‘What is going on with Jefferson Arms?’ Unions raise concerns about project’s developer

By TIM ROWDEN
Editor

With St. Louis taxpayers’ money, the proposed developer of the Jefferson Arms in downtown St. Louis plans on using out-of-state contractors and workers, paying less than standard wages, and has no intentions of complying with the City’s minority and women inclusion standards.

Outraged, the St. Louis Building & Construction Trades Council, Eastern Missouri Laborers District Council and St. Louis-Kansas City Carpenters Regional Council issued a joint statement last week raising concerns about the Jefferson Arms redevelopment project and calling on the City of St. Louis to demand Alterra International, the developer, demonstrate how their plan to complete the project will be done successfully and safely.

Alterra already owes $60,000 in unpaid property taxes to the city, has a record in other communities of struggling to pay creditors within agreed upon timeframes and has even been sued by workers in Dallas, Texas for failure to pay overtime.

Alterra CEO Mukemmel Sarimsakci, who goes by Mike, or “Turkish Trump,” has plans to redevelop the 13-story Jefferson Arms building, at 415 N. Tucker Blvd., into a Marriott-branded hotel, single-family apartments and ground-level retail. But the project has been plagued by delays, and Sarimsakci has shown little interest in meeting the local hiring requirements stipulated as part of the tax incentives he received for the project.

The Councils have launched a website and produced a video highlighting the problems with the project. You can see the video at the website jeffersonarmsfacts.com.

The website highlights the more than $20 million in tax incentives that Alterra received for the project, including $17.4 million in tax-increment financing and $2.6 million in special sales tax districts on the site.

The website and video also note the more than $60,000 in property taxes Alterra owes to the city of St. Louis. The website launched on June 20. The video was posted to YouTube on June 26.

“The Jefferson Arms project has more than $20 million in tax incentives, and there are serious concerns that need to be addressed to protect workers and taxpayer dollars,” the three Councils stated.

Because the redevelopment will utilize $17.4 million in tax increment financing (TIF), Alterra has to use at least 25 percent certified minority-owned companies and at least five percent certified women-owned businesses.

“The incentives have important requirements for apprenticeships, hiring local workers and minority participation,” the three councils note. “To date, it is unclear how Alterra will meet those requirements — especially after area business leaders learned Alterra had already made deals with out-of-state contractors before bids were even requested locally.”

$60,000 IN UNPAID TAXES
Alterra currently owes the city more than $60,000 in unpaid taxes, has a track record of struggling to repay creditors within agreed upon timeframes, and has even been sued by workers in Dallas, Texas, for failure to pay overtime.

“These are serious red flags,” leaders of the Councils stated. “Projects with public investment need to benefit taxpayers, local workers and local contractors — not just the developer.”

CRITICAL FOR CITY TO DEMAND ANSWERS
“We believe it’s critical for the city to demand evidence of how Alterra intends to finance this project, and how they will meet the requirements of apprenticeship, local workforce hiring, and minority participation,” the Councils said.

“The proposal as written would make the Jefferson Arms Hotel a great addition to downtown St. Louis, and we’re excited by that possibility. But not at the expense of taxpayers, local businesses or worker safety. Alterra International must demonstrate their plan to complete the project successfully and safely.”

The Jefferson Arms is one of downtown St. Louis’ biggest buildings. Located at 415 N. Tucker, the building has sat vacant for almost two decades. It’s redevelopment has the potential to be a jewel in the City’s rebirth and revitalization, setting the standard for downtown development for decades to come. But only if it is done correctly.

BELITTLING HIRING REQUIREMENTS
But Labor leaders say Alterra and Sarimsakci, the project’s principal, have belittled the hiring and wage requirements attached to the City’s tax incentives, making clear in meeting after meeting that he:

• Does not intend to hire local workers – instead hiring an out-of-state demolition workforce.
• Does not intend to maintain area standards for wages and safety.
• Has no interest in complying with St. Louis minority and apprenticeship inclusion standards to maintain a local, diverse and trained workforce to ensure the project is built safely and efficiently and will provide area standard wages to local workers who reflect the City’s diversity.

After Labor leaders wrote a letter to St. Louis Mayor Lyda Krewson outlining their concerns, she arranged a meeting June 13 between Building Trades’ Executive Secretary-Treasurer John Stifler, Laborers’ District Council Business Manager Brandon Flinn, Carpenters’ Assistant Executive Secretary-Treasurer Don Brussel and Thomas Holsman – former CEO of the Associated General Contractors (AGC) of California – who represents GHJ Construction, a California-based unit of Beijing Construction Engineering Group, which Alterra has tapped as general contractor for the project.

They met in the Krewson’s office with Otis William – executive director of the St. Louis Development Corporation – and Rodney Crim of the St. Louis Economic Development Partnership.

‘A BAD LOOK FOR THE CITY’
Stiffler said the meeting went downhill quickly, noting the contractor did not have a list of subcontractors but indicated their intent to use non-union Cardinal Plumbing on the project and non-union out-of-state TEAM Enterprise out of Irving, Texas for building remediation.

Stiffler said TEAM Enterprise has a predominantly Hispanic workforce and has been named in federal lawsuits for failing to pay minimum wage and failure to pay overtime.

Although no contracts have been signed, Stiffler said Holsman said they have “handshake agreements” with the subcontractors and that they work projects with 50/50 union and non-union labor all around the country.

“I said, ‘Well, you might, and there are some jobs that are, but you’re not going to do it on this project, especially when you’re getting $2O million in TIF money from the city,” Stiffler said, adding that the then went on to explain the Building Trades’ Building Union Diversity (BUD) program and how that could help meet the requirements for local union minority and women workers on the project.

“They’re going to be bringing in a Hispanic workforce to take jobs that we’re training BUD students and all the trades are training women and minorities to do,” Stiffler said. “It’s a bad situation for the city.”