Atlanta City Council considers tying social benefits programs to transportation referenda projects

By David Pendered

Atlanta city councilmembers are citing Atlanta’s Olympic Games in their emerging effort to ensure that city residents are hired for at least 30 percent of jobs, and that other community benefits be provided, if city voters in November approve two referenda totaling $2.8 billion for transportation projects.

1996 OIympics opening ceremony

The 1996 Summer Olympic Games in Atlanta were conducted in venues built by, and with some materials produced by, union members, following an agreement signed by Olympics organizers and organized labor. Credit: olympic.ca

A city attorney already has red-flagged the proposals, saying they relate to territory protected by Georgia’s right-to-work laws. Marc Goncher, of the city’s Law Department, said he didn’t think the proposals have been vetted with Mayor Kasim Reed’s administration.

Regardless, the proposals outlined in Resolution 4061 don’t have teeth, Goncher told the council’s Community Development Committee on July 26.

“The resolution as written has a lot of ‘shall’ and ‘required’ language,” Goncher said. “It’s more an advisory paper. The ‘shalls’ will be interpreted as, ‘please do this.’”

Supporters counter that the city can devise a way to thread the needle and make sure money collected from Atlanta taxpayers helps Atlanta residents.

After all, the city found a way to do something similar during the $1.6 billion in construction leading up to the 1996 Summer Olympic Games in Atlanta, according to Councilmember Andre Dickens, a co-sponsor of the original resolution with Councilmember Kwanza Hall.

“We did it for Atlantic Station, for the Olympics, for the consent decree,” Dickens said, with the last example being the multi-billion-dollar renovation of the city’s water and sewer system.

The Community Development Committee passed the paper with one amendment. All members present wanted their names attached: Michael Julian Bond; Joyce Sheperd; Ivory Lee Young, Jr.; and Cleta Winslow.

Greensferry sewer tunnel

Atlanta’s ongoing effort to improve its water and sewer systems is being built with a labor force that is required to include Atlanta residents, according to Atlanta Councilmember Andre Dickens. File/Credit: lachel.com

Dickens, the committee chair, said the paper can be refined during the council’s two-week summer recess. The item is tentatively on the council’s Aug. 15 agenda.

The deal reached with organized labor before the 1996 Olympics is the stuff of urban legend among some Atlanta neighborhood organizers.

The Olympic deal was evoked, without effect, during the debate over the redevelopment of Fort McPherson. The deal was evoked, with effect, in negotiations before Atlanta agreed to provide $200 million for the Mercedes-Benz Stadium. The deal was evoked, with no effect yet, in the pending deal to redevelop Turner Field.

Of note, a resolution passed by the Atlanta City Council did not factor into the deal between Olympics organizers and organized labor.

Civil protest forced the deal, according to a report in 1996 by Stewart Acuff. At the time, Acuff headed the Atlanta Labor Council and was a leader in the negotiations with the Atlanta Committee for the Olympic Games.

Acuff cited the Olympics deal in his 2011 book, Playing Bigger Than You Are: A Life in Organizing. Former Democratic presidential candidate Bernie Sanders wrote the preface to the book.

Stewart Acuff, on 2013 book tour in England

Stewart Acuff, on 2013 book tour in England

Acuff’s 1996 piece states:

  • “The City Council passed a resolution [in 1991] urging ACOG to ensure the work was done at fair wages with benefits and training by local workers and contractors. No effect.”

What did have an effect was the occupation of a tent city that labor erected next to the Olympic venue five days before the official groundbreaking, planned for June 10, 1993. Demonstrators planned to take over the groundbreaking, Acuff wrote. A deal was reached at 6:30 p.m. on June 9:

  • “[T]he building trades council signed an agreement with the contractor setting union wages and benefits and setting aside 10 percent of the jobs for community residents. Although the agreement covered about half of ACOG’s total construction, there was still a lot of work left. We weren’t done.”

