Interest Rate Hike Helps CitiSquare Clear Hurdle

INTEREST RATE HIKE HELPS CITISQUARE CLEAR HURDLE 
Newark Council Reserves Right to Revisit Without Labor Guarantees

A looming interest rate hike that threatened the $2 billion redevelopment of Newark’s Bear Stadium site prompted the City Council to expedite an $18 million subsidy for the developer without a guarantee in writing of paying a prevailing wage or a labor harmony pact covering the construction and operations of the complex. 

But City Council President LaMonica McIver issued a stern warning to the attorney for the developer that the Council could revisit the deal if he failed to “act fast” on the outstanding labor issues and commit the firm’s promises to the unions on paper.

“We are 150 percent for labor here—the Council is and I know the Mayor is,” McIver told Calvin Souder, the attorney for the Lakewood based Accurate Builder & Developers. “We want to see this resolved by the end of the week.”  McIver also suggested to her Council colleagues, that going forward, the city come up with kind of master union agreement that would “apply to all development of a certain magnitude because that’s the fair thing to do.”

“We have  committed to work with the unions and at the very least have ensured that we will pay fair wages on this particular site,” Souder told the Council. The developer’s lawyer conceded that “good faith” negotiations were ongoing with 32BJ SEIU and with Local 3 of the Laborers International Union of North America, but that nothing was yet committed to paper.

IN CITY IN A CITY

Accurate Builders & Developers already has approval to develop a mini-city on the 11-acre property located west of McCarter Highway and just steps away from New Jersey Transit’s Broad Street Rail Station. Previously, the site was home to the Newark Bears & Eagles Riverfront Stadium that closed in 2013 and was demolished in 2019. The plans call for the complex to include 11 buildings that will house 4,200 apartments as well as 100,000 square feet of commercial, office and hospitality space as well as require 3,000 parking spaces.

The ambitious plan, being marketed as CitiSquare, is to be completed over the next 15 years in nine phases. The initial round envisions  a pair of 18-story residential towers with close to 600 apartments tied together by a common floor that will include a restaurant and retail space. The developer has committed to providing more than 400 affordable units, a ten percent set aside, that got blasted by some of the activists in attendance at the hearing for being inadequate for a city in the throes of a serious  housing crisis. 

Members of the Council and a steady stream of speakers during the public comment portion of the hearing also took exception at the developer’s last minute effort to offer only a verbal commitment and a one sentence email to city officials to resolve the outstanding labor issues.

“I am not in for a pony ride,” said Council Member Louis Quintana. “I want it in writing before I vote and it is important. I have an obligation to the constituency of this city, not to the developer, to be a guardian….I would suggest we defer this in good faith until next week.”

April Fitch is a security officer at Liberty International Airport and is a member of 32 BJ SEIU, which represents 175,000 property service workers from Boston to Miami including 13,000 in New Jersey.

FAMILY SUSTAINING WAGES

“I was also born and raised in Newark and have lived through many of the cycles this city, my city, has seen,” Fitch told the packed chamber. “When it comes to its own building service contracting the City of Newark has acknowledged the importance of paying family-sustaining wages that are on par with the private commercial building service workers in downtown Newark. That is why we have a Prevailing Wage law for Building Service Workers.” 

Fitch continued. “However, these protections do not apply to development projects, even those receiving an abatement, such as the Bears Stadium project, also known as, CitySquare, where developers have not made commitments towards the building service workers that will eventually staff the development.”  

Fitch urged the City Council to vote no on the “$18 million tax abatement for this project until the developers commit – in writing – that they will do the right thing, pay fair wages, offer accessible quality healthcare, and paid time off.”

32 BJ SEIU has 3,500 building service employees under contract who work as janitors, security officers, porters, maintenance workers and building superintendents in Newark. 2,500 union members live in Newark as well.

“We can and must do more to ensure working families benefit from the multi-billion dollar projects,” said Carla Thomas, a 32 BJ assistant district leader. “32 BJ supports responsible development and welcomes investors in Newark. But we must ensure development benefits working families through creation of family sustaining jobs. Without a clear commitment to good jobs  for workers who service this luxury development will be left behind.”

