Gaylord Entertainment’s Decision to Leave Chula Vista…..What
Really Happened.
By Jim Ryan
AGC Executive Vice President
During
the past several months, I have been working with Gaylord
Entertainment to try to craft an agreement that would save the
$1 billion (yes $ 1 billion!) hotel and convention center
project in Chula Vista. If you are not familiar with the
situation, read the front page of the Union Tribune from
Saturday….the headline reads….
“Chula
Vista Bayfront Deal Crumbles Over Labor Impasse”
I have been in
the negotiations and know what happened.
After listening to the “spin” that Tom Lemmon, the business
manager for the San Diego County Building and Construction
Trades Council, and his entourage have been putting out I
thought I would set the record straight!!!!
In
November 2005, the Port Commission selected Gaylord from
Nashville Tennessee to develop a bayfront project in Chula Vista
that Chula Vista and the Port have been interested in developing
for decades. Gaylord owns a number of hotel/convention centers
throughout the country, including Gaylord Opryland Resort in
Nashville, Gaylord Palms Resort near Orlando, and Gaylord Texan
Resort & Convention Center near Dallas.
After
signing the letter of intent, the San Diego Construction and
Building Trades Council, along with Jerry Butkewitz, the local
head of the AFL CIO, paid Gaylord a visit. The message was
clear….the Building Trades wanted the hotel convention center to
be built under a union-only Project Labor Agreement, and Jerry
wanted the 2,500-3,000 permanent jobs that would be created when
the project was completed, to be union jobs.
Soon
after the visit, the Environmental Health Coalition positioned
itself to disrupt the project. Many of us are convinced that the
Coalition is a front organization that is financed by the
International Brotherhood of Electrical Workers (IBEW). They
use a law firm in San Francisco to make sure that they are
positioned to delay or kill projects as the projects move
through the various environmental hurdles required in
California. Of course…just like at Petco…it is made perfectly
clear to the developers that the concerns of the Environmental
Health Coalition will “go away” if a union-only Project Labor
Agreement is signed!!!!
Anyway….welcome to San Diego…..Gaylord!!!!
So,
since July, 2006, Gaylord has been spending a few million
dollars to develop a detailed concept design for the facility.
They unveiled this design in March, 2007.
They were also studying our
construction market. Now remember, Gaylord is an
experienced developer…they have developed and successfully built
several “mega” projects. They understand that the construction
budget needs to be met or the financials for the project just do
not work. Evidently, after they studied our market, they
determined that a project of this size and scope in San Diego
County that restricted the contractors bidding on the project to
union-only bidders would significantly increase the construction
cost of the project…..not because union bidders are necessarily
more expensive, but because they would receive far fewer bids
for each bid package that was put out for bid.
I
suspect they would like to have at least 5 or 6 bidders on each
package…and there may be up to 50-75 packages, if not more, on a
project like this. When they analyzed the union construction
market in San Diego County, it was apparent that they would be
lucky to have 2-3 bidders on most packages if the union-only
requirement was in place. They knew San Diego’s construction
economy for the next several years was expected to be very
strong. Narrowing the bidding pool to fewer bidders could
impact the total cost of the project by 10-15% more than if the
market were opened up to all local bidders. With a $700 million
construction budget…..even 10% is real money….$700
million….enough to make the project not feasible….it represents
$500,000-600,000 of additional overhead per month….for 20
years!!!
So…since March,
2007, proposals have been exchanged between Gaylord and the
Building Trades.
A final meeting
was held on Friday morning June 29th at the Marriott
Gaslamp Hotel beginning at 7am.
The unions were represented by Tom Lemmon, Jerry Butkewitz, Al
Shur, the Business Manager for the IBEW, Jennifer Badgeley, IBEW,
and an attorney from San Francisco who represents the IBEW. I
suspect this firm also represented the Environmental Health
Coalition, but I am not sure.
Gaylord was represented by Bennett Westbrook, their senior Vice
President, Richard Freeman, a local labor attorney. I also
attended at Gaylord’s invitation.
Gaylord agreed with the union’s demands on almost every issue.
Jerry Butkewitz was assured that Gaylord would not resist
organizing efforts for the workers in the hotel….thus assuring a
union workforce for the hotel…as I understand it this involves
2,500-3,000 workers. Gaylord agreed with all union language and
wage proposals (detailed below).
So…what hung up the negotiations?
The
unions wanted the bidding for each package to consist of a
minimum of 3 union contractors. If three union contractors were
not interested in bidding, Gaylord was to notify the unions at
least 30 days in advance. If the union could not come up with
another union bidder, Gaylord could invite non-union bidders to
compete on the package. If a non-union bidder was the successful
bidder, the unions would not require the craft employees of the
non-union bidder to pay union dues…in essence they could work
non-union.
