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Local union labor will be used for Horseshoe Casino

Caesars Entertainment Corp. will use local union labor to build the Horseshoe casino on Russell Street, ending a dispute that dragged representatives of Gov. Martin O’Malley and Baltimore Mayor Stephanie Rawlings-Blake into the negotiations.

Rod Easter, president of the Baltimore Building & Construction Trades Council, said the deal — struck this month — covers construction of the $400 million, 262,000-square-foot casino, but does not include concrete work and a planned 4,000-space parking garage. Caesars expects the job to employ 2,000 people.

“The national building trades came in and worked out an agreement with Caesars and Whiting Turner because they just weren’t listening to us,” Easter said Wednesday. “We had to get a little more leverage on them. … We’re not happy that the parking garage and the concrete are not part of the package, but it’s better than nothing. They have an agreement. It’s going to put people to work.”

Easter declined to provide further details of the deal, deferring to the national Building and Construction Trades Department, AFL-CIO, which negotiated the Project Labor Agreement after Maryland Secretary of State John P. McDonough oversaw a series of meetings that began in November. Calls to the national building trades office were not returned.

Rawlings-Blake asked for the initial meeting after labor unions told her that Whiting Turner Contracting Co. was reluctant to use union labor to build the casino because of costs. McDonough said he attended that first meeting and each subsequent one as an O’Malley liaison.

“Eventually, the building trades and Caesars negotiated directly,” McDonough said Thursday. “We were sort of an initial facilitator.”

In a statement, CBAC Gaming LLC — a group of investors led by Caesars — said it would now turn its attention toward resolving labor issues surrounding casino operations. A rally is planned on Saturday near the site of the future casino, where local union workers and labor leaders plan to demand Baltimore residents are hired to work at Horseshoe.

“CBAC Gaming LLC is pleased to have reached a labor agreement regarding the construction of Horseshoe Baltimore and looks forward to continuing its discussions with union representatives regarding the operational phase of the casino,” the CBAC said in the statement.

Some university studies have shown that union-only Project Labor Agreements can increase construction costs by about 20 percent due to higher wages and decreased competition, but proponents say PLAs guarantee labor peace that help projects come in on-time and on-budget.

Once gambling expansion was given final approval by voters last November, casinos were allowed to stay open 24 hours a day, seven days a week. They have also started operating table games such as blackjack, and bids are being drawn up for a sixth state casino, to be built in southern Prince George’s County.

Approval of the expansion led Caesars to pledge to spend an extra $25 million building a poker-centric Horseshoe casino instead of the planned Harrah’s casino.

Unions weren’t guaranteed a share of the work in the expanded gambling law passed by the General Assembly last August, but local union leadership lobbied lawmakers and campaigned for the measure based on the assumption that union workers would be well-represented on construction crews. When it became apparent late last year that Whiting Turner and Caesars were considering other options, labor leaders were displeased.

The tension boiled over in December, when Metropolitan Baltimore Council AFL-CIO President Ernest R. Grecco canceled an annual January labor conference that was to be held at Bally’s in Atlantic City, N.J., a Caesars-owned property. More than 500 were expected to attend the conference, Grecco said.

In a December letter to Caesars Eastern Division President Donald Marrandino, Grecco wrote that the apparent decision to use non-union labor to build Horseshoe Baltimore was a “slap in the face.”

Caesars and Whiting Turner eventually came around, but Easter said the state’s involvement played an important role in the months-long negotiation.

“The governor’s office was extremely helpful,” he said. “I will give them credit where credit is due, and I’ll throw a brick at them when they need it.”

Construction has started at the casino, but a lawsuit filed by residents of nearby Westport in February expressed concerns about toxins remaining in the soil there from a pesticide and chemical plant at the site that closed in the early 1900s.

A Baltimore City Circuit Court judge issued a temporary restraining order that halted work at the construction site, but the order was lifted March 14. Residents have since filed an appeal with the Court of Special Appeals. The Maryland Department of the Environment, meanwhile, has filed a motion to dismiss the lawsuit.