Can city stop Whole Foods over pay? Lawyers differ

Seattle Mayor Mike McGinn's bid to hold up a large West Seattle real estate development because he doesn't think Whole Foods pays employees enough raises a question: Is this legal?

No, according to longtime Seattle land-use attorney Elaine Spencer, who thinks McGinn's move is unprecedented. She doesn't see anything in the city's policies that would let the mayor attempt this.

But the mayor says what he is doing is legal and that Seattle should expect more of the same if he wins a second term this fall.

Metaphorically speaking, McGinn threw a firecracker into the middle of the mayoral race when in a July 15 letter he recommended that the city refuse to surrender an alley needed by the developers of the $100 million-plus apartment and retail project in which Whole Foods would go.

McGinn's move just three weeks before the Aug. 6 primary is the latest example of local unions flexing their political muscles.

City of SeaTac voters on Nov. 5 will vote on a union-backed plan to raise the city's minimum wage for some workers in and around Seattle-Tacoma International Airport to $15 an hour. With support from Working Washington, another group with ties to labor, fast-food employees have filed complaints with the Seattle Police Department alleging some restaurants did not pay them or made them work off the clock.

Pressing Seattle City Hall to use land-use regulations to block big commercial projects is a somewhat new twist. A union of hospitality workers is agitating, for example, against R.C. Hedreen Co.'s proposed $450 million downtown hotel project because the union thinks the hotel will bring too many low-paying jobs to Seattle.

The Whole Foods project in West Seattle is the latest to face this sort of scrutiny.

McGinn is urging his staff to recommend denial of the alley vacation that the developers of the West Seattle project need. His reasoning: the 340-unit project at Fauntleroy Way Southwest and Edmunds Street does not provide "adequate public benefit," and falls short of his "overarching commitment to just and sustainable development."

Spencer, the Seattle land-use lawyer who practices at Graham & Dunn, is incredulous over the mayor's reasoning. She said that official city policy dictates that land-use decisions such as vacating alleys and streets be decided on the basis of transportation-related factors. Will closing an alley, for instance, negatively affect circulation in the area?

"If I were representing Whole Foods, I would very much feel blindsided," said Spencer, who is not involved in the case.

McGinn, who is also a lawyer, conceded that, historically, things like traffic impacts are how street vacation requests are decided. But city policy does allow officials to base such decisions on Seattle's comprehensive plan, which seeks "a greater proportion of living-wage jobs that will have greater benefits."

"From a planning perspective, I think that is an appropriate thing to look at," said McGinn, who added there are already seven groceries near the Whole Foods project in West Seattle. McGinn said six of the stores offer employees comprehensive health benefits and "family-supporting wage scales."
It's up to the City Council to vote whether to vacate a street or alley.

The 43,000-member United Food and Commercial Workers Local 21 is backing the re-election of McGinn, who said the question comes down to whether the city should sell a property to a company that could drive down wages, such as Whole Foods, a non-union chain.

Whole Foods spokeswoman Ann Marie Ricard said the average wage for the company's non-leadership employees in Seattle is $16.15 an hour, and that the company offers employees "100 percent paid health care premiums."

City Attorney Pete Holmes, through a spokeswoman, declined to say whether he thinks McGinn's position is legal.

Lennar Multi-Family of Miami and Weingarten Realty Investors of Houston are the developers of the Whole Foods project. Weingarten Senior Development Manager Lance Sherwood declined to say whether his company has seen unions inject social-justice issues into land-use decisions.

Other developers are less shy. In a letter to members of the City Council, Donald E. Marcy, chairman of the Government Affairs Committee for the Washington state chapter of real estate group NAIOP, said McGinn's action not only "defies Seattle's regulatory requirements" but would set the city on "an untested and dangerous path."

McGinn, however, said that when it comes to street vacations, it's fair to consider "shared prosperity for the people who stock our groceries or clean our hotel rooms."