The Truth About Project Labor Agreements

In response to the Lansing City Council’s recent decision to put union handouts ahead of job creation, Michigan developer Pat Gillespie is considering legal action against the city.

Last week, several members of the Lansing City Council demanded that Mr. Gillespie require contractors to sign wasteful and discriminatory project labor agreements (PLAs) on the over $20 million downtown development project planned for the Lansing City Market.  After refusing to require a PLA on the project, the City Council failed to grant the project the tax incentives needed to move the development forward.

It is now being reported that Gillespie is considering legal action against the council.  Here is an excerpt from the local paper, City Pulse’s website (“Kids in the Hall,” 10/19/10):

Developer Pat Gillespie is exploring the option of suing the city over the City Council’s decision last week to block tax incentives for his $23 million Market Place project downtown.

Gillespie’s attorney John Fifarek said “all options are being considered right now” on filing a suit against the city for denying the 24-year brownfield incentive plan. He added that the Council had no authority to deny it because of contentious prevailing wage agreements with labor unions.

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Fifarek cited precedence set by the U.S. Supreme Court in what’s commonly referred to as the 1993 Boston Harbor case. In it, the Court ruled that the government couldn’t impose requirements like prevailing wages or project labor agreements (PLAs) on private projects. These types of agreements set wages and benefit packages prior to work on the project. They often are used when hiring union labor, but can also include non-union workers.

“It was a clear violation of the law and their action was illegal,” Fifarek said. “It was clearly in breach of the development agreement.”

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“There is an indication that litigation may be pending,” Smith said following Monday’s meeting. “I will reserve comment for the point at which litigation commences.”

During the meeting, City Council Vice President Kathie Dunbar made a motion to reconsider the Market Place brownfield plan, which was to last 24 years for the $23 million project.

Dunbar spoke sternly to fellow Council members urging them to reconsider the resolution.

“We are not legally allowed to let labor issues affect the decision on the brownfield,” she said. “There’s a lot at stake here.

Yet the Council voted 4-4 on reconsidering the brownfield plan, with At-Large Council members Derrick Quinney, Carol Wood and Brian Jeffries and First Ward Councilman Eric Hewitt dissenting — the same four who voted against the original proposal.

The failure to reconsider Dunbar’s motion all but sank the possibility of the Council approving Market Place tax incentives. It would take a six-Council member vote to suspend the rules of the City Charter to reconsider the resolution a second time.

Fifarek said the Market Place project is now “in turmoil, if not dead.”

Monday’s public comment period was on the Knapp’s redevelopment, which is also up for a brownfield Michigan Business Tax credit, and also Market Place. Seven people representing labor unions and 19 who wanted the tax incentive approved for Market Place spoke up.

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Conversely, dozens of members from the local #LoveLansing contingent showed up at Monday’s meeting. Many of them were wearing “I heart Lansing” t-shirts being sold by Joe Manzella in the Council Chamber lobby. The shirts were going for $12 and were a play on the “I heart NYC” symbol.

The #LoveLansing people who spoke implored the four Council members for voting no and blocking what they see as an important development downtown.

“We can’t let this derail us,” Manzella, of the Lansing Economic Area Partnership (LEAP), said. “These are not labor issues. We’re talking about politics — we can’t play these games anymore.”

Manzella announced last week that he intends to challenge First Ward Councilman Eric Hewitt, who voted against the incentives, for his Council seat in the 2011 election.

Rick Preuss, owner of Preuss Pets in Old Town, also urged the Council to reconsider their vote on Market Place.

“It’s unfortunate Pat Gillespie is in this position. He should be complimented in any way — he started the movement,” Preuss said, referring to economic development downtown.

In other business, the Council passed a late-item resolution that temporarily changes a polling location in south Lansing from South Washington Apartments, 3200 S. Washington Ave., to the South Washington Office Complex, 2500 S. Washington Ave. due to road construction.

City Clerk Chris Swope said each registered voter in the second ward, precinct 3, will be notified prior to the Nov. 2 General Election.

“It’s literally right up the street,” Swope said of the new location.

The people of Lansing need jobs, not union handouts.  We will continue to follow this story on TheTruthAboutPLAs.com.