Court Opinion

ID: 8408905
Source: CourtListenerOpinion
Date Created: 2022-11-02 16:49:29.172285+00
Date Added: 2024-06-11T16:47:37.563560
License: Public Domain

BYBEE, Circuit Judge,
dissenting:
Laws that work an “impairment of a State’s own contracts ... face more stringent examination under the Contract *1158Clause than [do] laws regulating contractual relationships between private parties .... ” Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 244 n. 15, 98 S.Ct. 2716, 57 L.Ed.2d 727 (1978). There is a good reason for this. Parties enter into contracts to “order their personal and business affairs according to their particular needs and interests. Once arranged, those rights and obligations are binding under the law, and the parties are entitled to rely on them.” Id. at 245, 98 S.Ct. 2716. When the state is a party, there is an additional risk that it will employ its sovereign powers to alter the settled terms of the contract. Although the temptation to secure by legislation what a state has failed to achieve through negotiation is great, the Contract Clause commands that states resist this temptation.
The City of Berkeley succumbed to this temptation by employing its sovereign power to secure terms that it failed to negotiate in its proprietary capacity with RUI. Through the Marina Amendment, the City imposed obligations on a small number of businesses holding long-term contracts with the City (such as RUI) and, moreover, it made these obligations retroactive. The Marina Amendment is, accordingly, a rule of neither general nor prospective applicability. See Landgraf v. USI Film Products, 511 U.S. 244, 266-67 & n. 20, 114 S.Ct. 1483 (1994); Exxon Corp. v. Eagerton, 462 U.S. 176, 191-92, 103 S.Ct. 2296, 76 L.Ed.2d 497 (1983). Berkeley violated the Contract Clause of the United States Constitution because it has “impair[ed], by legislation, the obligation of its own contracts.” Woodruff v. Trapnall, 51 U.S. 190, 207, 10 How. 190, 13 L.Ed. 383 (1850). I respectfully dissent.1
I.
The majority forgoes a factual recitation of how Berkeley passed the Marina Amendment. These facts bear retelling and I recite them, because they reveal why the Marina Amendment is an improper exercise of municipal authority that offends the Contract Clause. After describing how the Marina Amendment substantially impairs RUI’s lease, I discuss why the Marina Amendment is not a valid exercise of Berkeley’s sovereign power. I then proceed to the analysis that the majority fails to reach, the two additional prongs of the Supreme Court’s framework for Contract Clause challenges.
In 1999, the City commissioned a survey of living wage laws in other cities and an economic study of the potential impact in Berkeley of such a provision. The survey found that cities had not adopted a living wage for employers generally. Instead, they had required a living wage as a condition for entering into new municipal contracts or renewing existing ones.2
The study of the economic impact of such a policy for Berkeley recognized that a living wage ordinance (“LWO”) would raise labor costs. It identified three groups who would potentially bear the incidence of these additional costs: (1) the City might receive lower rent revenue when its leases became subject to the LWO because lessees would demand a rent reduction to compensate for the higher labor costs; (2) consumers might have to pay higher prices for the goods and services because businesses subject to the LWO would pass the increased labor costs *1159onto consumers; and (3) employers might realize lower profits because they could not recover all of the higher labor costs through rent reductions or higher prices. The study could not predict precisely what share of the additional costs each of these groups would bear, but warned that “most of the direct costs of a living wage policy will be born by the City of Berkeley.” Howard C. Greenwich, City of Berkeley Living Wage Analysis 8 (Nov. 30, 1999) (“Greenwich Study”).
The Greenwich Study recommended that any LWO cover leaseholders with more than seven employees and gross revenues over $200,000. With respect to how many lessees would be covered, the study observed:
Although not enough surveys were returned to accurately estimate the financial impact of lessee coverage, it would have a major impact at the Marina. Three leaseholders, a hotel and two restaurants, are major employers of low-wage workers. Because these employers hold long-term ground leases, with the next expiration in 2017, the City should consider requiring a living wage during the next rent negotiating period starting in 2004. The lessees may demand reduced rent if they are required to comply with the living wage ordinance.
Id. The Greenwich Study specifically recommended that the City “consider rent adjustment times for triggering living wage requirements. Otherwise, the three largest businesses [at the Marina] that employ low-wage workers will not be covered until the year 2017.” Id. at 32. The three major employers at the Marina were the Radisson hotel; HS Lordships, a restaurant; and Skates, a restaurant owned by RUI.
