Tag Archive for Hilton San Diego Bayfront

How to Get Your Money if You Were a Construction Trades Worker Building the Hilton San Diego Bayfront Hotel

Did you work on the construction of the Hilton San Diego Bayfront Hotel? A June 17, 2013 press release issued by the California Department of Industrial Relations (DIR) – Labor Commissioner Collects Over $8 Million in Wages for Public Works Job at Hilton Hotel in San Diego – states that you may be owed money, but it did not explain how workers can collect their money.

As a result of my June 17, 2013 blog post about the State of California determining that the Hilton San Diego Bayfront Hotel was a public works project (Contractor Has to Shell Out $8 Million After Unions Win Argument That Hilton San Diego Bayfront Hotel Was a “Public Works” Project), I’m receiving communications from some of the 2000+ workers on that project who want to know how to get their payments. The California Division of Labor Standards Enforcement (Labor Commissioner’s office) gave me the following information about what to do if you are one of those 2000+ workers:

Send your contact information to this California Division of Labor Standards Enforcement district office address (presumably via a letter or postcard) explaining that you were a trades worker on the Hilton San Diego Bayfront Hotel:

California Division of Labor Standards Enforcement
7575 Metropolitan Drive, Room 210
San Diego, CA  92108

According to a representative in the DIR Legal Division, payments to former workers (in the form of checks) are supposed to be available 60-90 days after the June 17, 2013 official announcement. A third-party administrator is handling the processing of the payments.

The phone number for this San Diego district office is (619) 220-5451 and the web site for all California Division of Labor Standards Enforcement district offices is http://www.dir.ca.gov/dlse/districtOffices.htm.

As one attorney remarked to me, it’s unclear how the Department of Industrial Relations is going to determine exactly what is owed, because contractors would not necessarily have maintained certified payroll records for a project that was originally assumed to be a private construction job and not a public works job. For example, how will job classifications be determined for work done several years ago? Are any of the alleged 172 subcontractors on that project now out of business after several years of economic distress in the construction industry? Have employment records been saved? Will all workers be regarded as journeymen? How does the agency know there were 2,051 workers in total?

Contractor Has to Shell Out $8 Million After Unions Win Argument That Hilton San Diego Bayfront Hotel Was a “Public Works” Project

Are you one of the 2000+ construction trade workers who built the Hilton San Diego Bayfront Hotel? The California Division of Labor Standards Enforcement (Labor Commissioner’s office) gave me the following information about what to do:

Send your contact information to this California Division of Labor Standards Enforcement district office address (presumably via a letter or postcard) explaining that you were a trades worker on the Hilton San Diego Bayfront Hotel:

California Division of Labor Standards Enforcement
7575 Metropolitan Drive, Room 210
San Diego, CA 92108

According to a representative in the DIR Legal Division, payments to former workers (in the form of checks) are supposed to be available 60-90 days after the June 17, 2013 official announcement. A third-party administrator is handling the processing of the payments.

The phone number for this San Diego district office is (619) 220-5451.


This morning (June 17, 2013) the California Department of Industrial Relations (DIR) issued a press release declaring that the Labor Commissioner Collects Over $8 Million in Wages for Public Works Job at Hilton Hotel in San Diego. Surely unions will portray this settlement as a victory for exploited workers against greedy capitalists. Actually, it is a symptom of absurd, ambiguous, union-backed definitions of public works in state law.

Right off the bat, you notice something odd: the headline of the press release includes the clarification that the hotel was a “public works job.” How did a Hilton hotel become a public works job? You thought “public works jobs” were government projects such as schools, courthouses, libraries, and post offices.

You thought wrong. In 2001, Governor Gray Davis signed the union-backed Senate Bill 975 into law. It expanded the definition of a “public works” project to include just about any assistance of any financial value from a government:

For purposes of this section, “paid for in whole or in part out of public funds” means the payment of money or the equivalent of money by a state or political subdivision directly to or on behalf of the public works contractor, subcontractor, or developer, performance of construction work by the state or political subdivision in execution of the project, transfer of an asset of value for less than fair market price; fees, costs, rents, insurance or bond premiums, loans, interest rates, or other obligations that would normally be required in the execution of the contract, which are paid, reduced, charged at less than fair market value, waived or forgiven; money to be repaid on a contingent basis; or credits applied against repayment obligations.

