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Also: John Doherty retires after 42 years with ABC
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Inside 4
Executive Perspective
After a long, hard fight, governmentmandated project labor agreements are illegal in Michigan.
6
Vital Signs
Michigan’s core cities are making a comeback, and ABC members are at the heart of the effort.
14 ABC Victory: Ban on PLA Mandates UPHELD Landmark decision upholds ban on union-based discrimination in the Michigan construction industry.
20 John Doherty’s Best Advice: Stay Focused on the Marketplace
Retiring executive John Doherty and his colleagues recount how ABC has triumphed and what will secure its vitality moving forward.
Michigan’s core cities are making a comeback, and ABC members are at the heart of the effort.
18 Public Construction VOLUME VII, ISSUE 4
Advisory Notice
Questions and answers on the effects of the new legislation eliminating government- mandated PLAs.
ASSOCIATED BUILDERS and CONTRACTORS of MICHIGAN 2013 BOARD of DIRECTORS Chris Beckering – Chairman Pioneer Construction – Western Michigan Chapter
After two elections; after two bill introductions in the House and Senate; after passing two bills signed into law by the governor; after three court rulings; after multiple legal briefs; and after countless hours of relentlessly fighting for ABC members and the free enterprise philosophy of the Merit Shop, government mandated project Labor Agreements (PLAs) are illegal in Michigan!
Brian Stadler – Vice Chairman Wolgast Corporation – Greater Michigan Chapter Dave Sheffield – Secretary/Treasurer Onslow-Sheffield – Southeastern Michigan Chapter Dave Mollitor – Past Chairman Consolidated Electrical Contractors – Greater Michigan Chapter Jim Cripps Cripps Fontaine Excavating, Inc. – Western Michigan Chapter
On September 6, 2013, the United States Court of Appeals handed down a landmark decision upholding the ABC of Michigan-backed Fair and Open Competition in Governmental Construction Act that makes it illegal for public construction users to discriminate against
Rick Jackson Jackson Associates, Inc. – Southeastern Michigan Chapter Mike Kelly Wolverine Building Group – Western Michigan Chapter Rod Kloha Circle K Service Corp. – Greater Michigan Chapter Bill Molnar Wm. Molnar Roofing, Inc. – Southeastern Michigan Chapter Dan Murphy MAG Insulation – Greater Michigan Chapter Jack VandeGuchte – Western Michigan Chapter Dan Welch Welch Tile & Marble Company – Western Michigan Chapter MICHIGAN MERIT CONTRIBUTORS Publisher: Christopher Fisher Managing Editor: Mary Boardway, CAE Communications Coordinator: Elise Layton ABCMI Economist: Don Wilson Design and Printing: Keystone Millbrook Advertising: Strategic Value Media Michigan Merit (ISSN# 1938-9051) is the official publication of Associated Builders and Contractors Inc. of Michigan (ABC of Michigan) and is published quarterly at 230 N. Washington Sq., Suite 202, Lansing, MI 48933, (517) 853-2545. Please direct all inquiries to the previous address. Articles written by outside authors do not necessarily reflect the views of Associated Builders and Contractors Inc. of Michigan. ABC of Michigan reserves the right to reject or edit all material submitted for publication. The appearance of an advertisement in Michigan Merit does not constitute endorsement of the advertiser, its products or services, nor do Michigan Merit or Associated Builders and Contractors Inc. of Michigan guarantee or warrant any claims or offers made by the advertisers.
Merit Shop companies and their employees.
As a result, we are all freer today than we were on September 5, 2013. This means that all companies and workers, union and nonunion alike, will be guaranteed equal opportunity to work on projects funded by their own tax dollars. It also means that taxpayers won’t be denied the fiscal accountability they deserve. No longer will Merit Shop companies be hung out to dry in union-only monopoly schemes devised by political elites and union bosses that are financed by public money.
‘‘It seems the harder I work, the more luck I have.’’ Thomas Jefferson 3rd US President (1743-1826)
Michigan is again a national leader in transparency, openness, equal opportunity, and free enterprise in the awarding of public contracts. A great deal of credit goes to the countless ABC members around Michigan whose blood, sweat, and tears made this possible. Special thanks are also credited to Gov. Rick Snyder, Lt. Governor Brian Calley, Attorney General Bill Schuette, Senate sponsor John Moolenaar and fellow senators who supported the law, House sponsor Joe Haveman and fellow house members who supported the law, as well as ABC National and the ABC chapters in Michigan with whom ABC of Michigan has worked side by side for this entire fight. Teamwork, a ton of time and effort, and doing the right thing makes for an unstoppable combination! Yours for the Merit Shop, Chris Fisher
Permission to reprint in whole or in part is hereby granted, provided the following credit line is used: “Reprinted by permission from Michigan Merit, a publication of Associated Builders and Contractors Inc. of Michigan.”
