Gaylord pulls out of Chula Vista

User Forum Topic
Submitted by GoUSC on July 6, 2007 - 11:18pm

I find it amazing that unions can get away with this. Basically the labor union said either you agree to use all-Union labor on your project or we will sue you at every step of the environmental impact (EIR) process. This is veritable public black-mail.

http://www.signonsandiego.com/news/metro...

Here is a link to Gaylord's letter to the City:

http://www.signonsandiego.com/news/metro...

Pretty no holes barred.

Submitted by citydweller on July 7, 2007 - 12:59am.

I get the impression that Gaylord is just using the unions as an excuse to get out of the deal. With a possible recession ahead, a project that large would be pretty risky right now. Also, where were they going to get the financing to build it? With credit tightening their lenders may have been backing out.

Submitted by GoUSC on July 7, 2007 - 9:11am.

I disagree. I am in the development business and see this first hand. The Unions have gotten wise to the EIR process and are using the threat of lawsuits on developers to get their way. Gaylord was under no obligation to go forward with the project and could have just as easily said they didn't want to go forward because of economic conditions.

Submitted by temeculaguy on July 7, 2007 - 12:22pm.

Way to go Unions, instead of getting 50% of the 8,000 jobs, you got your members 100% of zero jobs. Unions are trending more toward what is good for the union rather than what is good for the members or the community. How come I never hear the unions in the building industry flex their muscle with regards to illegal alien workers which is what has truly held down the wages of their members.

Submitted by jl in sd on July 7, 2007 - 1:22pm.

Wouldn't limiting bids from unionized contractors and subcontractors ensure that Gaylord doesn't hire illegal immigrants?

Submitted by GoUSC on July 7, 2007 - 2:11pm.

The problem is that the Union only represents 20% of the construction work-force in San Diego. If Gaylord would have agreed they would have cut out 80% of the workers in town. That would have created a virtual monopoly on the few unionized companies and resulted in significantly higher costs. Gaylord was fully prepared to PAY union wages and agreed to it. They just didn't want to be limited to a small group of sub-contractors. I applaud them for telling the Unions to go to hell.

Submitted by Borat on July 7, 2007 - 3:23pm.

Huh-huh. You said "Gaylord". Huh-huh.

Submitted by citydweller on July 7, 2007 - 5:54pm.

The article in today's Union Tribune said that the unions required only that Gaylord hire local workers, they did not require that they hire union labor. Does anyone know if that is true? I know the Union Tribune doesn't always get it's facts straight.

Submitted by GoUSC on July 8, 2007 - 10:01pm.

Everything I have read stated pretty clearly the Union wanted Gaylord to only hire Union Members.

Submitted by PerryChase on July 8, 2007 - 11:49pm.

Gaylord was never obligated to hire union labor only. They feared "disuption" and lawsuits if they didn't. If Gaylord does everything by the book, and if Chula Vista residents truly support the project, then Gaylord has nothing to fear.

I think it's just a cop out of the project during a downturn. Blame the unions now to strenghten your negotiating position when the project gets revived in 10 years.

If the project is so great, why aren't development companies from all over the USA bidding for it? In that case, Chula Vista should have no problem finding a replacement builder.

The Chula Vista bayfront sounds like a stale real estate listing with no buyers. If a 2/2 in Downtown SD drops to $350k, then one in Chula Vista is worth no more than $250k. There's still plenty of buildable land in Downtown SD and 6000 condos are coming. Who's gonna buy in Chula Vista?

Submitted by drunkle on July 8, 2007 - 11:58pm.

union workers make what, 25/hour? the contractor bills what, 100/hr?

non union make what, 15/hour? if that? the contractor bills what, 100/hr?

why do you hate americans?

Submitted by GoUSC on July 9, 2007 - 7:46am.

PerryChase,

The Union told Gaylord that they either sign an agreement obligating Gaylord to ONLY use Unionized Labor or if they didn't the Union would sue Gaylord during the EIR process and do anything in their power to stop the project. Gaylord had already agreed to pay Union Labor wages but were refusing to be required to limit their bidding pool to only 20% of the contractor labor force in San Diego.

Also I am sure another developer will be found but you are forgetting the 2+ years of work Gaylord has invested in this project and worked with the City. A whole new agreement will have to be drafted, negotiated, etc. This will take years.

And those of you who are quoting it has to do with the current economic situation, this project would not be completed for YEARS. Whatever economic situation we see today will be at least partially corrected by then. Gaylord has a history of tacking big complex projects and has completely may successful ones. They just weren't willing to fall prey to the Unions and called the Union bluff.

Submitted by PerryChase on July 9, 2007 - 10:24am.

If all the ducks are in a row for Gaylord, why then do they have to fear the unions threats of lawsuits? Just proceed and ignore them.

With 6000 condos coming to Downtown SD in the next few years, and a possibility to build 30,000 more, I don't think that Chula Vista has a chance for a long while.

Gaylord is saying that using all union labor will add $50 to $75 million. So standing up to the union, incurring any delays and defending lawsuits might cost $10 - $20 million at most. In a billion dollar project, that's small potatoes.

I'm not defending the union but if the profits are there, then the project will get built one way or another.

Submitted by El Jefe on July 9, 2007 - 11:35am.

Under normal circumstances I would tend to agree. You could easily move ahead under the "proceed and ignore" policy. The unions would sue and Gaylord would likely prevail in court

Unfortunately the game changes DRAMATICALLY when there is litigation against the EIS. All the union has to do is find 1 vernal pool created by their own tire tracks, or a single burrowing owl nest and the whole thing can get VERY MESSY. Everyone knows that if someone looks hard enough they will find at least 1 endangered/protected species on a coastal site that size, and in a worst case scenario, Gaylord could be required to purchase a similar property (location, size) to relocate all endangered species and deed the property to be held as open space indefinately.

All the support in the world from the city of Chulajuana wouldn't do Gaylord a bit of good if the Unions challenged the EIR in court and dragged the State/Fed EPA into it.

Unless the city was willing to accept ALL responsibility and liability for producing a clean EIR on the site, on the first mention of challenging the EIR, walking away was clearly the best exit strategy for Gaylord.

Submitted by GoUSC on July 9, 2007 - 11:39am.

PerryChase...

It doesn't work like that when it comes to EIR's. $10 to $20 million? It could end up costing Gaylord much more than that in time, legal fees, consultant fees etc. I do this stuff for a living and the risks are not easy to quantify.

Submitted by PerryChase on July 9, 2007 - 1:26pm.

Like I said I'm not defending the union. But I'm generally suspicious of large public/private partnerships where the public is subsidizing private profits. Cost overuns generally run to 100% of the original estimate. Developers often times go back to the politicians many times to re-negotiate better deals after the fact (see the Padres and the Chargers).

Here Gaylord is saying that a 5% to 7.5% of the project killed the whole thing. Give me a break. There's more to it and blaming the union is the red herring. The real estate market changed and Gaylord wanted Chula Vista to give more.

Citizens are not feeling so flush these days so there's little stomach for more give-away of public assets. Think about it. Chula Vista residents are plain middle class. They'd be stupid to let their tax dollars support a luxury bayfront development so that outsiders can come in and flip.

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