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Monday, February 3, 2014 by Michael Kanin

Groups petition federal court to join city’s White Lodging lawsuit

An attorney representing the Workers Defense Project filed legal documents Saturday that ask a U.S. District Court judge to allow the workers center and the Save Our Springs Alliance to become party to ongoing legal action between the City of Austin and White Lodging Services Corporation.

 

In the documents, Brian McGiverin of the Texas Civil Rights Project argues that Workers Defense and Save Our Springs offer a view of the situation that city attorneys could not otherwise extend. “The Petitioners are neither developers nor the City,” writes McGiverin. “Their interests are neither permanently aligned nor opposed to either the City or entities that petition it. Rather, the Petitioners ask to file their brief on behalf of the City in order to protect transparent government.”

 

The dispute at the center of the legal action is over a package of fee waivers offered by the city to White Lodging to help lure the construction of another convention-capable downtown hotel. The city pulled those incentives after Workers Defense complained that not all construction laborers on the project – a J.W. Marriott Hotel at Third Street and Congress Avenue – had received prevailing wages, as was eventually stipulated by the development agreement.

 

White Lodging then sued the city. In their suit, White Lodging attorney J. Bruce Scrafford with Armbrust & Brown took a much broader tack, arguing that right of way fees typically assessed to construction projects as they take over city space for building are unconstitutional.

 

Should the court accept the argument that Workers Defense and Save Our Springs can offer their take on the situation, McGiverin has prepared an amicus brief that lays out their position. In it, he rehashes a bit of painful history surrounding the White Lodging deal.

 

“All of White Lodging’s arguments ultimately hinge on its staffers’ interaction with Rudy Garza, an assistant city manager who left the city shortly after taking the unlawful action that provides the basis of the Plaintiffs’ lawsuit,” reads the brief. “The Austin City Council passed an ordinance in July 2011, which essentially told White Lodging there was a $3.8 million pot of money available to them, but if they drew on the money, they would be required to pay their workers prevailing wages…White Lodging argues that the term ‘prevailing wage’ was ambiguous, and therefore, it had to seek clarification from Rudy Garza.”

 

McGiverin then turns to the meat of his argument: “But there is one problem: even if you assume that White Lodging’s obligation to the city was ambiguous, you must still concede the ordinance clearly involved an exchange of some sort,” he continues. “That section of the ordinance asked White Lodging to do something in return for that money. But White Lodging approached Garza with an interpretation of the prevailing wage section of the ordinance that would have made it meaningless, because it would create no obligation – destroying any notion of reciprocity. The term White Lodging used in their correspondence, ‘anticipated targeted average wage rates,’ is intentionally misleading and an obvious attempt to evade the transactional nature of the (agreement).

 

“White Lodging was acting in bad faith,” McGiverin concludes, “there is no way they could have believed the ordinance was offering them $3.8 million in return for doing nothing.”

 

McGiverin then turns to the Texas Open Meetings Act, and argues that the White Lodging interaction with Garza – an email exchange – “amounts to a secret meeting (that) conflicts with the Open Meetings Act and the power vested exclusively in the City Council by Austin’s City Charter.”

 

Whether or not McGiverin’s motion is granted – and the court entertains his amicus brief – the case seems set to remain hot. During Thursday’s Council meeting, Council Member Kathie Tovo entertained the idea of halting an agreed-upon reimbursement of $295,000 for the construction of a chiller facility at the Marriott.

 

Tovo questioned both Austin Energy officials and the attorney representing the city in the White Lodging suit about whether the city should withhold the reimbursement in light of the ongoing dispute. City legal representation suggested that the two issues were separate, and urged Tovo to leave them that way.

 

In the end, her colleagues agreed and all but Tovo voted to approve the reimbursement.

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Key Players & Topics In This Article

Armbrust & Brown: law practice based in Austin. Armbrust & Brown has donated to the Capital of Texas Media Foundation.

Texas Civil Rights Project: A nonprofit that provides free legal assistance and education to low-income individuals.

Texas Open Meetings Act: The Texas law that requires government decision-making to be open to the public.

White Lodging/JW Marriott

Workers Defense Project: A nonprofit advocacy group that provides resources to ensure low-income workers fair employment.

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