A year after opening, Tacoma City Grocer still picketed by unions – and some aren't sure why

Tacoma City Grocer, the first full-service supermarket in the downtown core in two generations, undoubtedly looks like the store civic and business leaders dreamed of for decades.

Bright red cafe tables dot the sidewalk in front of floor-to-ceiling windows, which gleam with offerings of fresh flowers, meat, fruits and vegetables. Elegant rows of wine bottles glisten. Made-to-order coffee and sandwiches hint at a bustling downtown workforce.

On opening day this past September, another element was added to the scene: about two dozen people from a union, informing shoppers that the store was non-union.

At the time, most people believed the picket line would last a few weeks or months. Almost a year later, picketers remain. Monday through Friday, early morning until late afternoon, a handful of people line the sidewalk in front of 1250 Pacific Ave., holding signs encouraging shoppers not to support a store desired by downtown leaders and residents for years.

“This is a long time to have any kind of organized action against a retailer, for any reason,” Bert Hambleton, a Bellevue-based retail grocery consultant for 32 years, said in a July interview. “I can’t think of one that has gone on this long. I also can’t think of a single time where this activity has led to what the union was after in the first place, which is to get the workforce unionized.”

Union leaders say that’s not their goal. They also believe leaders of a city where union support runs long and deep should have prevented a non-union operator from opening in the building, which is partially city owned. But the contract between the city and the private developers who co-own and manage it give a clear blessing to retail.

Eleven months into the picket, many Tacomans – including some staunch supporters of organized labor – say when it comes to the downtown grocery store, the union is picking the wrong fight.

In multiple interviews with The News Tribune this spring and summer, dozens of people from shoppers to businesspeople to elected officials have said they’re not sure how to resolve the stalemate or how it even began. They’ve expressed everything from puzzlement to anger over how the city can’t seem to fulfill one of its longtime wishes without controversy. They’re concerned about the message sent to other businesses considering a move to downtown Tacoma. And some are worried that the store won’t survive.

“I don’t cross picket lines regardless of how stupid they are,” said Bill Johnston, a retired labor negotiator and former UFCW staff member. “Then there are also people who look for logic in what they do, and they don’t see logic here.

“It’s really sad,” he said. “Here’s a store that’s badly needed downtown, and (the owner) has got himself into this big fight. It’s doing him no good, the union no good, the city of Tacoma no good.”

Others see the picket line as part of a larger debate. Private and public unions across the country are on the defensive, particularly since the Great Recession. Gov. Scott Walker of Wisconsin survived a recall campaign sparked by his efforts to severely restrict the collective bargaining rights for most public workers in his state.

“There is no time in our history where workers are at more risk of losing wages and benefits than they are right now,” said Curt Williams, organizing director at SEIU 1199NW, which represents health care workers. “It’s not always comfortable to have to walk through a picket line to get groceries. But there should be some uncomfortableness in our community around income inequality. How do we face this otherwise?”

Store owner Tyler Myers said the picket doesn’t make sense.

“I’m a small employer,” he said. “I’ve made a big, big investment in the city of Tacoma. I’m trying to do everything the right way, and I’ve got pickets on the sidewalk.”

Leaders of United Food and Commercial Workers Local 367 say their goal is to educate the public about the necessity of supporting unionized stores to maintain community standards.

“Union wages set the bar. If you didn’t have union employers setting the bar for the rest, then the bar gets lowered. So organized labor is what is sustaining our communities and our country,” Local 367 president Denise Jagielo said.

Union leaders won’t say what it would take to end the picket. They do say they plan to continue it indefinitely.

“We’re talking to the public. We’re asking the public to shop the union shops around the area. So there wouldn’t be any kind of discussion between us and anyone at (Tacoma City Grocer),” said Local 367 spokeswoman Kat Overman said last week. “We’re not organizing. We’re not negotiating.

“We have no plans of going away. And people who are wondering, they can wait and see.”

HOW A NON-UNION GROCER CAME TO DOWNTOWN

The last grocer in the downtown core, Manning’s Market, closed its doors in 1972. Two stores have operated for years within the city’s defined boundaries of downtown: The Safeway on the Hilltop, and Stadium Thriftway in the Stadium District. Neither are within walking distance of the apartments and condos along the Foss Waterway, or the campus of the University of Washington Tacoma.

