Video Documents Big Labor’s Project Labor Agreement Shakedown in Lansing

0 December 3, 2010  State & Local Construction, Uncategorized

Take a look at this outstanding video posted by The Mackinac Center that explains the grip of Big Labor’s powerful special interests on some members of the Lansing City Council. We’ve covered this story before, but basically, Lansing City Council members beholden to Big Labor’s anti-competitive and costly agenda issued threats to halt both the cleanup and economic development of a contaminated riverfront property located in the capitol city’s downtown region unless the project’s developer agreed to Big Labor’s demands.  Big Labor was able to manipulate the Lansing City Council into holding up an environmental cleanup tax abatement for the project unless the developer agreed to a project labor agreement (PLA) on the $23.1 million upscale apartment complex. This video explains why this special interest shakedown is a black eye for Lansing’s government and could have ultimately cost Lansing jobs and economic progress, if not for a wise court ruling. 


Here is additional background on the controversy from Michigan Capitol Confidential (Big Labor Fights Against Lansing Entrepreneurs … and Virg Bernero?, 11/15/10):

The developer, Pat Gillespie of East Lansing, purchased the property for $1.6 million from the city. He did this knowing that he would need to spend at least $1 million – and perhaps much more – clearing up an as yet unknown amount of environmental contamination. In the sale agreement with Gillespie, the city agreed to use reasonable efforts to help him acquire brownfield tax credits and other assistance to help pay for the clean-up of the contamination. The property sits on the bank of the Grand River, five blocks from the state Capitol Building.

To fulfill the city’s part of the agreement, the council took up the issue of extending the brownfield help during two council meetings in October. But at these meetings there emerged a sentiment by four of the eight council members who believe that Gillespie should also be required to agree to a PLA covering 100 percent of the jobs used to build his apartment complex. It is estimated that at least 84 workers will be hired for the work.

Ultimately, the council deadlocked 4-4 on votes to extend the brownfield assistance, thus effectively refusing to approve the help. Gillespie sued, and on Oct. 25 Ingham Circuit Court Judge Rosmarie Aquilina ruled that he had held up his end of the land purchase contract and awarded the brownfield package to him.

On Nov. 8, following the court order, council met again and had another acrimonious debate about whether or not they should vote to discuss an appeal of Aquilina’s decision. Mayor Bernero joined this debate and steadfastly supported Gillespie.

Councilmember Kathie Dunbar is allied with the mayor on this issue. At the Nov. 8 hearing she also fired several warnings toward the four council members who wished to continue down the path of blocking Gillespie’s plans.

“We breached a contract,” said Dunbar of the council’s vote against Gillespie. “When you do that, you negate your insurance policy that covers your claims.”

Losing a drawn-out legal appeal with no insurance protection, Dunbar noted, could force the city to pay up from its general fund for all of the damages and all of the attorney fees associated with its decision to breach the contract. She warned that it would be the taxpayers of Lansing who would pay for the council’s costly mistake if the politicians decided to continue their PLA demands on Gillespie in the courts.

In a contentious appearance before the council, Bernero accused the block of four of playing “roulette” with the city’s development future, and putting “petty politics before progress.” He also estimated that fighting and losing a “dangerously shortsighted” appeal could cost the city as much as $6 million and compromise the city’s ability to fund police and firefighters.

Big Labor’s shrewd political maneuvering is often how they obtain government-mandated union-only PLAs on pubic works projects. Instead of delivering the best possible project at the best possible price to taxpayers through fair and open competition, Big Labor has to develop a scheme to increase union market share that cuts competition and forces employees to join a union and/or pay union dues in order to work on a construction project paid for by their own tax dollars.

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