“Done” occurred in early 1994. The Atlanta Labor Council announced its support for Bill Campbell for mayor in July 1993. Campbell won a run-off against former Fulton County Chairman Michael Lomax race with 73 percent of the vote. Campbell appointed Acuff to represent labor on ACOG’s board.

“We got their full attention,” Acuff wrote.

Mercedes-Benz Stadium July 2016

The Mercedes-Benz Stadium is being built with the help of city residents who found jobs through the Atlanta Workforce Development Agency. Credit: David Pendered

Atlantic Station, 2005

Atlanta Station was built following negotiations between the developer and the city that benefited city residents, according to Atlanta Councilmember Andre Dickens. Credit: emseal.com

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

28 replies
  1. scfranklin says:

    There is evidence of the success in areas of additional job and business opportunities in the Atlanta Committee for the Olympic Games’ Eqyal Econkmjc Opportunity Program. At the time the opportunities were unprecedented in the Olympics movement and Atlamta’s private sector projects. A decade or so later there is evidence of similar job opportunities and expanded business opportunities built into the Atlantic Station project. Atlanta in these two projects built on its illustrious history of finding concrete ways to include African Americans, women and other minirities and local residents in multi million dollar development and projects., city Hall and civic commitment to do so was the key ingredient.Report

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  2. PeggyPowellDobbins says:

    Way to go, Atlanta City Council!! Splendid to see Atlanta resuming it’s “show the way” forward for modern cities. Congratulations David, Andre, Kwanza. And don’t forget, now state Senator Vincent Fort, as the president of Atlanta Planning Advisory Board, and Columbus Ward, President of People’s Town Neighborhood Association, along with Stewart, invented the model. Reading this this morning is best lesson for me: have patience and faith and what seemed ahead of its time will become the will of all the good peopleReport

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  3. CathyWoolard says:

    We should ensure that Atlanta based labor and businesses get a preferential nod in RFP’s for infrastructure projects.  That will help keep taxpayer funds in the form of profit spending, local hiring and purchasing here where the project funding is generated.  That doesn’t mean we aren’t getting the best bid, but we are placing concrete value on investing locally.Report

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  4. Wormser Hats says:

    “What’s good for the goose, is good for the gander.”  Buy America provisions help ensure materials for federally-funded transportation/infrastructure projects are domestically-sourced.  “Buy Atlanta”  would not only benefit the residents and businesses of our city, but could encourage even more engineering and construction service-providers to locate in town.

    Resident employers and workers with “skin in the game” are inherently going to be better citizen stewards of our investments, than those perched OTP and merely generating revenue for principals and shareholders who often aren’t even members of the metropolitan community.Report

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  5. Burroughston Broch says:

    Every time you restrict free and open competition you increase costs. Atlanta City purchasing requirements for minority participation gave inflated the costs of projects for years and the taxpayers must pay for it.Report

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  6. Burroughston Broch says:

    The competition is only between the bidders and the price is inflated. Here’s how part of it works:
    1. City regulations require minority participation in supply of materials.
    2. Contractor orders materials from Minority Supplier that in reality is only an accounting office with heavy City Hall connections.
    3. Minority Supplier orders materials from a Real Supplier that stocks the materials. Real Supplier delivers materials to Contractor and sends a bill to Minority Supplier.
    4. Minority Supplier marks up Real Supplier’s bill by say 25% and bills Contractor.
    5. Contractor pays Minority Supplier, Minority Supplier pays Real Supplier and pockets 20% for providing no service other than laundering the transaction through his books to meet City regulations.
    This is just one of many reasons why City building costs are inflated.Report

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  7. scfranklin says:

    @ BB
    Like you I am well aware of the typical municipal procurement process.
    Creating competition has been a challenge sometimes but not always. For large infrastructure projects the contracts even at competitive prices are attractive. The alternative is to accept status quo that traditionally in America have excluded minorities and women from business opportunities. Excluding certain groups from business opportunities for 200 years deserves rectifying. In addition taxpayers don’t pay for much of the Iarge scale infrastructure projects rather rate payers and customers and users do as in the case of airport.Report

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  8. Rich Driggs says:

    @CathyWoolard  Thank you for this comment. As the CEO of Heery International, a local Design and Program Management company, it has been frustrating watching our professional sports teams contract with architectural firms out of Kansas City to complete these local projects which have significant public investments.  The vast majority of other other cities take a very parochial approach to this and support the local firms that have a rich history of supporting the city with jobs, tax revenue and community service.  We do a disservice to local business and local tax payers when we allow this to happen without so much as a discussion or in some cases even a public tender.

