Community Benefits Program fuels a race to the bottom.

The Anderson Plaza ribbon cutting on April 21 marked the completion of the City of New Rochelle’s most ambitious project yet under the “Community Benefits Bonus Program” for the downtown.  

In exchange for building an additional four floors in the Stella, developer WBLM paid $4,000,000 to construct the Plaza. WBLM is a partnership of Chappaqua-based Wilder Balter Partners Inc. and Larchmont-based L+M Development Partners.

“I am grateful for our development partners,” Mayor Noam Bramson said at the inauguration, adding the plaza was a “good illustration of marriage between public space and private development to make our community stronger.” 

Little known is that this public/private marriage birthed the non-union sweated labor (hard work in poor conditions for low pay) used to construct this new “amenity” right in the middle of the downtown.  

New RoAR News has learned that the non-union workers who built the plaza were paid poverty wages. One construction worker told New RoAR News, “I don’t make enough to buy lunch” at one of the businesses nearby.

This super-exploitation of workers was made possible by the City’s decision to tap WBLM to pay for the Anderson Plaza construction with funds from the Community Benefits Bonus Program. 

By making a private entity, WBLM, the developer of Anderson Plaza, the city skirted the prevailing wage requirements of public works projects. This was done through a lease-back arrangement where the property owner is awarded the development project and the municipality rents the property to avoid paying the prevailing wage. 

The City also used a public/private partnership to avoid paying construction workers a living wage for the construction of the Renaissance at Lincoln Park’s new 356-vehicle parking garage. 

Under New York State Labor Law, construction on a public road such as Anderson Street is normally considered a public works project.  Under the law, contractors and subcontractors must pay the prevailing rate of wages and supplements (fringe benefits) to all workers under a public work contract. This protects against public moneys being used to exploit workers by requiring employers to pay workers fair wages and benefits when performing public work.

New Rochelle’s Community Benefits Bonus Program requires developers to pay a fee in exchange for permission to build more density than the downtown overlay zone allows.

Stella is a new high-rise rental apartment project built with deep public subsidies, including $6.2 million in city, county and state tax breaks, and a New Rochelle IDA 30-year PILOT (Payment in Lieu of Taxes), now estimated to be worth well over $33 million in savings to the Stella owner.  Not to mention the $10 million in grants and low-interest loans, the tax-exempt bond financing and the tax credit subsidies baked into the project’s mortgage financing.

Westchester County also used this lease-back model to avoid paying prevailing wages for the construction of the Family Court on Garden Street.

Shortly after the inauguration of Anderson Plaza, on May 2, Manhattan District Attorney Alvin Bragg indicted JM3 Construction, a contractor that worked on the Stella, for fraud and corruption to defraud city and state agencies.

In the absence of effective policies and legislation, the city is fueling a race to the bottom. Much of the development downtown is being done by low-road contractors who don’t hire local residents, don’t pay fair wages, provide little or no benefits, and put workers and the public at risk.