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A federal judge dismissed a hotelier’s lawsuit accusing local labor unions of conspiracy and racketeering, but the case illuminates shifting dynamics and ongoing disputes within San Diego politics that aren’t going away.
In late 2018, after hearing that SeaWorld was backing out of a hotel project, San Diego Mayor Kevin Faulconer had a good sense why.
He was talking to Bill Evans, a hotelier who’d been working with the theme park, shortly after the announcement. As Evans would later put it in a lawsuit, Faulconer leaned in and offered a guess.
“It was the union, right?”
Weeks later in court documents, Evans argued that Unite Here! Local 30, which represents hotel workers, and the San Diego County Building and Construction Trades Council, have been holding public lease agreements hostage until hoteliers and developers agree to hire union workers on the job site and then stay neutral in any unionizing efforts inside the subsequent hotel.
Over a decade, he alleged, the labor groups have created a “playbook” that delays and threatens the financial viability of non-unionized hotel and development projects. They do so, Evans argued, not just by leaning on their Democratic allies in positions of power but by waging public campaigns and raising environmental concerns, sometimes in the form of a legal challenge — then dropping their opposition after getting what they want.
The allegations were explosive, at least on the surface. Evans accused a pair of labor leaders of extorting votes from public officials and leveraging their power through financial support. A former City Council president, for instance, refused to docket one of his projects because she believed it would upset the unions that had helped her “win this thing,” Evans alleged.
Earlier this month, though, U.S. District Judge William Hayes dismissed the case before it even got off the ground, ruling that the local unions appeared to be engaging in constitutionally protected speech. What Evans had portrayed as anticompetitive behaviors — he cited federal conspiracy and racketeering laws, among others — were deemed legitimate methods of petitioning in a democratic society.
Though the dismissal was not the outcome Evans had hoped for, the ruling in a way acknowledged his point. The judge didn’t disagree that the unions had been applying political pressure to further their own ends. He just determined that those actions weren’t illegal.
For their part, the labor groups don’t deny that they’ve challenged a number of hotel projects on environmental grounds. But they contend that Evans has mischaracterized their motivations and criteria for opposing projects. As Local 30’s own attorney wrote in a motion: “These allegations do not describe some unlawful scheme … but the normal workings of politics.”
Throughout 2019, Evans and other members of San Diego’s traditional right-of-center business establishment had cited the lawsuit as a potentially game-changing move, something that could blow the roof off labor’s attempts to consolidate and wield power at City Hall. It may now be better viewed as a primal scream aimed at labor’s growing influence, proof that the time has come for hoteliers and developers to make peace with the unions if they want to get major projects on public lands done.
That tension isn’t going away anytime soon. In the meantime, the case illuminates something important about San Diego politics: Those who’ve elected to partner with labor rather than go to war appear to have already benefited and will continue to do so in the future.
“A lot of people in this town have been used to getting what they wanted,” said Jerry Butkiewicz, the former secretary-treasurer of the San Diego-Imperial Counties Labor Council, “and now that there’s unity among workers, those people are gonna need to share in the prosperity.”
Evans himself is an example of what might happen when one refuses to play ball in San Diego. And by his telling of events in the lawsuit, it’s cost him.
SeaWorld, he said, backed out of the hotel deal in 2018 because of labor opposition to another one of Evans’ projects. His family’s hotel business operates the Bahia Resort on Mission Bay and wants to expand, but labor leaders have joined with a community group to challenge the proposal. They’ve cited environmental and recreational concerns, including the possible closing of a public access road on Mission Bay that paddlers and other beachgoers rely on.
Word, Evans said, traveled back to SeaWorld executives that labor would make trouble for their future roller coaster rides — which require Coastal Commission approval — if the theme park continued to work with him. SeaWorld, he said, ultimately decided that going up against labor wasn’t worth the hassle. In terminating its contract with Evans, the theme park ate $2.8 million in fees and expenses.
Shortly thereafter, Evans and the CEO of his family’s company sat down with union representatives to try to talk through their differences. Evans portrayed the group as boastful and arrogant, telling him that their problems would go away if only he agreed to stay silent in any unionizing efforts inside his hotel and rely on a developer willing to hire union workers on the construction side. The two concepts are known, respectively, as a card check neutrality agreement and project labor agreement, or PLA.
At the meeting, for instance, Evans said Tom Lemmon, business manager for the Building Trades, a construction workers’ union, likened the situation to a grenade and told Evans it was up to him to put the pin back in.
In an interview with Voice of San Diego, the labor leaders disagreed with Evans’ framing of the meeting and said they’d simply offered Evans the opportunity to work together. Local 30’s president, Brigette Browning, said she pointed out how successful some of their past challenges had been and that Evans should help them settle the concerns over the public access road near his hotel.
In his lawsuit, Evans pointed to several times when he said labor had twisted the arms of hoteliers and developers to get what they wanted.
