Pasadena’s Strict Job Policy Creates Strain for Builders
A policy requiring developers in Pasadena to give preference to city residents for new jobs is sending ripples through a city already strained by tensions between slow-growth activists and the business community.
The policy, under which developers must interview Pasadena residents first for certain jobs, is among the most stringent in California. Commonly referred to as a “First Source Agreement,” it applies to the commercial projects approved two weeks ago under the limits of the slow-growth initiative.
Developers of five projects--ranging from a 10-story office complex to a 44-unit Travelodge Suites hotel--have already signed the agreement, promising to consider qualified city residents first in the hiring process and to regularly inform the city of any additional openings.
Besides developers, subcontractors and tenants of commercial buildings must also comply with the agreement.
Although business owners and city officials generally agree that a big selling point of major development projects is the number of new jobs generated, they are at odds over whether Pasadena should ensure that its residents get a first shot at those jobs.
“To say you have to interview Pasadena residents first, that’s a disruption of the business community,” said Ann Hight, president of the Pasadena Chamber of Commerce. “The more you put in the way of them, the less likely (the city’s) chance to get the businesses we want.”
Other San Gabriel Valley cities, including Monrovia, El Monte and Duarte, strongly encourage companies to hire local residents and often work with school districts and job centers to identify qualified people. But they don’t require companies to use the services.
A mandatory employee-referral program in Berkeley, where developers must inform the city’s employment agencies of new openings before advertising in the newspapers, is more lax than Pasadena’s because Berkeley companies are not required to interview the residents.
For some developers, Pasadena’s policy is an insult added to the injury of the Growth Management Initiative passed in March.
The initiative set an annual limit of 250 residential units and a limit of 250,000 square feet for large commercial projects.
The First Source Agreement was drafted and approved by the Board of Directors in November, 1988, before the initiative was passed. In August, the board adopted it again and applied it directly to the initiative.
Jurgensen’s Market, which received approval to expand to a three-story shopping and office complex, has not signed the agreement yet. An attorney for Jurgensen’s, Steve Pepe, said the policy might be acceptable when the city provides aid to a developer, but “in this case, they’re attempting to regulate the employment practices of private employers. There are practical problems. (The First Source Agreement) might have an adverse impact on a company’s desire to promote people within the company.”
Pasadena officials said that question is moot, since the agreement only applies to new positions for which there is a known pool of qualified applicants in the city. Rather than being an unfair burden on employers, the First Source Agreement is a free service that businesses should take advantage of, city officials said.
Supporters of the policy predict that other cities will jump on the bandwagon and start drafting their own mandatory employment policies. The policy is especially appealing as many cities increase the emphasis on improving employment opportunities for their own residents and reducing traffic congestion by shortening the distance people drive to work.
“Pasadena tends to be a trend-setter,” Alhambra City Manager Kevin Murphy said. “We’re going to get to the point where we have to do those types of things that Pasadena is doing. Whether it’s fair, probably not, but whether it makes sense for Southern California, probably.” For Pasadena developers, there may be more stringent demands to come. Under the last phase of the Growth Management Initiative, the city may revise the First Source Agreement and apply a stricter version to new construction that could include fees for job training and quotas for hiring residents, said Diane Lovell, the city’s career services administrator.
Mayor William E. Thomson Jr. said he is against setting quotas but favors requiring businesses to pay for the training of city residents, an arrangement that already exists in several Pasadena projects.
Before the Doubletree Hotel at Plaza las Fuentes won approval, developers agreed to fund city programs to train unemployed residents for hotel jobs. The deal was successful: 70% of the 260 jobs Doubletree has filled so far have been given to Pasadena residents, said Andrew Slater, the hotel’s general manager.
“I would anticipate there’ll be concern expressed by the business community, but I don’t think that should deter us from considering” developer fees to support job training programs, Thomson said. “Pasadena has a population that has a substantial number of people without jobs. These jobs aren’t getting filled by people here.”
Pepe said Jurgensen’s is waiting for the city to modify the First Source Agreement before signing it. The company objects to certain provisions of the current policy, including requiring subcontractors and new tenants to interview Pasadena residents first. But Lovell said the only changes made to the agreement will be language clarifications. City staff members are scheduled to present the clarifications to the Board of Directors on Tuesday.
If city officials decide to adopt a stricter policy that requires a certain percentage of jobs to go to residents, they will have to fight a legal precedent: In 1984, the U.S. Supreme Court ruled that such a policy is unconstitutional.
The issue of quotas aside, Hight said she is not sure the policy can work.
“We’re concerned with all aspects of it and the effects it will have on the community. There seems to be disincentives in this. There’s more of a stick than a carrot. It’s punitive instead of an incentive.”
