The Truth About Project Labor Agreements

On Feb. 6, the Minnesota Vikings signed an agreement with the Minnesota Building and Construction Trade Division (BCTD), AFL-CIO to require contractors to sign a project labor agreement (PLA) on the upcoming construction of their new stadium. This will ensure that nearly all of the construction jobs on the project will go to union workers—leaving the 70 percent of the state’s construction workforce that chooses not to join a labor organization out in the cold.

With Minnesotans likely to pick up at least some of the bill for this project, this PLA will keep thousands of hardworking taxpayers from being able to compete effectively for a project funded by their own tax dollars.

Associated Builders and Contractors Minnesota Chapter President Bob Heise expressed his thoughts on this discriminatory PLA in an op-ed published by the Star Tribune on Feb. 14. Here are the highlights:

These PLAs are bad public policy. In Minnesota, three out of four construction workers are employed by contractors not affiliated with any union.

Since PLAs effectively preclude open-shop companies from working on a stadium project, they discriminate against the majority of workers who choose not to join a union but whose hard-earned tax dollars may go toward funding this project.

Organizations like the Associated Builders and Contractors would never advocate a public policy that says “union contractors should be banned from doing public work.” That would be as offensive to us as it is when the unions advocate policies that shut out merit shops.

If the unions really are as efficient as they claim, they wouldn’t need to advocate for public policies that give them an artificial competitive advantage in projects like stadiums.

Several minority and women’s groups have been vocal opponents of union-only agreements

The National Association of Women Business Owners, National Black Chamber of Commerce and the Latin Builders Association are among the groups that have gone on record opposing PLAs. The National Black Chamber of Commerce described PLAs as anti-free-market, noncompetitive and, most of all, discriminatory.

Basically, the PLA deal was sold to the Vikings on the basis that they could reduce costs and ensure “labor peace.” Both propositions are erroneous.

By limiting the bidding pool to union-only contractors, you reduce healthy competition and drive up costs, almost guaranteeing wasteful spending of taxpayer dollars. The unions also agreed not to strike on the Vikings stadium project in exchange for the concession that the PLA be signed.

They contend this saves money by avoiding costly delays and keeping labor peace. The real meaning of labor peace is that, since only union labor will be working on the stadium, unions will not engage in strikes. This guarantees protectionism for a small part of the construction market.

These restraints imposed by the Vikings are political decisions, which have no economic rationale. The real losers are the taxpayers across the state who have chosen not to be affiliated with a union. Their tax dollars will subsidize a stadium that they will not be allowed to build.

It’s going to be difficult to gain legislative support to fund a Vikings stadium when the Vikings can only support some fans some of the time.

Big Labor frequently targets large-scale stadium projects for PLA mandates for several significant reasons. Stadium projects fit union bosses’ narrative that PLAs are required for large, complex projects. Additionally, because stadium projects are large, unions have the opportunity to put large numbers of members to work when they are covered by a PLA. Most importantly, unions target large stadium projects for PLAs because they are often built in cities controlled by politicians supported by Big Labor. Unions attempt to leverage this political muscle to ensure that PLAs are mandated on stadium projects.

Unfortunately for union bosses, PLA mandates have a public record of poor performance on stadium projects. Cost overruns, delays, safety issues and other problems have plagued stadium construction projects covered by PLAs.

Here are the highlights from the 2011 edition of Maury Baskin’s publication, Government-Mandated PLAs: A Public Record of Poor Performance.

Miller Park – Milwaukee, Wis.

• This stadium, built under a government-mandated PLA, was supposed to be completed in time for opening day of the 2000 season. Instead, the new stadium was not completed in time to be used at all during that season due to construction delays, which included a fatal accident involving union workers.
• In August 1999, the PLA-mandated construction came to a halt when a crane collapsed onto the stadium, killing three workers and injuring three others.

Gund Arena – Cleveland

• Original costs were estimated at $118 million. After the governing agency entered into a PLA, the final cost came in at $148 million—$30 million (25 percent) more than estimated.

