First Convention Complex contract approved; Branstad threat in the air

CEDAR RAPIDS - Mayor Ron Corbett and a City Council majority last night didn't blink in a dispute with Gov. Terry Branstad over the city's Convention Complex project labor agreement even though the Iowa Finance Authority has warned that such an agreement could cost the city a $15-million state I-JOBS grant.

On a 6-3 vote, the council majority dusted off the threat and voted to approve a first of several construction contracts on the Convention Complex project in which the city's project labor agreement with the Cedar Rapids and Iowa City Building Trades Council applies.

The vote did not come until council member Chuck Wieneke, who voted in the minority along with council members Pat Shey and Kris Gulick, said the city needed the $15-million state grant too much to risk losing it.

Wieneke spent considerable time chronicling how what had started as a $67-million Convention Complex project, with a $35 million federal grant and the $15-million I-JOBS grant, now had morphed into a $75.6-million project with an additional expense of $25 million to buy and renovate the hotel next door and another $10 million for a new parking ramp across First Avenue East. At the start, the city needed to find $17 million in local funds, now it is looking for close to $60 million, an amount that will climb to nearly $75 million if the city loses the I-JOBS grant, he said.

The city put its project labor agreement in place on Dec. 14, a little more than a month after Gov. Branstad's election and a month before he took office. Upon taking office, Branstad issued an executive order saying he would withhold state funds from public projects with project labor agreements.

Wieneke suggested that Branstad doesn't have to do anything now but sit back and withhold payment of the $15-million I-JOBS grant to the city, a state of affairs that will require the city to file a lawsuit against the governor to try to secure the money.

Corbett told the council that he had talked to Gov. Branstad's chief of staff as recently as Sunday, though he reported no breakthrough in the impasse. He said he also has talked to the Iowa Attorney General's Office about issuing an opinion.

At one point, Corbett read from the letter to him from the Iowa Finance Authority, which in one part states that the authority “may” declare the city in default of its I-JOBS agreement and that the authority “has the option” to withhold funds.

“It's not an iron fist,” the mayor said. “ … I don't think they're going to move.”

He asked Wieneke if the city wasn't opening itself up to a lawsuit from the building trades council if the city tried to go back on its project labor agreement.

Wieneke noted that the city is looking for the governor's help on other important city matters - the biggest is the city's request for state help to pay part of the cost of the city's flood-protection system. And Weineke said the city wasn't doing itself any favors with the governor “to take a stick and poke him in the eye” over the issue of a project labor agreement.

The city approved the project labor agreement - Branstad predecessor Chet Culver encouraged the agreements - as a way to ensure that local workers did much of the work on the Convention Complex project. Opponents of the agreements say they drive up costs and keep some contractors from bidding.

The project's demolition contract went to local firm D.W. Zinser Co. for more than a $1 million under the engineer's estimate for the work. Zinser, though, was the only firm to submit a “responsive” bid for the work.