It's too bad about the Gaylord Project
Bayfront Development Deal Crumbles Over Labor Impasse
Company pulls out of Chula Vista project
By Tanya Mannes and David Washburn
SAN DIEGO UNION-TRIBUNE STAFF WRITERS
July 7, 2007
A redevelopment deal that would have erased decades of failure to build up the Chula Vista bayfront – and made the city a big player in the national convention business – is dead.
Citing an inability to reach an agreement with local unions after more than a year of negotiations, Gaylord Entertainment said yesterday that it will no longer pursue a plan to build a $1 billion hotel and convention center on the city's long-vacant bayfront.
The Tennessee company's decision marked a stunning reversal of fortune for a deal that Chula Vista Mayor Cheryl Cox just months ago called “the most realistic and realizable plan for the bayfront that I've seen in more than 30 years.”
While Cox and other city officials joined Gaylord in blaming unions for the deal's demise, local labor leaders, along with Rep. Bob Filner, D-San Diego, said the company's intractable negotiating stance and Cox's poor leadership led to its unraveling.
Cox said Gaylord CEO Colin Reed called her yesterday afternoon from Nashville to tell her the news.
“He said he cannot subject his company to the disruption and blackmail of organized labor and must move on,” she said during a hastily arranged news conference on the steps of City Hall. “This opportunity has now been chased away.”
Labor leaders, in their own telephone news conference, said they had made numerous concessions in recent weeks, and in the end had required only that Gaylord hire workers – and not necessarily union workers – from the San Diego area.
“We are disappointed that Gaylord Entertainment has abandoned this project because we weren't willing to sacrifice local men and women,” said Tom Lemmon, business manager for the San Diego Building and Construction Trades Council.
“It is Gaylord's choice,” he said. “They are walking away because they are not willing to build a project that works for the entire community.”
Since Gaylord approached Chula Vista in 2005, city and Port of San Diego officials have touted the project's potential benefits: a 10 percent boost in city revenue; 3,000 new, permanent jobs; and a springboard for other commercial and residential development.
“After over a year of unproductive discussions with the San Diego Building and Construction Trades Council, we have concluded that their unwavering, unreasonable demands render the project unfeasible for our company and our shareholders,” the letter states.
Gaylord wasn't required to reach a labor agreement with the unions, but Westbrook said in the letter that without a deal, “the Trades Council, working in conjunction with the Environmental Health Coalition, has made it clear that it will take steps to disrupt the project” through lawsuits and bad publicity.
Lemmon and Jennifer Badgley, of the International Brotherhood of Electrical Workers, said Gaylord, not the unions, refused to negotiate in good faith.
They said the unions made a series of concessions in recent months concerning union labor on the project, and only refused to budge on the requirement that Gaylord hire local workers.
“At the end of the day, it came down to Gaylord's unwillingness to commit to local hires,” Lemmon said.
Joining the union leaders were Filner and Laura Hunter of the Environmental Health Coalition.
Labor “went more than halfway” and shouldn't take the fall, Filner said. He blamed Cox and other elected leaders for letting the deal slip away.
“I was shocked that it was only labor fighting for the jobs, not the political leaders,” Filner said. “The city of Chula Vista was looking for a scapegoat, not to take a leadership role.”
Since the early 1970s, South Bay leaders have tried but failed to clean up and develop 550 acres of largely port-owned industrial and marsh land that stretches from the Sweetwater Marsh Wildlife Refuge to just south of the South Bay Power Plant.
Gaylord's project would have been huge, with up to 2,000 hotel rooms and 400,000 square feet of convention space that would have bordered on new public parks.
After a year of preliminary talks, Gaylord entered formal negotiations with Chula Vista and port officials in July 2006 regarding the terms of a $308 million public subsidy, probably paid through bonds and revenue generated by the development.
At the same time, the company began talking with labor groups about a projected 6,500 construction jobs.
Westbrook said the unions insisted on bidding restrictions that would have increased the building cost by $50 million to $75 million. The restrictions would have prevented the company from seeking nonunion bids on most jobs, he said.
Lemmon and Badgley called Westbrook's statements “inaccurate.”
Lemmon said union leaders were willing to relax the bidding restrictions that Westbrook called deal-breakers. He also said they were ready to take out “the union security clause,” which would have guaranteed that project workers be unionized.
Lemmon and Badgley said Gaylord officials spent little time in the room during the final negotiating session June 29, and in the end walked out without saying anything.
“We clearly do not deserve the onus of responsibility for Gaylord deciding not to build here,” Badgley said.
Cox said the city and Port Commission remained neutral in the labor talks until last week, when Gaylord's June 30 deadline passed without an agreement. This week, she said, officials tried but failed to reopen negotiations.
“Reasonable people acting responsibly should have been able to work something out,” Cox said yesterday.
In a telephone interview, Westbrook said the company's decision was difficult – and final.
“We've been overwhelmed by the support we've received in the Chula Vista community and the San Diego region,” he said. “We're very disappointed in this outcome.”
Chula Vista Chamber of Commerce CEO Lisa Cohen, who has been a vocal booster of the project, was distraught that a “golden opportunity” was lost.
“It's a sad day for Chula Vista,” she said at the news conference with Cox. “We opened our arms to Gaylord, we were very excited, and now we're devastated and shocked.”
Port Commissioner Mike Bixler said the demise of the deal is “an economic tragedy for the South Bay and San Diego County.”
Other officials expressed regret, but said they remain hopeful that another developer will come along for Chula Vista.
Possible candidates could include John Moores' JMI Realty and Manchester Resorts, owned by Doug Manchester, both of which submitted bids that lost out to Gaylord's.
JMI President John Kratzer said he wasn't surprised the deal fell through, given its scope and the difficulty of developing in California. He said JMI might consider resubmitting its earlier, “less ambitious” proposal.
“I think we will have to let all this settle down and shake out,” Kratzer said. “But if the port and the city decide they want to solicit new proposals, we would certainly re-evaluate our proposal.”
A representative for Manchester Resorts didn't return a call for comment.
The San Diego Chargers organization is looking for sites for a new stadium and has focused on land in Chula Vista and Oceanside. Cox said it's too early to speculate as to whether Gaylord's announcement will affect that search.
Port Commission Chairwoman Sylvia Rios issued a statement in which she said the announcement was “devastating,” but that she won't give up.
“We must now look to the future,” Rios said. “It is only prudent that the port and the city of Chula Vista begin a review of alternatives to attract another anchor project that will act as an economic catalyst for the bayfront plan.”