Local hiring requirement a tough challenge for new Detroit arena project
Shortage of tradespeople in the city causing headaches for developer
An agreement for a land transfer from the City of Detroit to Ilitch Holdings Inc., that enabled construction of a new arena for the Detroit Red Wings requires that 51% of the project’s construction workers must come from the city. That stipulation is creating a challenge for Ilitch, the owner of the Red Wings, due to a shortage of skilled tradespeople who live in the city.
Construction firms that fall short of the hiring goal can still work on the project, but must pay a fee or offer free training and provide instructors and equipment. Many construction workers move out of the city after they acquire skills to earn a better wage. Detroit’s mayor is considering offering low-interest loans on city-owned houses to try to retain construction workers.
The arena construction will create an estimated 5,500 jobs with nearly 2,800 of those workers needing to come from Detroit. The project could become a training ground for tradespeople who will be needed on other major projects in the area including blight removal, the M-1 rail project, and the planned New International Trade Crossing bridge that will span the river between Detroit and Windsor, Ontario.
Even if the local hiring requirement weren’t in effect, the arena project would be hard pressed to find enough laborers, carpenters, electricians, pipe fitters and other trades, with the region experiencing a labor shortage due to an aging workforce.