LIVING WAGE COALITION IN THE NEWS

City Strikes Deal With Sheraton, Labor Reps
Agreement Will Allow Workers To Unionize, Protect City's Investment

October 8, 2003

By CHIP McAULEY
ARGUS-COURIER STAFF

New hope emerged Monday for workers who want to unionize at the Sheraton Petaluma Hotel with the announcement of a tentative deal that officials say works for all parties involved. The deal will give union reps nine months to organize workers and protect the city's $900,000 investment in the hotel.

City Manager Mike Bierman met with the hotel workers and WG Management -- the firm that runs the Sheraton -- last Friday for more than six hours attempting to forge a compromise among workers who hope to easily unionize, the hotel's new management team and the city, which hopes to protect its investment.

Bierman said two main negotiating points having to do with unionizing and a living wage appear to have been successfully resolved. Now the city, which had been asked by WG Management to break its original owner participation agreement in return for its $900,000 investment, will amend its agreement. The city's money will now be repaid beginning in 10 years, with payment completion within 25 years. The city will also be off the hook for another $1.8 million it might have had to pay as part of the agreement.

A new modified election process will allow workers to decide whether or not they want to unionize -- which the union has nine months to complete. If they do, this will also satisfy members of the Living Wage Coalition who said the workers will then effectively make a living wage by being in the union. Currently, workers make $10 an hour or $11 an hour without benefits. A living wage mandate was part of the city's agreement with the hotel and original owner Kirk Lok -- who was foreclosed upon by WG Management after defaulting on a $22 million loan.

If workers successfully unionize, said Bierman, the living wage section of the city's agreement with the Sheraton would be "amended and eliminated."

Marty Bennett, co-chair of the Living Wage Coalition, said the group was supportive of the new agreement. "We will have a democratic election for new union representation," he added. Bennett said a living wage ordinance could be introduced before the City of Petaluma next year and that the success with the Sheraton negotiations was a good first step in that direction.

The amended owner participation agreement will return the City Council for a vote Oct. 27.

(Contact Chip McAuley at cmcauley@arguscourier.com)

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Petaluma Favors Sheraton Hotel Workers In Dispute

September 16, 2003

By TOBIAS YOUNG THE PRESS DEMOCRAT

Petaluma rebuffed warnings it could lose its $889,000 stake in a luxury hotel, siding instead with hotel workers who filled the City Hall council chambers Monday to ask the city to retain its labor contract.

An investment group is ousting entrepreneur Kirk Lok after his hotel company defaulted on a $21 million loan and plans to take over the Petaluma Sheraton Hotel, which opened 15 months ago at the city's marina.

The group, which includes Telecom Valley pioneer Don Green, said it will repay the $889,000 Lok borrowed from the city only if the city releases it from a labor agreement the city negotiated in exchange for the loan. The labor agreement allows unobstructed union organizing and a minimum wage of $10 an hour with benefits or $11 without.

Thomas Birdsall, who represents WG Investments, warned the council Monday that by postponing a decision, the city may lose its only chance to be repaid the money. He added if the agreement remains intact, the investment group also may demand the remaining $1.8 million the city had agreed to lend the hotel with no assurance of repayment.

But the council, without dissent from its seven members, directed City Manager Mike Bierman to return to negotiations with the investors -- this time including labor representatives.

About 80 people filled the council chambers, most of them wearing pro-union placards.

Bierman acknowledged that he erred in not bringing labor representatives intothe negotiations when they started months ago. "They were not at the table," Bierman said. "I'm going to rectify that because they should have been at the table."

Former City Councilman David Keller, who helped negotiate the hotel pact when he was on the council, said the WG Investment group appears to be betraying the public's trust. "Now what it's looking like is a take-the-money-and-run process," Keller said. He said the city should also recoup the deferred interest on the loan, which the city estimates at about $65,000.

Lourdes Coronado, speaking in her native Spanish and using an interpreter, told the council to keep the labor agreement intact. "We need respect, we need cheaper health insurance and also the bonuses that they promised," she said. "For all of this we need someone to protect us. We need the union."

If the union is successful before the city and the investors can reach agreement, Birdsall said WG would no longer have an incentive to negotiate with the city or repay the money that Lok's company borrowed.

"If the city postpones a decision, it may make a decision without meaning to do so," Birdsall said. "Once the union has enough signatures, WG will no longer have the incentive to make its offer." Birdsall said the labor concessions Lok agreed to put the hotel at a competitive disadvantage. He said no other hotel in the North Bay has agreed to such terms.

Occupancy rates have increased from a low of 25 percent to a high of 60 percent in August. But it would cost significantly more to operate the hotel if its workers form a union, said WG attorney John Friedemann.

Union representatives who turned out on Monday said the hotel is supposed to be serving as a model to help workers earn a "living wage" while helping the company retain good employees and quality service.

Union representatives said the Green group has the financial resources to meet its obligations, adding that Green donated $10 million to build a music center at Sonoma State. "This is not a person that is financially struggling," said Andy Lee of the Hotel Employees and Restaurant Employees union.

Lok, who planned the hotel over a decade while Telecom Valley boomed, had hoped the $33 million, 183-room hotel would fill a need for business accommodations and a conference center. But the upscale hotel opened in the wake of a faltering technology economy and eight months after the 9/11 terror attacks, and it has struggled ever since. "WG's been writing checks all year long to keep the doors open," Birdsall said.

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LIVING WAGE COALITION OF SONOMA COUNTY
Phone: 707-623-7395
Email: livingwagesoco@gmail.com
PO Box 427
Santa Rosa, CA 95402