Many thanks to Helder Gil on Twitter, who pointed out this editorial from last week that concerns the construction at the CityCenter DC site between New York Avenue and H Street in the middle of downtown. The site was the focus of a ruling recently that has possibly put the District in a very difficult position of reimbursing developers for millions of dollars of labor charges.
At question here is the Davis-Bacon Act signed into law in 1931 by President Hoover. The law states that buildings, and other projects, constructed by the federal government as public works, are governed by certain rules, including wage rates that are no less than the prevailing rate of pay for that job elsewhere in the city. The Department of Labor ruled that the CityCenter DC project was subject to these rules because, though the development is being paid for by private developers, and financed outside of the city, because the land is leased to the owners for 99 years, one administrator at the DOL has declared that enough to apply to the developers.
You’d think that this sort of thing would come out of the pockets of the developers (in this case, according to the developers, that could be $20M), but according to the ruling official, Nancy Leppink, it’s the city’s responsibility to reimburse the developers to the tune of $20M for the difference in wages.
More interesting is the result that this might have at the Walter Reed development site, which the city owns and would likely lease to developers. At stake could be another $20M in potential revenue in taxes on the businesses in that space, which could be jeopardized by this ruling.