Friday, 09 November 2012 01:14

Convention Center Expansion Clears Major Hurdle

San Diego's $520 million proposed Convention Center expansion received a major boost Thursday, when Mayor Jerry Sanders announced a formal agreement with labor groups to support the project.

Labor will drop its lawsuits against the project's environmental plan and the hotel-room tax increase used to finance it. The expansion's contractor, Clark and Hunt construction groups, agreed to a local-hire deal with labor, similar to what's known as a project labor agreement.

Thursday's announcement makes the expansion more likely to happen for two key reasons:

• Labor is an influential lobby at the California Coastal Commission, a regulatory agency that has to approve the expansion. Having labor on the city's side almost certainly will help its chances.

• By dropping out of a lawsuit against the hotel-room tax increase, labor has left that effort without its most well-funded opponent. Two separate open-government advocates are still challenging the tax hike. They contend that the general public needed to approve the tax increase rather than the city's hoteliers.

We'll explain both issues and add more about the labor deal below.

Coastal Commission

The Coastal Commission regulates environmental issues and waterfront accessibility. Expansion boosters hope that a five-acre park planned for the top of the larger Convention Center will help the project's chances for approval. But it remains a big challenge.

Chargers special counsel Mark Fabiani, for one, has expressed doubt that the commission will sign off. He has called the expansion proposal "a box-like structure impeding public access to the waterfront."

But organized labor has powerful allies at the Coastal Commission.

"Having an agreement with labor to work together on this really helps us at the Coastal Commission," Sanders said at Thursday's press briefing. "That's a huge thing. Labor's very influential there and having us work together on this, I think, will move it fairly quickly."

Tax Increase

We've reported in-depth about the legal battle over the hotel-room tax hike that's supposed to finance most of the expansion.

At issue is whether hoteliers alone were allowed to approve the tax increase or whether the general public should have been required to vote. The city has taken the matter to court to find out. City Attorney Jan Goldsmith pegged the chances of a judge signing off on the hotelier-approved tax hike at no more than 50-50.

The city's hotel-workers union had filed suit against the tax, but has now agreed to drop its challenge.

The lawsuit doesn't end now, though. Two separate open-government advocates remain opposed.

"The case moves forward," said Cory Briggs, a lawyer representing one of the remaining opponents.

But the hotel-workers union had the deepest pockets by far of any of the challengers. If the city wins the initial decision, there could be less of a chance for an appeal.

Labor Deal

The war between organized labor and nonunion contractors over government-funded construction projects has raged for years.

The struggle boils down to contractual deals known as project labor agreements. They set rules like who contractors hire and how workers are compensated. In exchange for additional benefits, unions agree to prevent costly work stoppages. Nonunion contractors argue the deals keep them from winning contracts in a competitive bid and that they cost taxpayers more.

The contractors won a recent battle in June when city voters overwhelmingly approved Proposition A, which banned city-mandated project labor agreements. But that doesn't mean all project labor agreements are off the table.

Contractors are allowed to make project labor agreements or deals like them if they want.

"It's totally up to the private contractor," said Lorena Gonzalez, who heads the region's largest labor organization.

That's exactly what has now happened with the Convention Center expansion: Labor and the contractor made a deal. Gonzalez said the arrangement wasn't formally a project labor agreement but included many similar elements, such as local-hire provisions, worker-training efforts and mandates for greater involvement by small subcontractors.

You can find out more background about project labor agreements and the Prop. A ballot measure in a Reader's Guide we published in May.

One final note. Mayor-elect Bob Filner opposes the Convention Center expansion's financing plan, but has said he'll implement it if the court approves the tax increase. He also has said he could broker a labor deal that would help the project get through the Coastal Commission.

Now, that labor deal is done.

By Liam Dillon

-Voice of San Diego