Colony Liquor & Wine Distributors, which has been doing business in the city of Kingston since the 1930s and has 200 employees, the majority of them with well-paying, union jobs, is threatening to leave the city.
Repeated calls to the company seeking comment over a two-week span were not returned.
The announcement came as a surprise in light of news several months ago, following its merger with Service-Universal Distributors, that Colony planned to build a $10 million extension of its existing facility in midtown. Selkirk is reportedly Colony”™s next home, should it move.
The city and county are redoubling their efforts to make sure that doesn”™t happen. “I”™m doing everything I can to keep them here,” said Kingston Mayor James Sottile. “It would be devastating not only to Kingston, but to the region, if they pulled out.”
Sottile characterized the liquor distributor as “a clean business. They have good paying jobs. A couple of Colony”™s employees”™ wives work for the city, and they”™re very concerned about either having their children move to a different school system, or dealing with the possibility of their husbands losing their jobs.”
Sottile said he”™d known since last November that “we were in competition with another community.” He said the planned move was connected with the recent merger. “They”™re not in control of their own destiny. There are other owners at the table.”
But the real trigger may be something else: the Ulster County Industrial Development Agency”™s requirement that IDA-funded projects valued at more than $5 million pay a prevailing wage to the construction workers.
Sottile said that initially, “Colony didn”™t explore the option of applying for IDA money because of the (prevailing wage) provision. But I took the approach, ”˜Why don”™t we ask?”™ It was shortsighted of the IDA to allow 200 jobs, many of them union, to leave.”
Yet no one at either Ulster County Development Corp. (UCDC) or the Ulster County IDA disputed the fact that the company is a pre-eminent employer that must be compelled to stay. “UCDC and the IDA are doing everything we can to retain a major employer,” said Lance Matteson, president and CEO of UCDC.
March Gallagher, president of the Ulster County IDA, said her office was exploring the best way to craft an exception on the prevailing-wage policy for Colony, without undermining the key purpose of the provision. The IDA “doesn”™t have the authority to deviate from the labor policy,” she said (it does in the case of a uniform tax exemption). “If the organization is for-profit and the project is over $5 million, it must pay the prevailing wage. We would have to create the authority to allow us to do so.”
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Gallagher said she is reluctant to “add the blanket authority to deviate from the labor policy, because every project would then ask for the exception.” Instead, she is considering granting the exception with the qualifier that the project conform to long-term job standards.
Gallagher said she had no problem doing this in the case of Colony. The company “has a history of paying a living wage. Most jobs (in the county) pay $12.50 per hour, but they pay higher. Colony”™s average salary is $39,000.” Colony aside, Gallagher said she still adheres to the basic premise of the prevailing-wage requirement. “If big projects coming to the Hudson Valley are pursuing tax benefits, they should pay a decent wage. But this is a different situation.”
Gallagher also said she would have considered taking similar action in the case of two other county employers who closed up shop, Hydro Aluminum and Schrade knife company, both located in Ellenville. “If they had the potential to stay, which they didn”™t, you would have seen the same. We can”™t afford to let 200 jobs walk out of Ulster County without trying to keep them here.”
While she acknowledged “we need to hustle if we want to be competitive,” there is nonetheless a procedure that must be followed. First the IDA would have to create the exception, which she expected would occur in late November, followed by a hearing on Colony”™s application for the IDA loans. Meanwhile, “we”™re working closely with the city to create a package of benefits.”
The amount of the prevailing wage depends on the type of trade and is determined by “a complicated schedule,” Gallagher said. The policy was implemented last year, although it was subsequently modified to enable companies with projects valued at less than $5 million to pay only 75 percent of the prevailing wage. Ulster is one of three counties in the state with the policy.
Rockland is one of the others. Steven Porath, director of economic development for the Rockland Economic Development Corp., said to date, there hadn”™t been a company requesting an exemption from the prevailing wage requirement. While he acknowledged the provision “impacts a company”™s construction costs, the issue has not been detrimental to our economic development.”
Steve Finkle, Kingston”™s director of economic development, said that Colony would qualify for Empire Zone tax breaks, such as an exemption from paying sales tax on construction materials. He said one option that had been explored was reducing the size of the extension building from 120,000 square feet to 85,000 square feet, which would have brought the cost of construction to under $5 million. That would in turn have required the company to pay construction workers only 75 percent of the prevailing wage, which, Finkle said, “is very low.”
Finkle said that in general, he is supportive of the prevailing-wage policy. “All the jobs the city bids out are at the prevailing wage. We”™re supportive, but it”™s tough because we”™re competing against other places in the state.”
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