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Cal Coast ENRA October 20, 2008 Legal counsel recommends the following language which is included in the ENRA being presented to the City Council for approval. 19. Execution of Defmitive Agreement (iii) Developer shall meet with labor union and trade organization representatives and shall use reasonable best efforts to negotiate terms that will promote labor harmony with respect to the construction and operation of the Project. Cal Coast has agreed to accept the revised language and agrees to use good faith efforts to negotiate with labor representatives in efforts to promote labor harmony in connection with the development and operation of the project. Staff concurs with legal counsel and Cal Coast that the language proposed by the Building Trades Council is premature and recommends the best effort language proposed by legal counsel. Staff is also concerned with the vagueness of the language as it is unclear what would occur if the Developer and unions are unable to reach an agreement. In an effort to evaluate what other cities are doing, staff diligently researched other cities to discover what type of labor harmony language agencies are including in agreements and to analyze the impact of the language on projects. UNITEHERE! (a labor union representing the hospitality industry) staff provided examples of language and background information. Research was gathered on the following California agencies: • City of Pasadena 2008 RFP for a convention center hotel included a provision that anticipates labor peace language may become part of a future agreement. • City of Mountain View 2008 RFP for a hotel included a requirement for a MOU between the hospitality union and the developer prior to a lease agreement being signed with the City. Project terminated. • Port of San Diego 2000-2001 RFP for a hotel gave preference to a proposal that reduces the risk of labor strife. Hilton is scheduled to open 1,100 rooms in late 2008/early 2009. Hilton entered into a private agreement with the union which prohibits strikes or picketing in exchange for rights to organize. The appropriate City of San Diego staff person has not yet been located in order to evaluate the benefits and drawbacks that this language had on the project. • City of Seaside 2004 Ordinance requires collective bargaining in hospitality projects where City has interest. No hospitality projects have been completed or are under construction since passage of the ordinance. City of Marina 2001 Ordinance requires collective bargaining in hospitality projects where City has interest. No hospitality projects have been completed or are under construction since passage of the ordinance. • City of Millbrae 1998 hotel development agreement required union labor and resulted in a dispute over use of local vs. state labor resources. Local bids were high which contributed to the project not being developed. Development agreements now include language that requires developer to comply with California state prevailing wage requirements. • City and County of San Francisco 1997 Ordinance includes labor representation procedures in hotel and restaurant developments which the City has interest. As laws have changed, the legality of the ordinance at this time is called into question. 3