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How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 3

This is Part Three, explaining how unions may attempt to win control of the construction and permanent jobs at the ancillary development around the arena. Part One explained the background of how construction trade unions have already obtained a monopoly on the construction workforce for the arena itself. Part Two explained the union plot to monopolize the service jobs at the arena.

Factions in the Construction Industry: Trusting Pragmatism Versus Principled Cynicism

Leaders of the Sacramento regional construction industry were on the sidelines as the new ownership of the Sacramento Kings basketball team privately negotiated a Project Labor Agreement with trade unions for construction of the new downtown arena. Yet construction business associations such as Associated General Contractors (AGC) and Associated Builders and Contractors (ABC) still supported the city’s plan for the arena.

In a pragmatic decision, these construction associations took the risk to trust that private developers for buildings near the arena will not require their contractors to sign Project Labor Agreements. This development will supposedly include 475,000 square feet of office, 350,000 square feet of retail and commercial space, up to 550 new residential units, and up to 250 hotel rooms, for a grand total of as much as 1.5 million square feet. Up to 11,000 jobs would result.

In exchange for acquiescing to the Project Labor Agreement on the arena, these associations expect fair and open competition for adjacent projects within the city’s Entertainment and Sports District. The Sacramento Bee reported this perspective expressed at a January 27, 2014 rally of contractors and union leaders in support of the arena:

John Cooper of Associated General Contractors said his group, which represents both union and nonunion builders, supports the arena project. “We see an opportunity for huge leaps and bounds when it comes…to job creation,” said Cooper, the AGC’s regional manager.

But Cooper said he’d “pull my support” if the ancillary development – a hotel, retail and more – isn’t open to all bidders. He said “I’ve been assured” there won’t be a project labor agreement covering this ancillary development, like there is for the arena itself.

Political consultant Chris Lehane, who is part of The4000’s leadership, said it’s “premature to ask those questions” about how the ancillary development would be built.

“Our focus right now is to make sure we get those 11,000 jobs,” Lehane said.

A handful of electrical contractors objected vehemently to this arrangement. They felt that allowing unions to have a monopoly on construction of the basketball arena would set a precedent for other major projects in the region. In addition, they did not trust union leaders or the politicians backed by union leaders to resist such a lucrative target once it was definite.

Dissenting from the major trade associations, these contractors individually provided enough campaign funding to revitalize a floundering signature-gathering campaign on petitions for a ballot measure for voters to establish a city charter provision requiring voter approval of a public subsidy for an entertainment or sports facility. Arena supporters feared – and arena opponents expected – that Sacramento voters would approve this check and balance against the proposed $258 million public subsidy for the basketball arena.

Enough signatures were collected to qualify the petition for the June 2014 ballot, but the city clerk disqualified the petitions because of numerous technical errors. The campaign then sued to overturn the city clerk’s decision, but a Sacramento County Superior Court judge agreed with the city clerk’s judgment and also ruled that the city charter could not be amended in this manner.

Can Unions Resist Grabbing More Work Through CEQA Greenmail?

Which of these two positions among bickering groups of contractors will be proven right? One possible indication of the future is an ultra-last-minute attempt by unions to amend a last-minute bill in the California State Legislature providing certain breaks to the arena and surrounding development from the California Environmental Quality Act (CEQA), the primary tool of unions to extort concessions from private developers. (This practice is known as “greenmail.”)

Late in the 2013 session, Senate President pro Tem Darrell Steinberg (D-Sacramento) amended Senate Bill 743 to make some minor modifications to the California Environmental Quality Act and “expedite judicial review of the entertainment and sports center project” for the Sacramento Kings basketball team. Despite some griping from Left and Right, SB 743 passed 56-15-7 in the Assembly and 32-5-2 in the Senate. This occurred early in the evening of the last day of the 2013 session.

As the midnight deadline for legislative action approached, Assembly Bill 852 mysteriously appeared on the Assembly floor, courtesy of Assemblyman Roger Dickinson (D-Sacramento). This bill supposedly made technical corrections to SB 743, passed earlier in the evening.

Reportedly a specific individual senior staffer for the Assembly Republican Caucus became suspicious of the bill and investigated it. This staffer realized that it was some sort of union scheme to remove the CEQA breaks for development around the downtown Sacramento arena.

The Sacramento Bee described what happened next:

In a final flare of end-of-session drama, Assembly Republicans led the defeat of a last-minute labor-inspired cleanup bill related to legislation passed earlier in the evening to hasten the building of a new arena in downtown Sacramento.

Assembly Bill 852 surfaced late on Thursday evening, after both houses had passed Sen. Darrell Steinberg’s SB 743 to streamline the construction of a new arena for the Sacramento Kings. AB 852 was cast as a minor cleanup bill, making just a small change to the arena bill by further restricting which projects could be exempted from some environmental review.

It was requested by labor unions, Steinberg said, who feared that other businesses would get in on the streamlined environmental review procedures intended for the arena.”The concern from labor was that Wal Mart and the big box stores could potentially take advantage of that part of (SB) 743 to get an exemption,” he said.

The 2013 legislative session wrapped up in anger and partisan rancor as the Assembly Republican leadership refused to support AB 852 and accused the Democrats of trickiness. The bill only received 28 votes in the Assembly, and the legislature adjourned for the year with SB 743 intact.

