A City Council committee wants Cincinnati’s leadership to investigate whether workers in a Clifton Heights development project are being paid what they’re supposed to.
The Strategic Growth Committee on Wednesday passed a motion asking the city administration to report back on wage payments to workers on the U Square development. The project includes a parking garage as well as residential and commercial units.
Under Ohio law, workers on projects funded by cities must be paid a prevailing wage, which is equivalent to the wage earned by a union worker on a similar project.
The city only has money invested in the garage, and the state of Ohio recently ruled that workers on other parts don’t have to be paid prevailing wage.
Council members Wendell Young, Cecil Thomas and Laure Quinlivan produced a video in which they interviewed carpenters who said they were being paid less than the prevailing wage.
At issue is a letter from developer Towne Properties that says the company will pay all workers prevailing wage anyway. Arn Bortz with Towne Properties said his company cuts a check to subcontractors respecting that agreement, so if workers aren’t being paid the proper amount it’s their fault.
City Solicitor John Curp told members of the Strategic Growth Committee that under city and state law, the subcontractors are not required to pay workers a prevailing wage on parts of the project that are not getting public funding. He said the letter from the developer does not hold the weight as a legal contract.
Young, Thomas, Quinlivan and Councilman P.G. Sittenfeld all expressed the need to overhaul the way the city enters into development contracts to better protect workers.
However, City Manager Milton Dohoney hinted that overzealous requirements for high wages could chase off some development projects.
He said that a project like U Square is tied to the Clifton location because of its proximity to the University of Cincinnati, but the city can’t be too restrictive when it comes to businesses that could expand elsewhere.
Dohoney said the city also doesn’t currently have the manpower to do the kind of aggressive enforcement that the council members were asking for.
Councilman Young countered that he would like to see the city be as aggressive with enforcement as they are with making economic development deals.
“We want to change the rules of the game to make sure everyone is treated equal,” Young said.
In a 7-0 vote today, City Council’s Budget and Finance
Committee approved development plans for Fourth and Race streets to
build a downtown grocery store, 300 luxury apartments and a parking
garage to replace Pogue’s Garage.
Following the city’s $8.5 million purchase of the
property, the project will cost $80 million. The city
will provide $12 million through a five-year forgivable loan, and the
rest — $68 million — will come from private financing.
The committee hearing largely focused on the downtown grocery store, which Odis Jones, the city’s economic development director, called the “next step” of the city’s overall plans to invigorate residential space and drive down office vacancy downtown.
Development company Flaherty and Collins will oversee the grocery store project, which was originally attached to the city’s plans to semi-privatize its parking assets.
The grocery store will be 15,000 square feet — slightly smaller than the Kroger store on Vine Street, which is about 17,000 square feet — and open daily from 7 a.m. to 10 p.m. It will be run by an independent operator, which is so far unnamed.
Flaherty and Collins CEO David Flaherty acknowledged it’s “a compact space,” but he said it will be enough space for a “full-service grocery store” with all the essentials, including fresh produce.
The grocery store will be at the base of a new, 30-story residential tower, which will include 300 luxury apartments and a pool.
Across the street, the city will replace Pogue’s Garage, which city officials have long called an “eyesore,” with a new garage.
The seven Democrats on City Council voted in favor of the plan, with Independent Councilman Chris Smitherman and Republican Councilman Charlie Winburn abstaining.
Democratic Councilman P.G. Sittenfeld questioned the funding sources for the project. City officials explained the $12 million loan will come through urban renewal bonds, which were previously set aside in an urban revival plan that encompasses all of downtown.
Jones said the money was going to a hotel-convention center deal when the city originally pitched the parking plan, but that deal has since collapsed.
City officials also noted the urban renewal fund, which is generated through downtown taxes, can only be used on capital improvement projects that support development and redevelopment downtown. Although the fund could be modified by City Council, it could never go to operating budget expenses such as police and fire.
Public dollars will go to the public garage, while private funds will carry the rest of the project.