But….to clarify…if there were three union contractors willing to
bid then no non-union bidders could bid. This is a major point
that Tom Lemmon seems to “glass over” during his comments.
Gaylord countered with a proposal to ensure three union bidders
on each package. If it appeared there were not going to be
three union contractors bidding each package, then Gaylord would
notify the unions 30 days in advance and Gaylord would allow
additional union contractors to bid the package if the unions
located these additional bidders. Gaylord insisted that in
addition to these three union contractors on each package, there
could also be non-union contractors bidding each package as
Gaylord saw fit. In this proposal, the non-union craft
employees would also not be required to pay union dues nor join
the union.
So….Tom Lemmon’s “spin” that the union’s allowed non-union
bidders had a fatal qualification…..this was true only if three
union bidders could not be found to bid the package. Gaylord
was fearful that restricting the bidding in this manner was
going to have a detrimental effect on the bidding. In a busy
market like San Diego’s….three bidders may bid but they may not
be that interested in the project and their bids will reflect
this. Both sides agreed getting more than three union bidders
on most packages would be difficult….San Diego’s construction
market is predominantly made up of non-union firms.
Gaylord had ensured a level playing field for union and
non-union bidders. All non-union bidders would be required to
pay the union wage scale to each craft employee and to provide
benefits (health, pension, etc.) matching the union benefits.
Gaylord’s proposal required all contractors to agree to
Labor-Management Meetings, No Strike-No Lockout, the same hours
of work and holidays as the local union agreements, the same
safety provisions as the union agreements, the same working
conditions as the union agreements, allowing open access to the
project by union officials…the same as the union agreements…the
same non-discrimination provision as the union agreements…the
same EEOC and Veterans Employment as the union agreements……a
settlement process for jurisdictional disputes for both union
and non-union contractors, a grievance procedure process for all
employees on the project, a parking reimbursement package, a
termination process for all employees, etc…the list goes on and
on…
Gaylord was even requiring all contractors on the project to be
audited by an independent CPA firm to ensure compliance with all
provisions of the agreement…..
Gaylord’s proposal also ensures local preference in hiring. Tom
Lemmon is trying to spin this to convince the public that the
union proposal was the only way to protect local workers and to
make sure they would be hired. Gaylord agreed with the local
worker provision…..the effect of local hiring would have been
the same in both proposals.
So it
got down to this…..the unions wanted to include non-union
bidders only if 3 union contractor bidders would not bid the
project…..Gaylord wanted to include 3 union contractors bidding
each package, but also to have the option to include non-union
bidders on each package.
And because of
this ……the unions have eliminated 6,500 construction jobs and
2,500-3,000 permanent jobs.
Good
job Tom, Jennifer, Al, and Jerry. This was a “tremendous”
victory for the workers of San Diego County!!!!
By Daniel Weintraub: Science Alone Can't Guide Air Pollution
Decisions
Published 12:00 am PDT
Sunday, July 8, 2007
Gov. Arnold
Schwarzenegger's recent sacking of Robert Sawyer, the state's
top air pollution regulator, has prompted critics to demand that
the governor defer to scientists to make decisions about
mitigating the effect of human industrial activity on the air we
breathe. Sawyer is a respected UC Berkeley professor of
environmental and energy science who did not want to take
direction from the governor or his staff.
In at least
one case, involving smog in the San Joaquin Valley,
Schwarzenegger says he wanted to move faster than Sawyer,
chairman of the California Air Resources Board, was willing to
go. In another case, involving implementation of the state's
global warming bill, Sawyer was pushing to move more quickly
than the governor's staff thought was wise.
But whether
Schwarzenegger wanted to go faster or slow the pace of
regulation, it is a comfortable myth to think that these kinds
of decisions can be left to science alone.
Regulating
pollution is not only about science. It is also about economics.
And scientists, no matter how smart or educated they may be, are
not necessarily the best people to tell us how their findings
should be weighed against the other needs of society.
If the state
really wanted to fight smog, for instance, it could ban the
private automobile. But no one (or almost no one) is
recommending such a thing. The reason: The car is an integral
part of our lives, and without it, the economy would grind to a
halt. Millions of people would be far worse off, even if a few
might live longer if they were not exposed to the tailpipe
exhausts that cars emit.
Banning the
car is an extreme example. But the point is that nearly every
regulatory decision involves trade-offs that science alone
cannot resolve.
The air board
is now pondering, for example, whether to give construction
companies more time to comply with a regulation requiring them
to reduce the particulate matter created when they burn diesel
fuel in their off-road heavy equipment.
