Charter Cities: No Longer an Oasis From CA Prevailing Wage

November 21, 2016

By Jon Welner


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PREVAILING WAGE LAW is California's "other" minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars--and can be brought years after construction is complete.

The Number of Charter Cities Exempt from Prevailing Wage Has Dropped from 52 to Almost None in Less Than Two Years

A charter city is a city that governs itself by adopting a "charter"--sort of a municipal constitution--rather than by complying with general state laws. California has 121 charter cities (out of a total of 482 cities).

In California, charter cities have supreme control over their own "municipal affairs." This means that charter city ordinances and regulations supersede all state laws with regard to local matters. State Building & Construction Trades Council of California v. City of Vista (2012) 54 Cal. 4th 547, 555-556 ("City of Vista").

This power also applies to prevailing wage. In City of Vista, the California Supreme Court held that charter cities are free to decide whether or not they want to apply State Prevailing Wage Law to locally funded public works:

Continue reading "Charter Cities: No Longer an Oasis From CA Prevailing Wage" »

NEW CA PREVAILING WAGE LAW SUSPENDED BY FEDERAL COURT!

October 19, 2016

By Jon Welner


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PREVAILING WAGE LAW is California's "other" minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars--and can be brought years after construction is complete.

U.S. District Court Suspends New Law that Made Deliveries of Concrete Subject to California Prevailing Wage (AB 219)

In a surprise move, the U.S. District Court in Los Angeles issued an Order today blocking implementation of AB 219, a new statute that added the delivery of ready-mix concrete to the growing list of activities covered by California Prevailing Wage Law. (Please see my prior post on AB 219 for additional background.)

AB 219 was passed last year and took effect on July 1, 2016. The new law imposed massive new burdens on the ready-mix industry, including complex new record-keeping and tracking requirements. On June 30, 2016, a group of eight ready-mix companies filed a lawsuit challenging the new statute as a violation of Equal Protection and federal law. The Court granted the plaintiffs' motion for a preliminary injunction on October 18, 2016.

Continue reading "NEW CA PREVAILING WAGE LAW SUSPENDED BY FEDERAL COURT!" »

Another First: CA Prevailing Wage Law Expanded to Cover Material Suppliers

October 14, 2016

By Jon Welner


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PREVAILING WAGE LAW is California's "other" minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars--and can be brought years after construction is complete.

AB 219 Expands Prevailing Wage To Include Deliveries of Ready-Mix Concrete

Since the 1930s, prevailing wages have applied only to construction work, not to the manufacture or delivery of construction supplies.

In California this distinction was made explicit in 1976, when the Court of Appeal held that "materialmen" and "employees of materialmen" who sell supplies to the general public are exempt from prevailing wage law; and "the delivery of standard materials" to a public work is not subject to prevailing wage. O. G. Sansone Co. v. Department of Transportation (1976) 55 Cal. App. 3d 438, 442-443.

Simply put: prevailing wage has always applied to the bricklayer, not to the bricks.

Until now. Last year, the California Legislature passed and the Governor signed AB 219, which extends prevailing wage requirements to the delivery of ready-mix concrete to public works. The bill was codified as Labor Code Section 1720.9.

Continue reading "Another First: CA Prevailing Wage Law Expanded to Cover Material Suppliers" »

What Does "Prevailing" Mean, Anyway? And Why Is the Prevailing Wage Rate So High?

October 5, 2016

By Jon Welner

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PREVAILING WAGE LAW is California's "other" minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars--and can be brought years after construction is complete.

The Way DIR Calculates Prevailing Wage Rates Ensures that the "Prevailing Wage" Is Almost Always a "Union Wage"

"Prevailing wage" is a misnomer. Contrary to what the name implies, the prevailing wage is not the wage rate prevailing in a given area. That is the "market rate." Rather, the prevailing wage rate is generally the rate that union workers get paid in a specified area, which is much higher than the market rate.

Continue reading "What Does "Prevailing" Mean, Anyway? And Why Is the Prevailing Wage Rate So High?" »

California Prevailing Wage: Five Traps to Avoid

September 26, 2016

By Jon Welner

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PREVAILING WAGE LAW is California's "other" minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars--and can be brought years after construction is complete.

Even if you think your project is private, it still might be a "Public Work" subject to Prevailing Wage in California!

Five Traps to Avoid

California Prevailing Wage Law applies to any project "paid for in whole or in part out of public funds."

Prior to 2002, this was easy to understand. Public funds were public funds. If a project received cash from a state or local agency, it was a "public work" subject to prevailing wage.

Continue reading "California Prevailing Wage: Five Traps to Avoid" »

California Prevailing Wage Law Expanded to Cover Private Projects

September 22, 2016

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By Jon Welner

PREVAILING WAGE LAW is California's "other" minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars--and can be brought years after construction is complete.


welner oil.jpgFor the first time, some private projects are covered by California Prevailing Wage Law. Hospitals, refineries, and chemical plants are covered.

