The Bella Vita project in downtown Medford, a six-story retail/office/residential complex designed to wrap around the city’s new parking garage, is on hold while a prevailing wage dispute is settled. (Mail Tribune / Jim Craven)

Downtown Medford's ambitious Bella Vita project is on hold pending a wage dispute before the state labor bureau, but the developer says construction could begin by June.

The Fair Contracting Foundation, which monitors prevailing wage contracts in Oregon and Washington, filed a complaint with the state Bureau of Labor and Industries BOLI in December against Cook Development Corp. of Portland, the developer, and the Medford Urban Renewal Agency for not providing a prevailing wage rate for a public project.

"It's really put a delay in things," said Terry Cook, the developer heading up the $25 million, six-story residential and commercial project between Main, Eighth and Fir streets. Bella Vita is designed to wrap around a new parking garage built by MURA.

The parking garage was built with prevailing wage rates for construction workers, while plans called for the private development portion not to pay prevailing wages. Prevailing wage rates, required by state law on public projects, can significantly boost the cost.

In a March 6 response letter, Rose Freytag, prevailing wage rate compliance specialist for BOLI, wrote that "the parking garage, residential space, office space and retail space all comprise a single structure and therefore, the entire project is subject to Oregon's prevailing wage rate law."

After receiving that letter, MURA representatives and Cook met with BOLI staff and decided the problem could be resolved by changing the agreements between the public agency and the private developer.

Jackie Rodgers, MURA's acting director, said the language just needs to be clarified.

"Some of the verbiage sounded like there may be a partnership in building Bella Vita, and there isn't," she said. Rodgers said MURA paid prevailing wages for the parking structure construction, which was a public project.

Christine Hammond, administrator of the wage and hour division at BOLI, said if the contracts are rewritten so that MURA and Cook are not integrated, BOLI will be satisfied.

"We're waiting to hear back from them," said Hammond.

Dan Thorndike, MURA's attorney, said part of the complaint included concern that the ground floor of the condos is the roof of the underground parking, linking the two structurally. But Thorndike said it's not much different than shared walls of urban buildings: It doesn't mean one building's owner owns the adjacent building.

He said MURA and Cook are ironing out the contract language.

"I feel pretty optimistic about this," said Thorndike.

Cook said having to pay prevailing wages can bump a project's wage costs by 50 percent. He said he hopes BOLI approves of the new contract and construction can begin in June.

"The crane has been ordered," he said.

Reach reporter Meg Landers at 776-4481 or e-mail mlanders@mailtribune.com.