Delays, High Costs Hit Des Moines Project Governed by Labor Agreement

Published February 1, 2007

Despite a Project Labor Agreement (PLA) that supporters said would ensure on-time work and on-budget costs, significant construction delays and higher costs have plagued the Iowa Events Center in Des Moines, according to a 2006 report by the Public Interest Institute (PII) in Mt. Pleasant, Iowa.

Critics say PLAs raise prices by forcing the project to be manned by union labor, which reduces competition for bids.

The Iowa Events Center project was conceived by the Polk County Board of Supervisors in 2000 to help revitalize the downtown Des Moines area. The project included construction of the new Wells Fargo Arena and Hy-Vee Hall and renovations to the existing Veterans Memorial Auditorium.

“The use of a PLA on this construction project placed an unnecessary burden on the workers who were frozen out of the opportunity to work, businesses that were not allowed to compete, and the taxpayers who were forced to pay even more for the Iowa Events Center construction because of the cost overruns of the project,” said PII President Don Racheter.

No PLA, Lower Costs

The Tyson Events Center in Sioux City, Iowa is similar to the Iowa Events Center, with new construction and renovation of existing facilities. The Tyson Events Center project did not use a PLA, however, and was completed on time (it opened at the end of 2003) and on budget.

The cost of the entire Tyson Events Center project was $245 per square foot, compared to $268 per square foot for the Iowa Events Center. When comparing only the newly built portions of each project, the Tyson Events Center’s cost is $233 per square foot, compared to $315 per square foot for the Iowa Events Center.

That’s a difference of $82 per square foot.

According to Polk County Auditor’s Reports for the fiscal year ended June 30, 2000, the Iowa Events Center was projected to cost up to $200 million. But by fiscal year 2005, the cost had risen to $217 million, according to the auditor.

Agreement Struck in 2002

Supervisors approved a PLA with the Central Iowa Building and Construction Trade Council for the Iowa Events Center in 2002, arguing the agreement was necessary to complete the project on time, on budget, and safely.

Because events must be scheduled well in advance in this type of venue, completing the project by the specified opening date was vital.

The first event scheduled to be held at Hy-Vee Hall was the 2004 Autumn Festival Arts and Crafts Show. Although that event was scheduled nearly two months after the projected completion date of the hall, construction was not finished on time. Officials halted work for the weekend and opened the hall temporarily in order to hold the long-planned festival.

Hy-Vee Hall and Wells Fargo Arena were completed 105 and 40 days, respectively, after the promised dates of completion.

Many Bidders Shut Out

While proponents of PLAs, mainly unions and their supporters, claim these agreements are necessary to prevent disruptions such as strikes or work slowdowns on construction work projects, opponents believe PLAs can be and are being used to circumvent right-to-work laws by effectively requiring non-union construction companies to become “unionized” to bid on and participate in a construction project governed by a PLA. Iowa is one of 22 right-to-work states.

The Iowa Events Center PLA established requirements for contractors that kept non-union and many union companies from bidding on the project, reducing competition and raising costs.

The PLA required contractors to recognize “the Union as the sole and exclusive bargaining representative of all craft employees” and “hire employees for covered work through the job referral systems offered by each signatory Local” union.

Contractors who were not parties to the current collective bargaining agreement between the trade unions and contractors–in other words, non-union shops–were allowed to employ their “core” employees on the project, but only if those employees applied to the local union for project work.

Steve Stanek ([email protected]) is managing editor of Budget & Tax News. Public Interest Institute research analysts Amy K. Frantz, Jonathan Miltimore, Robert N. Stewart, Laura P. Keith, and Brad Cook contributed to this report.

For more information …

“The Project Labor Agreement for the Iowa Events Center: An Unnecessary Burden on the Workers, Businesses, and Taxpayers of Iowa,” by Public Interest Institute research analysts Amy K. Frantz, Jonathan Miltimore, Robert N. Stewart, Laura P. Keith, and Brad Cook, is available through PolicyBot™, The Heartland Institute’s free online research database. Point your Web browser to and search for document #20331.