Originally appeared in the Stockton Record

Posted Mar. 2, 2015 at 8:09 PM

STOCKTON — Haggling over the price tag attached to a small patch of second-story airspace in downtown Stockton might seem like a punchline in search of a joke.

But during a 77-minute discussion at last week’s City Council meeting, a complex dispute over airspace in the financing package for a new and ballyhooed affordable-housing project in downtown Stockton seemed for a time to jeopardize the deal.On one side were the developers of the 40-unit project that is planned for the woebegone southeast corner of California Street and Weber Avenue.On the other side were trade-union officials concerned about the wages to be paid to the construction workers who will be hired to build the project, dubbed Cal Weber 40.A week ago, the gap between the sides seemed to be a gulf.

Seven days later, it appears the gulf has been bridged. The City Council will hold a special meeting tonight at City Hall to discuss the matter again and to cast their votes on the air-rights issue. If the resolution passes, developers expect to break ground in 27 days.

“I’m comfortable with it,” Mayor Anthony Silva said late Monday afternoon. “Obviously, this project is good for Stockton, especially downtown Stockton, and it’s something that needs to happen. If we’re going to show that Stockton is a healthy city coming out of bankruptcy, we definitely need to start building again.”Councilman Michael Tubbs convened a 60-minute meeting Friday afternoon between developers and union officials to hammer away at the matter.

“They talked it out,” Tubbs said. “Questions were asked and posed. I was excited because at the end, I felt relationships were formed between the unions and the developers.”

The projected cost of the Cal Weber project is $12 million, paid for through various government loan programs and tax credits.Included in the project, representing 3 percent of the total cost, were the air rights above Stockton’s downtown Lot K on American Street between Main Street and Weber.

The developers, including locals Anthony Barkett and Chris Flaherty, plan to build a second-story parking deck for residents above Lot K as part of the Cal Weber project.When the council unanimously approved the project last June, plans called for the city to lease the air rights to the developers for 55 years at no cost.

Last Tuesday, however, the council was asked to approve an air-rights lease containing different terms — 65 years with a $370,000 payment from developers to the city about two decades before the start of the 22nd century.

Why the revision? Developer Danny Fred told the council that if the lease was not revised, financing for the project would be scuttled. Fred said receiving an outright gift of the air rights from the city would, by law, have triggered a requirement for developers to pay all Cal Weber construction workers at union rates. That requirement, Fred said, would significantly increase construction costs.

“A 25- to 30-percent increase on a project like this, there would be no project,” Fred said.Union representatives quickly stepped forward, voicing concern that developers might be maneuvering to build Cal Weber on the cheap with low- or minimum-wage workers.“I think it’s kind of ironic that we’re talking about affordable housing for the working poor,” Sal Rotolo, the business representative for Sheet Metal Workers’ Local Union No. 104, said at last week’s council meeting. “How about we build some projects with workers who are being paid an affordable wage?”

The council ultimately tabled the matter. Friday, Tubbs and City Manager Kurt Wilson hosted the meeting with the unions and the developers. Tonight, the council once again will consider the 65-year lease with the $370,000 payment.

On Monday, Barkett called the Friday meeting “very productive” and added that developers never intended for Cal Weber to be a “prevailing wage” project. But he also said there is no intention to bring in low-wage laborers and said local construction crews will be doing the work.

“We all came together, we worked through it, we intend to use union contractors and we currently use union contractors,” Flaherty said. “We won’t be using exclusively union contractors, but we have some non-union contractors who we have employed before and they’re going to be on the project, as well.”Said Rotolo: “More than likely we’ll probably back off and allow the project to go through. I can guarantee you we’ll be monitoring it very closely. If we find out our workers are coming from outside the area and are getting paid low wages, then the next time we’ll have to draw a line in the sand.”

— Contact reporter Roger Phillips at (209) 546-8299 or rphillips@recordnet.com. Follow him at recordnet.com/phillipsblog and on Twitter @rphillipsblog.