Norwood News

Central to the battle over the Kingsbridge Armory redevelopment is the demand by community organizations that retailers pay their workers a “living wage” at the revamped facility.

The groups, organized under the umbrella of the Kingsbridge Armory Redevelopment Alliance (KARA), argue that because the Related Companies is receiving $50 million in public subsidies (not including the $15 million break they received on the appraised value of the landmark) they have a special obligation to ensure that workers at the Armory can afford to support themselves and their families.

According to standards set by Local Law 38, a city statute passed in 2002 that mandates salaries for workers at companies contracting with the city, a living wage is defined as $10 an hour with health benefits (about $21,000 a year) or $11.50 without. The law doesn’t govern private development projects like the Armory, even though public subsidies are involved.

A Norwood News survey of 11 chain stores in the vicinity, including FYE, Target, Starbucks, Marshalls, Foot Locker and The Gap — determined that most retailers pay a starting salary of between $7.50 and $8.50 an hour without benefits. (The highest salary was $9.50 at Best Buy.) Most of the positions are part-time, another problem for living wage advocates.

Jesse Masyr, Related’s lawyer and spokesperson, says the living wage mandate is a deal-breaker. “I can’t ask tenants to have a [higher] wage package than they have just two miles down the road,” Masyr said in an April interview with the Norwood News, referring to the company’s Gateway Mall project south of Yankee Stadium. He said much the same thing at a land use review hearing last month, when Community Board 7 Chairman Greg Faulkner said to Masyr after Related’s presentation, “I heard nothing about living wage jobs.”

Advocates dispute Masyr’s logic.

“It’s not the neighborhood’s fault if local elected officials couldn’t make Gateway work,” said Bettina Damiani of the advocacy group Good Jobs NY, referring to the controversial Community Benefits Agreement at Gateway that had limited community participation.

Jeff Eichler of the Retail, Wholesale and Department Store Union (RWDSU), and an active KARA member agrees. “They always say – how can you force them to do it one place and not another. Why can’t they do that?” he said, adding for comparison that unions like his organize at some store locations and not others, resulting in varying salary structures.

In the April interview, Masyr also said another reason Related couldn’t place any requirements on prospective Armory tenants is that retailers are reeling from the free-falling economy.

But living wage advocates insist that paying a living wage actually saves money for retailers in the long run.

“It’s not going to hurt their bottom line,” said Sebrina Owens-Wilson, a researcher with the Partnership for Working Families, which assists local groups around the country in pushing for community benefits agreements (CBAs). “If you pay people a wage that makes it worthwhile to come to a retail job, they’re going to stay. If you pay them minimum wage, your turnover is so high.”

She added that retailers incur significant costs for recruiting and training, and high turnover adds to those costs.

Michelle Mattingly, research associate at the Fiscal Policy Institute – a liberal New York-based think tank – says the living wage won’t do much damage to a large chain’s bottom line.

“Research shows that wage floor increases represent a small percentage of retailers’ and restaurants’ sales revenue and that these costs are easily absorbed,” Mattingly stated in an e-mail. “In an economic downturn, it is all the more important to invest our public resources wisely. Low-income New Yorkers are already struggling, and they need access to family-supporting jobs.”

When the city’s Economic Development Corporation issued its Request for Proposals (RFP), it stressed the living wage. “NYCEDC will view favorably development plans that maximize the number of jobs that meet the City’s living wage and health benefits standards,” the document states.

The RFP required interested developers to “explain how the proposed tenanting plan maximizes the number of jobs that meet these criteria” in a Local Hiring and Unionization Plan (LHUP). EDC said they could not release Related’s LHUP, because it is “part of Related’s proposal for the Armory. We do not share proposals while there are ongoing negotiations.”

The living wage is only one of seven principles in KARA’s platform, but it’s the one the organization is most vocal about and the one that dominated testimony from its members at the June hearing, where KARA members insisted that Community Board 7 vote no on Related’s proposal because a CBA outlining the company’s commitments has yet to be negotiated.

The issue is shaping up as a standoff as the public stances of both Related and KARA are that their positions are non-negotiable. What ultimately happens behind closed doors as KARA, Community Board 7 and Bronx Borough President Ruben Diaz, Jr. strategize on how to get the most of Related in a CBA is anyone’s guess.
Stay tuned.

-Andrew Boryga contributed to this story