After receipt of the study, the City Manager wrote a memorandum to the Mayor and City Council stating that the proposed LWO would have no “significant financial impact” on city lessees at the Marina, because these leases “do not have open negotiations for any where from 10-15 years.” The memorandum also noted the “proposal from the Living Wage advocacy community” to apply the LWO to Marina employers, but “recommended that any concept of a ‘living wage zone’ be referred to the City Attorney for further analysis and review.” In a second memorandum, the day before the Council voted on the LWO, the City Manager again advised that “[t]hose leases most targeted by the living wage advocates, the Marina leases, do not have open negotiations for anywhere from 10-15 years.”
Berkeley adopted the LWO in June 2000. Berkeley, Cal., Ordinance 6548-N.S. (June 27, 2000) (creating Berkeley Municipal Code § 13.27). The LWO does several things. First, the ordinance identifies the employers subject to the LWO. It applies to parties conducting business with Berkeley or receiving some financial benefit from it, such as contractors, licensees, and lessees. The LWO applies only to employers with more than six employees and at least $350,000 in annual revenue. Id. § 13.27.030. It also exempts employers “subject to a bona fide collective bargaining agreement where the waiver of the provisions of this Ordinance are[sic] set forth in clear and unambiguous terms in such an agreement.” Id. § 13.27.070.H. Second, the LWO mandates a scale of minimum hourly wages keyed to the provision of health benefits. It sets the hourly wage at $9.75/hour for employers that furnish health benefits and at $11.37 for employers that do not.3 Id. § 13.27.050(A). *1160It also requires employers to offer workers twenty-two days off per year for vacation, sick leave, or personal necessity, and at least twelve of which must be paid days. Id. § 13.27.050(B). Third, the LWO establishes a private right of action for employees in county and state courts. Id. § 13.27.090-.100.
The LWO applies to every city contract or lease as of the date of the agreement with the City or the date when the agreement is amended. Id. § 13.27.060. A memorandum from the City Attorney to the City Manager and Department heads issued shortly after the City Council adopted the LWO discussed how to deal with “contracts and leases that were already ‘in the pipeline.’ ” Contracts and leases approved by the City Council after June 20, 2000, and otherwise subject to the LWO, might have to be “re-assemble[d].” The memo noted that “Revising contracts and leases that are actually impacted by the LWO may involve some re-negotiation.”
One month later, in July 2000, representatives of Appellee Hotel Employees and Restaurant Employees Union Local 2850 sent two faxes to the City Council urging it to amend the LWO to apply immediately to the Marina lessees. The first asked the Council to “do everything in its power, including restructuring [the City Attorney’s] workload if necessary” to make possible a vote on an amendment to the ordinance at a Council meeting in eleven days. It exhorted the Council not to “leave behind ... the [Marina hotel] workers, who worked so hard to get [the LWO] passed.” The fax included a draft of a proposed amendment that provided: “Notwithstanding any other provision of this Chapter, the compensation requirements of [the LWO] shall become effective for businesses located on public trust lands thirty (30) days after the effective date of this Ordinance.” The second fax, sent ten days later, requested that the Council direct the City Attorney to put the amendment in “a form that the City Council can put to a vote” and to clarify its intent to develop an ordinance that will “cover large hospitality employers, particularly those at the Berkeley Marina.”
In September 2000, the Council adopted the “Marina Amendment” to the LWO. The Marina Amendment applies to entities within the “Marina Zone” that employ six or more workers and generate $350,000 or more in annual gross receipts. Berkeley, Cal., Ordinance 6583-N.S. (Sept. 19, 2000) (amending Berkeley Municipal Code § 13.27). It defines the Marina Zone to include only lands that Berkeley held in public trust, id. § 13.27.020(B), and therefore, it does not reach any employers who were not already conducting business with the City. Although the Marina Amendment does not expressly provide for an effective date, and although the LWO applied prospectively, Berkeley understood the Marina Amendment to apply retroactively to existing leases.
II.
