Then There's This: White Lodging's Steal of a Deal
City to developer: What part of 'must pay prevailing wage' do you not understand?
In a cat-and-mouse saga bordering on the ridiculous, a Downtown hotel developer last week missed a "final" deadline to comply with the city's prevailing wage ordinance or risk forfeiting its $3.8 million in fee waivers.
In a certified letter sent May 31 to Indiana-based White Lodging Services Corp., Rosie Truelove, director of the city's Contract Management Department, gave the developer until June 4 to pay back wages owed to 13 carpenters working on the JW Marriott Hotel project at Second and Congress. The 13 were identified in a sample audit the city initiated in February, after workers complained they were getting stiffed on pay. Truelove further requested permission to interview four carpenters' helpers to determine if back wages were also due workers in that job classification.
A Council Do-Over?
The developer, in a June 4 response to the city's latest in a series of ignored deadlines, instead requested that the matter be placed on the City Council agenda "for clarification and ratification of the city's initial position." The first available meeting date would be June 20, and thus far no one on Council has signaled a willingness to revisit the ordinance. The Workers Defense Project, an advocacy group that first brought the pay discrepancy to light, fears that if the matter returns to Council, a majority may give in to arguments by White Lodging's influential arm-twister Richard Suttle and end up watering down the ordinance. White Lodging argues that because one former assistant city manager signed off on an altogether different wage agreement proposed by the developer, that's the one White Lodging should be able to stick with as it continues construction on the hotel. (It's important to note that the former ACM in question, Rudy Garza, quit his city post a year later and formed a subsidiary business with Paul Bury, whose engineering firm is a key contractor on the $300 million Marriott project.)
To most people who have followed this two-year-old tale, the city's "initial position" on this issue couldn't be more clear. It was formed June 29, 2011, with Council's approval of the fee waivers, along with an amendment by Council Member Mike Martinez requiring the developer to pay prevailing wages to construction workers. The ordinance also requires the developers to reimburse the fees to the city if it fails to comply with the directive.
White Lodging wants to settle this dust-up with city higher-ups, without having to pay the $5,000 in wages the city currently says it owes the 13 workers. The number of employees allegedly getting stiffed on pay could increase if the city is able to expand its audit of the project's payroll.
Clearly, the wage skirmish between mid-level city administrators and a national hotel developer is tarnishing the image of one of Austin's most high-profile projects and doesn't bode well for White Lodging's future business relations with the city. The 1,012-room hotel – billed as the largest JW Marriott in the U.S. – is expected to generate millions in revenue while meeting a growing demand for more Downtown hotel rooms to serve the convention and tourism industries. The pay dispute also highlights the need to add more teeth to staff's ability to enforce the city's prevailing wage ordinance as Austin leaders continue offering economic perks to businesses.
Meanwhile, with the wage issue in flux, a Travis County judge on Wednesday rejected a Workers Defense Project petition seeking to conduct depositions of White Lodging representatives. That sends the ball back to city staff, and possibly Council. The advocacy group vows to continue pressuring the city to force the hotel developer's hand. Said WDP's Greg Casar, "White Lodging's expensive lawyers and lobbyists will not stop justice from being done."