Hammering it out

PLA ordinance passed for large-scale development

Development projects with tax agreements with the city that are valued at more than $15 million will now be required to use 20 percent union labor.
Development projects with tax agreements with the city that are valued at more than $15 million will now be required to use 20 percent union labor.

Project labor agreements (PLA) will now be required for all private development projects more than $15 million that sign payment-in-lieu-of-tax (PILOT) agreements with the City of Bayonne. The ordinance was introduced at last month’s meeting, and the Bayonne City Council at its Feb. 14 monthly meeting voted unanimously to pass it. A PLA is a collective bargaining agreement signed by one or more labor unions and a developer that establishes the terms and conditions of employment for a construction project.
Bayonne is now one of only a few cities in the state to have passed such an ordinance, modeled after Jersey City’s PLA ordinance, which was passed in 2007 and revised in 2017.
Union workers at the meeting voiced support for the ordinance, citing safety, fair pay, youth career building, the benefits of hiring local workers, and gender inclusion.
“This is putting the population of the town to work, opening doors to apprenticeship programs,” said Bayonne resident and union worker William Boyle. “Money goes back into the economy.” He said that the PLA can help workers be compensated fairly, at least enough to live in Bayonne.
Contributions from the younger generations are both technical and financial. Older union members need the younger generation to pay into the system like they did when they started out.
Sandy Hussain, 29, a graduate of Bayonne High School, and union apprentice, said that a PLA could help raise awareness of an underrepresented career path.
“I think that if more people found out and knew what we were doing there would be more job opportunities for the entire town,” she said.
“Bayonne has always been a place that takes pride in our blue-collar roots, and this ordinance honors that history while looking to the bright future we’re building together,” said Council President Sharon Ashe-Nadrowski. “On behalf of the city council, I am incredibly proud that we have taken this action along with Mayor Davis to help our neighbors get back to work and do it right here in our city.”
Bayonne is historically a blue-collar city and still has the highest rate of union membership in the county. The PLA ordinance, which required union membership in Bayonne and Hudson County, comes after years of union members voicing its support at city council meetings where PILOTs are discussed.

“Right now, you’re talking $15 million. I think it should be even less.” – Timothy Boyle


Market model

The city council in June of 2015 passed an ordinance mandating PLAs for public projects of more than $5 million; the new ordinance applies to private developments with PILOT agreements. PILOT agreements allow a developer to make payments, usually as a percentage of revenue from the project, directly to the municipal government instead of property taxes.
To those who work in construction, PLAs are a story of union versus nonunion labor. Union members tend to advocate for PLAs, while developers do not because it is in their interest to have labor costs as low as possible.
In Jersey City, this conflict resulted in nonunion industry groups filing a lawsuit that resulted in July’s revised PLA ordinance, on which Bayonne modeled its new PLA ordinance.

Confidence rising

Now that shovels are starting to dig into the former military ocean terminal base (MOTBY), where thousands of units of luxury residential housing are planned for construction, confidence in Bayonne’s ability to attract development is high. It wasn’t always that way.
When developers were applying for PILOTs the most, between 2013 and 2016, interest rates for borrowing were low. Real estate investors had credit and capital, and Bayonne had expansive tracts of land that it struggled to sell for more than a decade. With rising land values, Bayonne started using PILOTs while competing in a real estate market accustomed to them.
Much of Bayonne’s expansive shovel-ready, formerly industrial sites are now slated for development. Construction workers, meanwhile, are salivating at the prospect of constructing the remaining Gold Coast holdouts
“You are the last Gold Coast right now,” William Boyle continued. “All that property there is a gold mine, but don’t give it away. Let us, the residents, work there.”
Boyle also called for lower thresholds for requiring union labor and higher percentages of labor that should be required. “Right now, you’re talking $15 million. I think it should be even less,” he said. “Ten or even five.”
After the vote, union members clapped, then swiftly left the room.
“They’re out. They’re all going to build their buildings now,” Ashe-Nadrowski said.
“I think they’re going to take their wives to dinner,” said Bayonne City Clerk Robert Sloan, alluding to the fact the evening’s hearing was on Valentine’s Day.

Rory Pasquariello can be reached at roryp@hudsonreporter.com.