197 Cal. App. 4th 1020
Cal. Ct. App.2011Background
- California's prevailing wage law (Labor Code §1720 et seq.) applies to public works unless an exception applies.
- The Port District leased land to OPB for a hotel project, with a rent credit totaling $46.5 million over up to 11 years.
- OPB contracted for hotel construction via a developer and construction manager; Port District required a completion guaranty.
- DIR determined the project was a public work subject to the PWL; petitioners sought mandamus to overturn that finding.
- Trial court granted mandamus, ruling the project was not paid with public funds; the appellate court conducted independent statutory interpretation.
- Court reversal: the project is a public work because construction was done under contract and paid for in part with public funds via the rent credit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| whether the project involves construction done under contract | CCCC: lease-based arrangement constitutes construction under contract | Petitioners: no direct contract for construction; only a ground lease | Yes; the Lease satisfied 'construction ... done under contract' |
| whether the construction was paid for in whole or in part out of public funds | CCCC: rent credit reduces payments to the developer funded by public dollars | Petitioners: no public-fund payment supporting construction costs | Yes; rent credit constitutes payment from public funds under §1720(b) |
| whether rents reduced, waived, or forgiven qualify under §1720(b)(4) | CCCC: rent credit amounts to a reduction/waiver of rent | Petitioners: rent credits are not reductions under the statutory phrase | Yes; rent credit is a reduction/waiver within §1720(b)(4) |
Key Cases Cited
- McIntosh v. Aubry, 14 Cal.App.4th 1576 (Cal. App. 1993) (discourages narrow readings of 'public funds' in pre-SB 975 era)
- City of Long Beach v. Department of Industrial Relations, 34 Cal.4th 942 (Cal. 2004) (statutory construction of 'construction' and public funding context (pre/post SB 975 discussion))
- State Building & Construction Trades Council of California v. Duncan, 162 Cal.App.4th 289 (Cal. App. 2008) (addressed public-subsidy types and LIHTCs under SB 975)
- Greystone Homes, Inc. v. Cake, 135 Cal.App.4th 1 (Cal. App. 2005) (pre-SB 975 interpretation of subsidies; rejected as controlling here)
- Azusa Land Partners v. Department of Industrial Relations, 191 Cal.App.4th 1 (Cal. App. 2010) (independent statutory interpretation; agency deference framework)