State panel upholds Great Wolf tax deal with Fitchburg
A state panel has upheld a series of tax incentives for the Great Wolf Lodge water park and hotel in Fitchburg after a carpenters’ union alleged the company failed to use local contractors to build the facility and that subcontractors did not comply with some labor laws.
The Economic Assistance Coordinating Council (EACC), part of the state Executive Office of Housing and Economic Development, recommended Wednesday that the estimated $17 million in incentives remain in place. Last year, Great Wolf and the Fitchburg City Council reached an agreement on a 20-year tax increment financing (TIF) deal. In the accord with the city, Great Wolf agreed to create 200 new full-time jobs and invest $65 million in the facility, resulting in a $29-million increase in real estate value and a $28-million increase in personal property taxes.
The EACC, which has to sign off on the TIF, added that a push to revoke the incentives also required a petition from city officials. But there was none.
Great Wolf opened in June in what had been a Holiday Inn hotel and CoCo Key water park located off Route 31 on Royal Plaza Drive. Great Wolf employs about 270 full-time employees, and just as many part-time employees during its peak season, the EACC said, with about 65 percent of its employee base from within or near the city.
In December 2013, inspectors from the state Department of Industrial Accidents (DIA) visited the Great Wolf site and issued “stop work” orders to eight different entities working on the project. Those orders led Great Wolf to withdraw its application for EACC approval. But after the stop-work orders were resolved, the council approved the TIF.
Great Wolf contracted with Horizon Construction Group of Madison, Wis., to construct the project, and Horizon used numerous out-of-state subcontractors, the EACC said.
Great Wolf spent $69 million to construct the site, including $11 million for contractors, suppliers and other Massachusetts-based vendors, the EACC said.
The union asked the council to reopen the case, citing three reasons, among them charges that Great Wolf failed to use local contractors on the project and that subcontractors “willfully” violated state and federal employment laws, the EACC said. Further, according to the EACC, the union charged that Great Wolf either knew about the violations or failed to prevent them, despite telling the EACC it would do so. Great Wolf disputed those allegations.
While the EACC's decision is "unfortunate," the results of the DIA's actions "are well documented and not in dispute,” said Jack Donahue, business manager for carpenters union Local 107 of Worcester, in an email response to a request for comment.
Meanwhile, Susan Storey, a spokeswoman for Great Wolf Resorts, based in Madison, Wis., said her company is pleased with the decision.
“Our commitment to the local economy was present during the construction phase of our resort and has never wavered,” she said in response to an emailed request for comment. “We look forward to putting this matter behind us so we can continue to focus on our guests and the experience they have while at Great Wolf Lodge.”
'Compelling arguments' by union
However, along with the decision, the council said the NERCC raised "compelling arguments" about whether projects receiving such tax incentives should commit to hiring local contractors and stick to those commitments. The EACC added that it should "consider mechanisms for encouraging cities and towns to include local contractor preferences" within legal limits in new TIFs.
Donahue agreed.
“It is clear that the EACC now recognizes the need to strengthen their policies and procedures to help prevent another 'Great Wolf' from happening," he said, adding that the union will continue to monitor taxpayer-supported construction projects "and remain firm in our belief that developers and contractors that receive tax relief should not break state laws.”
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