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City demands return of White Lodging Fee Waivers

Friday, June 14, 2013 by Michael Kanin

 

City of Austin officials Friday cut fee waivers awarded to White Lodging Services Corporation as part of a development agreement for the construction of a new Marriott hotel at Third Street and Congress Avenue. The ruling, which comes from Assistant City Manager Anthony Snipes, requires the firm to repay all fees waived thus far and halts any additional fee waivers from the date of the letter.

 

Neither the amount of waivers doled out to the firm as of Friday, nor the figures for how much remained were immediately available. In all, City Council members approved $3.8 million in fee waivers for the project.

 

The news came as accusations from three entities brought the simmering fight over the construction of the project to a new level Friday.

 

Officials with the Workers Defense Project filed another formal complaint against White Lodging for alleged violations of prevailing wage agreements associated with the deal. Their action comes as the International Brotherhood of Electrical Workers Union Local 520 office also filed a separate complaint Friday against the Marriott project for five electricians reportedly not paid prevailing wages associated with the project.

 

The filings mark the second and third official wage action taken by Workers Defense on behalf of project construction workers the organization claims are being underpaid in accordance with a development agreement between the City of Austin and White Lodging.

 

Workers Defense and the IBEW also filed complaints with city Code Compliance over what they say is a failure by two project subcontractors to provide what under city law are adequate rest breaks to project construction workers. That was followed by a complaint to the federal Occupational Safety and Health Administration over what Workers Defense says is a lack of water at the site.

 

Further concern came from area minority contractors. Paul Saldaña told In Fact Daily Friday that the project had zero percent participation in all minority categories in an April report. “They haven’t been submitting their monthly reports as part of the third party agreement in the ordinance,” Saldaña said. “They have not made any outreach or demonstrated good-faith effort to ensure there is opportunities for local small, minority, and women-owned businesses…(and) to our knowledge – to my knowledge – they have not made any contact with any of the minority trade associations about contracting opportunities.”

 

Saldaña continued. “Again, this is yet another part of the ordinance agreement that Council approved.”

 

White Lodging President and CEO for Investments and Development Deno Yiankes continued to defend the project against what he called “baseless” accusations. In an email statement received by In Fact Daily late Friday, Yiankes referenced a recent court denial of a Workers Defense request for a deposition of a high-ranking White Lodging official.

 

“We were pleased with the court’s swift and clear response to deny the Workers Defense Project’s claim,” he wrote. “The claim was without merit and the court agreed. Continued baseless claims will not deter White Lodging from bringing this $300 million JW Marriott Convention Center Hotel, which with 100,000 square feet of meeting/exhibit space, will make Austin, Texas one of the leading cities in the United States for major conventions.  The project is creating thousands of construction jobs for the city and will permanently employ over 750 people once we open in the Spring of 2015.”

 

Yiankes was not immediately available for comment on the fee waiver revocation.

 

The issue centers on a series of interpretations about what, exactly, City Council members and White Lodging officials meant when they accepted the terms of the agreement – specifically the meaning of the term “prevailing wage.”

 

White Lodging maintains that an interpretation of the ordinance that establishes the development agreement it received from former Assistant City Manager Rudy Garza allows it to average calculations for prevailing wages. That approach saves the firm a significant amount of money.

 

Workers Defense argues that the city ordinance instructs White Lodging to pay individual prevailing wages. Their side of the debate is somewhat bolstered by a series of letters from the head of city contract management Rosie Truelove. There, Truelove seeks a raft of payroll information from the firm. She also writes that they should pay back wages owed to form carpenters. (See In Fact Daily, June 6)

 

Truelove issues an ultimatum. “Failure to comply with this request will result in my notification to Mayor and Council of White Lodging’s failure to comply with the City’s prevailing wage requirements associated with the (project),” Truelove writes. “As a result of this failure to comply, White Lodging would need to reimburse the city for all development fee waivers provided.”

 

The Workers Defense complaint references the situation. “Considering that, at the present time, White Lodging’s fee waivers have not been reimbursed to the city, we would like to formally file prevailing wage complaints on behalf of the glaziers (glass-workers) on the project,” writes Workers Defense Business Liaison Gregorio Casar in an email. “These glaziers are making $7.80/hour less than the established rate. The company on the project is WinCon. These complaints should be considered in addition to complaints filed by the form carpenters.”

 

Casar further suggests that his new complaint could be beneficial to city interactions with White Lodging. “We believe that this additional formal complaint will assist the City in bringing White Lodging into compliance with the ordinance, whether it is through full payment to workers, or through termination and clawback of the fee waivers,” he writes.

 

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