The Communications Workers of America, the largest communications and media labor union in the country, is threatening to pull its August 2021 convention if the center doesn’t negotiate with local groups demanding the center provide $100 million in relief funding for out-of-work hospitality workers.
The Convention Center has yet to address the demands from a coalition of 35 local groups, called the Coalition to Create a Fair Fund for Hospitality Workers. That qualifies as an ongoing labor conflict, a CWA official told The Lens.
“There’s almost always a clause that says we don’t have to go there if there’s a labor dispute,” CWA Secretary-General Sara Steffens told The Lens in an interview. “Every union builds that into our contracts for these conferences and conventions. The last thing we’d ever do is cross a picket line.”
The current dispute began in March, when the newly-formed local coalition began calling on the Convention Center to release $100 million of its reserves — totalling about $180 to $200 million — to support the tens of thousands of tourism workers in New Orleans who are out of work due to the coronavirus crisis.
In two subsequent meetings, the Convention Center’s board made no indication that it’s even considering allocating funds for general worker relief, though it has committed to paying its own employees through at least the end of this month.
Instead, center officials plan to use their large cash reserves to fund development projects, including a $557 million capital plan and a $700 million, publicly subsidized hotel. A new “entertainment district” of new apartments, restaurants and bars that would surround the hotel will include certain infrastructure improvements included in the capital plan. It’s not yet clear whether other public funding will be used. The hotel and entertainment district would be built on a vacant tract of land on the center’s upriver side.
Though a key vote on the entertainment district has been temporarily delayed, officials have made it clear in recent weeks that they intend to go forward with the developments, despite uncertainties brought by the global pandemic, opposition from City Council members and a recent report from watchdog Bureau of Governmental Research that encourages the center to pause and reassess the prudence of the projects.
In an April 17 letter to Convention Center President Michael Sawaya, CWA Secretary-General Sara Steffens said that the conflict could push the CWA to relocate their next annual convention, which is currently scheduled to happen at the New Orleans Convention Center in August 2021.
“The convention center should not be allowing $184 million in unrestricted net assets to sit unused while workers in New Orleans face layoffs, food shortages and evictions,” the letter said. “Please be advised we plan to raise this matter at the next AFL-CIO Executive Council meeting. This conflict must be resolved in order for our convention next year to proceed as scheduled.”
The CWA has 700,000 members across the country, according to its website, and represents workers ranging from flight attendants to utility workers to public school teachers. The union is affiliated with the AFL-CIO, and CWA’s president sits on the executive council. The affiliated members of the AFL-CIO executive council represent over 50 labor groups and 12.5 million members, according to its website.
Steffens said the next AFL-CIO executive council meeting is on June 17. CWA’s president said she hopes the conflict will be resolved by then. Otherwise, the CWA will be warning other unions about doing business with the center.
“It’s about letting other unions know about this dispute, other people that might be looking to book conferences. We book these conferences well far out, years in advance of the date. And there are probably people looking right now at whether to book at [the New Orleans] convention center for years to come. So we want to alert other people.”
In a response letter to Steffens this weekend, Sawaya maintained the Convention Center’s messaging over the last few weeks: The best thing the Convention Center can do for New Orleans tourism workers is continue with its planned developments so the center can compete with other cities and continue to bring in conventioneers that will spend their money in the city.
“We are laser-focused on ensuring that the convention center will continue to play a major role as a driving force in the local economy, and will be a critical component to the economic recovery,” the letter said. “Our plans to reinvest in our facilities and improve is more important now than ever, as we prepare to ensure we are ready to host conferences such as yours in the not too distant future.”
Steffens said that Sawaya’s letter failed to resolve CWA’s concerns.
“That didn’t address the concerns to me. What’s important to us is the process of working with Unite Here and other unions and generally supporting the hospitality workers. If our fellow unions made an agreement with them then we’d be happy because then there’s two sides at the table. But it doesn’ t work unless there’s two sides at the table.”
An emailed statement from the Coalition to Create a Fair Fund for Hospitality Workers said the group was “in awe of the support and solidarity of our sisters and brothers at the Communications Workers of America.”
“As Mr. Sawaya said, the Convention Center’s ‘duty during these challenging times is to provide service to [their] community.’ Their community is made up of nearly 100k hospitality workers across the GNO region without whom there would be neither conventions nor tourism nor the various taxes that support the Convention Center. We hope that the concerns raised by the CWA as well as ourselves get a less dismissive hearing in the near future.”
