Four months after Santa Monica voters overwhelmingly voted to defeat an initiative that would have prevented such an action, the Santa Monica City Council ordered its staff to draft a “living wage ordinance” that would require significantly higher pay for many workers at large businesses in the city’s coastal tourism zone.
Community and labor activists have long advocated a wage floor of more than $10 per hour for hotel maids and other service workers on the high-priced coast. Business groups, led by several luxury hotels, have fiercely opposed the idea and have vowed to challenge any such ordinance in court.
However, proponents with Santa Monicans Allied for Responsible Tourism presented two legal opinions that the law would be constitutional.
Following a 5-2 vote, council members said they hoped to vote on the new law by early June.
The council left the actual level of pay open for further discussion, along with whether higher wages should be phased in over time or instituted more quickly. But the council majority otherwise voted to support a plan that would affect businesses along a two-mile coastal stretch and in the downtown core with annual revenue of at least $3 million.
The proposal has drawn national attention because it would create a new model for living wage laws, which have been adopted by more than 50 local governments, including the city and county of Los Angeles. Typically, living wage laws apply only to contractors who do business with the local government. Santa Monica would be the first city to require private businesses to pay the higher wage.
Maguire Returns to Playa Vista
Los Angeles developer Robert Maguire has reportedly agreed to buy a prime piece of the giant Playa Vista project site near Marina del Rey for an estimated $90 million.
Maguire is expected in a few weeks to finalize an interim agreement to buy 114 acres at the eastern edge of Playa Vista from property owner Playa Capital Corp. The deal, which could take several months to complete, would allow Maguire to develop what could become one of Los Angeles’ largest commercial projects, totaling more than 2 million square feet, on land where DreamWorks SKG once planned to build a studio.
After spending several years shaping plans for the mostly undeveloped property, Maguire lost control of Playa Vista in late 1997 amid financial problems and a bitter feud with DreamWorks.
In another section of Playa Vista, Maguire last year purchased a small parcel of land in partnership with Chicago-based Equity Office, the nation’s largest owner of office buildings. Maguire is pursuing plans to build a 426,000-square-foot office complex on the site.
Valley Secession Report Released
The San Fernando Valley could be a viable independent city, but would need to pay at least $68 million a year to the rest of Los Angeles for services to achieve the breakup, according to a long-awaited report by the Local Agency Formation Commission.
The strong and diverse tax base of the Valley would produce more than $1 billion a year, enough to cover all city functions, pay Los Angeles and still leave a surplus, the study found.
The LAFCO report concluded that many key functions, such as delivery of water and power, are so intertwined that they could never be separated from the city of Los Angeles.
The report lays the groundwork for the possible dismantling of the nation’s second-largest city. Secession is far from certain, but the report makes it more likely that the question will be put to a vote of the city next year, when majority approval in the Valley and in the city as a whole would be required for passage.
The LAFCO report, which was attacked by secession opponents, confirmed the suspicions of separatists that the Valley subsidizes the rest of Los Angeles. The subsidy this year, the study found, totals $123 million.
Farmers Enters Partnerships
In an indication of its ambitious expansion plans, Los Angeles-based Farmers Insurance Group announced partnerships with Bank of America and Ulico Insurance Group, a company that provides commercial insurance to the AFL-CIO and other unions representing more than 16 million workers.
Bank of America, the nation’s largest bank, will offer Farmers’ home and auto insurance to its customers, while Farmers will market the bank’s accounts, credit cards and loans through its 17,000 agents, the companies said.
The labor alliance also gives Farmers an exclusive right to offer homeowners and auto insurance to workers whose unions are served by Ulico, which provides liability, workers’ compensation and commercial property insurance to labor organizations.
Farmers, the nation’s No. 3 auto and home insurer, aims to triple its $11 billion in premium sales in four years, a plan that if successful would make the company a rival to market leader State Farm Insurance, company officials said.
Actors’ Earnings Down
The Screen Actors Guild said its members’ combined earnings from union acting jobs dipped 5 percent to $1.59 billion last year, as income from commercials fell because of a strike against the ad industry.
The income includes payments for the performers’ work in new films, television shows, commercials and interactive media, as well as appearances as non-speaking extras. The income also includes residuals, or payments made when a film or TV show is shown after its initial run.
Actors’ income from commercial work fell 16 percent to $529.8 million last year from $630.3 million in 1999, the guild said. A strike against advertisers last year by SAG and the American Federation of Television and Radio Artists lasted almost six months.
SAG income from theatrical movies fell 1.8 percent to $417.3 million, while income for television work rose 3.7 percent to $624.1 million. Television residuals, an area for which SAG is seeking an increase in its next contract, fell 5.7 percent to $144.3 million.
Satellite Launcher Signs Deal
Long Beach-based Sea Launch announced it has signed a contract to launch two communications satellites for Hughes Electronics Corp.’s Spaceway unit in a deal with Boeing Co., which also is building the orbiters.
Boeing, which bought Hughes’ satellite-making arm for $3.85 billion last year, owns 40 percent of Sea Launch, an international consortium that runs a floating satellite launch platform near the equator.
Financial terms of the deal were not disclosed.
Sea Launch has completed five successful missions to date.
New Cuts at Creative Planet
Citing tougher market conditions, Los Angeles entertainment B2B company Creative Planet announced that 75 more employees will be laid off.
The new round of layoffs follows the firing of 70 people in December by the company that once employed 300. Most of those affected work in the marketing and content divisions of the business-to-business venture that provides databases, budgeting and scheduling tools for television and film production companies.
Although Creative Planet secured $30 million in additional financing in December, a sluggish economy and anticipated strikes by Hollywood writers and actors spurred the layoffs, officials said.
Jakks Hit With Infringement Suit
Malibu-based Jakks Pacific Inc. has been hit with a patent infringement lawsuit by toy-making rival Rose Art Industries involving a children’s modeling compound.
The suit involves Jakks’ product Zyrofoam, a mass of foam particles and gel that, like clay, can be molded into shapes.
New Jersey-based Rose Art said it bought the exclusive licensing rights from an undisclosed patent holder and began selling the compound, called Floam, last month.
Gemstar Inks Pact With Comcast
Gemstar-TV Guide International has agreed to a 20-year deal to supply interactive program guides to Comcast Cable Communications, the country’s third-largest cable operator.
The Comcast agreement gives Pasadena-based Gemstar pacts with three of the nation’s top five cable operators, which serve half of all U.S. households with cable.
The company, formed in July by the merger of Gemstar International and TV Guide, controls more than 100 critical patents for the guides that allow viewers to display program listings on their TV sets and navigate them with a remote control.
Gemstar earned nearly $23.2 million from advertising on interactive program guides, and many analysts believe that number will top $100 million in 2001.
Newspaper Employees Unionize
Employees of Chinese Daily News in Monterey Park, one of the largest Asian daily newspapers in the United States, have voted to unionize.
Organizers with the Communication Workers of America said the vote covering 152 workers is part of a trend by foreign-language media to join unions. The bargaining unit covers all employees, from reporters to printers.
General Manager David Liu said the family-owned newspaper is challenging the 78-63 vote to the National Labor Relations Board because of alleged improprieties during the election. In the meantime, he said, management does not recognize the union and will not negotiate a contract.
