Los Angeles Daily News
Like battlefield generals, a cadre of Los Angeles business leaders and lobbyists marshaled a strategy to win a rare, and at least temporary, victory last week at City Hall.
Forcing the City Council to back down on its imposition of a "living-wage'' ordinance on a dozen hotels near Los Angeles International Airport LAX, the fight was not without casualties.
The hotels still are faced with paying workers higher wages, labor unions risk losing city backing on any future living-wage issues, and taxpayers will be tapped to pony up for investment promises in the Century Boulevard Corridor.
But for the business community, it marked one of its most aggressive and unified efforts to take on City Hall politics in recent years.
"For business, they finally tried to flex their muscles, but didn't get quite as far as they thought they would,'' said Jack Kyser, chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the of the Los Angeles County Economic Development Corp.
"Part of it is that labor has been active in City Hall a long time. Business got its knees scuffed a bit, but did come together to win something.''
The dispute between labor and the hotels had been brewing for years as unions tried to organize the 3,500 workers.
But it heated up late last year in a series of demonstrations in which Councilwoman Janice Hahn Janice Hahn is a member of the Los Angeles City Council representing the 15th district. Hahn was elected in 2001 and reelected in 2005, running unopposed. The 15th District encompasses the Los Angeles communities of Watts, Wilmington, Harbor Gateway, Harbor City, Athens on the , who chairs the Trade, Commerce and Tourism Committee, was involved in a confrontation.
Hahn agreed with the unions that a living wage and other changes were needed at the hotels. As Hahn pushed the issue, the business community began to cautiously gauge city officials' support.
Business strategy
David Fleming , the Latham and Watkins attorney who was a leader of the San Fernando Valley San Fernando Valley secession movement and now heads the county Chamber of Commerce, first broached the issue with Mayor Antonio Villaraigosa during his trip to Asia in September.
"The mayor was receptive from the start,'' Fleming said. "I suggested to him on the trip that the business community was very concerned about this living wage spreading, and the least the city could do was try to quarantine it to this one area.
"I also told him I thought there was a good chance that there would be an election on the issue, that it would be very divisive and that there were serious legal questions about the city's actions.''
After the full City Council quickly adopted the proposal in November, concern spread that the ordinance could eventually wash over the rest of the business community.
A strategy was quickly formulated to stand up to City Hall.
Fighting the council
Enter two of the city's top lobbyists and political strategists -- Harvey Englander and Arnie Berghoff, both veterans of battles with the City Council on everything from Sunshine Canyon Landfill to land-use matters.
Englander, who became the spokesman for the hotel industry, said the two developed a clear strategy to keep the business community focused and use overwhelming force to slam through petitions for a voter referendum on the issue.
"We made sure the council knew that we were prepared for a long fight,'' Englander said. "We purposely went out to get twice the number of signatures needed for the referendum to show we were serious. We got those signatures in 20 days, with the purpose to show we were serious. And we were prepared to spend whatever it took in an election."
"We had received signals early on that the mayor and the council didn't want this election. Once we got that signal, it was a matter of working things out. Our goal was to get them to rescind the living-wage ordinance. We were successful in that goal.''
Talks between the two sides, however, dragged on for weeks until Villaraigosa became directly involved.
All sides credit him with pushing to get an agreement and leaving much of the hands-on work to his legal adviser Tom Saenz, who has been credited with keeping the groups talking through the tense 72 hours before Wednesday's deadline.
Saenz also came up with the legal argument that the City Council could repeal the ordinance and order a similar one drafted without triggering a new election.
"What we wanted, most of all, was to avoid a potentially divisive election,'' Saenz said. ``We were confident that voters could be convinced to support the living wage, but you never know in an election what could happen.''
A potential election was estimated to cost the city $3 million -- with total campaign spending at least triple that. Officials also feared debate could have become mired in race and immigration issues rather than trying to help workers.
"None of us wanted that,'' said Gary Toebben, president of the Los Angeles Area Chamber of Commerce who brought together the business community to deal with city officials.
Council President Eric Garcetti said the mayor helped focus the two sides to deal with the most crucial issues.
"From our side, we were concerned about the treatment of the workers,'' Garcetti said. "The business community was concerned about limiting this to a certain area. What we achieved is two things: better pay for the workers and a quarantine on the living wage.''
New ordinance
Under the new deal, the council rescinded the ordinance it passed in November but moved to draft a new ordinance under which the hotels would voluntarily phase in higher wages by July 1.
Those wage requirements would be quarantined to that area and not allowed elsewhere in the city -- unless they pass several hurdles.
The business community also won a commitment from the city to study increasing investment within a new "airport hospitality overlay zone'' including the possibility of building a mini-convention center and investing in promotions, marketing and street improvements.
"We are still a long way from being done, but we were able to get some time to deal with this in a more thoughtful way,'' Toebben said.
Kyser said it will take time to assess the overall impact of the deal.
"This is one of those cases where the devil will be in the details of the new ordinance,'' he said.
Toebben, who came to the chamber last year from a post in Kentucky, said the process was a learning experience.
"It was clear to me that we have a lot of work to do at City Hall. There were a lot of conversations going on that we were not part of and we need to be more involved if we are going to get the win-win situation the mayor has been talking about.''
In the end, Councilwoman Wendy Greuel said it came down to both sides giving in a falling inwards; a collapse.
"I think whether you look at this from a union point of view or business, no one wanted to spend the money, time and effort for an election,'' Greuel said. "Everyone wants a strong economy and job creation. The question was how do we get to that end.''
