D.C. to fight Labor Department ruling requiring ‘prevailing wage’ rates for downtown project

Brett McMahon, president of Miller & Long D.C., called Leppink’s ruling “fairly shocking.” Miller & Long is one of the largest concrete builders in the country and one of the largest employers of construction workers in the Mid-Atlantic region.

He said that, in general, Davis-Bacon wages in the District run 10 percent to 15 percent higher than market-rate pay. After reviewing the ruling, McMahon estimated that 99 percent of construction projects within the city’s boundaries could be affected.

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“What they’re doing is basically trying to redefine what is a public project for the purposes of Davis-Bacon application, which usually has meant government dollars involved,” he said.

But Yellig said there’s little reason to think the CityCenter ruling would necessarily apply to other projects that have different types of public benefits. “To say, ‘Oh, my God, this means any economic development project that the District authorized is automatically covered’ is an overstatement,” he said.

The District and Hines/Archstone are appealing Leppink’s decision before an administrative review panel. That board’s decision can be appealed in federal courts.

Attorney General Irvin B. Nathan has engaged Howard M. Radzely, a former deputy secretary of labor in the George W. Bush administration, to handle the District’s appeal on a pro bono basis. Hines is represented by Maurice Baskin, who is also general counsel of a national trade group of building contractors that has opposed broader application of prevailing-wage agreements.

Yellig said it could be two years or more before the appeals board makes a ruling. Should the appeals fail, he said, the union would most likely ask that back wages be paid to CityCenter workers.

There is some dispute whether taxpayers or developers would be on the hook for the differential between market-rate and prevailing wages. Leppink, in her letter, says the District would be responsible; city officials say the cost would be borne by Hines and Archstone and their investors, Qatari Diar Real Estate Investment.

Leppink did not respond to calls for comment. Should her decision stand, it would not require developers to hire union workers on CityCenter or similar projects, though it would make union contractors more competitive.

Gray’s opposition to the labor-backed position comes at a time when many unions that supported his election last year are finding their relations with the administration unexpectedly strained. Hoskins said that although Gray personally approved the administration’s position, he “has been and remains a supporter of the Carpenters Union.”