In 2012, the Assembly Labor and Employment Committee rejected (on a party-line vote – Democrats opposed and Republicans in support) Assembly Bill 987, sponsored by Associated Builders and Contractors of California and introduced by Assemblywoman Shannon Grove (R-Bakersfield). This bill would have simplified a section of California Labor Code 1720 defining “public works” that two court decisions have described as “As statutes go, Section 1720 is hardly a triumph of the drafter’s art.” Unions like the law as written, and their triumph described below shows why they oppose any reasonable amendments to the law.

The United Port of San Diego owns property on the San Diego waterfront next to the San Diego Convention Center. In 2002, the Port issued a Request for Proposals for an entity to lease the land and build a hotel on the site. After choosing Hilton San Diego Convention Center, LLC to lease the land and build the hotel, the Port negotiated a lease that included a rent credit equal to 60 percent of the rent due each month for 11 years, not to exceed a total of $46.5 million. Subsequently the Port provided a “rent credit acceleration” for the hotel developer.

Hilton San Diego Convention Center, LLC chose Hensel Phelps, an investor in the project, as the general contractor. In April 2004, Hensel Phelps asked the Port if the hotel project was a public works job subject to the payment of state-mandated construction wage rates (so-called “prevailing wages”) to trade workers. In a memorandum dated May 12, 2004, the Port considered the available information and concluded that “the Hilton Hotel development is not considered a public works project subject to the payment of prevailing wages.” See that memo here: May 12, 2004 – Port Says Hilton San Diego Not Public Works.

After construction began in 2006, the Carpenters Contractors Cooperation Committee (CCCC) and Southern California Labor/Management Operating Engineers Contract Compliance Committee, two union-affiliated labor-management cooperation committees, referenced the rent credit and asked the California Department of Industrial Relations (DIR) to determine whether or not the Hilton Hotel was a public works project subject to state-mandated prevailing wage laws. The DIR began its own analysis of the project. See September 14, 2006 DIR Request to Port of San Diego for Hilton San Diego Documents.

In a response to the DIR dated October 2, 2007, Port of San Diego staff stated that it “believes that given the specific conditions of the RFP; challenges caused by extensive site remediation; the extent of public improvements; location; and size of the site, the transaction that was negotiated with Hilton represents the market for this particular site,” thus denying that the rent credit exceeded fair market value. The Port also warned that if the state decided to declare the hotel a public works project, it would discourage additional development of the area:

Port staff has received inquiries from other tenants, who are in the process of developing leaseholds, regarding this matter. We are concerned that attempts to treat private leaseholds as public projects will set off a chain reaction and have a chilling effect on redevelopment and reduce rental revenue to the Port, which will in turn negatively impact the Port’s ability to further its own capital projects.

Associated Builders and Contractors (ABC) of California (my former employer) and Associated General Contractors (AGC) of California submitted letters to the DIR arguing that the Hilton hotel was not a public works project. The Southern California Labor/Management Operating Engineers Contract Compliance Committee submitted a rebuttal to the ABC and AGC arguments.

November 30, 2007 San Diego Hilton Not a Public Works – ABC of CA Comment

December 7, 2007 San Diego Hilton Not a Public Works – AGC of CA Comment

December 19, 2007 San Diego Hilton is a Public Works – Operating Engineers Union Response

On April 1, 2008, the Director of the California Department of Industrial Relations determined that “the construction of the Hilton San Diego Convention Center Hotel and related development” is “a public work subject to prevailing wage requirements.” See April 1, 2008 DIR Director’s Decision – San Diego Hilton – Public Works.

Hensel Phelps filed an administrative appeal of the decision, and the DIR sought additional comments. See April 25, 2008 DIR Notice of Appeal – San Diego Hilton. Among the commenters were Associated Builders and Contractors of California: see May 8, 2008 San Diego Hilton Not a Public Works – Comments on Appeal – ABC of California.

On June 23, 2008, the DIR Director denied the appeal and affirmed his original decision that the Hilton San Diego Convention Center Hotel was a public work subject to prevailing wage requirements. Four days later, Hensel Phelps filed a lawsuit (Hensel Phelps Construction Company vs. California Department of Industrial Relations) in San Diego County Superior Court to overturn the DIR Director’s decision.