Since the 1930s, prevailing wage laws have applied only to projects receiving public funds. Until now.

In 2013, Governor Brown signed SB 54, a new California law that applied prevailing wage requirements to privately funded construction work at chemical facilities that handle hazardous materials, including refineries.

In 2015, the Governor signed AB 852, a similar law expanding prevailing wage to cover the privately funded construction of hospitals. The new law covers projects funded at least in part by conduit revenue bonds.

welner hospital.jpgThis is the first time that prevailing wage law has been applied to construction projects that receive no public funds.

This legislation opens the door to extending prevailing wage to other types of privately funded construction. No word yet on what's next.
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Jon Welner is a leading practitioner of prevailing wage law in California. He is a Partner at Jeffer Mangels Butler & Mitchell LLP (JMBM) and Chair of JMBM's Prevailing Wage Group. Contact him at JWelner@jmbm.com.

JMBM's Prevailing Wage Group advises and defends developers, contractors, and manufacturers on the most challenging and complex prevailing wage matters in California.

ABA Section of Environment, Energy, and Resources: Economic impacts in ESA critical habitat designations

November 4, 2015

Federal environmental lawyer, Matthew J. Sanders, recently joined Jeffer Mangels Butler & Mitchell as Of Counsel in our San Francisco office. Sanders' federal and California environmental law experience includes successfully litigating myriad federal and state appeals, writs, and motions and providing strategic representation and counseling on major projects and enforcement actions. Through his experience in government, the non-profit sector, and private practice, Sanders has developed strong relationships throughout the environmental and energy legal community.

In his recent article entitled Economic impacts in ESA critical habitat designations, co-authored with Alicia E. Thesing and published by the American Bar Association's Section of Environment, Energy and Resources, Sanders and Thesing discuss the Ninth Circuit's recent decision in Building Industry Association of the Bay Area v. U.S. Department of Commerce and its implications for future critical habitat decisions and challenges.

The decision -- which affirmed the designation of more than 13,000 square miles (8.6 million acres) of critical habitat for the federally threatened green sturgeon -- holds that the National Marine Fisheries Service (NMFS) has discretion in how it considers the economic impacts of designating critical habitat. Sanders and Thesing write that the decision "will give federal agencies more leeway in making critical habitat decisions" and have potentially different implications for environmental and industry plaintiffs.

Economic impacts in ESA critical habitat designations

Federal Environmental Lawyer, Matthew J. Sanders, Joins JMBM

October 13, 2015

Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce that environmental lawyer Matthew J. Sanders has joined the firm as of counsel in its San Francisco office.

"As a former federal environmental lawyer, Matthew will be invaluable to our clients. I have no doubt they will greatly benefit from his past experience," said Benjamin M. Reznik, Chair of JMBM's Government, Land Use, Environment and Energy Department.

Sanders joins JMBM with thirteen years of broad experience, ranging from federal and state court litigation to complex counseling and compliance work. Most recently, Sanders was a clinical supervising attorney and lecturer at Stanford Law School. He has also served as an appellate attorney in the Environment and Natural Resources Division at the U.S. Department of Justice, as an attorney in the Real Estate and Environmental Group at Paul Hastings LLP, and as a law clerk for the U.S. Court of Appeals for the Ninth Circuit.

"Many of our mining, traditional energy, and alternative energy clients will benefit directly from Matthew's experience with public land and natural resources issues acquired during his time at the Department of Justice," said Kerry Shapiro who heads JMBM's Natural Resources and Construction and Building Materials Groups in San Francisco.

Sanders' federal and California environmental law experience includes successfully litigating myriad federal and state appeals, writs, and motions; providing strategic representation and counseling on major projects and enforcement actions; and developing key relationships throughout the environmental and energy legal community.

"JMBM's environmental and natural resources lawyers are known throughout California for delivering excellent results to their clients," said Sanders. "I am thrilled to join the JMBM team and believe my experience as a federal lawyer will benefit the firm's many clients whose projects and businesses are regulated by federal agencies."

Sanders received his J.D. from Stanford Law School, where he was co-editor-in-chief of the Stanford Environmental Law Journal, and his B.A, magna cum laude, from Carleton College. He is a frequent writer on environmental law issues and is active in the American Bar Association, the Stanford Law School Alumni Association, and a number of other organizations.

About JMBM's Government, Land Use, Environment and Energy Group
JMBM's Government, Land Use, Environment and Energy (GLUEE) attorneys have vast experience in litigation, regulatory, and administrative matters. We handle permitting and compliance issues for clients seeking to locate and develop new sites, relocate, or expand operations; we assist them in resolving environmental issues including air, water, hazardous materials, and soil-related work; and we represent their interests before every level of government, particularly throughout the state of California. The Group publishes the California Land Use Blog.

