At least we should get some jobs

On April 29, 2011, in Latest News, by The Somerville Times

By William C. Shelton

(The opinions and views expressed in the commentaries of The Somerville News belong solely to the authors of those commentaries and do not reflect the views or opinions of The Somerville News, its staff or publishers.)

The best social program is a job. Jobs bring income, self-esteem and opportunity to workers. They bring revenue rather than expenses to government. They stimulate a community’s economy when workers purchase goods and services.

But Somerville is poor in jobs. We have two workers for every Somerville job, as opposed to Boston and Cambridge that have two jobs for every worker, a four-fold difference.

Which is why a reasonable share of construction and permanent jobs created by the proposed Assembly Row Development at Assembly Square should go to Somerville workers.

Admittedly, most of those will be in retail. They won’t run the spectrum from low-skilled to high-skilled jobs that the office and research-and-development projects we were promised seven years ago would bring. But most are entry-level jobs that can set Somerville residents on a path toward the kind of reliable employment that will allow them to remain in this increasingly expensive city.

We are being asked to issue bonds and forego $50 million in property tax revenue over the next 30 years to help pay for infrastructure that would support Assembly Row and its 400 housing units and 187,000 square feet of retail space.

This is a tough decision. The Commonwealth of Massachusetts is telling us that unless we do this, it won’t help pay for the Orange Line station that is so important to office and R&D uses.

Almost everyone, including most aldermen acknowledge that the deal would involve some level of risk. But there is disagreement over the extent to which it would be a gamble. And there is disagreement as well regarding how much tax revenue the development would generate after paying for the bonds and the new municipal services costs.

So, many feel that Somervillens should get first preference on the jobs thrown off by the development. At a March 31st Board of Aldermen meeting, Aldermen Bruce Desmond, Bill Roche, Tom Taylor, Jack Connolly, and Maryann Heuston expressed support for this sentiment.

Local activist Fred Berman has forcefully advocated for it. He says that if we help pay the costs and take the risks associated with the proposed deal, we should benefit from the resulting construction and permanent jobs. “In exchange for agreeing to help pay for that infrastructure, the Board of Aldermen should obtain a legally binding commitment from the developer to hold its commercial tenants accountable for ensuring that a decent share of their employees are Somerville residents.””

Once in place, the proposed infrastructure could help support the more valuable commercial development that we all hope will eventually come. A preferential hiring agreement now, could set a precedent for the future employers who would populate those offices and R&D facilities.

Alderman Bill Roche represents the Assembly Square district. He points out that Ward 1’s diverse residents will bear the greatest traffic and pollution burdens that come with the development’s construction and subsequent operation.

He says that “If the retail and commercial businesses that would like to set up shop in Assembly Square push back on signing a local hiring agreement, then I as one Alderman would not want them locating here.” He would also like to see the creation of job training programs.

So far, the mayor’s staff say only that Federal Realty Investment Trust (FRIT)  “has committed to using union labor on their future projects” and that “FRIT commits to facilitate discussions between tenants and city staff regarding job training for Somerville residents and hiring advantages for Somerville residents…” That hardly has the binding force of the contract that Roche, Berman and others are looking for.

But the mayor says that we should trust FRIT because they have lived up to their commitments. In fairness, I should point out that FRIT is not the developer who promised to build millions of square feet of office space and then left town with $30 million in profit once they had obtained permits for a big-box strip mall. Or who signed a covenant to finance the infrastructure that we are now asked to pay for.

Critics of preferential hiring arrangements say that such commitments cannot be legally legislated. They’re right.

But cities all over the country have executed Community Benefits Agreements (CBAs). They are not legislation, but contracts. They often obligate developers to put preferential hiring requirements in their tenants’ leases.

The Lennar Corporation, for example, proposed a large development in San Francisco’s Bayview-Hunter’s Point neighborhood, with residential units, offices, and retail space. In May 2008, the San Francisco Labor Council and ACORN executed a CBA with Lennar. Among its many provisions is the requirement that all project employers participate in a local hiring program. The City of San Francisco is a third party beneficiary with enforcement rights.

The Hollywood and Highland Center comprises a 4,000-seat theater, hotels, and 1.2 million square feet of retail space. In 1998 the Los Angeles Community Redevelopment Authority signed a contract with its developers that included a first-source hiring plan.

A first-source plan requires employers to interview applicants referred by a “first source” office before interviewing other applicants. As well as benefitting Somerville residents, it can enable employers to access a variety of sources of applicants through a single job notice.  Career Source, a nonprofit funded by the Massachusetts Department of Unemployment Assistance, would be one organization well equipped to serve as a first source.

Federal Reserve Bank staffer Sandy Gerber writes that, “the use of CBAs has been targeted to development projects that require a public subsidy or involve exceptions to routine business start-up or improvement processes.”

The proposed Assembly Row development has already benefited from a major zoning change and millions in federal stimulus package funds. More to the point are the proposed infrastructure bonds that prompt this discussion.

At least we should get some jobs out of the deal.

 

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