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June 15, 2023

The Cove development in Worcester has awarded $7.7M to diverse subcontractors

Photo | Courtesy of V10 Development A rendering of The Cove, being constructed on Greet Street in Worcester

The Cove, a seven-story development abutting Polar Park in Worcester, has awarded 18% of its contracts so far to subcontractors run by women or people of color.

This is set against a non-binding goal of 20% of the contracts going to certified woman- or minority-owned enterprises, although the project is only 12% complete and has awarded 86% of its construction contracts, so the project still has time to meet its goals.

The project, undertaken by Boston developer V10 Development and Worcester’s Churchill James, had the 20% goal for contracts with women business enterprises and minority business enterprises set by the City of Worcester’s Responsible Employer and Inclusionary Participation Policy at the time, said Worcester Chief Development Officer Peter Dunn, speaking at the Worcester Redevelopment Authority’s June 8 meeting. However, the project does not benefit from a tax-increment exemption from the City, so it does not face penalties for the goals.

So far, the project has given contracts with a total value of $7 million to MBEs and $670,000 in contracts to WBEs. There were still $6.5 million in contracts to be awarded as of April.

When complete, the Cove will feature 171 residential units and 16,000 square feet of commercial space at 89 Green St. When construction began in November, V10 said the complex was slated to open in August 2024.

In the fall, the City updated the diversity contract goals for publicly-backed projects, which do not apply to The Cove as the goals were changed after the project began. These new goals are to provide 15% of contracts to WBEs and 10% to MBEs.

The City tracks workforce and contractor demographics of projects receiving tax benefits from the city government. In the case of The Cove, the City is tracking its project because it sold property for the project to The Cove’s developer. The project does not face any penalties since it doesn’t receive tax breaks.

The City proposed a stricter REIPP policy in the spring for developers receiving city tax breaks. Developers could face fines or even a reduction or revocation of tax benefits. This stricter policy is under review by the City Council’s economic development committee, said Dunn. In the past, many projects that received tax breaks or have been tracked by the CDO have fallen short of meeting workforce diversity goals, and the general contractor behind Polar Park paid a $1.9-million fine in December for making false claims about the employee and subcontractor diversity of that project.

The Cove project, as of April, employs 24.3% Worcester residents, about even with the 25% goal, which is lower than the 50% goal for projects receiving City tax breaks.

The project has so far employed 67.7% people of color, far exceeding the 38% goal; but zero women. These numbers are far from final as the project is only 12% complete, with six subcontractors having been on site.

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June 15, 2023
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