Letter to Concord City Council on January 7, 2020 Vote That May End Concord Naval Weapons Station Reuse Project
You Have a Choice re: Union Environmental Extortion of Concord Naval Weapons Station Reuse Project
January 6, 2020
Re: Agenda Item 6b: Considering whether Lennar Concord, LLC’s efforts to negotiate one or more Project Labor Agreements Satisfy Section 16.c. of the Council’s Adopted Term Sheet for Phase 1 of the Reuse Project which states, “Developer anticipates entering into, and will negotiate in good faith to secure, one or more Project Labor Agreements for project construction.”
Dear Concord City Councilmembers:
The Coalition for Fair Employment in Construction was founded in 1998 to protect fair and open competition in the awarding of construction contracts. We have long tracked the lobbying efforts of union officials in Contra Costa County to convince elected officials to impose anti-competitive and costly requirements on construction companies. Often these government mandates have led to performance failures and even abandonment of the projects altogether.
You are in danger of adding to those failures with the Concord Naval Weapons Station Reuse Project. It’s time to move forward without the continued mandate for a Project Labor Agreement.
History of Project Labor Agreements in the City of Concord
In the 1990s Contra Costa County and the City of Concord were state and national leaders in using Project Labor Agreements to give unions a monopoly on construction trade work, thus restricting bid competition and increasing costs of construction. The first government mandate in California for a Project Labor Agreement was imposed in 1994 by the Contra Costa County Board of Supervisors for the Contra Costa Regional Medical Center. The first government mandate in California for a Project Labor Agreement on routine public works building construction was on the City of Concord New Police Facility in 1995.
But something went wrong. In 1999, the Concord City Council approved bid specifications for the Downtown Concord Parking Garage with a Project Labor Agreement mandate quietly and obscurely slipped in it. The engineer’s estimate was $5,670,000, but the low bid was $7,523,531 - 33% over the estimate. And although the entire parking structure was expected to be finished by December 5, 2001, the second and third floors did not open to the public until April 30, 2002. And the city's construction manager did not certify the project as complete until October 24, 2002 - almost a year late.
Not surprisingly, this failure deflated the enthusiasm of the City of Concord to require construction companies to sign a Project Labor Agreement with unions as a condition of working on city contracts. In addition, a well-publicized disaster for implementation of the 2002 Contra Costa County Project Labor Agreement policy in 2002 and 2003 undermined the union political strategy on Project Labor Agreements for several years. Some of the problems with this policy were reported in a 2012 publication, “The Troubled History of Government-Mandated Project Labor Agreements on Contracts for Contra Costa County, California.”
Project Labor Agreements did not appear again in the City of Concord until 2010, when union officials began lobbying for a Project Labor Agreement on construction within the former Concord Naval Weapons Station. That’s where you come in.
2011 Staff Analysis of Project Labor Agreements Was Not Convinced That a Mandate Was Beneficial for the City
An April 5, 2011 staff report on the Concord Reuse Project-Area Plan indicated an intention to recommend a Project Labor Agreement mandate on developers in the reuse plan. As noted in a staff report for a September 12, 2011 meeting of the city’s Policy Development and Internal Operations Committee, “During the Concord Community Reuse Project’s planning and adoption process, advocates for Contra Costa labor organizations requested that future amendments to the 2030 General Plan have specific policies directing the use of: 1) Project Labor Agreements (PLA’s)…” The staff report also noted the following:
- ...one of the defining characteristics of PLAs is that they require all workers on a project to agree to union representation in order to identify and empower a bargaining representative for labor. This does not necessarily preclude non-union shops from participating on a project but it does require them to consent to the terms and conditions spelled out in the PLA. However, non-union contractors have argued that the requirement of consent discourages their involvement, which in turn reduces competition. They also have argued that a reduction in competition has an adverse effect on project bids (10-13% higher costs) and in some cases further constrains local hiring and local contracting2. When one considers that union labor currently accounts for less than 25% of the labor force in the Bay Area, any actions that might chill competition must be evaluated to confirm the positive advantages noted above…
- It was very difficult for staff to find definitive proof of the effectiveness and success of these agreements. There are volumes of published material in support and opposition to the use of PLAs including case law. However, very little of the published material is prepared by independent, peer-reviewed organizations and most comes from advocates of one side or the other of the issue.
