Major capital projects, such as the multi-million dollar construction of two new residential colleges slated to open in 2017, give Yale the opportunity to influence the New Haven economy in a less direct but no less meaningful way than the voluntary payments it makes each year to the city.
In deciding who will do its construction work, the University has the power to determine which businesses will benefit from some of the most lucrative construction contracts in recent state history.
When Yale President Peter Salovey and Vice President for New Haven and State Affairs Bruce Alexander ’65 met with the city’s Board of Alders in March, they indicated city businesses would reap some of the rewards of contracts. Alexander said the University should be pursuing ways to increase the share of contracts that stay within the city: “We have to get more aggressive about this.”
The administrators’ assurance carried significant weight for the city lawmakers, whose predecessors on the Board voted four decades ago to block the University’s previous expansion.
Salovey said the project, slated to begin in earnest in February 2015, would “of course” create local construction jobs.
While University administrators said this week that the project will be consistent with longstanding commitments to employing city residents, New Haven officials said the scale of the construction could have an unprecedented impact on the local economy. They urged the University to consider all possible means of lifting the city’s prospects as it expands its own footprint.
“There are people in New Haven who have been out of work for some time,” Mayor Toni Harp said. “We would hope that with a multi-million dollar project like this, it could give people new work.”
Contracting with New Haven businesses would improve the entire local economy by giving residents expendable income, Harp added.
For construction to which New Haven is a party — meaning the provision of public funds or other types of subsidies — city policy sets a series of standards, including a percentage of construction jobs that must go to city residents, minorities and women. The city also requires a certain percentage of the value of contracts and subcontracts to go to firms owned by women, African-Americans and Hispanic-Americans, as well as to small businesses located within New Haven.
With full rights to the site and the requisite zoning allowances, Yale is not compelled to follow these rules. Still, the University plans to voluntarily meet the city’s hiring standard, which Matthew Nemerson SOM ‘81, the city’s economic development administrator, said requires that 25 percent of the jobs go to New Haven residents, 25 percent to racial minorities and roughly 7 percent to women.
Yale has typically not bound itself to the requirement about contractors and subcontractors. Indeed when it comes to the lead construction manager, the University plans to select a larger, regional firm, according to Associate Vice President of Facilities John Bollier. Nemerson said he would like to see the University move toward a commitment to distributing contracts to city businesses, and not just jobs to residents. Still, Bollier said that the University’s construction efforts seek to positively impact the city and its community.
“We strive to have our construction program benefit New Haven and its residents,” he said. “We have met or exceeded city guidelines in the past for New Haven resident and minority hiring and expect to be able to do so for the colleges.”
Additionally, the bid process for the subcontractors who will directly implement the work was designed to afford opportunities for as many of New Haven’s subcontractors as possible by requiring that a large scope of work be broken down into smaller “packages,” Bollier said.
Harp said she hopes whichever lead contractor the University chooses has experience complying with minority and small business hiring standards. She added that if Yale is serious about meeting city-recommended percentages, it should create a monitoring mechanism to ensure compliance. She offered the services of the city’s own Commission on Equal Opportunities.
In addition to the benefit of construction jobs, the project will also substantially increase the reimbursement the city receives from the state under Payment in Lieu of Taxes, which reimburses municipalities for nontaxable land.
Matthew Nemerson SOM ’81, the city’s economic development administrator, said the colleges represent the new mayoral administration’s “first big Yale project,” a learning opportunity for the city and the largest employer in town. Because of that identity, Yale should do as much as it can to support local employment, said Brian Wingate, vice president of Local 35 Union and a member of the Board of Alders’ community development committee.
“If Yale University wanted to show its true commitment across the lines of race and class — and really help minorities and businesses — it would use this project to put people here to work,” Wingate said, calling for a transparent partnership with contractors that sets high expectations for inclusion of minority and New Haven contractors.
Reverend Scott Marks, a co-founder of the Connecticut Center for a New Economy and leader of the activist umbrella organization New Haven Rising, echoed Wingate’s call, saying the city is in a “jobs crisis.”
The new colleges are entirely donor-funded.