What’s Up, Bob?

[October 29th, 2008]

Why is Oregon’s most vocal advocate for construction workers to get higher wages arguing against those same workers’ interests in a proposed $10 million Northeast Portland remodeling project?

That question is puzzling representatives of the plumbers and steamfitters’ and electrical workers’ unions, among others. They hope to see dozens of their members employed on the remodel of an old five-story Ramada Inn at 10 N Weidler St. to affordable housing and addiction services for Central City Concern.

And they’re also hoping their members will get “prevailing (read: union) wage”—which with benefits can be double non-union wage, depending on the work—for the project. The remodeling is financed with money from the Portland Development Commission, the city of Portland and Multnomah County.

The union officials expected an automatic ally for that request in Bob Shiprack, the longtime head of the Oregon State Building and Construction Trades Council. Shiprack has advocated loudly for years with the city-owned Portland Development Commission and other governmental agencies to ensure projects including public funds pay prevailing wage.

But now, in a pending legal battle over what’s called the Rose Quarter Housing Project, Shiprack has argued in written testimony that a Bureau of Labor and Industries finding that the job should pay prevailing wage is “illogical on its face.”

Shiprack’s seeming flip-flop hit a nerve for some union reps given Shiprack’s history. The PDC, which invests hundreds of millions of dollars in public-private partnerships, was a particular target of Shiprack’s past advocacy.

“It’s beyond me why Bob’s taken the position he has,” says Donald Kool, an organizer for Plumbers and Steamfitters Local 290. The local has been fighting for prevailing wages on the Rose Quarter Project since 2005.

That same year, the state Bureau of Labor and Industries took up Shiprack’s battle to get PDC to condition its funding of public-private partnerships on prevailing wage. BOLI sued the commission in Multnomah County Circuit Court.

Its argument failed (a ruling affirmed last year by the Oregon Court of Appeals). But the combined advocacy of BOLI and Shiprack led to a compromise. Jobs that included more than $750,000 in public money would henceforth pay prevailing wage.

That compromise became law in 2007, after the Legislature passed House Bill 2140.

In practical terms, the expansion meant more money for Shiprack’s building-trade constituents. It had a sweeping effect in Portland, where the PDC is involved in many, if not most, large-scale developments.

But in April, when the bureau said the Rose Quarter project would be entirely covered by prevailing wage, Central City Concern filed an appeal with an administrative law judge.

Shiprack then stunned and disappointed some of his constituents by filing a brief in September supporting Central City. In effect, he argued that his members should get paid less than BOLI ordered.

The International Brotherhood of Electrical Workers Local 48 opposes Central City and Shiprack’s position.

“Local 48 does not support Central City Concern’s appeal,” says Norman Malbin, a lawyer for Local 48. “[Shiprack’s position] has the effect of making his constituents less competitive in this market.”

Shiprack says his position is consistent with his interpretation of the intention of the 2007 legislation—to exempt new affordable housing from prevailing wage requirements.

“It should be a split project, with prevailing wage on the commercial part [a ground floor housing treatment services] and the residential part exempt,” Shiprack says.

The Rose Quarter Project will create 176 apartments for people making 50 percent or less than the metro-area median income ($47,250 for a single person). Shiprack says that although he remains a strong advocate of prevailing wages, he also says negotiations before the 2007 legislative session between affordable housing developers and labor has intended to exempt new affordable housing.

His onetime ally, the Bureau of Labor and Industries, says Shiprack is wrong. Christine Hammond, administrator of BOLI’s wage and hour division, says the Rose Quarter Project is neither new construction nor the renovation of an existing apartment building, the legal requirements for exemption.

“The project just doesn’t meet the plain test of the law regardless of who says it does,” says Hammond.

Shiprack blames the state bureau for the unhappiness among some labor unions. “BOLI tried to inflame a couple of my people,” he says.

He insists that labor broadly supports his position on the Rose Quarter Project. “My executive board met last week, and we’re on the same page,” he says, although he adds that the board did not discuss the Rose Quarter Project specifically.

Shiprack also vehemently denies he is trying to ingratiate himself to the project’s major funder, the PDC.

A PDC-financed company headed by his wife, Judy, who’s running for a seat on the Multnomah County Board of Commissioners, owes the city agency $1.8 million for an Old Town development gone awry (see “Shipracked,” WW, Sept, 17, 2008).

“That’s just plain ridiculous,” says Shiprack, who also served on the board of that company, Link Community Development Corp., of the possibility he’s shilling for PDC.

An administrative law judge will hear Central City Concern’s appeal on Nov. 4.