Union Backroom Deal on Convention Center Pays Off in San Diego

Only a few advocates of fiscal responsibility and limited government have comprehensively and widely engaged in the business of state and local governments in California over many years. They recognize with dismay that union leaders and their cronies have become adept at evading the constraints of republican constitutional government. Unions have learned how to circumvent the parts of the legislative process where objections can be registered in an official decision-making public forum.

State agencies and local governments are borrowing huge amounts of money from Wall Street through bond sales to fund construction projects tangled up in “Progressive” dreams to remake society through the coercive power of Government. The public can’t find out what is happening and lacks an effective legislative vehicle to stop it once they know. And the business establishment, union leaders, and politicians are fine with that. They don’t want “Tea Party” people spoiling the lucrative vision that future generations of California (and American) taxpayers will pay back, with interest.

The latest proof is in San Diego, where on October 10 the California Coastal Commission approved a request of the United Port of San Diego to amend its Master Plan to allow a $520 million expansion of the San Diego Convention Center and a new 500-room second hotel tower for the adjacent Hilton Bayfront Hotel. This ends legislative obstacles to the project. (There are still a couple of stray lawsuits for expansion supporters to fend off.)

As noted by local news media after the vote, in 2012 union leaders were the strongest opponents of the convention center expansion. UNITE-HERE Local Union No. 30 filed a lawsuit contending that the financing mechanism for the project was illegal. The San Diego County Building and Construction Trades Council and affiliated unions – through the law firm of Adams Broadwell Joseph & Cardozo – submitted lengthy comments and exhibits claiming that the Port’s environmental reviews violated the California Environmental Quality Act (CEQA).

No one was fooled into believing that unions wanted to protect taxpayers and save the planet. In June 2012, 58% of voters in the City of San Diego approved Proposition A, a “Fair and Open Competition” ordinance that prohibited the city from entering into contracts that required construction companies to sign a Project Labor Agreement with unions.

In response, the winning design-build entity for the project (selected somewhat subjectively through “best value” criteria) indicated in its proposal that it would be willing to work around the law if necessary. And of course it was necessary.

When the Board of Port Commissioners approved the convention center expansion and environmental review at its September 19, 2012 meeting, lawyers for unions submitted more environmental complaints. Lorena Gonzalez spoke out against it as the head of the San Diego and Imperial Counties Labor Council. (She would be elected to the California State Assembly in a special election several months later.) During a break in the meeting for staff to analyze the new union objections, she was in the hallway talking with San Diego Mayor Jerry Sanders.

On September 21, a scheduled meeting was on the mayor’s calendar to discuss a proposed deal emailed that morning from a private email account of his chief of staff to Lorena Gonzalez. Here are the terms of the deal:

On November 8, Mayor Sanders, Lorena Gonzalez, and other key officials held a press conference to announce settlement agreements. Unions were withdrawing their lawsuits and committed to stop objecting to the project on environmental grounds. In response to reporters’ questions, it was admitted that construction companies would be required to sign a Project Labor Agreement to build the convention center expansion. (The San Diego County Building and Construction Trades Council finally had to issue a press release on November 16 acknowledging and defending it.) Also on that same day, Mayor Sanders appointed Rabbi Laurie Coskey, the Executive Director of the Interfaith Committee for Worker Justice, to the San Diego Convention Center board of directors.

Opponents of the Project Labor Agreement then held a press conference outside the convention center with hundreds of workers to condemn the deal. A web site was established called www.SanDiegoConventionCenterScam.com to inform the public about the unsavory aspects of the planned convention center expansion.  And after months of fruitless requests for relevant public records, the Coalition for Fair Employment in Construction filed a lawsuit against the city and managed to obtain the actual Project Labor Agreement and a limited amount of evidence proving that a deal occurred between the mayor and the head of the unions.

It didn’t matter: for the pragmatists seeking to make money as a result of this expansion, deals with extortionists were simply a cost of doing business. Featured at the October 10 Coastal Commission meeting were hours of public comment from downtown business and union leaders supporting the convention center expansion, without one word mentioned about the union deals. (One unelected and unaccountable declared representative of the mayor’s office even made a strange financial commitment during the meeting of $500,000 of public money to something.)

At the end of the meeting, the very last speaker spoiled the carefully-constructed community consensus.

Eric Christen, executive director of the Coalition for Fair Employment in Construction, used his brief speaking time to reveal the union abuse of environmental laws (aka “greenmail”), the backroom deal that gave unions monopoly control of construction and other privileges (including a specific political appointment), and the brazen circumvention of state and local laws. He submitted more than 700 pages of documents showing exactly what happened.

Establishment leaders in the room were livid. Union representatives booed and screamed insults after he finished his comments. One commissioner said he was new and inquired if the Coastal Commission had mandated the Project Labor Agreement. The commission then ignored the negative recommendation of its staff and unanimously approved the convention center expansion in front of the jubilant crowd.

Throughout this entire process, elected and appointed officials never held a hearing or voted on the settlement agreements, the union deal, or the Project Labor Agreement. It was all done behind the scenes through backroom deals without the knowledge of the public.

That’s the way business is now done throughout the state, whether it’s California High-Speed Rail, the new arena for the Sacramento Kings basketball team, a new courthouse built by the state judiciary branch, or dozens of solar, wind, and geothermal power generation projects. And the people in power are quite smug that their Progressive vision is finally becoming reality.

See what happens when you actually agree to create good jobs, with living wages & healthcare? #SDCCexpansion #cccmtg

— Lorena Gonzalez (@LorenaSGonzalez) October 11, 2013

Sources

1. Proposition A  – City of San Diego Fair and Open Competition Ordinance
2. Clark-Hunt RFP to Manage Labor Relations for the Benefit of the City and Project
3. Union Comments on Draft Environmental Impact Report – Letter – June 29, 2012
4. Union Comments on Draft Environmental Impact Report – Exhibits – June 29, 2012
5. Union Comments on Final Environmental Impact Report – Letter – September 19, 2012
6. Scheduled Meeting for Union Deal – September 21, 2012
7. Union Deal with Mayor’s Office – September 21, 2012
8. Settlement Agreement – Building Trades Unions – November 8, 2012
9. Settlement Agreement – UNITE-HERE Union Local 30 – November 8, 2012
10. Settlement Agreement – Various Construction Trade Unions – November 8, 2012
11. Mayor’s Appointment to San Diego Convention Center Corporation Board of Directors – November 8, 2012
12. Press Release of San Diego County Building and Construction Trades Council – November 15, 2012
13. Lawsuit to Obtain Copy of Union Project Labor Agreement on San Diego Convention Center Expansion
14. Project Labor Agreement for San Diego Convention Center Phase 3 Expansion
15. Letter of Support from San Diego County Building and Construction Trades Council – September 12, 2013
16. Key Support Letters for Convention Center Expansion to California Coastal Commission

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.