About JMBM
Jeffer Mangels Butler & Mitchell LLP is a full-service law firm committed to providing clients with outstanding results. From our offices in San Francisco, Los Angeles and Orange County, we serve our clients' needs worldwide. For more information, visit www.jmbm.com.

State Agencies Cannot Use State Budgetary Uncertainties to Escape Mitigation Obligations under CEQA

August 5, 2015

By Neill Brower

The California Supreme court determined the California State University ("CSU") could not rely solely on earmarked appropriations from the State Legislature for payment of "fair share" mitigation fees the CSU determined necessary for full mitigation of impacts, and the absence of specific legislative appropriations for mitigation fees did not render payment of mitigation fees infeasible. On August 3, 2015, the California Supreme Court filed its decision in City of San Diego v. Bd. of Trustees of the California State University, Case No. S199557, rejecting the notion that the contingent nature of State budgeting excused a failure to commit to enforceable mitigation for off-campus impacts resulting from on-campus development. Further, because the CSU relied on the purported infeasibility of paying mitigation fees as a basis for its Statement of Overriding Considerations, the Statement of Overriding Considerations was unsupported by substantial evidence as to that finding.

In this case, the CSU approved an Environmental Impact Report ("EIR") to expand the San Diego State University ("SDSU") campus to accommodate, among other significant components; a hotel, academic research, medical, social, administrative, and conference facilities; faculty and student housing; a 10,000-student enrollment increase; and associated increases in faculty and staff by 2030 school year. Among other impacts, the EIR determined the project would result in significant contributions to cumulative traffic impacts on off-campus roads in the City of San Diego and Caltrans jurisdictions. The EIR determined the specific improvements required to mitigate these impacts and calculated the "fair-share" fees necessary to construct those improvements.

Continue reading "State Agencies Cannot Use State Budgetary Uncertainties to Escape Mitigation Obligations under CEQA" »

Government & Land Use Lawyer Daniel F. Freedman Joins Jeffer Mangels in Los Angeles

April 13, 2015

Los Angeles -- The Government, Land Use, Environment & Energy Group of Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to welcome Daniel Freedman as an associate in its Los Angeles office.

Mr. Freedman's experience includes representing and advising clients on matters relating to real estate development, zoning, project entitlements, CEQA, NEPA, federal and state environmental law, and governmental advocacy. He has advised clients working major commercial, residential, and industrial developments, renewable energy, high-speed rail, billboard siting, mining and government contracting. Daniel also has civil litigation experience in both state and federal courts.

"In addition to his impressive legal experience, Daniel's consulting background in government and public affairs will bring an added dimension of effectiveness for our clients," said Benjamin M. Reznik, Chair of JMBM's Government, Land Use, Environment and Energy Department.

Prior to entering the legal profession, Daniel advised government agencies, energy and infrastructure development companies, and environmental organizations on issues relating to environmental policy, government affairs, and political strategy. He also organized and managed regional and statewide advocacy and outreach campaigns on environmental policy and regulatory issues, and clients working on complex projects such as concentrated solar, off-shore liquefied natural gas terminals, waste-to-energy, long-haul transmission, wind energy, carbon capture and sequestration and water infrastructure. Daniel also takes pride in his role as co-founder and board chairman of the Los Angeles Sustainability Collaborative, an executive committee member of the Bet Tzedek New Leadership Council, and volunteer for United in Harmony. Daniel is a graduate of U.C. Berkeley, where he earned his Bachelor of Science in Conservation Resources Studies, and UCLA where he earned his Master's degree in Urban Planning. He then received his Juris Doctorate from Loyola Law School, Los Angeles.

"I'm excited to join a law firm with such a strong reputation for effective advocacy in the land use and environment arena," said Freedman. "I look forward to contributing to the success of our clients."

About JMBM's Government, Land Use, Environment & Energy Group

JMBM's land use attorneys represent a wide range of industries, businesses, trade groups and individuals with interests before all levels of local, state and federal government, especially throughout California. Our particular strength is handling all permitting and compliance issues for clients seeking to locate and develop new sites, relocate or expand operations. Projects we have helped move through the approval process include residential developments and apartment complexes, hotels, shopping centers, theaters, office buildings, and a wide range of industrial projects such as mines, energy plants and manufacturing facilities. Jeffer Mangels is recognized as a "2015 Best Law Firm" by U.S. News & World/Best Lawyers®, ranking in the first tier for Land Use and Zoning Law in Metropolitan Los Angeles.

Land Use Lawyer: Football in Los Angeles? It's All About The Land.

