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Union Signs Agreement with OTO Development for Two Downtown Santa Monica Hotels

Santa Monica Real Estate Company, Roque and Mark


Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore Kutcher & Kozal, LLP

By Jason Islas
Staff Writer

November 9, 2013 -- After months of testifying against plans by OTO Development to build two mid-priced hotels in Downtown Santa Monica, the regional hospitality workers' union brokered a deal Friday that will guarantee union support for the projects.

UNITE HERE Local 11 and the South Carolina-based developer reached terms after months of negotiation days before the development agreements are scheduled to go before the City Council for final approval.

The agreement, sources said, would lay the legal groundwork for workers to unionize once the hotels have begun operating.

“(W)e have reached an agreement with OTO that guarantees great jobs for the city of Santa Monica, groundbreaking job training provisions, new local hiring initiatives, and strong standards for organizing and free speech rights for workers in Santa Monica,” Francis Engler, the westside organizing director for the union, told The Lookout Saturday.

In his statement, Engler said that while the union now supports plans for the two six-story hotels planned for the corner of Fifth Street and Colorado Avenue, there are still a few tweaks union representatives want made to the proposals.

“The only changes we recommend to the staff report is to designate the internship in the development agreement be designated for local opportunity youth and to make the living wage level $15.37 instead of the proposed amount,” Engler said.

City staff proposed that OTO pay a $14.08 an hour wage to workers, which the developer has agreed to, according to the staff report. The figure is based on the City's living wage requirement for its contractors.

“The purpose of the living wage provision in the Development Agreement is to ensure that the proposed hotel provides its workers fair and reasonable compensation comparable to similar Santa Monica hotels and hotels in nearby communities without placing the proposed hotel at a competitive disadvantage,” staff said.

The new agreement brings an end to the months-long battle that the union waged against the project in the public forum. (“Two Small Hotels in Downtown Santa Monica Spark Labor Concerns,” July 22)

Over the course of multiple hearings in front of the Planning Commission that began in July, the union testified that the proposed two hotels -- one a Hampton Inn by Hilton, the other a Courtyard by Marriott -- would come with “weak” community benefit packages and that the union and OTO had not signed a neutrality agreement, a precursor to unionization.

At a Planning Commission meeting in July, Mike Gallen, OTO's director of development for the west coast, said that OTO was not opposed to signing a neutrality agreement, but the union wanted OTO to agree to union neutrality for any future developments in the county.

At that same meeting, Unite Here representatives refused to comment on Gallen's claim because the negotiations were private. (“Santa Monica Planning Commission Wants More Commitment from Hotel Developer,” July 26)

In September, the union staged a demonstration, rallying about two dozen workers to march on City Hall, demanding that officials pressure OTO into offering a $15 minimum wage. (“Union Marches on City Hall for Higher Wages in New Santa Monica Hotels,” September 3)

OTO has agreed to pay $635,000 per hotel to help fund community projects like the City's new hospitality training academy, which targets at-risk youth and trains them for careers as hospitality workers.

Almost half of the cash contribution -- $294,000 per hotel -- is slated to help fund the Colorado Esplanade project, which will transform Colorado Avenue west of Fifth Street into a one-way street with wider sidewalks and a buffered cycle track.

The project, the City hopes, will help absorb the influx of pedestrians expected when the Expo Light Rail's terminal station at Fifth Street and Colorado Avenue opens in 2016, connecting Santa Monica to Downtown Los Angeles by train for the first time in half a century.

And OTO's two new hotels, if they get built, will be at the epicenter of this transformation.

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