Labor issues bedevil Great Wolf Resorts in Fitchburg

FITCHBURG More than $17 million is on the line for Great Wolf Resorts Inc., as the New England Regional Council of Carpenters' application to revoke state and local tax relief approved last spring for the company's latest resort in Fitchburg takes another step forward.

At the Economic Assistance Coordinating Council's meeting Sept. 24 at Worcester City Hall, the EACC agreed to create a special panel to review the carpenters union's request, which was brought after allegations surfaced that some contractors hired by Great Wolf to renovate and expand the former Holiday Inn and CoCo Key Water Park off Route 31 were paid in cash and did not carry workers' compensation insurance.

Great Wolf, based in Madison, Wisconsin, owns and operates a dozen family resorts in the U.S. and Canada under the Great Wolf Lodge brand that feature specialty restaurants, arcades, spas, fitness rooms and children's activity areas in addition to water parks at each resort. The Fitchburg resort opened in June.

In March, the EACC approved Great Wolf's application for a 20-year tax increment financing deal with Fitchburg granting the company a personal property tax exemption totaling $16,464,000 and another $680,000 in state investment tax credits.

In April, the carpenters' council sent a letter to Greg Bialecki, secretary of the state Executive Office of Housing and Economic Development, asking his office to rescind approval of that 20-year TIF after violations were discovered at Great Wolf three months earlier.

The Department of Industrial Accidents had issued eight stop-work orders to eight contractors working on the project for not having Massachusetts workers' compensation insurance, according to DIA documents.

The stop-work orders automatically place the contractors on the DIA's debarment list, the carpenters' council said, and allegedly make the company ineligible for TIF approval.

In Great Wolf's application for the TIF, the company agreed it would not knowingly hire subcontractors or other third parties that did not have workers' compensation insurance, and the company affirmed it had not hired subcontractors within the past five years that had been debarred by a government agency.

Great Wolf did not inform the EACC of the stop-work orders before the council's meeting to approve the TIF, the carpenters' council alleges.

The company also stated in its application that it would rely on local subcontractors for much of the construction work, but instead used multiple contractors from Wisconsin, where Great Wolf is headquartered, that employed out-of-state residents, the carpenters' council alleges. It says those workers were misclassified as independent contractors.

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Labor issues bedevil Great Wolf Resorts in Fitchburg