The expanded Cossetta Italian Market and Pizzeria will receive a city subsidy package of about $2 million without being required to pay a living wage to workers.

The St. Paul Housing and Redevelopment Authority, made up of the City Council, voted 6-1 Wednesday to give eatery owner Dave Cossetta a break from paying the wages required of businesses that receive a subsidy of more than $100,000. The authority approved a $1.7 million forgivable loan and $387,000 in tax-increment financing.

The majority of members argued that Cossetta's 100-year-old family restaurant is a landmark attraction. Cossetta, many noted, is not a "New York developer" who comes in, receives a subsidy, pays sub-standard wages and leaves town.

The $10 million expansion will nearly triple the size of Cossetta's, adding seating, a rooftop restaurant, wine cellar and bakery. The eatery, downtown on West 7th Street, is expected to provide 140 construction jobs and 100 new full-time-equivalent positions by 2015, according to documents submitted by Cossetta. Many cited the jobs as a compelling reason for the wage exemption.

A living wage is 130 percent of federal poverty level for a family of four, $13.98 an hour for 2011. Or it can be 110 percent, $11.82, if the employer provides basic health insurance, according to the city Department of Planning and Economic Development.

Cossetta's has 69 full-time workers and 68 part-time. With a recent 3 percent raise, all but nine full-time employees earn the living wage and the others are "very close," Thune said.

Cossetta told the council that of the new jobs, 75 percent will be full time and at or near living wage. He noted that most restaurants have more part-time than full-time employees, but that is reversed at Cossetta's. "Our wages are above the national average and the Minnesota average," he said.

Only Russ Stark voted against giving the wage reprieve. "On what basis would we be able to deny the next waiver if this one passes?" Stark asked.

Among those who wanted the living-wage requirement was Jim Ivey, a Lowertown resident and software business owner who attended a recent labor rally at the state Capitol. "I want somebody to be able to afford to live in the city," he said. "I would like to know what we meant last week when we marched to the Capitol and said, 'We are one.'"

Voting to allow Cossetta to pay his workers less than a living wage were: Harris, Thune, Kathy Lantry, Melvin Carter, Dan Bostrom and Lee Helgen.

Rochelle Olson • 612-673-1747