Of course, there was no plan for a Wal-Mart next to the Kings arena. But the distaste of the Left for Wal-Mart provided a politically-potent rationale to “fix” SB 743. An article in Salon provided a perspective on SB 743 otherwise neglected by the news media:

Along with special exceptions for a new stadium for Sacramento’s basketball team, the new law restricts some grounds for CEQA lawsuits. “It’s going to give much more leeway to big companies to just come in and ram these projects through,” said James Araby, who directs the Western States Council of the United Food & Commercial Workers union…

The UFCW and Wal-Mart – and allies on both sides – faced off with particular fury not long before the final SB 743 vote, as legislators considered language labor argued was needed to stop the bill from becoming a loophole for unchecked Wal-Mart expansion…

[Assemblymember Lorena] Gonzalez, a former labor council secretary-treasurer, told Salon that in fights with Wal-Mart, “one of the only tools we’ve been able to use is CEQA, and specifically the traffic impact of Wal-Mart.” Following what she called “massive lobbying by the Chamber of Commerce” and “mainly by Wal-Mart,” the labor-backed amendment failed.

An official with the union-aligned Planning and Conservation League acknowledged in the article that “We all know that Wal-Mart is one of the biggest targets of CEQA lawsuits.”

Is it likely that the amendments backed by the United Food & Commercial Workers union will reappear at the last minute in a budget trailer bill or some other gut-and-amend bill in 2014? Of course it is, and every union will benefit from ending the CEQA break.

More evidence that unions will use environmental laws to target the ancillary development around the Kings arena comes from comments submitted to the City of Sacramento concerning the Draft Environmental Impact Report for the Entertainment and Sports District. As noted in Part 2, the UNITE HERE Local Union No. 49 submitted objections to the report along with remarks about wanting to retain and represent service workers at the new arena.

In addition, a group called Sacramento Coalition for Shared Prosperity submitted objections in conjunction with a demand for a “Community Benefits Agreement” that developers must sign for ancillary development. That agreement, modeled on the L.A. Live Community Benefits Agreement for development around the Staples Center, could guarantee “union jobs” for hotels, restaurants, janitors, parking attendants, and construction trade workers, among various occupations.

Perhaps the biggest threat to the downtown arena is the possibility that SB 743 is unconstitutional and that the arena doesn’t even qualify under the criteria in SB 743. If a court agreed with either of these claims, the environmental review would probably need to start from the beginning.

How will the Sacramento Kings basketball team ownership and the City of Sacramento respond to these costly union demands, packaged with the grounds for potential environmental lawsuits? If unions exploit the weakness of SB 743, they may get the whole package – provided the resulting cost increase allows the Entertainment and Sports District to get built in the first place.

The Three-Part Series: How a Basketball Arena Would Expand the Unionized Workforce in Sacramento

1. See How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 1

(how construction trade unions have already obtained a monopoly on the construction workforce for the arena)

2. See How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 2

(how unions are likely to win representation of the food and service workers at the new downtown Sacramento arena)

3. See How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 3

(how unions will likely target the ancillary development around the arena)

Sources

Union Leaders and Building Contractors Rally in Support of ArenaSacramento Bee – March 11, 2014

UNITE HERE Local 49 comments on Draft Environmental Impact Report

Sacramento Coalition for Shared Prosperity comments on Draft Environmental Impact Report

California Senate Bill 743

California Assembly Bill 852

Legislature Rejects Late Night Attempt to Tweak Kings Arena BillSacramento Bee – September 12, 2013

Very Sneaky, Walmart: How The Mega-Retailer Rolled Back California RegulationsSalon – October 14, 2013

Regional Sports and Entertainment Facilities in the Urban Core Attract Costly Political Meddling: Sacramento Kings as a Case Studywww.FlashReport.org – December 16, 2013

 


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

 

 

 

How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 2

Part 1 of “How a Basketball Arena Would Expand the Unionized Workforce in Sacramento” described how unions obtained a monopoly on construction of the arena through a backroom deal for a Project Labor Agreement. Part 2 describes how unions are likely to win representation of the food and service workers at the new downtown Sacramento arena. Part 3 will outline how unions will likely target the ancillary development around the arena.


Will food and service employees at the new downtown Sacramento Entertainment and Sports Center have union representation? UNITE HERE claims to represent 25,000 concessions workers at 50 stadiums, serving over half of all major league sports teams, for employers such as Aramark, Levy, SMG, Centerplate and Ovations.

It is intent on making sure it does not lose the one major league professional sports team in Sacramento – the Kings of the National Basketball Association.

Surprisingly, the March 26, 2013 non-binding term sheet between the owners of the Sacramento Kings basketball team and the City of Sacramento does not specifically address the relationship between the Kings owners and the arena employees. It only states that the owners “may elect to hire a private management company experienced in the management of comparable facilities to manage the ESC, subject to the reasonable approval of the City.”

Unions are vigilant. The Sacramento Valley Union Labor Bulletin reported the following on May 21, 2013:

In a letter sent to Sacramento City Council members, staff and allies in March, the Sacramento Central Labor Council asked that specific language be incorporated into any pre-development agreement for a sports and entertainment complex in the city.

Provisions included that the development team members and operators provide guarantees that current employees at the Sleep Train Arena be retained at the new arena, that Labor peace guarantees be upheld for all hotel and food and beverage enterprises associated with new arena development with relevant unions in Sacramento County and that sustainable wages and health benefits for employees working at the arena facility and ancillary developments. Other provisions also were outlined.

What the Sacramento Central Labor Council wants is a “Community Benefit Agreement” with a service worker retention policy, similar to what’s in the Community Benefit Agreement covering the Anschutz Entertainment Group (AEG) L.A. Live Sports and Entertainment District Project in Los Angeles. (That development includes the Staples Center, home to two professional basketball teams and a professional hockey team.)

Former Kings owner Maloof Sports & Entertainment began using Levy Restaurants in 2010 to provide food and beverage service at what is now Sleep Train Arena, where the Kings currently play. Sacramento’s UNITE HERE Local Union No. 49 claims to represent 300 food-service workers at Sleep Train Arena.

This union is likely to use a few strategies to keep control of the workforce in the new downtown Kings arena. In fact, it is already implementing one of these strategies.

