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Stung By Costco, East Harlem Officials Hope Jobs will Come from Other Stores at East River Plaza

By DNAinfo Staff on February 9, 2010 12:48pm  | Updated on February 9, 2010 12:31pm

East Harlem officials got some answers from Costco about its recent layoffs, but many concerns remain.
East Harlem officials got some answers from Costco about its recent layoffs, but many concerns remain.
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By Jon Schuppe

DNAinfo Reporter/Producer

EAST HARLEM — Still stinging from layoffs at the neighborhood’s new Costco, public officials are shifting their focus on getting local residents hired at the other big-box stores that will be opening at East River Plaza.

Best Buy is scheduled to open March, and Target and Marshalls are expected to follow in July. Officials want to avoid a repeat of what happened last month, when Costco surprised them with news it was laying off scores of workers. The announcement came two months after the wholesale outlet opened with promises of jobs for people who lived nearby.

In the end, 132 people lost their jobs—not the 160 the company orignally reported. Of the 279 workers who remain, less than half are from the neighborhood, officials said.

That's considerably less than the 60 percent goal outlined in a “memorandum of understanding” with the shopping mall’s developer. The agreement, between Community Board 11 and Tiago, a partnership of Forest City Ratner Companies and Blumenfeld Development Group, is not legally binding. But officials say it’s key to maintaining a healthy relationship with the surrounding community.

“There’s a lot of work to be done still,” said Matthew Washington, the board’s chairman. “It seems Costco wants to establish itself as a good community partner but it remains to be seen how that entire project will work in our community.”

Last week, local officials got their long-awaited meeting with Tiago and Costco. The Feb. 2 debriefing was private, but board members discussed it publicly Monday night.

At the meeting, Costco representatives explained their hiring and firing decisions, officials said, but apparently did not provide a key piece of information — the number of East Harlem residents who lost their jobs.

The company broke down the layoffs into three categories: those who were not expected to stay on after the holidays, those who “did not meet work standards,” and those who the company wanted to keep, but couldn’t because the store’s financial performance did not meet expectations.

“We walked away from the meeting not angry,” said LaShawn Henry, who heads the board’s City Properties and Land Use Committee. "But we’re still trying to understand how Costco could have overshot their projections for hiring and had to lay off this amount of people. Especially with this economic downturn, you want to be on the mark.”

Many residents have said that they haven't shopped at Costco because the plaza charges for parking. Tiago says it needs the money to pay off loans that financed the project.

The layoffs were a blow to East Harlem because local officials gave the developer approval to have overnight deliveries in return for assurances that the stores at East River Plaza would hire people who live in the neighborhood, which has a 17 percent unemployment rate.

“We talked about 1,700 full time jobs,” Washington said. “And we haven’t seen on full time job up until this point, so we have some things to push on with the developer.”

A representative from Tiago did not immediately return a call on Tuesday seeking comment.

Now the board is turning its attention to Best Buy, which will hire 100 people when it opens next month. Officials say they want to improve the screening of applicants, which is done by STRIVE, a local non-profit that trains people trying to move from public assistance to jobs.

Local officials are also trying to get Costco and the other stores to participate in a program run by the city’s Human Resources Administration that pays certain workers’ salaries for six months.

So far, there have been no takers.