Showdown at the Blackstone Hotel

William McNary leads a community delegation supporting unionized workers at the Blackstone Hotel | Credit: Adrian G. Uribarri

For decades after it opened in the early 1900s, Chicago's Blackstone hotel was known as "the hotel of presidents," host to John F. Kennedy, Woodrow Wilson and both Roosevelts.

Today, it is a hotel of controversy, host to a protracted and public labor dispute.

Frustrated over the slow pace of its first contract negotiation, the union representing many hotel workers is employing a unique strategy: They argue that the Blackstone owes a fair contract not only to its workers, but also to the public. The hotel, they say, is a beneficiary of millions in public financing and has a debt to Chicago and the United States.

The union has also enlisted a coalition of community members to support its side in negotiations.

"When you get public money, you should be working on behalf of the public good," says William McNary, leader of the community delegation. "We don't think it's in the public interest to create more working poor. We think it's in the public benefit to promote people from poverty to the middle class."

Since June, McNary and a group of academics, clergy and community organizers have been lobbying managers to finalize a contract with workers at the hotel, reopened in March 2008, after a renovation estimated between $121 million and $139 million.

The hotel's fortunes had dwindled during the latter part of the 20th century, when the neighborhood around South Michigan Avenue lost favor with tourists. It was later acquired by a group associated with the Maharishi Mahesh Yogi, the Beatles' late spiritual leader, but efforts to turn it around failed.

It was vacated in 2000, when federal inspectors announced that they had found willful safety and health violations at the aging hotel.

In 2006, the hotel's parent company, Sage Hospitality Resources, received $18 million from Chicago and at least $21.5 million in federal tax credits for a renovation, according to city documents. The company's plan was to reopen it as part of the Marriott International Inc.'s Renaissance Hotels & Resorts.

The funds included tax-increment financing, a controversial method of directing public money toward development in distressed areas of the city. They also included new-market tax credits from the U.S. government.

To secure the federal money, Sage created the Hospitality Fund, which qualified as a community-development entity under the Internal Revenue Code.

The code stipulates that to be eligible for the tax credits, such entities must have the primary mission of serving low-income communities — the area around the Blackstone had a 26.3 percent poverty rate, according to U.S. Census 2000 data — and they must be accountable to them.

McNary, a longtime labor advocate at Citizen Action/Illinois, says the hotel has run afoul of those requirements by opposing a union and thereby limiting worker compensation.

"My only concern here is to make sure that the workers get justice," he says. "They are not cattle. They are human beings. They deserve a voice in the decisions at their workplace."

On Wednesday, the delegation sent a letter to Sage headquarters, asking the company to identify members of the Hospitality Fund's board so they can eventually meet or discuss the Blackstone contract. The delegation asked that Sage respond this week.

McNary says the delegation has not yet received a response, but Blackstone attorney Norman Buchsbaum says the hotel has fulfilled its social duty.

"We pay taxes. We employ people. Somebody should be congratulated for providing jobs in this economy," Buchsbaum says. "We provide jobs to over 200 people who come to work and get a paycheck and have benefits."

He says that the hotel has recognized the union, and that it is working to reach an agreement with workers during difficult economic times. The Blackstone workers' union, Unite Here Local 1, has also faced challenges renewing contracts with more than two dozen other hotels in the city.

"Everyone in the hotel industry is having a hard time," Buchsbaum says. "I don't think we should be singled out for having a problem at this time in the business."

Problems at the Blackstone go beyond mere contract language, however.

In July, Unite Here filed a charge with the National Labor Relations Board that accused the hotel of firing nine workers involved with union-organizing activity. According to the charge, two testified against the hotel in proceedings with the NLRB.

Annie Clontz, 24, says managers at the Blackstone offered her a promotion in May. She says she declined the move into management because it would have disqualified her from the union.

"I saw it as an effort to be promoted out of the bargaining unit," Clontz says.

One month later, she says, hotel executives fired her, alleging that a customer had complained that she added a $3 tip to his check.

Clontz denies the accusation, and the union filed a charge against the hotel on her behalf.

Last week, the NLRB dismissed that charge, but the board has previously ruled against the hotel, based partly on Clontz's testimony before she was fired.

In March, it found sufficient evidence that the Blackstone's managers had illegally tried to decertify the workers' union.

According to Unite Here, hotel executives held mandatory meetings in which they encouraged workers to sign a petition against the union, and they assisted them in circulating it.

Buchsbaum says managers held one meeting related to the petition, and that employees who did not attend "were not disciplined." He says managers were trying to fulfill a federal requirement to notify workers that they have 45 days to decertify a bargaining unit after its approval.

He says that while that requirement would have been fulfilled by posting a notice around the workplace, hotel executives wanted to be sure it was read to workers in several languages. He says the managers did not encourage or discourage workers from signing a decertification petition.

"That was our great, big campaign," Buchsbaum says.

Yet Clontz recalls at least three occasions in December and January in which managers talked about the petition after presenting the meetings as unrelated to the union. They would pay workers to attend, she says.

"They would kind of disguise it," Clontz says. "Sometimes it was an employee-appreciation meeting that was required. There would be cupcakes and things of that nature. They would have something on the big, black screen that said 'Spring Fling,' but at this 'Spring Fling,' we're talking about the decertification petition."

Union supporters were silenced at the meetings, she says.

"When I want to say something positive," Clontz says, "I get the microphone ripped from my hand."

McNary says the actions were a cynical abuse of the hotel's neutrality agreement with Unite Here.

The agreement, signed before the hotel reopened, required Blackstone managers not to interfere with the formation of a union, and to recognize one if employees joined. But it expired after initial recognition, and McNary says Blackstone executives tried to use that to their advantage during the decertification period.

"This is plain, old union-busting at its worst," he says.

Robert Cartwright, general manager at the Blackstone, says he wants the best for the Blackstone's employees, and that their supporters have wrongly portrayed the situation by omitting important details.

"There's two sides to every single story," he says. "We're getting bombarded with anything and everything, with a lot of false accusations."

Cartwright says that while the hotel has laid off union members, it has also cut more than half a dozen managers to cope with declining revenue. He says it also has good relations with another union at the hotel, Local 399 of the International Union of Operating Engineers.

Michael Gavin, vice president of the engineers' union, agreed that it is a "good relationship," despite limited contact with Cartwright, who started at the Blackstone about five months ago. He says his union is not involved in negotiations between the Blackstone and Unite Here.

Staff Writer Adrian G. Uribarri can be reached at 773.362.5002, ext. 12, or adrian at chitowndailynews dot org.