Both of those stores have unionized employees, as do almost all groceries in Pierce County. The exceptions are rare: Costco, Trader Joe’s, Walmart and WinCo.

Since people started moving back downtown in the mid-1990s, a grocery in the downtown core has been at the top of the civic wish list. At least four developments have sought one in the past several years, most recently a Whole Foods as part of the proposed mixed-use building north of the McMenamins Elks Temple.

While the developers of the Elks mixed-use building tried to land Whole Foods, city leaders asked the owners of Pacific Plaza to hold off on their supermarket plans to give the Whole Foods deal a chance. Whole Foods also is non-union. The Elks mixed-use building ultimately didn’t happen.

“We wanted from day one to bring a grocery store to Tacoma as part of this project,” said Dan Putnam. He is one of 11 local business owners who, through a partnership with the City of Tacoma, turned a rundown municipal parking garage into a modern office building called Pacific Plaza.

Between 2009 and 2011, commercial broker Jeff Kraft said he approached more than a dozen grocers: major national players like Safeway and Kroger; regional stores like Metropolitan Market; and local independent operators like Stadium Thriftway.

The large companies declined quickly, Kraft said, because they were concerned the area didn’t have enough potential customers. Others believed the 16,000-square-foot space was too small.

In an interview this spring, Putnam recalled asking Kraft specifically to target local operators.

“I’m born and raised in Tacoma. We asked him to approach the stores around, first of all Stadium Thriftway,” he said. “Make sure they know they’re welcome.”

Thriftway owner Mike Hargreaves toured the space in the summer of 2010.

“We were trying to sell the space to him,” Putnam said, recounting the pitch: “Here’s how the space works. We think you’d be the perfect fit. If it was someone else it could be competition, but I don’t think that’s a huge factor.”

Hargreaves declined. He already had announced plans to expand his current location on North First Street, around the same time it seemed likely a grocer could open up just blocks away as part of the Elks McMenamins complex.

In January 2011, Putnam and his partners announced an agreement with The Myers Group, a Whidbey Island-based independent grocer. The company owns four other IGA-branded stores in Washington, including an urban grocer in downtown Seattle. Myers’ Seattle store, which opened in 2008, wasn’t picketed by the UFCW local that represents grocery workers in King County.

UNION INVOLVEMENT

When Myers signed a five-year lease to operate a full-service grocery on the southeast corner of Pacific Plaza, Hargreaves told The News Tribune that he believed the store would marginalize his. He also said the new grocer was unfair competition because it was moving into space that existed only because city government worked with a private developer to renovate the building.

Myers and Putnam said then that the new store wouldn’t compete with Stadium Thriftway, since urban stores focus on markets measured in blocks. Stadium Thriftway is more than a mile away.

“Even toward the end, Tyler said, ‘Hey, if Mike wants to go there, no problem,’ ” Putnam said. “Maybe (Myers) was looking for an out. You have two studies saying numbers will be good, but when there’s been nothing for 40 years, how good are the numbers?

“It’s the first grocery store in downtown Tacoma in 40 years,” Putnam said. “It’s risky.”

Putnam said the first time he heard about the union’s concerns was immediately after the Jan. 4 announcement. Hargreaves, whose employees are represented by Local 367, got in touch.

“He expressed that this was a problem, and that (Myers) was a non-union shop and that it was an uneven playing field with our project and the non-union store,” Putnam said. “In the nicest way possible he said he would get the union involved.”

In a July interview, Hargreaves denied that.

“In no way did I ever say I would get the union involved,” he said. “It was an informational thing: ‘This is (the union’s) stance on a new store coming in. And do you know that, Dan?’ I think he vastly overestimates my ability to have the union do or not do anything.”

“My concerns are old news as far as I’m concerned,” he said. “If you’re writing on why are (the picketers) still down there, that’s between the union and Tyler.”

THE MYERS GROUP AND LOCAL 367

In 2003, employees of Myers’ store in Ocean Shores voted to unionize through Local 367, which represents about 7,000 workers in six counties including most grocery workers in Pierce County.

