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May 02, 2005
Benefits study makes comeback
A controversial proposal that once threatened to derail the 'Heart of the City' development is back. And that news is coming as an unwelcome surprise to the business community.
At issue is the South Bay Labor Council's plan to require developers that receive subsidies from the city of San Jose to meet labor concerns over jobs, wages, affordable housing and other issues. The idea could be headed back before city council in a matter of weeks.
When the highly charged Community Benefit Assessment issue first arose in December 2002, it provoked a clash between union and business interests, and heightened concerns that the Labor Council was expanding its influence on the city council and that its agenda would make San Jose less competitive for new business.
The issue was so divisive that the council appointed Mayor Ron Gonzales and council member Dave Cortese, a lawyer with experience in mediation, to bring labor and business interests together.
The committee formed for that purpose, however, has never met. Yet amid evidence the plan is advancing, there are rising concerns that the matter is now being decided behind closed doors.
"We want it to be done in a public process, not a private process," says Jim Cunneen, president and CEO of the San Jose Silicon Valley Chamber of Commerce.
Phaedra Ellis-Lamkins, executive director of the Labor Council, says the Labor Council has been meeting with the mayor's office to keep the issue alive and expects the issue to come before the council in six to eight weeks.
"Business has not been a part of discussions because it says it is philosophically opposed and won't negotiate," Ms. Ellis-Lamkins says. "We can't live with that."
One reason for the recent push was legislation that would extend the life of the redevelopment agency, which provides most of the subsidies that fueled labor's concerns. With funds running low, the redevelopment agency wasn't doing any large projects. With the RDA maneuvering in Sacramento for legislation that would extend the life of its project areas, Ms. Ellis-Lamkins says she decided to press ahead once again with the project.
Ms. Ellis-Lamkins says her conversations in the mayor's office have been primarily with Joe Guerra, the mayor's budget and policy adviser. Mr. Guerra did not return phone calls, but the mayor confirmed the discussions have been taking place. He says he has not set a date for reintroducing the issue before council.
"We are still looking at her request," the mayor says. "We're still trying to reactivate the committee. Quite frankly, we've had other priorities we've been working on. We hope to get back to that issue as soon as possible."
It was in late 2002 that the Labor Council pressed its case for the first time before the city council. Its program, called Community Benefits Assessment, came out of a lengthy study by the Labor Council's Working Partnerships foundation into the impact of developments built with public subsidies. The stated goal was to make sure that the public's money, in the form of subsidies for development projects, is well spent.
But the measure was introduced in a memo that few even on the council had seen. It called for each development project to produce a community benefits assessment that developers likened in its complexity to an Environmental Impact Review, a document that can take months to complete.
The Dec. 10, 2002, proposal also would have set goals for affordable housing, worker pay and green space and required the city to make sure that developments would meet those standards. Business tenants of a development, for example, would have to pay employees the so-called Living Wage -- $9.50 per hour with health benefits or $10.75 without. (The California minimum wage is $6.75.) The Labor Council itself would have been given a role in enforcing the provisions of the proposal.
All of this mortified the business interests in the room, especially developer Shaul Kuba, a principal at CIM, which was expecting the council to approve its $184 million 'Heart of the City' development at that meeting.
Asked what he would do if the retail tenants in his building would be required to pay the living wage, he said, "I would have to walk, if that is required."
The surprise memo was written by council member Cindy Chavez and signed by members David Cortese and Linda LeZotte. Ms. Chavez amended the proposal so that the most draconian demands would be left up to negotiations between the city and CIM.
Mr. Gonzales was livid that the CIM project had been threaten by the last-minute demands from the Labor Council, and he voted against the project that he had previously championed. Also joining him was Councilman Chuck Reed and former council members Pat Dando, John Diquisto and George Shirakawa Jr.
Mr. Gonzales later created a committee that included himself and Mr. Cortese to help mediate the differences between business and labor on the issue. Mr. Cortese says he has not been notified of any meetings on the issue.
Other council member were similarly surprised by the news. "This is the first I've heard that it was still alive and coming back," Mr. Reed says. Ms. Chavez says she doesn't know what form the proposal is taking now, adding, "There were elements to the (original) plan that I liked."
A chamber-organized group, The Coalition for Jobs Now, hasn't met in months, but it has scheduled a meeting in May to talk about how businesses will respond to the return of the Community Benefits Assessment.
A member of the jobs coalition, Bob Hines, calls the original proposals "overreaching and outrageous," but says he wants to keep an open mind about the proposal. "We're not sure what's in it this time," he said.
The original proposal, however, "sent the message that San Jose was not a good place to do business," he says. "We don't need this type of development controlled for certain social issues."
The biggest surprise for many is that there is sudden action after such a long period of hibernation.
"I am very surprised that there is a plan to bring something forward to council in the absence of good faith discussions with the business community," says attorney Joan Gallo, who had been appointed to serve on the mediation committee. But she added, "I don't have any doubts that we will have those meetings before any specific plan goes to city council."Posted by Coalition Webbies at May 2, 2005 12:19 PM