Holding Up the New Arena with Environmental Objections

On January 31, 2014, UNITE HERE Local 49 submitted a letter to the City of Sacramento with comments about the Draft Environmental Impact Report (DEIR) prepared in accordance with the California Environmental Quality Act (CEQA). After listing a variety of failings in the DEIR, the union letter asserted that “Due to the various inadequacies described herein, the DEIR is substantially inadequate in its overall consideration of the potential environmental impacts of the project, particularly with regards to the ancillary development around the ESC (hotel, residential, office, commercial).”

Also noted in the letter is the union’s concern about “the approximately 300 food-service workers at Sleep Train Arena who are most directly impacted by the project.” This of course is the real concern, and UNITE HERE will certainly be looking for a deal with the Kings ownership to make the environmental objections go away.

Incidentally, unions are involved in another fight over control of concessions for a sports complex in Sacramento. On February 28, 2014, the board of directors of the California Exposition and State Fair approved a proposal by Ovations for construction of a multi-use sports facility to host the Sacramento Republic Football Club Division III professional soccer team.

Union officials complained at the board meeting during public comment that Ovations had not yet reached an agreement for union representation of concessions workers at the facility.  To pressure Ovations, they could appeal the board’s approval of a “categorical exemption” for the project under the California Environmental Quality Act (CEQA), thus delaying the construction and ensuring the facility isn’t ready well into the team’s 2014 season.

State Legislation

Labor unions throughout California are constantly worried that entertainment and sports facility management will try to cut costs (or “boost profits”) by ending their obligations to collective bargaining agreements. One prominent example in California is Honda Arena in Anaheim, where the Ducks professional hockey team plays.

On June 27, 2013, Governor Jerry Brown signed into law Senate Bill 71, a budget trailer bill that included a special provision pushed by UNITE HERE and added at the last-minute without committee hearings:

Existing law, the Displaced Janitor Opportunity Act [of 2001], requires contractors and subcontractors, as defined, that are awarded contracts or subcontracts to provide janitorial or building maintenance services at a particular job site or sites, to retain, for a period of 60 days, certain employees who were employed at that site by the previous contractor or subcontractor. The act also requires that employees retained for that 60-day period be offered continued employment if their performance during that 60-day period is satisfactory. The act authorizes an employee who was not offered employment or who has been discharged in violation of these provisions by a successor contractor or successor subcontractor, or an agent of the employee, to bring an action against a successor contractor or successor subcontractor in any superior court of the state having jurisdiction over the successor contractor or successor subcontractor, as specified.

This bill would, until December 31, 2014, apply the provisions of the Displaced Janitor Opportunity Act to every contractor, as defined, that provides food and beverage services at a publicly owned entertainment venue, as defined.

This provision was carefully written to target one specific entertainment and sports facility: the Honda Arena, owned by the City of Anaheim.

Senate Bill 71 was signed three days before the in-house operator Anaheim Arena Management took over food and beverage service operations of the Honda Arena from a contractor, Aramark Sports and Entertainment.

With Democrats still hovering around a two-thirds super-majority in the California State Assembly and State Senate, this provision could be amended so that 2014 becomes 2015, thus entangling the new Kings arena in a policy originally targeted at the Honda Arena.

Litigation

Senate Bill 71 provided unions with a tool to retaliate against Anaheim Arena Management. On August 20, 2013, union workers filed a class action lawsuit in Orange County Superior Court against Anaheim Arena Management to get back-pay and interest. In addition, UNITE HERE Local 11 sued Anaheim Arena Management to get the former Aramark workers back in their old jobs.

Anaheim Arena Management was accused of only retaining 75 of the 568 food and beverage service workers previously employed by Aramark. A judge imposed a temporary restraining order, but ultimately Anaheim Arena Management prevailed in court against the union.

Pressure from the Sacramento City Council

Unions may have leverage through the provision of the non-binding term sheet stating that Kings ownership “may elect to hire a private management company experienced in the management of comparable facilities to manage the ESC, subject to the reasonable approval of the City.” Could “reasonable approval” require a commitment for unionized food and beverage service workers? If a Community Benefit Agreement is not in place and the Kings ownership decides to contract out its operations at the arena, the approval process at the Sacramento City Council could be a place for UNITE HERE to apply pressure. It appears this option would not be available to UNITE HERE if the Kings ownership decided to manage operations in-house, as was done at Honda Arena in 2013.

Sources

Proposed, Non-Binding Terms of a Potential Transaction for Entertainment and Sports Center in Downtown Sacramento

Arena Project Will Have Labor Jobs, Mayor Says – Sacramento Valley Union Labor Bulletin – May 21, 2013

UNITE  HERE Local 49 CEQA DEIR Comments on Kings Arena – January 31, 2014

Community Benefits Agreement for the Los Angeles Sports and Entertainment District Project

Senate Bill 71 (2013)

UNITE HERE litigation against Honda Center in-house operations management: Temporary Restraining Order and Class Action Complaint for Damages

 


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

 

 

 

How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 1

Proponents of a proposed $447 million new “entertainment and sports center” in downtown Sacramento for the Kings professional basketball team claim the arena itself would generate over 4,000 full-time jobs, including employees hired temporarily for construction, employees for operations of the arena, and other outside service jobs related to arena events and activities. Proponents also claim that 11,700 total jobs would be created through construction and permanent employment at ancillary downtown development around the arena.

Unions want to represent every one of those workers who are not legitimately classified as management. Their plan is not to attain control of these jobs through merit or through selling the benefits of unionism to workers, but through backroom deals. These deals include an already-implemented Project Labor Agreement, a proposed Community Benefit Agreement, and other side agreements for employee retention and employer neutrality in organizing campaigns.