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Above: Rockford Construction, Meijer CEO, Hank Meijer, Detroit Mayor Dave Bing, Governor Rick Snyder Left: Gillespie Group, Stadium District, Lansing Right: Three Rivers Corporation, Dow Diamond Stadium, Midland Below: Rockford Construction Headquarters, Grand Rapids
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Left: Pioneer Construction, Grand Rapids Downtown Market Banquet Hall Below: Rockford Construction, GRid70, Grand Rapids
VITAL SIGNS Michigan’s core cities are making a comeback, and ABC members are at the HEART of the effort.
By Carla Kalogeridis
WWW. A B C M I . C O M
FA LL 2013 7
In an effort to revitalize Michigan’s core cities, ABC member contractors and developers are collaborating on a variety of projects that are not only providing jobs for many contractors but also breathing new life into tired communities.
“Core cities revitalization projects help local businesses by attracting and retaining the people who can live and work there,” says Dan Kozakiewicz, president of Three Rivers Corporation,“and that, in turn, helps the cities because it increases property values and builds their tax base.” An award-winning construction company specializing in the Great Lakes Bay Region, ABC member, Three Rivers is immersed in such a project right now. Mill End Lofts in Bay City kicked off last spring and is a mixed-use project that builds on the local iconic Mill End Store brand and will include corporate and residential components. “We couldn’t re-use the building because it’s just too far gone,” says Kozakiewicz, “but we’re re-purposing the Mill End brand.” He says the project will revitalize the downtown area, providing spaces for people to live, work, and play in the heart of the city. Mill End Lofts is the kind of project that tells Jennifer R. V. Nelson that she and her staff are making a difference in Michigan’s effort to reinvent itself. As senior vice president — community development and portfolio management and general counsel for the Michigan Economic Development Corporation's Community Development team, Nelson helps create vibrant, sustainable, and unique places to live and work in Michigan. She also heads the Portfolio Management team, which oversees the loan and grant awards managed by the MEDC, including the Community Revitalization Program and several others.
Three Rivers Corporation, Mill End Lofts, Bay City
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Left: Pioneer Construction, Grand Rapids Downtown Market Hall and Upper Level
MEDC is a public-private partnership that serves as the state's marketing arm. It is the lead agency for business, jobs, tourism, and overall economic growth. Founded in 1999, MEDC offers a number of business assistance services and capital programs to attract and accelerate business development. It also developed and manages the state's popular Pure Michigan brand. The Community Revitalization Program has had a definite impact on builders and contractors in Michigan, Nelson says. The program supports projects in core cities and throughout Michigan, rehabilitating abandoned buildings, brownfields, and historical sites. “Our group makes funding available for these projects, often providing the gap funding between what the bank will loan and what the project is actually going to cost,” she explains. “With declining property values, bank financing has been hard to achieve for some developers. We help them find loans and grants that make the projects possible.” For example, the Community Revitalization Grant that ABC member, Rockford Construction received helped fill a financial gap that existed for the development of its new corporate headquarters. “The facility was a former factory and had extensive contamination located within and around the building,” says Mike Mraz, vice president, real estate development for Rockford. “The cost to clean up the area would have made the project unfeasible had it not been for the support of the MEDC and the Brownfield Redevelopment Authority.” “Our headquarters renovation will be the catalyst for future development and investment on the city’s near West Side,” he says. “And as an investor, we are beginning our latest development already, an 18-unit, multi-family rental community known as Living @ 600 Douglas. We break ground in fall 2013, with an anticipated completion in spring 2014.”
“Our group makes funding available for these projects, often providing the gap funding between what the bank will loan and what the project is actually going to cost,” she explains. “With declining property values, bank financing has been hard to achieve for some developers. We help them find loans and grants that make the projects possible.” JENNIFER R.V. NELSON, SENIOR VICE PRESIDENT, MEDC COMMUNITY DEVELOPMENT TEAM
(CONTINUED ON NEXT PAGE)
WWW. A B C M I . C O M
FA LL 2013 9
Gillespie Group, Midland East End, Midland
The MEDC website has been instrumental in connecting developers and contractors with the communities that need them. In an effort to boost transparency, projects approved by the Michigan Strategic Fund are posted on the website monthly, Nelson
Passed by the Michigan legislature in 2011, MEDC’s Nelson says she has been “very pleased” by the projects that have been funded and completed by the Community Revitalization Program to date. Challenges haven’t come in program implementation, but rather, in educating developers and communities that the support is available. MEDC divided the state into 10 regions and placed a community assistance team in each area. “I think the support is working,” Nelson says. “Statewide developers are aware of the program and are now actively using it. From a messaging standpoint, this idea that Michigan is reinventing itself and that builders now have the tools and support they need has encouraged communities to become more proactive on projects and encourage builders to get involved.”
says.
