RANDY GORDON

Hoteliers to City: Stay Out of our Business . . . Unless You’re Bankrolling It
By Dave Wielenga

“City government needs to stay out of private-sector business!” declares Randy Gordon, his tone strong and terse, as though he really means it. That’s the way Gordon says just about everything.

A powerfully built man whose comfort in a good suit somehow makes him seem even more so, Gordon is a familiar figure—and voice—at City Hall, where he unapologetically pushes the agenda of the Long Beach business community with all available force. That’s his job as the president and CEO of the Chamber of Commerce. He does it well.

Consider the case Gordon makes for completely rejecting—and leading the fight to overturn—the Labor Peace Agreement recently passed by the Long Beach City Council.

“The ordinance,” Gordon says simply, “is anti-business.”

The Labor Peace Agreement would give lowly paid workers in hotels located on city-owned land—for now, that’s just the Hyatt Regency and the Airport Marriott—the right to join a union in exchange for the promise not to strike. The idea is to protect Long Beach’s tourism-based economy from the specter of picket lines, clenched fists and chants while improving the lives of the people bussing tables and making beds.

“That’s just a smokescreen for city government intrusiveness,” scoffs Gordon. “This ordinance would have a major effect on the future development of new hotels on city property.”

So, what else is new? The involvement of city government—in the form of multi-million-dollar sweetheart deals—was crucial to the development of the Hyatt and Marriott in the first place. That’s how Long Beach lured those giant corporations to town in the 1970s and 1980s.

But Gordon has no objection to that kind of government intervention.

“It was probably the only way to bring hotels to Long Beach at that time,” Gordon reasons. “Remember how Long Beach was back then? Nobody wanted to come.”

Long Beach changed Hyatt’s mind by contributing $6.7 million in subsidies from the city’s Tidelands Trust to construction costs. The handouts didn’t stop there. The city secured for Hyatt a $3 million federal grant and charged the company just $200,000 a year in rent for 8.5 acres of waterfront land. In return, the city intended to profit from bed taxes, parking fees, percentages of the hotel’s net income and the like. Official projections estimated that in the first 10 years after the Hyatt’s 1983 opening, Long Beach would make at least $21 million and possibly as much as $50 million.

Instead, Long Beach lost big-time. By 1994, the Hyatt hadn’t paid a penny on rent and, with interest, owed the city $27 million.

The hotel hadn’t paid its mortgage, either, and defaulted on its $55.7 million loan from Mitsubishi Bank, which was moving to foreclose.

How did the city respond?

Not by staying out of the private sector.

First, city officials helped Hyatt negotiate with Mitsubishi, which forgave $24 million of the hotel’s debt. Then, the city simply allowed Hyatt to skate on $24.3 million of the money it owed Long Beach taxpayers.

Gordon knows this story and where you’re going with it, but although he listens politely it’s obvious that he’s not going along.

“I wouldn’t call that government intrusiveness in the private sector—I would call it government supportiveness,” Gordon says steadfastly. “That was an example of a pro-business City Council supporting the private sector in a positive way.”

Theoretically, councilwoman Suja Lowenthal—whose Second District includes the Hyatt Regency—agrees. “It’s pretty well accepted that when a city wants to encourage development—when a city considers development in the best interests of its citizens—a city will often provide subsidies,” she says.

But Lowenthal insists that the same theory applies to the Labor Peace Agreement. “It is an ordinance that is in the best interests of our citizens,” she says. “It is a quality-of-life issue for hotel workers, and an issue of economic stability—eliminating the possibility of strikes—for our city.”

The City Council approved the Labor Peace Agreement in January after more than a year of exhaustive negotiations among politicians, business and labor groups. The final version underwent four rewrites and survived seven votes by the City Council and one veto by Mayor Bob Foster, who went on to mediate the final compromise.

But when it was finally passed, Gordon marshaled the Chamber of Commerce’s Hospitality Alliance—a subset of hoteliers—to kill it. Chamber money was used to pay street teams for every signature they could get in support of suspending the Labor Peace Agreement until a public referendum could be held. They succeeded, and the Labor Peace Agreement is dead, at least until an election in February of 2008.

According to Gordon, the city’s hotels already have labor peace. “Operations at non-union hotels in Long Beach have not been disrupted for more than 30 years,” he points out. “Employees at the Hyatt and Marriott are obviously very satisfied with management.”

Of course, workers at non-union hotels who might express dissatisfaction with management or move to organize a union probably wouldn’t be working at those hotels very long.

“Most likely, they’d be terminated,” says Ada Briceño, president of Unite Here Local 681, the Long Beach-Orange County hotel workers union that participated in negotiations over the Labor Peace Agreement. “People have to be quiet about that at work, but we get lots of phone calls.”

Briceño says the average wage of non-union hotel employees—such as housekeepers, bell men, servers, cooks, dishwashers—is about $8 an hour, which requires many people to work multiple jobs and makes health insurance unaffordable.

As Long Beach has transitioned to a tourism economy from a manufacturing economy, these are the jobs that have replaced the city’s formerly highly paid, well-insured, unionized workforce. The result has been an increase in the poverty rate and a strain on city-funded services, such as health care.

“We’re trying to raise the standard of living in Long Beach,” says Gerrie Schipske, Fifth District city councilwoman, who supports the Labor Peace Agreement. “These hotels are on city-owned land, and the terms of the leases should benefit the people of the city.”

Adds councilwoman Suja Lowenthal: “The Chamber of Commerce doesn’t complain when its members are the people benefiting by receiving city subsidies.”

Gordon is intransigent.

“I simply don’t buy the comparison,” he says. “When the city subsidized those hotels, it was a subsidy that everybody was doing. This Labor Peace Agreement is something different.”

Not that different. The city of Los Angeles already has one.