The majority dismisses RUI’s claims because it concludes that Berkeley has not impaired any “specific terms” of its lease with RUI. Maj. op. at 1147 (quoting General Motors Corp. v. Romein, 503 U.S. 181, 186, 112 S.Ct. 1105, 117 L.Ed.2d 328 (1992)). I respectfully disagree. I would find that Berkeley and RUI have a contract and that the Marina Amendment substantially impaired it. I would then require Berkeley to carry its “burden of establishing that [the law] is both reasonable and necessary to an important public purpose.” S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885, 894 (9th Cir.2003). Ac*1161cord, Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400, 411—12, 103 S.Ct. 697, 74 L.Ed.2d 569 (1983). In my view, Berkeley cannot satisfy this “heavy burden.” S. Cal. Gas, 336 F.3d at 896.
A
The majority finds that “[n]o specific provision of the lease agreement addressed payment to or employment benefits for RUI’s employees.” Maj. op. at 1147. The majority is, of course, formally correct that the lease contains no provision expressly addressing the compensation of RUI’s employees. This observation, however, does not end our inquiry.
A broader, and to my mind more common-sense, view of the contract between Berkeley and RUI compels the conclusion that the Marina Amendment affects the agreement the parties reached in 1996 and that the impairment is substantial. See Romein, 503 U.S. at 186, 112 S.Ct. 1105. The Marina Amendment impaired the lease agreement in at least two ways. First, it violated a general principle of contracts that the agreement between the parties is contained within the four corners of the document. Berkeley could have negotiated with RUI for a living wage in 1996. It did not. Instead, in 2000, upon realizing that RUI’s contract could not be renegotiated for some years, Berkeley simply adopted an ordinance directed at the Marina lessees and made it effective immediately. Second, the Marina Amendment reduced RUI’s expected profits by imposing additional operating costs on RUI, costs that Berkeley knew were the legitimate subject of negotiation.
1
Federal law controls whether an agreement constitutes a contract for purposes of Contract Clause analysis, although we will “ ‘accord respectful consideration and great weight’ ” to state contract principles. Romein, 503 U.S. at 187, 112 S.Ct. 1105 (quoting Indiana ex rel. Anderson v. Brand, 303 U.S. 95, 100, 58 S.Ct. 443, 82 L.Ed. 685 (1938)). Under California law, lease agreements for a period longer than one year must be in writing, Cal. Civ. Code § 1624(a)(3) (West 2003), and are subject to the “general rules of interpretation applicable to all contracts.” Stockton Theatres, Inc. v. Palermo, 124 Cal.App.2d 353, 268 P.2d 799, 801 (1954). California requires that “[w]hen a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible_” Cal. Civ. Code § 1639 (West 2003). RUI’s lease also contained an integration clause, and the inclusion of an integration clause in a written contract precludes subsequent modifications, absent additional writings by the parties. See Masterson v. Sine, 68 Cal.2d 222, 65 Cal. Rptr. 545, 436 P.2d 561, 563-64 (1968) (an integrated contract is the parties’ complete and final agreement); Cal. Civ. Code § 1698 (West 2003) (permitting modification in writing of a written contract). Furthermore, except as otherwise provided by statute,”[a]ll contracts, whether public or private, are to be interpreted by the same rules....” Cal. Civ. Code § 1635 (West 2003). California courts have distinguished between government’s proprietary and sovereign capacities and held that governments acting in their “proprietary or business capacity” are not' entitled to certain rules, defenses, or presumptions to which they are entitled when acting in a sovereign capacity. Corp. of America v. Durham Mutual Water Co., 50 Cal.App.2d 337, 123 P.2d 81, 83 (1942). Accord M.F. Kemper Constr. Co. v. City of Los Angeles, 37 Cal.2d 696, 235 P.2d 7, 12 (1951).
In 1996, RUI and the City renegotiated the lease agreement when RUI sought the City’s approval to assign the lease to a subsidiary, and the City took the position that it could withhold its approval for any *1162reason. The 1996 negotiations were quite specific, and the parties negotiated three new terms. First, Berkeley negotiated for, and obtained, a higher rental payment. Under the original lease, Berkeley was entitled to 2.75% of the lessee’s “gross receipts”; under the new lease it receives 3% of RUI’s “gross receipts” until 2007, and 3.3% through the end of the lease in 2018. Second, Berkeley insisted on, and obtained, RUI’s agreement to install a new grease trap, at an expected cost of $50,000 to $55,000. Third, Berkeley demanded, and RUI agreed, that RUI would pay $7,000 per year for landscaping.
