As City Council considers Port Covington TIF request, fight with unions emerges as possible sticking point

As the City Council weighs financing for the massive Port Covington proposal backed by Under Armour CEO Kevin Plank, some unions representing construction workers say they have come to an impasse negotiating with the developer.

About 300 people attended the second public hearing before the Baltimore City Council on the request by Plank's private real estate firm, Sagamore Development, for $535 million to build infrastructure in the area, where Sagamore plans to work with partners to create about a massive mixed-use project, including a campus for Under Armour.


The project could generate about 15,000 construction jobs as it unfolds over more than two decades, according to estimates prepared for the city.

Negotiations with the unions over rules governing those positions were a focal point of the meeting, where more than 100 people signed up to testify. Last week, testimony by labor leaders consumed almost forty-five minutes and drew sharp questions from members of the council, who stressed that they wanted to see a deal.


Before the hearing, City Councilman Edward Reisinger said he didn't want the union issue to be a sticking point, expressing hope the parties could reach an agreement.

Sagamore last week said it would pay prevailing wages on a quarter of the infrastructure work on the site, according to a letter obtained by The Baltimore Sun. But the letter did not mention a project labor agreement, which would guarantee a portion of the work for union labor and had been pushed by some groups.

Several speakers sparred over whether Sagamore would be required to use unionized workers in construction of the project.

"We support the TIF; we do not support the PLA," or project labor agreement, said Wayne Frazier, president of the Maryland Washington Minority Companies Association.

But critics called Sagamore's 25 percent offer not good enough, given the size of its financing request and the fact that city construction contracts worth more than $5,000 already require prevailing wages.

"It's a no brainer that it's a prevailing wage and shame on them for ever trying to use that as a negotiation tool," said David Allison, business manager for the Baltimore Washington Laborers' district council of the Laborers' International Union of North America. "Prevailing wage — that's a starting point, but it's not negotiation."

Prevailing wages are based on an annual survey conducted by the state and are similar to union rates.

It's not clear if the city's prevailing wage rules already apply to projects paid for through tax increment financing. City Solicitor George Nilson said there are questions about it but reached at home Tuesday, declined to offer an opinion "on the fly."


If the wage rules do not apply that would be a "big omission," said City Councilwoman Mary Pat Clarke, who raised the issue last week and said the law was designed to level the playing field between union and non-union bidders.

"This is a big project and prevailing wages are there for a reason," she said. "A solution has to be found there."

Through a spokesman, Sagamore declined to respond to questions about the negotiations. In a statement, President Marc Weller rejected the idea that talks have stalled, citing ongoing conversations with individual locals.

"We are far from any kind of 'impasse,'" he said. "To the contrary, we continue to have productive conversations with union locals and have made material progress with many of them. We look forward to continuing the discussions and making similar progress with other relevant groups."

TIF deals, which use new property tax revenue generated by the project to repay the bonds floated by the city, have been controversial in Baltimore in the past. But in 2013, when the city council debated Harbor Point, the developer early on agreed to use a project labor agreement for part of the work and key building trades leaders supported the proposal.

This time, several labor groups, including unions representing teachers, hospitality, government and service workers, have said they stand together in asking for the city to impose stronger requirements on the developer, including requirements for local hiring, sustainable wages and transportation to the job site.


They also point to union apprenticeship programs, saying they will create a pipeline of workers who can benefit from the multi-decade project and build careers in the industry.

"There is a sort of a history of TIFs that have been approved and promises to Baltimore City that were made by developers that didn't come to fruition, so we're trying to get some clear agreements so that Baltimore City workers benefit from this development," said Mark Coles, executive director of Community Hub for Opportunities in Construction Employment or CHOICE.

Sagamore already has signed an agreement with the city setting a goal of hiring at least 20 percent of all on-site employees from Baltimore City. Opponents say a project labor agreement would limit contractors' ability to hire locally and lead to workers getting brought in from other places.

"They don't have the workforce," said Mike Henderson, president of Associated Builders and Contractors in Baltimore. "The sad thing is there's plenty of work for everybody … without anybody getting special considerations."

The Evening Sun

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Some said the rules would be a particular burden to minority contractors, many of whom employ non-unionized workers and hurt small business, imposing paperwork and other burdens.

"This is America and we should be able to choose who we hire and what wages we pay, period," said Frazier of the minority companies association, before the hearing. "We should not burden the owner with paying more than what they could possibly get a skilled worker for on the open market."


The Maryland Minority Contractors Association is opposed to a project labor agreement, said former Mayor Sheila Dixon, who works for the group. But Dixon said that she personally thinks there is a way to craft a deal that would be a "win-win."

"Most of the unions do have really good apprenticeship programs and this is the piece that's missing," she said.

City Council President Bernard C. "Jack" Young said last week that where the unions stood was "important," but his spokesman, Lester Davis, declined to say this week whether he would support the TIF request without some kind of agreement.

"I don't think you're ever going to get a situation where 100 percent of any groups or individuals are satisfied," he said. "From the council president's perspective it's more important to let the entitites work thing out, more so than putting his thumb on the scales prematurely. I think he's encouraged and has full faith that those groups working with the developer are going to be able to hammer out a deal."