The science is
pretty clear. It tells us that diesel exhaust is dangerous. When
you breathe it, the tiny particles lodge in your lungs and can
cause cancer and other illnesses. The Air Resources Board's own
studies estimate that construction equipment causes about 700
premature deaths every year in California.
But the
industry says moving too quickly to reduce that deadly pollution
would force them to junk their current fleet of bulldozers,
loaders and graders, driving up the cost of construction and
potentially forcing some of them out of business. They want to
phase the new rule in more slowly so that they can replace their
old, heavy polluters as they wear out naturally.
Picking the
date by which that transition must be complete is not about
science. The science tells us only that the machines are
hazardous to our health. If that were the only issue, you would
ban all diesel engines today. But in the real world, someone
must take that information and balance it against whatever harm
might come from spending more money on construction, thus
leaving less money for all of our other priorities. Or against
the effect of losing an important piece of our construction
industry if smaller firms, weighed down by the higher costs, go
under.
In another
tough call, the air board recently agreed to seek an extension
for the San Joaquin Valley to come into compliance with federal
smog rules. The reason: The board concluded that the air is so
dirty around Fresno that no reasonable amount of regulation,
given current technology, would allow the region to reach the
goals set for it in the time allowed. Again, while there is
science at the heart of that decision, it is mostly about
economics, about how much dislocation regulators are willing to
cause in pursuit of cleaner air.
Then there is
global warming, which has rapidly become the biggest
environmental issue of our time. Although some prominent
scientists still believe that the research is unclear, there is
a large, nearly universal consensus that humans are causing the
earth's atmosphere to warm, with potentially disastrous
consequences.
But even if
you accept that the scientific case is closed, that is only the
beginning of the debate about what to do. We are not going to
stop burning carbon overnight. So the question becomes: Which
sources of greenhouse gases should we reduce, and when? Are we
willing to pay more for our electricity, if that's necessary, or
for our cars, or for cement? If so, how much more? Science
cannot answer those questions. They are questions of economics,
and ultimately politics.
If
Schwarzenegger can be faulted, it is for not making a strong
enough case in public for the need to balance these competing
priorities. He likes to say we can have it all -- a cleaner
environment and a stronger economy. In the long run, that might
be true. But many of decisions to get us there do cause economic
harm in the short term. The governor should be willing to
acknowledge that, and to publicly defend any actions he takes to
reduce that damage.
A Storm Water Crisis is Coming: You need to be Prepared! -
August 2 Meeting to Discuss New Regulations
Although it is summertime, the rainy season is just around the
corner. With rains come storm water run-off, and with run-off
come potential fines! AGC wants to help you understand the
implications of new and potentially damaging storm water
regulations.
Earlier this year, the San Diego Regional Water Quality Control
Board adopted a new General Municipal Storm Water Permit
(Municipal Permit) for San Diego County. The Municipal Permit
includes many new and untested requirements that will have
significant impacts on both local contractors and public
agencies. Meanwhile, the State Water Resources Control Board
has begun considering a Preliminary Draft Construction Storm
Water Permit, which will affect contractors and public agencies
statewide.
On
Thursday, August 2 from 10:00 – 11:30 AM, AGC will host a
meeting to discuss the impacts of these two permits and hear
from experts about the strategies to address those impacts.
Contractors, engineers, architects, and public agency
representatives are encouraged to attend.
Click here for
a registration form.
There is no charge!
Some
of the reasons to attend the August 2 meeting:
·
The Municipal Permit
makes San Diego County’s 18 cities, the County of San Diego, the
Airport, and the Port of San Diego responsible for contaminated
run-off entering their storm drains regardless of the source.
Expect to see agencies sue other agencies and expect to see the
responsibility fall to the general contractor, whose project may
be alleged to have caused the discharge.
·
The Municipal Permit imposes significant new
requirements, which will significantly increase the costs of
public and private work. A
hydro-modification requirement will impose significant new
limitations on post construction discharges and durations, and
many projects may be required to have costly, unproven and
potential dangerous on-site treatment plants to remove silt and
sediment from run-off water.
·
The Municipal Permit
requires jurisdictions to limit significantly the amount of land
that can be graded at any one time without significant
additional Best Management Practices and monitoring controls.
·
The Municipal Permit
has added new standards to improve controls, data collection,
enforcement and project design, which will require re-evaluation
of the way projects are developed by regional architects,
designers, and engineers.
·
The Proposed State Construction Permit
exacerbates the land use and operational controls already
required in the Municipal Permit.
