Thursday, August 27, 2009

Living Wage: Armory's Dying Wish?

Yesterday, Bronx BP Ruben Diaz and Assemblyman Jose Rivera joined with Stuart Applebaum of the RWDSU to demand that the development of the Kingsbridge Armory include a living wage component. As the NY Daily News reports: "They want a living wage - even if it kills the deal for redevelopment of the Kingsbridge Armory. The demand is among a list of nine that Bronx Borough President Ruben Diaz unveiled Wednesday in a proposed community benefits agreement (CBA) he and local stakeholders hope to hammer out in negotiations with the armory developer, the Related Companies. "This is an excellent opportunity to set a new paradigm," said Diaz, "where corporate America can come in and make a profit, but do it in a way that truly benefits the community."

Which raises the question of whether the Related Company will ever accede to this reasonable request-or resist, and allow the project to die. That assumes, of course, that the proponents of the living wage demand are able to muster the same support that opponents of a supermarket in the Armory have. Currently, all eight Bronx council members oppose the large food use; but where the delegation as a whole stands on this other key issue remains uncertain.

That being said, the demand for a living wage remains as a compelling component of any subsidized retail development. In our view, it is always problematic to use tax payer dollars to incentivize new retail projects; since the end result is usually the shifting of retail sales from existing mom and pop stores to national chains, And, as Stacy Mitchel's seminal work in this area underscores, this kind of policy results in a net loss to the locality.

Put simply, local dollars re-circulate at a much more productive rate that those of national chains headquartered elsewhere. Therefore, if we are going to subsidize chain stores that cannibalize existing neighborhood retailers, the least we can insist on is that these entering retail outlets pay the locals at a proper living wage. Anything less is simply cheating both the neighborhoods and the tax payers in general.

Appelbaum gets it right: "I don't buy that assumption," said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union. "It's not a matter of whether it's going to be profitable, but the size of the profit they will make." Living wage advocates point to the $40 million in city taxpayer money subsidizing the armory project in the form of tax breaks and city-funded repairs. "If they are taking from government," said Appelbaum, "they have to give back to the community."

And, as the Crain's Insider reports this morning: "Bronx Borough President Ruben Diaz Jr. and local leaders have drawn up a community benefits agreement that they hope to negotiate with The Related Companies, which is seeking city approval to redevelop the Kingsbridge Armory. They’ll ask Related for recreation space, local hiring, living-wage jobs, a pledge from employers in the development to not interfere with union-organizing campaigns, and the exclusion of a big-box grocery store. A Diaz spokesman says the plan includes a “legally binding enforcement provision,” to ensure that the developer complies. Negotiations with Related are expected to kick off soon. "

So let's get to it! This project symbolizes all that's wrong with the mayor's top-down development policy-and the tush backwards supermarket initiative. In its current fiscal state, the city can ill afford robbing from Peter to not pay Paul schemes. If this project isn't constructed with the proper foundation, then it should rightfully collapse under its own ill-conceived weight.