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Teamsters Challenge Subsidies Awarded to Clare Rose
GREAT NECK, N.Y. – Teamsters and local labor leaders sent a letter to the Town of Brookhaven Industrial Development Agency today, urging the agency to hold local Budweiser distributor Clare Rose accountable for violating the company’s subsidy agreement with the town. Clare Rose has received over a million dollars in property tax breaks from the Brookhaven IDA, but has violated the requirement that it maintain jobs at the facility built with public subsidies. The IDA has the power to deny Clare Rose future subsidies and recapture some subsidies already paid out.
The letter is signed by Teamsters Local 812 President Ed Weber, Teamsters Joint Council 16 President George Miranda, New York State AFL-CIO President Mario Cilento, and Long Island Federation of Labor President John Durso. The full text of the letter appears at the bottom of this press release.
“The Brookhaven IDA board can and should hold the company accountable for job retention,” the letter reads. “Clare Rose has clearly violated the letter of the agreement, and it has blatantly violated the spirit. Every time an IDA awards property tax breaks to a company, it means less resources for our schools, roads, and other essential public services. The cost is justified with the promise of good jobs and economic development for local residents. Clare Rose’s attacks on its local workers break that promise.”
In 2009, Clare Rose entered a subsidies agreement with the Brookhaven IDA for the construction of a new facility for the beer distributor, which will reduce the company’s taxes through 2030. In 2016 alone, Clare Rose’s property taxes were reduced 86%, from $567,040 to $82,207.
In exchange, Clare Rose was required to maintain at least 177 jobs at the facility, a requirement that the company broke when it decided to permanently replace its union workers. If Clare Rose fails to meet those job retention requirements “at any time,” the Brookhaven IDA may declare all unpaid rent and other payments immediately due and payable; terminate the company’s lease; revise and increase the company’s annual payments; and recapture a portion of the forgone taxes previously given to Clare Rose.
Workers at Clare Rose have been on strike since April 23rd, when the company unilaterally cut drivers’ wages by 30% and ended the workers’ pension. On the first day of the strike, the company wrote to the union, and sent letters to union members personally, notifying them that they were being permanently replaced. On Monday, the company reiterated the decision in a Facebook post by Clare Rose CEO Sean Rose’s wife, Michelle McLaughlin Rose, that stated, “Clare Rose is hiring permanent warehouse men, permanent driver’s [sic], and summer helpers.”
More and more Long Island stores and bars have run out of Clare Rose products as the strike gains momentum. Clare Rose is the sole distributor of Budweiser, Bud Lite, Heineken, Pabst, Blue Point, Greenport, and several other craft beers for Long Island. It is headquartered in East Yaphank with an additional facility in Melville.
The union negotiated with Clare Rose for months without progress before the highly-profitable company imposed huge wage and benefits cuts. The union said the strike against the company’s illegal actions will last until Clare Rose executives withdraw their draconian demands and agree to a fair contract with workers.
Teamsters Local 812 represents more than 3,500 Teamster families working in the beverage industry. Its members produce, haul, deliver, merchandise, and sell soda, water, beer, and sports drinks throughout the New York metropolitan area.
May 16, 2017
Fred Braun
Chair
Town of Brookhaven Industrial Development Agency
One Independence Hill
Farmingville, New York 11738
Dear Chairman Braun,
The Town of Brookhaven Industrial Development Agency (Brookhaven IDA), was created to support economic development and good jobs for the residents of Brookhaven. In 2009, and again in 2014, the Brookhaven IDA awarded tax breaks to Clare Rose, the local Budweiser beer distributor, for the construction of its headquarters and distribution facility in East Yaphank. In light of the company’s recent wage cuts and the replacement of long-time, local workers with out-of-state workers, we urge you to reexamine these subsidies and use the IDA’s powers under its agreement with Clare Rose to hold the company accountable.
Clare Rose received a PILOT – payment in lieu of taxes agreement – in 2009 that was amended in 2014 for a new facility. Clare Rose will pay less in property taxes from 2010-2030. In 2016 alone, its property taxes were reduced 86%, from $567,040 to $82,207. Additionally, from 2009-2010, Clare Rose received a sales tax exemption valued at $888,291. Clare Rose received an amended PILOT in December 2014 for the installation of solar panels. It received an exemption from sales tax valued at $315,000.
These subsidies were intended to support good jobs for Long Island families, but Clare Rose has done the opposite. In April 2017, Clare Rose unilaterally and illegally imposed wage and benefit cuts on its 130 Long Island workers. The company cut drivers’ pay by 30% and withdrew from the pension fund, the disability fund, and the salary continuation program. When workers went on strike to protect their livelihoods, the company notified Teamsters Local 812, and the workers individually, that the 130 workers would be permanently replaced. Soon thereafter, the company began replacing Long Island workers with out-of-state workers.
Under the agreement with Clare Rose, you and the Brookhaven IDA board can and should hold the company accountable for job retention. To meet its obligations to receive these subsidies, Clare Rose must maintain 177 full-time employees. If Clare Rose fails to meet those job retention requirements “at any time,” the Brookhaven IDA may declare all unpaid rent and other payments immediately due and payable; terminate the company’s lease; revise and increase the company’s annual payments; and recapture a portion of the forgone taxes previously given to Clare Rose.
Clare Rose has clearly violated the letter of the agreement, and it has blatantly violated the spirit. Every time an IDA awards property tax breaks to a company, it means less resources for our schools, roads and other essential public services. The cost is justified with the promise of good jobs and economic development for local residents. Clare Rose’s attacks on its local workers break that promise.
We urge the Brookhaven IDA to use all its power under the agreement with Clare Rose to hold the company accountable for cutting wages, cutting benefits, and taking jobs from Brookhaven and Long Island residents.
Sincerely,
Ed Weber
President
Teamsters Local 812
George Miranda
President
Teamsters Joint Council 16
Mario Cilento
President
New York State AFL-CIO
John Durso
President
Long Island Federation of Labor