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Union Environmental Appeal of San Jose Infill High-Rise Fools No One

Today (Tuesday, August 13, 2013) construction trade unions either showed exceptional arrogance or exceptional foolishness when they chose to exploit the California Environmental Quality Act (CEQA) against a high-profile “infill” project in downtown San Jose.

For the past few years, some California state legislators have wanted to discourage CEQA actions meant to advance objectives unrelated to environmental protection. Even Democratic legislative leaders such as California State Senate President pro Tem Darrell Steinberg (D-Sacramento) are seeking minor CEQA amendments to reduce obstacles to infill development, which is regarded by some as a wise planning strategy for the environment.

Under these circumstances, it was astonishing to see the Santa Clara-San Benito Counties Building and Construction Trades Council appeal the San Jose Planning Director’s approval of a downtown 23-story residential “infill” project called One South Market Street. The appeal was filed by the law firm of Adams Broadwell Joseph & Cardozo and based on alleged CEQA violations and planning and zoning code violations.

No one was fooled. San Jose Mayor Chuck Reed declared “It’s not really about the environment … it’s abuse of the environmental process.” And Councilman Johnny Khamis complained that the city council had two abusive back-to-back CEQA objections on its agenda, one with an anti-competitive motive and one with a union motive.

In the end, the city council rejected the union appeal, although two council members voted to support the unions. One of them was San Jose City Councilman Xavier Campos, who is the brother of Assemblywoman Nora Campos, who is married to Neil Struthers, who spoke at the meeting in support of the CEQA appeal as the head of the Santa Clara-San Benito Counties Building and Construction Trades Council.

Groundbreaking for the project had already occurred in a ceremony on June 25, 2013. No one up to that point had indicated any concerns about permitting or environmental review. But on that same day, the law firm for construction unions submitted an objection letter. The unions formally appealed various aspects of the project on July 9 and July 12.

In an August 13, 2013 article about the appeal (Union Challenging Downtown San Jose High-Rise), the Silicon Valley Business Journal indicated that the union objections to the project were not necessarily related to environmental concerns.

So what’s going on? Sources told me the union appears to be trying to send a message after several key subcontracts on the job were delivered to non-union contractors out of Sacramento.

“The Building Trades are not opposed to more high-rises downtown. What we are opposed to is this developer generating more profits at the expense of local workers and the environment,” Neil Struthers, CEO of the Santa Clara & San Benito Counties Building & Construction Trades Council, told me in an email.

He added: “No project should be given the ability to avoid the requirements every other developer must meet as it relates to water quality, affordable housing and traffic mitigation. Someone needs to stand up to those that have the power to gain preferential treatment from local government.”

Reportedly the contractor most objectionable to the unions is a large electrical company that works on major commercial projects throughout Northern California. Its headquarters is in Sacramento, but it has a Bay Area office in Hayward, 25 miles away from downtown San Jose via Interstate 880. Construction companies in Northern California capable of working on a 23-story high rise building tend to have a regional market – these are not hometown plumbers.

Because the City of San Jose has provided tax and fee waivers with financial value to the developer, One South Market Street is regarded under California law as a public works project. All construction companies – both union and non-union – must pay state-mandated construction wage rates (“prevailing wages”) to their trade workers on this project. In California, state prevailing wage rates always duplicate the wage rates in the applicable union collective bargaining agreements for that trade in that geographical region.

In other words, local hiring or wage rates are not legitimate issues. Control of the workforce is the issue.

Presumably, the Santa Clara-San Benito Counties Building and Construction Trades Council will continue to interfere with the project (perhaps with a lawsuit) until the developer (Market Street Tower Venture, LLC, on behalf of Essex OSM REIT, LLC) agrees to sign a Project Labor Agreement or some other contract giving unions a monopoly on construction of the building.

The One South Market Street CEQA appeal shows that unions have a strong economic interest in stopping any proposals that compromise the obstructive power of CEQA. It should not be a surprise that construction trade unions are reportedly the primary obstacle to Senator Steinberg’s very modest CEQA reform bill, Senate Bill 731, but apparently Senator Steinberg was surprised, according to the August 5, 2013 article from California Forward: CEQA Roundup: Have Negotiations Really Stalled?

