Steve Ross sure knows his way around City Hall (part of the reason he has become one of the most successful developers of his generation). From his start in affordable housing to megadevelopments like the Time Warner Center, Hunter’s Point South in Queens and Hudson Yards, Mr. Ross, chairman of the Related Companies, always seems to get just what he wants when the city is involved. One sore spot was the fight over the Kingsbridge Armory, in the Bronx, which was unexpectedly rejected by the City Council three years ago.
The fight centered around whether workers at the armory project, which was to receive a considerable amount of public subsidies, would have to be paid more than minimum wage, something labor unions were lobbying heavily for. That fight led to the eventual proposal of a living wage bill. In an unexpected, if unsurprising, twist, it now turns out City Council Speaker Christine Quinn has carved a portion of Hudson Yards out of the living wage bill, according to The Times.
A large portion of the Hudson Yards project, a 26-acre mixed-use development along the city’s Far West Side, is specifically excluded from the proposed so-called living wage legislation in a draft that was written by Ms. Quinn’s office and is now circulating among supporters of the bill.
Ms. Quinn plans to ask her colleagues next month to approve the long-debated bill, which would require companies and developers that receive substantial city subsidies to pay their employees at least $10 an hour. She had already announced that the legislation would exempt tenants in projects that receive city subsidies from paying the living wage; only the direct employees of the developers and some contractors would be affected.
The Hudson Yards exemption caught many of the bill’s supporters by surprise, according to people who were briefed about the legislation in telephone calls in recent days and in a meeting on Thursday morning.
A Related spokeswoman directed The Observer to Speaker Quinn’s office for comment, which declined to discuss the Times‘ report.
A Quinn spokeswoman told The Times that, “The final version of this bill and its details are still being drafted. The legislation has not been finalized.” Presumably this means its parameters, which currently exempt development between 10th and 11th avenues, could still change.
According to a source at City Hall, who was not at liberty to discuss the bill publicly, Related’s property is being given the exemption for fear that without it, construction of the commercial towers on the eastern portion of the site could stall. Related recently broke ground on that portion of the project, with Mayor Bloomberg and Speaker Quinn in tow, once Coach agreed to be the anchor tenant of the first commercial tower.
The feeling is that with two more to come, the construction of which it is hoped will catalyze development in the surrounding portion of the neighborhood, it is better to ensure the projects than the wages therein.
“There are a couple special differences here,” the source said. “There’s a city-specific interest in seeing this through, since we borrowed $3 billion to build a subway out there, which will partly be paid back through commercial development. And there is a particular problem with the yards, versus the development around the Garden or Moynihan Station or elsewhere in the Hudson Yards district, in that you are dealing with the decking, which is especially burdensome.”
The council is also trying to determine whether or not the block would be exempted anyway, because it might be de facto grandfathered out of the living wage bill. It has been argued that because of the type of tax benefits and development incentives being offered, it is closer to an as-of-right project than one built with the usual set of negotiated subsidies. In this case, there are subsidies, but they are inflexible and were agreed upon in years past, before the bill passed.
Whether or not this means living wage protections are warranted and appropriate is still to be determined, and could be a topic of great debate among backers of the living wage movement. Still, this provision was pointed to as a reason that other developers could not lobby for their own carve outs in the future.
“We don’t want to add any new burdens to hold up that development,” another source said.
Update: Even with an exemption for the Related Companies, the Retail Wholesale and Department Store Union supports the bill.
“It’s misleading and inaccurate to use Hudson Yards as a litmus test for judging the strength of the final bill,” union spokesman Dan Morris said. “We’re still on track to get a very progressive bill that goes further than what any other city has done to raise wage standards for taxpayer-subsid
“It will fundamentally improve the way EDC, the largest economic development agency of its kind in the country, uses subsidies to structure and negotiate developments deals,” he added. “We’re proud of what we’ve accomplished.”
