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LCA Contractors Fined $5.2 Million for Hiring Shortfall

Taxpayer-funded city project hired less than half of local labor goal

March 21, 2018

A new report says Detroiters performed about one-quarter of the work on the Little Caesars Arena (LCA) last year even though the city requires Detroit residents make up 51 percent of hired labor on projects that are taxpayer funded.

The $863 million LCA project was covered by a required Detroit labor agreement that requires any project that receives a brownfield tax abatement or has purchased land from the city below market rate must abide by the 51 percent Detroit resident labor rule.

Contractors who fail to meet the 51 percent compliance mark are fined. The Detroit News says the latest figures that were released Tuesday by the city showed contractors paid at total of $5.2 million by October 2017, with at least 44 contractors fined from $51,169 for an electrical contractor to $9.63 for a painting contractor in one month alone.

Most of the fines the city has collected have gone to fund training programs to address the skilled-trades shortage. Of the $5.2 million collected, $2.9 million has gone to workforce development, officials said. For fiscal year 2018, the department has been allotted an additional $2.5 million.

The greatest need for Detroit workers is for electricians, said Jeff Donofrio, executive director of the city’s workforce development office. Other areas of low compliance were found among steel workers and plumbers.

“We’re trying to build the pipeline of individuals going into the trades, going into construction, taking advantage of these job opportunities,” Donofrio said. “Sometimes that might be entry-level construction opportunities, sometimes that will be an actual pathway to journeyman and a very long-term career in construction.”

image: Olympia Entertainment

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