The Fair Wages for New Yorkers Act

Picture via KimTheWolf (flickr), showing a protest sign at Georgetown University in Washington, D.C. (where the living wage is almost $15 per hour.

The Kingsbridge Armory CBA campaign may have tanked, but its supporters have not been deterred. They're hoping the city council will enact the Fair Wages for New Yorkers Act, which would mandate a $10 minimum wage for all projects receiving more than $100,000 in subsidies. As many people have argued of late (including myself), institutionalizing the living wage would be preferable to relying on CBAs and deal-by-deal negotiations. "[T]his debate is not just about one parochial section of the Bronx," explained Ruben Diaz, Bronx Borough President. "This is a citywide debate."

Some details about the bill:

• The law would apply to projects receiving all sorts of subsidies, not just direct cash payments. It would count indirect subsidies like bond financing, tax abatements or exemptions, tax increment financing, fee waivers, energy cost reductions, environmental remediation costs, property acquisition write-downs, and other discretionary assistance.
• Projects used exclusively for affordable housing, or to house social services, arts, or cultural organizations would be exempt from the wage requirement. (Okay, but what does "exclusive" mean?)
• Covered employers include the developer/subsidy recipient; subsequent owners of the property; tenants and subtenants; and contractors that work on the project for 30 days or more (including temp services, food service contractors, and on-site service providers). However, non-profits with annual budgets of less than $1 million would not be subject to the wage requirement.
• Employees would be entitled to a living wage, regardless of their part time, temporary, or seasonal status. Independent contractors would be covered too.
• The living wage would be $10, or $11.50 for employees not receiving health insurance. These rates would be adjusted annually, based on the local consumer price index.
• The living wage requirement lasts for the longer of 30 years or the duration of the subsidy.
• Employers have to post notice of the living wage rules, give a copy of the notice to each employee, and keep records of hours worked and wages paid. The city comptroller's office can inspect those records whenever it wants, either on its own initiative or after receiving a complaint. If an investigation uncovers evidence of a violation, the comptroller would hold a fact finding hearing, and then issue an order, disposition, or settlement. Remedies could include: requiring payment of back pay plus interest to the wronged employee; a fine, not to exceed 200% of the total amount due to the employee; requiring the disclosure of additional records; and/or requiring the reinstatement of any employee retaliated against for trying to enforce the wage requirement.
• If an employer receives two violations in any six year period, the employer would become ineligible for financial assistance for five years.
• Developers and employers would also have include clawback provisions in their financial assistance agreements with the city or city economic development agency, and if an employer failed to cure a violation, it could lose its financial assistance and even be required to pay back already received subsidies.

Well, Mayor Bloomberg has predictably opposed the bill. As explained at the Atlantic Yard Report, his reasoning is completely illogical:

Bloomberg's conclusion: "The free market works much better."

"Having the public subsidize some workers and not others is not fair," he added.

Um, couldn't the same be said about "some projects and not others"?

I would add, isn't it a little unfair when employers, but not employees, get subsidies? And c'mon, we're not really talking about socialism here, we're talking about $10 per hour in one of the most expensive cities in the world. We're talking about ensuring families a decent quality of life.

Bronx Borough President Ruben Diaz, Jr., is one of the bill's chief supporters. City Councilmembers Annabel Palma and G. Oliver Koppell sponsored the bill at his request, and it's received endorsements from about 20 other councilmembers. City comptroller John Liu and Public Advocate Bill DeBlasio are also on board. And about a dozen other community organizations have signed on to the Living Wage NYC campaign.

No doubt we'll be hearing more about this. For more to read:

• Sam Dolnick, Wage Proposal May Prompt Fight at City Hall, The New York Times, May 23, 2010
• Daniel Massey, Living-wage debate gets broader, louder, Crain's New York Business, May 23, 2010
• John Del Signore, Bloomberg Expected to Fight "Fair Wage" Bill, Gothamist, May 24, 2010
• Eliot Brown, Living Wage Bill Formally Introduced; Bloomberg Smirks, The New York Observer, May 25, 2010
• Molly Zelvonberg, Keep the working poor working, fair wages law is "Nice," but stupid says Bloomberg, NY Examiner, May 25, 2010
• Jeanmarie Evelly, Kingsbridge Armory Battle Inspires Citywide Living Wage Bill, Bronx News Network, May 26, 2010
• Michelle Chen, Living Wage Fight Revitalized in New York City, In These Times, May 28, 2010
• Juan DeJesus, Pols, Labor Leaders Launch Wage War Against Big Business, NBC New York, June 2, 2010

Gotham Gazette: "Will Derailing a Bad Project Lead to a Good One?"

