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A source close to the talks
tells GlobeSt.com that the
City Council could override
the vetoes as soon as May 15th.
NEW YORK CITY-The commercial real estate industry has applauded Mayor Michael Bloomberg’s veto of the City Council’s prevailing wage legislation, but local labor unions representing building service employees slammed the proposal as inequitable and fiscally irresponsible.
In an e-mail to GlobeSt.com, Steven Spinola, president of the Real Estate Board of New York, says imposing wage mandates increases costs on employers and raises the risk of less jobs, investment and tax revenue for the city. “We appreciate the speaker’s efforts to balance a series of interests,” he says, adding, “such types of legislation, however, is flawed because of the precedent it sets.”
Previously, the City Council proposed to establish a prevailing wage requirement for building service employees in certain city leased or financially-assisted facilities. As introduced, the legislation covered building service employees working at economic development projects receiving more than $1 million in discretionary financial assistance, or at least 100,000 square feet, as well as those working in office buildings where the city leases at least 10,000 square feet and a majority of the total space, according to city records.
Council Speaker Christine Quinn is also pushing council members to pass living wage legislation, which would require companies that receive substantial subsidies from the city to pay their employees a living wage of $10 or $11.50, depending on benefits.
After the mayor vetoed the prevailing wage bill and declared his intent to veto the living wage act if passed, Quinn said the City Council would “move quickly” override the actions. “This year alone, city benefits to businesses and developers will cost taxpayers nearly $250 million,” she says, in a statement. “All we are trying to do is ensure that taxpayer investment is going to subsidize jobs that pay a reasonable wage.”
During his 15-minute speech, Bloomberg said both bills are based on “legally dubious theories” and if they become law, “we will challenge them in court.”
Citing projects such as Cornell and Technion University’s new applied science campus on Roosevelt Island, NYU’s new Center for Urban Science and Progress in Downtown Brooklyn and redevelopment and rezoning efforts in Willets Point and Coney Island, Bloomberg said the two bills would make it “harder and more costly” to bring economic opportunity to all five boroughs.
The mayor added that the legislation would also create a tiered minimum wage that would favor some businesses and industries over others. “When it comes to deciding what that pay should be, I believe that government has an obligation to set a minimum wage, but beyond that, private businesses should be free to make their own decisions,” he said.
The mayor noted that the City Council “wisely carved out” a large amount of groups that would have been hurt by the bills, including certain developers of affordable housing, supermarkets and the Far West Side, including Related Co.’s Hudson Yards project. Using Fresh Direct’s move from Long Island City to the South Bronx as an example, he explained that the council delayed the living wage bill to ensure that it didn’t apply to the deal, which is estimated to bring more than 1,000 jobs to Hunts Point.
In response, Mike Fishman, president of Local 32BJ, a building service union with more than 120,000 members in eight states, says in a statement that the bill will ensure that building owners benefiting from public subsidies do not undercut private enterprise by paying wages below the predominant private-sector rate. “We agree with the mayor about the need to protect taxpayers,” he says. “But workers are taxpayers. This veto hurts city taxpayers, the economy and working families.”
Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, argued that the vetoes come at a time when income inequality and the city’s wage gap is growing. “Over the past decade, City Hall has expanded government’s role in the market through billions in subsidies to companies and developers, but doesn’t want taxpayers to get a decent return on their investment,” he says, in a statement. “That’s unacceptable.”
Categories:
Northeast,
Office,
Development,
New York
Jacqueline Hlavenka Jacqueline Hlavenka, Northeast Region Reporter for GlobeSt.com and Real Estate Forum, is responsible for coverage of news and information pertaining to commercial real estate in New York City. Prior to joining ALM, she served as a municipal beat reporter for Greater Media Newspapers in central New Jersey. Her work has also been published in The Asbury Park Press, The Village Voice, Interior Design Magazine and Condé Nasts Cookie Magazine. Contact Jacqueline Hlavenka.
