City leaders investigate development receiving city funding

U Square causes controversy

CINCINNATI, OH (FOX19) - Three Cincinnati City Council members raised concerns Thursday that subcontractors working on the "U Square @ the Loop" development might not be properly paying workers or city taxes. According to the city, the project has received over $20 million in public funds.

Council member Laure Quinlivan says they were tipped off by unions. On Friday Wendell Young and Cecil Thomas stopped by the construction site near UC's campus.

"The people who are responsible are the folks at the top who are getting paid our tax money for the job," council member Laure Quinlivan said. "If they want to hire [subcontractors], that's fine but they are held responsible for those subs."

Wendell Young says some workers on site told him they were paid $500 for a 60 hour work week and 400 if they worked less.

"Obviously these workers, if what they say is true, are being exploited," Young said.

Council members questioned whether workers should be making "prevailing wages.

"Our position is: it's all one thing and you should be paying prevailing wage on all of it," Quinlivan argued.

On the other side, however, documents obtained by FOX19 from the City Administration show the state determined in September that prevailing wages are not required on the residential portion of the construction. A city spokesperson says those wages are only required for construction of the street, streetscape, public plaza, two parking garages.

Council members' second concern centers on whether some subcontractors were not paying city taxes.

"Our understanding is that there's no tax," Wendell Young said of his conversations with workers on site. "In fact we were told initially that many of them were being paid cash."

Council members argue any lost tax revenue is too much when finances are strapped.

"We cherish every dollar we can hold onto," Thomas said.

"I've been told that that dollar figure could be north of 500,000 dollars," Young shared.

After their visit, a city building inspector found three contractors working on the project were not properly registered with the city.

Two of those have since registered and the third has applied and is waiting for tax department approval. FOX19 attempted to contact those subcontractors, but were not able to reach anyone Thursday.

"What we've discovered at this particular location is just the tip of the iceberg in our city," Cecil Thomas said Thursday.

The council members stated they planned to continue investigating the issue, hold hearings, and even draft stricter regulations to make sure all contractors in the city are 'playing by the rules'.

A spokesperson for the U Square development says the general contractors are happy to be held accountable because "there's nothing we've done that's been inconsistent with the requirements of the city."

Meg Olberding, spokesperson for the City of Cincinnati says she is unable to comment on specific tax issues. She says if the city is aware of any individual or company with tax issues they do look into it, however, and take appropriate action.

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