This is Part One, explaining the background of how construction trade unions have already obtained a monopoly on the construction workforce for the arena itself. Part Two will explain the union plot to monopolize the service jobs at the arena. Part Three will address the construction and permanent jobs at the ancillary development around the arena.

Kings Arena

Construction of the Arena

Project Labor Agreement Long Expected

As far back as October 2003, Sacramento construction trade union officials were alluding to their desire for a Project Labor Agreement on a possible new Kings basketball arena. Groups such as the Coalition for Fair Employment in Construction, Associated Builders and Contractors, and the Western Electrical Contractors Association began efforts to try to preserve fair and open competition.

For union leaders, it would be a matter of pride to declare this high-profile project as built exclusively by union workers. In addition, the sheer size of the project would pour large amounts of money into union political operations via dues and employer payments to labor-management cooperation committees. It would help all unions in the region to accelerate the political conversion of Sacramento’s suburbs from Republican federal, state, and local representation to union-backed Democrat representation.

For more detail on this early stage of the fight for fair and open competition on a new Sacramento Kings arena, see The Union Quest for a Project Labor Agreement on a New Sacramento Kings Basketball Arena: Part One – 2006

An Attempt to Prohibit Project Labor Agreements in the City of Sacramento Fails

In 2011, a coalition of construction associations, taxpayer groups, and other business interests collected signatures on petitions for ballot measures to prohibit the County of Sacramento and the City of Sacramento from entering into contracts that required construction companies to sign Project Labor Agreements as a condition of work. Local governments throughout the state were adopting these “Fair and Open Competition” policies through voter initiatives or elected boards.

Unions responded with a massive radio advertising campaign to scare people into not signing petitions, along with relentless in-person harassment of signature gatherers and other antics to interfere with the campaign. Then they shoved a last-minute gut-and-amend bill through the California legislature (Senate Bill 922) that nullified all Fair and Open Competition charter provisions and ordinances for counties and general law cities. It also cut off state funding to charter cities that had such policies. Because Sacramento was a charter city, the Fair and Open Competition – Sacramento campaign continued to collect signatures for the city ordinance. It submitted petitions with a total number of signatures well over the amount needed, but the measure failed to qualify in January 2012 because an astonishing number of the signatures were not valid. Union leaders gloated.

The Way Is Clear for a Project Labor Agreement

With voters no longer a threat to the union goal to impose a Project Labor Agreement, plots could proceed. A March 2012 resolution for an arena deal with potential team owners (which subsequently derailed) had an unannounced and unexpected provision for a Project Labor Agreement and Community Benefit Agreement tacked on the end through a city councilmember’s amendment, with no opportunity for public comment. See Out of Nowhere: Project Labor Agreement and Community Benefit Agreement Tacked on End of Motion for New Sacramento Kings Basketball Arena.

A “Request For Proposal For Lead Contractor” issued on June 21, 2013 by a new set of team owners informed prospective respondents that “The Contractor shall also meet and negotiate with local labor regarding a possible Project Labor Agreement for the ESC,” that is, the “entertainment and sports center.” In addition, respondents are asked to “Please describe your experience, if any, with labor on construction projects in northern California including, without limitation, negotiations with labor and the results, the size of the project, and project labor agreements.”

Announcement of a Backroom Union Deal

The public relations firm told us to celebrate the Project Labor Agreement.

The public relations firm told us to celebrate the Project Labor Agreement.

On September 4, 2013, a public relations firm hired by the Sacramento Kings (Mercury Public Affairs) informed local news media with only a few hours notice about a press conference to announce a special deal with the Sacramento-Sierra’s Building and Construction Trades Council. This deal was the long-anticipated Project Labor Agreement.The press conference featured Sacramento Mayor Kevin Johnson, top union officials, and top Kings team officials. Their consultants were even successful in “working on getting a few women there.” But also in attendance at the press conference were uninvited protesters from local non-union construction companies.

These opponents of the backroom union deal spoiled the visual impact by holding signs and banners on the balconies overlooking the atrium where the press conference was held. At the end of the official press conference, protesters then held their own impromptu press conference (using their opponents’ unsecured audio equipment) to condemn the Project Labor Agreement and call for the arena to be built instead in the suburbs, away from union influence and backroom deals. This high-profile celebration of union political power turned into a debacle.

Protest of Sacramento Kings Arena Project Labor Agreement - September 4, 2013

Following the press conference, non-union contractors circulated a memo entitled “Eight Steps to Possibly Alleviate Taxpayer and Contractor Outrage about the Backroom Deal for a Project Labor Agreement on Construction of the Sacramento Kings Arena.” Neither the Kings nor the City of Sacramento responded.

Motivation for the Backroom Union Deal

Although no one directly involved in the proposal, negotiation, or execution of the Project Labor Agreement has explicitly admitted it in public, most informed observers claim the union deal was mainly intended to neutralize the threat of construction unions exploiting the California Environmental Quality Act (CEQA) to delay permitting for the arena through comments, appeals, and lawsuits. Political and business leaders recognized that construction trade unions in Sacramento routinely engage in “greenmail” to hold up projects until the developer provides economic concessions (usually a Project Labor Agreement). Some recent examples within the City of Sacramento included the Railyards project and the Greenbriar and Delta Shores developments.

Once unions had control of the arena construction work, their lobbyists at the state capitol had no objections when State Senate leader Darrell Steinberg (who represents downtown Sacramento) pushed through a bill (Senate Bill 743) in the last days of the 2013 California legislative session. This bill provided special breaks under CEQA to the Kings arena to hinder the efforts of other interest groups to hold up the project with environmental objections.

