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City of Austin, Texas to Audit White Lodging, Developer of the JW Marriott,
to Ensure Compilance of a Prevailing Wage Requirement Agreement
in Order to Receive $3.8 million in Waived Fees

By Shonda Novak and Marty Toohey, Austin American-StatesmanMcClatchy-Tribune Regional News

Jan. 13, 2013--The city of Austin will audit the company building a downtown JW Marriott hotel to ensure that it is sticking to the terms of an agreement to receive $3.8 million in waived fees.

White Lodging, the project's developer, agreed to pay its construction workers prevailing wages, which can vary depending on the market for construction jobs. City officials say they have no evidence the company has violated the agreement but say discussions with White Lodging last year left them concerned that the company is interpreting the prevailing wage requirement differently from the city.

City spokesman Doug Matthews said the city began the audit after calls from the American-Statesman about a complaint from a local electrical workers' union chief that workers would not be paid prevailing wages.

According to a Friday memorandum, confusion might have been caused by the direction of a former high-level city staffer who, in advising White Lodging on the finer points of the city's requirements, gave approvals that turned out to be "contrary to the (agreement) passed by the (City) Council."

White Lodging spokesmen said the company has met all the city requirements and welcomes an audit.

"Our general contractor has honored our prevailing wage agreement ... and fully anticipate honoring it through the remainder of the job," said Deno Yiankes, White Lodging's president and CEO of investments and development.

But Philip Lawhon, the local coordinator for the electrical workers' union, told the American-Statesman that White Lodging's general contractor informed electricians interested in working on the hotel that, when the electrical work begins, they would not be paid prevailing wages. The IBEW Local Union 520 has not filed a complaint with the city.

Three days after the Statesman asked the city staff if it had seen any evidence to support the complaint, the staff issued a memorandum stating, "This complaint reinforced our concerns regarding non-complaint activities occurring at the job site."

The $300 million Marriott is now a huge, fenced-off hole on the east side of Congress Avenue between Second and Third streets. When finished in 2015, it will be a 34-story, 1,012-room luxury hotel intended to bolster Austin's convention industry.

It is also a politically charged project because of the incentive agreement. The City Council agreed to waive $3.8 million in fees, and White Lodging agreed to pay its workers according to the city's standard for prevailing wages. The city's economic development office determined that the deal was a net plus to Austin's economy; critics claimed the city was giving away money because the hotel would be built anyway.


(c)2013 Austin American-Statesman, Texas

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