Wages a sore point for Durham hotel deal

jwise@newsobserver.comAugust 24, 2013 

Kevin Dick, director of the City of Durham’s Office of Economic and Workforce Development.

CITY OF DURHAM

When Kevin Dick, the city’s economic-development director, said Concord Hospitality’s proposed hotel would pay “approximately 50 percent” of its employees more than the city’s “livable wage,” he hit a nerve with some City Council members.

“How about the other 50 percent?” asked Mayor Pro Tem Cora Cole-McFadden. “They deserve a living wage no matter what the job is.”

Mayor Bill Bell and the other council members present said they were also concerned and, while the incentive eventually passed 5-1, several said the were voting Aye “reluctantly.”

The city’s current “livable” wage is $11.91 an hour and is going up to $12.17 Jan. 1. It is set, according to the city’s human resources department, to be 7.5 percent above the federal poverty rate for a family of four.

Some city contractors are required to pay the livable wage, but the standard has not been required for developers of hotels and other hospitality projects, Dick said.

“The market for those industries doesn’t pay that well,” he said.

Concord CEO Mark Laport said most of the company’s employees who start at low pay “get raised above that quickly through seniority and getting raises,” and that Concord has good employee benefits.

Still, “Market forces have us paying less than $11.91 at the beginning.”

Attorney Ken Spaulding said Concord had anticipated questions about its wage scales and had discussed pay during negotiations over the incentive.

“We wanted to deal with it proactively,” he said. “To have as much living wage participation as possible.”

One reason for being proactive, he said, was that Concord needed the incentive’s approval as quickly as possible.

“You all are very well aware of the Federal Reserve and what (Chairman Ben) Bernanke and others have said about possibly raising interest rates,” Spaulding said.

“This is a very tight deal ... and everything can be thrown out of whack if the interest rates go up. Timing is of the essence,” he said.

“We may be in Durham, we may be in North Carolina, but we are impacted by what goes on nationally.”

Wise: 919-641-5895

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