Thomas added that prospective building service workers at the municipally subsidized project should be entitled to affordable healthcare coverage. “Nationwide, only 36 percent of workers in the lowest wage quadrant are offered [health] insurance and only 21 percent of these low wage workers participate in their employer’s plan,” she said. 

“Obviously, there is a lot of tension revolving around a project of this magnitude and rightfully so,” said Paul Roldan, president of Local 3 of the Laborers International Union of North America. “There are a lot of complexities as witnessed today in the beginning stages of a project and of course a lot of them include the community and the lack of effort in including the community is what seems to be an issue including the members of the community that are part of the laborers union and organized labor in the City of Newark.”

DIGNITY IN A DEAL

“If it’s not written down it’s not done,” warned community activist Debra Salters, a Newark resident and construction trades professional. “We know that in life we are taught that. So, yes, we need this in writing….I could tell you one thing right now and when the paper comes it is different….This can’t be a last minute conversation in the hallway or last minute email before I walk into the Council chamber.” 

Salters, who worked construction on the American Dream project said she was concerned that the developer’s commitment to pay a prevailing wage was only limited to so-called permanent workers. “We need to see that in writing,” she said. “Does the worker working today have a job tomorrow? This is why we need to see these things in black and white—concrete—this is what was said.”

Quintana’s motion to defer the authorization of the $18 million project subsidy only garnered one additional vote from Council Member Dupre L. Kelly, who was recently elected from the West Ward.

“I love that the prevailing wages are agreed to and the labor harmony agreement but I would like to see the labor harmony agreement,” Kelly said. “I am for the community and I am pro-union. I want to see all of that. I want to see us make the right decision for the people and have them included in this process.”

Accurate Builder’s lawyer warned the Council that his client had locked in an interest rate that was set to expire August 1 and that the “cost of the loans would double” derailing the project if the Council failed to vote to move forward. 

It was North Ward Council Member Anibal Ramos Jr. who suggested that the panel move forward on the project but “revisit” the $18 million subsidy “if we don’t have the [labor] agreement in a reasonable part of time.”

CLOSING RANKS

Joe Wilson is a labor historian and a strategy consultant for unions. He says it’s vital for 32 BJ and the building trade unions to “negotiate together and to be connected with the City Council and have everything codified in writing and iron clad so that the workers benefit and the community doesn’t get gouged with only a paltry 400 affordable units out of an over 4,000 unit development.”

“We are seeing some support which we really appreciate from the Mayor and the City Council pushing the developer to do the right thing which we are encouraged by,” said Kevin Brown, vice president of 32 BJ SEIU’s New Jersey Council in an interview before the July 26 hearing. “But the bottom line is do they get this money without a commitment for good jobs and benefits.”

During public comments Munirah El Bomani, a Newark housing activist, told the Council that the city’s existing inclusionary zoning and affordable housing strategy was seriously inadequate. 

“The rents are too high and the inclusionary zoning is not working for all Newarkers,” she said. “You need to get all hands on deck. We need you to designate land that should be turned back to public housing. We need you to give outsiders, wealthy people who are coming here and 20 percent [of the units] and give the community 80 percent of them.”

In February of 2021, the Rutgers Center on Law, Inequality and Metropolitan Equity (CLIME) issued a report that documented Newark needed to add 16,000 affordable housing units. The analysis did not include the latest economic statistic that captured the fallout from the pandemic, like rising foreclosures, homelessness and evictions.

According to CLIME, 59 percent of all Newark renters were rent burdened, paying more than a third of their income for rent while one third were paying more than half of their income for shelter. 40,000 Newark households earn less than $30,000 a year and compete for less than 20,000 low rent units.

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2 responses to “Interest Rate Hike Helps CitiSquare Clear Hurdle”

  1. So if the developer declines to go forward with the project due to prohibitive labor costs, you will still have a large vacant piece of blighted land for many years to come.

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