The union says Myers walked away from negotiations, was ordered back by the National Labor Relations Board, then used legal maneuvering to stall the process so a contract wasn’t achieved.

Myers says he negotiated in good faith. He said out of 35 employees, about six or seven decided to strike. It lasted nine months, which Local 367 says is the longest strike in its history. The strike ended, Myers said, when one of the strikers asked to come back to work and others followed.

Just more than a month after Putnam and Myers announced the Tacoma lease, the then-president of Local 367, Teresa Iverson, sent Putnam a letter asking for a meeting.

“We are wondering if any consideration was given regarding what kind of employer this is,” according to Putnam’s copy of the Feb. 14 letter. “This union has not had a positive experience with Mr. Myers.”

The rest of Iverson’s letter questioned whether union employers had been offered the Pacific Plaza space.

On March 2, 2011, Putnam and one of his partners, Tom Absher, met with two union representatives.

“The purpose of that meeting was to notify them that, did you in fact contact union employers? Because we have previous experience in 2003. We had concerns,” said Jagielo, who represented Local 367 along with attorney Finley Young.

Putnam said they first discussed wages. He said Myers has assured them he pays a fair wage, but he and Absher asked the union to provide their scale for comparison.

After the meeting, Putnam said they gave it to Myers, “and he said we meet or exceed this, and the benefit package you can argue about what’s better or not better.”

Then, he said, the conversation turned to recruiting.

“The union leadership chastised us that we didn’t contact the union leadership about the store,” Putnam said. “We told them we contacted (Hargreaves) and Metropolitan Market, and I saw surprise.”

“That kind of upset me,” he said. “If they’re not attentive to what’s going on in this city – it’s been on the front page of the newspaper. I said that in the meeting: ‘I’m surprised you didn’t know.’ ”

PACIFIC PLAZA AND THE CITY

Jagielo and other union leaders hold city leaders responsible for allowing a non-union store to move in.

The lesson of the downtown grocery store, Jagielo said, is that “people need to be involved in their local politics.”

“There has to be more transparency in the city so the community knows what’s going on, so they can voice their opinion,” she said.

Pacific Plaza was born through a public request the city issued in 2005. It wanted ideas for how to renovate its two 35-year-old parking garages that had become eyesores along Pacific Avenue. News Tribune columnist Dan Voelpel wrote about the request twice in 2006, and it bubbled up to full public view on March 20, 2007, when the entire City Council was presented with the proposal from Putnam and his co-owners.

About two weeks later, on April 3, 2007, the council voted to enter into the partnership.

“This is where we got caught in the IGA issue,” Local 367’s Overman said. “The public-private partnerships started behind closed doors. Someone would come to the city and say, we have this idea, and they’d work the details back and forth, and have it all worked out before the council laid eyes on it. They were expected to just discuss it and vote on it.

“And the community had no input until the council saw it.”

When the building was finished, the parts that the city originally owned – the parking structure – were turned back over to the city. Using a condominium structure, Putnam and his partners own the new office structure on top of the garage and lease the ground floor from the city.

Under its agreement with the city, Pacific Plaza’s owners can sublease that ground floor for “commercial retail activity.” Documents governing the arrangement contain no other requirements or restrictions. Some of the language, though, seems to give city staff the ability to approve or disapprove tenants.

“The City reserves and retains the right to review proposed retail activities and tenants or sub-lessees in advance for administrative approval by the City, which approval shall not be unreasonably withheld,” according to the city’s lease of the ground floor space to Pacific Plaza.

“That’s the triggering provision that allows us any level of peek at what someone otherwise would be able to do,” city attorney Elizabeth Pauli said.

It’s also part of what drove the developers to seek council approval in 2009 to use half of the ground floor as office space for the state attorney general’s Consumer Protection Division. When Putnam and Absher made that request, they told the council they were diligently seeking a grocer for the other half of the retail space.

After Putnam and Myers announced the store in January 2011, representatives from Local 367 not only contacted Putnam. They reached out to City Council members.

The lease was signed about six weeks later, and the City Council wasn’t involved. “The ultimate lease was private to private,” Pauli said.