In 2016, for instance, attorneys for Local 30 complained to the Wetlands Advisory Board about “serious flaws” in the environmental impact report produced as part of a renovation at the Town and Country Hotel in Mission Valley. In response, the city agreed to postpone the deadline for comments and Local 30 submitted a 123-page letter to San Diego elevating its environmental concerns to public review and delaying the approval process.
But Evans contends that those concerns disappeared after the hotel owners agreed not to oppose any unionizing efforts among their workforce. Browning declined to say whether the hotel has a card check neutrality agreement in place.
One of the more high-profile battles took place in 2012, when both Local 30 and the Building Trades publicly argued that an expanded Convention Center would reduce parking and increase traffic, making San Diego a less desirable place to live and work, and restrict growth while making significant demands on public infrastructure.
Eventually, a deal was struck behind closed doors, the terms of which were revealed in an email from then-Mayor Jerry Sanders’ chief of staff to labor reps and others. In exchange for the unions dropping opposition to the Convention Center project, Sanders agreed to put a labor-friendly person on the Convention Center board.
The labor unions contend that their environmental concerns for various hotel projects have been real and just because some of those complaints were unsuccessful in court doesn’t mean they were without merit. Browning also said that if Evans agreed to unionized workers at the expanded Bahia, she would continue to advocate for keeping the nearby public access road open.
Evans also complained in his lawsuit that he and others were unfairly blocked from competing on at least one project: the development of Seaport Village, an area of land between downtown San Diego and the bayfront. Evans said he’d partnered with a developer and in 2016 offered one of six bids that met all the criteria, but the Port of San Diego agreed to talk exclusively with the only developer who’d struck a deal with labor groups.
Evans’ overarching contention is that unions in San Diego reflexively use environmental litigation to challenge any project that doesn’t serve them economically.
But Carol Kim, political director for the Building Trades, said there are plenty of school construction bonds that move forward in San Diego County without PLAs attached, and that her union doesn’t automatically oppose those. At the same time, she said, general contractor groups have actively undermined school bonds with PLAs and helped kill one as recently as 2016 in East County.
She also argued that because part of the California Environmental Quality Act deals with workers and labor issues, the law is a legitimate tool for unions to consider when evaluating whether a project is a good deal for their members and the public.
“We’re leveraging for working people everything we can,” she said, “because this particular economy, and the data points to it both nationally and locally, it is not an economy that works for local people.”
While the nation’s gross domestic product grows, worker income shares have held stagnant over the last couple decades.
“We’re starting to realize there’s no one willing to fight these forces unless we use legal tools at our disposal,” she said.
Kim said the Evans lawsuit reveals a sense of entitlement among the downtown business establishment. “They feel anyone standing up against them must be corrupt,” she said.
Not everyone feels this way. In fact, part of Evans’ gripe is that hoteliers and developers are now expected to give in.
In its quest to develop part of Harbor Island over the years, Sunroad Enterprises had been caught between government agencies. The company has also been met with environmental challenges by Local 30, but the two sides play nice now.
The Union-Tribune reported in October that one of Sunroad’s proposals — a 450-room hotel — was revived by port commissioners. Browning said the port had been close to putting the project back out to bid when the company called her and wanted to know how they could work together. According to the company, the project now includes both a card check neutrality agreement and a PLA. Local 30 representatives spoke in support of the development at a public hearing.
“It’s been a good partnership,” Browning said.
Uri Feldman, president of Sunroad Holding Corporation, disagreed with the characterization that his project was ever on life support, or at least that the holdup was related to labor opposition. But because “we live in a state and in a city that has lots of approval processes and lots of different interests,” he said, the smoothest way to get anything done is to get everyone on the same page early.
Unions are one. Environmental groups are another.
“Each fight for their own interest,” he said. “Sometimes they’re aligned and other times not necessarily.”
Historically, the hotel and construction workers in major U.S. cities haven’t always gotten along. San Diego is different because its leaders have tried to make it so.
Butkiewicz said the decision to advocate for one another locally was intentional. While running the Labor Council in 1990s and 2000s, he also sat on the San Diego Regional Chamber of Commerce. During that time, he discovered the hotel and development industries had a “playbook” of their own, he said.
They’d concede to the demands of one union but not another, creating division. They’d argue that one union shouldn’t care what the other got. Nowhere, of course, was it written down, but it was effective.
One of the earliest tests of labor’s commitment to solidarity came in 2005, when Gaylord Entertainment proposed the development of a new resort and convention center on the Chula Vista Bayfront. Local 30 had gotten a card check neutrality agreement, but the Building Trades hadn’t gotten a PLA.
“It could’ve gone really bad,” Browning said. “Like you could sense it in the meetings that if I had been a chest-thumping egomaniac, like some people [who] have been in the labor movement [who] are now gone, I could have been really offensive to the Building Trades and only thought about the betterment of my union. But I would say it’s reaped rewards a thousand-fold because they reciprocated for me in other situations that have since happened.”
