Agenda Text
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That this Board calls upon developers that receive any form of public financial support to use responsible prevailing-wage contractors that provide health insurance, workers compensation, retirement benefits, and apprenticeship training to build their projects.
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Official Text
WHEREAS: The Assembly Row developer Federal Realty Investment Trust (FRIT) has been the direct and indirect beneficiary of approximately $73 million of public support from the City of Somerville and the Commonwealth of Massachusetts to their projects in the form of direct public grants and publicly-subsidized financing; and
WHEREAS: Numerous residents and community groups warned Federal Realty Investment Trust (FRIT) not to select Callahan, Inc. as its general contractor for their Parcel 6 448-unit residential project, because Callahan has a longstanding business model of using subcontractors that often pay substandard wages and benefits, engage in tax and insurance fraud by illegally misclassifying their employees as “independent contractors,” pay them in cash under the table, or sometimes don’t pay them at all; and
WHEREAS: Several members of this Board and of Somerville’s State Legislative delegation, as well as numerous residents and community groups, called on FRIT to select instead a union general contractor for the project; and
WHEREAS: Despite the extensive public financial support for the Assembly Row development, and despite the fact that FRIT is a huge, publicly-traded company worth about $9 billion, FRIT hired Callahan as its general contractor, arguing it could not afford to use union labor; and
WHEREAS: Just as feared, Callahan selected an irresponsible contractor, Force Corporation, to perform a substantial portion of the work, despite the fact that Force Corporation, its owner and principals, and their predecessor companies, are well-known for their illegal business practices; and
WHEREAS: Callahan’s subcontractor Force Corp. and its owner and principals have agreed to a Consent Judgment in Federal Court in Boston after the United States Department of Labor sued them for illegally misclassifying employees as independent contractors, thereby cheating employees out of wages and cheating the government out of payroll taxes, and the Consent Judgment will require them to pay over $2.3 million in back pay and interest and liquidated damages, and another $262,000 in civil penalties, and the payroll and withholding taxes they failed to pay; and
WHEREAS: The United States Labor Department is currently suing for over $1 million the predecessor companies that Force Corp’s owner and principals had operated because they repeatedly ignored numerous citations for workplace safety violations; and
WHEREAS: If FRIT had hired a responsible general contractor, all the various forms of public support for the project would not be benefiting contractors like Callahan and Force, whose business practices are antithetical to the public good; and
WHEREAS: If FRIT had hired a responsible general contractor, all the workers who are building the project would be receiving area standard wages and benefits and would be able to afford to live in the residences under construction; NOW THEREFORE BE IT
RESOLVED: That the Somerville Board of Aldermen hereby calls on all developers that receive any form of public financial support to use responsible, prevailing-wage contractors that provide health insurance and worker’s compensation, retirement benefits, and apprenticeship training to the workers that build their projects.