Economic Development Newsroom

Council's Demands Would Kill Arena and Cost 3,500 Jobs

Tuesday July 18, 2006

Mayor Abramson To Veto Council’s Resolution, Offers Solution

Mayor Abramson at the Arena Press Conference on July 18, 2006The Louisville Metro Council’s demands for extensive construction hiring guarantees would doom the downtown arena project and cost the region more than 3,500 jobs in construction and operation of the riverfront facility, Mayor Jerry Abramson said today.

In a diverse display of unity, Gov. Ernie Fletcher, Arena Authority members, business leaders and minority- and women-owned business representatives joined Abramson today at Louisville Slugger Field to urge Louisville Metro Council members to live up to their promise to fund Louisville’s share of the economic development project.

Abramson announced he is vetoing the amended agreement passed last week by a divided Metro Council and will send over a revised agreement that includes guarantees for fair labor practices, market-rate wages and minimum participation for minority and female workers. The revised agreement has the support of the governor and Greater Louisville Inc., the metro chamber of commerce.

Gov. Fletcher reaffirmed his belief that the construction hiring terms added by the Metro Council, known as a project labor agreement, violate state laws designed to guarantee a level playing field for workers and would make it impossible to issue $75 million in state bonds to begin the project.

Louisville Arena RenderingBusiness leaders, who have collectively pledged tens of millions of dollars toward funding for a downtown multipurpose arena, are concerned that the council's requirements for a union labor agreement would bring a high degree of uncertainty to public sector financing for the project.

“The council’s actions – whether intended or unintended – threaten the very future of this important project,” Abramson said. “And I’m going to do all that I can to make sure our council members and the 700,000 people we represent know what’s at stake.”

The Commonwealth of Kentucky, the Arena Authority and the business community are guaranteeing funding for about 70 percent of the money required to build the arena. Abramson and the Louisville Metro Council have previously pledged to provide 30 percent of the project’s cost, revenue generated from increased economic activity from the arena and downtown parking receipts.

Abramson used the empty seats at Slugger Field to illustrate the magnitude of the jobs at stake – an estimated 2,700 construction jobs over the next three years and nearly 800 permanent jobs when the arena is complete.

“If the council refuses to work with our financing partners, those seats will remain as empty as they are today,” Abramson said. “There will be no arena project. There will be no jobs for anyone – male or female, minority or majority, union or non-union.”

The revised agreement will include several changes made by the council and supported by the financial partners:

  • Guaranteeing prevailing wage (market-rate pay) for each trade involved in the project;

  • Establishing a goal of at least 20 percent minority participation and 5 percent women participation for employees and contractors;

  • Providing opportunities for both union and non-union employees and contractors;

  • Establishing a goal of 75 percent of arena construction jobs for Kentucky and Indiana residents, and a goal of at least 60 percent reserved for residents of the Louisville Metropolitan Statistical Area; and

  • Establishing a committee convened by the Louisville Urban League and Justice Resource Center to assist with recruitment and training of minorities and verification of appropriate minority participation.

“I’m asking our Metro Council members to carefully consider their actions,” Abramson said. “It’s time to put aside partisanship, to resist those who favor brinksmanship and to show true leadership for our community and our state.”