- Informal inquiry with local agencies in Contra Costa County such as the City of Brentwood, the CCWD or the MDUSD provides success stories but also cases where overall projects did not go as well as planned. However, in the latter case it is often very difficult, after the fact, to determine if the lack of success of a project in whole, or part, was the result of a PLA or some other outside influence (weather, for example) or some combination thereof. The Todos Santos Parking Garage PLA is a case in point. The project did not go as smoothly as the City would have preferred but the reason is not clearly related to the fact that there was a PLA in place.
At the October 11, 2011 Concord City Council meeting, the Reuse Project Director reported that the Policy Development and Internal Operations Subcommittee had reviewed the staff recommendations on each of the suggestions and provided guidance in the formation of the recommendations presented in the supporting report. He “acknowledged that there is a lot of information which supports both Union and open-shop (non-union) labor agreements, making it difficult to find a middle ground, but stated that it would be premature to recommend that Project Labor Agreements cover all of the construction on the base. He did recommend that a pilot program be designed to test the effectiveness of Project Labor Agreements and Open Shop Agreements during the first phase of development.” The mayor reported that the Subcommittee had “discussed a 50-50 approach to a Phase One Pilot Program on the construction on the base; 50% Project Labor Agreement and 50% Merit Shop (non-union) awarded contracts.”
Following the presentation, the city council heard numerous speakers for and against the controversial Project Labor Agreement proposal. It also received substantial information from the public for and against the proposal: "Staff has received literally volumes of material," the Reuse Project Director said. It was obvious that the issue was whether or not construction trade unions should obtain a monopoly from the government of the City of Concord for this private work.
Now It’s 2020, and Impact of the Project Labor Agreement Mandate Is Known
Eight years have passed. The economy is booming. Demand for housing that’s affordable exceeds supply. Much has happened related to the Concord Naval Weapons Station Reuse Plan, but construction has not occurred. And unions still demand a government mandate for control of all construction work, on their terms, that increases costs.
Project Labor Agreements continue to hinder economic development and opportunities for housing that’s affordable in the City of Concord. In their quest for Project Labor Agreements on private projects, unions hired a law firm to submit baseless objections under the California Environmental Quality Act (CEQA) in 2016-2018 to the proposed Concord Village project (228 residential units) and in 2018-2019 to the proposed Avalon Town Center II project (310 residential units). Whatever happened behind the scenes with the unions means the people of Concord still wait for that housing.
On September 13, 2016, the Concord City Council voted to require construction companies to sign a Project Labor Agreement with unions as a condition of working on city contracts exceeding $750,000. We have not seen an analysis of performance under this policy, but we note at least one project - Measure Q Maintenance Project #7 (2018) - in which there were only two bids and the low bid was 32% over the engineer’s estimate.
Now unions are jeopardizing the Phase 1 development of the former Concord Naval Weapons Station with their usual costly demands. In fact, their letter criticizing the negotiations comes from the same law firm (Adams Broadwell Joseph & Cardozo) that submitted the CEQA objections to the Concord Village project and the proposed Avalon Town Center II project. This law firm in fact is on the cutting edge of CEQA abuse in California, where unions use the law to hold up projects until the owner “agrees” to a PLA. Is this what you want to abet?
There have been many failures throughout California as local governments try to reuse closed military bases for residential, commercial, and industrial development. Some of these failures occurred because of government-mandated conditions on developers - conditions imposed at the demand of construction trade unions. Do you regard Mare Island in Vallejo as a model worthy of emulation?
The City of Concord is on the verge of placing the Concord Naval Weapons Station on the base reuse failure list because of its mandate for a Project Labor Agreement and the inflexibility of unions in negotiations. Is this the legacy you want to leave for the City of Concord and Contra Costa County?
Executive Director (since 1999)
Coalition for Fair Employment in Construction