August 9-16, 2002

REBIRTHING PAINS
The voices of preservationists were wailing last week, and their teeth were gnashing as well, over disclosure of some of the city of Detroit's plans for the redevelopment of its downtown area. I sorrowfully admit feeling the preservationists' pain. The Downtown Detroit Development Authority approved a $700,000 loan to enable the demolition of the long vacant Madison-Lennox Hotel, owned by Illitch Holdings of Detroit. Located along Harmonie Park at Madison and Randolph, it's about a block from my office, I've walked past its ruins countless times. In my opinion, the building is architecturally undistinguished. Quite profoundly so. I've also been told it would be difficult and extremely expensive to renovate. One of its two towers is timber framed. Considering its age, there's probably asbestos removal and lead paint issues connected with it as well. Taking it down will be no great loss. But reported with the loan was the city's plans to demolish the former Statler-Hilton Hotel, as well as concerns that the long closed Book-Cadillac Hotel and other architecturally significant - if vacant - landmarks may also have to bite the dust. True, downtown Detroit currently doesn't generate an excessive demand for hotel rooms. That's quickly expected to change when Ford Field is opened this fall and Compuware's new headquarters is inaugurated next year. City officials trying to win major conventions for Motown always have to face a hurdle of an inadequate supply of hotel space and that situation's not expected to change if present plans hold true. Even when Detroit's three major casinos finally build their permanent facilities, they're only talking about adding a total of a mere 1,200 rooms. I should think someone would be interested in bringing the Statler-Hilton and Book-Cadillac Hotels back to their former glory. Many years ago Amway Corporation did so for the former Pantlind Hotel in Grand Rapids, attaching a modern tower to it while totally renovating the old structure. Today, reborn as the Amway Grand Plaza Hotel, it's a fine facility that doesn't seem to have any problem in keeping its excellently appointed rooms filled. If it can be successfully done by a soap and skin lotion maker, why not in the still reigning Motor City of the world?

SLIGHTLY LOWER
A preliminary report issued by the Construction Labor Research Council on 2002 collective bargaining agreements in the nation's construction industry indicates a slight decline in average first year wage and fringe benefit increases. They appear to be coming in at $1.51 per hour, or 4.5%, compared to the $1.54 per hour, or 5%, figure reported for the same period in 2001. Second year increases in new, multi-year agreements, are averaging $1.50, or 4.2%; $1.45 or 3.9% for the third year; and $1.32 or 3.3% for the fourth year. The report derives its estimates from data collected from 74 settlements covering 81,057 workers.

THE TAX MAN STEALETH
In a move that attracted little attention, on June 6 our federal Internal Revenue Service published a notice of proposed rulemaking regarding the taxation of mobile construction equipment currently exempt from federal highway excise taxes. Yeah, buddy, that's right. Uncle Sam's got his eyes on your wheel loader. You can access a copy of exactly what the IRS published at www.irs.gov/pub/irs-regs/10382999.pdf. According to observers, the agency is proposing to extend its definition of "highway" vehicles to cover such construction essentials as mobile cranes, concrete pumps, and similar off-road equipment capable of traveling on roads to reach construction sites. If adopted, the new regulations would make such equipment subject to the new vehicle excise tax (currently 12% of the purchase price), as well as federal vehicle fuel taxes (currently 24.4 cents per gallon for diesel). One group - the Associated General Contractors of America - has begun calling it a "stealth tax" on construction. That organization adds that the IRS recently ruled, in its Technical Advice Memorandum 0200227005, that "sand dump trucks" used in transporting sand to oilfields and tractors used in a variety of oil field and other operations are to be subject to the same taxes. Of course the imposition of these taxes is unfair. If not insane, Even so, Washingtonoids apparently believe they can sneak it by us. Written and electronic comments on the notice of proposed rulemaking are being received until September 4th. I suggest you download the June 6 notice, study it, and send your comments through the IRS web site at www.irs.gov.regs. They can also be mailed to CC:ITA:RU (REG-103829-99), Courier's Desk, Internal Revenue Service, 1111 Constitution Ave. NW, Washington, D.C. Be sure to send copies to your Congressional representative and Michigan's two senators as well. Information concerning the submission of comments can be obtained by calling Treena Garrett at 202/622-7180. Questions about the proposed regulations can be directed to Bernard H. Weberman at 202/622-3130. Always be polite and friendly on the telephone, but at the same time, don't hesitate to be direct. U.S. Senator Kit Bond (R-Mo.) has written to the IRS, asking that the September 4 deadline for comments be extended for 90 days, but don't hold your breath. The tax man smelleth easy pickings.

CLARK'S IN CHARGE
On August 5 Governor John Engler announced the appointment of Noelle A. Clark as director of the Michigan Department of Consumer & Industry Services. It's to become effective on August 13. Ms. Clark is vice president of Hasselbring-Clark Co., a Lansing based distributor of office equipment. Previously she had served on the Michigan Workforce Development Board and, from 1993 to 1999, on the Michigan Jobs Commission. She's also on the national board of directors for the National Federation of Independent Businesses and is a former board member of the Michigan Chamber of Commerce. "Noelle Clark will excel as director of the Michigan Department of Consumer & Industry Services," Gov. Engler says. "Her extensive background as a businesswoman and her leadership in business organizations will serve the people of Michigan well."

SCAFFOLDING IN CHICAGO
Toughened rules on the use of scaffolding in the Windy City were approved late last month by the Buildings Committee of Chicago's City Council. A draft version had specified the approval of a structural engineer to vouch for the safety of the scaffolding design and the equipment being used. It, however, was replaced by an amendment requiring that erectors and users of scaffolding instead provide certified proof that they have completed approved training. Critics had said requiring an engineer's certification would have been prohibitively expensive on small projects. As scaffolding by its very nature is easily modified and moved, engineers with any common sense probably would be reluctant to grant their approval. The rules - which were sent to the full council for final consideration - require that permits be issued for scaffolds used on all buildings more than 40 feet high in downtown Chicago and more than 80 feet high in the city's neighborhoods. In addition, the users of the scaffolding must be covered by at least $1 million in liability insurance. The new ordinance requires scaffolds to be raised to the roof or lowered to the ground - as well as be appropriately secured as specified by their manufacturers - if heavy winds start blowing through project sites or are being forecast as coming your way. Last March 9 winds gusting to approximately 57 mph may have been responsible for causing a large scaffolding installation on Chicago's Hancock Building to detach. The collapsing scaffolding was blamed in the deaths of three people on the ground.

A SMALL FRACTION
Despite years of encouragement, women still make up a tiny percentage of the nation's construction workforce. That's the conclusion of the U.S. Bureau of Labor Statistics in its new report, Highlights of Women's Earnings in 2001. The document breaks out employment by gender and detailed occupation. Of the 4.5 million workers in our country's assorted skilled trades, only about 94,000 were female. That's less than 2.1%. Of the construction women careerists, 5,000 were operating engineers (2.1% of a total of 231,000 operating engineers); 2,000 were construction trades helpers (3.6% of 83,000); and 4,000 were construction inspectors (7.4% of 54,000). Copies of the report are available at www.bls.gov/cps/cpswom2001.pdf.

Questions? Comments? Idea?
Please submit your responses to the Great Lakes Fabricators & Erectors Association as soon as possible. You can call our new offices in downtown Detroit at 313/309-2000. Or you can drop an email to Guy Snyder at guysny@concentric.net or call him at 313/961-9217. We hope to hear from you soon!