$78 million project near UC subject of prevailing wage dispute

CINCINNATI - A dispute about whether a $78 million project being built in Clifton Heights that uses some city money should pay prevailing wage to its workers is headed to court.

An area labor union, the Greater Cincinnati Building and Construction Trades Council, is suing developers of the U Square at The Loop project in Hamilton County Common Pleas Court.

The lawsuit alleges developers must pay construction workers at a prevailing wage standard under Ohio law because the property is 50 percent owned by a public authority and is supported, in part, by public funds.

U Square has received about $22 million in city assistance.

Prevailing wage laws are designed to ensure that all workers receive “fair” wages, health insurance and other benefits.

The union is suing Towne Calhoun Development and Al Neyer Inc.

Part of the project is owned by the Clifton Heights Community Urban Redevelopment Corp. (CHCURC), a nonprofit group that seeks to eliminate urban blight in the area near the University of Cincinnati.

CHCURC gave part of the land to the city, so it could build streets and other infrastructure improvements.

The project consists of four parts: the building site, two separate parking sites, a plaza and an area known as Market Street.

Developers are building the parking sites, plaza and Market Street parts of the project as “public improvements” subject to Ohio’s prevailing wage law, but insists Market Street is entirely private and the law isn’t applicable to that portion.

Joseph D’Angelo, the union’s attorney, alleges that is an inaccurate interpretation of Ohio law and is costing construction workers hundreds of thousands of dollars in pay due to them.

He is asking the court to enter a declaratory judgment against developers and order back pay for workers.

“As long as Ohio has had a prevailing wage law, since 1931, it has applied to all public improvements,” D’Angelo said.

“A ‘public improvement’ exists where construction is undertaken by or for a public authority,” he added. “It is our position that the entire U Square @ the Loop project is being constructed by or for a public authority.  So the entire undertaking is a public improvement, regardless of whether, or how many discrete projects might be planned.”

Judge Beth Myers has tentatively set June 3 to listen to oral arguments in the case.

WCPO Digital began seeking comment from developers on Feb. 18, and most recently tried again on March 13. To date, no reply has been given.

One of Towne’s principals is ex-City Councilman Chris Bortz, who lost reelection in 2011.

U Square @ The Loop is a mixed-used real estate project planned on 4.2 acres of land located between McMillan and Calhoun Streets, one block south of UC.

Once completed, the project will include apartments, offices, shops and restaurants. It was about 80 percent leased as of earlier this year.

The dispute first emerged publicly in November when City Council Members Laure Quinlivan, Cecil Thomas and Wendell Young publicized complaints by construction workers at the project. Some workers were being paid $500 per week, far below the prevailing wage.

“We were under the impression that it was a prevailing wage project,” said Quinlivan, a former WCPO reporter.

“It was bid that way, it was advertised that way and there’s documentation to that effect,” she added. “Some time after the project got started, that changed.”

Late last year, council members said developers told them they would agree to prevailing wage in the future, but it never occurred.

Cincinnati City Council is preparing a motion to prevent future disputes on projects partially financed with public money.

The motion requires that prevailing wage rates be paid on any development project receiving city investment or support totaling 30 percent or more of the project’s cost. Investment includes infrastructure, tax credits and land donations.

The requirement is similar to one used by other cities nationwide, including New York City.

City Council’s six Democrats signed the motion, which will be discussed March 19 by council’s Strategic Growth Committee. The full council will approve the measure likely on March 20.

“We think this is a good thing to have on the books,” Quinlivan said. “If we had it in place before none of this would’ve happened.

“I just hope the action we’re taking will change the system,” she added. “We have a heck of a lot of deals in the pipeline, and this can really help local workers and the economy.”