Hotel Online  Special Report


..

advertisement



San Antonio Convention Center Hotel Project Draws Lawsuit

SAN ANTONIO, Texas (April 25, 2005) -- The construction trades arm of the local AFL-CIO has turned to the courts in its push for workers who will build a Convention Center headquarters hotel to be paid the area's prevailing wage.

The San Antonio Building and Construction Trades Council sued the city in district court last week, accusing local officials of flouting state law.

In Texas, construction companies working on publicly financed projects have to pay their workers wages in line with what most other area laborers earn, even if public funding covers only part of the costs.

Although the project is being financed with private funds, the council's president, Bob Salvatore, contends some public money will be involved.

"They may not have a lot of real, hard dollars in this," Salvatore said, "but any way you turn and look, the city has a financial interest in this project."

He noted the city is paying attorneys and financial advisers to work on the deal, the project is tied to the Convention Center, and the bonds that will pay for most of the construction would have to be repaid with tax revenue if the hotel were to fail.

"I have no idea what they think the city's advantage is" in not seeking a prevailing-wage pact, Salvatore said.

Assistant City Manager Christopher Brady sees it as a clear-cut issue.

Brady, who's overseen negotiations with the Austin-based developer, said the city didn't pursue a prevailing-wage deal with FaulknerUSA because the 1,000-room hotel won't be built with public money.

"It's been our contention all along, as well as the developer's, that it's a private project," Brady said. "A private developer's building it, they're putting their money into it, and the bonds that are being used will be paid back by the hotel operations."

The hotel's construction is expected to cost $227.5 million, or about $12.5 million more than FaulknerUSA estimated when the council picked the contractor for the project last December.

The city will issue $130 million in federal empowerment zone bonds for the hotel, which will be attached to the Convention Center.

Revenue from the hotel would pay off the debt -- unless it's inadequate to make the payments to bondholders. In that case, the developer would turn to state sales and occupancy tax revenues, then local hotel taxes.

But Brady has said only a devastating economic downturn would lead to tapping the hotel's tax revenue.
FaulknerUSA officials declined to comment.

The Construction Trades Council filed the lawsuit April 14, the same day the City Council approved several ordinances related to the bond sale and agreements with FaulknerUSA. Losing the lawsuit, Brady said, could add to the project's cost and force changes in the city's deal with the company.

He declined to elaborate.

Plans call for the hotel to open in early 2008.

-----

To see more of the San Antonio Express-News, or to subscribe to the newspaper, go to http://www.mysanantonio.com.

Copyright (c) 2005, San Antonio Express-News

Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail [email protected].



Also See: City of San Antonio Selecting a Developer for $280 million, 1,000 room Convention Center Hotel / December 2004

FaulknerUSA Unanimously Chosen By San Antonio City Council to Build 1,000 room Convention Hotel; Commits $77.3 million to $215 million Project / December 2004

To search Hotel Online data base of News and Trends Go to Hotel.Online Search

Home | Welcome! | Hospitality News | Classifieds | Catalogs & Pricing | Viewpoint Forum | Ideas/Trends
Please contact Hotel.Online with your comments and suggestions.