ABC Members Help Transform Communities
“The message we’re trying to
Pat Gillespie, founder and president of Lansing-based Gillespie Group, an ABC company, says the incentives have not only been essential for his company, but also for most organizations that seek to develop in the urban core. “They allow developers like us the opportunity to breathe new life into urban sites that are contaminated or blighted,” he explains. “Without the incentives, these projects may never happen, as the cost relating to environmental clean-up and site prep challenge their feasibility.”
send to all is to use our tools to create vibrant, sustainable places so that we can retain the most talented people in Michigan,” she says. “These
Chris Beckering, director of business development for Pioneer
projects are transforming
Construction, an ABC member, located in Grand Rapids, feels the
abandoned or run-down
same way about the several revitalization projects his firm has
spaces into livable, walkable
completed as well as others still in the works.“Several of these
communities, and that’s good
projects would not have happened but for the revitalization
for the cities, the residents,
program,” he says.
and the businesses that surround them.”
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Kozakiewicz says MEDC’s effort is definitely creating opportunities for contractors, and if ABC members aren’t taking advantage, they should “re-assess their marketing plans” and focus on state-run development agencies, communities, and municipalities that are focused on revitalizing cities. “The driver for contractors is to help build businesses that need a strong workforce,” he says. “Strong communities build stronger workforces, and that creates even more opportunity for contractors.” M IC HI GAN MERIT
Beckering says Pioneer has also had great success with revitalization projects in Grand Rapids, including the Grand Rapids Downtown Market, a $30 million project expected to create 295 new jobs; the 833 Michigan Street development, a $6 million mixed-use project expected to create 60 new jobs; and the Midtown Village Hotel, a $27 million project in the planning stages that is expected to create 40 new jobs. “The revitalization program has helped ignite projects that had stagnated or wouldn’t have happened without it,” Beckering says. “Those three projects alone are expected to bring 395 jobs to the area.” Mike Mraz of Rockford Construction, says his company has been involved with many revitalization projects from Detroit to Grand Rapids. Major projects include GRid70, Cooley Law School, and 10 other multi-tenant buildings in the Heartside District of Grand Rapids. The Monroe Center has been completely revitalized in part due to the long-term commitment of Rockford, adds Mraz. In fact, Blue Cross Blue Shield relocated its headquarters to Monroe Center, which helped pave the way for further development, including Front Row Condominiums, MoDiv retail incubator, and additional office space. This fall, Rockford will be starting another large-scale project called The Morton, which Mraz says will bring additional retail to the area, along with at least 100 marketrate apartments. Mraz says the impact that Rockford’s various projects are making in Grand Rapids is obvious and that the incentives offered by the state of Michigan are clearly “helping to re-energize the city’s downtown core.”
An additional outcome of investment in the urban core is the creation of a critical mass of people, which drives economic development, Mraz adds. “The more people we can attract to live, work, and play in the downtown area, it will help everyone included — not only from a prosperous and vibrant business district, but also from the resident’s and visitor’s quality of life.”
(CONTINUED ON NEXT PAGE)
WWW. A B C M I . C O M
Remember to Give Back, Too As fortunate as it is to reap the benefits of the availability of revitalization project funding, Three Rivers Corporation’s Dan Kozakiewicz points out that developers and contractors must do their part to support the overall effort as well.
“Contractors should support the collaborative efforts between state and local municipalities to encourage economic development in their communities,” advises Kozakiewicz. “When the state offers incentives, it has to come out of the state’s budget, so contractors can support this activity by encouraging their state representatives to vote for economic development packages.” Kozakiewicz says contractors sometimes forget the importance of political efforts. “Get involved politically with these revitalization efforts so that the state has a good model to assess its return on investment,” he says. His advice is for contractors to become members and offer support to their own community’s local economic development agency (the one he supports is called Midland Tomorrow, for example.) In addition, he says ABC members should invest in economic development by partnering with developments or local development agencies to invest in revitalization projects so that they can come to fruition.
