The Truth About Turner Winning the Sacramento Kings Arena Project

It's been a while since I've written a blog post, but today's news of Turner Construction winning the bid for the proposed downtown arena for the Sacramento Kings has inspired me to write.  And no, this isn't a rant about the arena--it's simply a post to clear up some misconceptions.

First, I read some commentary online where people are claiming Turner is a home-grown Sacramento company.  Nope, not even close.  Turner is the largest general building contractor in the United States and is based in New York City.  It's owned by an even larger Spanish construction conglomerate.  Turner has built structures all over the world.  It's a solid company that has built many major sporting venues, including the Mecca of all sports (Yankee Stadium) and the new 49ers stadium.  But Turner is not headquartered in Sacramento, nor was it started in Sacramento.

The other misconception is just the opposite of the aforementioned one: Turner is a big New York company that's going to come into town and build the arena with it's people from outside Sacramento and no local construction jobs will be created.  This is also far from the truth.  Anyone listening to 98 Rock in Sacramento is evening at about 6:00 would have heard me argue why this isn't the truth.  Turner's local office, by itself, is the largest general building contractor in Sacramento.  Its been in Sacramento since the 1980s (I believe--I would verify this but this is a blog and it's after 10:00 and I need to be up at 5:00 in the morning).  Turner hires a lot of Sac State Construction Management graduates and one of their Preconstruction Managers teaches part time at Sac State.  While Turner is based in NYC, it has deep local roots and has built many noteworthy projects in Sacramento (Terminal B at SMF, the new SMUD headquarters, etc.).  Combine the local knowledge of their Sacramento office with the stadium expertise embedded in the company nationally and you have a company that's more than capable of building a state-of-the-art stadium.

Another issue that Dog (the 98 Rock DJ) brought up is that many of the skilled labor jobs will not be created locally.  He thinks that maybe 35% of labor will go to local tradesmen.  I think it will be closer to 65%.  Here's my argument.  The project will likely involve a Project Labor Agreement (PLA) that mandates union labor to be used on the project.  If that is the case, most of the labor will come from local union halls because many labor unions restrict the flow of labor between locals (moving labor from one local to another is called "portability" or "porting in" in labor speak).  Some unions are more strict about this than others.  Iron workers have greater ability to travel than electricians, but the mass migration of union labor is pretty rare for single projects.

Even if a PLA isn't signed, Turner is signatory to the unions that represent cement masons, carpenters and laborers (if not additional others). So the rules regarding using local labor and not porting in labor from other locals still stands.

Even if labor could come from other places, where would it come from?  Dog suggested Texas, which is a likely suspect since there's a lot of construction going on there.  But Texas is already lacking in construction personnel to meet its own demand, so people are plenty busy down there.  Plus, for all but the most specialized labor, it is too expensive to bring labor to Sacramento from far off places (Texas, Nevada, Arizona, etc.) because contractors would have to pay per diem and lodging, on top of wages.  Also, a lot of the labor from those regions is nonunion, and thus will not be able to work on the project (if a PLA is put in place) or for Turner (regardless of a PLA).

So what about the Bay Area?  That's not too far away.  But the Bay Area has different union locals, so portability is still an issue.  That aside, the Bay Area is booming compared to Sacramento (it's booming compared to any region in the U.S.!).  Skilled labor in the Bay Area makes higher wages than do people in the Sacramento region, whether prevailing wages are mandated or not.  It's not likely that skilled labor will leave the Bay Area, where jobs are plentiful and wages are higher, to work in Sacramento, even for a cool stadium.

Turner will likely bring management personnel to Sacramento from other regions (project management is rarely subjected to union labor rules).  I hope they do.  Many Sac State grads are working in the Bay Area on projects like the 49ers stadium and the Transbay Terminal.  I think it would be great for them to come back to the area and help build this project.  But the management jobs are just a fraction of the work force.

Lastly, I'm comfortable predicting that local labor will be used because a few companies that are not from the area teamed up with local general contractors to bid on the arena.  The reason they do this is so that they have a local partner that knows the local labor force and can manage it properly.  The teams typically make an agreement that says "I'm a big company that understands arenas and has built them all over, and you're a local company that understands the local labor force, let's team up on our bid."  I'm obviously paraphrasing, but that's the gist of the partnership.  If local labor was not needed, the big out-of-town contractors would certainly not team up with local general contractor partners, they would simply bus in labor from wherever they could get it cheaply.

All-in-all, Turner is not a Sacramento-based company, but they have a strong local presence and they are fully qualified to do the job.  Additionally, they will be using a lot of local labor to build the new arena.  This will be a Sacramento-built project.

Dog, it was fun debating with you.  When the subcontracts are signed and it becomes clear that way more that 35% of the construction jobs created are for people from the Sacramento region, I won't make you eat crow.  When the dust settles, it will likely be bird hunting season, so I'll bring you some delicious pheasant or dove.  Even though we were debating, we both want the same thing: for Sacramentans to get their fair piece of the action.  I'm confident that they will.