Elwood calls on CenterPoint to prove it's complying with prevailing wage laws

ELWOOD, Ill., Aug. 29, 2013 /PRNewswire/ -- The Village of Elwood has asked a judge to require CenterPoint Properties to provide documentation to determine if the developer is in compliance with state law in paying workers a prevailing wage.

Although state law and the Tax Incremental Finance (TIF) agreement between the Village and CenterPoint require that it pay prevailing wages, CenterPoint has refused to reveal any payroll documents that would confirm that workers are receiving prevailing wages at its Deer Run Industrial Park development, which is the focus of a TIF.

Today's court filing is the most recent  development in an ongoing dispute, which prompted the Village to take legal action earlier this year after CenterPoint failed to provide information on how it spent $110 million in Village taxpayer dollars for the redevelopment of the 1,820-acre site at the former Joliet Arsenal.

"We find it troubling that CenterPoint refuses to hand over public documents that would reveal if prevailing wage laws have been violated," said Elwood Mayor William Offerman. "Because taxpayer dollars and public records are at issue, the Village has a duty and obligation to ensure that prevailing wage statutes are enforced and that local workers are getting paid what they deserve and what is required by law."

CenterPoint is owned by the California Public Employees' Retirement System (CalPERS), a public pension fund based in California.

The prevailing wage statute is a state law requiring a minimum wage and benefits threshold for workers on taxpayer-financed projects. The statute helps ensure good jobs are created for Illinois workers and protects those workers against unscrupulous contractors who pay low wages.

According to the redevelopment agreement, CenterPoint is contractually obligated to ensure workers who perform TIF-funded work earn a prevailing wage set by the Illinois Department of Labor and paid by the project's contractors and subcontractors.  It also states that the developer must "keep and maintain separate, complete, accurate and detailed books and records necessary to reflect and fully disclose the cost of the TIF Funded Improvements and disposition of all funds..."

The Illinois Prevailing Wage Act states that all workers contributing on "public works" receive the prevailing wage. "Public works" is defined as work by a public body or paid "wholly or in part by public funds," including "all projects financed in whole or in part with bonds, grants, loans, or other funds made available by or through the State or any of its political subdivisions..."

In February, the Village filed a lawsuit in an attempt to force CenterPoint to detail how the company spent the $110 million taxpayer subsidies from the Village and other taxing districts after the company repeatedly failed to release the information.

CenterPoint had insisted that the project was not economically feasible without public subsidies from the Village. The TIF was created in exchange for CenterPoint's commitment to invest $840 million of its own money to develop the Deer Run project that called for industrial, retail, restaurants and hotels that would create up to 12,000 jobs and generate more than $20 million in annual incremental tax revenue. But, as the Village contends in its lawsuit, CenterPoint never built any hotel, retail or industrial facilities and only 3,800 jobs have been created.  What was supposed to be a mixed-use project has evolved mostly into warehousing, with lower wage jobs. Meanwhile, less than one-third of the more than $20 million per year of projected TIF increment the developer promised has ever materialized.

SOURCE The Village of Elwood