CITY HALL — The City Council Tuesday compromised on a living wage for future workers at a new hotel slated for 710 Wilshire Blvd., leaving neither business interests nor labor advocates happy.
In a 4-3 vote, the council approved a wage rate of $11.29 or $12.54 per hour, depending on whether workers also received benefits. Tipped workers were excluded from the provision.
The rate was a midpoint between developer Alexander Gorby’s initial offer of $10.64 and $11.89 per hour depending on benefits and a flat $14.97 per hour that workers rights advocates sought.
The agreed-upon rate is still below the $13.54 per hour that outside groups pay their workers when they contract with City Hall.
Councilmembers Terry O’Day, Kevin McKeown and Mayor Pro Tem Gleam Davis voted against the measure on the grounds that hotel workers in the new jobs wouldn’t be able to afford to live in Santa Monica, and would instead have to travel from outside the city’s borders to serve wealthy clientele.
“The council majority has created low-wage jobs and further institutionalized the working poor in Santa Monica,” McKeown said.
Those in the majority worried that a higher wage would sink the project that’s anticipated to bring in an estimated 267 jobs, $31 million to city coffers over the next 10 years and an $11 million restoration of a landmarked structure.
The developer and a team of experts reinforced those fears by reminding the council that the extra money involved could be the deciding factor between a project that can get financed and move forward, and one that can’t.
“It’s important to look at the data that’s been provided on the topic and make an informed decision, not an emotional decision or a political decision,” said Kenneth Kutcher, a land-use attorney representing Gorby.
Councilmember Bobby Shriver, for one, wasn’t buying it.
A rough estimate of the numbers involved pointed to a $57 million profit in the first year of operation, Shriver said.
“For me, that’s an important factor, because the concept of this onerous burden by a living wage or that the project might not get built because of it seems a little whimsical to me,” Shriver said.
Shriver ultimately put forward a motion that would have locked in the wage rate at the city-mandated $13.54 per hour without benefits and $12.29 with benefits. That failed, however, other requirements passed, including a provision requiring the developer to use local artists for the hotel, stressed local hiring for both construction and permanent jobs, locked in a 290-space minimum for the underground parking and ensured that internships offered through the project went to Santa Monica residents.
Over 25 members of the public came to advocate for the living wage provision, many of whom work at unionized hotels in Santa Monica like the Fairmont Miramar & Bungalows, Loews Hotel, the Viceroy Hotel and the Sheraton Delfina.
They were to be disappointed.
“They did not listen to the needs of the people,” said Lorena Samoya, an employee at the Fairmont Miramar.
McKeown echoed her comments Wednesday, and pointed out that a living wage in Santa Monica is “good for the whole community.”
“The outcome on this project falls woefully short of a living wage — not only in amount, but in the exemption of tipped workers, who must now rely on uncertain customer generosity to cover the certainties of family rent, food, and medical expenses,” McKeown wrote in an e-mail.
The night was a recap of a divisive fight in the early 2000s between hotel and business interests that called itself FAIR (Fighting Against Irresponsible Regulation) and a group of residents and activists called Santa Monicans Allied for Responsible Tourism.
The City Council approved a living wage ordinance in 2001 that would have mandated businesses near the coast with annual revenues in excess of $5 million to pay their workers a minimum wage between $10.50 an hour with benefits and $12.25 an hour without.
Before it took effect, FAIR launched a campaign against the ordinance and won the right to put it on the ballot for the following November.
The initiative, called Measure JJ, was narrowly defeated 13,930 votes to 12,990. Activists believed it had been derailed by a series of three deceptive mailers.
Ron Davis, chairman of the Santa Monica Chamber of Commerce, warned the council to avoid a repeat of that episode.
“Wages should be set by the market with the exception of minimum wage laws created by federal and state governments,” Davis said.
The living wage attached to the agreement will come into effect only after the hotel is ready for guests, and will last for 15 years.
It could still become null and void, however, depending on what happens with two pending development agreements for a Courtyard by Marriott and Hampton Inn slated for the intersection of Fifth Street and Colorado Avenue.
The living wage provision in the 710 Wilshire project’s agreement states that the developer can ax the requirement if any hotels with applications in as of Jan. 23 for a development agreement slated for Downtown are not also required to offer a living wage.