An affiliate of the largest private owner of Marriott hotels in China built a condo tower in downtown San Jose with forced labor. Does Marriott know who they’re in business with?

This article is the beginning of a series focused on the global reach of the owners of Marriott hotel properties. This series will examine the treatment of workers, local communities, and regulatory compliance. A key question is how Marriott, as it seeks to expand rapidly across the globe, conducts due diligence of its international partners.

R&F Properties, one of China’s largest construction companies, is the largest private owner of Marriott hotels in China.[i] Z&L Properties, described by the San Francisco Chronicle as R&F’s US spinoff,[ii] has assembled a portfolio of residential and mixed-used construction projects across California.[iii]

One of these projects is the Silvery Towers (since rebranded 188 West St. James) in downtown San Jose.[iv] In 2017 federal agents freed more than a dozen immigrant workers who had been held in captivity by a subcontractor who had forced them to work on the condo tower. The contractor has been convicted of forced labor and is pending sentencing.

188 West St. James Street (formerly Silvery Towers), as it appears on Z&L Properties’ website[v]

Forced labor at Silvery Towers and a San Francisco Marriott hotel

In August 2014, Full Power Properties (a subsidiary of Z&L Properties[vi]) purchased a downtown San Jose site that had been entitled for a 643 residential unit, two tower project called “Silvery Towers.”[vii]

In August 2017, ICE agents freed more than a dozen immigrant workers who had been held in captivity by contractor Job Torres Hernandez. Hernandez had forced the workers to work on construction projects without pay in the Bay Area, including the Silvery Towers project.[viii]

One of Torres’ companies had worked as a subcontractor on the renovation of the Union Square Courtyard Marriott Hotel in San Francisco. According to a news report, workers at that hotel say Torres shorted them and the hotel is where workers first told authorities that Torres confined them in his warehouse, which led to his arrest.[ix]

In July 2018, the Department of Labor announced that Full Power Properties had paid $250,000 to 22 employees supplied by Job Torres Hernandez, operating as Nobilis Construction. [x]  The DOL reportedly told the San Jose Mercury News, “Full Power Properties oversaw and approved the work performed by workers provided by unlicensed subcontractor Job Torres, doing business as Nobilis Construction. Full Power approved the work performed by the employees; provided direction and supervision of all the work; and exercised control.”[xi]

Even after the revelation of forced labor at Silvery Towers, one worker was not kept safe on the site. In August 2018, an employee at the construction site fell to his death. The employee was on the payroll of Swinerton, a consultant on the project. CalOSHA launched an investigation of the death.[xii]

In March 2019, on charges stemming from the raid that freed the Silvery Towers workers, Hernandez was convicted of forced labor and harboring an undocumented immigrant.[xiii] After the verdict, Hernandez filed a motion for a judgment of acquittal.[xiv]

Does Marriott know who they’re doing business with?

In the articles that follow, we will explore R&F’s history of worker mistreatment. This raises a fundamental question about Marriott: why are they partnered with a company that has this history?

Marriott has made anti-human trafficking efforts a cornerstone of the company’s global commitment to safety and human rights. CEO Arne Sorenson, who has referred to human trafficking as “a horrific form of modern slavery that entraps millions of people around the world,” has said that Marriott’s efforts are part of standing up for the most vulnerable in society while also protecting associates and guests.[xv] How does Marriott’s partnership with R&F square with its stated ideals?

 

 

[i] “目睹万达融创富力买卖现场:酒店从336亿砍到199亿,” Ifeng, 7/20/17.  http://finance.ifeng.com/a/20170720/15540153_0.shtml

[ii] J.K. Dineen, “Suits, overruns slow condo projects by Chinese developers in SF,” San Francisco Chronicle, 2/9/19. https://www.sfchronicle.com/bayarea/article/Suits-overruns-slow-condo-projects-by-Chinese-13602784.php.  Z&L is also described as an affiliated of R&F in Janice Bitters, “Chinese developer revamps St. James Park tower proposal in San Jose,” Silicon Valley Business Journal, 6/6/18.

[iii] Portfolio, Z&L Properties, retrieved 4/1/19. http://zlproperties.com/portfolio/.

[iv] 188 West St. James, Z&L Properties, retrieved 4/1/19. http://zlproperties.com/project/188wstjames/. Details of the name change are in George Avalos, “Downtown San Jose housing tower faces default on city deal,” The Mercury News, 4/9/19.

[v] 188 West St. James, Z&L Properties, retrieved 4/1/19. http://zlproperties.com/project/188wstjames/.

[vi] Statement of Information, Full Power Properties, filed with the CA Secretary of State, 7/20/17.

[vii] Nathan Donato-Weinstein, “Chinese developer buys downtown San Jose tower site from KT Properties,” Silicon Valley Business Journal, 8/19/14.

[viii] Matthias Gafni, “ICE frees more than dozen immigrant workers held captive in Hayward,” East Bay Times, 8/30/17. https://www.eastbaytimes.com/2017/08/30/ice-frees-more-than-dozen-immigrant-workers-held-captive-in-hayward/.

[ix] “Construction Boss Accused of Scamming, Imprisoning Undocumented Workers,” KPIX CBS SF Bay, 11/15/17. https://sanfrancisco.cbslocal.com/2017/11/15/construction-boss-accused-of-scamming-imprisoning-undocumented-workers/.

[x] “U.S. Department of Labor Investigation Results In San Francisco Bay Area Construction Contractor Paying $250,000 Owed To 22 Employees,” US Department of Labor, 7/1/18. https://www.dol.gov/newsroom/releases/whd/whd20180718.

[xi] Levi Sumagaysay, George Avalos, “San Jose construction workers held captive are paid $250,000 after government probe, builder claims violations dismayed it,” Mercury News, 7/23/18. https://www.mercurynews.com/2018/07/23/san-jose-construction-workers-held-captive-are-paid-250k-after-government-probe/.

[xii] George Avalos, “Silvery Towers project site death in San Jose triggers state probe  ,” Mercury News, 8/16/18. https://www.mercurynews.com/2018/08/16/silvery-towers-project-site-death-in-san-jose-triggers-state-probe/

[xiii] Verdict (Docket entry #170, filed 3/18/19), USA v Hernandez (4:17-cr-00462), USDC Northern District of California.

[xiv] Motion for a Judgement of Acquittal (Docket entry #175, filed 3/28/19), USA v Hernandez (4:17-cr-00462), USDC Northern District of California.

[xv] “Marriott International Has Trained 500,000 Hotel Workers to Recognize the Signs of Human Trafficking,” Marriott News Center (press release), 1/18/19. https://news.marriott.com/2019/01/marriott-international-has-trained-500000-hotel-workers-to-recognize-the-signs-of-human-trafficking/.