The Building Trades went on to secure a PLA, but lost it when Chula Vista voters passed Measure G in 2010. The initiative prevented public dollars from being used on construction projects that came with a PLA. The project, however, will still have union workers because the people putting it together agreed to it.
Because of the developer’s “early commitment to a local workforce” and a joint venture with the contractors, “we are pleased at the outcome of our efforts and negotiations,” Lemmon said in a statement.
There’s irony in the fact Evans’ suit focuses so heavily on SeaWorld, because the theme park’s 1998 ballot measure exempting it from coastal height limits has been credited with opening up the worldview of San Diego’s labor groups in the first place.
Former City Councilwoman Donna Frye remembered approaching Butkiewicz, the former Labor Council leader, before the election to ask for financial support to oppose the measure. She argued that unions and environmentalists had more in common than they thought. And without any money to wage a campaign against SeaWorld’s ballot measure, she and her allies had been drawing attention to themselves and their cause by wearing a whale costume in public.
SeaWorld’s ballot measure squeaked by. And after it did, Frye recalled telling labor groups, “See, if you had helped me a little bit we could have stopped this.”
Marco Gonzalez, an environmental attorney, remembered sitting down with Frye, Butkiewicz and Lorena Gonzalez, his sister, who later took over the Labor Council and is now a member of the state Assembly. The point of the conversation was that labor and the environment were two important legs of the liberal political stool in California and it was in their interest to collectively advocate for social justice issues.
“We recognize that we aren’t always going to see eye to eye,” he said, “but we can’t let those 10 percent of times we disagree undermine the 90 percent of times we agree.”
Browning described herself as an environmentalist and said she’s in favor of Measure A, the countywide initiative on the March ballot that would force development projects that deviate from the county’s general plan to go to a countywide vote. Without it, she said, developers will continue to buy cheap land, convince the county to rezone it and make millions while contributing to sprawl. She called the tactic “sneaky” and short-sighted.
“It’s not just some rhetoric for me,” she said. “I really believe in having a sustainable San Diego so that my children can prosper and my members’ children can prosper.”
Of course, it’s not a perfect relationship. Labor and environmental groups will be at odds sometimes. One wants to build and the other is at times skeptical of, even hostile toward, development.
Frye, for instance, is opposed to Measure C. That initiative goes before San Diego voters in March and would raise hotel-room taxes to pay for a Convention Center expansion. It has the support of both Local 30 and the Building Trades and would also set aside money for road repairs and homeless services.
Frye called the whole thing “crass” and said road repairs and homelessness were just “excuses” to get public support when the bulk of the money would likely benefit the downtown business establishment. She also raised objections to building along the waterfront at a time of rising sea levels.
It’s unlikely that Evans was motivated to sue because of the shifting politics of San Diego, but there is an unmistakably partisan tone to any conversation about the larger role that labor and developers play.
The growing influence of local unions has coincided with the growing influence of the Democratic Party. At the same time, the downtown business establishment has historically been linked to the Republican Party, whose local influence has plummeted. In recent years, the local Chamber of Commerce, for example, has endorsed Democrats in major contests, something that would have been unthinkable in the not too distant past.
Labor’s fingerprints were all over San Diego City Councilwoman Lorie Zapf’s loss in 2018. Their support helped hammer coastal District 2 voters with mailers connecting her to President Donald Trump. Zapf lost by more than 15 percentage points to Democrat Jen Campbell and went on to leave the GOP. With Zapf gone, Democrats assumed a veto-proof majority over the same body that a guy like Evans needs if he’s ever going to expand the Bahia on public land.
Increasingly in San Diego, the major political battles are likely to be between pro-labor Democrats and pro-business Democrats.
It’s not just developers who are getting the message. Lobbyists are too. One of Local 30’s representatives at city hall, Kimberly Hale Miller, is also the chairwoman of the San Diego County Taxpayers Association. Hale Miller didn’t return an interview request. Browning called her “one of the smarter ones” for recognizing the city’s political shift.
“She has a perspective that never came into the equation,” Browning said. “When I was doing strategy without that perspective, it limited us winning. I need to be able to understand the other side’s thought processes so that when we create a strategy, it’s not going to just appeal to the people who I already know.”
Going forward in court, Evans has three options. He can admit defeat. He can appeal to a higher court. Or he can file a motion to amend his complaint and argue with additional evidence.
Evans declined to comment for this story, and referred questions to one of his lawyers, who said she was disappointed in the judge’s decision and is weighing all the options. They have until early February to decide.
Steve Coopersmith, an attorney for the Building Trades, said the judge’s decision to dismiss the case was a victory for free speech and a complete shutdown of Evans’ attempt to turn the unions’ right to petition into a crime.
If the case is ultimately killed, it may have the unintended effect of solidifying labor influence in San Diego rather than hindering it.
“I hope that the city and the port have a new perspective on public lands and that we’re not just talking about the lease-holders anymore,” Browning said. “We’re talking about the people who are working there, cleaning the dishes, cleaning the hotel rooms. They deserve the American dream just as much as the developers do.”