Advocate for jobs? Or roadblock for developers?
PHOTO/COURTESY
Frank Kartheiser, coalition co-chair: Worcester needs to think about how key development projects help “the broader community.”
City Councilor Konstantina Lukes wonders whether the recent actions by the Worcester Community-Labor Coalition will cause other developers to rethink their plans.
During the recent delay before the Worcester City Council signed off on the sale of the former county courthouse, one thing became clear: a new voice had made itself heard in Worcester's redevelopment plans.
The Worcester Community-Labor Coalition caused a stir beforfe the council's vote, demanding that jobs for local workers become part of the agreement with Brady Sullivan Properties, the New Hampshire developer that had agreed with the city to buy the former courthouse for $1.2 million and turn it into 115 apartments and retail space.
During negotiations that followed a public forum about the negotiated deal, the city secured a commitment for the developer to spend half of its construction budget for the Lincoln Square landmark on contractors and subcontractors from within a 30-mile radius or with companies that have approved apprenticeship programs.
“We believe we don't have to take just any deal,” says Frank Kartheiser, the coalition's co-chair. “There is a lot of optimism here and we need to think about how this helps the broader community.”
In addition to the spending commitment, the group also secured a voice in discussions on future developments through regular meetings with the city manager.
The coalition is focused on increasing local jobs — both union and non-union — and hiring more minorities, women and youth, he said. Organizations within the group — which includes Massachusetts Jobs with Justice, Stone Soup, and the Worcester-Fitchburg Building Trades Council — have been lobbying for their own interests for years, Kartheiser said. Now there is one unified voice, backed by many groups to give that voice weight, he said.
Buy-in from councilors
Several city councilors agree with the group's goals. The group “is a healthy coalition because it is made up of a lot of different groups, not just organized labor,” said District Three Councilor George Russell, who sits on the council's economic development committee.
But the debate surrounding the courthouse did not sit well with Councilor-At-Large Konstantina Lukes, who characterized the demands placed on the developer and the discussion around the project as a “black eye.” She also raised concerns that such negotiations, which took place after Brady Sullivan reached an initial agreement with the city administration, could dissuade other developers. Lukes said she's concerned something like this will happen again with the coalition, especially since it will meet regularly with the city manager.
“I'm afraid of another level of bureaucracy that is going to be attached (to development),” she said.
Yet, negotiations over development projects occur often, said District Five Councilor Frederick Rushton, who chairs the economic development panel, which provides a forum for community feedback and aims to get the best possible deal out of agreements negotiated by the city administration.
But Kartheiser explained that the time to discuss more local jobs is before the council signs off on a development, when the city has negotiating leverage.
Unions’ potential impact on costs
Yet, when the word “union” comes up in negotiations, it raises the reddest of flags for developers.
To a developer, that translates into higher costs, said Gregg Lisciotti, a Leominster developer who focuses on projects in Northern Worcester County. Union labor costs can reach 30 percent more than those of non-union workers, he said, and requirements to use union labor could cause concern for potential developers.
“It just comes down to money at the end of the day. It's budgetary. If it's going to add 30 percent to your labor costs, if you don't have to do it, why would you do it?” said Lisciotti, who explained that he has no issues with unions, but that union labor is an added cost that would have to be factored in.
Even a local hiring restriction could give developers pause, he said. Developers will hire locally where it makes economic sense, as it often does, Lisciotti said, but most developers have teams of subcontractors whose work they know and trust.
“It would weigh heavily whether I would want to get involved in a process that could restrict me from doing what I need to do to be successful in a project,” he said. “We've already got enough regulations and issues to deal with. We don't need another layer.”
Brian Thibeault, who recently purchased the Higgins Armory Museum building and plans to renovate it, explained that developers are always negotiating with cities as they move forward. But having a discussion with a city board or committee isn't something that would dissuade him from pushing ahead with a project.
“You're always negotiating with the city whether it is (a) curb cut or a pull-off lane,” he said. “That happens every day. That's just the way it is.”
In the three years Rushton has chaired the economic development panel, its members have turned down only one proposal. The initial deal to renovate the Osgood Bradley building at the corner of Franklin and Grafton streets was not recommended because of details surrounding a real estate tax exemption. But the developer, Vision Development, returned and the council signed off on the project to house 250 college students under a modified tax agreement.
Worcester is in a strong position, with a growing economy, good buildings prime for redevelopment and a skilled workforce, according to Rushton and Russell, and the city government needs to continue to ensure that proposed deals will help the community on multiple levels, including the addition of jobs.
“The developers have not been scared off,” Rushton said. “It was kind of odd hearing business people complain about negotiations when they do it every day … we should never shy away from having public discussion.”
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