Staten Island megaproject was a result of union concessions, tax breaks

Renderings of Empire Outlets mall and New York Wheel in Staten Island
Renderings of Empire Outlets mall and New York Wheel in Staten Island

A combination of union concessions, city tax breaks and a willingness by developer BFC Partners to take on greater costs led to the last-minute agreement on the Staten Island St. George’s waterfront development, the borough’s biggest project in decades.

As late as mid-October, BFC was willing to hire union labor for only 15 percent of the site, but late last month, the developer said it would hire union workers for the entire $580 million mall project, which includes 80 stores and a 200-room hotel among a million square feet of mixed-used space. In exchange, the unions pledged to cut the developer’s construction costs by 20 percent, according to Crain’s. The project was approved by City Council last week.

Council member Debi Rose was instrumental in pulling the deal together, according to Crain’s. “I started this process wanting these projects to be a ‘win-win’ benefiting Staten Island, and there was doubt expressed that those goals could be reached,” Rose said in a statement to Crain’s after the project was approved. “I am happy to stand here today and say the elusive win-win has been achieved.”

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BFC principal Donald Capoccia told Crain’s that the agreement came about because “we were able to overcome the financial challenges” of hiring union workers.

The city’s Economic Development Corp. told Crain’s that the tax breaks were not a result of pressure from the developer. “In this case, correlation does not imply causation,” said EDC President Kyle Kimball. “We went over things in painstaking detail to make this work without making any drastic changes to the original framework of the deal.” [Crain’s]  – Hiten Samtani