On February 25, 2010, a San Diego County Superior Court judge ruled that the Hilton San Diego Convention Center Hotel and related construction was not a “public work” subject to prevailing wage requirements. On April 23, 2010, the Director rescinded his earlier decision and ruled that the Hilton San Diego Convention was not a public works project. See April 23, 2010 DIR Rescinds Coverage Determination for San Diego Hilton.

But the Carpenters Contractors Cooperation Committee appealed the judgment to the Court of Appeal, Fourth Appellate District. On July 26, 2011, the court reversed the Superior Court decision and ruled that the rent credit was a payment of public funds, regardless of whether or not the rent reduction had a realizable monetary worth. See July 26, 2011 Hensel Phelps v San Diego Port District Appeals Court Decision – Prevailing Wage on Hilton San Diego Bayfront Hotel.

The State Building and Construction Trades Council of California had filed an amicus brief in the case. In its July 21, 2011 bulletin Court of Appeal Rules Prevailing Wage is Required on San Diego Hilton Project, it expressed outrage that “the Schwarzenegger Administration refused to file an appeal to defend the Department of Industrial Relations’ coverage decision” and that “the Port District and the Developer should be ashamed of themselves.”

The DIR press release explains what happened next:

Hensel Phelps Construction Company and the Labor Commissioner then negotiated the amount of wages due to the workers. All 2,051 workers will receive the full prevailing wages they earned on this project. They performed every aspect of construction, from foundation drilling to concrete pouring to steel erection to landscaping.

Hensel Phelps Construction Company will pay a third party administrator to process payments to the workers. The prime contractor will also pay an additional $400,000.00 to the Labor Commissioner as reimbursement for investigative costs.

Now we know that state-mandated construction wage rates cost an extra $8 million for a specific $350 million hotel project built in downtown San Diego in the mid-2000s. You can imagine the cost of prevailing wage for a project in a rural area during the recent economic downturn.

Is it surprising that the developers of the proposed Turtle Bay Sheraton Hotel in Redding suspended their plans earlier this year to build the hotel when unions managed (on their second try) to get the DIR to determine that hotel would be a “public works” project? See my February 15, 2013 post Unions Rise to Defense of “Prevailing Wage” Rates Jeopardizing Hotel Project in Redding and my January 31, 2013 post Redding Needs a Charter to End Nonsense Definition of Private Hotel as a “Public Works” Project.

Brazen! Union Officials and Their Environmental Lawyers at Port Commissioners’ Meeting Threaten to Stop San Diego Convention Center Expansion Using California Environmental Quality Act (CEQA)

The September 19, 2012 meeting of the United Port of San Diego’s Board of Port Commissioners was packed with the San Diego region’s civic leadership, including the Mayor of San Diego, Jerry Sanders. They were at the meeting to see and celebrate the Port taking the next steps in approving the proposed $520 million San Diego Convention Center expansion, as well as an expansion of the adjacent Hilton San Diego Bayfront Hotel. Representatives were there from numerous major business groups in the region, including the San Diego Regional Chamber of Commerce.

United Port of San Diego Headquarters Building on Pacific Highway

United Port of San Diego Headquarters Building, where union officials and their lawyer brazenly abused CEQA on September 19, 2012 in front of San Diego’s civic leadership.

Also there was Kevin Dayton, President & CEO of Labor Issues Solutions, LLC. No one there knew or cared, and I finally found a seat in the back corner. I suspected that the law firm of Adams Broadwell Joseph & Cardozo was going to pull a stunt at the meeting on behalf of the San Diego County Building and Construction Trades Council and UNITE HERE Local Union No. 30. Knowing their modus operendi, I figured a lawyer was going to make a huge last-minute document dump at the meeting under the authority of the California Environmental Quality Act (CEQA). I was right!

The party-poopers promptly rained on the parade when the commissioners opened the agenda item to public comment. An official of the UNITE HERE Local Union No. 30 led off the attack by declaring that the 1400-page final Environmental Impact Report required under CEQA was deficient and needed to be withdrawn for revisions. Then someone from the law firm of Adams Broadwell Joseph & Cardozo submitted to the commissioners a 42 page letter (with 197 footnotes) on behalf of the phony union front group called “The San Diego Coalition for A Better Convention Center” with 250 pages of referenced exhibits. She was given extra time to speak because Tom Lemmon – head of the San Diego County Building and Construction Trades Council – submitted a speaker card and then transferred his speaking time to her.