THE GOVERNMENT ROLE

Since the government had a role in creating the building, union leaders say, it should have had more say in who the tenants are.

“If I understand the concern of the union, it was over the process by which it ended up being a non-union shop,” City Councilman Jake Fey, whose district includes downtown, said in recent interview. The union believes “since it’s a public building in some way shape or form, there should have been consideration of it being a union shop and that there wasn’t proper notification of it being a non-union shop.”

A provision to deal with that concern could have been negotiated as part of the development agreement or the lease terms, Pauli said. But adding new requirements after those contracts are signed is like trying to add an egg to a baked cake.

“If we know of a specific condition that we want to place on someone’s use of property, we would tell them at the time of (lease) negotiation,” Pauli said. “To introduce a new condition could be considered unreasonable withholding.”

Overman and Fey both said they’re working on proposals to make public-private partnerships more transparent. Fey referenced both the decision to allow the attorney general’s office in Pacific Plaza and the Tacoma Walmart as examples of the need for earlier public participation.

“There’s not a clear-cut way for people to be able to express their opinions ahead of time that it might make a difference,” he said. “The perception is that it’s always at the last minute and almost an accomplished fact by the time the public finds out about it.”

Johnston, the former union staff member, said the union should have been more politically proactive.

“Some people in labor here are blaming the council” for the lengthy picket, because they believe the lease should have been blocked, he said.

“I don’t,” he said. “I don’t think the union kept them up on what was going on. The union dropped the ball. All of the sudden the council turned around and they were stuck and hadn’t been told anything.”

Fey said he had no opinion on whether the picket was justified.

“It’s the right of the union to picket, and people can judge for themselves whether they think it’s appropriate or not,” he said. “I guess I would say I’m a little surprised it’s lasted this long.”

Mayor Marilyn Strickland, who lives downtown, said enough’s enough.

“This is the first full-service grocery store we’ve had downtown in decades. Every single grocer in town had the opportunity to open in Pacific Plaza and they passed on it. So Tyler Myers took a risk and opened there,” she said.

The picket has “run its course and it needs to stop. We should all share the goal of success for our business. That’s not anti-union, it’s pro-Tacoma.”

BROADER CONTEXT

Union leaders see the downtown picket line as part of a larger battle.

“It’s important to figure out how to engage with the larger community on these issues” like income inequality, said the SEIU’s Williams. “We can band together and organize and try to make it better, or, I don’t know what our other choice is that advances anything.”

At 20 percent, Washington state is still the fourth most labor-dense state in the country, according to figures from the federal Bureau of Labor Statistics. The national rate is 12 percent.

In Pierce County, about 26 percent of employees are unionized, according to figures from the Pierce County Labor Council. Tacoma is a bit higher, at 28 percent.

The downtown store is “an important fight because there’s a Safeway just up the hill,” said Labor Council secretary Patty Rose. “If you allow an employer to have an unfair advantage – not pay family wages, or health benefits – they can undercut the store that is providing good jobs, wages, retirement security, health care. We don’t want a race to the bottom.”

Myers said he pays his employees better than union scale, though he declined to provide a complete breakdown for comparison. Union leaders don’t believe him. There’s no way to know without analyzing and comparing two stores’ entire wage schedules.

Myers cites his company’s turnover rate of less than 10 percent as evidence that his workers are happy.

Shelby Dodge, a cashier at Tacoma City Grocer, said she was a member of Local 367 and worked at three different Safeways before being hired at Myers’ store. She prefers working outside the union, she said, because it’s less hassle and pays better.

“There was drama all the time,” she said. “I had trouble getting a 20-cent raise when I changed departments. Here, I was making more on my first day than at my last job.”

The picketers at this point rarely hand out fliers or engage the public at all. Several picketers wear headphones for most of the day, and none would respond to questions from The News Tribune about why they were there. They referred a reporter to the picket leader, who wouldn’t give his full name. He said he was a third-generation union member, out of work, and that’s why he was on the picket line. He declined to say more.

Several dozen shoppers through the spring all said they were put off by the fact that some of the picketers are not displaced union workers, but are paid by the union to be there.

Jagielo said some picketers are union members, or previous union members hired for this job.

