In a stunning move, the Lansing, MI City Council has decided to put political payback to powerful special interests ahead of creating jobs for local residents.
This wouldn’t be THAT big of a deal, except the East Lansing-Lansing unemployment rate has jumped to over 10 percent.
Major development plans for downtown Lansing are now delayed – and may never happen – thanks to a last minute demand by Big Labor that the city council require wasteful and discriminatory project labor agreements (PLAs) as a condition of granting local financial incentives for these projects. After Lansing City Attorney Brig Smith gave council members an opinion that they could not legally require contractors to sign PLAs on the projects, the council failed to approve the tax incentives necessary for the projects to go forward.
Here are the highlights and the aftermath as covered by the Lansing State Journal (“Lansing Armory, Condo Incentives Rejected, Dealing Blow to Project,” 10/12/10) with our emphasis added:
Plans to build condominiums near the new Lansing City Market might be scuttled and a plan to renovate the Marshall Street Armory will be scaled back because the Lansing City Council voted down incentives to help finance the projects, developer Pat Gillespie said Monday night.
The votes followed a contentious discussion about project labor agreements — stipulations that all workers on a construction project be paid union scale wages and benefits. Councilman Derrick Quinney proposed last week that PLAs be required on Gillespie’s projects.
Earlier in the evening, City Attorney Brig Smith said the city couldn’t legally mandate PLAs in Gillespie’s projects. Even so, the council listened for more than an hour to some residents and union members who supported the PLAs, and many residents and business people who didn’t, before taking a vote.
The votes on the armory project and the marketplace plan were both deadlocked, which is essentially the same as a vote against the measures. Council members Quinney, Carol Wood, Brian Jeffries and Eric Hewitt voted against the incentives, and A’Lynn Robinson, Kathie Dunbar, Tina Houghton and Jessica Yorko voted for them.
“I’m stunned. This is mind-boggling,” Gillespie said after the vote on the armory project. “My blood pressure is at 9,000.”
The vote against Gillespie’s project was “ludicrous,” Dunbar said, and others on the City Council and some supporters of Gillespie suggested that the naysayers based their vote on the PLA debate, even though no PLA agreement was attached to the proposals.
“Of course that was the reason,” Trezise said.
After the votes, union supporters high-fived each other and gave fist bumps, while Gillespie supporters gathered in the lobby to talk about what had just happened.
Some said that the votes Monday night sends a chilling message to others who might be considering development in Lansing.
“What am I supposed to tell developers now?” Trezise said.
“What this vote says is, jobs and investment are not important to the city right now.”
This vote sends the message that if jobs can’t be funneled to union hiring halls exclusively, then the Lansing City Council doesn’t want them. Never mind the fact that 75 percent of Michigan’s private construction workforce chooses not to join a labor union. This leaves the vast majority of local construction workers asking themselves why the Lansing City Council wants to deprive them of a potential opportunity to work.
The editorial board of the Lansing State Journal agrees and said so in an Oct. 11 editorial (“Approve Tax Incentives; Nix PLA Mandate,” 10/11/10). Here is an excerpt, with our emphasis added:
The Lansing City Council’s sudden interest in Project Labor Agreements, as they relate to the approval of tax incentive offers, has council members – and the city itself – on a disturbing, even dangerous, trajectory.
At immediate issue tonight are approvals for tax incentives for two development projects: the Marshall Street Armory and the Marketplace site across from Cooley Law School Stadium. Both projects have gained support from the council before. And they should get positive votes again tonight.
Last week, though, the possibility emerged that a council bloc would try to tie the city’s approval to whether developer Pat Gillespie and his Gillespie Group accept PLAs on the projects for area trade unions. This would be part of a sweeping new city policy to require PLAs (agreements by private firms to follow certain wage and hiring practices preferred by unions) on all new major construction projects that seek city tax help.
The council can’t even require that city employees paid with city tax dollars live in the community that employs them. That’s awfully shaky ground from which to start lecturing private employers about their practices.
Gillespie, of course, doesn’t gain if a project stalls. He spent $1.6 million to buy the old City Market site to house his Marketplace development. He bought the armory site. He’s trying to do business in Lansing, but he doesn’t have to do it in the capital city – as ACD.net head Kevin Schoen warns in his message to the council (at right).
Lansing is in a competition. Every large community has tax incentive programs and a willingness to use them. A PLA-only policy would make Lansing less competitive, less likely to land major new projects.
Shelve this bad idea and approve the incentives.
The people of Lansing would have been better served if the City Council had taken the LSJ editorial board’s advice.
If you live in the Lansing area, contact your City Council representative and tell them that your community needs jobs, not special interest handouts.