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County: Wage rules apply to hotel rebate

By   /   Friday, May 11th, 2012  /   2 Comments

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A proposed Santa Barbara County program that would have given Los Angeles developer Rick Caruso a $15 million tax rebate to revive a hotel in Montecito faces a major hurdle after county officials concluded that developers must trade the rebate for potentially much higher construction labor costs. A Caruso Affiliated spokesman declined to comment on…

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2 Comments

  1. David Denholm says:
    Friday, May 11th, 2012 at 12:10 pm

    There are also a great many studies showing that prevailing wage laws increase costs. I have often seen reports about a project needing to be rebid because the first bids didn’t include prevailing wages. The second bids based on prevailing wage rates are invariably higher. I have never seen a bid come in lower because it included prevailing wages.

  2. SmartCitiesPrevail says:
    Friday, May 11th, 2012 at 8:00 am

    Despite what’s written in this article, there’s an overwhelming body of evidence showing that prevailing wages do not increase construction costs. This is particularly apt on large projects such as this where the higher productivity of skilled workers comes into play and enables contractors to efficiently manage their workforce. A comprehensive list of the studies is available at http://www.smartcitiesprevail.org/resources/research_casestudies.html

    The county should also consider that thoughtful pairing prevailing wages with arrangements to use local contractors that participate in successful apprenticeship programs and hire from the surrounding area will serve an important economic development function by ensuring that wage income is recycled in the communities from which the subsidy originates and that young workers are provided with pathways to enter sustainable careers in the construction industry.