The city’s $12 million investment comes through a five-year forgivable loan, which means the city will get its money back if parts of the project, including the privately funded grocery store, fail to meet standards within five years. After the five years are over, the loan is forgiven and any failure would result in a total loss on the investment.
Smitherman, who opposed the city’s parking plan, criticized the city administration for not presenting the current funding plan as an alternative to the parking plan: “What I’d like as a public policymaker is to see all of the options in front of me so that I can choose not just one option but maybe three options.”
Sittenfeld also questioned Flaherty about two previous projects Flaherty and Collins undertook that went bankrupt. Flaherty said the bankruptcies were mostly related to the economic downturn of 2008, but admitted the bankruptcies forced the company to make changes.
The city estimates the project will produce 650 construction jobs and 35 permanent, full-time jobs.
For the city, the project is part of a much bigger plan
that includes getting 3,000-5,000 new residential units built
downtown in the next five years to meet rising demand.
“It’s hot to be downtown right now,” Jones said.
Jones explained the property would have cost Cincinnati millions of dollars regardless of the city’s buyout and development plans because of a liability agreement the city made in the 1980s.
“When you start from
there and you gradually come up and look holistically at the project,
taking action was not only necessary, it was prudent,” he said.
City Council today approved funding and accountability measures for the Cincinnati streetcar project, allowing the project to move forward.
On Monday, the Budget and Finance Committee approved the measures, which CityBeat covered in further detail here. The funding ordinance closes the streetcar project's $17.4 million budget gap by issuing more debt and pulling funding from various capital projects, including infrastructure improvements around the Horseshoe Casino.
The accountability motion will require the city manager to update City Council with a timeline of key milestones, performance measures, an operating plan, staffing assessments and monthly progress reports.
Council members Roxanne Qualls, Laure Quinlivan, Chris
Seelbach, Yvette Simpson and Wendell Young voted for the measures.
Council members P.G. Sittenfeld, Chris Smitherman and Charlie Winburn
voted against both. Councilwoman Pam Thomas voted against the funding
ordinance, but she voted for the accountability motion.
City Council also unanimously approved funding for a development project on Fourth and Race streets, which includes a downtown grocery store, luxury apartment tower and parking garage to replace Pogue's Garage. CityBeat covered that project in further detail here.
Cincinnati Mayor Mark Mallory will deliver his annual State of the City address next week.
The address, which will be Mallory’s seventh since taking office, will be given 6:30 p.m. Tuesday. It will be held in the Jarson-Kaplan Theater at the Aronoff Center for the Arts, located at 650 Walnut St., downtown.
When CityBeat asked what the theme would be for this year’s address, a spokeswoman for Mallory declined comment.
“Our office won’t be previewing or giving information out about the speech this year,” said Julianna Rice, a policy aide to the mayor.
Generally, because seating is limited, anyone wishing to attend must receive a ticket through the mayor’s office. For more information, call 513-352-3250.
Mallory, a Democrat, was sworn in as the 68th mayor of Cincinnati on Dec. 1, 2005 and was reelected in 2009. He cannot run again in 2013 due to term limits.
Mallory’s election marked a new era for City Hall as the first two-term mayor under the city's new “stronger-mayor” system, as well as Cincinnati’s first directly-elected black mayor, and the first mayor in more than 70 years who didn’t first serve on City Council.
Mallory celebrated his 50th birthday on Monday.
Tuesdays will be market day at downtown’s Fountain Square beginning in late spring and lasting until early fall. And to fill the market, the group that manages the plaza is accepting applications from interested vendors.
The Cincinnati City Center Development Corp. (3CDC) will operate the market for 21 weeks, from May 1 to Sept. 25. The midday, mini-market will be open from 11 a.m.-2 p.m.
A state lawmaker will host two sessions later this month designed to give advice to small business owners on obtaining loans to start or expand a business.
State Sen. Eric Kearney (D-9th District) is sponsoring the Small Business Credit Access Forum on July 28. The sessions will be held at the TechSolve Business Park, located at 6705 Stegner Drive in Carthage.