Teaming Up to Win
Partnering with local businesses, two unions saved their members' jobs and also improved business prospects for the San Jose convention center.
By Clyde Weiss
SAN JOSE, CALIFORNIA
After the hi-tech bubble burst in 2001, followed by the drastic drop in tourism after the terrorist attacks of 9/11, city officials here in the "Capital of Silicon Valley" were forced to rethink how to attract lost business to the area. Their solution? Privatize the money-losing San Jose McEnery Convention Center.
That spelled real trouble for the civil service workers employed there, including some 80 members of the Municipal Employees Federation (MEF) chapter of Local 101 (Council 57), plus a handful represented by the International Union of Operating Engineers. Contracting out the center's operations threatened their jobs.
In the end, the workers — including security, custodial, event coordination, attendant, technical and clerical personnel — kept their jobs through a creative partnership that could serve as a model for certain kinds of privatization fights. They did that with "Team San Jose," a non-profit corporation that assumed full responsibility last August for managing the convention center and related cultural facilities, including the Center for the Performing Arts. It's a case study of how unions, working in partnership with the private sector, can save public-sector jobs.
THE RFP. When officials of San Jose — California's third-largest city — set out to find a less-expensive way to operate their convention center, they issued a "request for proposal" (RFP) to lure potential contractors. Their decision didn't surprise union leaders, says Bill Pope, MEF chapter president at the time (and now an AFSCME retiree).
"We recognized that the city council had concerns over management" because the convention center was being run too expensively, he explains.
Pope told the council, "If you have a problem with management, deal with the management — don't make the employees compete for their own jobs, because they're not the ones you're after.'" The point hit home, and the city council agreed to let the employees submit their own proposal to revamp the center's operations.
In addition to the employees' proposal, three other bids were received: two from private firms and one from Team San Jose, a coalition of hotels, local cultural groups and the Conven-tion & Visitors Bureau.
Unfortunately, the employees' plan had a built-in flaw that would doom it: It retained the existing management structure and style. "We knew that was not going to fly," says Pope, who explained: "You paint a yellow house green, it's still the same house." City officials, he adds, "weren't comfortable with the status quo. They were looking for something different."
BUILDING A BETTER HOUSE. Team San Jose was created in December 2003 as a nonprofit corporation whose goal was to improve the local economy while operating the convention and cultural facilities at a lower cost. To do that, it had to win the city's RFP.
Team San Jose's bid included a key element that would help: Its executive board included two union representatives — Pope, representing AFSCME, and a member of the Operating Engineers.
In June 2004, the city council rejected the bids of the private firms — and the employees' own proposal — because they were more expensive than Team San Jose's offer. The council then unanimously approved a five-year contract with the coalition, beginning that August. At that point, the civil service staff was absorbed into the Team's operations with no loss of jobs or union memberships, although some were moved into other city positions.
PROSPERITY AHEAD. Strengthening the region's economy by increasing the number of events held at the convention center is a major goal of Team San Jose. Increasing gross revenue will reduce the city's operating subsidy.
It's been less than a year since Team San Jose took over, but the group has already been successful. As The Mercury News reported in February, the Team's approach has "reduced expenses this year by 18 percent, increased revenues by 24 percent, brought more people downtown by staging about 85 more events and booked more hotel rooms."
Don Fenton, chairman of the board of Team San Jose and president and CEO of the Convention & Visitors Bureau, cites the partnership with labor as Team San Jose's strength. "In the past," he explains, "we had managers who — in my opinion — didn't understand that organized labor needed to be right at the table when strategies were decided. Not just labor strategies, but all strategies."
The unions' concerns are now shared throughout the enterprise. "We've committed to make no substantive moves of any sort without AFSCME right there," says Fenton. "It's a partnership. It isn't an us-or-them thing."
Deborah Powell, vice president of Council 57, president of Local 101 and the current AFSCME representative on Team San Jose's executive board, says the bottom line — for both the city and the unions — is that this unique partnership "is able to run the convention center in a more profitable manner, with our employees as part of the process."
