Why Do Private Corporations and Developers in California Sign Project Labor Agreements? San Diego Provides a Clue

0 September 23, 2010  State & Local Construction, Uncategorized

In October 2001, the California Research Bureau released a “study” commissioned by California State Senate Pro Tem and Big Labor advocate John Burton (D-San Francisco) about Project Labor Agreements (PLAs).  As you can imagine, this report was full of logical fallacies, but fulfilled the intention of Sen. Burton to get an “authoritative” study to support PLAs at a time when construction unions and Governor Gray Davis wanted a PLA on the construction of the new campus of the University of California at Merced.  (The campus was built without a PLA after strenuous objections from leaders in the Central Valley who didn’t want San Francisco workers to travel out-of-area to Merced to build it.)

Remarks scattered throughout the report gave readers the impression that private corporations and developers are eager and willing to require their construction contractors to sign PLAs with unions.  For example, the report’s executive summary claimed the following:

“Perhaps surprisingly, private construction projects in California are much more likely to use PLAs than are public projects. Of the 82 project labor agreements reviewed for the content analysis in this report, nearly three-quarters (72 percent) were private sector agreements. In addition, 22 out of 23 private cogeneration electricity plants recently built or under construction in California used PLAs.”

Set aside the facts that the 82 PLAs were selectively provided by construction union officials and that the report never considers that the high percentage of construction projects that are privately-funded might reflect why 72 percent of the reviewed PLAs were on private projects.  Does the frequency of PLAs on private projects indicate that corporations and developers want to require their contractors to sign PLAs with unions?  No, it does not.

Why do private owners sign PLAs in California?  It’s all about getting proposed projects through California’s environmental review process without the unions gumming up the works.

Take, as an example, union-backed amendments approved on a 6-2 vote by the San Diego City Council on September 14, 2010 to change the City of San Diego’s Land Development Code and the Centre City, Marina, and Gaslamp Quarter Planned District ordinances.  The new language would take away exclusive authority of the appointed Centre City Development Corporation (CCDC) to review and approve new large downtown hotel projects and give final authority instead to the elected City Council.

On March 17, the Centre City Advisory Committee had considered the issue and voted unanimously (24-0) to recommend that no changes be initiated to the review processes for downtown hotels.  So why did all six Democrats on the San Diego City Council approve these amendments?  It had nothing to do with protecting the environment.

Unions such as UNITE-HERE (which represents workers in the hotel industry) want an additional leverage point to block approval of new hotel projects while they pursue pledges from hotel developers to sign a collective bargaining agreement for the workforce of the proposed hotels.  Meanwhile, construction unions see additional environmental review as another step in the permitting process where they can hold up construction until the hotel owner signs a Project Labor Agreement.

The elected San Diego City Council has a majority willing to hold up a project to help the unions pursue their agendas, but the appointed Centre City Development Corporation has been fair and reasonable about approving large projects and has resisted union manipulation.  Therefore, the unions proposed (and won) changes in the review process to get more political control over permitting.

The amendments were opposed by numerous business organizations in San Diego, including Associated Builders and Contractors.  News coverage of the vote included the San Diego Union-Tribune (Labor Leaders Declare Victory in Hotel Vote).

How can this racket be stopped?  The November 2010 election to the San Diego City Council of candidates such as Lorie Zapf (known for her work with Citizens Against Lawsuit Abuse) could restore a process that for 30 years effectively focused on the merits of the project and the legitimate impact of the project on the environment.

For now, the people of San Diego get to see their hotel permitting process hijacked by politically-dominant labor unions seeking to strong-arm developers into signing labor agreements for their theoretical future employees.


On September 26, the San Diego Union-Tribune cited the San Diego City Council’s new hotel approval ordinance as a reason to be wary of proposed city tax increases in an editorial entitled “Does council majority want Prop. D to pass?”  The editorial observed that the city council has placed a proposed sales tax increase on the November 2, 2010 ballot for the City of San Diego, even while the council majority passes new union-backed ordinances that will hinder economic growth and job creation.

But what happened Sept. 14 illustrated why some are wary. That day, Frye and her five Democratic City Council colleagues took a key step toward a council takeover of final approval of large downtown hotel projects, shunting aside the Centre City Development Corp., the city’s downtown redevelopment agency.

This was no minor change. CCDC has been one of the city’s most effective and valuable institutions and is credited with overseeing downtown’s breathtaking renaissance. So why would the council’s six Democrats want to emasculate the agency despite dire warnings that it would scare off developers and scuttle many job- and revenue-generating projects? Because organized labor saw a takeover of the approval process not just as a way to potentially force the use of union labor in hotel construction and operations but because it saw control of the process as a way to extract concessions on other fronts.

Last week, council Democrats backed off from another union-serving power play involving a proposal to require city contractors to follow “prevailing wage” rules. But insiders say the delay is almost certainly temporary and expect the measure to soon resurface. The same holds for another union favor: legislation that would require an economic impact analysis of any Walmart supercenter seeking to sell groceries and compete with unionized grocers.

In California’s major coastal cities, unions have filled a political vacuum left behind by informed, stable citizens who fled these cities in the past 20 years for less expensive family-oriented housing in the suburbs or for a better economic climate in other states such as Texas.  Local politicians in these cities now cater to the unions because they are only accountable to the union political machine.  As the San Diego Union-Tribune suggests, the passage of a city sales tax increase would seem to confirm that the San Diego City Council doesn’t need to worry about the sentiments of the voters, as long as council members do the bidding of the unions.

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