Archive for the ‘Job Quality Standards’ Category

Led by Community Groups, Newly Elected Officials Put Accountable Development in NYC on Front Burner

February 22, 2010

The rotten political culture in New York has forced ordinary New Yorkers to become increasingly savvy at making their voices heard, particularly when it comes to big development projects. And it’s making a difference. Advocates in the Northwest Bronx, for example, led by the Kingsbridge Armory Redevelopment Alliance (KARA), spent years organizing for a plan for the Armory that would bring good, permanent jobs to neighborhood residents. In a dramatic climax at the end of 2009 to their dogged efforts, they managed to defeat a proposal that fell short of these basic standards.

Blocking the city’s determination to take the low road represents remarkable progress, but what New York desperately needs is development policies that guarantee concrete benefits for local residents. Could a brand new crop of elected officials who are talking tough on accountable development provide a critical moment for advocates to finally accomplish just that?

Early signs are promising. Take the city’s new Comptroller John Liu, who spiced up February’s board meeting of the New York City Industrial Development Agency by voting ‘no’ on tax breaks for several projects, including a Western Beef grocery store proposed for the Bronx that, according to its application for benefits, would pay employees an average wage of about $19,000 a year with no benefits. Stating his concern that the current system lacks “clear processes and standards for project development and approval,” Liu pledged to “examine how scarce public resources are used to advance our City’s economic development.”

The proposed Western Beef would fulfill an urgent need for grocery retailers in this part of New York City, but Liu’s call to examine IDA’s way of doing things more closely could lead to more analysis of the consequences of subsidizing companies that pay poverty wages in order to address other legitimate problems such as food deserts.

Just over a week after his debut at the board meeting, Liu was at it again, suggesting in a bold op-ed in the Daily News that New York is behind other cities like Los Angeles and Milwaukee in embracing equitable economic development policies, a point neighborhood advocates have also fought hard to convey. He called for city developers to stop “stifling” neighborhood voices, and for remarkably high standards of transparency, accountability, and inclusiveness in Community Benefits Agreements, a promising tool that has thus far proven little more than a sham in New York City.

Other public officials appear to be hopping on the accountable development train, too. In another recent Daily News op-ed, the city’s newly-elected Public Advocate Bill de Blasio toughly proposed a citywide code of conduct for businesses that receive public subsidies, and called for requiring firms to pay a prevailing wage, and to stay neutral when workers try to form a union. These are all positive signs that some of the city’s newly elected officials may have gotten the message that voters have long been pushing. Now is a critical time for advocates to stay on alert and keep these officials on the right track.

Not to deny the handful of veteran public officials who have been pressing for policy reform, like Manhattan Borough President Scott Stringer, who has been advocating for stronger accountability at the New York City Industrial Development Agency for some time now. Stringer’s appointee to the IDA board, Kevin Doyle, stands out as one of the few board members willing to ask challenging questions about IDA’s decision-making processes.

In addition to ensuring that large development projects are a boon to local residents, creating more equitable development policies will also help exorcise the larger culture of corruption that bedevils the city and state. This was most recently played out in the indictment of Bronx City Councilman Larry B. Seabrook on charges that he stole cash from the city through a series of money laundering schemes, including one connected with the new Yankee Stadium. It’s all too easy to view such scandals as the bad behavior of stray individuals, and stop there. But by condoning a process that excludes community input and encourages wheeling and dealing behind closed doors over transparent, democratic means, our current approach to development reinforces the very culture that incubates such tainted public officials.

Ordinary New Yorkers are clearly prepared to keep fighting for a different way. Hopefully Liu and de Blasio will do them justice by continuing to show real leadership on these issues, creating momentum for other elected officials to fall in line.



In the Bronx, could a loss lead to a win?

October 22, 2009

blogphotokara2No, it’s not baseball, it’s NYC’s land use process. This week, the New York City Department of City Planning voted 8 to 4 in favor of a plan to develop the Kingsbridge Armory in the Bronx into a mall, even though the deal lacks a Community Benefits Agreement (CBA). So why are supporters of creating a CBA optimistic?

