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Cloquet City Council removes project labor agreement requirement for private projects

The approved change removes the requirement for private projects receiving city funding to enter into a PLA and adds incentives for projects that enter into an agreement.

Cloquet project labor agreements
Dan Olson, vice president of the Duluth Building and Construction Trades Council, left, addresses a crowd of attendees in the Cloquet City Hall parking lot before a City Council meeting to amend the city's code on project labor agreements on Tuesday, March 21.
Dylan Sherman / Cloquet Pine Journal

CLOQUET โ€” Despite over 150 representatives from the local trades union present, the City Council voted to amend its current city code to remove the requirement for private projects receiving city funding to enter into a project labor agreement.

The 5-2 vote, with councilors Sheila Lamb and Elizabeth Jaakola dissenting, was made swiftly after a hour-long work session held prior to the meeting Tuesday, March 21.

Councilors stressed that this change does not affect the city's projects that are required to enter into a PLA, as they heard some misconceptions from constituents leading up to the meeting.

The proposal was initially brought to the council by the Cloquet Economic Development Authority on Feb. 7.

The city's project labor agreement requires public projects that cost over $175,000 to enter into an agreement. This requirement extended into private projects as well as long as they were receiving public funding in some capacity for their projects.

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However, the change now allows the EDA to offer an incentive of an additional 15% of funding to private project opting to use a PLA.

Holly Hansen, the city's community development director, brought the proposal to the council after hearing private developers' concerns about the current agreement.

Hansen referenced that the city has seen zero private projects enter into the PLA since it was adopted in 2017, and believes that by including the incentive, the city could see an increase.

Dan Olson, vice president of the Duluth Building & Construction Trades Council, said he was disappointed with outcome.

"We need to reach out to them and see what their next plan is without that language," he said. "At the end of the day, we still want to make sure we have got a safe workforce and people are happy getting the wage and benefits they deserve."

Olson, along with other trades council representatives, had time to argue for the PLA to remain in place for private projects during the work session.

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A sign left on a bench by an attendee after the Cloquet City Council meeting on Tuesday, March 21.
Dylan Sherman / Cloquet Pine Journal

Olson's main argument was that the agreement is overall beneficial to the city as it protects the city's investment into a project by having a PLA.

"The language is to protect your investment, we don't see a hindrance in leveling the playing field," he said. "What if you got int a bad developer?"

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Mayor Roger Maki voted in favor of the change as he believes the current code does not work for the city.

Maki referenced the examples from the Cloquet Chamber of Commerce and EDA, that businesses and developers are not in favor of having that requirement on themselves.

"We have people that want to do things and they won't sign the PLA," he said. "We're being hurt."

Maki added the change does not guarantee investment and development in the city, but again cited the fact the city has had zero private projects enter in a PLA since its inception.

"We don't have any examples of how the PLA has protected anybody. There were no private projects," he said.

Jaakola said she voted against the change after the presentation and specific data from the union.

Some of the data included other cities and municipalities that have PLAs for private projects and the number of union workers who live in the city, which is 632.

Jaakola added that the argument from the unions that having the PLA requirement for the private projects receiving city gap funding helps protect city investment resonated with her.

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"A PLA protects the city's investments and that is what my job is," she said.

Dylan is a former reporter for the Cloquet Pine Journal.
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