CEQA Objections to San Diego Convention Center Expansion

The cover page of the California Environmental Quality Act (CEQA) “document dump” of the law firm of Adams Broadwell Joseph & Cardozo on behalf of unions against the Environmental Impact Report for the San Diego Convention Center expansion project.

Never to be left out of a militant union action in San Diego, Lorena Gonzalez, head of the San Diego County Central Labor Council, rushed into the meeting late to announce there were problems with the Environmental Impact Report for the convention center. She proposed that the Port Commissioners approve a “tolling agreement” that would extend the statute of limitations for the unions to file a lawsuit. This would give unions more time to squeeze their demands out of the developers and the convention center’s public and private partners.

A representative of the leftist San Diego-based Center for Policy Initiatives attended the meeting but did not speak. This group has not been involved in CEQA issues, but it is very involved in labor issues.

I also spoke, as a representative of Labor Issues Solutions, LLC. I noted there was an underlying story and then revealed the whole scheme. Of course, most people in the room knew about it already but do not want to acknowledge it in public.

After these antics, the Port Commissioners recessed the meeting for about 20 minutes so Port staff could scan the document dump by Adams Broadwell Joseph & Cardozo and make a preliminary determination of whether or not the unions introduced new and valid CEQA objections to the proposed convention center and hotel expansion. If the comments were serious threats, the Port Commissioners would need to table the approval of the Environmental Impact Report.

Staff ultimately identified four potential areas vulnerable to lawsuits or appeals, but also indicated how the issues would be addressed. In the end, the Port Commissioners voted unanimously to approve the Environmental Impact Report, while noting that they expected litigation and appeals unless relevant parties were able to make a deal with the unions.

What is the San Diego County Building and Construction Trades Council seeking with its CEQA objections? As I documented in my March 11, 2011 www.thetruthaboutPLAs.com article entitled It’s Out in the Open: Project Labor Agreement a Costly Possibility for San Diego Convention Center Expansion, construction union officials want a requirement for construction contractors to sign a Project Labor Agreement as a condition of working on the projects. Presumably UNITE HERE wants some sort of neutrality agreement for union organizing.

It’s nothing new in California and nothing new in San Diego. It’s “greenmail.”

NEWS MEDIA COVERAGE

Convention Center Project Takes a Major Step Forward – San Diego Union-Tribune – September 20, 2012

Port Approves Environmental Report For Convention Center Expansion – KPBS – September 19, 2012

CEQA Reform is Over for This California Legislative Session: Sustainable Environmental Protection Act May Return in 2013

CEQA reform is over for this legislative session.

Some union officials, environmental lobbyists, and lawyers specializing in exploiting the California Environmental Quality Act (CEQA) are celebrating with emailed bulletins and tweets. (See the August 23, 2012 “Sierra Club California Statement on Abandonment of Environmentally Dangerous Bill.”) One particularly happy Tweeting union leader is Lorena Gonzalez, head of the San Diego County Central Labor Council, AFL-CIO.

That’s no surprise if you read my August 8 post,”Unions Submit 436 Pages of Objections to Draft Environmental Impact Report for Proposed San Diego Convention Center Phase III Expansion Project: CEQA Abuse Run Rampant.”

UNITE HERE Local 30 (based in San Diego) and the San Diego County Building and Construction Trades Council have filed a massive CEQA objection with the United Port of San Diego concerning the Draft Environmental Impact Report (EIR) for the proposed San Diego Convention Center Phase III Expansion Project and the adjacent Hilton San Diego Bayfront Hotel expansion.

Here are some recent Tweets from Lorena Gonzalez ‏@LorenaSGonzalez:

And the Rubio #CEQA reform bill is officially dead! Yay!

URGENT: Don’t let them gut California Environmental Quality Act. Sign NOW: http://SaveCEQA.com  #CEQA #SaveCEQA

I support #CEQA. Gutting 40 years of progress will hurt the environment, workers and the public! These aren’t reforms, they go too far.

