By Matthew Holloway |
The City of Glendale’s Proposition 499, the “Hotel and Event Center Minimum Wage and Wage Protection Act,” was soundly defeated on Election Day. The defeat was a rebuke to Worker Power, a California special interest group seeking “economic justice and the preservation of democracy.” Prop 499 was met with staunch opposition in Glendale from the coalition “Save Glendale Jobs,” funded by hospitality industry leaders and supported by three Glendale Councilmembers Lauren Tolmachoff, Joyce Clark, and Vice Mayor Ian Hugh.
The ballot measure would have mandated “hotel and event center workers receive a $20.00 per hour minimum wage (increases annually), service charge payments and premium pay to be enforced by a newly created city department of labor responsible for investigating employer violations involving payment of wages, reporting, recordkeeping, and overtime requirements.”
Hotel developer Chris DeRose, president of CivicGroup LLC, a firm seeking to bring a LivSmart by Hilton Hotel to downtown Glendale, was joined on a conference call prior to the vote by Clark, Hughe, Tolmachoff and Councilmember-elect Dianna Guzman. DeRose explained the serious problems that the proposition would cause for the burgeoning West Valley City, deep in an extended project of downtown revitalization as well as business owners.
“We’re in the process of taking that out to capital. Then we get a proposition that gets ballot access that threatens to upend all of our economic modeling and throw uncertainty into the whole project,” DeRose explained.
“Unfortunately, that’s frozen us in our tracks because whether you’re talking to a bank or you’re talking to investors, they want to know, ‘Hey, what’s the labor cost here?’ For a hotel, your number 1 expense, especially in a limited-service model where you don’t have F&B, it’s salary for staff. And so, this proposition has created uncertainty, and we’re not able to answer those very basic questions right now. And as a result, we’re not able to move the project forward.”
He added that the proposition appeared to be a “Trojan horse.”
“What’s really unusual about this, it’s a minimum wage that’s really – it’s a proposition that is disguised as a minimum wage. The minimum wage part is the Trojan horse.”
“The problem is that there’s actually a cap on productivity and that is unprecedented. I don’t know of another jurisdiction in America where you have a cap on productivity and in this case it’s 3,500 square feet, which is about 10 hotel rooms.”
Councilmember Clark noted the serious impact the proposal could have had on Glendale’s competitiveness in attracting businesses saying, “I think it’s important to note that Glendale will be the only city in the state to mandate $20 an hour. And overtime, it’s more than that. It’s $40 an hour, which people are not paying attention to. It puts Glendale at a competitive disadvantage with every city in the state and the Common Sense Institute says that it may cost Glendale anywhere from a million dollars on up annually just to regulate this and in lost revenue from other projects that may have considered locating in Glendale.”
Councilmember Tolmachoff expressed concerns about navigating the regulatory mandate the city would be required to assume saying, “To put the city in a position to be a regulatory authority and to have to intervene and interact between a civil disagreement between an employee and an employer is absolutely no place for a city to be.”
Save Glendale Jobs Chair Kim Grace Sabow said in a statement after the proposition’s defeat:
“I extend my sincere appreciation to Glendale voters, who chose to preserve and protect the jobs our industry creates. I want to thank the many supporters of our effort, without whom this result would not have been possible, including key business leaders, elected officials, and law enforcement. I also want to thank our dedicated campaign team, which expertly managed every aspect of this campaign, and our volunteers, who spread the word across the city about how damaging this measure would be. Together, we formed a mighty coalition.
“I am thrilled for Glendale, which I am certain will not only continue to grow and create more outstanding destinations, attractions, and experiences for visitors but will also continue to deliver more great jobs and career opportunities for Glendale residents.”
According to Maricopa County Elections, the proposition was defeated by 15.32 pts., or approximately 10,338 votes as of this report.
Matthew Holloway is a reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
