Detroiters performed one-quarter of the work hours in construction of the $863 million Little Caesars Arena, less than half as many hours required for projects subsidized by city taxpayers, according to a new city report.
Contractors were fined more than $5.2 million for failing to meet Detroit’s requirement that city residents get 51 percent of the more than 2.8 million hours worked constructing the new home of the Detroit Red Wings and Detroit Pistons.
Enforcement of the 51 percent work requirement, an executive order that dates back to Coleman Young’s tenure of mayor, has been stepped up with the construction boom in downtown and Midtown Detroit and concerns among community leaders that Detroiters aren’t benefiting equally in the prosperity.
That’s caused city officials to adjust their approach to the ordinance instead of simply making it a fine that contractors build into the cost of doing business in Detroit.
“The biggest thing is to grow the pipeline of people available to work for (construction companies) so they can’t keep making the argument, or there is no argument to be made, that there are no Detroiters for these jobs,” said Portia Roberson, group executive for civil rights, inclusion and opportunity, whose city office enforced compliance of the labor rule.
The 51 percent Detroit labor requirement applies to any development project that receives a brownfield tax abatement or purchased land from the city below market rate, Roberson said.
In the coming year or years, Roberson said, the Detroiter employment rule will be enforced on Dan Gilbert’s skyscraper project at the former Hudson’s department store site, the Detroit Pistons’ practice facility in New Center, Gilbert’s Monroe Blocks office building project, the Packard Plant revitalization, redevelopment of the old Herman Kiefer Hospital complex and redevelopment the former Standard Accident Insurance Co. building at 640 Temple St.
The fines levied on contractors that worked on the Little Caesars Arena project were dedicated to a worker training fund set up to try get more Detroiters into the trades, especially the more skilled crafts such as electrical, plumbing and carpentry.
The city’s final report shows contractors working on the new arena met the Detroit labor requirement in only five of the 30 months of construction, between April and August 2015 at the outset of construction.
In steel work, electrical, carpentry and plumbing, the arena’s contractors never made the 51 percent mark in the 12 months of the project as the finish work got more complex.
“When a project is breaking ground and you’ve got people out there shoveling and moving … you could pretty much pick up 51 percent, 52 percent laborers,” Roberson said. “When you start going up on a scaffolding, laying a piece of iron 50 feet up in the air, it got less and less possible to find Detroiters.”
The data collected from the fines revealed where the shortages of workers are most severe — and that has spawned programs to get more Detroiters into the pipeline, said Jeff Donofrio, executive director of workforce development for Mayor Mike Duggan.
The Duggan administration has dedicated $1.75 million of the LCA fines to reviving skilled trades training programs at Randolph Career and Technical School, which was down to 80 students in its high school, Donofrio said.
About $10 million raised from private and public sources has funded capital improvements, new equipment and the creation of adult training programs, which began in January.
Enrollment in the high school program climbed to 300 students this year, Donofrio said.
The enrollment boost at Randolph includes 47 students in the electrical program, which had ceased operation for the past three school years, he said.
The city also created a program to relieve contractors of the fines if they hired from plumbing and carpentry unions that agree to reserve 25 percent of their first-year apprenticeship slots for Detroiters.
Construction contractors are now favoring unions that participate in the program, Roberson said.
The city workforce initiatives aim to both fill immediate labor demands and create a long-term sustainable workforce with middle-class wages.
“We’re really trying to play the long game,” Roberson said Tuesday. “It’s not about getting somebody on a job for few months and they really don’t learn any new skill set.”
– Editor’s Note: This story has been corrected to reflect that Randolph Career and Technical School had been down to 80 students.
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