Steinberg himself seems to have been surprised by the opposition on the part of some labor leaders, in particular, who have pushed back against his most basic goal: Updating the CEQA process for infill projects. While the Senate leader has tried from the start to write a bill that would drive more of this type of development across the state, sources say some labor leaders view the coming infill wave as the source of a steady stream of jobs – and they are wary of losing CEQA as a tool they can use to reach project labor agreements with developers.

Reform of the California Environmental Quality Act is not an environmental issue. It’s a labor issue.

News Media Coverage

San Jose Denies ‘Greenmail’ Environmental Appeals on High-Rise ProjectSan Jose Mercury-News – August 13, 2013

San Jose Council Says ‘No’ to Union’s CEQA Challenge of One South MarketSilicon Valley Business Journal – August 13, 2013

Sources

Staff Report on Appeal of Santa Clara-San Benito Counties Building and Construction Trades Council to One South Market Street Project (includes June 25, July 9, and July 12 letters from law firm of Adams Broadwell Joseph & Cardozo)

Initial Study/Mitigated Negative Declaration for One South Market Street and Mitigation Monitoring or Reporting Program for One South Market Street

Union Challenging Downtown San Jose High-RiseSilicon Valley Business Journal – August 13, 2013

California Senate Bill 731 – CEQA reform for infill development projects

CEQA Roundup: Have Negotiations Really Stalled? – California Forward – August 5, 2013

KT Properties One South Market Street

Background on One South Market Street from Silicon Valley Business Journal

CEQA Works – the coalition of environmental groups and labor unions opposed to CEQA reform

www.PhonyUnionTreeHuggers.com


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

Advancing the Union Agenda: A More Mundane Silicon Valley Ambition

As reported over the past few months in www.UnionWatch.org, almost all of the sixteen community college districts within 50 miles of San Francisco have succumbed to the union political agenda and now require their construction contractors to sign a Project Labor Agreement with trade unions as a condition of working on taxpayer-funded projects. And unions are busy picking off the holdouts. Since the November 6, 2012 election, I’ve amended the chart (see below) to indicate the imminent end of fair and open bidding competition at the Ohlone Community College District based in Fremont and the West Valley-Mission Community College District, which includes the cities of Santa Clara, Los Gatos, Saratoga, and Monte Sereno.

I regret to report that the celebrated (but somewhat exaggerated) free choice, free mind, free market culture of Silicon Valley is about to experience another costly intrusion of government into commerce, this time for the benefit of construction unions. Through the 2000s, politically-moderate elected board members at the West Valley-Mission Community College District resisted political pressure to negotiate a Project Labor Agreement for the unions. Leading the charge to ram this union deal through the board of trustees was Chris Stampolis, a Democrat Party activist intent on advancing his own political career with the help of powerful San José union officials.

Trouble arrived soon after 60.1% of voters in the West Valley-Mission Community College District voted for Measure H in November 2004, thereby authorizing the college board to borrow $235 million for construction projects by selling bonds. In May 2005, the West Valley-Mission Community College District issued a request for proposals for construction management services that included notice of a possible Project Labor Agreement, prematurely revealing the union plan to get monopoly control of the work.

Opponents of Project Labor Agreements were ready to respond when Neil Struthers, the head of the Santa Clara-San Benito Building and Construction Trades Council, made a formal presentation during the May 17, 2007 West Valley-Mission Community College District board meeting about a Project Labor Agreement, at that time disguised as a “Construction Career Agreement.”

A majority of the board was either lukewarm or opposed to the plot of union officials and board member Chris Stampolis to give unions control of the work. Risking retaliation from powerful union interests, the San Jose/Silicon Valley Chamber of Commerce issued a letter in 2008 opposing the proposed Project Labor Agreement for West Valley-Mission Community College District Project Labor Agreement. The threat faded – for a time.