    Thank you for supporting local businesses and residents!

    Rich DriggsReport

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  9. Burroughston Broch says:

    So you justify making all taxpayers pay more in order to provide an advantage for a few? That’s straight out of Orwell’s “Animal Farm” in which all of the animals are equal, but some are more equal than others.Report

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  10. Burroughston Broch says:

    Buy American provisions are a sham. I was involved in a Federal project with these provisions. Millions of dollars of equipment was produced in Germany, imported to the USA where a minor bit of work was performed and then the product was labelled Buy American compliant.Report

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  11. scfranklin says:

    1. I challenge whether there is evidence of pass through contracts as you describe. That is myth.
    2. Oversight and guidelines of equal opportunity programs is stringent and includes US Supreme Court and GA Supreme Court. Procurement is closely monitored for abuse and is very rare.
    3. Users of water system and airport pay user fees whether airport landing fees and water sewer bills not taxpayers which refers to property taxpayers and sometimes sales taxpayers.
    4. I concur the system must be fair, closely monitored and operate with a level playing field.
    You on the other hand speak without presenting evidence of higher prices or costs.Report

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  12. Wormser Hats says:

    Burroughston Broch  Buy American provisions were never intended to guarantee of domestic-sourcing, just a performance objective for federally-funded projects.  The availability of waivers from this provision served to ensure that cost and quality were not sacrificed for the preference of American-made materials.  It would have been hypocritical for the Recovery Act (aka “Stimulus) to aid the American economy and jobs by simply allowing foreign steel and equipment to be employed in the reconstruction of our infrastructure, without at-least passing a test for domestic provisioning.
    I’ve been involved in billions of dollars in federal-aid projects.  Most were designed and built by American-owned firms using American materials and American labor. However, many of those firms are-today the operating arms of foreign-owned corporations, some with stocks not even traded on the domestic market. I don’t know whether it’s true globalization or corporate colonialization, but American entrepreneurship and employment have been a conspicuous casualty when home-grown firms sell-out to owners from across the pond who employ foreign technical professionals and equipment to design and build domestic infrastructure. 
    There is some consolation in these outfits that have local offices, but they are conspicuously less-invested in improving the quality of life and the sustainability of infrastructure on our shores, than the domestic progenitors they snatched-up from founding partners.
    Buy American was/intended as a “preferential treatment,” but not an absolute limit on quality and competitively-priced materials.

    I really don’t see what our City Council is proposing to be much different. As long as it’s an “Atlanta First” not an “Atlanta Only” protocol, the only objection should come from those who don’t have enough interest in our city to invest in doing business here.Report

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  13. Rich Driggs says:

    Burroughston Broch I should hire you as a consultant!  🙂  To suggest that Heery and other local firms don’t have the talent to participate in the design of these facilities would be inaccurate.  

    There are ways to get local firms involved in a material way even if you wanted to keep a KC firm as the lead, through document production, engineering, commissioning, etc.  

