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Then There's This: Labor Reps Target Marriott

Construction workers say they're getting stiffed on wages at city-backed project

By Amy Smith, Fri., Feb. 8, 2013

A rendering of the new Downtown Marriott 
under construction
A rendering of the new Downtown Marriott under construction

Labor representatives on Wednesday stepped up their claims that hotel developer White Lodging Inc. is violating the wage provisions the company agreed to uphold in exchange for $3.8 million in development fee waivers from the city. In response, White Lodging insists it is complying with the city ordinance.

The new claims brought forward by labor leaders follow complaints in January from electrical workers that the developer wasn't honoring its end of the agreement to pay construction workers prevailing wage rates on the new Down­town Marriott project. At a Wednesday press conference, the Workers Defense Project and other labor reps produced sworn affidavits from two carpentry workers, one who stated he was being paid $12 an hour instead of the prevailing rate of $13.20, and another from a power equipment operator who said he was being misclassified as a laborer. WDP business liaison Gregorio Casar* said construction crew members who operate power tools can't be classified as laborers under the city's prevailing wage policy. Additionally, the workers group produced an email from a Marriott representative who informed one of the contractors that "there is no prevailing wage scale for this project."

White Lodging began construction last fall on the $300 million, 1,003-room luxury hotel at Second and Congress – expected to help meet the demands of the growing tourism business and better position Austin to compete for large conventions and other major events. Before the project broke ground, the City Council agreed, in June 2011, to waive nearly $4 million in development fees – on the condition that White Lodging's construction contractors comply with the city's prevailing wage policy. According to the ordinance, if White Lodging fails to comply, it must reimburse the city for any fee waivers it's received thus far and forfeit the remaining unused fees. Under the ordinance, White Lodging also committed to meet the city's contractor goals for minority- and women-owned business, and the city agreed to reimburse White Lodging $500,000 in costs associated with the relocating a wastewater line.

Ignorance is No Excuse

The first sign of trouble emerged last month, when interim Assistant City Manager Anthony Snipes sent a memo to the mayor and Council that suggested White Lodging was in violation of the city's prevailing wage policy. He said the city's contract management department had initiated a wage audit after receiving verbal complaints from leaders of IBEW Local Union 520, which represents electrical workers. Snipes and other city staff members had actually known about the wage discrepancies since September but didn't launch an investigation until four months later, after electrical workers raised concerns. In his memo, Snipes explained that a former city staff member had "provided direction and approval to White Lodging that was contrary to the ordinance passed by Council." The unnamed staffer's direction "may have caused confusion with White Lodging and led them to believe that they could pay less than the City's published prevailing wage scale ..."

Brian McGivern, an attorney with the Texas Civil Rights Project, says a misdirection from a city staffer shouldn't exempt White Lodging from complying with the ordinance. "If the city takes the position that it's the fault of the former assistant city manager giving the developer bad advice about whether or not they actually had to follow the city ordinance ... I hate to use the word 'ridiculous,' but that just doesn't comport with how the law works at all," he said.

Late Wednesday, Contract Management Director Rosie Truelove notified Council that she is reviewing the workers' complaints as part of the audit.

Even with labor leaders' new documentation released this week, the Marriott developer maintains it is in full compliance with the ordinance. In a statement issued after Wed­nesday's press conference, the company wrote: "White Lodging remains committed to our agreement, and is working with the city to comply with the conditions of the fee waivers. We are also committed to achieving the goals related to the prevailing wage issue. Not only are we adhering to the agreement, we are exceeding the prevailing wage targets average by at least 15%."

Meanwhile, as city staff tries to figure out how the workers' claims square with White Lodging's denials, a City Council subcommittee is in the process of crafting changes to the city's overall policy on economic development incentives. And an agenda item for the next City Council meeting (Feb. 14) calls for a preliminary decision on whether prevailing wage violations may have occurred on the city's construction of the African Amer­i­can Cultural and Heritage Facility.


The last name of Gregorio Casar was misspelled in the print edition and in an earlier version of this story. We regret the error.

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