FA LL 2013 11
Grand Rapids isn’t the only core city on Rockford’s radar. Detroit has been in national headlines for the last couple of years regarding its efforts to revitalize, and Rockford Construction has contributed to that effort as well. Rockford just completed a new $20 million supercenter for West Michigan-based Meijer at the old state fairgrounds property near 8 Mile Road and Woodward Avenue. Interestingly enough, although the company has more than half of its 200 stores in Michigan, in its 80-year history, this is Meijer’s first store in Detroit. "Detroit is so critical to our success and anything that we can do to add jobs to the community is powerful," said Rockford’s Mike VanGessel at the grand opening. Lansing is also seeing its share of revitalization projects. Gillespie’s firm has been involved in numerous revitalization brownfield projects in Lansing such as Prudden Place — a high-end, multi-family community; Stadium District, which hosts 20 residential condominiums, 30 high-end apartments, and 36,000 square feet of office and retail space; the Armory, a historic revitalization project that once housed the National Guard’s 119th Field Artillery Regiment and now serves as a nonprofit’s headquarters; and Marketplace, downtown Lansing’s newest high-end urban 80-apartment development scheduled for completion in fall 2014.
“Each urban project that we have completed has had a positive impact on the surrounding community,” Gillespie says. “In all instances, they have Carla Kalogeridis is associate editor of ABC of Michgan’s Michigan Merit magazine
added new residence and business activity to the urban core, and these are essential elements in the overall effort of community revitalization.” MM
Gillespie Group, Lansing Armory
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Affairs
GOVERNMENT
Precedent-Setting Decision Upholds Michigan Law Banning PLA Mandates ABC of Michigan celebrated a victory on September 6, 2013, when the U.S. Court of Appeals for the 6th Circuit upheld a law that banned government-mandated project labor agreements (PLAs) on taxpayer-funded construction projects. "This landmark decision ends union-based discrimination in the Michigan construction industry and ensures taxpayers get the fiscal accountability they deserve," says Chris Fisher, president of ABC of Michigan. "This decision has national implications and makes it crystal clear that Michigan and other states can pursue equal opportunity in public contracting regardless of labor affiliation." Specifically, the appeals court upheld Public Act 238 of 2012, which amended Michigan's Fair and Open Competition in Governmental Construction Act (Public Act 99, 2011). ABC of Michigan, the statewide leader in pushing for passage of legislation to end government-mandated PLAs, has been battling the issue for decades, as more than 82 percent of Michigan construction contractors and workers were being shut out of many publicly-funded construction projects because they were not unionized. Upon seeing an opportunity to finally bring about muchneeded reform, ABC took the campaign to a new level in 2010 by creating a task force to focus on the PLA issue. The effort went into high gear toward the end of 2010 when bill
language was drafted and ABC of Michigan lined up key legislative sponsors. The association also orchestrated an extensive lobbying effort with House and Senate lawmakers and the governor’s office. “The leadership of Sen. John Moolenaar (R-Midland) and Rep. Joe Haveman (R-Holland) played a key role in our success,” says Fisher. “They understood the issue and were able to communicate its negative effects to their fellow legislators, especially the fact that PLAs drive up taxpayer costs. We gained support for the bill among lawmakers early on.” ABC members across the state fought hard in meetings with their lawmakers, participating in grassroots lobbying at the State Capitol and sending more than 1,000 emails and letters to elected officials. Throughout the effort, ABC stayed focused on its key messages, hitting the economic impact on taxpayers and the discrimination against the majority of workers the hardest. “In today’s economy, the state cannot afford to pay for what amounts to special interest kickbacks to favored political groups,” Fisher stressed in repeated media interviews. “The end to anticompetitive picking of winners and losers by public entities means the beginning of a new era of fiscal accountability on construction projects paid for by public tax dollars.”
ABC of Michigan, the statewide leader in pushing for passage of legislation to end government-mandated PLAs, has been battling the issue for decades, as more than 82 percent of Michigan construction contractors and workers were being shut out of many publicly-funded construction projects because they were not unionized.
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Affairs
GOVERNMENT
Michigan Attorney General
Left to Right: Renee Sandborn, Sandborn Construction; Jim Cripps, Cripps-Fontaine Excavating, Inc.; Rod Kloha, Circle K Service Corp.; Bill Molnar, Wm. Molnar Roofing Co., Inc.; Governor Rick Snyder; Chris Fisher, ABC of Michigan; Senator John Moolenaar (R-Midland); Mrs. Amy Moolenaar; Michael Marks, The Mackenzie Companies.
