Dive Brief:
- Essentia Health announced Monday that terms for a project labor agreement (PLA) have been reached for the healthcare system's $800 million Vision Northland project in downtown Duluth, Minnesota.
- Also party to the PLA are construction manager McGough, based in Minneapolis-St. Paul, and the Duluth Building & Construction Trades Council. Unionized carpenters, masons, plasterers, ironworkers, millwrights, operating engineers, painters, plumbers, roofers, sheet metal workers, sprinkler fitters and more are expected to put in more than 2 million hours on the project.
- Essentia estimated that the project will create 5,600 onsite temporary construction jobs and another 3,600 offsite construction-related positions while adding $2.7 billion to the state’s economy and generating $880 million in combined personal earnings.
Dive Insight:
The Vision Northland project is slated to get underway in November, and includes construction of a replacement hospital bed tower, clinic and outpatient surgery center, encompassing more than 815,000 square feet of new medical facilities and the renovation of 115,000 square feet of existing space. Construction should be complete in the spring of 2022.
PLAs are an option for owners of both private and public projects, although a contentious one. Owners that enter into the agreements believe they are a way of ensuring that a project will have a steady supply of local, skilled workers earning, at the very least, the area’s prevailing wage and fringe benefits. PLAs are often required on projects that use taxpayer funds.
Employer groups like the Associated Builders and Contractors argue that PLA mandates, as opposed to voluntary PLAs, limit fair and open competition for construction projects, increase overall project costs and discriminate against qualified nonunion contractors and their employees.
ABC and other groups lobby hard to eliminate PLA mandates, and, in March, Kentucky became the 25th U.S. state to ban government-mandated PLAs. The state's Fair and Open Competition Act bars state and local government agencies from forcing contractors to sign on to PLAs for public projects but does not require agencies to ban them altogether. The law also does not keep contractors from entering into voluntary PLAs.
The Minnesota/North Dakota Chapter of the ABC sued the Minneapolis Public Schools district in March for requiring nonunion contractors to sign on to PLAs as a condition of bidding; to hire union workers, sometimes ahead of their own employees; and to pay into fringe benefit programs which their nonunion employees will not be able to access in the future. The lawsuit claims that local, open-shop contractors could lose out on $66 million of work because of the PLA mandate. That case is still ongoing.
