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As Construction Safety Debate Heats Up, Contracting Group Acknowledges Shift Away from Unions

By Sally Goldenberg
07/05/2017 05:02 AM EDT

The city’s leading trade organization representing building contractors, historically an ally of construction unions, is increasingly welcoming employers who use nonunion workers as well.

The shift, which the group’s president acknowledged in a private speech and interview last week, is taking shape as city officials, organized labor and developers spar over the terms of a bill that would regulate the increasingly dangerous construction industry. A handful of unions, meanwhile, are locked in disputes over collective bargaining agreements that were set to expire last week.

Lou Coletti, president of the Building Trade Employers’ Association, delivered a candid speech last Wednesday at a dinner hosted by the Construction & Realty Services Group at Keens Steakhouse in Manhattan. He made clear his organization is embracing “open shop” companies whose workers are not required to be in unions and typically charge lower rates.

He also vowed to sue if a bill being drafted in the City Council requires government-funded subsidies for increased worker training mandates because his members already bear that cost themselves, according to a recording of his remarks obtained by POLITICO New York.

“We’re an organization that’s in transition. Ninety-five percent of my construction managers and general contractors are building open shop,” Coletti said. “There are trades that have made changes, and if they made changes, their prices are at the table and it works and if it doesn’t, then they don’t get the job. It’s that simple. We’re a contractor group, not a labor group.”

“We know we’ve lost a tremendous amount of market share in the residential marketplace as well as the interior marketplace,” he added. “It’s a fact. We’re in an open shop environment — that isn’t going to change. The question is, how is the BTEA going to change to address that?”
Coletti’s organization is made up of 27 contractor associations representing 1,700 construction managers, general contractors and subcontractor firms employing 120,000 workers, according to its website.

Its mission, according to the site, is to “advance the interest of the New York City Construction Trade Associations and their corporate members, recognizing that a vibrant unionized construction industry is essential to the economic future of New York City.”

But after years of scarce lending and climbing land costs — and an often unsuccessful effort to persuade unions to lower their rates —contractors and building managers began working with non-unionized labor, Coletti said in an interview. The shift coincided with a broader feud over union wages, sparked by the 2015 expiration of the 421-a property tax break, which was reinstated this year with a partial pay requirement.

“Open shop is not where we want to be,” he said. “We prefer doing a job with 100 percent building trades, but if we don’t have 100 percent of them who allow us to be cost-competitive, we reach the point … that we can no longer afford not to compete for that work.”

Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York, penned an op-ed in the Commercial Observer last month entitled, “Gotham Was, Is and Always Will Be a Union Town” in response to an article about unions losing their stronghold on the real estate industry.
He said his umbrella organization of unions “has not only worked to reduce wages and cut construction costs, but unions have also made historic changes to collective bargaining agreements including work rules.”

Government projects have been rolling in — his members are working on the revamped LaGuardia Airport, plans for a new Penn Station and the Kosciuszko Bridge, he wrote.

He also took aim at the Real Estate Board of New York for working alongside two “front” organizations that represent nonunion contractors — the New York Construction Alliance and the Associated Builders & Contractors.

“In reality, NYCA and ABC represent the narrow, misguided interests of seven contractors and unfortunately a few thousand exploited construction workers,” he wrote. “And REBNY is now helping to push their agenda.”

Several sources involved in the construction safety debate said Coletti is making a play to get members of the New York Construction Alliance to join his organization. The alliance represents several prolific general contractors, including Lettire Construction Corp. and L+M Builders Group.

Coletti acknowledged he is in talks with open shop contractors but said his association hasn’t decided on the scope of its expansion yet.

He also criticized the Associated Builders & Contractors, which is based in Syracuse, for having little presence in the five boroughs as it lobbies the City Council on the construction safety legislation.

“My new nickname, and I hope you use it in the article — I call them the mouse that roared,” he said.

Their main objection to the bill, he said, is simple economics. “They don’t have a commitment to safety and they don’t want to pay for it,” he said.

“If not for this mouse that roared, (the bill) would have been passed and hundreds of merit shop contractors and tens of thousands of workers would be unemployed right now while Mr. Coletti sat on the sidelines watching the legislation move,” association president Brian Sampson replied.

The bill was the subject of a day-long, contentious Council hearing in January but is being redrafted before a final vote, which has yet to be scheduled.

Among the unresolved issues is who would foot the bill for the new mandated training courses, which could total up to 242 hours for certain specialized workers.

A source close to the negotiations said the Real Estate Board of New York plans to sue if it deems the final bill favors unions. Coletti also warned of litigation.

“The Buildings Department better have the resources it needs to fully enforce this law, or you have wasted everybody’s time and this bill will be a joke,” he said during his remarks at the industry dinner last week. “And number two — I don’t want to see a penny of public subsidy for the training programs absent what they do with the immigrant workers.”

If the city covers the cost of training for contractors, it would benefit those who are not members of his organization, he said.

He said he has been in touch with Mayor Bill de Blasio’s administration and the Council but warned, “none of them know what they’re doing with this curriculum.”

This story originally appeared in PoliticoPro.