So happy to see most of our SD Democratic Legislators asking their colleagues to keep their hands off CEQA #SaveCEQA

Meanwhile, I posted this in the comment section of the Sacramento Bee article, “Bid to Overhaul California Environmental Law Falls Short“:

The Sierra Club representative called the bill “one of the worst attacks on environmental protections that we’ve seen in the 40-year life of this law.” They actually mean, “one of the worst attacks on our political agenda from Democrats, whom we thought would never betray us by supporting economic growth and job creation.”

Actually, it’s questionable whether or not this “Sustainable Environmental Protection Act” of 2012 would have been all that effective in hindering the professional CEQA operators – the people who use CEQA for economic or financial objectives. It was certainly tame and weak compared to Assembly Bill 598, for which the Sierra Club lobbyist took great offense during a January 9, 2012 hearing of the Assembly Natural Resources Committee. If that bill had become law, it would have shut down the CEQA extortion industry by limiting the authority to file lawsuits under CEQA to the California Attorney General.

The Sierra Club and the Natural Resources Defense Council can continue to enjoy their “Blue-Green Alliance” of convenience with labor unions and turn a blind eye to how CEQA is exploited for purposes other than environmental protection, such as coercing Project Labor Agreements, Neutrality Agreements, etc.

They’ve been coasting for 40 years on the Friends of Mammoth v. Board of Supervisors of Mono County decision of the California Supreme Court in 1972, which stunned many by applying CEQA to private projects and activities. One day soon the political pendulum will swing to the Right in this state (probably after the state tries to file for bankruptcy), and then AB 598 will become law.

In the meantime, enjoy the CEQA paperwork! For example, here’s what the Fresno County Planning and Land Use Division has been dealing with as unions object to proposed solar energy power plants:

The Fresno County Planning and Land Use Division responds on August 7, 2012 to a request for records concerning submissions of the law firm of Adams Broadwell Joseph & Cardozo on behalf of California Unions for Reliable Energy (CURE) concerning proposed solar energy generation projects.

Unions Submit 436 Pages of Objections to Draft Environmental Impact Report for Proposed San Diego Convention Center Phase III Expansion Project: CEQA Abuse Run Rampant

The United Port of San Diego gave the public a deadline of June 29, 2012 to submit comments regarding the draft Environmental Impact Report (EIR) required under the California Environmental Quality Act, or CEQA (California Public Resources Code Section 21000 et seq.) for the proposed San Diego Convention Center Phase III Expansion Project and an expansion of the adjacent Hilton San Diego Bayfront Hotel.

The San Diego Union-Tribune and the San Diego Daily Transcript then reported on the parties that submitted comments regarding the environmental impact of this high-profile $520 million proposed project. Here are links to the articles, along with the parties identified in each article that submitted the comments:

Convention Center EIR Cites Numerous Impacts – San Diego Union-Tribune – July 3, 2012 and Concerns Expressed on Center Expansion: Report Brings Up Aesthetics, Noise, Air Quality, Traffic – San Diego Union-Tribune – July 6, 2012

18 individuals and organizations, including the city of Coronado, the San Diego Padres and the San Diego County Archaeological Society

Port Preparing Final Convention Center Environmental Impact Report – San Diego Daily Transcript – July 3, 2012

Organizations to comment on the 61-megabyte report included CalTrans, the Department of Toxic Substances Control, the Native American Heritage Commission, the city of Coronado, the city of San Diego, the Alliance for a Cleaner Tomorrow, the San Diego Padres, Ballpark Village, the San Diego Archaeological Society and San Diego Association of Governments.

So when I looked at the United Port of San Diego’s PDF file containing the comments submitted for the draft EIR, I was stunned to see that 436 of the 536 pages of submissions came from an organization not mentioned in either of these articles: “The San Diego Coalition for A Better Convention Center.”

The San Diego Coalition for A Better Convention Center is “an unincorporated association of individuals and labor unions” identified as including the San Diego County Building and Construction Trades Council, the UNITE HERE Local 30 union, and their local union affiliates. It is represented by the South San Francisco law firm of Adams, Broadwell, Joseph & Cardozo.

The union CEQA objection letter itself to the San Diego Convention Center Expansion Phase III is 62 pages, and then there are 374 pages of exhibits. To see the letter AND the exhibits, go to the full set of Convention Center CEQA comments here. (The union submission starts at page 101 of the PDF document and ends at page 536.)