In New York City, where heads of commissions and board leaders are predominantly mayoral appointees, rarely is there dissent or even serious questions raised about proposed projects. But years of organizing and learning the ins and outs of development policy by members of the Kingsbridge Armory Redevelopment Alliance (KARA) have put officials on a bumpy ride. “No” votes from Planning Commission members representing Manhattan, Brooklyn, the Bronx and the city’s Public Advocate (there was one recusal from a Mayoral appointee) opens up significant leverage for organizers as the project needs final approval from City Council members in those boroughs.

With the strong backing of the relatively new Bronx Borough President Ruben Diaz and a unique showing of labor support – including the retail workers, building trades, Central Labor Council, teachers and SEIU 32BJ – KARA is in a strong position to push for CBA negotiations with Related Companies even though the developer is not required to participate in such talks.

“We are not asking for anything radical or extreme. We are simply asking that, in a borough that has the highest poverty rate in the nation and has consistently seen the highest unemployment numbers in New York State, Related and their future tenants provide living wage jobs with benefits that allow Bronxites a chance to provide for their families and to build a better life,” said Diaz.

As the project winds its way through the City Council for the final phase of approvals, KARA and the Bronx Borough President hope that the developer who wants to develop “Shops at the Armory” (with tens of millions of dollars of subsidies, a rock-bottom purchase price of $5 million for the landmarked building and the benefit of a $30 million new roof thanks to New York City taxpayers) will come to the negotiating table.

Considering that massive development projects in New York City, and the Bronx in particular (think Yankee Stadium, Gateway Mall, Croton Water Filtration Plant), have been easily approved without real community benefits, KARA is ahead of the curve and could shepherd in the first real CBA in the Big Apple.

Runaround on Job Numbers for Stimulus-Financed City Point Project

September 18, 2009

Is the New York City Economic Development Corporation (EDC) cooking up different sets of job numbers for the City Point project depending on its audience?

Conflicting figures in hearings, meetings, official documents, and the press over the past week are cause for some raised eyebrows at the very least.

City Point is a large mixed-use project planned for Downtown Brooklyn that was just approved for $20 million in tax-free financing in the form of Recovery Zone Facility Bonds (RZFBs), a new program created by the federal stimulus bill (ARRA). The bonds are intended to finance the project’s first phase, consisting of 184,000 square feet of retail space.

Brooklyn activists testified against the deal at a September 10 public hearing on grounds that EDC is failing to leverage the subsidies to ensure jobs will pay a living wage, provide benefits, and go to local residents. Activists also want to see 10 percent of space in the new facility set aside and made affordable for small businesses that were displaced to make way for City Point.

But it’s hard to stay focused on issues of job quality when you have to spend time sorting through the different claims on job numbers.

Here’s a breakdown:

Those who testified on the project did so based on a formal cost/benefit analysis posted on EDC’s website shortly before the hearing. In these documents, EDC projected that City Point will create 68 new permanent jobs and 108 construction jobs during the first phase of construction. (This round of bonds is only intended to finance the first phase, not the entire development.)

Less than a week later, on September 15, EDC staff told New York City Capital Resource Corporation (CRC) board members who were to vote on the allocation that the project would generate 208 permanent jobs and 328 construction jobs. (CRC is part of EDC.) According to EDC, these higher numbers incorporate jobs projected for a later phase of the project that has nothing to do with the current bond allocation, but which they believe will be indirectly catalyzed by completion of the first phase.

A majority of CRC board members voted to approve the financing.

EDC also touted the bigger numbers to the media, though a typo in their September 15 press release on the project explains why Amanda Fung reported in Crain’s New York Business that City Point would create 108 (rather than 208) permanent jobs, and 328 construction jobs.

These inconsistencies look especially bad in light of passionate participation at the three and a half hour hearing on September 10. Turnout was impressive. There was real debate. It was democracy in action.

But the EDC’s handling of these numbers undermines that process.

It’s misleading for EDC to promote figures that were not included in its official analysis, and that the public wasn’t given. Shouldn’t board members vote on the project based on the same numbers furnished to the public?

