Two issues arising in the past few days perfectly demonstrate why California is viewed as an unfriendly place to do business.
First, Senate President Pro Tem Darrell Steinberg used the problematic “gut and amend” legislative process to create a new bill whose intent is to weaken the environmental review process for a proposed new Sacramento Kings arena.
This squalid maneuver coincided with Sacramento Mayor Kevin Johnson holding a press conference where he and the new owners of the Sacramento Kings stood surrounded by union construction workers to announce a “labor deal” had been reached on the building of the arena.
This “deal” is what is called a project labor agreement, and it essentially makes any project covered by one union-only.
With the Sacramento construction market 85 percent union-free, why would the owners agree to a PLA that will only make this project more expensive?
Why would Steinberg, who has not allowed much-needed significant reform of the California Environmental Quality Act, or CEQA, all session suddenly see the light on this one project with just days left in the legislative session?
The two are connected, of course, and paint an ugly picture of discrimination and corporatism at their worst.
In June, Sacramento Kings Basketball Holdings LLC issued a request for proposals from construction companies to be the lead contractor in building the Sacramento Entertainment and Sports Complex.
It told the winning bidder, Turner Construction, to make a deal with construction trade unions.
According to the request for proposals, “The Contractor shall also meet and negotiate with local labor regarding a possible Project Labor Agreement for the ESC.”
Under a project labor agreement, unions have the exclusive right to provide trade workers to the job site. The lead contractor and its subcontractors pay all employee benefits to union trust funds. Workers would pay mandatory union dues and fees.
One factor that helped unions to get this monopoly on building the arena was their proven record of delaying and blocking major development projects with environmental objections by exploiting CEQA.
A union-backed CEQA lawsuit against the proposed Sacramento railyard project was a prominent example of union “greenmail.” They are currently doing the same thing with the Delta Shores project in south Sacramento.
Political and business leaders in the Sacramento region were well aware of the threat of a CEQA lawsuit.
Union leaders had sought monopoly control for building an arena since the mid-2000s. So to eliminate this threat, the owners of the Kings agreed to throw the majority of local workers and apprentices under the bus. Steinberg promptly reciprocated with Senate Bill 743.
Arena supporters claim that this “agreement” is needed because it will make sure the project comes in on time and on budget and will not have any strikes or work stoppages.
Yet two much larger projects being built just north and south of where the arena will be built, the $1 billion Sacramento International Airport expansion and the $1 billion Stockton California State Corrections Hospital Facility, have both come in on time and on budget. Both have union and non-union working side by side and neither has had strikes or work stoppages.
Arena supporters claim that this is the only way to guarantee that local workers will be hired. Yet with 85 percent of the local construction workforce union-free, a PLA is the last thing that you would want if that is your goal. The owners have a ridiculously small goal of “60 percent local hire” for this project when without a PLA that number would be much higher.
The problem for arena backers is that they fail to understand that just because they have bought off big-labor special interests with a PLA does not mean that non-union contractors and associations will sit quietly by while our workers, apprentices, and contractors are treated like second-class citizens. We will also continue to highlight and oppose the greenmail that unions use locally and around the state to hold up projects.
All Sacramento citizens are being asked to support this project. All Sacramento citizens should be permitted to work on it without being forced to join a private entity to do it. Let local union bosses try to hold up this project using CEQA and see where that gets them.
Don’t reward and enable their bad behavior with backroom deals that treat some Americans like second-class citizens.
Eric Christen, a resident of Grass Valley, is executive director of the Coalition for Fair Employment in Construction.