I have to admit I’m flabbergasted that the public in San Diego remains unaware that construction unions and hotel employee unions submitted the bulk of environmental objections to this project. How were the unions and their lawyers able to sneak this by without attracting attention to it?

Adams, Broadwell, Joseph & Cardozo has an extensive history of submitting burdensome environmental comments about proposed San Diego projects on behalf of unions, while at the same time top officials running these unions pressure the project developer to sign a Project Labor Agreement for construction and/or some sort of agreement with UNITE HERE for hotel employees. Some of the most prominent examples include Petco Park, Ballpark Village, and Lane Field. The list below is an excerpt from my June 1, 2012 post entitled Is the City of San Diego’s Proposition A (on the June 5, 2012 Ballot) Meaningful and Necessary? Absolutely! Here’s the Documented Proof.

Unions Routinely Block Private Projects in the San Diego Region with Environmental Objections Until Developers Surrender and Agree to Sign Project Labor Agreements with Unions and Require Their Contractors to Do the Same

It’s hard to track and document the numerous threats and legal actions in the San Diego area by construction unions (and other unions such as UNITE-HERE) to exploit the California Environmental Quality Act (CEQA) and other environmental laws to block and delay approval of private development projects until a labor agreement is signed. The negotiations and extortion goes on behind closed doors, and often the victimized developer is compelled to succumb in secret while claiming publicly that signing a Project Labor Agreement with unions is a wonderful business practice.

Two companies that exposed the union extortion to the public were Seaworld and Gaylord Entertainment.

1. Seaworld expansion – threatened in 2002, but resisted, and a PLA was not implemented.

2. Gaylord Entertainment hotel and convention center at the Chula Vista Bayfront – threatened in 2007 and 2008, but resisted. Gaylord ultimately abandoned the project and commenced construction instead of a resort complex in Arizona.

Other companies gave in without much of a public fight:

1. San Diego Padres Petco Park – IBEW Local 569 identified alleged environmental problems in 1999, developer agreed to a PLA in 2000, project magically became OK for the environment.

2. Ballpark Village – there was a Ballpark Village draft PLA circulating in 2005, after a law firm representing IBEW Local No. 569 identified environmental problems with the project. Four years later, the same law firm identified environmental problems with the project on behalf of UNITE-HERE. Do you still wonder why California is struggling economically?

3. Poseidon Desalination Plant in Carlsbad – developer avoided union interference by agreeing to a PLA in 2005.

4. Downtown San Diego hotel projects, including Lane Field (Intercontinental Hotel and Aviana Suites), Sunroad Harbor Island Hotel, and San Diego Marriott Marquis & Marina facilities expansion projects – although the law firm of Adams Broadwell Joseph & Cardozo has identified alleged environmental problems with these proposed projects on behalf of UNITE-HERE Local No. 30 in at least some of these cases, that same law firm has also represented the IBEW Local No. 569 using the same strategy of exploiting the California Environmental Quality Act (CEQA).

5. Palomar Power Plant in Escondido – Sempra Energy signed a PLA and avoided licensing delays at the California Energy Commission instigated by intervenor California Unions for Reliable Energy (CURE). There is also a 30-year Maintenance Labor Agreement for this power plant.

6. Otay Mesa Generating Station – see here how CURE extracted this PLA from Calpine.

7. Sunrise Powerlink transmission line – PLA implemented in 2010.

8. Pio Pico Energy Center in East Otay Mesa – The State Building and Construction Trades Council of California proudly announced on November 3, 2011 that it had extracted a PLA for the construction of this power plant. You will not be stunned to hear that California Unions for Reliable Energy (CURE) did NOT intervene in the licensing process at the California Energy Commission on this 300 MW project. It’s odd how CURE sees devastating environmental problems with solar energy generation but passed this one by…

Other projects of uncertain status:

1. 655 Broadway – no PLA, union-only though.

2. Sapphire Tower at 1262 Kettner Boulevard (Santa Fe Parcel 6) – IBEW Local No. 569 identified alleged environmental problems in 2004.

3. Chula Vista Bayfront project – Pacifica Companies – news media indicated that PLA seemed likely.

4. Carlsbad Energy Center – threat or already agreed to PLA.