The lease is silent on the question of RUI’s employee wages and benefits. The fact that the lease, which constitutes the entire agreement between the parties, does not set employee wages and benefits necessarily implies that the parties agreed not to contract on wages and benefits.4 Cf. Sonoma County Org. of Pub. Employees v. County of Sonoma, 23 Cal.3d 296, 152 Cal.Rptr. 903, 591 P.2d 1, 7 (1979). (“An increase in wages is frequently the very heart of an employment contract; other provisions, including those relating to fringe benefits, are inextricably interwoven with those relating to wages, since employees may surrender various employment benefits in exchange for a wage increase.”) Berkeley could have insisted on a wages and benefits provision. Since it did not and since the written contract constitutes the entire agreement of the parties, Berkeley may not later insert an additional term. To the contrary, contractual silence in the presence of an integration clause implies that, absent a generally applicable law, Berkeley promised not to impose unilaterally higher wage and benefits costs on RUI.
If the litigants were both private parties, contractual silence on wages together with an integration clause would clearly prevent the lessor from subsequently altering the bargain they had struck by requiring the lessee to pay some prescribéd wage. Because the compensation of the lessee’s employees falls outside the scope of the integrated lease agreement, the lessor has no authority to insist the lessee pay some prescribed wage. Similarly, contractual silence on wages in an integrated agreement allows the employer, subject to generally applicable local, state and federal laws, to work out its own arrangements with its employees. In effect, silence in this integrated lease contract represents Berkeley’s agreement not to interfere in RUI’s wage setting. Noninterference is thus an understood, or implicit term in the contract in the same sense that other unnego-tiated terms — covering the signage, the dining room decor, or a gift shop, for example — are similarly left to RUI.
Our court has recognized that the Contract Clause protects such implied contractual terms. For example, in Univ. of Hawaii Prof'l Assembly v. Cayetano, 183 F.3d 1096 (9th Cir.1999) we held that although a collective bargaining agreement governing state employees made no specific mention of dates on which the employees were to be paid, “[a] course of dealing can create a contractual expectation,” and that for over twenty-five years, the state had paid its employees on particular days. Id. at 1102. The timing of pay days was “material to the terms of employment,” “a negotiable matter,” and thus an “implicit term[]” of the employment contract. Id.
Moreover, Berkeley established a course of dealing with RUI. Berkeley does not allege that it ever, in the more than 30 years that RUI or its predecessor in interest has held a lease at the Marina, previously sought to set the wages its lessees *1163paid their employees. Berkeley’s own economic expert acknowledged, and the City Manager explicitly stated, that the LWO could not reach the Marina leases until their terms expired. Berkeley’s tacit recognition that it could not alter the terms of existing leases was evident in its applying the original LWO to prospective leases only. The subsequent Marina Amendment contravened the implicit terms created by its prior course of dealing.
When it adopted the Marina Amendment and applied it to existing leases, the City effectively rewrote RUI’s lease by ordinance. As the record plainly shows, Berkeley knew that the Marina Amendment would have an immediate impact on RUI and perhaps two other leaseholders at the Marina. Berkeley used its sovereign authority to achieve what it failed to negotiate in its proprietary capacity.
The Contract Clause protects parties doing business with the government from such arbitrary exercises of sovereign authority, as we and California state courts have recognized.5 The Contract Clause’s protections cannot be so easily circumvented by faulting RUI for failing to negotiate “specific terms” regarding matters it could not have anticipated. If that were so, then nothing would prevent Berkeley-the-sovereign from requiring RUI to hang hew signage, redecorate its dining room, or do anything else that Berkeley-the-market-participant “forgot” to include in its lease. Even worse, Berkeley could legislate terms that it attempted, but failed, to negotiate. Had RUI and Berkeley not reached agreement on 'the grease trap, the majority would allow Berkeley to enact a grease trap ordinance directed at RUI. Under the principle adopted by the majority, there is no end to the terms that Berkeley might legislatively rewrite, so long as they are not covered by “specific terms” in the lease.
