Oct. 20 2010 12:00 AM

One union leader gives his side on the Market Place project: ‘We’ve started to talk past each other as far as developing our city’

Joe Davis hopes the drama over granting tax incentives to local developer Pat Gillespie will be a learning experience — for politicians, the private sector and the hands that build whatever results from agreements between the first two.

“It’s important to have individuals work and get paid a fair wage. We have to make sure labor is valued,” said Davis, who is a representative with the International Brotherhood of Electrical Workers. “That shouldn’t stop with the person who has the ability to finance the project.”

Davis is not anti-development, nor is he anti-capitalist — “Far from it,” he said. He is, however, skeptical about trusting Gillespie to guarantee an “agreeable wage” for construction workers and to do so through an open bid process.

Half of the City Council sided with Davis on Oct. 11.

The Council voted 4-4 that night on granting a 24-year brownfield tax incentive to Gillespie’s $23 million mixed-use Market Place development, and it upheld that vote this week. It voted along the same lines against a two-year brownfield extension for his $14 million Marshall Street Armory renovation. At-Large Council members Derrick Quinney, Brian Jeffries, Carol Wood and First Ward Councilman Eric Hewitt voted no on the incentives.

Gillespie has made it clear that, without the brownfield tax incentives, the area next to the City Market will become a surface parking lot. However, the armory project is still likely to move forward, as an 18-year brownfield tax incentive is already in place (Gillespie wanted 20). Gillespie wants to use the former armory as a headquarters for five regional nonprofits.

Jeffries and Quinney said their no votes were due to a lack of agreement between unions and Gillespie on wages, dating back to March. City Council Vice President Kathie Dunbar — who voted for the incentives — warned that this mounting lack of trust between Gillespie and the unions is a detriment to economic development.

Gillespie is considering filing suit against the city on grounds that it is illegal to vote against brownfield incentives for a private project even though wage agreements are not in place.

So if the two sides couldn’t agree on an open bid process and prevailing wages until now, why would they after the incentive is granted, Davis wonders.

Davis said the unions are playing with a “double-edged sword.” They are fighting for the right to be part of an open bid process for the construction jobs. But in risking the perception of being a roadblock for the overall project, a doomed project means no construction jobs — union or non-union.

Some are painting the Council members who voted against the incentives as anti-development and anti-Gillespie. That is why local residents Joe Manzella and Rory Neuner launched City Council campaigns for the 2011 election on Oct. 12. A member of the Lansing Regional Chamber of Commerce political action committee is collecting money to oust Quinney, Wood and Hewitt, who are up for re-election in 2011.

Davis said the unions simply want two things: fair wages and an open bid process for the Market Place and armory construction work.

Open bidding means that subcontractors can compare their bids for the work with everyone else, as opposed to a closed bid process, where the developer reviews cost estimates and makes a decision. Prevailing wages are the actual wage plus benefits. They can be negotiated on any contractual work, be it union or nonunion hires.

Davis thinks it’s fair for the city to ask for something in return for granting tax breaks — and it’s hardly radical. The state requires prevailing wages for all construction projects related to state-owned buildings and schools. The potential Knapp’s building redevelopment has prevailing wages in place because it is applying for federal dollars to get the project started.

Davis said the prevailing wage for a high voltage electrician in the tri-county area is around $30 per hour, while the industry standard for generalized construction jobs is $22 per hour. He wants people to realize that any salaries less than that end up in Gillespie’s pocket.

The idea for a project labor agreement, or PLA, was kicked around for the armory project before the Council’s vote Oct. 11, but City Attorney Brig Smith said it would have been illegal to “retroactively” attach one to the project. A PLA establishes wages, benefits and other workplace rules before work begins on a large-scale construction project. It can include both union and non-union workers.

Dale Belman, a professor of labor and industrial relations at Michigan State University, said the saga playing out between the two sides is a political one.

He said labor groups have “legitimate social goals,” and leveraging a City Council vote is a “way of getting their issue considered.” Had the Council approved the tax incentive, they wouldn’t have that leverage.

He also said Davis’ concerns about an open bid process are legitimate. Sometimes, developers “shop the best bids” in a closed process, enticing favored subcontractors.

“I can see why there’s some unhappiness out there” (by unions) because they suspect the bidding process is rigged, he said.

Belman said construction work is unique to all other unionized jobs. The work is temporary and part of an economically sensitive industry. Making money today is more important than maintaining relationships, he said.

For Davis, who is 45 and a Lansing Everett High School graduate, the debate gets more personal by the day.

He did his Army National Guard drills at the Marshall Street Armory between 1999 and 2005 as a lieutenant and then as a captain. He said Gillespie’s intentions for using the armory as a nonprofit center are “great” and that it’d be ideal to resolve “the issue hanging over it.”

Davis hopes the community will at least understand why the unions are fighting for an open bid process and reasonable wages.

“We have started to talk past each other as far as developing our city,” Davis said in his soft-spoken voice. “This labor unrest is not good for our community.”