CityPlace on the rocks deal on union workforce requirements
The newly negotiated CityPlace development deal may burn due to fears that leaders of the long-delayed project will not commit to the unionized construction workforce.
About a week ago, the city government announced that it had reached a settlement agreement with the leaders of the CityPlace downtown development project. The agreement aims to constrain construction on the streets surrounding the project and to orient new construction, which has encountered one skirmish after another since 2018.
But this new deal does not contain any guarantee that union work – and the higher wages and benefits that come with it – will be used to build CityPlace. This prompted Vermont AFL-CIO President David Van Deusen to encourage Burlington city councilors to vote against the new deal on Tuesday night.
Van Deusen is also concerned that Don Sinex, a developer involved in the CityPlace project from the start, will not guarantee that he will engage in union funding for the project – his most recent proposal to fund the construction of CityPlace. .
Until a few weeks ago, Van Deusen said he was excited about a potential partnership between Sinex and the national union housing trust AFL-CIO. Now, “I feel confused,” Van Deusen said.
Van Deusen spoke with Sinex about using the syndicate’s $ 6.7 billion mutual fund to invest in the downtown Burlington project, which includes hundreds of apartments and new retail space in detail. The union will only accept projects if they have a guarantee from the US Department of Housing and Urban Development, which ensures that a loan is protected in the event of a project default.
Sinex recently explained to VTDigger that he saw union investment as an optimal financing avenue, given that private financiers are wary of the risk of new developments during a pandemic.
CityPlace was largely blocked due to a revolving door of financiers – Rouse Properties was the first firm to pledge funding, but was later bought out by Brookfield Asset Management, a global investment firm, which also pledged in 2018 to fund CityPlace, but withdrew 2020.
Sinex said it was not convinced that a HUD guarantee could be obtained. “The HUD is a creature of habit,” he told VTDigger. “And I’m just not familiar with what they are.” Sinex also said it is still considering the private financing route.
At the time, Van Deusen said he was “extremely confident” in funding the unions and that a guarantee from the HUD could be obtained. The partnership would also produce hundreds of union and apprenticeship jobs for marginalized groups. But after seeing Sinex’s comments in VTDigger, he said union confidence had weakened. He said the union had started contacting Devonwood Investors LLC, Sinex’s real estate company.
“It raised a red flag,” Van Deusen said. “We told Devonwood that, listen, if you want to take a different direction of fundraising, we’ll be happy to work with you. But we must have in writing that we are going to have union jobs on this project. We need more than just a verbal commitment.
“We want to be locked up”
Sinex refused to commit to using union labor for the project, Van Deusen said. He therefore calls on city councilors to reject the current development agreement and modify it, in order to ensure that union labor is used on the project.
“Don Sinex has indicated that he doesn’t want to be locked into anything right now,” Van Deusen said. “We want to be locked up. We want to know that this project is going to benefit the working class of Vermont and be done by the unions.”
In an emailed statement to VTDigger, Sinex said obtaining a HUD warranty can take over a year, and even then it can be denied. These potential delays are the reason his team is still looking for private funding.
“We can’t just rely on the HUD, and therefore the AFL-CIO, and to do so would be foolish and irresponsible on my part and that of our team,” Sinex wrote.
New development deadlines in the settlement agreement also add pressure. They state that construction must begin within two years or that developers must bear the cost of building the streets around the development, which would otherwise be covered by financing by tax increase – a mechanism in which the new land income resulting from the development will reimburse the loans.
Van Deusen argues that the development agreement can be revised to be more flexible and to accommodate HUD warranty delays. He said the union had also offered its resources to Sinex to help it navigate the HUD process.
“We gave Devonwood everything on a silver platter,” Van Deusen said. “There is a bit of a mystery to me about what heists are.”
Sinex also stated that the development agreement, as written, has many working conditions, including the fact that some of the project employees are paid living wages, as determined by the Burlington Livable Wage Ordinance. But the agreement does not require the hiring of unionized workers.
“The provisions of the new development agreement on labor, wages and labor practices clearly reflect our commitment to providing the local community with good jobs that pay good wages and require our joint venture. [joint venture] to adhere to good working practices, which benefits everyone in the community, ”Sinex wrote. “These working conditions that we have accepted will be fulfilled by us, regardless of how we finance the project. ”
Van Deusen said a deal had been offered to Sinex that would ensure union labor was used to build CityPlace. But after Sinex initially refused to sign, Van Deusen said he was not convinced a deal would be reached by Tuesday night’s board vote.
What will the board do?
On Monday afternoon, City Council Chairman Max Tracy P-Ward 2 said he would not sign the development agreement without a union guarantee. He said he was unsure of the current position of his progressive colleagues – a majority on the board. They will be in caucus on the issue later Monday.
“This is an issue where we really need a clear commitment from Don on this part of the deal,” Tracy said.
He said advisers were trying to resolve these issues on Monday and Tuesday. “I have expressed these concerns to the administration as well,” Tracy said. “And so they’re trying to figure out what that engagement might look like. But so far, I haven’t seen anything.
Burlington Mayor Miro Weinberger did not respond to a request for comment.
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