Labor Issue Derails Local Tax Break for Churchill

Efforts by Churchill Downs to obtain local tax breaks totaling an estimated $7.5 million over 30 years were derailed Friday after representatives of the track were unable to reach an agreement over labor demands being made by the Louisville, Ky. Board of Aldermen.

According to the Louisville Courier-Journal, the failure of the negotiations means that Churchill could delay or scale back the second phase of the $100-million construction project currently underway.

The tax break would have helped pay for a second, more extensive renovation than the $27-million phase already underway. The second phase would include more corporate suites, a 1,700-seat satellite wagering facility, new lighting, new premium box seats and a press box, and a new Eclipse Room and Turf Club.

The aldermen last month approved the creation of a special tax district surrounding Churchill Downs that will give the track up to 80% of new revenue generated from sales and occupational taxes, or as much as $150,000 a year.

However, according to the Courier-Journal, aldermen balked at providing more tax breaks without labor concessions. The deal hit a major snag Tuesday when aldermen said they wouldn't approve it unless Churchill agreed to stipulated labor provisions, the newspaper reported, noting that throughout the negotiations the aldermen stood with the union leaders.

According to the paper, the union deal called for the track to guarantee that at least 95% of the value of all contracts on the second phase of renovation be awarded to contractors with collective-bargaining agreements. In exchange, the unions would agree that there would be no strikes or work stoppages and would agree to maximize the number of women and minority contractors and employees working on the project.

Alderman Don Johnson said the unions also wanted Churchill Downs to ensure that any non-union workers hired on the project would be required to pay dues to the union contractors supervising their work. And Johnson said the unions wanted a guarantee that any non-union workers would be paid full union-level benefits while on the job.

If non-union workers were hired, ''we wanted them to be paid union wages and benefits. Churchill Downs would not agree to that,'' Wise said.

The CJ reported that Churchill officials did agree to an aldermanic and union demand that workers on the project's second phase be paid the state-set prevailing wage. In some cases, that figure is lower than wages paid under union contracts.

The newspaper reported that Churchill general manager Alex Waldrop was reluctant to discuss details of the talks. Waldrop did say said that he interprets the proposal to mean that even though 5% of the contracts could have gone to non-union contractors, 100% of the workers would have to be union.

Waldrop said 85 percent of the work on the first phase will go to union workers. And it's a ''fair estimate'' that at least 85 percent of the value of the second phase would be awarded to organized labor.

''The prevailing wage was a huge concession for us,'' Waldrop said.

But Waldrop said the demands made by the aldermen and the unions would have ''eliminated competition (in bidding on work), driven up the price of the project and limited the minority and small-business participation in the project,'' the Courier-Journal reported.

Despite the apparent stalemate, Waldrop said the track hopes to keep the talks with the city open. ''We will continue to see if there is any chance that the unions will back off'' their demands, he said. ''We definitely will review its scope,'' Waldrop said of the second phase of construction. ''It may be a very different project.''