When Gov. Rick Snyder (R) signed the Fair and Open Competition in Governmental Construction Act into law, the governor echoed the need for equal opportunity and fiscal accountability in public contracting. “This legislation is important because it gives everyone equal opportunity to compete for jobs,” Snyder says. “Governments need to make decisions based on competitive bidding and value for taxpayer money.” Last year, the U.S. District Court for the Eastern District in Michigan enjoined the 2011 law in response to a complaint filed by the Michigan Building and Construction Trades Council, AFL-CIO, and the Genesee, Lapeer and Shiawassee Building and Construction Trade Council, AFL-CIO. Gov. Rick Snyder signed Public Act 238 in June 2012 in an effort to amend the initial law and address the court's concerns. After the district court enjoined the amended law in November 2012, the case went to the U.S. Court of Appeals for the 6th Circuit, which upheld the 2012 amendments to the law, ensuring that government-mandated PLAs are prohibited on state, local, and other publicly funded projects in Michigan.
Bill Schuette
“Encouraging robust competition and free enterprise will improve efficiency and save hard-earned taxpayer dollars.” BILL SCHUETTE, MICHIGAN ATTORNEY GENERAL
Attorney General Bill Schuette (R-Midland) defended the law on behalf of Michigan in the Federal Courts. "The public contract bidding process should be open and fair for all of Michigan’s builders and contractors,” says Schuette. (CONTINUED ON NEXT PAGE)
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Affairs
GOVERNMENT
"In response to President Barack Obama's 2009 Executive Order 13502 encouraging federal agencies to mandate the use of PLAs on large-scale
PLAs typically force contractors to:
construction projects and Big Labor's effort to promote PLA mandates, state
• Hire most or all of their craft employees from union hiring halls
says ABC Senior Manager of State and Local Affairs Andy Conlin.
after state has stood up for taxpayers and rejected government-mandated PLAs,"
"So far, 18 states have banned government-mandated PLAs, and this ruling shows that state governments are well within their rights to say that these
• Follow inefficient union work rules
taxpayer-funded handouts are not welcome on projects in their states."
• Hire apprentices exclusively from union apprenticeship programs
Numerous studies show PLAs discourage merit shop contractors and subcontractors from competing for public construction contracts, thereby increasing costs to taxpayers and discriminating against the 81.2 percent of
• Pay into union benefit plans on behalf of employees, even if they have their own qualified benefit programs
Michigan's construction workforce that does not belong to a labor union. ABC of Michigan 2013 Chairman of the Board Chris Beckering, director of business development for Pioneer Construction, comments, “This Circuit Court of Appeals ruling is a significant victory for the Merit Shop construction industry in Michigan and throughout the United States. Michigan taxpayers will no longer
PLAs typically force employees to:
be victims of this discriminatory and wasteful practice." In response to the ruling, Michigan communities already are removing
• pay union dues
PLA requirements from bid solicitations. On September 9, 2013, Washtenaw
• accept unwanted union representation
County, Mich., removed a requirement that contractors agree to the terms of a construction unity board agreement — another name for a PLA — as a condition
• forfeit benefits earned during the life of a PLA project unless they join a union and become vested in union benefit plans.
of performing work on an upcoming public park expansion project. Additionally, on Sept. 11, 2013, ABC of Michigan sent a guidance flier (see page 18) to every government entity in the state with a history of requiring wasteful and discriminatory PLAs, informing them that government-mandated PLAs are now illegal in the state of Michigan. MM
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FA LL 2013 17
On September 6, 2013, the US Court of Appeals reinstated Michigan’s law making the use of governmentmandated project labor agreements (PLAs) ILLEGAL. This overturns a lower court ruling resulting in the immediate reinstatement of Michigan law prohibiting the use of state and local government-mandated PLAs. This new law prohibits the use of government-mandated (including public school, community college, and university) PLAs, Construction Unity Board (CUB) agreements, harmony agreements, and any pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project. Also, any discrimination on the basis of labor affiliation is explicitly prohibited.
