3/13/08

Curbing non-union labor in Minnesota

The proposed expansion of the Mall of America would create 7,000 union construction jobs for three years and, when completed, would yield a $1 billion increase in state sales tax revenues over 20 years, proponents say. For these reasons, they add, the state Legislature should act to approve public financing for the parking ramp proposed as part of the Mall of America's Phase II.

"The top legislative priority for the Carpenters and several other trades, as well as ... the Building Trades Council, is the Mall of America expansion," said Kyle Makarios, political director for the North Central States Regional Council of Carpenters.

Phase II of the Mall of America would more than double the size of the mall, adding 5.6 million square feet to the mall's current 4.2 million square feet. The expansion would connect to the current mall on all four levels and would include retail, hotels, entertainment venues, and a NHL-size hockey arena.

Private investors would invest $1.8 billion in the expansion, said Dan Jasper, Mall of America's public relations director.

The state will be asked to fund about $200 million in public infrastructure improvements, the bulk of the money going to build a new parking structure.

The precedent: the City of Bloomington financed and owns the mall's current parking ramps.

While Bloomington invested in infrastructure for the mall, the state did not, Jasper noted. Yet in the 15 years since the mall opened in 1992, he said, it has generated $800 million in tax revenues for the State of Minnesota.

In the 20 years following the proposed expansion, the mall says, Phase II sales taxes would generate more than $1 billion in new revenue for the state.

Last year, the tax bill passed by both the Minnesota House and Senate included funding the Phase II parking structure by temporarily diverting part of the tax stream generated by the mall for that purpose. Governor Tim Pawlenty vetoed the entire tax bill, however, and the Phase II parking ramp funding died with the veto.

This year, Phase II proponents have not yet settled on a infrastructure funding mechanism to propose, Jasper and Makarios said.

Skeptics might question why, during an economic downturn, the state should be asked to finance a new Mall of America parking ramp.

"At a time when job creation is at an all-time low ... we need this project," said Makarios. He noted that in addition to creating 7,000 construction jobs, Phase II would create 7,000 permanent jobs. "It couldn't come at a better time," he said.

Last year, before the Governor's veto, the Building Trades staged an outdoor rally at the State Capitol in support of Phase II and announced that the Mall of America had signed a Project Labor Agreement to use 100 percent union labor on the job — the largest PLA in the state's history.

"That PLA is still intact," said David Ybarra, business manager for the Minneapolis Building & Construction Trades Council. Given the changed economic climate, Ybarra emphasized, he's thrilled that the Mall of America wants to proceed with Phase II as planned.

"The mall owners are willing to invest $1.8 billion in Minnesota," he emphasized. "That's a significant boost to the economy."

"We have unions who have unemployment we haven't seen in 20 years," Ybarra reported. "We need to work."

"One way you get out of recession is to put people back to work," Ybarra noted.

"Most people don't remember, but when the Mall of America was originally built, we were in a recession," said the mall's Jasper.

Ybarra remembers well. In 1991, Ybarra was a first-year apprentice newly-accepted into Sprinkler Fitters Local 417. Work was underway to complete Phase I of the Mall of America and, he recalled, 106 out of 240 members of Sprinkler Fitters Local 417 were then working on the project. "I probably would not have gotten into the trade if it wasn't for the Mall of America," Ybarra said.

"We have a 20-year relationship [with the Building Trades] that's ongoing," Jasper said. "We think it's been good for labor and it's been good for us."

And good for Minnesota, Jasper added, as the mall's tax revenues show.

The mall currently attracts 40 million visitors yearly — a number that would grow by another 20 million with Phase II completion, Jasper said. "One half of the dollars spent at the Mall of America come from tourists — from people beyond Minnesota. They bring their money."

For more information on the economic impact of the Mall of America and the mall's proposed Phase II expansion, visit www.mallofamericaphase2.com.

(workdayminnesota.org)

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