Proposed Hotel in Oakland's Chinatown Gains Approval Despite Minimum Wage Violations


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Hotel employees stand behind Sima Patel as she addresses the planning commission. - DARWIN BONDGRAHAM
  • Darwin BondGraham
  • Hotel employees stand behind Sima Patel as she addresses the planning commission.
Last night, the Oakland planning commission green-lighted construction of a new hotel in Oakland's Chinatown, denying an appeal made against the project by the union Unite HERE 2850.

The union argued that variances granted by city staff for the building's height, and absence of a loading dock, were contrary to the city's planning code. But the core issue really boiled down to whether the project would create living-wage jobs, and the hotel developer's track record of following labor laws.

Taylor Hudson of Unite HERE 2850 told the planning commission that, while the hotel development might appear to be a question limited only to land-use issues, it was in fact a decision bearing on the question of inequality, and whether Oakland will implement policies that provide good jobs. Hudson said the planning code requires city staff to take into account the impact a project may have on public services, including affordable housing. He said, that based on the wages paid by the Patels at two existing East Bay hotels they own, the proposed hotel would likely generate low-wage jobs with no health benefits, further fueling Oakland's housing crisis and demand for already thin-stretched social services for the working poor.

But the Patels told the commissioners their project will generate $1 million in hotel taxes once it's completed, and that the average visitor will end up spending money and generating more jobs in Oakland.

"We hope to break ground and complete the project as quickly as we can. The business and leisure travel market in Oakland is booming and we want to help fill the needs for rooms and jobs in this community," said Dhruv Patel in a statement released following the commission's vote.

The Patel's also disputed reports that they have mistreated some of their workers and stolen wages.

"We've treated our people well. Some of our employees are here tonight," said Sima Patel at the meeting. Then, she waived her arms and about a dozen of her company's current employees stood up. A few of the Patel's employees spoke later in the meeting to say they were paid well and fairly treated.

But some of the Patel's ex-employees have accused them of wage theft among other labor law violations, and last February the city conducted an investigation of the Holiday Inn Express near the Oakland Airport, which is owned by the Patels, and confirmed that the hotel had violated Oakland's minimum-wage ordinance.

Nevertheless, planning department staff defended their initial approval of the project last night. Pete Vollman of the planning department told the council that the variances granted to the Patels for a tall parapet wall exceeding height limits, and the absence of a loading dock, were minor and not inconsistent with past practice. As to the core issue of labor, Vollman added that the city did consider the number of new jobs the hotel would create, but he said that planning staff can't consider anything as detailed as the level of wages paid.

"We don't feel getting into the individual breakdown of what the wage is gets to the requirements [of the city's planning code]," Vollman told the commissioners.

  • Darwin BondGraham
  • Greg McConnell.
Greg McConnell, a lobbyist with the Jobs and Housing Coalition said the union's appeal was really a power play in an effort to try to unionize the Patel's hotels. "We want everyone to clearly recognize the motivation for this appeal is not some technical violation. It's whether the developers would agree to submit to card check neutrality so 2850 can organize this hotel," said McConnell. "Everyone in the room knows it."

Previously, however, both Unite HERE 2850 and Dan Cohen, a spokesman for the Patels, have said that the union is not attempting to organize the hotels owned by the Patel family. Rather, the union said their objections to the proposed hotel are based on fears that the hotel will drive down wages for hotel workers at other locations. The union said the decision to approve the hotel without taking the jobs question seriously sets a bad precedent whereby the city does not account the record of a company proposing to open a new business, and even rewards those who break the law.

At the end of the night, only one planning commissioner objected to the project. Commissioner Jahaziel Bonilla said the variances granted for the parapet and loading berth were bad decisions.

But commissioners Chris Patillo, Amanda Monchamp and Adhi Nagraj, and Jim Moore all said they agreed with staff's architectural variances and they were eager to approve a hotel project.

"It's unfortunate that development in Chinatown has been stagnant way too long," said Commissioner Patillo. "Chinatown needs to change, grow and evolve."

Monchamp said in favor of the project that hotels will generate other higher wage jobs in Oakland in sectors like tech, but was unwilling to consider the actual quality of jobs the hotel would directly create. "As to the issue of how much of a wage this hotel owner will bring, we can't consider how much will be paid," she said about the workers who will clean and maintain the hotel.

Nagraj acknowledged that the city recently investigated the Patel's for violating city labor laws at one of their existing hotels, but still he voted to approve the project. "That stuff certainly is troublesome," said Nagraj, before adding "I'm comfortable passing this."

The commission's approval was final with no further appeals available to the union.