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Apr
2013
25

Alabama Contractor Receives Tax Breaks from Eugene, OR Government, Proceeds to Hire Just 32% Local

A massive student apartment complex is being built in downtown Eugene, Oregon, and of the 28 contractors on the site only nine are from the Eugene/Springfield area. This has local tradesmen and women upset.

Subcontractors brought in from out of state are to blame says Patrick Smith, Secretary-Treasurer of the Lane, Coos, Curry, Douglas Building Trades Council:

We have local contractors who are perfectly capable of handling that project,” Smith said. “The construction industry is a major sector of our local economy, and many of our contractors and their employees are out of work.”

The massive project is being built at breakneck speed and its size means specialized labor is needed. While it is inevitable that some out-of-region contractors contribute specialized skills there appear to be more than a few locally sourcable jobs being less-than-locally sourced. The Register-Guard describes the size of the project:

With four five-story buildings enclosing 466,648 square feet, plus two seven-story parking garages, the development on parts of three city blocks near 13th Avenue and Olive Street is large. And CEI is under orders to build the complex, at an estimated total cost of $89 million, as quickly and inexpensively as possible, those familiar with the project said.

The conflict is about more than local hiring standards, though. It’s a matter of the government giving preferential treatment to a company that is not returning the favor. Capstone Construction received tax incentives (“10 years of property tax waivers worth an estimated total of $8.5 million”) to build this project. Local labor officials say this means it is their responsibility to ensure that the government investment provides its maximum stimulus effect by pumping money into the hands of local workers who will spend it in the community.

The tax break, known as the Multi-Unit Property Tax Exemption, has become a controversial topic in the region. Many residents feel that the incentives are unnecessary. In February, City Council voted to suspend the MUPTE program until July while they reviewed their criteria for qualification. Patrick Smith suggests that the incentives be given to companies who promise to hire locally and build energy-efficient buildings.

“We need construction standards in our tax break zones,” he said. “Currently, the construction phases of these projects are not even part of the equation.”

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