One year later, PLAs used very differently

By Pat Shaver

CORRIDOR – This time last year, a project-labor agreement was in place for the University of Iowa ambulatory care clinic under construction in Coralville, and the Cedar Rapids city council had yet to even discuss using one on the city’s Convention Complex project.

Things have changed markedly since. The PLA for the UIHC clinic project, as well as another for expansion of the Iowa Veterans Home in Marshalltown, have been rescinded. The agreement for the Cedar Rapids project, signed in December of last year, was set aside after protracted discussions between Gov. Terry Branstad, Cedar Rapids Mayor Ron Corbett and others.

PLAs aren’t dead – one is being used on a hotel and parking facility project adjoining the Cedar Rapids Convention Complex, for example – but they are nowhere near as prominent as they were a year ago.

A PLA is a collective bargaining agreement negotiated between the municipality or organization and local unions to define terms and conditions of employment. By agreeing to use mostly labor unions, the project is in return expected to be completed on time without dispute or strikes and is intended to save money by achieving those goals.

The agreements weren’t on the radar of most folks prior to a February 2010 executive order from then-Gov. Chet Culver encouraging state agencies to designate any project worth $25 million or more as a PLA.

Debate ensued, with organized labor applauding the move and non-union workers and others decrying it.

The Iowa Board of Regents voted 5-4 in August of last year to approve the use of a PLA for the UIHC project, the first major state project to use a PLA.

As 2010 progressed, however, Gov. Terry Branstad began to campaign aggressively against PLAs. After he was elected and then took office in January, his first executive order banned project labor agreements on projects that use state funding.

The Cedar Rapids City Council had informally approved using a PLA on the Convention complex project on Nov. 9, just a week after Mr. Branstad was elected. It officially approved the agreement on Dec. 15. A month later, on Jan. 14, Mr. Branstad was inaugurated and issued his executive order.

The order, as interpreted by Mr. Branstad, meant that Cedar Rapids would not be able to use a $15 million I-JOBS grant for the project if the PLA remained in place. After months of wrangling, in June, the city of Cedar Rapids reached an agreement with Mr. Branstad and the Cedar Rapids/Iowa City Building Construction Trades Council to allow the city to use the state funding.

“The convention center portion of it that PLA no longer exists due to fact that the governor was withholding I-JOBS money on it,” said Scott Smith, president of the Cedar Rapids/Iowa City Building Trades Council, AFL-CIO. “The building trades stepped up and took a shot. If we release the city from that agreement then the governor would release the money, and he did.”

The city agreed to rescind the PLA for the Convention Complex, which allowed the state to release the $15 million I-JOBS grant for the project. The city will still be able to have project labor agreements for the hotel and parking parts of the project because state funds are not being used.

Along with I-JOBS funding of about $15 million, the city was awarded a $35 million grant to assist with the convention complex project, the largest that the EDA has ever awarded. The Hall-Perrine Foundation grant contributed about $2.5 million to the project.

The $75.6 million facility will include a new exhibit hall, ballrooms, meeting rooms and pre-function space, plus a renovated events arena and renovated hotel with an additional ballroom and meeting room space. The new complex will be approximately 435,000 square feet.

“The city took the initiative to offer us another agreement on the hotel portion of that entire project. The governor agreed to allow them to do that because there were no state funds involved in it. That portion of the project has been recently bid and all that is going right now hazardous material abatement,” Mr. Smith said. “We are waiting for finalized contracts to be signed by the general contractor and schedule a start date. Which may be around the end of this month or into November.”

On March 11, the project labor agreement was removed from UIHC’s $73 million outpatient medical facility, which is under construction at the Iowa River Landing District in Coralville.

The PLA was removed from the portions of the project for which construction contracts had not yet been awarded.

The Cedar Rapids/Iowa City Building Trades Council and the Central Iowa Building and Construction Trades Council did go to federal court against Mr. Branstad over rescission of the PLAs on the UIHC clinic and Iowa Veterans Home projects.

On May 3, the groups filed a lawsuit against Mr. Branstad, the regents and Mike Carroll, executive director of the Iowa Department of Administrative Services, in response to the governor’s executive order ending PLAs on projects. Judge John Jarvey of the U.S. District Court for the Southern District of Iowa in Des Moines dismissed the suit in September.

The trades council is undeterred, and Mr. Smith continues to extol the merits of PLAs.

“In general, PLAs are good for the community. It assures that at least half of the labor on the project will come from this local area and not come from outside the area or out of state,” Mr. Smith said. “It requires contractors or sub contractors to hire at least 50 percent of their people they need from local area. It upholds the standard of living for folks around here, keeps people off unemployment role in the area.”