Any state or local governmental ordinances, policies, or contract documents (including public school, community college, and university policies) in conflict with this new law are now nullified. What does Michigan’s Open Competition in Governmental Construction Act prohibit? Any term that requires or prohibits a bidder, offeror, contractor, or subcontractor from entering into or adhering to an agreement with one (1) or more labor organizations in regard to a project or a related construction project; or otherwise discriminates for becoming or remaining or refusing to become or remain a signatory to, or for adhering or refusing to adhere to, an agreement with one (1) or more labor organizations in regard to that project or a related construction project. In 2012 a Federal Court ruled against Michigan’s law prohibiting PLAs. Does this overturn that ruling? Yes. Specifically, the appeals court upheld Public Act 238 of 2012, which amended Michigan's Fair and Open Competition in Governmental Construction Act. Last year, the U.S. District Court enjoined the law in response to a complaint filed by the Building and Construction Trades Council, AFL-CIO. The case next went to the U.S. Court of Appeals for the 6th Circuit, which Sept. 6 upheld the law, ensuring that government-mandated PLAs are prohibited for publicly funded projects in Michigan. Are government–mandated PLAs, CUB Agreements, Harmony Agreements, etc. prohibited? Yes. Any union preference, Project Labor Agreement (PLA), Construction Unity Board (CUB) Agreement, Harmony Agreement, Community Workforce Agreement, or construction agreement that requires an agreement with a labor organization is illegal. Moreover, any term that can discriminate or give preference on the basis of labor affiliation (including a contract term that is unique to the unionized construction sector) is illegal. May a governmental entity base the awarding of a grant, abatement, tax credit, or incentive for a construction project on the stipulation that a labor agreement be attached to that project? No. The law prohibits such requirements or discrimination based upon labor status, or based upon the willingness or refusal to enter into an agreement with a labor organization. Does the law do more than ban governmental PLAs, Construction Unity Board (CUB) Agreements, Harmony Agreements, etc.? Yes. Any discriminatory term unique to the unionized construction sector is strictly prohibited. The law prohibits any contract term that would “otherwise discriminate against a bidder, offeror, contractor, or subcontractor for becoming or remaining or refusing to become or remain a signatory to, or for adhering or refusing to adhere to, an agreement with one (1) or more labor organizations in regard to that project or a related construction project.”
Does the new law only affect state governmental- or statefunded construction? No. The law prohibits government-mandated (non-voluntary) union agreements at all levels of educational, state, and local governmental construction, regardless of whether state, local, or federal tax dollars are attached to a construction project. The law explicitly affects the state of Michigan, as well as any county, city, township, village, school district, intermediate school district, community college, university, or governmental instrumentality construction. May a construction manager acting on behalf of a public entity require a PLA, CUB Agreement, Harmony Agreement, etc. for a publicly-owned construction project? No. The law states that a construction manager acting on behalf of a governmental unit shall not place any of the terms prohibited in the act into bid specifications, project agreements, or other controlling documents. The act also applies to any other discriminatory term that reflects labor affiliation. President Obama signed an executive order in 2009 authorizing the use of government-mandated PLAs on federal projects. Is a PLA permissible if federal dollars fund a state or local project? No. President Obama’s Executive Order simply authorizes government-mandated PLAs on Federal projects. But it does not authorize local or state government PLAs. A PLA would only be permissible and mandatory if it is required by the federal government on a federal project. Absent a federal governmentmandated PLA, it is illegal to require one on an educational, state, or local governmental project. What type of public construction is covered by the act? State, local governmental, and educational construction is covered by the new law. It applies to “any actual physical improvement to real property owned or leased, directly or through a building authority, by a governmental unit, including, but not limited to, roads, bridges, runways, rails, or a building or structure along with the building's or structure's grounds, approaches, services, and appurtenances. When does this ruling that upholds Michigan law prohibiting government-mandated PLAs take effect? It became effective immediately on September 6, 2013. It does not affect contracts entered into before September 6, 2013, May a contractor refuse to sign a voluntary PLA without repercussions? Contractors SHALL NOT, under law, be discriminated against, be penalized, denied award of contract, or be subject to ANY repercussion whatsoever by refusing to sign a voluntary PLA.
This industry advisement is not intended as legal advice. For any legal questions, please consult a qualified attorney. For other questions, visit ABC of Michigan at www.abcmi.com.
C Ronald H Chambers
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FA LL 2013 19
John Doherty’s Best Advice: “Stay Focused on the Marketplace” As John Doherty closes a more than four-decade career of leadership for the ABC Western Michigan Chapter, he and his colleagues recount what has helped the organization triumph and what will secure its vitality moving forward. By Carla Kalogeridis
W
HEN JOHN DOHERTY was asked to join ABC’s Western Michigan Chapter to help organize its apprenticeship training programs, it was a leap of faith for both him and the organization. “Although I had some background in education, it wasn’t a job I was particularly qualified for as a young man,” Doherty recalls, “but it was an interesting opportunity because ours was one of the first merit shop apprentice programs for the construction industry in the nation.” Forty-two years later, with a successful career as one of ABC’s most respected chapter presidents in the nation coming to a close, it was a gamble that paid off for all involved. Doherty marvels that he spent nearly his entire career with the Western Michigan Chapter. “The years go by a lot faster when you’re busy and like what you’re doing,” he says.
John Doherty visits a member construction project.
The ABC members liked what he was doing, too. Michigan Construction Hall of Fame member Larry Erhardt, Sr., founder of Erhardt Construction, has known Doherty through his entire career at ABC.