Standing Strong at the Kingsbridge Armory

September 8, 2009

esnuestroIn a move rarely seen in The Bronx lately, an elected official is standing up for the creation of good jobs and accountable development. Newly elected Bronx Borough President Ruben Diaz Jr. has voted no on a land use proposal to build a subsidized mall inside the Kingsbridge Armory because the developer refused to sign a community benefits agreement.

This must come as a shock to Related Companies, which plans to develop the mall and has gotten subsidies and sweetheart real estate deals from the city in the past. Related was awarded the contract to purchase the armory from the mayoral-controlled Economic Development Corporation for the bargain basement price of $5 million. The armory is a landmarked building that spans an entire city block, has a new roof, and is directly across the street from a subway and bus lines. 

The city seemed to move in the right direction in 2006 by involving community leaders in developing a Request for Proposal and including language that applicants supporting a living wage provision for the permanent jobs associated with the project will be viewed favorably. But after that the community hasn’t been involved.

Diaz’s vote doesn’t mean the proposal can’t happen; the project now moves through the city’s 60-day labyrinthine land-use approval process that includes hearings and votes by the City Planning Commission and the City Council. If other elected officials follow Diaz’s lead, the city could leverage the subsidies to bring Related back to table with the community and still hammer out an agreement.

For nearly a decade the Northwest Bronx Community and Clergy Coalition advocated for community use of the armory. In 2005 the group joined with the Retail, Wholesale, Department Store Union to create the Kingsbridge Armory Redevelopment Alliance (KARA), which called for a project that creates living wage jobs,  promotes retail that doesn’t compete with long-time businesses and builds much-needed community, educational and recreational space for neighborhood youth.

The Borough President’s stance comes not a moment too soon. Unfettered, subsidized development has grown rampant in The Bronx: Gateway Mall (developed by Related) near Yankee Stadium and the Water Filtration Plant have not brought promised jobs, have run far over budget and/or have moved forward in the land use process under the guise of fake Community Benefit Agreements.

Kudos to Diaz for standing up for his constituents and hopefully setting a new standard that won’t allow subsidizing mega developments to come at the expense of locally owned stores and diminished wages, taxes and jobs.

Opening Week Problems for New York Yankees Go Beyond Blowin’ in the Wind

April 24, 2009

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There’s more going on in The Bronx at the new Yankee Stadium opening week than just the now infamous wind tunnel that’s left fans aghast. Here’s a run down of news that’s probably kept the team’s public relations staff team very busy:

 

            The City’s Economic Development Corporation released job figures for the stadium but they raised more questions than answers. For example, how many Bronx residents were hired? What are the wages and benefits? As expected, most of the new non-construction jobs are seasonal so what is the economic impact of those short-term jobs in contrast to the billion dollar subsidy price tag?

             Assembly Members Richard Brodsky and James Brennan asked the New York State Supreme Court to have the Yankees comply with a subpoena as part of the Assembly’s investigation into the $1.3 billion the team received from the New York City Industrial Development agency in tax-free financing the new stadium. It seems the subpoena is having an effect as the Yankees might have to turn over documents.

             South Bronx residents and advocates joined clamoring Yankee fans on opening day to demand officials move more quickly to replace the over 22 acres of parkland where the new stadium now sits.

             New York City Comptroller William C. Thompson, Jr. released another audit showing the Yankees owe the city $68,000 in rent. Not paying the rent is a disturbing trend for the Yankees as previous audits by Thompson show they have underestimated the rent by about $3 million since 2002.

             And finally, the already dubious economic multiplier effect of the new stadium is in serious doubt since the priciest seats are empty.  What are the restaurants, parking garages and concession stands in the stadium to do without rich fans?

Money for Nothing

February 24, 2009

Money for NothingThe West Virginia Center on Budget & Policy has just released a new report examining how state agencies can improve their bang for the buck on job-creation investments. The report, entitled “Money for Nothing: Do Business Subsides Create Jobs or Leave Workers in Dire Straits?,” focuses on the three of the most common subsidies with job-creation requirements: the Economic Opportunity Tax Credit, the Manufacturing Investment Tax Credit, and the West Virginia Economic Development Authority’s (WVEDA) low-interest direct loans.