Perhaps this scheme satisfied construction unions, but it did not discourage Unite Here Local No. 49 from submitting objections to the Draft Environmental Impact Report (DEIR) for the Kings Arena. Nor did SB 743 discourage community organizations from submitting objections to the DEIR with the open intent of seeking a Community Benefit Agreement for the ancillary development around the arena.

Other parties even asserted in their DEIR comments that SB 743 was unconstitutional and that the arena did not actually qualify as a project under the criteria set in SB 743. If a court later agrees with these claims, a new environmental impact report will need to be drafted, and SB 743 will ironically end up jeopardizing the project altogether.

No Public Accountability or Transparency Allowed

To this day, the Sacramento City Council has never discussed or voted on the Project Labor Agreement. Even more offensive, the Project Labor Agreement has never been released for the public to review, despite Mayor Johnson citing the agreement in his State of the City address on February 12. Tweets from the State of the City event indicated that some people misheard Mayor Johnson claim that arena construction would employ “sex-offenders,” although the Project Labor Agreement apparently includes a provision to employ “ex-offenders.”

Rumors get started when backroom deals remain a secret even as they are promoted as policy accomplishments. Why is it so important to withhold this celebrated deal on a public works project from the people who will be paying for a majority of it, plus the interest on the money borrowed through the city’s sale of revenue bonds?

In addition to being an accomplishment of the city’s chief elected executive, the mysterious Project Labor Agreement has also become relevant for litigation in the state courts involving the city. The Sacramento-Sierra’s Building and Construction Trades Council cited the Project Labor Agreement as the basis for justifying its February 14, 2014 amicus brief in defense of the city’s decision not to qualify a ballot measure requiring voter approval of public subsidies for the arena.

A request to the City of Sacramento for the Project Labor Agreement under the authority of the California Public Records Act failed to produce it.

Cost Impact Is Likely But Not Acknowledged to Date

A non-binding term-sheet between the Kings and the City of Sacramento dated March 26, 2013 provides for a $258 million subsidy for the Entertainment and Sports Center. Under state law, this subsidy means that the arena is a public works project, and contractors would be required to pay prevailing wage rates based on union labor agreements.

The Project Labor Agreement will go beyond this wage requirement to cut bid competition and raise costs even further. As an additional contractual obligation, the Project Labor Agreement will require contractors to obtain workers from unions and pay fringe benefits and other payments into union trust funds.

Various studies, anecdotes, and common sense have suggested that Project Labor Agreements raise the cost of construction projects by about 15%. The March 26, 2013 non-binding term sheet for the arena stated a total cost of $447 million. Did that amount account for the reduction in bid competition resulting from a Project Labor Agreement mandate?

An Aggressive Response from Supporters of Fair and Open Competition

In Sacramento, non-union contractors dominate electrical work on public works and commercial construction. Knowing that public opinion in the City of Sacramento is strongly against providing $258 million in public funding to billionaire team owners and professional basketball players, a group of large Sacramento-based non-union contractors provided essential funding to a new organization (Voters for a Fair Arena Deal) created to finish collecting signatures on petitions to put a measure on the June ballot to require a citizen vote to authorize any public subsidies for entertainment and sports facilities.  Residents of the City of Sacramento await a judge’s ruling on whether they will get to vote in June on this ballot measure. (See “Voter Approval for Public Funding of Professional Sports Arena Act”)

On February 26, 2014, a Sacramento County Superior Court judge agreed with the City of Sacramento and ruled that petitions for a vote on public subsidies contained too many inconsistencies and interfered with the city’s charter authority. Citizens will not have a chance to vote on the public subsidy, whether it is $258 million or some other amount in the end. See the decision in Camacho v. Concolino.

Meanwhile, the Coalition for Fair Employment in Construction is demanding that the Sacramento Kings ownership and the Sacramento-Sierra’s Building and Construction Trades Council immediately release to the public a copy of the alleged Project Labor Agreement for the proposed Kings Arena. It threatens to file a lawsuit against the City of Sacramento to get it.

Such a lawsuit could expose some embarrassing background about how and why unions obtained a monopoly on arena construction. In 2013, the Coalition for Fair Employment in Construction sued the City of San Diego to obtain the San Diego Convention Center Phase 3 Expansion Project Labor Agreement, another Project Labor Agreement negotiated and executed in a secret backroom deal. In the process, the coalition obtained the actual union deal and the complete list of political payoffs to unions from the San Diego Mayor’s office.


Sources

Measuring the Cost of Project Labor Agreements on School Construction in California – study by National University System Institute for Policy Research in San Diego – July 2011

Proposed, Non-Binding Terms of a Potential Transaction – term sheet between the City of Sacramento and an investor group in order to retain the Sacramento Kings NBA basketball franchise and to develop a new Entertainment and Sports Center (ESC) in downtown Sacramento.

The Renaissance Report economic analysis of the impact of the new entertainment and sports center and related downtown development to Sacramento.

Mayor Kevin Johnson Announces Project Labor Agreement at September 4, 2013 Press Conference, Opposition Has One Too

Senate Bill 743 (2013)

Senate Bill 922 (2011)

Regional Sports and Entertainment Facilities in the Urban Core Attract Costly Political Meddling: Sacramento Kings as a Case Study – www.FlashReport.org – December 16, 2013

September 4, 2013 Sacramento Kings Arena Project Labor Agreement Final Press Kit – “Great…let’s circulate to key folks.”

September 3, 2013 Sacramento Kings Arena Project Labor Agreement Press Conference – “working on getting a few women there” Re Labor Presser Check-In 

September 4, 2013 – Press Conference Announcing Project Labor Agreement for New Sacramento Kings Arena – Final Press Kit

Coalition for Fair Employment in Construction Calls for Public Access to Backroom Union Deal Imposed on Proposed Sacramento Kings Arena – Press Release – February 19, 2014

February 14, 2014 – Sacramento-Sierra Building and Construction Trades Council – Amicus Curiae – Kings Arena Vote

January 31, 2014 Unite Here Local 49 CEQA Comments – Sacramento Kings Arena Draft Environmental Impact Report


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

 

California Construction Unions Circumvent Public Scrutiny of Project Labor Agreements

A common and enduring complaint of the political Left is that constitutional structures established in the country’s republican form of government hinder progress and subvert the democratic will of the people.