2
The Marina Amendment impaired RUI’s lease in a second way; It reduced RUI’s expected profits by imposing additional operating costs on RUI. Although RUI is not entitled to any particular rate of return or level of profits under its lease, it might have negotiated differently Berkeley’s share of the gross receipts had *1164it known of the Marina Amendment. As in any commercial transaction, RUI values the lease for its expectation, the amount of profits it anticipates from operating a restaurant at the Marina. By requiring that RUI pay higher wages, more, generous benefits, and potentially higher rent, the Marina Amendment raises the cost of operating the restaurant, and consequently, reduces the value of the lease to RUI. From RUI’s perspective, the Marina Amendment is tantamount to an increase in the rent due to Berkeley.6 The total cost of leasing a space is a matter “so central to the bargained-for exchange between the parties ... that it must be deemed a term of the contract.” Romein, 503 U.S. at 188-89, 112 S.Ct. 1105. An increase in RUI’s cost of operating Skates is “a severe impairment that defeats the expectations of the parties under the contract.” Cont’l Illinois Nat’l Bank & Trust Co. v. Washington, 696 F.2d 692, 700 (9th Cir.1983), appeal dismissed sub nom., The Don’t Bankrupt Washington Comm. v. Cont’l Illinois Nat’l Bank & Trust Co., 460 U.S. 1077, 103 S.Ct. 1762, 76 L.Ed.2d 338 (1983).
The majority inexplicably rejects the idea that the value of the lease to RUI is the profit RUI anticipates from operating the restaurant and that the Marina Amendment reduces this value. Maj. op. at 1153-54. Instead, the majority implies that any inquiry beyond the narrowest rendering of the contract risks resurrection of Lochner v. New York, 198 U.S. 45, 25 S.Ct. 539, 49 L.Ed. 937 (1905). Our analysis, however, has nothing to do with substantive economic due process. The Contract Clause addresses legislation that retroactively impairs contracts. The abandoned doctrine of Lochner prohibited certain prospective contracts.7 Unlike the judicially-created doctrine of substantive economic due process, “the Contract Clause remains part of the Constitution.” Spannaus, 438 U.S. at 241, 98 S.Ct. 2716. Consistent with Contract Clause precedents, and contrary to Lochner, we do not “engage in a utilitarian comparison of the public benefit and public loss.” U.S. Trust Co. v. New Jersey, 431 U.S. 1, 29, 97 S.Ct. 1505, 52 L.Ed.2d 92 (1977); cf. Lochner, 198 U.S. at 75, 25 S.Ct. 539 (Holmes, J., dissenting) (“a constitution is not intended to embody a particular economic theory”). The desirability of living wage laws is thus irrelevant to the Contract Clause question before us. The Contract Clause is a neutral rule that protects workers as well as businesses. See, e.g., Univ. of Hawaii Prof'l Assembly, 183 F.3d at 1103; State of Nevada Employees Ass’n v. Keating, 903 F.2d 1223, 1228 (9th Cir.1990); Sonoma *1165County Org. of Public Employees, 152 Cal. Rptr. 903, 591 P.2d at 11. Moreover, my review of Contract Clause cases in California8 and other courts9 reveals that the Clause is invoked most often by public employees to prevent municipal and state governments from reducing their compensation during times of fiscal crisis.
3
To offend the Contract Clause, the impairment must be substantial, Energy Reserves, 459 U.S. at 411-12, 103 S.Ct. 697, and the Marina Amendment satisfies this test. RUI estimated that the Marina Amendment will increase its annual labor costs by $121,000 per year, which represents a 22% decrease in its net revenues. Relative to RUI’s average annual rent for the preceding three years of roughly $197,000 per year, the increased labor costs represent a 61% increase in the cost to RUI of satisfying its contractual obligations under the lease. The significance of the impairment was also immediately apparent to Berkeley. The City-sponsored Greenwich Study advised that, if applied prospectively, the LWO would prompt potential lessees to insist on lower rents. Whether RUI would have negotiated lower rent in view of the LWO is unknown, because Berkeley imposed the Marina Amendment on RUI’s existing lease almost immediately.
The Marina Amendment’s cost to RUI, however, was far greater than that of the other provisions that RUI and Berkeley actually negotiated. During the last negotiations of the lease in 1996, Berkeley and RUI bargained over who would bear the $50,000 cost of installing a “grease trap.” Even more telling, they bargained over $7,000 in landscaping costs. If the parties perceived that these expenditures were sufficiently material to warrant negotiation, then the Marina Amendment — which could raise labor costs by more than $100,-000 — is certainly a substantial impairment. Moreover, the City Manager felt these items were substantial enough to warrant writing a detailed report on them to the City Council. Upon completion of the 1996 negotiations, Berkeley’s City Manager drafted a memorandum to the Mayor and City Council describing the financial impact of the new lease. He estimated that through 2007, the City would gain an additional $22,000, and from 2007 to the end of the lease in 2018, Berkeley would gain an additional $27,000. All of these amounts pale in comparison to the expected cost to RUI of the Marina Amendment.
