A proposal to construct 50 more single-family homes for low-income renters may hinge on whether Springfield City Council members grant an exception to a 2023 ordinance that guarantees union involvement in the hiring and pay of workers on large projects.
The proposed fifth phase of home development in the Nehemiah Expansion project would provide desperately needed, decent and affordable housing on the city’s east side, according to the Rev. Silas Johnson, pastor of Calvary Missionary Baptist Church.
Johnson told City Council members during a Feb. 12 meeting in front of more than 150 building trades union supporters that a city-mandated “project labor agreement,” or PLA, would boost labor costs for the project by more than $5 million and kill the plan.
Johnson, a retired union electrician at city-owned City Water, Light & Power, is pushing for a “modified PLA” that would cover a more limited part of the project, covering only infrastructure work.
The project’s construction cost is estimated at $18 million. Financing costs and legal expenses, as well as funds to leverage state tax credits and encourage private investment, would bring the total project cost to an estimated $23 million. The project also would require approval from the Illinois Housing Development Authority.
The City Council is considering spending $1 million in federal block grant funds and $500,000 in from the Far East Tax-Increment Financing District to assist in the project. The council could vote on the funding, and the requested modified PLA, at its Feb. 18 meeting.
The projected increases in labor costs would disrupt the complicated bundle of private and government financing for the proposed project and prevent it from moving forward, according to Johnson and Mike Niehaus, the owner of Springfield-based Windsor Homes, Nehemiah’s general contractor.
More than 350 people are on the waiting list to rent, and potentially purchase, one of the 50 new two-, three- and four-bedroom homes in phase five of the project, Johnson said.
Niehaus said 76 lots would be improved, with 41 of those lots currently owned by the city and 35 acquired by Nehemiah over the years. Eleven blighted buildings would be torn down, he said.
“I live in the neighborhood,” said Johnson, who has spearheaded Nehemiah Expansion – a nonprofit branch of his church – and the related construction of 120 homes on the east side in four earlier Nehemiah phases over almost two decades. “It’s personal to me.”
But Brad Schaive, retired business manager of Laborers Local 477 in Springfield and a consultant speaking on behalf of building trades unions, said the $5 million estimate of increased costs was “the biggest lie I’ve ever heard in this room” and “a smokescreen.”
Schaive faulted Niehaus for failing to provide details backing up the estimate of additional labor costs. Niehaus said he will have those details for the council’s Feb. 18 meeting.
“We deserve respect,” Schaive told council members in front of the overflowing crowd of people, many of them wearing bright orange vests. “We deserve the right to fair pay, and we deserve a city council and a city that recognizes that a PLA guarantees local,” he said. “It guarantees minority participation, and it guarantees we will make sure people are provided for and the law is followed. That makes many people nervous.”
Schaive said earlier phases of Nehemiah Expansion, which were built without PLAs, made use of too many out-of-town contractors and not enough minority workers. Niehaus disputed that statement.
Niehaus said few union contractors have bid on Nehemiah’s earlier phases. Union contractors in central Illinois tend to focus on commercial and not residential construction, he said.
Johnson said in a letter to council members that Windsor Homes “is diligent in trying to hire minority-owned businesses and businesses utilizing minority and female workers.”
Project labor agreements were allowed but not required on projects that involved city funds until the council voted in summer 2023 to make PLAs a requirement for all projects totaling more than $50,000.
The vote came after the election of Mayor Misty Buscher, who beat the incumbent mayor, Jim Langfelder, and received more campaign contributions from organized labor than Langfelder. Many council members have received contributions from unions over the years.
According to the AFL-CIO, PLAs are “collective bargaining agreements between building trade unions and contractors” and “govern terms and conditions of employment for all craft workers – union and nonunion – on a construction project. They protect taxpayers by eliminating costly delays due to labor conflicts or shortages of skilled workers.”
Critics, such as the anti-union National Right to Work Legal Defense Foundation, say PLAs “usually require contractors to grant union officials monopoly bargaining privileges over all workers; use exclusive union hiring halls; force workers to pay dues to keep their jobs; and pay above-market prices resulting from wasteful work rules and featherbedding.”
Niehaus noted that Springfield city code says PLAs are required “unless it has been determined that a project labor agreement would not advance the city’s interests of cost, efficiency, quality, safety, timeliness, skilled labor force and labor stability, and the city’s policy to advance minority-owned or female-owned businesses, or businesses utilizing minority and female workers.”
Niehaus said Windsor Homes always pays the federally required “prevailing wage,” or the central Illinois average for all workers – union and nonunion – who take part in residential projects.
PLAs in the state require prevailing wage rates set by the Illinois Department of Labor. Those rates, he said, are higher, in many cases, than overall regional prevailing wage rates because state rates are derived from averages paid on commercial projects, which tend to be more expensive.
Council members didn’t ask any questions after the statements from Schaive and the Nehemiah Expansion representatives. Ward 2 Ald. Shawn Gregory, who represents the Nehemiah area, asked Nehemiah officials and labor unions to work together on a compromise.
Schaive said Johnson and Niehaus are bluffing when they say a PLA would sink the project.
“What they do is their business,” Schaive said. “I could care less, honestly. The fact is the law here is a project labor agreement.”
Springfield resident Ken Pacha spoke during the meeting’s public comment period and encouraged the council to not be swayed by labor unions.
“We have an opportunity to make a real change in this city,” he said, “and if we fail to do that because we’re more worried about upsetting a union, who cares? Stick a rat outside and cry me a river. They don’t give a damn about those houses being built. They want the money, just like everybody else.”
This article appears in SBJ February 2025.