Michael Hart

Gaylord Has a Good Excuse
July 10, 2007

Associate Editor Rachel Wimberly spent much of last week chasing down what became, late on Friday afternoon, the story of Gaylord Entertainment pulling out of a $1 billion hotel-convention center project in Chula Vista, Calif. Ostensibly, Gaylord decided that, if it had given into what it characterized as unreasonable demands on the part of the local construction unions, the price of the project would have increased by $50 million to $75 million – which its CEO said would have rendered it unfeasible.

That was the result Friday afternoon, but Rachel spent a lot of the week struggling with sources who would not make themselves available or only wanted to speak off the record. Meanwhile, we presume, there was a lot of backroom drama going on we were not privy to. At that time my own feeling was that, despite all the sturm und drang, things would be resolved and the Gaylord project in the San Diego area would be built.

In my experience, that’s often how these episodes play out. Plus, I couldn’t believe an organization as sophisticated as Gaylord appears to be couldn’t have anticipated this and have a plan. I also couldn’t believe that San Diego-area union leaders would really let such a huge construction project slip through their fingers, or that local political and economic leaders wouldn’t put some pressure on them to see the writing on the wall.

I was wrong. Gaylord did walk away, but I can’t help thinking the union labor obstacle wasn’t just a convenient excuse. This is a company that has grown used to communities bending over backwards to do business with them. Its existing properties are in Tennessee, Florida and Texas, all pro-business states where unions carry very little clout. I’m not sure what they worked out with the Gaylord Natl. about to open in Maryland, but I’m guessing local officials made it very easy to do business there too. However, Nashville, or Grapevine, Texas, or even Prince Georges County, Maryland, are not California.

And union labor wasn’t the only problem Gaylord should have predicted it would have if it chose to build something that big on the Southern California coastline. If you live near the beach in San Diego County, you practically need an environmental impact study to pave your driveway. It had already run into problems with local authorities concerning how big a convention center it was going to be allowed to build.

My suspicion is that all the difficulties ahead of Gaylord finally outweighed the benefit a hotel-convention center would have represented to it. And luckily for Gaylord, some hard-headed union officials made it easy to walk away.

Posted by Michael Hart on July 10, 2007 | Comments (0)