A development firm worth $60 billion intends to challenge a state decision that it must pay prevailing wages to workers on its massive project planned for Santa Clara.
The $8 billion Related Santa Clara project, from New York City-based firm The Related Companies, benefits from public subsidies granted by the city. Therefore, it's considered a public works project that must pay prevailing wages, according to a decision from California Department of Industrial Relations Director Katrina Hagen.
The decision deals a blow to Related, which denies the project is a public work, and to Santa Clara Mayor Lisa Gillmor, who helped architect the deal for the development. However, Related and the city asked the department for an extension to Jan. 31 due to the holidays, and it was granted, Melton said. The outcome of the appeal can be challenged in court.
"By deducting the premium costs from the capped fair market value of the parcels, the city will in effect be partially reimbursing or crediting the developer for its infrastructure development costs," Hagen wrote. She also pointed to a city staff report where Santa Clara noted it intended to take on some of the"responsibility" for Related's high development costs through a reduction in rent in earlier years of the lease.
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