Council to take up pay waiver for Costco

4/13/2006

Toledo City Council will convene in a special session at 3:30 p.m. today to approve a waiver from the city's living-wage law for a Costco store after Mayor Carty Finkbeiner refused to grant one.

Council President Rob Ludeman said he supports the waiver, and said he hopes council passes it with a veto-proof majority of at least nine members.

Mr. Finkbeiner did not respond to a request for an interview left yesterday with his chief of staff, Robert Reinbolt.

The mayor previously said he believes the incentive package, worth about $3 million, counting city, state, and school district elements, is the most generous ever given a retailer in Ohio.

Mr. Reinbolt said earlier this week that given such an incentive, Costco and Westgate should live up to the living wage law.

Westgate has said it is investing up to $35 million to upgrade the aging shopping center at Secor Road and Central Avenue, and future tax revenues will more than make up for the incentives.

The living wage, equal to 110 per cent of the federal poverty level for a family of four, is $10.57 an hour, with health benefits after 60 days. The law, enacted in 2000, applies to businesses with 50 or more employees which receive economic assistance from the city.

Costco starts employees at $10 or $10.50 an hour, depending on the job, and provides benefits after 90 days for full-time workers and 180 days for part-time workers, Mr. Ludeman said.

"It's a minuscule amount," Mr. Ludeman said of the difference between what Costco pays and what the living wage law requires.

"It's something the community has discussed and really wants and needs," Mr. Ludeman said, referring to the Westgate redevelopment. He said passing the living wage waiver is necessary to keep the project on track.

Liz Holland, chief executive officer of the Chicago firm that owns the shopping center, said Costco will "absolutely" drop out of the agreement if the waiver becomes an obstacle.

She noted that Toledo gave a blanket waiver to encourage redevelopment of Southwyck Shopping Center in 2002 under former Mayor Jack Ford, although nothing has come of it.

"The question for the city of Toledo and Mayor Finkbeiner is are they prepared to stand in the way of a project that will happen," Ms. Holland asked.

Mayor Finkbeiner is allowed by city law to authorize two waivers a year. Earlier this year, he granted a waiver to a downtown employment firm that received a city grant to relocate its offices downtown. He has refused to award the second waiver to Costco, and has indicated he might veto a council waiver.

Ms. Holland has said that Costco set a deadline of April 25 to confirm that the project has full city approval.

The timing of today's meeting is designed to allow council to meet to override a veto, if necessary, before April 25. The mayor has 10 days to veto an ordinance.

Asked whether the waiver has at least nine votes in support, Mr. Ludeman said, "I hope so."

Westgate is receiving a $750,000 state brownfield cleanup grant to demolish the Dillard's building and a 15-year property tax abatement from the Washington Local School District valued at $1.5 million.

In addition, the city is paying $300,000 to Washington Local as a partial reimbursement of lost property taxes, and the city has committed to spend up to $500,000 on public infrastructure, primarily on new sewer lines.

Contact Tom Troy at:

tomtroy@theblade.com

or 419-724-6058.