BOLI rules multi-use housing project subject to wage laws

The Oregon Bureau of Labor and Industries has ruled that a multi-use project involving the Housing Authority of Portland (HAP) is subject to prevailing wage regulations.

The Civic Redevelopment Project involves HAP, the Portland Development Commission, Gerding Edlen Development Co. and Civic Housing Development Services, a limited liability corporation. HAP entered into a development agreement with Civic Housing LLC to construct Civic Commons — a $57 million mixed-use complex consisting of 38,000-square-feet of retail space, a 16-story, 260-unit market rate condominium tower, a 5-story, 140-unit affordable rent apartment, and a 340-stall underground parking garage.

HAP owned the property at Southwest 18th Avenue between Yamhill and Morrison Streets (near PGE Park). where it operated a 138-unit low-income apartment building. The public agency turned the property over to Civic Housing LLC under a development agreement to build Civic Commons. After it is completed, the LLC will convey the low-income apartment complex back to HAP.

Hoffman Construction Co. is the general contractor.

In addition to the property, HAP is investing more than $500,000 in cash to the project, with an additional $400,000 in cash and a $2 million loan coming from the Portland Development Commission. HAP also secured $18.1 million from the state-controlled Private Activity Bond Committee to finance the redevelopment.

When Hoffman put out a request for bids, several union contractors responded. They were informed, however, that the project was a private development.

Plumbers and Fitters Local 290 disagreed, contending that because of the tax dollars involved it should be categorized as a prevailing wage project. Oregon’s prevailing wage law is required on any public works contract over $25,000. Under prevailing wage rules contractors must pay workers’ wages and benefits that prevail in the area the project is built. Wages and benefits are determined by the Bureau of Labor and Industries based on regularly-scheduled contractor surveys.

HAP disagreed, claiming that because it didn’t directly hire the general contractor the project was exempt from prevailing wage laws.

Fair Contracting Foundation (FCF), a labor-funded organization that tracks prevailing wage abuses in the construction industry, says it is a public works job because HAP has money in the deal, it has “control and direction” of the project, and because city-regulated Workforce Training & Apprenticeship, and Minorities, Women & Emerging Small Businesses set-asides apply.

“Everyone appears to be a winner in this project except the construction workers,” said John Rowand, a senior investigator for FCF.

“It’s clearly an end-around attempt by the Housing Authority to undermine community standards by circumventing prevailing wage laws,” said Don Kool, a business representative of Local 290, who filed the initial complaint.