WASHINGTON — Plans for the $7.8 million renovation of the Franklin Building in downtown Watertown are a little cloudy, the project's organizer said, because federal wage requirements for construction workers have driven up the cost.

Neighbors of Watertown, the nonprofit group in charge of the project, is looking for ways around a federal requirement that workers be paid prevailing wages — and is asking for help from Sen. Hillary Rodham Clinton, D-N.Y., whose receptiveness has surprised some labor leaders.

At the heart of Neighbors of Watertown's complaint is the law that dictates that projects funded through the federal government — in this case, $350,000 from the Department of Housing and Urban Development to renovate the three-story historic building — pay workers regional prevailing wages.

Mrs. Clinton's sympathy for Neighbors of Watertown's argument raised eyebrows with some labor leaders, who have seen her as a reliable ally. She said in an interview that she supports the law, called the Davis-Bacon Act.

Neighbors of Watertown Executive Director Gary C. Beasley told Mrs. Clinton at a meeting of community leaders in Watertown last week that the wage requirements make renovation of old, often vacant downtown buildings into housing less financially feasible. Reporters attended the session.

He has asked Mrs. Clinton's office to look into changing the federal rules so that small housing-related projects with just a fraction of federal funding are exempt. He said he also is seeking a waiver from HUD on the wages at the Franklin Building, site of the former YWCA, although an agency spokesman said such waivers are unusual because the requirement is written into law.

Neighbors of Watertown is using money from the Community Development Block Grant program, funneled through New York state's Office of Small Cities. The bulk of the project's funding comes from New York's Division of Housing and Community Renewal, and Mr. Beasley said in early July that 90 percent of the necessary funding had been secured.

While Mrs. Clinton was not familiar with the specifics of the Franklin Building, she appeared open to Mr. Beasley's complaints and said her staff would work on the issue.

"We'll see if there's any way you can get relief," Mrs. Clinton told him.

In an interview after the meeting, Mrs. Clinton said that she supports the Davis-Bacon law but that agencies may grant waivers under certain circumstances, such as when a project has just a small percentage of federal funding.

And in a statement this week, after further inquiries by the Times, her office said she is committed to helping Neighbors of Watertown fulfill its mission of returning blighted buildings to productive use.

"Members of the senator's staff have been in touch with representatives at the organization to assess how Senator Clinton can help Neighbors of Watertown move forward with their current projects in a way that benefits all of the parties involved," the statement read.

Mr. Beasley, in an interview, said that his and other small-scale housing developers confront the issue regularly and that the Franklin Building is a good illustration. There, the project's main goal is to provide rental apartments, although street-level retail space is being renovated and cleared of hazardous materials.

The project was bid out as residential construction, so Neighbors of Watertown expected to pay workers the lower, residential construction rate under federal law, Mr. Beasley said.

Later, it discovered that the street-level portion of the project would be subject to much higher commercial wage rates, he said.

The wage requirements boosted the project's cost by $800,000, Mr. Beasley said. But the federal share of the project's cost is about 4 percent, he said.

"I think in another context it'd be called an unfunded mandate," Mr. Beasley said. "The purpose of our project is residential. That's what we do."

In the past, Mr. Beasley said, Neighbors of Watertown has avoided the issue by using federal funds only for property acquisition or other purposes that do not trigger Davis-Bacon. Generally, he said, prevailing wages in the north country are lower than those dictated by the Davis-Bacon law, which are influenced by higher wages in New York City, for instance.

"It's something we're always trying to juggle and finagle," he said.

Union representatives said they were surprised to hear Mrs. Clinton was receptive to working around the wage requirement. Davis-Bacon requirements are a key protection of workers' wages on federal projects and are a common battleground for pro-union and anti-union forces in Congress. Every year, opponents of the law try to exempt programs from them, and pro-labor lawmakers brush them back.

Labor leaders say the prevailing-wage laws do more than guarantee bigger paychecks to workers, by providing more highly qualified workers. That should be important when renovating older buildings such as those in downtown Watertown, said Dennis C. Affinati, chairman of the north country's building trades council and business manager of Local 810 of the International Brotherhood of Electrical Workers in Watertown.

"The building trades would certainly oppose any exception to Davis-Bacon," Mr. Affinati said. "Whenever you start chipping away at a law like Davis-Bacon, want an exception here, want an exception there, it waters down the law."

One Republican lawmaker who has stood with unions on the Davis-Bacon law is Rep. John M. McHugh, R-Pierrepont Manor. A spokeswoman said Neighbors of Watertown has not sought his help on the Franklin Building wages.

As for Mrs. Clinton, Mr. Affinati said, "She's always stood pretty strong, at least in our presence, in favor of Davis-Bacon."