    My point is it takes a concerted effort from our local leaders to ensure local companies are at least considered and ideally utilized (all other things considered equal), especially when public money is invested.  That seems perfectly fair to me and it’s something we experience all the time–hence why we almost always have local participation when we operate outside of our footprint.  Good discussion.Report

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  14. Burroughston Broch says:

    Buy American provisions give one foreign manufacturer a lock on millions of dollars per year of one type of equipment for all projects constructed under one district of the US Army Corps of Engineers. The competing domestic manufacturers are locked out. I have firsthand knowledge of this situation.Report

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  15. Burroughston Broch says:

    It is no myth and you know it. HJ Russell Company has not recently grown quickly because of expertise other firms do not offer.Report

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  16. Burroughston Broch says:

    Rich Driggs Burroughston Broch  Heery does not seem to enjoy the sports market reputation that some of its competitors enjoy.
    It would have cost additional fee to involve Heery as an associate. Sometimes the local leaders don’t want local firms knowing about the project and they retain out-of-town firms in the hope that they can keep the project under wraps. Atlanta has a great history of doing exactly that.
    Also, the fact that Heery is no longer a locally-owned firm might color decisions.Report

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  17. Rich Driggs says:

    Please explain how it would cost more to use a local firm than a firm from KC?
    The point is often times these projects are not even competed when public money is invested and this is wrong. Hence to your point, is the public getting the best value?
    There should be an effort to use local companies and LOCAL TALENT. It’s about supporting the folks who go down to work at the food bank, who buy thousands of dollars of school supplies for local underprivileged kids when school starts and hep build foster facilities for at-risk youth (all things our people do because they care about their community and want to give back)….again all things considered equal.Report

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  18. Burroughston Broch says:

    It would cost more to hire a prime KC firm with an ATL associate architect than to hire the KC firm to handle the entire project. The problems with associated firms are two fold: (1) who controls the project and (2) who seals the contract documents. Each firm wants as much of the fee as they can get. The prime firm has extra work to manage the associated firm. And sealing documents can become a tangle, depending on the standard of responsible care in the state.Report

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  19. Wormser Hats says:

    The provision of set-asides sanctions no monopoly on inefficiencies or induced higher-costs. 
    Even where codified sovereign immunity exists, risk-averse and unaccountable public agencies almost habitually drive inefficiency and cost. 
    As we’ve recently seen in the evisceration of the Georgia Environmental Policy Act from most state-funded transportation projects, the legislative remedy to inefficiency doesn’t merely eliminate set-asides, but virtually “throws out the baby with the bathwater.” However unintentionally, this actually increases the state’s exposure to liability under a myriad federal statues.Report

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  20. Wormser Hats says:

    Burroughston Broch  In the case you cite, was the waiver from the Buy American provision publicly-advertised in the Federal Register? Did the competing domestic manufacturers appeal the decision? Or did everyone with a claim to stake just sit on their hands for fear of being shut-out from future bidding? 
    As a former federal whistleblower, I know too-well the cost of standing-on-principle, but it doesn’t discount it as a necessary function of a good citizen.Report

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  21. Rich Driggs says:

    BB I wish this was how it worked. We would make a lot more money this way. Unfortunately it doesn’t (except in ATL on some of these publicly funded sports projects). Most all major projects with public money are done by Joint Ventures.
    Thanks for the discussion. You are an interesting provocateur.Report

    Reply
  22. Burroughston Broch says:

    You are welcome. I had 45+ years of engineering experience before retiring at the end of last year. I was an EOR on a $1 billion Federal JV, DB project.Report

    Reply
  23. Burroughston Broch says:

    No advertisement – it’s a standing requirement. The other manufacturers gave up protesting since, as you know, there’s the right way, the wrong way, and the Corps’ way.Report

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  24. Wormser Hats says:

    Burroughston Broch  My civil works experience comes mostly from USDOT administrations. To be sure, they are fraught with cronyism, too, but maybe a bit less-so, since they’re subject to musical chairs nearly every 4-years, plus there’s Congressional reauthorization of their programs every 5-6 years, and they are no stranger to a gauntlet of litigation.Report

    Reply
  25. Natallie Keiser says:

    Very exciting to see this.  I’m especially pleased to see the thoughtfulness around long term affordable housing for persons below 60% AMI.  This resolution recognizes that the public investment in infrastructure is likely to increase property values, property taxes and rents in nearby areas, and that provision for long term affordable housing can mitigate the likelihood that only people of higher incomes will be able to live near the improved infrastructure.Report

    Reply

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