The first act introduced into Congress by Republican Congressman Chris Jacobs, a millionaire real estate developer and nephew of Buffalo’s powerful Jacobs family, is an attempt to limit the liability of developers and property owners for workplace injuries sustained by construction workers in New York State.
Jacobs’s bill would preempt New York’s Scaffold Law on construction projects receiving federal assistance. While it would represent a major coup for the state’s powerful real estate industry, the bill could also benefit Jacobs personally. Jacobs owns a portfolio of properties in Buffalo worth as much as $33 million and he has received hundreds of thousands of dollars in campaign donations from the real estate industry.
Throughout the special election that seated Jacobs in Congress and his on-going general election campaign, Jacobs has embraced and leaned into the divisive political style of President Donald Trump, whose own wealth comes from a real estate empire built on his family fortune.
Now, in another symmetry with Trump, Jacobs has made his first Congressional priority enacting policy that may redound to his personal benefit as well as that of his corporate backers.
An end-run around key New York workplace safety law
Chris Jacobs was sworn into Congress on July 21, 2020 after winning a special election prompted by the resignation of former Congressman Chris Collins, who pled guilty to felonies related to insider trading. Jacobs, a former Erie County Clerk and New York State Senator, is the nephew of Buffalo billionaire Jeremy Jacobs, the owner of the multinational concessions and casino operator Delaware North and the Boston Bruins NHL franchise. To win his seat, Jacobs defeated Democrat Nate McMurray, who is himself a corporate attorney for Delaware North.
After getting his Congressional career off to an ignominious start by – accidentally, according to Jacobs – casting his first ever vote against funding for the US Postal Service, Jacobs’s first legislative act was to introduce the “Infrastructure Expansion Act of 2020” on September 11. Notwithstanding the bill’s name, Jacobs’s act does not fund or expand infrastructure in any way, but rather shields building owners and general contractors from financial liability from workplace injuries suffered by construction workers.
The bill is aimed squarely at New York’s Scaffold Law, a labor protection that holds property owners and construction employers responsible for ensuring that construction worksites above ground level “shall be constructed, placed and operated as to give proper protection to a person so employed.” The Scaffold Law is an early workplace protection law passed by the New York legislature in 1885 in response to frequent death and injury sustained by construction laborers working in unsafe conditions.
New York’s real estate industry has long sought to repeal the Scaffold Law, which can cut into developers’ profits by requiring increased spending on safety measures. It also can expose developers to financial liability when a death or injury occurs, which can increase their insurance costs. For decades, developers have sought to shift financial responsibility for workplace injuries to workers themselves.
Repealing the Scaffold Law is a perennial component of the lobbying agenda of powerful lobbying groups representing real estate developers and construction employers such as the Real Estate Board of New York and Associated Builders and Contractors. Regional and state chambers of commerce and corporate front groups like the Partnership for New York City, the Business Council of New York, and Unshackle Upstate have also prioritized efforts to kill the Scaffold Law.
Jacobs’s bill is an attempt to use the federal government to make an end-run around a New York worker protection that the real estate industry has, so far, been unable to kill at the state level. If passed by Congress and signed into law, it would drastically limit the reach of the Scaffold Law by exempting any project “for which Federal financial assistance is used, directly or indirectly.”
The “Infrastructure Expansion Act” was initially introduced in 2017 by former Republican Congressman John Faso, formerly of New York’s 19th Congressional District, and was backed by Jacobs’s predecessor in the 27th District, Chris Collins. Faso was unseated in 2018 in a close race with Democrat Antonio Delgado, while Collins resigned under the cloud of corruption related to federal insider trading charges to which he pled guilty in October 2019.
Jacobs’ multi-million dollar portfolio of buildings
Eliminating the protection afforded by the Scaffold Law would be a major victory for New York’s real estate industry, which has been a critical supporter of Jacobs’s political career. Moreover, Jacobs – himself a real estate developer with a multi-million dollar portfolio in the city of Buffalo – would also personally benefit from the repeal, creating the appearance that Jacobs is using his office for personal gain.
Through his firm Avalon Development and a network of LLCs, Jacobs has reported stakes in ten buildings in downtown Buffalo. In his personal financial disclosure filed with the House of Representatives Clerk in September 2019, Jacobs reported that his commercial and residential real estate holdings in Buffalo were worth as much as $33 million. That year, Jacobs reported earning as much as $470,000 in rental income from these properties.
In a more recent disclosure made in May 2020, Jacobs did not list all the buildings owned by Avalon Development, but reported that his ownership stake in the firm was worth as much as $25 million and that he received up to $1 million in rental income from 95 Perry Street, a building in downtown Buffalo where several state and local government agencies are tenants.
In addition to being a developer himself, Jacobs has been backed by New York’s real estate industry throughout his political career.
According to data from the Center for Responsive Politics, the real estate industry is the top donor to Jacobs’s congressional campaign, giving at least $116,553 on top of $511,000 in self-financing from Jacobs himself. In 2018, the Real Estate Board of New York was the third top donor to Jacobs’s state senate campaign after the state Republican Party and contributions from Jacobs himself, according to Ballotpedia. We reported in 2019 that Jacobs received at least $70,188 in New York State campaign contributions from beneficiaries of Buffalo’s 485-a tax break for real estate in addition to $30,666 of his own money contributed to his campaign.
Even if the Republican Party maintains control of the White House and Senate in the 2020 election, the “Infrastructure Expansion Act of 2020” has little chance of passing the Democratic Party-controlled House of Representatives. Regardless, the fact that Jacobs’s first legislative priority was to introduce a bill to benefit his backers in the real estate industry – and likely himself – is deeply concerning.