For example, while the Municipal Permit requires many
construction sites to install on-site treatment plants, the
Construction Permit declares that the plants be built to capture
and treat the 100 year, 24 hour rain event in 48 hours.
·
The Proposed State
Construction Permit proposes a strict limitation of the volume
of post construction run-off to be no more than 110% of the pre
construction condition.
These permits
will significantly impact land values, construction costs, and
corporate liabilities.
However, by understanding these new requirements both
contractors and public agencies will be able to manage the
construction costs and legal liabilities. Please
consider attending the meeting on August 2.
It
should be noted that the material for this article was provided
by Wayne Rosenbaum of Foley &
Lardner, LLP, who represented a coalition of
organizations opposed to the Municipal Permit (including AGC),
and to Michael Alberson, who has provided Storm Water Pollution
Prevention Plan (SWPPP) training for AGC members.
Meet your General Contractor - Pacific Building Group – July
26th
The
AGC Specialty Contractors Council will present a
"Meet Your General Contractor"
event on
Thursday, July 26
at 4:30 - 6:30 at the new offices of Pacific Building Group
located at 9752 Aspen Creek Court, San Diego, 92126.
Greg Rogers of Pacific Building Group has
agreed to be the featured GC and will have individuals from his
organization ready for panel discussion dealing with estimating,
subcontracts, field operations, contract awards, procedures and
billings. In business for 23 years, Pacific Building Group
offers a distinctive 360 degree service, general contracting,
tenant improvement and facilities maintenance. Come and find
out how this successful business operates and what to expect as
a subcontractor.
Hosted appetizers and beverages will be provided compliments of
Anderson Drilling and Tower Glass!
Make your
reservations
clicking
here for registration form
and faxing to 858-558-8444.
Affiliate Day – August 6th – SOLD OUT, BUT WE STILL
NEED HOLE SPONSORS
AGC’s
68th Affiliate Day Golf Tournament promises to be the best
ever. The event sold out 8
weeks in advance, with over 300 golfers set to enjoy
the two courses at Sycuan
Resort at Singing Hills. All 36 holes will have
exhibits this year. There are
four hole sponsorships remaining.
Contact Rae Krushensky at 858-731-9157.
We
also have space for those that would like to attend the cocktail
party and dinner after the golf tournament.
Click Here for a banquet form.
AGC Summer Mixer- August 16th
Last
October, when AGC had their official Open House to showcase the
newly remodeled building, AGC staff and members commented that
the AGC patio would be a great summer venue for a Mixer,
therefore, we are pleased to introduce our brand new member,
Zumasys who will be
hosting the Mixer on August 16th at the AGC. Zumasys
located in Lake Forest, recently appeared on Computer Reseller
News’ list of the 100 fastest growing IT solution s in the
United States.
These
mixers have turned into a popular event offering AGC members the
opportunity to mingle with business associates and gain new
contacts. CLICK
HERE FOR REGISTRATION FORM.
Pre-registration is required.
Upcoming AGC Safety and Education Classes
Please note:
***** Please register on line for classes ******
Go to our website at
www.agcsd.org and click onto Calendar for either
Construction
Education Classes or
Safety Training.
“AGC Education & Training….Building a Solid Foundation”
The latest AGC
Education Catalog (July –December 2007) is now posted on our
website.
CLICK HERE FOR CATALOG
Upcoming Construction Education and Safety Training ClasseS
JULY
Safety Training Classes
Fall Protection – July 18
click here
CPR/First Aid –
July 25
click here
Mobile Crane Certification
– July 23-27- contact Sam Iler, AGC Safety Director for
registration at 619.654.4055
JULY
Construction Education Training Classes
BIM-
July 10
click here
Blueprint 102- July 10
click here
Sure Trak – July 12 click
here
MAP Leadership – July 12
click here
CQM- July 17-18 (Contractor Quality
Management)
Upcoming AGC Committee Meetings
JULY
July 11- Safety Committee – 7AM
July 17- HR Meeting – 11 AM
July 17 – Electronic Age- 7 AM
July 20- Caltrans – 8 AM
July 26 – Meetings & Events – 12 PM
Looking Ahead…Upcoming AGC Events
UPCOMING AGC EVENTS
July 20 – Day at the Races –
SOLD OUT
July 26 – “Meet Your GC”
at
Pacific Building Group
click here for registration
August 6 – Affiliate Day Golf Tournament – Singing Hills-
SOLD
OUT!
August 16- AGC Mixer – AGC outdoor patio
click here for registration
September 22 – SDSU Aztec Football Tailgate & KGB Sky Show-
click here for registration form
October 12- Midway Mixer
November 1 - Build San Diego Awards
click here