Today's Gotham Gazette includes an excellent article by Joan Byron recapping the Kingsbridge Armory Redevelopment Alliance's campaign for responsible and accountable development in the Northwest Bronx. When Related Cos. proposed to redevelop the armory as a shopping center, KARA insisted on a CBA with a living wage requirement, and when Related refused to guarantee living wage jobs, KARA succeeded in convincing the city council to reject the project.

And so, Byron asks, will defeating the shopping mall proposal lead to a better development plan?

KARA is ready to go back to the drawing board, with an even clearer understanding of what the Bronx stands to lose, and to gain. Realizing the damage that a mega-mall would inevitably inflict, KARA and its allies are seeking a community-led vision that will maximize local benefits without destroying the neighborhood.

They won’t have to look far for a precedent. Another armory opened its doors to its host community this month, gracefully accommodating a women’s shelter, community space and a YMCA whose gym will also serve local kids during the school day. The redevelopment of Brooklyn’s Park Slope Armory took years to move from vision to reality, but KARA members are already asking "why not here?"

Kingsbridge Armory plans rejected, 45-1

The New York City Council yesterday rejected the Kingsbridge Armory redevelopment plans by a vote of 45 to 1, with one abstention. The vote turned primarily on developer Related's refusal to impose a living wage requirement on retail tenants, a stance that prevented finalization of a CBA between Related and the Kingsbridge Armory Redevelopment Alliance.

The vote was not altogether surprising, as the Bronx delegation to the city council has been actively pushing for the living wage requirement, but it nevertheless comes as a defeat to the Bloomberg administration, which saw the project as a boon to the borough. The rejection comes just about a week after an appellate court threw a wrench into Columbia's plans to build a new campus in West Harlem by holding that the project could not use eminent domain.

Under the New York City Charter section 197-d (available here), Bloomberg has the chance to file a written disapproval of the action, which can only be overturned by a two thirds majority of the city council. Council speaker Christine Quinn has stated that she has the votes to overturn any mayoral veto. If the rejection is sustained, Related will have 30 days to file a complaint for judicial review.

The Kingsbridge impasse continues

The Kingsbridge Armory Redevelopment Alliance is strongly opposing a compromise deal that would have supplemented wages with city money. "This is a bad deal for the Bronx and all New Yorkers and we are calling on the Council to vote it down," said Desiree Pilgrim-Hunter of KARA. "The so-called living wage fund that the Administration is proposing is nothing but a subsidized poverty fund."

Will there be a vote on the Kingsbridge Armory development today?

The New York City Council is scheduled to vote on the Kingsbridge Armory project today, but negotiations on the CBA and its controversial living wage requirement are ongoing. This has led members of the Bronx delegation to seek a postponement of the vote, possibly until Monday.

It seems that the Bronx delegation has proposed to subsidize living wage jobs, initially with the $5 million purchase price for the armory (which itself is an incredible subsidy to the developer), and thereafter through a 5% surcharge on the developer's profits. This way, living wages could be mandated on all retail tenants, but the costs would fall on the city and the developer, negating the developer's argument that the wage requirement would make it difficult to attract tenants.

Some Kingsbridge Armory links

For anybody interested in the Kingsbridge Armory redevelopment and possible CBA, it's worth a few minutes to take a look at Bronx Borough President Ruben Diaz Jr.'s recommendation to the planning commission. Regarding the CBA, Diaz states:

The developer has not agreed to a socially equitable Community Benefits Agreement. I cannot understand why the developer would not act in good faith with The Bronx and the City as a whole, by not considering the needs of the community. The provisions in the proposed Community Benefits Agreement are both fair and negotiable. Among the most important disagreements with the developer is their refusal to assure living wage provisions, defined by Local Law 38 adopted in 2002, as $10 per hour with health benefits. [The Economic Development Corporation] made it clear in the site RFP that it would favorably view development plans that maximize the number of jobs meeting the City’s living wage and health benefit standards. All the community wishes to do is to be a participant in what could be its greatest socioeconomic investment for generations to come.

It may be hyperbole to suggest that the developer has not "consider[ed] the needs of the community," but Diaz also explains that his office received "significant correspondence" from residents concerned about the need for a CBA. And as he cogently points out, the goal of the planning review process should be "to assure that development of City-owned property and use of government subsidies benefit surrounding communities on whose patronage the financial feasibility of this project will depend."