34 total cancelled events
It’s not a good time for the Convention Center to be losing business. According to information from a board meeting last week, 33 Convention Center events have already been cancelled in 2020 alone due to the coronavirus, accounting for an expected 358,000 visitors. Those losses will cost the Convention Center $8.2 million in operating revenue.
The center is also expecting to only collect roughly half as much tax revenue than it planned in 2020. The Convention Center is a public body that is mostly funded through the collection of local hotel, food and beverage taxes. In 2018 and 2019, those collections exceeded $65 million a year. This year — as nationwide lockdowns have brought the tourism and hospitality industries to a standstill — projected revenues have fallen from $66.4 million to just $33 million.
At the same time, it’s also not a good time to be a hospitality worker in New Orleans. Nationally, the country is seeing an unprecedented level of unemployment claims. And in New Orleans, with an economy rooted in hospitality and tourism, the coronavirus crisis and subsequent business closures have been particularly harsh.
“By all accounts the economic crisis for all of the above workers is going to last long past the containment of the Covid-19 pandemic,” the coalition said in a recent press release. “The timing of the crisis has meant that for the vast majority of [hospitality workers], their busiest, most lucrative season (March-June) has been essentially cancelled. Many rely on income earned during this season to provide for themselves and their families throughout the year. … In the best case scenario these workers are facing the prospect of at least eight months before their earning potential returns to anything approaching normal.”
Government aid for unemployed workers has expanded rapidly in the last month. According to many workers and reports, even that new aid isn’t keeping pace with the depth of the current economic crisis and isn’t accounting for the existing financial vulnerability of many workers even before the crisis.
A $600 boost to unemployment, approved by Congress, is set to expire this summer, and it’s widely expected that the tourism, hospitality and food service industries will be affected for long after that benefit goes away. Even in the short-term, the Louisiana Workforce Commission has been overwhelmed with unprecedented numbers of claims and there have been major delays for people trying to get benefits.
And although the federal government provided business loans and grants through the Payroll Protection Program, those funds have dried up, leaving many businesses out.
There have also been a number of local, private funds set up to help workers temporarily out of the job. But those, too, are struggling to keep up, according to The Times-Picayune/New Orleans Advocate, and some have stopped accepting applications altogether.
How much money does the Convention Center really have to spend?
In his letter, Sawaya said that although the center wasn’t supplying funds for New Orleans workers at large, “it is important to note that the 500 employees of the convention center have received both pay and benefits through April 30.”
However, according to one of the members of the local coalition, the Convention Center isn’t taking care of its contract workers, who aren’t technically employees. In March, before the coalition formed, Unite Here Local 23, a national labor union that represents many workers who contract with the Convention Center, was demanding that the center also guarantee pay for contracted workers who rely on Convention Center gigs, such as banquet servers and cooks.
The new CWA letter made an explicit mention of the Unite Here demands. Convention Center officials did not respond to that portion of the letter.
“We chose your venue for our CWA convention precisely because your relationship with and reliance on union workers. We were disappointed to learn from UNITE HERE Local 23 that you have been unresponsive to their March 23, 2020 letter requesting immediate financial relief from the convention center’s cash reserves for contracted employees at the convention center.”
Sawaya also argued in his letter that there was confusion over what level of unrestricted cash reserves the convention center actually has.
“Reports of our unrestricted net assets are generally misunderstood, as funding for the capital improvement plan will require a combination of our capital reserves and future debt obligations in order to cover the renovation scope,” the letter said.
The coalition has claimed that the center has $185 million in unrestricted cash reserves. That’s based on numbers from the state’s Division of Administration. A Convention Center report from September pegged the number at $215 million.
Sawaya said in the letter that just because money is technically categorized as “unrestricted,” it doesn’t mean that money isn’t already earmarked for certain purposes.
“While we are required to report account balances as unrestricted, that does not mean that they are uncommitted.”
In a financial report last week, the Convention Center claimed it had $149 million in “current unrestricted assets” and another $140 million in “designated and restricted assets.”
“We believe the top priority should be helping people through this pandemic,” Steffens told The Lens. “This isn’t the time to be sitting on reserve funds or thinking about really long-term plans. There are people who are hurting who need help right now. And those people should be our priority.”