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KC eyes local hiring pacts for public-supported developments

Seen from 93rd Street looking north, construction continues on the first two towers at the $4.45 billion Cerner Innovation Campus in south Kansas City. Only a small share of the construction workers the project are Kansas City residents. The city is now considering creating community benefit agreements, which would let the city negotiate with private developers who seek public incentives such as tax abatement or tax increment financing.
Seen from 93rd Street looking north, construction continues on the first two towers at the $4.45 billion Cerner Innovation Campus in south Kansas City. Only a small share of the construction workers the project are Kansas City residents. The city is now considering creating community benefit agreements, which would let the city negotiate with private developers who seek public incentives such as tax abatement or tax increment financing. tljungblad@kcstar.com

This summer, fewer than one in seven construction workers swarming over the huge new Innovation Campus in south Kansas City that Cerner Corp. is building are Kansas City residents.

That doesn’t sit well with people who think such big development projects — when partly subsidized by city taxpayers — should provide jobs for people who live in the city and pay those taxes.

Cerner is getting $1.75 billion in public assistance, the largest incentives bundle in Missouri history, to build its $4.45 billion office campus in south Kansas City. Over the 10-year buildout, the project expects to use 4,500 construction workers. Eventually, Cerner expects to house 16,000 employee there.

Kansas City Council member Alissia Canady is among residents who rejoice at the development. But she and others are pushing for a city ordinance to ensure that such tax-subsidized projects provide jobs to area workers or other local benefits.

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“The Trails project is a prime example,” Canady said, using a former name for the Innovation Campus site. “When developers hire from out of town, it creates a problem for us, for our taxpayers. … We realized we didn’t have a mechanism to compel developers to hire local residents. We’re proposing a solution.”

Technically, general contractors and their subcontractors, not the developer, hire construction workers. But the goal of providing local benefits remains the same: to create local jobs. However, everyone acknowledges that the city first needs a local workforce that’s skilled and capable of filling the available jobs.

Canady and fellow council member Scott Wagner are leading a push this week to create community benefits agreements, vehicles allowing the city to negotiate with private developers who seek public incentives such as tax abatement or tax increment financing.

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An agreement to provide jobs or other benefits — perhaps transportation or day care for workers and their children, living wage agreements, or infrastructure improvements in the neighborhood — would be reached before a developer could obtain incentives through any of the city’s economic development agencies.

Such agreements are used in Seattle, Denver and other cities around the country, Wagner said, emphasizing that Kansas City’s version would affect only future projects, not existing ones.

As it stands now, Cerner and its general contractor, JE Dunn, meet current hiring and local-impact demands. Through the development agreement, Cerner is channeling $2 million of super TIF revenue for neighborhood and infrastructure improvements and $6 million to education programs in the Hickman Mills School District. And JE Dunn is heavily involved in workforce training programs.

“We’re in compliance with the obligations of our development agreement regarding workforce development,” said Victoria Guerra, a spokeswoman for Cerner. She said the company supports the city’s efforts “to engage the urban core in large-scale economic development projects.”

Organizations like MORE2, which supports economic and racial equality, believe there’s a moral imperative for such projects to hire locally. MORE2 wants to pack the council chambers Thursday, when the council is expected to consider a community benefits resolution.

But here’s the hurdle: More training dollars and more training programs are needed to build a skilled local workforce.

“Contractors have to realize that we can’t meet hiring goals without training,” said Alise Martiny, secretary-business manager of the Greater Kansas City Building & Construction Trades Council. “And we need the contractors to put the money into training,” factoring the cost into their bids.

Currently, the city’s ability to bargain for “community benefits” lacks teeth because requests often enter the picture after incentives are granted, after general contractors and their subs are hired, Canady said.

Adding teeth is the devil-in-the-details work, Wagner said.

“It’s pretty clear that before we can put a workforce out there for hiring, they have to be trained,” Wagner said. “Various barriers, like transportation to jobs and day care, have to be dropped. There’s a lot of work to do to find a flexible vehicle that allows us to take some of the barriers down on a case-by-case basis.”

Clyde McQueen, president and CEO of the Full Employment Council, warned at a council committee meeting last week that one-size-fits-all rules won’t work. He said community benefits plans must be flexible enough to redefine exactly what the needed benefits are from a given project.

And Councilman Quinton Lucas said it’s important to be able to drive community benefits to parts of the city most in need, but also be able to define “community” broadly, as the city as a whole, if warranted.

Nobody wants a situation in which each new development proposal starts from scratch. We need a framework “to make it systematic and thoughtful,” Wagner said, setting guidelines for minimum project size, for example.

The resolution calls for the city’s existing Construction Workforce Board to meet with the city’s Economic Development Corp. and the agencies under its umbrella to arrive at a negotiating process for developers and the development agencies within 60 days from passage.

The 11-member Construction Workforce Board consists of appointees representing labor unions, school-sponsored training organizations, the urban community, the Heavy Constructors and Builders associations, minority and female contractors, and a subcontractor association.

The board monitors current city ordinances designed to increase retention, training and recruitment of residents, minorities and women on city construction contracts and throughout the Kansas City area.

“We consider it a great advisory board because it already represents a cross section of the community,” Wagner said. “Once (community benefits) are negotiated between the developer and the EDC, the proposal could go before that board. So, by the time the agencies vote on an incentive request, they would have a proposal that’s already been scrutinized by the community.”

Three other devil-in-the-details issues are included in the community benefits agreements resolution. One would require creation of a database of organizations “with knowledge of residents who are seeking employment opportunities.”

“Right now, the developer only has to say, ‘We called the union hall and they said they didn’t have anybody,’ ” Canady said of projects generally. “That’s not enough. We need a space for residents to list themselves for employment.”

Cerner points out that it already maintains its own workforce database for the Innovation Campus construction project.

Another issue is tied to legal concerns. A disparity study is needed to prove that Kansas City residents, particularly minorities, have been harmed by lack of access to available jobs. Without that, “you can’t set up a program with percentage goals,” Wagner said, citing federal law.

Finally, there’s funding — about a half-million dollars to pay for the disparity study and to add staff in the city’s Human Relations Department to enforce benefits agreements.

If the resolution passes this week, the council needs to follow up with an ordinance. And planners say the community benefit guidelines should be expanded to include city projects as well as subsidized private developments.

“With the Cerner project, with something going to happen at the airport, with the city’s infrastructure projects, we’re looking at billions of dollars of development in the next 10 years,” Canady said. “We don’t have the local workforce now to address all those needs, so we need to get on the training now.”

Diane Stafford: 816-234-4359, @kcstarstafford

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