According to such thinking, those constitutional structures need to be reformed and modernized so that government can be more “democratic.” A few astute political observers in California have noticed that unions and their political allies are advancing strategies at the state and local government levels that effectively chip away at checks and balances inherent in the structure of American constitutional government.

One example is the end of public deliberation and votes for Project Labor Agreements in the legislative branch of state and local governments. Instead, backroom deals are made in the executive branch to give unions control of the work.

In the past year, Project Labor Agreements have been imposed on four large publicly-funded construction projects without any public deliberation or votes. In some cases, the public has been denied access to the Project Labor Agreement.

1. San Diego County New Central Courthouse
Judicial Council of California – Administrative Office of the Courts
May 2013
$560 million in public funds

San Diego County New Central Courthouse Project Labor Agreement

No formal public discussion or vote on it. Repeated requests at Judicial Council meetings and to Administrative Office of the Courts staff for a public vote have been futile.

How Project Labor Agreement was implemented:

Background:

  • Judicial Council of California Imposes Project Labor Agreement on San Diego Courthouse – www.UnionWatch.org – June 8, 2013
  • Courthouse to be Built Under Labor Pact – San Diego Union-Tribune – June 7, 2013
  • I’ve Failed So Far in Seeking the Project Labor Agreement from the California Administrative Office of the Courts for the New San Diego Central Courthouse – www.LaborIssuesSolutions.com – July 10, 2013
  • Not Accountable for Project Labor Agreement – Until Now: Mailers Inform Judges About Union Deal of Administrative Office of the Courts – www.LaborIssuesSolutions.com – June 24, 2013
  • Coalition for Fair Employment in Construction to Hold Press Conference – June 20, 2013 at 11:00 a.m. – Condemning San Diego Courthouse Project Labor Agreement – www.LaborIssuesSolutions.com – June 20, 2013
  • Union Quest for Project Labor Agreements from Judicial Council of California and Administrative Office of the Courts Succeeds with San Diego County Central Courthouse  – www.LaborIssuesSolutions.com – June 8, 2013
2. San Diego Convention Center Phase 3 Expansion
City of San Diego
November 2012
$520 million in public funds

San Diego Convention Center Phase 3 Expansion Project Labor Agreement

No formal public discussion or vote on it. Appears to be a violation of a voter-approved city ordinance prohibiting the city from entering into contracts that require companies to sign Project Labor Agreements.

How Project Labor Agreement was implemented: Secret Deal between Mayor and Union Official to End Union Lawsuit and CEQA Objections to San Diego Convention Center Phase 3 Expansion

Lawsuit filed by Coalition for Fair Employment in Construction to get Project Labor Agreement after repeated rejections of public records requests: Coalition for Fair Employment in Construction v. City of San Diego

Background:

3. California High-Speed Passenger Train – First Construction Segment (Madera to Fresno)
California High-Speed Rail Authority
December 2012
$985 million in public funds

California High-Speed Rail Project Labor Agreement (Community Benefits Agreement) 2012

No formal public discussion or vote on it. Repeated requests at California High-Speed Rail Authority meetings for a public vote have been futile.

Bid specifications require prime contractor to sign Project Labor Agreement, so there is a government mandate to sign it.

California High-Speed Train Project – Request for Proposal for Design-Build Services

Background:

4. New Sacramento Kings Arena (Entertainment and Sports Center)
City of Sacramento (Public-Private Partnership)
September 2013
$448 million (includes $258 million in public funds

No formal public discussion or vote on it. Public does not have access to Project Labor Agreement. A proposal circulates to release the Project Labor Agreement to the public and have the Sacramento City Council vote on it.

Eight Steps to Possibly Alleviate Taxpayer and Contractor Outrage about the Backroom Deal for a Project Labor Agreement on Construction of the Sacramento Kings Arena

Background:


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

Revised List of Union Actions in 2013 Under the California Environmental Quality Act (CEQA)

California State Senate President pro Tem Darrell Steinberg is still talking about changes to the California Environmental Quality Act (CEQA) as the legislature works through its last two weeks in session in 2013.

His vehicle for CEQA amendments – Senate Bill 731 – is still alive. It contains language that would supposedly help developers of urban infill projects to circumvent petty environmental objections of small neighborhood groups. Unions have publicly refrained from taking a position, but reportedly their lobbyists have objected behind the scenes to any provisions that would weaken the ability of unions to use CEQA as a tool to pressure developers to sign union agreements.

Steinberg also plans to “gut and amend” a bill and transform it into a bill that gives special breaks from CEQA to Sacramento Basketball Holdings LLC, the developer of the planned new arena for the Sacramento Kings professional basketball team. It’s expected that all construction companies will have to sign a Project Labor Agreement with unions in order to build this “entertainment and sports center.”

In the meantime, examples continue to emerge of union involvement in the permitting process for public and private projects in California. A June 25, 2013 article in www.UnionWatch.org (Collect Them All: Environmental Objections of California Unions in 2013) listed nine identified projects. That list is now up to 23 projects, and surely there are some projects targeted by unions that are still missing from the list. Plus there are four more months in 2013 for additional union “greenmail.”