“
John is the consummate association professional,” Erhardt says, “good on his feet, articulate, enthusiastic, and passionate about the industry — and it shows in everything he does. John had the opportunity to move up to the national association, but he chose to stay in Western Michigan, and we are glad he did.
”
Over 42 years, Doherty has seen a fluctuating marketplace and a myriad of political influencers. It’s been a constantly changing environment, but woven throughout his career has been the impact of organized labor. “Sometimes, times were good and the union ignored us,” he says, “and other times they were determined to push us back into the woods.” Stan Sterk, CPA, managing partner of Ferris, Busscher & Zwiers, has known Doherty well for nearly 25 years. The two made many trips back and forth to Lansing during Doherty’s career, trying to make sure ABC’s members were taken seriously on the political scene.
“
Although we didn’t always agree, we each appreciated the other’s point of view,” Sterk says. “John was a good listener and able to support his point of view, and that has gone a long way to support the industry and move it forward to legitimacy.
”
Legitimacy and respect were exactly what was needed because Doherty says the unions were very aggressive against ABC’s Western Michigan Chapter and its members when he 20
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first started. “I didn’t personally feel threatened,” he recalls, “but I was afraid sometimes about certain situations. When the jobsite picketing and violence came through Michigan and other places across the country, it spilled over into firebombing offices, firecrackers thrown in businesses, and equipment damages. There were times I wasn’t sure how it was all going to work out.” Denny Scully, agency principal for Mapes Insurance and an associate member of the Western Michigan Chapter, developed a friendship with Doherty because his office was in the same building as ABC’s in earlier years.
“
The merit shop fight in his early days was a much larger issue on a day-to day-basis than it is now,” Scully says, “but it is not taken for granted thanks to John’s efforts. John’s impact has been huge because he is so knowledgeable and well-spoken.
”
Doherty says his job was to make sure the ABC Western Michigan Chapter did everything it could to do help members finish their contracts and projects by minimizing picketing and boosting jobsite security. That help came in the form of giving advice, tools, and ideas to help members manage, lead, and stay safe. “In some cities, it wasn’t uncommon to have 50 to 200 picketers show up at a job site,” Doherty remembers. “We’d advise the member company owners to make sure they drove the lead truck into the site to signal to employees that they were not afraid. We told them, if you don’t, your morale will go way down. The employees think, ‘If the boss won’t face these guys, why should I?’”
What Has Changed Under John Doherty’s Watch…
Doherty addresses members at an ABC of Michigan event.
Peter Kok, an attorney at Miller Johnson who has served as ABC Western Michigan Chapter’s legal counsel for years, agrees that Doherty has pretty much seen it all. But even when the business climate was tense and unsure, Kok says Doherty was always “measured and professional,” showing great common sense as well as a sense of humor.
“
When a tough issue arises, John automatically thinks first of what is in the best interest of members, and then holds their hands and works through solutions,” Kok says.
”
At the same time, he’s been a lightning rod for the industry’s most complex issues. He’s often quoted, is the go-to-guy, and can be counted on to speak to what needs to be done on any issue. John is the whole package.” Doherty says one thing that impressed him during those tense times was how ABC members stuck together. “There’s safety in numbers with this kind of thing,” he says. “In the 70s and 80s, it was very easy to get members because we all needed each other. If they were a non-union contractor or supplier, they needed us for safety, apprenticeship training, and security.”
n Labor climate. “Our young aggressive group of ABC contractors improved the industry’s jobsite productivity, and it helped change the minds of clients,” says Doherty, “especially those who had always used union workers.” n Safety and training. ABC contractors are among the safest in the nation. “Safety and training are still among our biggest concerns, but now we also place a priority on developing successful companies,” Doherty says. n Project delivery. Projects used to be bid out to the best contractor for the least money, Doherty says. Now, it’s a system that includes construction management, negotiated work, design-build projects, and team building utilizing BIM. n Project productivity. Technology, new materials/equipment/tools, systems and improved communication tools have increased efficiencies across the board. n Local operations. “It used to be that members would only go in a 60-mile radius but the recession changed that dynamic,” Doherty says. “People are travelling farther for better work.” n Political environment. “ABC’s work with the governor and legislature has opened up many opportunities,” says Doherty. “Things we never dreamed of are happening in Michigan. President Chris Fisher and ABC of Michigan are part of the conversation on every major business issue. We are the voice of the commerical construction industry.”