Diaz gave a number of other reasons for rejecting the proposal:

• no market study was conducted to determine whether the proposed retail uses will be viable, or to determine what their impacts on existing retail establishments will be. "This is critical in terms of determining the best uses for the community and the impact on the surrounding area."
• there is no need for a new grocery store as there are other super markets within a half mile of the project site
• there has been no assurance that the redevelopment will include the siting of at least one school; nor has the developer agreed to include other education facilities (e.g., space for Lehman College or performance space)
  
• "No identification as to how the City plans to use the $5 million acquisition price or annual taxes, which I feel should go towards the development and maintenance of the community facility, and not to the General Fund."
• there is no assurance that the project's interior designs will be consistent with the armory's Romanesque architecture
  
• several transit, traffic and parking issues have not been adequately addressed
  

Here are some additional links to the project's planning documents:

• Environmental Assessment Statement
• EA Positive Declaration
• Draft Scope of Work
• Final Scope of Work
  
• Draft Environmental Impact Statement
• Notice of Completion for DEIS

Some links

The news out of Seattle is that the Dearborn Street project has been canceled due to the economy. This means that the CBA won't go through either, but Puget Sound Sage affirms that "the CBA represents a groundbreaking model for making development accountable to community stakeholders."

On the east coast, there's also been a lot of talk about the new Yankee Stadium, including questions about the jobs being created, the replacement parks that are supposed to built, the economic prospects for all the new high-priced seats, and the odd "home run wind." Check out the Good Jobs First Clawback Blog for more.

In the Bronx, the IDA granted subsidies for the Kingsbridge Armory without a CBA

Despite New York City Comptroller and IDA member Bill Thompson supporting a CBA for the Kingsbridge Armory redevelopment and calling for the IDA to hold off on subsidy approvals until one was in place, yesterday the IDA approved tax exempt financing for the $323 million project. The Bronx News Network Live Blog estimates the benefits for the developer, the Related Companies, at about $17.8 million.

Thompson, backed by Manhattan Borough President Scott Stringer, moved to postpone the IDA vote until more information was available about the number of jobs to be created and their likely salaries. He also criticized the IDA and New York City Economic Development Corporation for not supplying him with procurement documents, and he questioned the propriety of the IDA subsidizing this project at all, since it's not an industrial project and it's not located in an empire zone or an empowerment zone. Regarding the uncertainty as to what kind of jobs the project is going to create (and for whom they will be created), Thompson remarked that "a Community Benefits Agreement should be negotiated to resolve these issues before a vote and to ensure adequate community involvement in the process." See Thompson's press release here.

(Update Mar. 13) More commentary from the Bronx News Network is available here.

Kingsbridge Armory CBA campaign

(photo credit- New York Times)

Bettina Damiani of Good Jobs New York reports on the Clawback Blog that the Kingsbridge Armory Redevelopment Alliance (KARA) is seeking to negotiate a CBA over the redevelopment of the Kingsbridge Armory in the Bronx, a 575,000 square foot structure built in 1917 and slated to be turned into a shopping center (see here and here for information about the redevelopment project and here for photos of the existing building).

KARA is part of a larger community alliance, the Northwest Bronx Community and Clergy Coalition (NBCCC), and it's made up of tenant and neighborhood associations, faith based groups, unions, elected officials and other community-based groups. The Alliance is seeking commitments to living wages, union protections, local hiring goals, community space and environmental protections. To achieve these goals, it's seeking to negotiate a CBA, a Labor Peace Agreement and a project labor agreement. KARA was involved in the process of selecting the developer for the project, Related Companies, which is also the developer of the Gateway Center at Bronx Terminal Market.

A New York City Economic Development Corporation press release explains that the project will include between 25 and 35 retail stores as well as an anchor department store, landscaped rooftop space open to the public and a public plaza. It will be built using green design and is expected to attain LEED silver status. Elected officials and Related spokespersons expressed their desire to continue working with the community during the development process.

More on Yankee Stadium

Matthew Shuerman of the New York Observer, who's been covering CBAs for quite some time, has an audio piece on WNYC about Yankee Stadium. He talks to residents about the project and the CBA, and to Michael Drezin, the Bronx's lawyer and spokesman. Drezin was responsible for the delays in distributing money from the CBA's community fund because he "mistakenly told the IRS that it would be a nonprofit organization." The application was denied because the fund should have been described as a private foundation. Like any good lawyer, Drezin blamed this oversight on his accountant. Shuerman also speaks with Bettina Damiani from GoodJobsNY in the piece. She cogently points out that the community should have been involved in this CBA from the beginning.