Here’s the revised list of union CEQA actions in 2013:

1. Glenarm Power Plant Repowering Project, City of Pasadena

March 13, 2013 – Comments on Final Environmental Impact Report – California Unions for Reliable Energy (CURE)

Here’s a chronology of how the law firm of Adams Broadwell Joseph & Cardozo, representing California Unions for Reliable Energy (CURE), objected on environmental grounds to a municipal power plant project on one hand while negotiating a Project Labor Agreement for the same project on the other hand:

2012-2013 – Interaction Between California Unions for Reliable Energy (CURE) and City of Pasadena – Glenarm Power Plant Repowering Project

2. Napa Pipe Project, County of Napa

May 20, 2013 – Request for a Subsequent Environmental Impact Report – Sheet Metal Workers Local Union No. 104, Plumbers and Steamfitters Local Union No. 343, and the International Brotherhood of Electrical Workers Local Union No. 180, pretending to be the “Napa Coalition for Responsible Development.”

I wrote about the union environmental objections to this project in my May 28, 2013 www.UnionWatch.org article Spread the Word: Brazen Union CEQA Abuse in Napa Valley.

3. Agincourt Solar Project and Marathon Solar Project, County of San Bernardino

February 1, 2013 – Comments on the Initial Studies/Mitigated Negative Declarations – California Unions for Reliable Energy (CURE), pretending to be “San Bernardino County Citizens for Responsible Solar.”

This one had a happy ending!

April 23, 2013 – Announcement from California Unions for Reliable Energy (CURE), pretending to be “San Bernardino County Citizens for Responsible Solar” – the Western Burrowing Owl, the Desert Tortoise, the LeConte Thrasher, and the Joshua Tree are saved – let’s build!

4. VWR International Supply and Distribution Facility, City of Visalia

February 14, 2013 – Visalia VWR Employees Vote to Join Teamsters Union

After the Teamsters Joint Council 7 and fellow plaintiffs flipped a lower court decision by winning CEQA arguments (among other arguments) on appeal in Coalition For Clean Air v. City of Visalia, the International Brotherhood of Teamsters Local Union No. 948 won an NLRB-supervised representation election for employees of the new VWR International facility in Visalia.

Footnote 4 in the September 14, 2012 appeals court decision states that “Respondent VWR International’s brief alleges that the CEQA action was originally commenced by the Teamsters union and one of its local officers, in an effort to halt construction of the Visalia facility, fearing that its completion as a non-union facility would lead to the closure of a unionized facility in Brisbane.”

5. Pioneer Green Energy Solar Project, County of Kern

January 7, 2013 – Comments on Draft Environmental Impact Report – California Unions for Reliable Energy (CURE), pretending to be “Kern County Citizens for Responsible Solar.”

Unions don’t seem to regard this project as particularly “green,” but maybe the green of money from a Project Labor Agreement will change their minds.

6. Imperial Valley Solar Company 2, County of Imperial

February 15, 2013 – Comments on Draft Environmental Impact Report – California Unions for Reliable Energy (CURE), pretending to be “Imperial Citizens for Responsible Industry” and also February 18, 2013 – Comments on Draft Environmental Impact Report – Laborers (LIUNA) Local Union No. 1184.

Two union groups going after this one. Do you ever wonder if the Sonoran desert toads know they’re being abandoned to be squashed by heavy equipment when unions get their Project Labor Agreements?

7. Casa Diablo IV Geothermal Plant, County of Mono

January 29, 2013 – Comments on Draft Environmental Impact Statement/Environmental Impact Report – California Unions for Reliable Energy (CURE) and also January 30, 2013 – Comments on Draft Environmental Impact Statement/Environmental Impact Report – Laborers International Union of North America (LIUNA) Local Union No. 783.

This project is getting a double whammy, including from a union whose members travel to Mono County to “enjoy its peaceful repose and diversity and rarity of species of plants and animals.”

8. Three Rocks Solar, County of Fresno

May 31, 2013 – Request to Fresno County Board of Supervisors to deny appeal of Planning Commission’s decision to deny Initial Study/Mitigated Negative Declaration and conditional use permit – California Unions for Reliable Energy (CURE), pretending to be “Fresno County Citizens for Responsible Solar.”

As if the Fresno County Planning Department didn’t already have enough paper from the law firm of Adams Broadwell Joseph & Cardozo. Imagine the trees unions are cutting down to protect the environment.

9. Dignity Health Elk Grove Medical Campus Project, City of Elk Grove

January 18, 2013 – Request for all documents referenced in the Draft Subsequent Environmental Impact Report – Plumbers and Pipefitters Local Union No. 447, International Brotherhood of Electrical Workers Local Union No. 340, Sheet Metal Workers Local Union No. 162.

Even if the developer pays for it, is there any dignity for city employees when law firms force them to spend a huge amount of time collecting a huge pile of paper? Is this how government employees should be serving the people?

10.  World Logistics Center Project – City of Moreno Valley

April 5, 2013 – Comments on Draft Environmental Impact Report – Laborers International Union of North America (LIUNA), Local Union No. 1184

This would be the largest master-planned warehouse complex in the United States, and unions want their share of the estimated $3.5 billion in construction and 20,000 permanent jobs.

11. Ocotillo Wind Energy Facility Project, Imperial County

February 27, 2013 – U.S. District Court rejects lawsuit filed by plaintiffs that include Laborers International Union of North America (LIUNA), Local Union No. 1184

Unions decided to file a lawsuit (Desert Protective Council et al v. United States Department of the Interior et al) challenging the Final Environmental Impact Statement/Final Environmental Impact Report to overturn a May 2012 decision made by the U.S. Department of the Interior, Bureau of Land Management, California Desert District, El Centro Field Office to allow 112 wind turbine generators.

12. Acheson Commons (2133 University Avenue), City of Berkeley

May 8, 2013 and June 13, 2013 – Requests for Zoning Adjustments Board not to approve Use Permits for the project – Alameda County Building and Construction Trades Council, pretending to be “Berkeley Residents for Sustainable Development.”

