Hotels Cease Prop KK Campaign; Opponents Skeptical

By Jorge Casuso

Less than two weeks before the election, the major supporters of the nation's first business-backed living wage measure announced that they have suspended their campaign activities, a last-minute change of strategy that has left opponents skeptical.

In a letter to Mayor Ken Genser released Friday, Edward Thomas president Tim Dubois said his company -- which is the biggest contributor to the measure --, along with industry allies, was responding to "positive actions taken by the Council during the public hearing on September 28."

"We at the Edward Thomas Companies hope that in responding to the City's overtures of continued open discussion, we can sow the seeds that will bear fruit in the form of working together to find a solution to the issue of the working poor," Dubois wrote in the letter dated October 25.

"The campaign has been, and remains to be, about the means by which the issues affecting the working poor can be fairly, equitably and legally addressed," Dubois wrote. "If the Yes on Proposition KK effort has done anything, it has succeeded in making a large portion of the Santa Monica electorate aware of the complexities and the gravity of the issue involved. In this regard, it has been a singular success."

The surprise announcement by the Edward Thomas Companies -- which owns the Shutters on the Beach and Casa del Mar hotels -- comes after the firm pumped $403,828 into the hotly contested campaign, which has raised a total of $922,779 from a handful of beachfront luxury hotels.

If approved by voters on November 7, Prop KK would preclude the City Council from passing any living wage measure, including a pioneering ordinance the council is currently considering that targets hotels in the coastal zone. The ordinance would be the nation's first to require that businesses with no municipal grants or contracts pay workers a living wage, in this case $10.75 an hour.

Opponents of Prop KK, who contend the measure is a "Trojan Horse" that would cover as few as 62 workers in companies with City contracts, were skeptical.

"I think they read the polls and found they were losing," said Vivian Rothstein, an organizer for Santa Monicans Allied for Responsible Tourism (SMART), the group that crafted the proposal being studied by the council.

"It's too late. The damage is done. The thing is on the ballot," said the Rev. Sandi Richards, the pastor of the Church in Ocean Park and a leader of SMART. "All the heinous things they said, they're not going to send a mailer saying they were wrong. There's no reason to trust any of it. We've been threatened in subtle and not so subtle ways with defeat."

Friday's announcement came after Dubois, along with Casa and Shutters owner Tom Slatkin, met with Genser and Feinstein shortly before the September 28 meeting. At the meeting at Izzy's Deli -- which was described as cordial -- Dubois and Slatkin raised their concerns about the proposed ordinance being studied by the council.

Their main concerns centered on the need for a tip credit to exclude waiters and waitresses from the proposed wage. They also discussed the possibility of extending the ordinance citywide, instead of restricting it to the Coastal Zone, and tying the wage increase -- which likely will be raised incrementally -- to a cost of living index to avoid unexpected hikes.

"They were mellow," said Feinstein, who had met days earlier with Dubois and Slatkin in the Casa del Mar lobby. "They raised some things I thought were very reasonable. It's always important to speak with everyone. I wish these discussions had happened before KK. We all have to live here after this is over, so it makes sense to talk."

"I'm interested in hearing from anyone that has something constructive to add to the dialogue," Genser said. "But I will never commit to anything without going through the whole public process. I can assure you that from me there were no committments. I don't think anything came out of it."

Sources close to the hotel owners said that the discussions gave reason for optimism, but they do not guarantee a truce.

"It was a very conciliatory meeting," the source said. "But this does not close the door to another war. Putting down the sword does not mean they (the hotel owners) will not do a referendum or a lawsuit.

"If the council can be taken at their word, there is a place at the table for these guys," the source said. "They're still supporting KK, although everything stopped the day of the meeting September 28."

According to the source, the Prop KK campaign continued to send mailers after the September 28 council meeting, but only those fliers that already had been paid for. "Everything committed to was done. The bill was paid."

According to campaign finance disclosure statements submitted to the City Clerk last week, the Prop KK campaign had raised a total of $922, 779 and spent $918,098 as of October 21. Of the total raised, the Edward Thomas Companies contributed $35,000 and CW Hotels Limited Partnership contributed $8,333 during the most recent filing period, which ran from October 1 to October 21.

At the special Council meeting of September 28, the council voted to delay a vote on SMART's proposed measure and asked staff to study some issues further, including some of the concerns raised by Slatkin and Dubois. They included the possibility of gradually phasing in the measure, the way it treats tipped employees and alternatives to the geographic area covered by the ordinance. (The Coastal Zone runs from Fourth Street to the coast north of Pico Boulevard and from Lincoln to the coast south of Pico.)

The delay, as well as comments made by council members at the end of the meeting, gave backers of Prop KK a sense of accomplishment and that calling off the campaign was "the right thing" to do.

"I just frankly think it's the right thing," said Donna Dailey Alvarez, one of the two supporters who signed the ballot arguments in favor of measure. "I think we've won. We at least got the SMART proposal delayed.

"They (the hotels) probably spent as much money as they need to spend," Alvarez said. "If they haven't convinced people, it ain't gonna happen. We'll just see how it goes from here."

Tom Larmore, who heads the Chamber of Commerce living wage task force, hopes the Edward Thomas announcement brings the two sides to the table.

"I think in their own mind, they think there will be a more conciliatory process and I hope that's true," Larmore said. "That's what I've been pushing for and I hope it works out that way."