Matt and Mike Pestronk, the brothers who together own Post Brothers Construction, did something considered impermissible in Philadelphia. They started renovating a large building in Center City without using 100 percent union labor.
The $38 million project to convert the rotting Goldtex shoe factory into high-end loft apartments, riled labor leaders after the brothers proposed hiring only 40 percent union tradesmen, saying that going all-union would have scuttled the project financially. Negotiations fell apart and the property, just a stone’s throw from the Reading Viaduct at 12th and Wood Street, has been transformed into a fortress of a construction site as skirmishes between developers and union protestors have escalated–garnering increasing publicity in the process.
But the high profile of the project has made the Goldtex building emblematic of a larger struggle, as the formerly unchallenged union dominance of the city’s construction trade is now called into question. Wage and benefit demands–with political support and project-crippling protest tactics to back up those demands–that for decades were simply regarded as “the cost of doing business in Philadelphia” have been flouted by a couple of 30-something Drexel University alumna.
As work inches forward at a fortified Goldtex, the weeks of protest have rolled by with no clear resolution. But even the current protracted stalemate suggests that trades’ strong-arm tactics and political allies may not be what they once were. Perhaps more importantly, the Post Brothers’ strategy begs a question: has it actually become cheaper to fight the unions than to hire them?
The Pestronk brothers have gone so far as to create a website with videos they say show union vandalism and intimidation tactics, as well as a list comparing the union’s average wage of $64 an hour with lower union wages in Washington DC. The Philadelphia Building and Construction Trades Council, which represents an array of different trade unions, believes this is part of larger “crusade” by the Post Brothers to destroy the union’s “way of life,” said business manager Pat Gillespie. He rejected comparisons to Washington DC, a place where he said interest groups had “broken the back of the union.” Gillespie added that union wages are set relative to each region’s average cost of living. (Washington’s cost of living is almost 25 percent more than Philadelphia’s.)
He said the unions negotiate with every developer to work out a labor cost that works for everyone involved. “If you asked me, $100 an hour isn’t enough, but we balance that with what a project can afford,” he said, noting that in the past, the trades have taken 10 percent pay cuts on projects to secure work.
“We do that all the time, we need these projects to live, like oxygen,” said Gillespie, adding that union productivity makes up for increased costs. “We have the most productive workers in America,” he said.
He says reasonable negotiation never took place with the Post Brothers, and claimed that their inability to reach an agreement on the use of union carpenters led to a strike by all the other skilled trades that had agreed to work the project. Gillespie believes this was the Pestronks’ intention all along, calling them “disingenuous” for now claiming that the unions turned down a reasonable offer, accusing the Post Brothers of “picking a number out of the air” and saying it was too expensive.
“I think it’s very odd that the problem was with one of the more economical organizations (the Carpenter’s Union), where people often tell the other trades to mirror them, because of how cost-conscious and efficient they are,” said Gillespie.
Perhaps a reflection of how acrimonious the dispute has become, Mike Pestronk said even Gillespie’s basic characterizations of the initial negotiations were “not accurate at all.” He said that Post Brothers had had positive negotiations with all of the individual trades groups on running a mixed shop at 12th and Wood, with 40 percent of labor going to all-union crews and the rest to contractors “who have worked with the unions and typically have mixed crews with some union and non-union.” He said he was later approached by Gillespie’s organization, who demanded the project “become all-union or they were going to do everything possible to stop the project.”
Why not go all union? “Simply cost,” said Pestronk.
“There would be no project if it had to be [all union]. The costs for the wages they want through negotiation are more than 50 percent higher than what the fair market demands,” he said, adding that all union labor would have put building costs at some “$300 per square foot,” more than double the Philadelphia average and a rate seen only on completely subsidized projects like public housing.
After rejecting the Council’s demands, said Pestronk, “we started getting calls from the union subcontractors who we were awarding the project to saying ‘our union is telling us we can’t work on your site’.” Post Brothers was forced to replace all the subcontractors with non-union workers in order to continue construction.
“That was when the picketing and protesting really escalated,” he added.
Union protests have become more common in the city as the flagging economy has increased unemployment in the construction trade. Non-union sites that normally would have been too small to be worth protesting, like the Milkboy Cafe at 12th and Chestnut, have become targets. The Goldtex site was simply too big to pass up. Picketers appeared at 12th and Wood as well as a separate Post Brothers development on Rittenhouse Street in Germantown that had been under construction with a mixed crew. The Pestronks say the union produced sexually explicit flyers featuring one of their wives, threw bottles of urine at their equipment, and have posted security videos online that show a masked man–allegedly a union supporter–dumping what appears to be oil on the site’s entrance ramp. Others show a crowd of union protestors scuffling with the site’s security guards. Union representatives maintain that they did nothing illegal, and accuse Post Brothers of staging acts of vandalism and editing videos to make the protestors seem like the aggressor.
“I would say it’s the ultimate case of the pot calling the kettle black, I can’t count how many times our guys have been threatened, had tires slashed and windows broken. These guys are violent thugs,” said Mike Pestronk.
After several weeks of accusations of vandalism, assault and provocation by both sides, the Pestronks requested and received a restraining order that keeps protestors 45 feet away from the site’s vehicle entrance at all times.
Please read this note if you are inclined to leave a comment on this article. First, if you’ve already made an argument about this issue on our previous article about the Goldtex project, don’t repeat it here. Second, please keep all comments on point and fact. No conjecture, no vitriol will be tolerated; comments not based in fact will not be accepted.
As a witness,I can attest to the well written, factual and non-biased reportage by Ryan Briggs, bringing to light the differences on both sides of the coin.