Allegedly the “largest apartment complex ever planned for Berkeley’s downtown,” this project moved forward after some sort of deal with the Alameda County Building and Construction Trades Council, as reported in this July 11, 2013 article City’s Largest Apartment Building Ever Gets Go-Ahead.

13. Campo Verde Solar Project, Imperial County

Laborers’ International Union of North America Local Union No. 1184, et al. vs. County of Imperial, ECU7294

Laborers Local Union No. 1184 filed a lawsuit against Imperial County to stop First Solar, Inc. from building the 139-megawatt Campo Verde photovoltaic solar project. 

14. Citation Residential Project, City of Milpitas

A California appellate court rejected an appeal from the Carpenters Local Union No. 405 related to the union’s efforts to challenge approval of a 732-unit condominium project. See the July 16, 2013 decision in May v. City of Milpitas.

15. Cordes Ranch Specific Plan, City of Tracy

July 24, 2013 – Objections to Final Environmental Impact Report for Cordes Ranch Specific Plan – Carpenters Union Local No. 152.

A construction union has CEQA objections to a commercial and industrial development proposed in Tracy.

16. Palen Solar Electric Generating System in Riverside County, at California Energy Commission

March 26, 2013 order granting petition to intervene from Laborers (LIUNA) Local Union No. 1184May 8, 2013 status report.

While California Unions for Reliable Energy (CURE) reached an agreement to end its interference with permitting for this solar thermal power plant, the Laborers union in Riverside County is just getting started.

17. Desert Harvest Solar Project, Riverside County

March 11, 2013 – U.S. Bureau of Land Management denies protest of Laborers (LIUNA) Local Union No. 1184 against Final Environmental Impact Statement.

Another solar project under assault. California Unions for Reliable Energy (CURE) has not objected to the project, perhaps because the IBEW Union Local No. 440 has the electrical work.

18. Los Angeles International Airport (“LAX”) Specific Plan Amendment Study, City of Los Angeles and Los Angeles World Airports

April 29, 2013 – Objections to the Final Environmental Impact Report – SEIU United Service Workers West; May 29, 2013 – Lawsuit Against City of Los Angeles and Los Angeles World Airports – SEIU United Service Workers West.

Another one of the those CEQA lawsuits that allegedly rarely happen. This one comes courtesy of Service Employees International Union (SEIU) United Service Workers West, which claims to represent 2,000 Los Angeles International Airport workers, including passenger service workers, security officers, sky caps, baggage handlers, cabin cleaners, janitors, and cargo handlers.

19. Sun Valley Energy Project in Riverside County, at California Energy Commission

August 5, 2013 – Request to California Energy Commission for Notices – Laborers (LIUNA) Local Union No. 1184.

Better late than never. California Unions for Reliable Energy (CURE) submitted a petition on February 8, 2006 to the California Energy Commission to intervene on this project.

20. One South Market, City of San Jose

Staff Report on Appeal of Santa Clara-San Benito Counties Building and Construction Trades Council to One South Market Street Project (includes June 25, July 9, and July 12 letters from law firm ofAdams Broadwell Joseph & Cardozo)

I wrote about this union CEQA appeal in the August 13, 2013 www.UnionWatch.org article Union Environmental Appeal of San Jose Infill High-Rise Fools No One.

21. Avalon Bay Communities – Dublin Station – Transit Center, City of Dublin

Carpenters Local Union No. 713 objected to this project in order to control the work. The union filed a lawsuit after the Dublin City Council rejected their appeal. On March 7, 2013, a California Appeals Court sided with the City of Dublin in Concerned Dublin Citizens v. City of Dublin.

22. Basin Street Properties – Riverfront Mixed Use Project, City of Petaluma

Pretending to be “Petaluma Residents for Responsible Development,” the Sonoma, Mendocino, and Lake Counties Building and Construction Trades Council managed to delay an August 13, 2013 Petaluma Planning Commission meeting with its CEQA objections to the Riverfront Mixed Use Project.

23.  Eagle Mountain Pumped Storage Water Project in Riverside County, State Water Resources Control Board

April 10, 2013 – Comments on Final Environmental Impact Report – Laborers International Union of North America (LIUNA), Local Union No. 1184

Water would move back and forth between two old mining pits at different elevations to generate electricity during peak hours of usage. The Laborers Union is concerned.

24. Apple Campus 2, City of Cupertino (added October 22, 2013)

The Service Employees International Union-United Service Workers West is trying to organize employees of companies that provide security under contract to the major companies in Silicon Valley, including Apple. It submitted comments on the Draft Environmental Impact Report and comments on the Final Environmental Impact Report for the massive proposed Apple 2 Campus.

I wrote about the union environmental objections to this project in my October 19, 2013 www.UnionWatch.org article Union Threatens to Block Apple, Inc. “Spaceship” with Environmental Lawsuit.

25. Regional Seawater Desalination Project, City of Santa Cruz and Soquel Creek Water District (scwd2) (added October 25, 2013)

California Unions for Reliable Energy (CURE) submitted comments and 224 pages of exhibits objecting to the Draft Environmental Impact Report for this project.

26. CleanPowerSF/Shell Community Choice Aggregation Program, San Francisco Public Utilities Commission  (added October 25, 2013)

International Brotherhood of Electrical Workers Union Local No. 1245, represented by Adams Broadwell Joseph & Cardozo, informed the San Francisco Public Utilities Commission that it would need to prepare an Environmental Impact Report under CEQA for the program. IBEW Local No. 1245 represents workers for Pacific Gas & Electric (PG&E). It wanted Shell to sign a Project Labor Agreement. See the union’s web site Stop the Shell Shock.


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.