Economy buffets wind and wages
Local developer Tritec, one of the builders speaking out about the prevailing wage requirement, employs hundreds of construction workers on big projects like the Ronkonkoma Hub above. Credit: Barry Sloan
Daily Point
Prevailing wage marches on, despite objections
In 2021, the State Legislature required any project that received public funds amounting to 30% of its total costs to pay its workers prevailing wage — usually defined as the highest level of hourly pay received by local union workers. A public subsidy board was established to define the details and determine which projects would be included and how. But there was a caveat.
Implementation, the legislation said, could be delayed “in the event that the board finds that there is or likely would be a significant negative economic impact of implementing the prevailing wage requirements.” Such a delay could be instituted statewide, or for a particular region.
And developers and business groups — including those on Long Island — are suggesting that negative impact threshold has now been met. In a letter sent this week to the Public Subsidy Board and the state Department of Labor, more than five dozen developers and business groups from across the state advocated delaying the law’s implementation, saying rising costs and interest rates, along with supply chain delays, have challenged the construction industry. Prevailing wage requirements, the letter said, would worsen that situation and “ … projects that will now be required to use prevailing wage will struggle to find financing and, regrettably, will not move forward.”
The letter writers, which included the Long Island Builders Institute, the Association for a Better Long Island and local developers like AvalonBay, B2K Development, Heatherwood, Rechler Equity Partners and Tritec, noted that the construction industry has seen interest rates on construction loans double, while construction material costs have risen by 45%. Labor costs, too, are on the rise, the letter said.
The letter compared the prevailing wage legislation to Gov. Kathy Hochul’s failed housing compact.
“One clear lesson from this year's legislative session is that any successful housing policy must protect and/or bolster a housing project's economic viability and if a project is not economically viable, it will not be built,” the letter said.
On Wednesday, developer Peter Florey, who sits on the Public Subsidy Board, read the letter at the board’s meeting and offered a motion requesting a hearing to consider the economic impacts, a hearing that could have led to a pause in the implementation. But no one even seconded the motion, and it failed.
“I’m not terribly surprised at the outcome, but I’m disappointed,” Florey told The Point. “We’ll just continue to work on this and to monitor what’s going on.”
— Randi F. Marshall randi.marshall@newsday.com
Pencil Point
Read up SCOTUS
Credit: CANADA, POLITICALCARTOONS.COM/Dave Whamond
For more cartoons, visit www.newsday.com/nationalcartoons
Final Point
Who the wind blew in
Tilting at windmills isn’t for Equinor, the developer of a planned $3 billion offshore wind farm about 20 miles from Nassau’s South Shore. These days, the Norway-based firm is busy trying to convince Long Islanders of the practical reasons for installing their 3.3-mile cable of green energy underneath the shoreline at Long Beach to a substation in Island Park.
If successful, Equinor’s Empire Wind 2 project would provide enough wind-driven electrical power for 700,000 homes by 2028. It also would help New York reach its overall goal of getting the state's power grid off fossil fuels and move toward renewable sources of energy.
But gaining public support isn’t easy. As part of their sales pitch to the public, a team of Equinor officials visited Newsday’s editorial board Wednesday and conceded they’re having difficulty convincing some Long Beach residents that their work installing cables won’t wreck the beach and their neighborhoods. Recently, Equinor met with local leaders and clergy but intends to do more smaller informational meetings to build public support for its project. A walk-in storefront in Long Beach also is in the works where questions can be answered and literature distributed.
Equinor still faces a series of local, state, federal reviews. One hurdle involves “parkland alienation” — getting state and local approval to use the beachfront as the underwater cable comes onshore from the turbines in the Atlantic. A bill to enable that passed the State Legislature and awaits Gov. Kathy Hochul's signature, after which the Long Beach City Council must give its approval. Equinor has said any delay in getting the permission could endanger the project’s future.
A little cloudy in the conversation: the financial hurdles that the company faces. Recent inflation pressures and other unexpected added costs will be part of the ongoing talks with state officials as they come up with a final package that decides how much in New York State subsidies will be provided for the project.
— Thomas Maier thomas.maier@newsday.com
