Building Industry Association
of San Diego

The City of San Diego Land Use and Housing Committee voted 3 to 1 to require hotels built in downtown San Diego to undergo additional scrutiny by the San Diego City Council following an afternoon debate over hotels and the type of jobs they generate.

An overflow crowd of mostly members of the hotel union,  ‘Unite Here’ urged the council to adopt the additional rules that will send projects to the full city council where they believe they will have a more sympathetic ear in regards to the wages paid to hotel workers and a greater chance at Project Labor Agreements.

The business community was out in mass to oppose the added regulations arguing that San Diego’s downtown is a model of regulatory and fiscal efficiency that has created thousands of jobs and millions of dollars  in property and TOT taxes for the city. The new rules will essential bring an end to the regulatory certainty that major projects need to be economically viable.  A study by the London Groups says San Diego stands to lose up to $207 million in potential TOT funds and over 10,000 construction jobs as a consequence of the new regulations.

A majority of committee members were not persuaded by the London Group findings. Councilmembers, Tony Young, Todd Gloria and Sherry Lightner voted in favor with councilmember Kevin Faulconer voting no after an impassioned plea to oppose new rules on a system that is clearly is not broken.

The measure heads to the full city council for consideration later this year.

The City of San Diego Land Use and Housing Committee will consider a union backed measure that – if successful – will pave the way for the union’s ultimate prize:  Project Labor Agreements.   Commonly referred to as PLAs, these agreements can require that only union labor be used to construct or operate hotels and can leave non-union companies shut out from the bidding process. PLAs can add up to 30% to the cost of construction.

The hotel union, ‘Unite Here,’ wants all major hotel projects to be appealable to the San Diego City Council where they believe they have a better chance at PLAs because a majority of the council were backed by unions in their elections. The regulation would apply to hotels built in the redevelopment area managed by the city’s Center City Development Corporation.  CCDC is one of the most successful redevelopment areas in the state that generates millions of dollars each year in property and sales tax that the city uses for infrastructure, parks and other improvements.

The requirement would essentially negate the benefits that come from CCDC by eliminating the regulatory certainty that has led to downtown San Diego’s impressive transformation over the last 25 years. It will also stymie future hotel plans costing the city millions in lost economic activity and jobs.

The San Diego business community has rallied in opposition to the proposal and has urged the LUH committee to reject the ‘Unite Here’ plan.

The hearing is set for 2:00 P.M. Wednesday, at city hall.