urban Peak an estimated $2 million in extra expenses, should the results of the February appeal hearing not swing in its favor. Tayler Overschmidt, director of communications for the Denver Auditor's Office, which oversees Denver Labor, says they will figure out the total sum in the coming weeks.

"We are going to work with the contractors to figure out who has been paid what so far, since they started work in 2023, and what the workers are entitled to under Denver law," Overschmidt tells Westword.

Any money owed would prove costly for Urban Peak, and throw a wrench into the Mothership project, Carlson said in March. "It will have an impact on what we are able to do in terms of staffing, furnishing and additional components to the building," she explained. "And so based on that, we requested the hearing with the auditor's office to work out what is what."

At the time, Matthew Fritz-Mauer, executive director for Denver Labor, told Westword that as with any wage theft case — regardless of who is accused — people "have to get paid the money that they've earned." Once that figure is determined, he added, workers will get what they're owed.

"The prevailing wage is essentially a minimum wage that applies to a job," he explained in March. "So if the hearing officer agrees with us that this is a building project, then there will have to be back pay paid."

Construction of the 66,000-square-foot building at 1630 South Acoma Street was made possible through partnerships, bonds and donations from the City and County of Denver, the State of Colorado, local fundraising efforts and the federal government.

Specifically, $16.8 million was supplied through the city's 2021 RISE Denver Bond program; $11 million through federal New Market Tax Credits; $3.7 million from the state; and then millions more through donations and other venues. Congresswoman Diana DeGette helped secure $3 million in federal funding for the complex, as well.

Carlson, who could not be reached for comment on May 1, told Westword in March that it would be hard to raise more money since the donation period has officially ended and Urban Peak has already tapped multiple resources.

"To find out in the eleventh hour that there is a possibility of needing an additional $2 million to this project is very challenging, particularly in the current landscape, where inflation is impacting our staff, our youth, our donors and our funders," she said. "We have to raise money for annual operations, not just for this campaign. We continue to provide services every single day. And there is only so much money out there. Our donors and government partners are incredibly generous to us, but there is only so much money."

The Mothership is slated to open in July.

"We look forward to the resolution of this issue so that we can both pay the extraordinary contractors that are working on the project appropriately and meet the needs of youth experiencing homelessness," Carlson told Westword in March. "We do not want this to be an either/or; what we want is to provide the most vulnerable among us with a dignified place to heal, learn and grow so that our youth can break the cycle of homelessness. We are also committed to paying the appropriate prevailing wage to the members of the community who are building the Mothership and our great city."

Overschmidt says Denver Labor understands that Urban Peak wants to do the right thing and is a valued asset to the community, but the organization still needs to be held accountable.

"This is a case of good people trying to do a good thing; it just wasn't quite done the right way," Overschmidt concludes. "At the end of the day, we just want workers to be paid in accordance with Denver laws."