Despite spending millions of dollars annually to encourage private businesses to create good-paying jobs, the report concludes West Virginia is getting little in return. The authors recommend better public disclosure on the details of each program, timely and company-specific information on the number and quality of jobs created, clear consequences for non-compliant subsidy recipients, and an annual unified development budget to keep state agencies better informed.

CBA Moves Forward in Pittsburgh

October 1, 2008

Pittsburgh has joined the list of cities with community benefits agreements. The plan is moving forward after the Pittsburgh City Council gave its blessing to the agreement, which was signed by several public entities as well as community groups and a private company. The One Hill CBA Coalition negotiated the deal with the owners of Pittsburgh Penguins hockey team, as well as the City of Pittsburgh, AlleghenyCounty and the county Sports and Exhibition Authority. The $750 million project includes a new arena for the Penguins and redevelopment of the arena where the team currently plays.

The One Hill CBA Coalition was formed in April 2007 when city and county officially agreed to subsidize a new arena for the team in the city’s Hill District. The Coalition consists of 97 community groups, church groups, small businesses and historic preservation groups. Carl Redwood, Jr., Chairman of the Coalition, told me he wanted to make sure the development was beneficial to Hill residents: “We needed to determine our community’s future and development projects that fit into our plan.”

Pittsburgh UNITED, a chapter of the Partnership for Working Families, played a crucial role in the coalition’s success by mobilizing allies from around the city. For instance, the group organized a bus tour for progressive allies and for members of the media to show them areas of the Hill that would benefit from a CBA. Ultimately, the media started talking about the importance of family-sustaining jobs, community involvement and giving workers freedom to organize.

Local elected officials and the owners of the Penguins were originally resistant to the idea of a signed CBA. After months of public actions and press coverage, the Penguins and the elected officials had no choice but to bargain with One Hill. Subsequently, the final negotiations involved community leaders, County Executive Dan Oronato, Mayor Luke Ravenstahl and Penguins President David Morehouse.

The CBA will involve the people who live in the Hill District in numerous ways and help to rebuild their infrastructure and economy. First, the Penguins and the city’s Urban Redevelopment Authority will each provide $1 million for a locally-owned full-service grocery store in the district. Additionally, residents will have access to a local employment center that gives district residents access to jobs created at the new arena and the redevelopment project that will pay $12 to $30 an hour. The CBA also calls for the creation of the master planning committee which sets forth development guidelines. Along with the construction of a community center for youth, families and seniors, the Hill District will also see the creation of a Neighborhood Partnership Program centered on social services for the neighborhood.

While the CBA is seen as a victory, Redwood admits that there are some people in the community who feel the agreement did not go far enough given the $290 million subsidy. Redwood emphasized the need to continue community involvement: “To have a victory like this is important but we need to build upon it.”

A Boost for Prevailing Wages in Ohio

August 29, 2008

Strong, healthy communities are built by workers who are paid fair wages for their labor. In Ohio, the administration of Governor Strickland will see to it that this occurs on more projects in which public money is involved.

Strickland reportedly will soon mandate wider application of the state’s prevailing wage rule. A recently circulated Department of Commerce memo indicates that the state will require prevailing wages on privately funded projects that also involve partial public funding. This interpretation of the Ohio’s Little Davis-Bacon Act could indicate big changes for wage treatment of almost all subsidized development in the state. According to a spokesperson for the governor, the directive, originally slated for a Labor Day announcement, will be released soon thereafter.

In addition to the Davis-Bacon Act, which applies prevailing wage to all federal development and subsidized construction in the District of Columbia, 34 states have their own Little Davis-Bacon Acts. However, only a handful of states apply prevailing wage rules to projects involving economic development subsidies. Expansion of the laws to economic development financing tools tends to be politically divisive.

For an issue so mired in political partisanship, this is a bold move by Governor Strickland. Prevailing wage laws have been relentlessly attacked by their opponents since the passage of the Davis-Bacon Act in 1931. (Interestingly, Senator Davis and Representative Bacon were both Republicans and passed the Act through a Republican controlled Congress and Republican President Herbert Hoover.) Attacks on prevailing wage take many different forms, including attempts to directly repeal the laws, legislative proposals prohibiting prevailing wage on specific categories of construction projects, and non-enforcement of existing laws by adversarial administrations.

