Developers who accept business subsidies from the Duluth Economic Development Authority soon may need to comply with a new requirement.

An ordinance headed to the Duluth City Council for a vote on Monday would require developers who receive financial aid from the authority to sign project labor agreements, often called PLAs for short. Such agreements are self-described as intended "to establish a framework for labor-management cooperation and stability."

Up until now, DEDA has not automatically required developers it assists to sign PLAs, although the city has mandated the agreements when public subsidies are provided.

Should the ordinance pass, the rules will become uniform so developers "will know exactly what the requirements will be, whether the subsidy came from DEDA or the city," said David Montgomery, Duluth's chief administrative officer.

The PLA requires a developer to pay all people working on a construction project wages and benefits consistent with local area labor agreements. Non-union developers may use their own people but must pay union scale.

The agreement also directs developers to fill job openings on a project through local union referrals. The requirements apply both to the general contractor and any involved subs, alike.

Montgomery doesn't expect the PLA requirement will drive project costs higher. He noted that developers who receive tax-increment financing assistance or other monetary aid from DEDA already are expected to pay prevailing wages tied to broad-based union agreements.

He noted that developers who sign PLAs are assured 'labor peace," meaning that a project won't be slowed by a union boycott or picket.

By working with people from the area trades, Montgomery said developers often can avoid common pitfalls that sometimes occur when workers are unfamiliar with local building codes and requirements. Fixing those mistakes after the fact can result in delays and added costs.

"Sometimes, going in a different direction can seem cheaper on the front end. But you'd have to question whether that was a wise decision down the road, when the cost of revisions and delays is factored into the equation," Montgomery said.

If the ordinance passes, Montgomery said it will reduce confusion and bring consistency to the expectations for the recipients of local business subsidies.

"It has long been a priority of the mayor and city administration to get this squared away," he said.