Saturday, Feb. 7, 2009 | 2 a.m.
In the showdown between Culinary Union leader D. Taylor and Las Vegas Mayor Oscar Goodman over the city’s downtown redevelopment plan, a larger issue has been overlooked.
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What has gotten the most attention was Taylor’s request that developers obtain union contracts for “large hospitality, entertainment and retail projects, including grocery stores.”
Goodman, outraged that the union later qualified two ballot measures to derail the redevelopment plan, made his feelings clear. The Culinary, he said, was trying to extort him, a claim the union vigorously denies.
Make no mistake: The Culinary wants future casino jobs to go to its members. Taylor’s list also makes it clear the union’s concerns extend beyond its own rank and file.
The union’s larger proposal is that all future jobs — union and nonunion — be subject to living wages and include health insurance. The union says it’s a fair exchange for the subsidies a private developer will receive.
(The redevelopment deal calls for Las Vegas and Forest City Enterprises, the primary developer in the disputed downtown plan, to swap land and for Forest City to receive an annual tax subsidy valued at $3 million to $4 million.)
Protecting future workers is common practice. According to a 2003 national survey by the Washington-based development watchdog Good Jobs First, at least 43 states, 41 cities and five counties have attached job quality standards to government subsidies, and the list is growing.
Greg LaRoy, the group’s executive director, says such employee protections are good taxpayer advocacy, and that far too often public officials don’t recognize the leverage they wield.
“When you’re sitting down negotiating with a company, the trophy isn’t you getting them to do the project,” he says. “The trophy is them getting access to your market, your infrastructure, your workforce. You need to be very cagey about the relative value of what they’re getting versus what you’re getting.”
Wage and benefits standards — in addition to other terms such as provisions for affordable housing and commitments to hire local residents first — are usually formalized in “community benefits agreements,” legally enforceable contracts negotiated and signed by community coalitions and developers.
Those coalitions, which often involve organized labor, agree to support developers as they seek government approval — in return for “community benefits.” Some local governments have then adopted the pacts as part of their development agreements with builders.
The practice is well known to Forest City. The company’s New York subsidiary signed a community benefits agreement with eight groups in 2005 to win support for Atlantic Yards, a Frank Gehry-designed mixed-use development in downtown Brooklyn. Under the agreement, the developer promised to provide job training, housing and business opportunities to local residents.
CIM Group, which won a roughly 50 percent discount on downtown land it purchased from Las Vegas as part of its Lady Luck development, signed a similar deal in 2003 for a mixed-use project in downtown San Jose, Calif. That agreement set aside space for local small businesses and committed the developer to working with the city on a child care facility.
But Scott Adams, who heads the Las Vegas Redevelopment Agency, said those kinds of agreements blunt government incentives. “If you have too many quid pro quos in the incentives, developers will go elsewhere — and they typically do,” he said. “I think if we were to ask for more, they’d no longer become incentives.”
Adams says Nevada law mandates community benefits, including that builders pay prevailing wages during construction. But, as the Culinary argues, there are no parallel provisions for permanent jobs. Adams says the law is adequate. Requiring more, he said, would put future tenants — and retailers in particular — at a competitive disadvantage.
Perhaps another motivating factor for the city: the fragility of downtown development. Adams described a domino effect following the construction of a new city hall. That project, he said, is intimately tied to four other sites and without it, the city’s master redevelopment plan falls apart.
As for the Culinary’s call for affordable housing, Adams said 18 percent of tax revenue in the redevelopment area is devoted to just that cause — but not necessarily as part of new housing.
His explanation essentially describes the city’s approach to developers: “There is no requirement, but that doesn’t mean it won’t be achieved.”