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Wagering on a wage deal in Albany

A conceptual illustrative rendering of the Nassau Hub

A conceptual illustrative rendering of the Nassau Hub project is pictured here. Photo Credit: RXR, BSE Global

Daily Point

Any wagers on a wage deal?

What happens in Albany over the next several days could change the future for one of Nassau County’s most prime pieces of developable land — the Nassau Hub.

Developer Scott Rechler, who, along with partner BSE Global, is supposed to build housing, entertainment and office space at the Hub, told The Point Friday that things at the Hub could change, depending on what happens with proposed legislation that would require all workers — union and nonunion — to be paid the same wages on projects that receive public money.

“If we do not see a reasonable outcome on prevailing wage, we will unfortunately need to reevaluate whether there is a future for transformative projects like the Hub project in New York,” Rechler said.

The original legislation proposed earlier this year would require developers to pay prevailing wage — an hourly rate usually established in collective bargaining agreements — on any project that receives any public money, including tax breaks, incentives, and grants.

Since then, the real estate industry, including Rechler, and labor leaders have tried to negotiate a compromise. Those conversations are ongoing, and now Gov. Andrew M. Cuomo is involved, sources told The Point.

But getting to a deal will likely come down to the wire. Part of the reason is that Long Island labor leaders, including Matthew Aracich, who heads the Building and Construction Trades Council of Nassau and Suffolk Counties, aren’t directly involved in the negotiating. Aracich told The Point that he’s in regular contact with state labor officials who are at the table, but real estate leaders say it’s harder to come to a deal without his presence.

“It makes it a much more challenging negotiation when you’re not negotiating with people you do business with every day,” Rechler said.

And the implications of legislation that doesn’t address Long Island’s concerns could go far beyond the Hub, he added.

“This would be Long Island’s Amazon moment,” Rechler said. “At a time when Long Island is trying to reposition itself for the 21st century, this will slow it down or could even stop it.”

Nonetheless, Aracich said that there has been progress, and he expects a solution to emerge before the session ends next week.

“If I’m looking at a gas gauge, the empty side is coming up, and the full side is coming down, and we’re meeting towards the middle,” Aracich said.

Multiple sources told The Point that the latest offer from real estate and business leaders would allow prevailing wage to apply to any project where 30 percent or more of the project’s cost is paid by public money. Those projects would have to pay all workers prevailing wage. That represents a change from past offers, which suggested that only some workers would be paid the higher wages. Some projects — like those built by not-for-profits and those that contain certain levels of affordable housing — would be excluded.

But there’ve been wrinkles since then, including a suggestion by some officials in Albany to create yet another commission in the legislation. The commission would set additional thresholds, where projects that receive a certain dollar amount of public funds — no matter what percentage of the total it is — would also have to pay prevailing wage. That would mean that larger projects — like the Hub — likely would automatically fall under the prevailing wage umbrella.

Long Island Association chief executive Kevin Law said he remains “hopeful” that a compromise can be reached. And representatives from both sides said they expected meetings to continue into next week.

“These negotiations … are almost like a Rolling Stones song. ‘You can’t always get what you want, but you get what you need,’” Aracich said.

- Randi F. Marshall @RandiMarshall

Talking Point

We will gladly pay you Tuesday for $700M today!

When Suffolk County Comptroller John Kennedy spoke at a rally against the Long Island Power Authority earlier this week, the Republican candidate for county executive made a point others have not raised: if LIPA wins its legal challenge to the property taxes on the Northport Power Plant, the Town of Huntington will have to pay the refund owed in the long run, but the county is required to advance the money.

The Suffolk County Tax Act created a system in which the county pays the refunds on property-tax overpayments, and the towns repay the county out of the following year’s property-tax proceeds.

The case is scheduled to resume in July. LIPA claims the plant is worth about $200 million, but the town has it assessed at $3.4 billion. If the town loses the case, the county could have to come up with $700 million or more to pay the refund. Suffolk would have to borrow that money, and Kennedy said at Monday’s event that the county’s finances are as tight as “a piano wire right now,” adding that in “no way, shape or form can Suffolk County absorb a $650 million or $700 million cost.”

Talking to The Point Friday, Kennedy said the normal method of handling an obligation like this would be short-term borrowing, but characterized the size of the sum, the downgrading of Suffolk County’s credit rating and extreme cash-flow issues as real challenges the county would face if it had to borrow that money.

But that refund would only be owed if Huntington loses in court, not if the town and LIPA can make a deal. LIPA has offered to gradually cut what it pays on the plant from $84 million a year to $42 million over nine years. Unlike some local politicians who’ve faced heavy pressure from the grassroots group Concerned Taxpayers Against LIPA and have argued LIPA should keep paying at its current rates, Kennedy says a settlement is the way to go.

“I know Brookhaven made a deal to cut the payments by 50 percent, and I’m not saying that’s the framework that has to happen here, but we do need a settlement,” he said. “I just think LIPA needs to engage in a more active negotiating process. They can’t sit there and claim they’re negotiating, and not be willing to move an inch.”

- Lane Filler @lanefiller

Pencil Point

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Final Point

An historic moment

The Democratic National Committee’s June debate lineups were announced Friday and they’ve already made history.

That’s because the debates will be the first time more than one woman appears on a major party presidential televised debate stage, the Center for American Women and Politics at Rutgers University tells The Point.

There will actually be three women making their cases each night. On June 26, the field includes Massachusetts Sen. Elizabeth Warren, Hawaii Rep. Tulsi Gabbard, and Minnesota Sen. Amy Klobuchar.

And the next night, New York Sen. Kirsten Gillibrand will share the stage with California Sen. Kamala Harris and author and activist Marianne Williamson.

Pore over the matchups here.

- Mark Chiusano @mjchiusano

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