Business leaders have dropped their effort to use a ballot referendum to overturn a law that extends L.A.'s living wage ordinance to workers at a dozen hotels near the Los Angeles International Airport after reaching a last minute compromise with the city.

The Chamber of Commerce agreed to the deal only after receiving a guarantee from the mayor and councilmembers that there would be language in the new ordinance requiring studies and other measures be conducted before the living wage could be expanded to other private businesses.

"The key for us was the ability to quarantine this to the airport area hotels, so that other businesses in the city or looking to locate in the city wouldn't be concerned that they would be next in the cross-hairs," said David Fleming, chairman of the L.A. Area Chamber of Commerce.

The agreement also provides for the creation of an economic overlay zone for airport-area hotels, possible hotel tax offsets and a city commitment to invest in the area to bring in more business all in return for business leaders not opposing higher worker pay, which will be guaranteed through a new city ordinance L.A. will adopt.

The deal was cut by the chamber, the Los Angeles Hotel Association, supporters of the living wage, Mayor Antonio Villaraigosa and members of the City Council, which will now rescind the original LAX-area living wage ordinance.

The new ordinance will apply to the city's existing living wage rate of $10.64 an hour ($9.39 for those with employer-provided health benefits) to 3,500 hotel workers in 13 hotels along Century Boulevard. It also will create an enhancement zone that will pave the way for revitalization of the Century Corridor, as well as the studies.

The City Council had until today to decide whether to schedule what some estimated would be a $15 million special election in May or to overturn its earlier decision.

After being approved last year, business leaders quickly gathered enough signatures to qualify the measure for a special referendum. But they eventually decided to forego the fight after a poll earlier this week showed overwhelming public support for the Century Boulevard living wage law.

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