“Union members are just like everyone else. They have to make a living too. Some do go down and volunteer when they can,” she said.

Reflecting comments from a dozen shoppers this spring, downtown business owner and local-shopping advocate Patricia Lecy-Davis said the situation was confusing particularly for people who, like her, support union values.

Moreover, Lecy-Davis said, the tactic isn’t working.

“I hear people asking all the time what is this for, why are they still there, what is the point? It’s all backfiring on the unions. It’s giving them a bad name. I feel like there could be better ways to get the message across,” she said.

Commercial brokers said most of the comments they hear are bewilderment, but there is an occasional remark that leads to worry about first impressions.

Kraft, a broker who works primarily with retailers, said some of his potential clients are concerned that their business could be targeted.

“Occasionally it will come up: Do you think I will have problems?” Kraft said his potential clients ask. “I can’t answer it. I know that they’re purposely targeting the grocers, and from what I hear they’ve targeted Tyler’s group before, so probably they won’t. But how can you say, if you just don’t know.”

OTHER CONSIDERATIONS

Others see a connection between the grocer battle and the fight over Bellingham-based Hollander Investments’ plans to build hotels on the Foss Waterway. Downtown rival Hotel Murano, whose employees are organized, fought a long court battle over environmental issues as a proxy to the real issue of collective bargaining. Hollander owns Marriott Courtyard, where employees aren’t unionized.

Former Mayor Bill Baarsma and Jeff Lyon, CEO of commercial brokerage Kidder Mathews, both connected those dots.

“Is that any different than this?” Lyon asked. “It’s part of being part of Tacoma. It’s one of the things we have to deal with.”

Local 367 picketed the WinCo in South Tacoma when it opened, too, but stopped after about six months.

“From the reports that we were receiving, market share was staying in our union stores that were providing decent wages and benefits, so we felt that we had done our job there and moved on,” Jagielo said.

Stadium Thriftway owner Hargreaves said in July that the downtown store wasn’t affecting his business.

Baarsma said he contacted Local 367 and city leaders last fall to try to find a solution. He got nowhere, he said.

“Those of us involved in (Pacific Plaza), and city’s involvement in that extraordinary success story, we all want to see that successful,” he said. “I said is there any way out of this? Any solution? Something the city can do? But I’m not the mayor.”

IS RESOLUTION POSSIBLE?

One Tacoma City Grocer shopper has been on both sides. In her career, she has worked for major grocery stores and for labor unions as an organizer.

“I personally am not off-put by the organized picket,” said Jane Arge, who recently moved downtown from Portland. “The right of those people to be there is protected by the First Amendment.”

She isn’t convinced Myers’ store will survive.

“I think I’m the anomaly that goes in there and buys two bags of groceries,” she said. “Most people I see use it as a convenience store. It’s a good place to buy meat, because it’s always marked down, because it’s not moving.”

Myers says the store isn’t profitable yet, but he didn’t believe it would be by now. Each week gets better.

“It takes at least a full season if not two full seasons, meaning two years, to know where you’re going to be,” he said. “We’re planning on being there for a long time.”

Johnston, the former UFCW staff member, said talking is the only way to end the picket.

“The solution is a political solution. That’s it,” he said. “And there’s lots of ways to do it.”

“If I was working for the city,” he said, “I would tell the owner of the store, and tell Denise (Jagielo), ‘We’re all gonna have lunch together. We want to talk. We’re sick of this.’ And sometimes that’s what it takes.”

Union leaders and Myers haven’t spoken, and Myers says he doesn’t intend to. Putnam hasn’t spoken to union leaders since the meeting more than a year ago. Strickland said she hasn’t spoken to union leaders since shortly after the lease was announced.

The county labor council’s Rose said in late July that it’s probably time to “start toward a resolution.”

“What could be a win-win solution here?” she said. “I agree with the mayor that we need a downtown grocery. So is it the mayor and I pulling both sides together and talking about resolution? I don’t know. Should it be an organizing drive asking workers to sign representation cards? Probably is. I don’t know.

“Maybe that’s a conversation at our August meeting.”

kathleen.cooper@thenewstribune.com
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blog.thenewstribune.com/business
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