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October 21, 2014

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Smith Center contractor upsets labor

Some subcontracts will be granted to companies that don’t use union workers

Click to enlarge photo

This is an artist's rendering of the Smith Center for the Performing Arts, which is expected to be the "anchor tenant" of the Union Park development, a city official says.

Smith Center for the Performing Arts

When bids came in two years ago to determine which company would be the main construction contractor for the Smith Center for the Performing Arts — the largest cultural public works project in the city’s history — one out-of-state company had home-field advantage.

Whiting-Turner Contracting Co., century-old and Baltimore-based, had been selected to build the Lou Ruvo Brain Institute, as well as the first two massive World Market Center buildings — each a stone’s throw from the Smith Center’s Union Park site.

The initial Las Vegas City Council selection of Whiting-Turner to oversee a quarter-billion dollars worth of construction raised no hackles in early 2008. But now, as Smith Center officials are set to break ground this month, concerns are being raised about the amount of work being given to nonunion subcontractors.

City officials who recently asked Whiting-Turner about the issue said more than one of every five subcontracting dollars is going to companies with nonunion labor.

By law, Whiting-Turner can select any companies it wants. But labor leaders are crying foul over the use of nonunion workers, who they claim are often exploited and don’t provide as high a quality of workmanship.

One local union boss, Carlos Aquin, president of Bricklayers and Allied Craftworkers Local 13, said he is outraged that Whiting-Turner is not going strictly union.

“My main concern is that Whiting-Turner has a history of going nonunion,” Aquin said. “Look at the economy. What they’re doing is basically taking advantage of people who are hard up.”

Aquin said that on previous construction sites run by Whiting-Turner, including those at Showcase mall and Forum Shops at Caesars, nonunion labor was used.

Aquin said he and his roughly 2,100 members — more than 40 percent of whom are unemployed — “will do whatever it takes” to get the company to back off the nonunion contracts for the Smith Center. Their efforts might include a picket and handbilling campaign at that and other Whiting-Turner sites, he said.

Whiting-Turner Vice President Paul Schmitt of the company’s Las Vegas office, declined to comment, citing his company’s long-standing policy of not talking to the news media.

As often happens when union-related matters come before the City Council, Councilman Steve Ross was put in a tricky position Wednesday as many of the final financing details for the Smith Center were approved, including its deal to pay Whiting-Turner $245 million as the main contractor, or “construction manager at risk.”

Ross, whose day job is secretary-treasurer of the Southern Nevada Building and Construction Trades Council, voted with the rest of the unanimous council to approve each of four Smith Center-related items.

Aquin’s union is among those in the trades council that Ross heads, and the two have spoken about Aquin’s concerns.

Ross said that in his capacity as head of the trades council, he’s “absolutely” concerned about Whiting-Turner’s selection of nonunion subcontractors. Regarding Aquin’s threat to picket the contractor, he said “they have every right to take any action they so desire.”

But he added that the main Smith Center subcontract at issue — the masonry and exterior stone contract that a city official confirmed went to Frazier Masonry, a nonunion contractor — was awarded legally.

As a councilman, he said, he has to do what’s in the best interest of the city.

Despite his misgivings, he said, he voted for the Whiting-Turner contract because of the council staff’s recommendation. He also noted that Smith Center officials were pleased with the company, which survived a tough vetting process.

According to a memo written by the city’s manager of purchasing and contracts, Kathy Rainey, the city used the “construction manager at risk” process to select a general contractor. The Legislature approved the process two years ago as a method to deliver public works construction using a competitive, qualifications-based process.

One of the benefits, Rainey said, is that the construction manager, in this case Whiting-Turner, establishes a “guaranteed maximum price” — and assumes the risk of cost overruns. Plus, if the project comes in under budget, savings are split, 75-25, between the city and the company.

Whiting-Turner is set to earn a 4 percent fee for its work, said Rainey, or about $10 million.

Union leaders, including Aquin and Ross, said one way for a main contractor to save money is to hire nonunion subcontractors, which typically bid lower than their union counterparts.

Though all public works subcontractors have to pay workers the “prevailing wage” for their trade, unions claim nonunion subcontractors often make lower bids because although they claim to pay prevailing wage, they often don’t. This can happen, Ross said, because nonunion workers sometimes don’t know their rights, sometimes they’re undocumented immigrants, or they’re simply desperate for work and afraid to rock the boat.

Moreover, Aquin and Ross said, union workers are usually better trained in their trades and in safety procedures.

Four companies bid for the Smith Center project and the field was whittled down through an extensive proposal and interview process.

The city went with Whiting-Turner, Rainey said, because it brought a combination of tested ability and value. “We wanted a certain level of quality, but not gold-plated,” she said. “Something reasonable.”

Rainey said Frazier Masonry is among the subcontractors Whiting-Turner has so far selected, but that those contracts have yet to be officially awarded.

A Frazier spokeswoman did not return a call.

Whiting-Turner reported to the city that 78 percent of the subcontracting dollars to build the Smith Center main hall are going toward union outfits, and 22 percent to nonunion companies.

Since architect David Schwarz came up with the designs for the neoclassical structure, the Smith Center has been touted as the most important cultural institution ever to take root in Nevada soil.

The cream-colored Indiana limestone center will include a 2,050-seat performance hall, two smaller theaters, a 300-seat cabaret space, and an educational center with classrooms. It will serve as a cultural oasis, at which local, national and international touring symphony, opera, ballet and theater companies will perform.

Funding for the project is coming in large part from city redevelopment agency bonds, Las Vegas bonds backed by a tax on tourist car rentals and a gift from the Donald W. Reynolds Foundation.

At the Wednesday council meeting, a Smith Center board member said the complex will compare favorably with New York’s Lincoln Center. Mayor Oscar Goodman went further, calling it “the epicenter of all that’s good for years to come.”

Myron Martin, president the Las Vegas Performing Arts Center Foundation, said he’s delighted with the choice of Whiting-Turner.

The Smith Center project is especially complex, he said, because of the precise acoustic requirements for the performance hall. Only a highly adept contractor can pull the whole thing off effectively.

“This is a team that’s worked as a team,” Martin said.

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