The windows are not floor to ceiling, the sills are over 3 feet high. You cant fall out them. OSHA is there every day because the unions call them. They would fine us and make us change our practices if they were unsafe!
In addition to costing 60mm the hilton next to the reading terminal market that the hiddencity article compared to the Goldtex building also featured crane workers sleeping on the crane itself. I took a picture of this scene this morning around 1130, but I cant seem to paste it in here.
Also, I would imagine the reason there is “no protection” in the windows at that building is because the windows are not floor to ceiling. I live in the building across the street and can see into the Goldtex building, there is at least a 4 foot high concrete wall from the floor before the window opening starts.
Right on Post Brothers, thanks for cleaning up my neighborhood!
This is very well written and incredibly insightful. This is much better than any of the journalism that is being done by the major media outlets in Philadelphia. It’s astounding.
As for the subject matter itself, the most telling thing is the methods being used by either side. The Post Brothers have an excellent website that uses excellent rhetoric. By “excellent”, I mean it is both written well as well as being well-reasoned. Are their “facts” all true? I don’t know, but they certainly seem believable. Meanwhile, the unions’ “facts” seem to be concocting stories and hearsay of rumors. Many of their “arguments” are really ad hominem attacks.
And let’s point out the irony of complaining about “German money” leaving Germany to build something in the United States. How would such a nationalist sentiment work in the context of the fact that so much of the money the United States federal government uses for its projects come in the form of loans from the Chinese? Would the same guy complaining about “German money” also complain about “Chinese money”?
I’m near that building almost every day. Maybe I should start taking photos of the union protesters parking on private property, urinating against peoples buildings and between cars and leaving trash on the sidewalk.
Also, this was a very well written story.
I’m going to start picketing 100% union jobs. How come it’s Okay for to have 100% union, but not the other way around. Instead of an inflatable rat, I’m going to get an inflatable rubber ducky!
FANTASTIC piece. On my walk to work every morning, I see at least 3 different union protests outside active work zones…. and my walk is barely 9 blocks. This is a huge issue that’s affecting any possible progress in Philly’s urban blight situation, and it isn’t talked about enough.
This is a great article. Well supported with some interesting facts- like most of these guys go home to the suburbs after a long day of trying to prevent development in the city.
Between Philadelphia’s absurdly ineffective government, high taxes (some of which are laundered back into private developments to pay the unions), and these inflated construction costs, it is truly amazing is that the city has been growing recently all.
Wonder what the city could do if it weren’t weighed down by the government/union axis?
A big part of the story is city council still says how hi whenever these guys jump- Jim Kenney shutting down the project at the unions behest using some bureaucratic pretense. He is obviously part of the problem with Philly government corruption, though hardly the only one.
Kudos to the Pestronk’s for trying to make the city a better place and their courage in confronting these thugs.
I particuarly appreciate this:
“Interestingly, Zuritsky’s company had actually been given the opportunity to buy the Goldtex building from its previous owner. “We looked at that building, because it was offered to us, and even if they gave us building for free we couldn’t make it work because we were gonna build it union,” he said.”
‘Nuff said, I think…
I live in the neighborhood and in no way do I support the unions. Post Brothers is doing a great thing for our neighborhood and, potentially, for the City. Imagine more and more sites going non-union because of this. Imagine the extent to which this City could improve because developers can afford to be innovative and creative?
Go Post Brothers!
Other articles that I have read on this say that union work is no longer required in the suburbs due to the Valley Forge Plaza using non-unionized labor in the early 80’s. Is that how it works, one large non-union development begets more non-union work? So is the Goldtex renovation the first mixed labor development of this magnitude in the city?
Yes, an excellent piece. Finally an intelligent take on a situation that no one had the guts to address.
I think political corruption is the underlying cause here….Philllie needs an overhaul!
$63 an hour? In this economy that is unheard of, the rest of us are working for 1/3 of that, sorry to not be so empathetic to your cause union workers!
Every person working on that site should be commended. They suffer jeers, degrading comments, physical threats, flattened tires, broken windshields, they get followed home, just for working an honest job for an honest wage.
Thank you for your patience.
It is appalling that the Philadelphia Inquirer, which touts itself as a voice for reform and transparency, has not run an editorial taking a position on the accusations and counter-accusations involved in this important showdown.
How easy would it be for all of the non-union guys on that job to join up with the protesting union? I hear lots of stories about how insular and closed–off unions are.
If they don’t allow new members, than it’s a case of hiring one shop over another and not fair pay for all.
Am I getting this right?
didn’t bart blatstein foreshadow this entire process with his work in northern liberties years ago….?
also, the entire construction industry is moving in a new direction – albeit moving very slowly. this new direction involves designers, contractors, and owner/developers working closely together (even contracting all three of these parties together) and there is no voice at the table for workers other than the tired “we want huge wages but our safety record is great and we all live outside the city anyway” voice of the unions.
the unions are placing themselves outside of this game changing industry conversation and therefore they will be left behind. instead of protesting, the unions should be training a new crop of project managers and laborers in “just in time” and “lean” management and construction practices. simply stated: the unions must innovate or they will certainly die.
I’d just like to chime in with the others and say this is an excellent piece, very well-written and thought through. That should be the standard for journalism but these days it simply isn’t. It’s great to see it.
As to the subject of the article, since the Goldtex project seems to be moving forward despite the protests, is there an estimated completion date? Does the union have anything else they can do to stop it (I’m not advocating that the should, I am just asking if they can).
Because if not, it will mean that you can build non-union in Philadelphia, albeit with great difficulty. A bigger developer, particularly an out-of-towner who does not play Philly-ball, might see that as an encouraging sign.