Ohio’s prevailing wage rule has weathered each of these attacks, but the Strickland Administration’s move could bring new controversy to the issue. An Ohio Department of Commerce memo obtained by Good Jobs First lays out a series of guidelines intended to clarify the application of prevailing wage rules. Common scenarios that will subject entire projects to prevailing wage include:

• publicly financed machinery or equipment in a newly constructed or remodeled private structure;
• infrastructure improvements on private land;
• remediation of environmental hazards for an identified end-user; and
• construction of multiple building projects in which only one building is subsidized.

The memo states that prevailing wage would be triggered when the funding comes in the form of bonds, grants, and loans but not by tax abatements, tax credits, or job training grants.

Happy Labor Day, Ohio!

Accountable Development Victory in New Jersey: Major Project to Include Housing and Job Quality Standards

August 5, 2008

The redevelopment of the Military Ocean Terminal in Bayonne will now promote good jobs and affordable housing in northern New Jersey. Much of the credit for this goes to the Garden State Alliance for a New Economy (GANE), which persuaded local officials to include job quality and housing affordability language in a Request for Proposals (RFP)to redevelop the decommissioned army facility.

The $10 billion 16 million-square-foot mixed-use redevelopment project—which is expected to create some 3,000 waterfront residential units, up to 1,000 hotel rooms and commercial and light industrial space—is eagerly anticipated in the community. Kate Atkins, executive director of GANE—a recently formed affiliate of the Partnership for Working Families —said involvement in the project was too important to pass up: “It will have a major impact on the region’s economy for many years to come.”

Representing a coalition of five unions and four community groups, GANE testified at local redevelopment authority meetings and held meetings with Mayor Terrence Malloy and other local officials. According to Atkins, “The coalition has been united on making sure that throughout the project the larger public benefit is really kept in mind–for example, making sure that construction jobs are good union jobs, and the permanent jobs are also high quality jobs.”

GANE’s goals are not only to educate public officials about their capacity to set high standards for developers, but also to send the message that it is possible to promote economic development that is financially beneficial to the community both in the short-term and in the long-term.

While GANE is pleased with its impact on the RFP, its job is not done. The group will monitor the process of selecting the developer to make sure that the project continues to promote equitable economic development.

Denver Adopts Job Quality Standards for TIF!

July 31, 2008
Members of the Prevailing Wage Committee

Members of the Prevailing Wage Committee

The Denver Urban Renewal Authority (DURA) took a big step forward this month in helping to ensure that TIF-funded projects are built by construction workers employed in high quality jobs. The adoption of two policies linking job quality standards to subsidized development projects represents a key economic development reform for Denver. The credit for this shift goes to the Prevailing Wage Committee, a grassroots organization composed of representatives of the building trades, and FRESC (formerly known as the Front Range Economic Strategy Center) who have been working toward this achievement for more than a year.

For over 50 years, Denver has had a law requiring the payment of prevailing wages for construction and other site maintenance work performed by private contractors and subcontractors on projects that are publicly owned or “financed in whole or part” by the city. This law wasn’t applied consistently, however, and the city spent nearly a half of a billion dollars on TIF projects over the last decade, many of which didn’t require the payment of family-supporting wages.

DURA’s new rule applies Denver’s Prevailing Wage Policy to trunk infrastructure construction on TIF-funded development. Trunk infrastructure includes any work done on roads, public utilities, parks, police stations, libraries and more. The policy includes provisions for regular and overtime pay, fringe benefits and timely payment of employees. DURA further adopted the Enhanced Training Opportunity Policy, which requires all projects to dedicate one percent of their TIF allocation towards workforce training of existing and potential workers as well as small or disadvantaged construction business owners.

Though there are numerous types of development subsidies to which reforms such as job quality standards may be attached, there are not many specific to TIF projects. Denver joins Maine; West Virginia; Davenport and Des Moines, Iowa; Hartford, Connecticut; Missoula, Montana; and Los Angeles as jurisdictions that mandate such standards.

As one of the largest purchasers of construction services, government has significant power to bolster wages in the industry. The move by DURA toward guaranteeing good jobs in TIF projects represents a solid investment in stronger communities and more accountable development.