In the June 2012 elections, 59.9% of voters approved Measure C, which authorized the college board of trustees to borrow another $350 million for construction by selling bonds. This time the unions and their allies had a more clever plan to get their government-mandated Project Labor Agreement for taxpayer-funded construction.

The same head construction union official made another presentation about Project Labor Agreements, this time disguised as “Promoting Local Hiring for Future Major Building Projects and Partnering to Develop Construction Industry Educational Pathways.” But this time the Project Labor Agreement presentation was scheduled as a “study session” at a May 8, 2012 “special” board meeting of the West Valley-Mission Community College District.

Notice that the board meeting notice that West Valley-Mission Community College District posted on its web site for the May 8, 2012 special meeting does not include any background information about this special agenda item, perhaps because only ONE side was studied during the so-called study session. Also notice that the West Valley-Mission Community College District failed to post the minutes of this May 8, 2012 special meeting on its web site.

Lessons:

(1) Just because a government entity is based in Silicon Valley doesn’t mean it is diligent or committed to transparency by opening its most controversial business to public scrutiny on the web. Union deals are best done when the taxpayers don’t know about it.

(2) Regarding community colleges, is there any other class of local government in California that manages so much money but has so little accountability to the People? Three times I’ve seen a one-sided, Project Labor Agreement presentation from union officials and their attorneys scheduled for a “special” community college board meeting, with the minutes of this “special” meeting somehow slipping through the cracks and not getting posted on the web for public scrutiny, as is done with the minutes of the regular meetings.

There’s a lot of strange antics still going on at West Valley-Mission Community College District board meetings. At the October 2, 2012 meeting, board member Chris Stampolis again called for discussion of a Project Labor Agreement at a future meeting. Then, at the October 14, 2012 meeting, Stampolis demanded that the minutes be changed regarding his comments on the Project Labor Agreement. He wanted the minutes to state his call for discussion at an October meeting, not a future meeting.

Finally, Chris Stampolis is getting his way. At tomorrow night’s meeting (November 13, 2012), the board of the West Valley-Mission Community College District is scheduled to give direction to the college administration about preparations to impose a Project Labor Agreement on the district’s construction contractors. Mr. Stampolis is obviously emboldened by the November 6 exercise of union political might in California and his own victory in the race for board of trustees of the Santa Clara Unified School District (where he’ll likely push for another Project Labor Agreement in that district to cover construction funded by three bond measures.) He wants to get this Project Labor Agreement in place at the West Valley-Mission Community College District before he leaves for new ambitions, and his proposed directive calls for the college administration to provide a final report on Project Labor Agreements at the December 11, 2012 board meeting.


Here’s the current status of Project Labor Agreements for community college districts in the San Francisco Bay Area:

Community College District (CCD) Year as PLA Target Year of PLA Enacted
Peralta CCD (Alameda County) 2004 2004, 2009
Chabot-Las Positas CCD (Alameda County) 2003 2006, 2010
Ohlone CCD (Alameda County) 2002, 2011 Looks like 2012
Contra Costa CCD (Costa Costa County) 2000 2012
College of Marin (Marin County) 2005 2008
Hartnell CCD (Monterey County) 2004 2004; rescinded 2004
Monterey Peninsula College Not Yet Not Yet
Napa Valley College (Napa County) 2004 Not Yet
City College of San Francisco (San Francisco) 2002 2005
San Mateo CCD (San Mateo County) 2002 2002, 2007
Cabrillo College (Santa Cruz, San Benito, Monterey Counties) 2004 Not Yet
Foothill-DeAnza CCD (Santa Clara County) 2007 2008, 2011
San Jose-Evergreen CCD (Santa Clara County) 2006 2011
West Valley-Mission CCD (Santa Clara County) 2005, 2008, 2012 Looks like 2012
Solano CCD (Solano County) 2003 2004
Santa Rosa Junior College (Sonoma County) 2002, 2005 Not Yet

See my www.UnionWatch.org analysis of why California’s community college districts are inclined to require construction contractors to sign Project Labor Agreements with unions:  Unions Increase Control of California’s Community College Boards.

Kevin Dayton is the President and CEO of Labor Issues Solutions, LLC and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com.