With a pivotal Louisville Metro Council vote related to the proposed $50 million soccer stadium only hours away, Louisville City FC leaders and a workers rights group remain at odds over the minimum wage that workers in the soccer district should be paid.
A club official told Insider that LouCity FC already had taken the unusual step of establishing a wage floor for the entire development and was investing with the Urban League to help lift Louisvillians out of poverty.
However, a spokesman for Jobs with Justice said the wage floor was too low and would continue to trap people in a cycle of poverty.
On Thursday, the council plans to vote on whether to purchase about 37 acres of land in Butchertown for $24.2 million and spend up to $5.8 million for environmental remediation and infrastructure. In a proposed lease-to-own deal, LouCity FC plans to acquire the land for $14.5 million over 20 years.
Owners of the second-division soccer club plan to build a $50 million, 10,000-seat stadium for an eventual bid to join Major League Soccer.
The club is playing its home games at Slugger Field, and is losing money each match, in part because it is missing out on revenue from concessions and stadium naming rights. The club will host a second-round playoff match at Slugger at 7:30 p.m. Saturday.
Club and city leaders have said they expect the stadium to spur additional private investments of about $130 million for hotels, restaurants and offices.
The council on Thursday also plans to vote on a proposal to ask the state to create a tax increment financing district, which would funnel some of the state tax dollars collected on new investments in the district to help pay for the stadium.
While two council committees have approved issuing $30 million in bonds and asking the state to create the TIF district, some council members said this month that they thought they were being rushed into a decision, prompting the council to postpone the matter for two weeks until Thursday.
Wage floor not enough for workers rights group
The club on Tuesday said that it would pay all of its employees in the development at least $12 per hour and require that other employers in the development would have to pay their employees at least $10 per hour.
“We’re extremely proud to offer what we’re offering,” Brad Estes, the club’s executive vice president, told Insider Wednesday.
He also said that the club’s actions are, for Louisville, unprecedented.
“No one has ever done what we’re doing,” he said.
The club on Wednesday also announced that it would donate $125,000 to the nonprofit Louisville Urban League to provide skills training to people who are unemployed or underemployed to help them achieve self-sufficiency.
Those actions show the club owners’ dedication to their community, Estes said.
However, Richard Becker, co-chair of the Kentucky Chapter of Jobs With Justice, said that the club was asking for about $60 million in state and local tax dollars but wanted to pay wages that would continue to trap people in poverty, which would require even more support from taxpayers.
“The wages … are poverty wages,” Becker told Insider on Wednesday.
Becker said that the city’s leaders like to look up to larger metropolitan areas in their pursuit of amenities and sports franchises, but council members also should look at how those area areas pay higher minimum wages and protect workers’ rights to form unions.
“We’re asking our city leaders to take a more holistic approach,” Becker said.
But Estes said that requiring a minimum wage in the district of $15 would undermine the whole project’s economic viability. Wages of that level would reduce the number of businesses who would want to locate in the district, he said.
It’s tough to land a hotel developer or restaurant if they have to pay wages that are significantly higher than those paid by their competitors outside of the district, Estes said.
Becker said, “If your business model falls apart when you have to pay a family sustaining wage, it’s probably not a good business model.”
But Estes said that less development in the district would harm the community as well.
If the district sees less development, that means fewer jobs, which would lower taxes collected by metro government, he said. In addition, Estes said, less development would mean fewer state tax dollars — and, even more critical, would reduce the club’s share of state TIF dollars, which would inhibit the club’s ability to pay its $14.5 million lease payment to the city.
Becker said he would spend much time in the next few hours to continue to improve the deal, saying that the proposed project still had the potential to be good for Louisville.
Councilwoman Barbara Sexton Smith, who sponsored the soccer legislation, praised both sides for their efforts and for coming together to reach an agreement.
“It’s a great thing for our community,” she said
Wages in the stadium district will be “well above” wages paid at other sports venues in the city, Sexton Smith said, and also would be above the city’s former minimum wage, which was struck down by the Kentucky Supreme Court.
In addition, the councilwoman said, the agreement draws a line in the sand. For future development deals involving the city, Sexton Smith said she would use the soccer stadium wage agreement as a basis for negotiations.