March 20, 2015

By Benjamin M. Reznik

The Los Angeles area, which once boasted two professional football teams, has been without an NFL franchise for twenty years. That's not to say there haven't been several stadium proposals during that time, among them a renovated Los Angeles Coliseum, Majestic Realty's proposed 600-acre site in the City of Industry, and AEG's proposed stadium in downtown Los Angeles, Farmers Field. While some observers blamed cities and local politics for a lack of movement on the stadium front, the reality is quite different - and both team owners and the NFL itself are in a position to call the shots.

Continue reading "Land Use Lawyer: Football in Los Angeles? It's All About The Land." »

California Land Use Lawyer: Will We See CEQA Reform In 2015?

February 5, 2015

By Benjamin M. Reznik

In terms of land use regulations that have far-reaching effects on development in California, the application - or misapplication - of the California Environmental Quality Act (CEQA) is near the top of the list. CEQA, when first implemented, certainly had a well-intentioned purpose: to protect the environment. But too often, CEQA is used as a Trojan horse by development project opponents to delay or ultimately thwart construction, increasing costs along the way. One of the most egregious examples of this took place in San Francisco, where a CEQA lawsuit even delayed the construction of environmentally-friendly bike lanes.

Continue reading "California Land Use Lawyer: Will We See CEQA Reform In 2015?" »

Residential Development in California: New Density Bonus Law Makes New Affordable Housing Difficult to Build

January 7, 2015

By Matthew Hinks

Governor Brown signed into law on September 27, 2014, AB2222, which amends the State's Density Bonus Law ("DBL"), Gov't Code §§ 65915, et seq. to establish significant constraints upon the use of the incentives provided by DBL in connection with certain real estate developments. The main purpose of AB2222 is to eliminate density bonuses and other incentives previously available unless the developer agrees to replace pre-existing affordable units on a one-for-one basis. The impact of the bill will be significant because it will remove the economic incentive to undertake density bonus projects where existing units are subject to rent control ordinances or similar restrictions.

Continue reading "Residential Development in California: New Density Bonus Law Makes New Affordable Housing Difficult to Build" »

Developers of single- and multi-family density bonus projects should submit their applications now

December 5, 2014

By Neill Brower and Sheri Bonstelle

AB2222: Significant Changes to California's Density Bonus Law Occur on January 1, 2015

On January 1, 2015, California Assembly Bill 2222 (Nazarian) goes into effect and modifies the State's Density Bonus Law by establishing significant additional constraints on density bonus projects. Key measures of this bill include:


  • Mandatory replacement of all existing affordable units on a site for the density bonus to apply. Affordable units will include, among others:

  • Affordable units;

  • Rent-stabilized units;

  • Units subject to any City ordinance or policy regarding affordability; and

  • Any units owned or occupied by low- or very-low income households, even if no ordinance or policy applies.

  • Inclusion of affordable units occupied or demolished within the previous five years within the provisions above; and

  • Increasing the term of affordable housing covenants from 30 years to 55 years.

  • AB 2222 exempts your project if you submit an application or the application is processed by December 31, 2014. Therefore, a small window still exists to submit your application for a density bonus project and avoid these new provisions.

    JMBM's experts in the State's existing and proposed density bonus laws are ready to assist you.

    Continue reading "Developers of single- and multi-family density bonus projects should submit their applications now" »

    Land Use Lawyer: Downtown Los Angeles Benefits from Chinese Investment

    November 24, 2014

    By Benjamin M. Reznik

    Downtown Los Angeles' real estate market is riding a wave of success, due in no small part to investment from major firms based in China. This past August, our client Shenzhen Hazens Real Estate Group Co. acquired the 178-room Luxe City Center hotel, located across the street from Staples Center and L.A. Live, and will be adding condominiums and retail space to the site. As noted by the Wall Street Journal's Craig Karmin, this purchase is part of a "flurry of new development and property sales," and comes on the heels of two other major Chinese-based investments in major Downtown Los Angeles properties: the Greenland Group's purchase of the Metropolis site just east of L.A. Live, and Oceanwide Real Estate Group's purchase of the Fig Central site in Downtown's South Park neighborhood.

    It's important to note that Shenzhen Hazens Real Estate Group's investment is for the long-term: just after the purchase of the Luxe site, Shenzhen Hazens and the Luxe Hotel Group signed a five-year contract to continue their partnership and to maximize their opportunities.

    Why is Downtown Los Angeles appealing to large, institutional investors? First, Downtown Los Angeles' status as an urban center with a solid base of residential, retail, and hotel real estate makes it very appealing for investors looking for longer-term investments. Second, unlike San Francisco and New York City, Downtown Los Angeles still has underutilized parcels, such as parking lots, in strategically-located areas that are appealing as sites for future large-scale projects. Third, as a trading hub that is home to one of the world's busiest container shipping ports, Los Angeles is in a prime location in the Pacific Rim to benefit from future global economic growth.

    Continue reading "Land Use Lawyer: Downtown Los Angeles Benefits from Chinese Investment" »