By Jim Bliesner
The United Food and Commercial Workers (Local 135) are picketing the El Super store in the City Heights Retail Village for a decent wage, health benefits and healthy working conditions. El Super just opened the store in late 2014 with a commitment to hire local City Heights residents.
Pickets allege “there are more people from Tijuana employed than from City Heights”. The Coalition for a Better El Super folks are distributing flyers illustrating 341 health code violations in various El Super stores throughout Southern California—things like “flies in the meat department” and “droppings from what appears to be a cat in the warehouse beverage storage cage”.
They both are asking customers to “Boycott El Super”. Mickey Kasparian, the head of UFCW says it is not unusual to find expired products in almost all El Super stores in southern California. They have been picketing for three weeks.
Kasparian says El Super had 7 union stores in Southern California, none in San Diego and the grocer recently refused to accept the new contract for the existing union stores. None of the union stores are in San Diego. In response, on April 22, 2014, El Super management filed unfair labor practice charges against the UFCW for the union’s failure to provide information that is directly relevant to ongoing bargaining— namely the results of an alleged investigation into food handling practices by the UFCW. Kasparian added, “The company just treats workers badly including no sick days, which means workers have to go to work sick, poverty level wages and unaffordable health care.”
City Heights previously had an Albertsons store that was all union. Most major US based grocery stores are union certified “and that results in a cleaner, safer, better paying middle class workforce that cares about the customer and the working conditions at the facility” says Kasperian. Albertsons in southern California was bought out by Cerberus, a private investment firm. The acquisitions were challenged by the Securities and Exchange Commission as constituting a monopoly and the SEC ordered Cerberus to sell off 27 of those stores to protect against unfair market share.
What has happened in many of the stores located in low income neighborhoods like City Heights is that they have been replaced by ethnic-based and, in the case of El Super, foreign owned companies who “have no standards for paying workers a decent wage or high level facility maintenance,” says Kasperian.
El Super is owned by Bodega Latina Corp which is a US subsidiary of Grupo Commercial Chedrani S.A.B. De C.V. in Mexico. It trades on the stock market for $40.70 a share and owns 211 stores in Mexico and 45 stores in the US, primarily in the Southwest.
In City Heights the El Super competes directly with locally owned and managed Murphy’s Markets as well as a collection of Asian based grocery stores, none of which are union and pay minimum wage as well. ”What you have here is an economic stranglehold by ethnic markets in low income communities based on the selling of food of questionable quality in many cases”, says Kasperian.
“We are used to food service workers being paid a reasonable salary aspiring to middle class life styles enhancing the general economic conditions in low income neighborhoods through quality jobs. We support and have always supported local hiring. What is happening is classic disinvestment in poor neighborhoods, just like the banks have always done. It is the stripping of assets for large corporate profits often based on public money.”
The local hire initiative with El Super came from the community activism and the helpful response and intentions of Councilwoman Marti Emerald. A local hiring fair was held. Informal inquires of workers in the store reveal no local residents. “There has been no follow-up, checking or insuring that the agreement terms are being met in spite of early predictions and concerns from area residents.”
The reason why these good intentioned ‘agreements’ don’t work says Kasperian is “there is no accountability and no monitoring. It’s not written on paper, but if it was it has no standing or method for monitoring. It’s well intentioned but it just does not work.”
In addition to the supermarket being under foreign ownership and management, the City Heights El Super store is located in the City Heights Retail Village, a commercial complex built by William Jones in conjunction with Price Charities and City redevelopment funds. The retail center was subsidized with public money.
It was intended—and in some ways does serve—to center retail activity, bringing the first Starbucks to the area along with Denny’s, Jamba Juice, etc. Kimco Realty, the publicly held REIT (real estate investment trust) bought the Retail Village from Jones in 2012. Kimco Realty is in partnership with Cerberus Capital Management.