Yankees CBA update

The Yankees have received a lot of attention because of delays in distributing funding under the CBA, but it seems that they have finally worked everything out. A spokesman for the community fund said yesterday that Bronx little league teams and and the City University of New York (CUNY) will be the first recipients of funding. Students from the Bronx will receive a preference in applying for the $50,000 CUNY scholarship. It's not clear yet, however, which little league teams will receive funding and how much they will receive.

The spokesman also denied claims that the distribution of funds under the CBA has been delayed. He attributed the problems to getting charitable tax status and finding suitable candidates for the fund's committee. The fact remains, however, that it's taken nearly two years for this funding mechanism to be implemented. Construction has been ongoing for much of that time as well, meaning that the benefits promised in the CBA have not coincided with many of the impacts of the development on its surrounding area. Quite a few people have characterized this as delay, even if the fund's spokesperson won't.

Now that the fund is up and running, I have a question: how is the community being involved in funding decisions? The community wasn't really included in negotiating the CBA, so is the fund going to be distributed in the same way, without real community input?

For more information on the recent funding decisions, see this article in the Bronx Beat. For the photo, thank jpchan.

Yankees update

Just a few weeks ago the New York Times reported that the money the Yankees were supposed to supply for a community benefits fund had been languishing in escrow for nearly a year and a half. 

Today, the New York Daily News reported that things have not gotten any better. Apparently, a dispute arose at a meeting between several Bronx officials and the Yankees President, Randy Levine, when he couldn't supply them with information about how many local residents had been hired or why the money for the CBA fund hadn't been distributed. Levine told the local officials to ask Bronx Borough President Adolfo Carrion, who played a significant role in brokering the CBA, about these problems. Carrion didn't attend the meeting, however, nor did any of the other local officials who signed the CBA.

A Yankees spokesperson did state that the team had met its 25% local hiring goal. The "construction advisory committee" that the CBA called for to monitor compliance has apparently never met, however. 

Yankee Stadium CBA

The Yankee Stadium CBA, completed in 2006, has faced stiff criticism. The agreement, to begin with, was made between the Yankees, the Bronx Borough President and the Bronx Delegation of the New York City Council; it was not negotiated or signed by any community groups. On this basis alone it arguably should not be called a CBA. One of the agreement’s most controversial provisions is the trust fund that it created to be administered by “an individual of prominence” through distributions to local nonprofit groups. Because the fund’s trustee will be appointed by the same elected officials responsible for the CBA, it has been referred to as a “slush fund” by critics who fear that funding will be not be distributed impartially. The Yankee Stadium CBA has also been criticized by community members (see here, for example) due to the fact that the development will eliminate more than twenty acres of parks, leaving the city to pay for their replacement in addition to the subsidies already being given to the project.

These concerns have proven to be somewhat warranted. In January 2008, nearly seventeen months after construction began, the New York Times reported that none of the money set aside by the Yankees had been distributed. Apparently, the funding has been held up because the advisory panel that is responsible for administering the fund has yet to choose a chairman, register as a charity or select any grant recipients. The Yankees have indicated that their obligations were fulfilled by depositing the money into escrow and that the club is not responsible for the delay, and since no community groups signed the agreement, none exist that would have standing to bring an enforcement action. As a practical result, this has meant that the only people who could move the funding along are the four elected officials who signed the agreement and who, apparently, have not been very proactive about seeing to its implementation. Other elected officials are frustrated with the situation and have “complained that they are in the dark” about the CBA. Indeed, the names of people chosen to serve on the fund’s advisory panel have not been released, save for one member who has been credited with making political donations to one of the elected officials responsible for the agreement. All of this goes to show that negotiating a CBA may be only the first of many battles in ensuring that community benefits are actually received. But the Yankee Stadium CBA, despite its weaknesses, should not be totally discounted yet. The Yankees have promised that the community will receive all of the money pledged to it, and it may just boil down to a waiting game for the moment.

Good Jobs New York has produced a detailed report critical of the Yankee Stadium deal. They explain that:

To seize public parklands, win rapid permitting, and land massive taxpayer subsidies for their new stadium in the South Bronx, the New York Yankees hired numerous former public officials and benefited from the actions of a few current elected officials to play insider baseball, shutting out Bronx residents and New York City taxpayers.

More information from Good Jobs New York is available here, and text of the CBA is posted here.