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Oct
2015
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Developer Finally Agrees to Settlement with Austin City Council Over Prevailing Wage Violations

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The long-running dispute between White Lodging and the City of Austin came to an end last night when the Austin City Council announced an agreement with the company over its failure to make good on prevailing wage promises that were attached to tax incentives for a Marriott Hotel construction.  The Austin Chronicle had the pre-announcement scoop:

The long-running city dispute with White Lodging over fee waivers granted its Congress Ave. Marriott hotel project – in return for a prevailing wage structure on construction labor – will apparently end this week with White’s agreement to repay $2.4 million in previously waived fees…

…That’s Item 11 on the consent agenda, although the guess here is that somebody will at least want to note aloud the city’s legal and political victory. According to the backup, Council approval will accept “White Lodging Services Corp.’s payment of the total development fees owed,” since White “did not meet the conditions” required under the waiver agreement. White Lodging will also dismiss its lawsuit against the city over the dispute, and the city will dismiss its countersuit to collect the fees.

Our archives are replete with background on the situation, which featured a defiant White Lodging attempting to skirt prevailing wage law on the $300 million, 34-story project.  The city council had help from the increasingly powerful Workers Defense Project, which has received high praise from workers’ rights advocates and press outlets as large as the New York Times.

In a statement sent to the American-Statesman, White Lodging said:

“The fee waiver dispute was an unfortunate exception to what has otherwise been a great working relationship with the city.  We have been pleased with the city’s support and cooperation in our development of the hotel.  The reception of the hotel by visitors to Austin and local Austinites alike has been overwhelmingly positive, and we are pleased that we were able to settle the dispute by making a payment that will largely be used by the city on programs designed to develop and benefit the downtown Austin business district.”

According to city documents, the money will be split three ways: roughly $2.2 million will go to the Business Retention and Enhancement Special Revenue Fund; another $102,000 will go to the city’s general fund; and the remaining $114,000 has been earmarked for the Austin Water Utility Fund.  

The settlement is a victory for District 4 councilman Greg Casar, who acted as the spokesperson for the Workers Defense Project when they originally brought the complaint to the council.  Austin is developing incredibly quickly, so strong precedent for what will be required in exchange for tax incentives must be set.

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