Labor leaders ‘cautiously optimistic’ about Diamond District terms
Labor union officials had positive initial reactions to goals sketched out for the $2.4-billion Diamond District redevelopment.
The final agreements around the redevelopment project are yet to be made by the city. But if the terms outlined in a nonbinding 20-page term sheet hold, significant union participation and local hiring could result.
The term sheet, which City Council will consider Monday, functions as an agreement to “certain proposed minimum business terms and conditions” for The Diamond District. When the city of Richmond put out a request for the project in June, it included few details on where laborers and tradespersons should come from, how much they should be paid and if they would be union members.
The term-sheet’s provisions go beyond the city’s goals in the RFO.
“This was clearly a priority for the city, and we will work in good faith to achieve the goals,” said a spokesperson for Jason Guillot, of Thalhimer Realty — one of the members of RVA Diamond Partners LLC. “RVA Diamond Partners recognizes the importance of this issue to the city and agreed to the goals set out in the term sheet.”
According to the term sheet, RVA Diamond Partners, the consortium of businesses and organizations tapped by the city administration to execute the project, will strive to select city residents for new unskilled construction positions.
Another goal is for 40% of construction hours to come from union workers for publicly financed portions of the project, while privately financed portions have a goal of 25% union participation. And 40% of the development construction, and management and operational activity once construction is completed, should come from small and minority-owned business enterprises.
The requirements also could expand local unions through apprenticeship programs and new hires for the project.
“We're excited to have the opportunity with The Diamond District to start seeing some change and making a difference down there,” said Marshall Brown, director of the Laborers' International Union of North America Mid-Atlantic's business development division.
The city has required union labor on redevelopments before, like on a $325 million project for the former public safety building. But the Diamond District is much bigger: City documents indicate the project could include $2.4 billion in investment, including bonds that would be repaid using future taxes in the district. If the project failed to meet financial expectations, the city would not have to make additional payments.
Project labor agreements in The Diamond District
The term sheet also sets a goal of negotiating project labor agreements with unions, which could significantly affect organized labor in the city.
PLAs — which are between labor organizations and developers or governments — set wages and benefits for workers and can include training programs.
The agreements were largely banned by Republican-sponsored state legislation in 2012. But localities have been able to require them since May 1, 2021, after Democrats passed a bill in 2020.
“A project labor agreement is going to guarantee that you're going to have a steady supply of workforce,” said Brown, of LIUNA. Amid a labor shortage, Brown said training programs in a PLA could keep workers on the project, too.
The centerpiece of the development, a new Flying Squirrels baseball stadium, has a hard deadline. If the Squirrels don’t have a new stadium that conforms with Major League Baseball standards by March 2025, it could lose its MLB affiliation.
Charles Skelly, the top elected official in International Brotherhood of Electrical Workers Local 666 and the president of the Richmond Building and Construction Trades Council, said a PLA is the best way to realize the city’s labor and employment goals. He was “cautiously optimistic that they'll meet those goals.”
“Unless the city and the developer are actually firmly committed to ensuring everyone, all the way through the subcontractors, are adhering to all these very valuable goals for the community, there's no real enforcement except under a project labor agreement,” Skelly said. “So, I'm a big fan of that, because it holds people accountable to worthy goals.”
Contractors should also participate in apprenticeship programs, the term sheet said. Skelly called the apprenticeships transformational for some workers’ financial futures.
“They go through a four-year apprenticeship and come out on the other side of that apprenticeship earning a middle-class living with good wages, health insurance, be able to retire with dignity,” he said.
The term sheet also indicates that the developer must provide evidence of PLAs that would set a minimum wage of $16.50 an hour — or the prevailing wage rate for the city, which is determined by the U.S. Department of Labor for certain industries.
The city, as of now, wants to require RVA Diamond Partners to have contractors “make a good faith effort” to only bring on Richmond residents as new hires and have 60% of existing construction laborers be residents. The goal would be for 50% of newly hired skilled tradespeople and 15% of existing skilled tradespeople to be residents.
Unions in Richmond, as in other places across the U.S., seem to be on the upswing; Skelly said his union has grown “about 40%” in the past four years.
The local-hiring component of The Diamond District plan represents a possible boon for unions in the area, as workers could join the project through union apprenticeships and remain members.
“This isn't a one-off project, you know. We're looking to stay and grow in [the Richmond area],” Brown said.
Spokespeople for Mayor Levar Stoney and the city of Richmond did not respond to VPM News request for comment by the end of Thursday.