Cleveland Browns Stadium – Cleveland

• The cost of the Cleveland Browns’ stadium, also constructed pursuant to a government-mandated PLA, was $21 million higher than the estimate in 1998. The union-only bids for the stadium were millions of dollars higher than the estimates.
• The final cost of the stadium was reported to be at least $61 million more than the original estimate, an increase of 25 percent.

Comerica Park – Detroit

• A PLA was signed and, upon completion of construction, costs were reported to be in excess of $320 million. The original cost estimate was $260 million in 1999.
• Four female African-American carpenters sued the Stadium Authority for discrimination and failure to provide promised job opportunities to minorities and women on the ballpark project.

Nationals Park – Washington, D.C.

• Construction of a new Washington Nationals baseball stadium under a government-mandated PLA ran significantly over the budgeted $611 million. By contrast, Baltimore’s nearby Camden Yards and Washington’s own FedEx Field (football) were built without any PLA requirements, with no cost overruns.
• The owner of the Washington Nationals initially refused to pay $3.5 million in rent because the PLA project was not “substantially complete” on the date the city was required to hand over the stadium.
• The PLA called for half of the journeyman construction hours to be performed by city residents, a high percentage of whom are minorities. A subsequent study revealed, however, that city residents only performed 27 percent of the work. Targets to have all new apprentices be city residents and to have their work constitute at least one-fourth of the hours dedicated to construction also fell short.

Lucas Oil Stadium – Indianapolis

• After using a $50 million contingency fund, this project was still $75 million over budget. (Read more about this project)

Citi Field – New York

• The New York Post reported in 2009 that the Mets’ new Citi Field, built under a PLA at a cost of $850 million, was “riddled with construction defects.” The defects included large chunks of concrete and granite and a neon sign falling from the stadium, as well as numerous problems with elevators, electricity and flooding of various stadium sections.

Safeco Field – Seattle

• In Seattle, the PLA construction of Safeco Field for the Seattle Mariners experienced very high cost overruns in 1998. The original estimate for the new stadium was $320 million. The stadium’s final price tag was in excess of $517 million, a 60 percent increase. Safeco Field was completed months later than scheduled as the stadium could not be opened in time for the beginning of the 1999 season, as had been promised, and the Seattle Mariners could not begin play at their new home until July 1999.

There have been other problems with stadiums not in the report.

The New Yankee Stadium – New York

• The NY Daily News reported that the community benefits agreementcontaining a PLA on the new $1.3 billion Yankee Stadium has been a “joke” and a failure:
  

  Then there are all those promises about contracts and construction jobs.

  The team acknowledges that more than 3,900 people have applied for construction work at the stadium. More than 80% didn’t belong to any union. Since you must be a union member to work on the site, the Bronx residents most in need of a job have been shut out of the daily workforce of 1,200.

  As for the union employees, a lot of the craft unions have been “checkerboarding,” according to one source who has worked on the stadium project from the start.

  “They take members who live in the Bronx but work at some other site in Manhattan, then they transfer them to the stadium just to boost the numbers. That doesn’t add any new jobs for Bronx residents.”

Construction is a complex, expensive and dangerous industry. Unfortunately, local hire failure, construction delays, cost overruns and even tragic accidents can happen.

It is also important to note that large stadium projects have been built without PLAs.  For example, on the new Dallas Cowboys Stadium, union and nonunion workers alike worked side-by-side to build the project on time and on budget without a PLA. The same can be said for the Redskins home, FedEx Field (formerly Jack Kent Cook stadium); the Baltimore Ravens stadium; and the Bank of America Stadium in Charlotte where President Obama is scheduled to deliver his DNC speech this summer.

Here at TheTruthAboutPLAs.com, we reject the contention that a PLA mandate will make large-scale projects more efficient, safer or more likely to guarantee job opportunities to women and minorities in the construction industry. PLAs simply guarantee that contractors have to play by Big Labor’s rules in order to work on a project.

For the people of Minnesota, we hope the stadium is finished on time and on budget as soon as the building plans are finally approved. Minneapolis is a great football town and it deserves a first-class stadium; just don’t think it is going to get one just because the union bosses say so.