Construction trade unions are getting a monopoly on building a multi-government collaborative San Francisco Bay Area project tangled up in trendy “progressive” concepts about how government should require private companies to create and operate their businesses.
As an item on the consent calendar of its “special meeting” agenda on December 17, 2012, the board of trustees of the Emeryville Unified School District approved a “Community Benefit Agreement” to be incorporated in a lease-leaseback contract signed by the prime contractor for the construction of the Emeryville Center for Community Life. This project is coordinated by the City of Emeryville and the Emeryville Unified School District and “touted as a model for the 21st century urban environment.”
Unions and other activist organizations routinely pressure local governments in urban areas of California to require developers to sign a “Community Benefit Agreement” as a condition of providing a permit or financial assistance for a project. Not surprisingly, these Community Benefit Agreements usually include a requirement for developers or contractors to sign a Project Labor Agreement with construction unions or adopt some other program (often a “First Source Hiring” program) that gives construction unions control of the work.
California has been on the cutting edge of local governments forcing developers to support union political agendas; in fact, four California regional think tanks backed by labor unions and other interests came together as the “California Partnership for Working Families” to develop a guidebook on using Community Benefit Agreements. These policy organizations are the East Bay Alliance for a Sustainable Economy (San Francisco Bay Area), Working Partnerships USA (San Jose), Los Angeles Alliance for a New Economy (aka LAANE), and the Center on Policy Initiatives (San Diego). The work of these groups to make “economic development subsidies more accountable and effective” generally goes unchallenged, as California is devoid of free market-oriented policy institutes that study state and local union interference with commerce.
The Community Benefit Agreement for the Emeryville Center for Community Life was developed by a consulting firm called A Squared Ventures, which worked with community “stakeholders” including the Residents United for a Livable Community (RULE), a group “concerned that the City has handed out tens of millions of public dollars to large developers without asking for many benefits for the community in return.” This same group has worked with the East Bay Alliance for a Sustainable Economy and UNITE-HERE Union Local No. 2850 to seek a Community Benefit Agreement for Phase II of the Bay Street project in Emeryville.
This Community Benefit Agreement for Emeryville’s Center for Community Life does not include a Project Labor Agreement, nor does the Community Benefit Agreement contain provisions that resemble provisions in a traditional pre-hire labor agreement. Instead, this Community Benefit Agreement sets employment goals for the project and simply requires the prime contractor and its subcontractors to obtain their workers through the union hiring hall dispatching process. For example, it requires contractors to “utilize name call procedures with the representative union hiring halls” to obtain workers classified as journeymen. Although it does not specifically indicate that contractors must request or obtain apprentices from union-affiliated Joint Apprenticeship Training Programs, this is apparently assumed in the additional provision that requires the prime contractor to “work with the construction trade unions to identify and implement local apprentice worker rotation opportunities” on a quarterly basis.
In addition to requiring contractors to obtain trade workers from unions, the Community Benefits Agreement requires the prime contractor to encourage Emeryville Unified School District students and their parents to attend recruitment events and meetings for a 16-week pre-apprenticeship program run by the Cypress Mandela Training Program, an organization with close ties to construction trade unions.
All of these requirements are intended to find jobs for people who live in certain zip codes in Emeryville, Berkeley, and Oakland, or within a wider “East Bay Green Corridor.”
But that’s not all. The prime contractor will be required to set up a “Learning Lab” on the job site to show students how the project achieves “environmental sustainability.” The Community Benefits Agreement requires contractors to pay the state-mandated prevailing wage to their trade workers (but that was required by state law anyway). There is a “living wage” requirement for workers not in the construction trades, based on the City of Emeryville’s living wage ordinance. The prime contractor will commit to using subcontractors and other construction-related contractors that are local small businesses.
California law allows school districts to choose “lease-leaseback” contractors using somewhat subjective “best value” criteria, rather than awarding the contract to the lowest responsible bidder. Surely the school district will chose its prime contractor based on its proposal to fulfill the requirement of the Community Benefits Agreement. A Project Labor Agreement is likely to be part of any proposals for the lease-leaseback contract.
Which developers and contractors will agree to meet these government-mandated conditions (or at least make it look like they’re going to meet these conditions)? I’m guessing a lot of the activists behind the Community Benefit Agreements expect these businesses to reduce their profit margin (and not increase the price) to fulfill these conditions for the good of the People, just like contractors allegedly have reduced their profit margins for the honor of working under the union Project Labor Agreement for the San Diego Unified School District. It will be interesting to see how the cost of the Emeryville Center of Community Life compares to other similar projects in the San Francisco Bay Area.
You are invited to go to the web site “dedicated to sharing information and encouraging an open conversation about the Emeryville Center of Community Life.” As it says, “From here you can participate in the emerging community dialog and gain access to current and background information that will help inform the exchange of ideas and allow for an authentic community engagement process.” You can share conversation and dialogue about fiscal responsibility, capitalism, free markets, profit, private property, etc.
1. I was surprised to see the provision in the Community Benefit Agreement requiring the prime contractor and the unions to rotate apprentices among various tasks, because union leaders like to claim that their apprenticeship programs provide comprehensive training for many tasks to their indentured apprentices, while non-union unilateral apprenticeship training programs exploit their apprentices by making them do the same task over and over again, in violation of their own program standards. Inclusion of this requirement suggests to me there is a problem with the scope of on-the-job training for union apprenticeship programs, at least in Alameda County.
2. Wouldn’t it be better to eliminate economic development subsidies altogether? Ask defeated California Assemblyman Chris Norby, author of Redevelopment: The Unknown Government, who was not rewarded for being alone in this position at the California state legislature. As government power has grown at the state and local levels in California, one of the easiest ways for corporations to make big money in this state is to avoid competing in the messy, insecure free market and instead feed off the compulsory tax payments of ordinary citizens and small businesses. In response, unions and other leftist groups pressure government officials to impose costly and burdensome requirements on these corporations, who in turn pass these costs along to consumers, and the cycle of crony capitalism continues at the expense of the fleeing middle class.
The Superintendent of the Emeryville Unified School District reported on April 10, 2012 that “because rent in the Bay Area is expensive and unemployment remains high, approximately 30 families in EUSD have been so impacted by the recession that they have opted to relocate to other cities.” It’s not a friendly place for ordinary families.
3. Which investors plan to buy the $95 million in bonds that 1,982 Emeryville voters authorized in November 2010 to be sold through Measure J in order to borrow money to pay for projects such as the Emeryville Center for Community Life? Interest and transaction fees for Measure J bond sales seem to be a loophole that allows the One Percent to make money off of this project. Or maybe the People’s Republic of China will buy the bonds.