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March 1, 2023

Worcester seeks stricter enforcement of DEI goals on projects receiving tax breaks

Photo | Timothy Doyle Madison Properties' SOMA development under construction in February

After a couple of high-profile violations of the City of Worcester’s policies on diversity hiring and contracting on projects receiving city tax breaks, the city government is considering instituting stricter enforcement for developers not meeting those goals.

The Worcester City Council on Tuesday officially received proposed updates to the City’s tax-benefits policies for developers. Updates to the policy include a recommendation to provide apprenticeships, goals for minority-owned and women-owned businesses, and enforcement of workforce goals for city residents, people of color, and women.

The policies cover tax increment financing and tax increment exemptions. TIFs provide property tax relief through the City’s Economic Development Incentive Program for commercial or industrial developments while a TIE does the same for housing developments through the Housing Development Incentive Program.

These programs seek to aid developers whose projects will add value to blighted and underused city properties and increase employment in the city. In turn, developers are asked to meet certain goals for hiring Worcester workers, contractors and vendors as well as workforce diversity benchmarks.

Milford general contractor Plumb House Inc.,working for Madison Properties on its SOMA (South of Madison Apartments) project ran afoul of the policy in 2022 for not submitting employee data to the compliance manager. In 2021, media outlet GBH found the general contractor building the $160-million public baseball stadium Polar Park lied to the City about how many contracts went to minority-owned and woman-owned businesses, which resulted in the contractor paying nearly $2 million in penalties following a Massachusetts Attorney General investigation.

Many projects fall short of the DEI goals set by the programs, but are exempt from penalty as long as they are found to be making best efforts towards the goals.

The update to the City’s policy would require a project’s construction manager or general contractor maintain a daily log of all workers entering and leaving the site to be submitted to the city’s Program and Compliance Manager bi-weekly. Failure to do so could result in fines or reduction or revocation of tax benefits.

In addition to the existing goals of a project employing 50% Worcester residents, 38% people of color, and 10% women, the applicant must commit to a goal of contracting at least 15% of all contracts to certified woman-owned businesses and 10% to certified minority-owned businesses.

The policy includes a goal of having at least one contractor or subcontractor with an apprenticeship program approved by the Division of Apprentice Standards of the Massachusetts Department of Labor and Workforce Development. The policy encourages apprenticeship opportunities to go to Worcester residents and students and graduates of Worcester Public Schools.

If the program and compliance manager finds that a project is not meeting the requirements of expectations of the policy, they will receive a letter of noncompliance and a $5,000 fine. The developer will then need to submit a corrective action plan. Failure to comply with the corrective action plan could result in revocation or reduction of the tax benefits.

At Tuesday’s City Council meeting, District 2 Councilor Sarai Rivera proposed making the policy an ordinance to make it more difficult to change in the future. District 3 Councilor George Russell agreed, but he suggested ensuring exceptions could be made, like when projects are submitted to the Zoning Board of Appeals for variances.

The matter will be further discussed in the City Council’s Economic Development Standing Committee.

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March 2, 2023

Seems like the City is making it more 'difficult' for these developers to be' achieve' successful goals

March 2, 2023

Wonder if Madison Properties is gonna file for bankruptcy, ? can't see them paying taxes on a non- existent biolab, the city can't find a tenant for

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