Despite steep opposition by labor leaders, the construction of a controversial 27-story residential and retail building in San Jose’s downtown core will go forward.

Labor leaders denounced the City Council’s late Tuesday night approval of the building as yet another green light for a large development that received substantial fee waivers without assured wage protections for its construction workers.

The development — submitted by developer KT Urban at 600 S. First St. — was the first such project passed by the council under the city’s weakened Ellis Act requirements.

The project — dubbed Garden Gate Tower — will include 4,840 square feet of retail space on the ground floor, 290 condominiums, 232 parking spaces and open space on the building’s rooftop. The condominiums will be a mix of studios, one-bedroom and two-bedroom units and include 28 affordable units, according to staff. The development will replace an office building and an apartment building with four rent-controlled units currently on the property.

“In the depths of a housing crisis, we have an opportunity to increase the number of rent-controlled apartments by a factor of seven while adding nearly 300 new apartments to our housing inventory,” said Mayor Sam Liccardo after the 9-1 vote, with Councilmember Maya Esparza dissenting. Councilmember Dev Davis was absent.

“This is an opportunity we should not take lightly.”

Under the city’s old Ellis Act policy, developers who tore down a rent-controlled apartment and rebuilt had to either designate half the new units for rent control or the same number as those removed, whichever was greater. But in a divided 6-5 vote last month, the council decided to cap the 50 percent rent-control requirement to seven times the number of withdrawn units.

In the case of Garden Gate Tower, KT Urban could have been required to provide 145 rent-controlled units under the old policy. Instead, the developer has promised to provide 28 rent-control units, as now required.

Jeffery Buchanan, director of public policy for Working Partnerships USA, said the “rollback of the Ellis Act” means projects like this will only serve the wealthiest in San Jose.

“I think when we look at this particular project and likely projects that follow after it, we’re going to see the result of policy-making where we set ourselves back in producing affordable housing, protecting our tenants and preserving our affordable housing stock,” Buchanan said during the meeting.

But a city-commissioned study earlier this year found that typical high-rise developments in downtown San Jose are not financially feasible and would not receive the necessary financing in order to build a project without amending the Ellis Act and offering developers a reduction in city fees.

So in September, the city voted to extend a longstanding fee waiver program that cuts construction fees in half for market-rate downtown housing towers, which proponents argued was critical for downtown high-rise projects like the Garden Gate tower to get built.

The major sticking point for construction workers is that a new prevailing wage ordinance passed by the council earlier this summer doesn’t apply to builders of downtown high rises, where construction of the project likely wouldn’t happen without a reduction of fees from the city.

Union members and advocates who spoke Tuesday night voiced concern that the council was moving forward with another downtown high rise before putting an ordinance in place that protects workers with not only a prevailing wage but also local hiring guidelines, along with guidelines for apprentice programs and hiring disadvantaged workers.

“We are not asking the city to build a rocket and fly to Mars, we are not asking the city to solve global warming or answer which came first — the chicken or the egg,” Tim Saxton, a member of the IBEW Local 332 chapter, told the council. “We are asking that construction workers not be exploited by shady developers and contractors and for the city to do what it promised it would do and enact a wage theft protection ordinance.”

The prevailing wage ordinance passed this summer came the same day as the contractor on the downtown high-rise Silvery Towers was sentenced to more than eight and a half years in prison for forcing immigrants to live in a squalid warehouse and work without pay.

The developer on the Garden Gate Tower, KT Urban, was previously the developer of the Silvery Towers property but sold it in 2014 before the convicted contractor was ever involved. Still, some labor groups raised concerns about the company’s relationship with other problematic contractors.

In November 2016, KT Urban President Ken Tersini wrote a letter of recommendation for Iron Mechanical, a contractor that installed heating and plumbing for KT Urban’s One South Market high rise project in downtown San Jose. The letter came just months after Iron Mechanical settled a wage theft lawsuit that alleged the contractor failed to pay workers overtime and provide them with legally required meal and rest breaks.

At Tuesday night’s council meeting, KT Urban’s co-president Mark Tersini denied any connection to the issues at Silvery Towers or with employees of Iron Mechanical.

“There’s no connection — never has been and never will be any connection to wage theft,” Mark Tersini told the council.

In response, the council passed a memo by Councilmember Sergio Jiminez that directs city staff to provide a progress report to council in the coming months on the status of the city’s wage theft prevention policy, including draft language for a recommended policy and timeline for enactment.

“As we move forward with residential development during our housing crisis, we cannot be absent-minded about protecting the rights of the workers who build our much-needed housing units,” Jimenez wrote in his memo.

The project site currently includes some historically recognized landmarks, including a Victorian-era four-unit apartment building, the old masonry Garden City Construction property, and an art deco sign that says City Center Motel.

The city is working with Habitat for Humanity on a possible sale and relocation of the apartment building and plans to work with the developer to find a home for the sign. The developer expects to incorporate the old masonry Garden City Construction facade into the ground floor of the building.