Top city officials and labor and business representatives were said to be close to an agreement Tuesday night that would keep off the ballot a referendum on a new law that extends the city's "living wage" ordinance to workers at a dozen hotels near Los Angeles International Airport.
Today is the legal deadline for the City Council to respond to a referendum petition, submitted by the business community last month, that would ask voters to reverse the law. The council can either rescind the law or put it on the May ballot.
Under the possible deal, the City Council would rescind the law and replace it with one that would apply the same "living wage" -- pay and benefits equivalent to at least $10.64 an hour -- to the hotels, but with provisions that might be more palatable to business, according to sources familiar with the talks, speaking on the condition of anonymity because a deal was not final.
Spokesmen for the mayor, hotels and labor declined to comment.
But five people familiar with the talks -- three inside the government and two outside -- said late Tuesday that they expected to reach a deal by this morning.
They said Villaraigosa was personally supervising negotiations, which included council President Eric Garcetti and council members Wendy Greuel, Janice Hahn and Bill Rosendahl.
A deal, if it goes through, would avert a ballot fight that could cost labor and business interests at least $3 million each.
Political observers suggested that the hotels near Century Boulevard could be a frequent stop for Democratic presidential candidates; former North Carolina Sen. John Edwards had already pledged to campaign to keep the law. A poll of 800 city voters conducted last week for a labor-affiliated group found that 74% of those surveyed supported the extension of the living wage to the hotel workers.
The law for the first time extended the city's decade-old living wage requirement to businesses without a direct financial relationship with the city.
Fine points of the possible deal to alter that law remained in flux Tuesday night. Parties were discussing how to phase in the living wage over time, rather than implement it immediately. The new legislation also could include language, the sources said, that would limit the future application of the living wage to other employers in the city.
The deal also would offer some carrots to the hotels, including the establishment of an "economic opportunity overlay zone" in the Century Boulevard corridor that would provide the hotels incentives to make improvements, the sources added.
These provisions arose from more than three weeks of conversations that involved Villaraigosa, his staff, various City Council members, representatives of the Los Angeles Area Chamber of Commerce, hotel lobbyists, and labor leaders such as Los Angeles County Federation of Labor Executive Secretary-Treasurer Maria Elena Durazo.
The thorniest item in the discussions was the insistence by the hotels that workers who rely heavily on tips for their income be exempted from any new legislation. Labor leaders and City Council members refused to go along, and Unite Here, a hotel workers union that is trying to organize workers at the 12 hotels, produced a legal opinion questioning whether such a "two-tier" living wage would stand up in court.
Any new legislation is instead likely to call for a study of the effect of the living wage on employees who get tips. The deal also could include a study of health insurance questions, including whether employee contributions to their own healthcare could be considered part of the living wage.
One question raised by such a deal is whether, by repealing one law and replacing it with similar legislation, the City Council could face legal challenges from those who signed the referendum petition.
Steve Merksamer, a Sacramento election lawyer and expert on initiatives and referendums, said that he had not studied the Los Angeles City Charter, but that "as a general rule, the people's right to referendum is a constitutional right in this state.
"And legislatures should not be allowed to circumvent that right when a referendum qualifies simply reenacting something that is the same or similar, because that divests the people of the referendum power."
But Richard McCracken, a San Francisco labor and election lawyer who does work for Unite Here, says that as a charter city, Los Angeles has control over how it shapes its initiatives and referenda. "The City Council has greater latitude because there is nothing in the charter regulating that kind of response to a referendum," he said.