Cedar Rapids adds safety, labor stipulations into agreement for city development incentives

CEDAR RAPIDS — The city of Cedar Rapids has revised its standardized agreement with developers who receive city financial incentives, giving the city more power to claw back incentives if contractors or subcontractors working on city-supported projects are found to have violated state and federal workplace safety and labor rules.

After state and local public officials in April reported safety and potential child labor violations at the mixed-use “Banjo Block” project downtown, the city this summer implemented new language in its standardized development agreement. These agreements are the legally binding deals detailing the obligations of both parties — the city and the developer — guiding a city-incentivized project.

The Banjo Block project, near the downtown Cedar Rapids Public Library, was awarded $6.5 million in tax incentives from the city. The state also provided over $17 million in tax credits connected to restoring a brownfield and providing low-income housing.

The revisions to the city’s agreement clarify that the developer must cooperate for “prompt” resolution to issues including “workplace safety, state or federal safety or labor matters,” and ask that the developer ensures contractors and subcontractors also follow all applicable city, state and federal laws and other regulations.

In the course of construction, under the new language, “upon confirmation of a violation by an agency or entity with jurisdiction over such matter, developer shall immediately ensure the violation is abated, which may include termination of the subcontractor from the project. Failure to abate any violation shall be considered a material breach of this agreement.”

Under the agreement, the developer also agrees:

Additionally, the city may ask the developer to provide it with verifiable payroll records of the developer, its contractors and its subcontractors, not including workers’ Social Security numbers. The developer also must notify each contractor and subcontractor of this provision.

Unless there’s an exception in the law, under language revisions, the developer shall use workers on the project who have unemployment insurance and workers' compensation coverage provided by the contractor or subcontractor. Upon the city’s request, the developer must provide proof for all workers on the project. The developer also must provide a list of subcontractors on the project if requested by the city.

“The City is strongly committed to worker protection and upholding labor laws,” City Manager Jeff Pomeranz said last week in his weekly memo to the City Council.

He said the city’s economic development division and city attorney’s office reviewed provisions of Cedar Rapids’ development agreements to “provide clarity and specificity” concerning violations of the law, “including with regards to safety and child labor, and how a lack of response to such matters could result in a breach” of the agreement.

In April, state Rep. Sami Scheetz, D-Cedar Rapids, and Linn County Attorney Nick Maybanks reported potential safety and child labor violations they saw during a tour of construction underway at 501 Fourth Ave. SE, in downtown’s Banjo Block. The tour of this and one other Cedar Rapids site took place as part of a labor union’s campaign to contrast safety precautions and other issues at job sites.

The Iowa Occupational Safety and Health Administration cited the general contractor, TWG Construction, for violations in May and offered $3,233 as part of an informal settlement agreement to resolve a list of “serious and other-than-serious” safety violations at the site that posed fire risks and trip hazards.

The contractor had until June 5 to pay, but Iowa OSHA was unable to confirm Wednesday whether TWG Construction had, or whether its investigation into possible child labor violations had concluded.

“Taxpayers deserve real accountability to ensure that their hard-earned dollars aren’t going to corporations that put workers in danger,” Scheetz said in a statement. “I am grateful that the City of Cedar Rapids listened to Cedar Rapidians and relevant stakeholders — and has now taken concrete steps to ensure that our tax dollars are spent responsibly going forward.”

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