Friday, October 18, 2019 by Jo Clifton

Pool asks whether city should sell Hilton property

More than 30 members of UNITE HERE Local #23 came to the Council meeting Thursday to show their support for an item on the agenda asking the board of Austin Convention Enterprises to rewrite its agreement with management of the downtown Hilton Hotel. The current agreement, which was signed in 2001, prohibits the hotel from allowing a union to organize and represent its employees. Those union members, many of whom work at Austin-Bergstrom International Airport, could not afford to wait until Council finished its marathon discussion about the camping-in-public ordinance.

Council approved that item in a unanimous vote, with Council Member Kathie Tovo absent for the vote. The resolution relating to the Hilton urges the ACE board to “strongly consider” approving a resolution allowing the hotel to negotiate an agreement with a union, as long as the union agrees not to strike, picket or “take other economic actions against the hotel.”

During Council’s 5:30 p.m. break, the Monitor had a chance to discuss the situation with Council Member Leslie Pool. Pool noted she had recently received a copy of a letter from attorney Peter Fischer to Mark Tester, director of the Austin Convention Center and president of Austin Convention Enterprises Inc. In that letter, dated Feb. 28, 2019, Fischer thanks Tester for selecting his firm, BakerHostetler “in connection with general labor relations advice involving hotel development.”

Fischer states that he will be “working on this case at a rate of $595 per hour,” with lower rates for associates. Pool said Austin Convention Enterprises is a spinoff from the city and she did not know why it needed a labor lawyer at that price. However, she added, “I know very little about the whole situation. But it would appear to me to be a very expensive hire. And I would ask why they believe they needed to have somebody so expensive and what is it about labor that they are afraid of?”

Pool said she doesn’t know a lot about the board of ACE, though City Council appoints the members. Those members will be recommending a new agreement between the city and the Hilton in the near future because the current agreement expires in 2021.

Pool said she wasn’t sure whether the city should continue to own the hotel. She suggested it might be a good idea to sell the hotel and use the proceeds to pay off the bonds. She said it might be possible to invest the money and make more than the city is currently making from the bonds. She estimated that the city currently makes about $2 million a year on the bonds. “We’d be divesting ourselves of a city asset, but I need to understand why we own the hotel in the first place,” she concluded.

Bo Delp, an organizer for UNITE HERE, provided his prepared remarks about the resolution to the Monitor. He said the hotel is projected to generate $32 million in revenue next year and the total projected interest for investors on the bonds backing the hotel is more than $100 million.

“So we were deeply troubled, and deeply disappointed, to learn that in the hotel operating agreement between ACE and Hilton, ACE required” that the hotel management not allow union organizing.

Delp added, “the city of Austin should have never entered into this operating agreement with language like this. The city of Austin should never be a party to any agreement that imposes a requirement to interfere with an object to a worker’s decision on whether to form a union.”

Council Member Greg Casar told his colleagues Tuesday, “This is actually about protecting our financial interests at the hotel by getting the same sorts of agreements that we’ve gotten at the airport and at the upcoming soccer stadium.”

Photo by LoneStarMike [CC BY-SA 3.0], via Wikimedia Commons.

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Key Players & Topics In This Article

Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.

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