Union Puts the Squeeze on Tax Breaks

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

I called him because he and other urban development experts who came here to speak to city council all had expressed various forms of skepticism about tax subsidies for developers. I even wondered if he would be supportive of the Unite Here initiative.

But far from that, he said he believes tax subsidies are one of several tools any competitive city must have in its arsenal in order to attract development. And he said the Unite Here initiative would effectively kill the use of significant subsidies.

"To be honest," he said, "and this is from my experience as a civic negotiator, 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 just doesn't work."

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.

Going back to my metaphor of the couple in the bar, most developers would develop a sudden headache and ask you to call them a cab.

"Time is of the essence," he said. "Let's say you had to wait six months for the next referendum. Numbers change. It's very expensive to hold an interest in land even on a short-term basis. Usually you have to pay hard cash for that."

He gave me several ideas—really interesting ones, I thought—for things the public could demand and maybe should demand in terms of information about subsidies, including asking to see a detailed pro forma.

In the Ray Hunt headquarters deal—this is my example, not his—the taxpayers should have been able to see a public report showing exactly what that deal was worth to the city in potential tax revenue, what was going on with comparable property nearby, what it was going to cost the city in infrastructure, and what was the likelihood, in the absence of a subsidy, that the property would be developed at the same level by somebody else.

Now there's a reform you could sink your teeth into.

Not this one. This one is not about helping you and me get a better handle on what City Hall does with our money. It's about bringing City Hall to its knees in a labor negotiation.

I spoke with Greg Utter, an attorney with Keating, Muething & Klekamp in Cincinnati, one of the firms representing Cintas in its suit against Unite Here. Utter told me Unite Here uses campaigns of public pressure to force companies to give up their right to demand a supervised union election.

"Typically the union knows that the employees don't want the union," he said, "and the union can't win an election if management asks for a normal union election through the National Labor Relations Board election process."

Instead, Utter said, Unite Here tries to force companies to agree to a "card-check" process and a "neutrality agreement" by which the company agrees not to oppose the union's organization effort. That means, instead of an election, the union can organize the company's employees simply by getting more than 50 percent of them to check "Yes" on a card. And the company has signed away its right to argue against any of what the union promises or alleges to workers.

The Cintas suit accuses Unite Here of conducting a campaign of terror and false allegations aimed at Cintas customers, stockholders and the general public. "So Cintas has gone through this for about five years now," Utter said, "and has decided enough is enough. We have filed a complaint in federal court in New York alleging that the union's daily barrage constitutes a campaign of extortion."

I contacted several lawyers who represent Unite Here in the lawsuit and heard back from none of them. But I did read their answer to the Cintas allegations against Unite Here, in the form of a motion to have the case dismissed, which is now under review by the judge. They cite both labor law and criminal law to argue that whatever Unite Here does, none of it rises to the level of extortion and all of it is fair play in labor law.

That's above my pay grade. It's what courts are for. What I notice in the Unite Here answer to the Cintas lawsuit is this: Unite Here does not even try to refute the charge that it uses collateral pressure techniques to bend management to its will. It just says the attack Web sites and the propaganda campaigns aimed at consumers and the efforts to undermine stock value are all fair play.

Maybe they're right. But you know what else is fair play? When these people started gathering petitions for an election, they stepped out of the courts and into the political arena. Our political arena.

Their lawyer in Dallas told me they may delay turning in their petitions. You know why I think they would delay? Because once they turn in the petitions, the process is set in motion and out of their hands. Then the petitions have lost their extortive value. Before they're turned in, the city could still cave to the union's demands, agree to card-check neutrality at the convention hotel, and the petitions could get lost in the river.

We know they could make trouble. We know we got a lotta windows in this joint. But I bet Dallas would rather see every damn window in the city smashed on the floor than give a single inch to this kind of crap.

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