Cerberus seeks out distressed investing and it may be that the original builders sold it as a distressed property with its public financing intact. Cerberus is an international real estate investment firm that
seeks out opportunities created by inefficient capital structures, event-driven distress and asset-level difficulties that can be acquired at a significant discount. Our real estate professionals are experts at creating debt transaction structures that offer downside protection, mitigate risk and align the interests of participating parties. Each opportunity is evaluated based on the underlying value of the asset and the risks associated with correcting the situation to unlock value. Former Vice President of the United States Dan Quayle, chairman of Cerberus Global Investments, and former United States Secretary of the Treasury John W. Snow, the Firm’s chairman.
The troubled history, the current labor issues with El Super, the vacant storefronts and frequent turnover as well as the sale of the property to national real estate trusts which further inhibits local responsiveness are examples of what happens when government funds for acquisition, demolition and construction do not include clear documents of public good.
The situation becomes even worse when these documents that do exist are unaccounted for. The Development Disposition Agreements (DDAs) that have been added to various CCDC or redevelopment deals are missing. Apparently Civic San Diego has hired a former CCDC/City employee, Janice Weinrich, to locate them.
So here you have one neighborhood retail site in disarray, missing DDAs from real estate deals throughout the redevelopment areas and to add to the confusion we have a majority of the redevelopment deals hanging in limbo in the California Department of Finance.
When the new CEO of Civic San Diego (Reese Jarrett) is asked about the disposition of those properties he says that he has no idea and no authority to access them. The properties paid for by redevelopment funds—including in some cases city-controlled CDBG funds and possibly general fund dollars—are in limbo, with no definitive timeline for their return or disposal.
Included in the state’s portfolio are numerous unfinished properties in City Heights as well as the other areas of influence for Civic San Diego—the Encanto/Southeastern areas. Those lots sit vacant and in some cases constitute eyesores. The state becomes an owner of distressed properties due to its inaction.
The question that lingers is whether a commercial facility built with public funds (in part) has an inherent “community benefits condition.” How long do those community benefits last? Would the sale of the Retail Village have happened without community input if a benefits agreement had been included? Would state handling of vacant properties and the current state of limbo have occurred if the properties had community benefit agreements?
Civic San Diego is involved in a series of community meetings to package the “values and goals” of the communities they serve. But that effort does not include actually developing project specific benefits agreements for specific future projects.
Such agreements are viewed as constricting development opportunities, especially if they are built into development agreements and contracts. They can be conceptual and value oriented but cannot be specific regarding actual benefits for the communities.
The question that lingers is whether a commercial facility built with public funds (in part) has an inherent “community benefits condition”. How long do those community benefits last?
Public agencies believe that if they attach community benefits to development deals, that private developers will not participate. This is basically the same assumption banks made when they chose to redline a neighborhood.
The assumption is that the neighborhood demographics or the geography limit the upside, and any social benefits further inhibit profit. These are culturally based assumptions which need to be overcome if the neighborhoods are to in fact to benefit from public subsidy of private development.
To avoid the sort of community disorientation now unfolding in City Heights around the Retail Village, Civic San Diego can enhance its negotiating position and insure community cohesion by adopting a policy of including specific “benefits agreements “on all publicly subsidized projects.
Benefits agreements are to Civic San Diego what DDAs were to redevelopment– a contract with the community.
Jay Powell says
Excellent points Civic vv CityHts. We need to know bottomline income expense budget and balance sheet for Civic. All the “Consensus Community Benefit” rhetoric is superficial without that baseline info. Civic has contract with City, in its capacity as the designated “successor agency” that is supposed to be negotiating with the state on the final disposition of all the assets formerly controlled by the City Council which was the legally designated legislative body that was responsible and in control of redevelopment.
Former City Councils abrogated their authority and responsibility by designating the former-former first “strong” Mayor (Sanders) as the Executive Director of their agency. The current Council under the current circumstances needs to assert its authority as the successor agency and use the Independent Budget Analyst to give them (and us) answers to these fundamental questions.
Civic’s response to who controls the assets is Governor Brown’s Finance Dept holds the bag. Who is negotiating with them on behalf of the City and those communities which have invested significant human and additional private and public capital over the past two decades in attaining these real estate assets for future public benefit?
Pull up the rock, shine a light and see what scrambles out. We want to know.