A group of nonunion construction firms has mounted a challenge to Muskegon County’s policy of requiring union-level wages on major building projects it financially supports. The group is threatening to file a lawsuit if the policy is applied to bids for work on an upcoming $17 million convention center in the city of Muskegon.

The West Michigan chapter of the Associated Builders and Contractors trade group contends that the policy violates state restrictions on prevailing wage requirements.

Norm Brady, president of the ABC chapter, said, “The law is clear. Local governments can’t get in between the employer/employee relationship. They cannot require (prevailing wage) any longer.”

Brady said his organization is in talks with county officials to remove the requirement from its requests for proposals on the convention center, which are expected to be issued shortly.

A March 26 letter from ABC’s attorney to County Administrator Mark Eisenbarth and the county board issued a warning. Sending out the bid requests without removing the prevailing wage provision, ABC said, “will result in the filing of a complaint seeking all appropriate and available legal relief and damages. This may lead to significant financial liability for the County.”

ABC affiliates in Michigan were behind last year’s successful effort to repeal Michigan’s prevailing wage law for state-funded projects, collecting more than 380,000 petition signatures on an initiative that was subsequently adopted by the Legislature. Prevailing wage laws prohibit government entities from awarding construction contracts to companies that don’t pay their employees wages and benefits at rates that unions represent as “prevailing” for various job classifications within a geographic area area.

But Brady said he believes the county is relying on a prevailing wage policy from 2013, and subsequent alterations to the policy, which tied local wages to federal guidelines after the state ceased calculating prevailing wage rates. Doing so is illegal, he said.

In an April 19 email, Eisenbarth responded to a series of questions about the prevailing wage policy and ABC’s challenge. “These are all issues that the County is currently reviewing and ... therefore I am unable to provide further comments at this time.”

County Commissioner Zach Lahring said he believes he is in the minority on the county board in supporting an end to the prevailing wage policy. Requiring union-level wages results in higher costs and shuts out competent, nonunion contractors, he said.

Lahring, however, said he was uncertain whether the requirement could be removed from the convention center project, which is technically a city of Muskegon proposal being financed with bonds guaranteed by the county.

The county made its financial backing of the project contingent on requests for proposals including a prevailing wage requirement, said Muskegon City Manager Frank Peterson. He said the city is aware of, “but not taking sides,” in the dispute between ABC and the county. Commissioner Lahring said the county’s policy should be revoked in any event because retaining it will “adversely affect the county and its taxpayers (on a multitude of construction projects) over the next ten years.”

The Michigan House of Representatives passed a bill on April 17 to essentially prohibit any extensions of a key deadline for businesses that operate in the medical marijuana industry, effective June 1. The recreational marijuana ballot initiative Michigan voters approved in 2018 imposes a comprehensive and costly licensing regime on marijuana businesses, including retail shops. But the transition from a less regulated system of so-called medical marijuana dispensaries to a new regime has not been smooth.

Specifically, only recently have licensing authorities caught up on processing a backlog of license applicants, with delays due to what those in the cannabis industry say are overbearing licensing requirements.

“The creation of the medical marijuana business program was a highly politicized legislative battle that took several two-year legislative sessions to complete,” said Rick Thompson, an industry advocate with the Michigan chapter of the National Organization for the Reform of Marijuana Laws.

“Special interests from business and law enforcement groups gained the inclusion of many unnecessary requirements and regulations in the program,” Thompson continued. “These extensive financial and background checks, exhaustive cannabis testing and transport procedures, seed-to-sale tracking and compliance protocols have extended the time needed to approve candidates for one of these businesses.”

Many people have pointed to a previous medical marijuana licensing board as a major source of the problem. The board was created as part of a “seed to sale” regulatory regime originally created for medical marijuana by a 2016 law, one of the legislative battles referred to by Thompson. Lawmakers were aware then that a recreational marijuana initiative was in the works, so the law they enacted included provisions to include it. Voters approved that initiative in November 2018, and it imposes its own comprehensive licensure regime.

In March, Gov. Gretchen Whitmer issued an executive order abolishing the medical marijuana board and transferring its license processing duties to a new agency that has regulatory oversight over both medical and recreational marijuana. The agency will be housed within the state Department of Licensing and Regulatory Affairs and staffed by its employees.

In a phone conversation, Dave Harns, a spokesperson at the licensing agency, pointed to the reforms as a step in the right direction for streamlining policy and approvals. “We were once months behind, then weeks behind. Currently, we are not behind. We are now opening applications as they come in,” Harns said, crediting the improvement to process changes the department developed internally.

Thompson said he expects the process of licensing adult-use (recreational) cannabis businesses to go a lot smoother when the agency issues “emergency guidance” by this summer.

The bill that recently passed the House was sponsored by Rep. Jim Lilly, R-Park Township, and it would establish that unlicensed medical cannabis businesses still in operation would be barred from getting a license for one year starting June 1.

Thompson, despite many challenges ahead, says he is still optimistic.

“Michigan has evolved away from questioning the medical necessity of cannabis, yet still struggles to accept cannabis-based businesses in many communities.” He added, “The future looks very bright for our industry.”