Labor Learns Wall Street’s Game
Aaron Bernstein and Ron Grover
Dec. 12, 1998
In November, Dreamworks SKG, the entertainment company, penned a deal to build a $200 million movie studio in Las Angeles to anchor the massive Playa Vista real estate project, planned to include 13,000 homes.
But the deal’s most improbable player is a union-owned insurer, ULLICO-parent of Union Labor Life Insurance-which is showing how labor can achieve its goals by flexing its financial muscle.
After much wheeling and dealing, ULLICO ended up as a Playa Vista co-owner with L.A. dealmaker Gary Winnick, Goldman Sachs, Morgan Stanley Dean Witter. ULLICO obtained pledges for 125,000 new union construction jobs over 15 years.
ULLICO is clearly ready to play with Wall Street biggies.
Vice-President, Mike Steed has invested in 55 deals since 1992, reaping average annual returns of 33%. And he obtained agreements that ULLICO’s partners will remain neutral in any union-recruitment drives affecting them.
“Private capital investing” says Steed, “creates opportunities for unions to get high rates of returns and organize new workers”