Union Puts the Squeeze on Tax Breaks

The only thing worse than giving developers subsidies is a union’s threat to stop the giveaways

"Very seldom could you pull off an accord in a project if every time you had to wait for some kind of public referendum. The timing justdoesn't work."

A petition drive under way right now in Dallas calls for a citywide election on tax subsidies from City Hall to developers. I'm amazed I'm not for it.

Show me a New York-based labor union backing a referendum on subsidies to developers, I should be looking at Christmas. I'm a lefty, pro-union guy with a strong bias against taxpayer giveaways. I ought to love this stuff.

Somehow the people behind the referendum on subsidies for developers don'tcome across like your typical civic activists. In fact, we are reminded of other,even older professions.
Somehow the people behind the referendum on subsidies for developers don'tcome across like your typical civic activists. In fact, we are reminded of other,even older professions.

Instead I'm getting a really bad odor.

A good public conversation about City Hall's habit of giving away our tax money is one thing—all to the good. That's not what I smell here.

Instead, I remember my best friend in junior high school in Michigan whose dad owned a big tire store on Woodward Avenue in downtown Detroit. The Teamsters were trying to organize the employees, and his dad was fighting it.

One day a guy in a bad suit with a bent nose came in, looked around the showroom with his hands in his pockets and a cigar in his mouth, and said, "Youse got a lot of windows in this joint. They could get broke youse ain't here one night."

That's what this smells like to me. You be the judge.

Unite Here, a national union representing service industry workers, is funding a petition drive to force a referendum in Dallas on all taxpayer subsidies to developers of more than a million dollars. In other words, if they get enough signatures, and if we have an election, and if their thing passes, then forever afterward any time the city council wants to give away more than a million dollars to a developer, we residents will have to vote on it.

Unite Here has been talking to the Dallas City Council about its desire to represent employees in a planned, city-owned convention headquarters hotel. It is also a pioneer in what are called "corporate campaigns" and the use of nontraditional pressure tactics.

Unite Here is being sued in federal court in New York by Cintas, the largest uniform supplier in the country. Cintas, a NASDAQ-traded firm headquartered in Cincinnati with $3.9 billion in annual sales, has accused the union of racketeering and extortion.

For a group that wants to be involved in the local political process, Unite Here has an odd way of conducting itself. I spent a week calling and e-mailing union officials here and in New York. Some guy in their New York press office kept telling me he was looking for someone who could answer my questions—I hadn't asked any yet—but he never got back to me. Their lawyer in Dallas did talk to me and promised to find someone who would call me back, but nobody ever did. A lady in the local union office answered the phone, told me the president of the local wasn't around, then switched me to the president's voice mail message, which sounded a whole heck of a lot like the lady who just answered the phone.

C'mon. What are these people, carnies?

Unite Here was formed in 2004 when two unions merged—the Union of Needletrades, Industrial and Textile Employees and the Hotel Employees and Restaurant Employees International Union. The union says it has 450,000 active members and represents 400,000 retirees.

There are serious, legitimate ways to go about reforming the process by which city tax subsidies are granted. This is not one of them. This is a way to kill all subsidies.

I think subsidies are a problem. We're talking about deals like the one in 2005 where the city council gave Hunt Oil (Ray Hunt) $6.3 million as an "incentive" for building a new 15-story $120 million headquarters building on the Woodall Rodgers Expressway at Akard on the north end of downtown.

Problem? Yeah, problem. Hunt was already committed to building the thing when the council gave him $6.3 million in tax dollars. So why did he need an incentive?

That's a fair question. It seems right and appropriate that we taxpayers get a chance to hear the full story on deals like that. But there's a big catch here. If the city had to call an election every time it wanted to give a developer a serious incentive, the city wouldn't be able to give incentives at all. Why? Because no developer would stick around for the election.

Let me put it this way. Think of the city as a young gentleman and the developer as a young lady, and the two of them are sitting in a bar. The young lady indicates she might be willing to come visit the young gentleman's apartment. He says, "Great. But I have to clear it with my parents first."

Very nice thought, I suppose. But the visit is not going to be, shall we say, consummated. Ever.

I discussed this idea last week with Larry Beasley, an urban development expert from Canada who had just been here the week before to address the Dallas City Council on inner-city development. Beasley has worked development deals from both ends of the room, as a city planning director in Vancouver and as a private developer.

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