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JOHN DOHERTY’S BEST ADVICE (continued) Some ABC Western Michigan Chapter members, for example, had fought in World War II and put their life on the line for their country, only to come back home and be told they couldn’t return to their livelihood unless they were union members. “The union would tell these guys, ‘You can’t work these jobs unless you are union,’ and these members would say, ‘Yes, I can. It’s a free country and I fought for these freedoms.’ By sticking together, we made our way through some very turbulent times and came out on the side of what’s right.” Doherty’s early career was consumed with labor issues. Initially, the labor movement focused on legislative changes. The union had a monopoly on labor supply, negotiating contracts, and they were gaining political power, Doherty says, by “getting their favorites elected.” Several building trade unions in the labor movement were rooted in organized crime, and there was a lot of fear. As a result, ABC in Michigan had adversaries in government and in the marketplace. “Building inspectors often came from a union background, and they would make it hard to get things approved,” Doherty says. “The union was always an adversary. We were never on the same side of any issues. It was difficult to counteract the influence of unions.” However, Doherty’s colleagues say he was smart enough to fight the battle where it needed to be fought — legislatively and in the marketplace.
“
Because John provided such a good presence, he was able to get the attention of politicians as well as members and business people,” says Erhardt. “He is certainly regarded as one of the top three — if not the top — chapter executive in the country.
”
Doherty says he knows that throughout Michigan, ABC has made a difference during his tenure because “the marketplace took a vote and we won!” Case in point: When Doherty started, 30 percent of Michigan’s construction workforce in Michigan was non-union; now, more than 80 percent of the workforce chooses not to be affiliated with a union.
John and wife, Shirley, at the ABC of Michigan 50th Anniversary Celebration.
However, even though ABC in Michigan has won the battle of market share, Doherty stands firm in his belief that there remains a great need for the association because there is still much to be done. Accomplishments during his tenure include building up insurance and safety programs, a community college collaboration to partner on skills training, workers’ comp program, an Excellence in Construction awards program, and building ABC Western Michigan Chapter’s own offices in 1979. “We’ve moved beyond fighting with unions,” he says. “We’re focused on building up the member companies and the industry, and providing opportunities for success. My job wasn’t over just because the pickets went away.” Doherty admits it’s more difficult to get members now than it was during the height of the labor movement. However, because of what the association and its members have been through together, the member companies are very loyal — even though many of those in the present membership have never seen any trouble from the unions. His advice for continuing ABC’s vitality is to make sure the organization is attuned to the marketplace and to technology. “Sometimes you get buried in the routine and incidentals and you can lose sight of what’s happening around you in the marketplace,” he cautions.
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“
The most important thing ABC does for its
members today is to preserve an environment for merit shop companies to grow and thrive,” says Doherty. “The second most important is what we haven’t let happen. It’s not as sexy as the guys who make things happen, but our job is also to keep bad things from happening. We excel at that and very few
”
people know about it.
—JOHN DOHERTY
A recent example is the Great Recession. Doherty went through three recessions before this last one, which he says was “the worst by far.” But even as bad as it got, Doherty says he was not tempted to take early retirement and let someone else deal with it. “I’ve never run out when things are challenging and there’s stuff to do,” he says. “I’m a fixer, a problem-solver kind of guy, and this has been a great place to apply those kinds of skills. “I’m more likely to get distracted and bored when things are going too smoothly,” he laughs. Doherty says that ABC members are battered and bruised by the Great Recession, but now they’re “out of that and ready to go compete in the new marketplace.” In fact, the success of ABC’s members in the marketplace, he concludes, will have more to do with the association’s growth than anything else. Doherty also stays mindful of the need for ABC to not only focus on legislative influence, but also respond to the marketplace itself. “Although, we do have to stop bad legislation from happening, at the chapter level it is important to stay focused on the marketplace in Michigan and in other places outside of Michigan. Look at the good things happening in other states because eventually it will make its way here. Everyone will follow the game-changers and the leaders.”
With Doherty’s retirement, there will be one less leader to follow. But even though he’s moving on, the example he set and the principles he stood for continue to resonate with members. His friends and colleagues say they have learned not only from his dedication and effectiveness, but also from how he treated others. For example, Scully points out, “In some associations, associate members are looked at just as people to build the membership roster. John reaches out to make us feel we have a place as members, brings us in to find committee spots, and encourages us to become a real part of ABC. I’ll remember John as the guy whose personal touch reaches out to all members, whether associates, suppliers or contractors.” “He’ll be remembered by the members as someone who served every single member, from the largest contractor to the smallest supplier,” agrees Erhardt. “John is always fair, treats everyone with respect, and helps each person deal with their issue no matter what it is.” MM
From left: Mark Sawyer, Executive Director, ABC Southeastern Michigan Chapter; John Doherty; Chris Fisher, President & CEO, ABC of Michigan and Jimmy Greene, President & CEO, ABC Greater Michigan Chapter.
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