One of Berkeley’s expert witnesses, a CPA, examined RUI’s books and testified that the “cost of compliance with the Living Wage Ordinance is not so significant or so adverse as to cause Skates restaurant to close its doors and does not threaten its *1166viability.” Perhaps that is the case, but the expert’s thesis is so modest that it renders his statement irrelevant. “Total-destruction of contractual expectations is not necessary for a finding of substantial impairment,” U.S. Trust, 431 U.S. at 26-27, 97 S.Ct. 1505, and “[e]ven adjustments in implicit financial terms can constitute substantial impairment.” S. Cal. Gas, 336 F.3d at 890. Whether measured in expected profits or in terms of how the parties actually responded, the Marina Amendment’s impairment of RUI’s lease is substantial.
4
The majority believes that because Berkeley could have passed a generally and prospectively applicable ordinance that, like a minimum wage law, set compensation and benefits above the amounts required by state and federal law, the Marina Amendment is necessarily a valid exercise of Berkeley’s police power. Maj. op. at 1153-54. “[T]he Contract Clause does not require a State to adhere to a contract that surrenders an essential attribute of its sovereignty.” U.S. Trust, 431 U.S. at 23, 97 S.Ct. 1505. In most cases, the general and prospective applicability of a change in the law assures private parties with public contracts that the state will not impair its contractual obligations with them (or, what is the same thing, enhance the private parties’ obligations). However, the Marina Amendment differs from an exercise of police power in two respects: (1) it singles out RUI for a change in its contract rather than applying generally to a broad range of employers; and (2) it retroactively alters the bargain that RUI and Berkeley struck.
First, generally applicable legislation typically protects the contracting party from special interest legislation or political gamesmanship. See Exxon, 462 U.S. at 191-92, 103 S.Ct. 2296. Even generally applicable legislation, however, may run afoul of the Contract Clause if the parties specifically negotiated a different term. See, e.g., Air Cal, Inc. v. City & County of San Francisco, 865 F.2d 1112, 1117 (9th Cir.1989) (San Francisco’s proprietary power “encompasses the power to regulate use of the property by ordinance, so long as the city has not chosen to enter contracts for use that are inconsistent with such regulations”) (citations omitted). In most instances, however, a party to a government contract affected by legislation must follow a law of general applicability just like everyone else.
Where the Marina Amendment is concerned, “just like everyone else” turns out to be RUI and, perhaps, no one else. When Berkeley contemplated the Marina Amendment, the City Attorney admitted that “[ajlthough it is obvious that some of the larger Marina entities, such as Skates, HS Lordships and the Radisson, will be covered by the amended Ordinance, the City does not know with any certainty which other entities will be included.” However, of the three principal leaseholders in the Marina Zone, the Radisson, HS Lordships, and Skates (owned by RUI), only Skates is currently subject to the Marina Amendment. Both the Radisson and HS Lordships have collective bargaining agreements and are thus exempt from the LWO and the Marina Amendment. Berkeley, Cal., Ordinance 6548-N.S. (June 27, 2000), § 13.27.070H. Berkeley also sent notice of the proposed amendment to other parties, including water-based entities, such as yacht, water-ski, and rowing clubs; and small retailers, including a caterer and a kite shop. But, it is unlikely the Marina Amendment covers any of the smaller entities, because they do not meet the threshold of six or more employees and $350,000 in annual gross receipts. Id. § 13.27.030. RUI has alleged that, at the very most, five businesses are currently subject to the *1167Marina Amendment. “But whether or not the legislation was aimed largely at a single employer, it clearly has an extremely narrow focus.” Spannaus, 438 U.S. at 248, 98 S.Ct. 2716 (footnote omitted).
This narrow reach distinguishes the Marina Amendment from a minimum wage law. If Berkeley had raised the minimum wage through a law of general applicability, RUI would not have cause to complain based on contractual silence in the lease. But that is precisely the problem here. The Marina Amendment is not a law of general applicability. RUI has a valid claim under the Contract Clause because Berkeley enacted a law that was obviously directed at RUI and, maybe, a couple of other Marina lessees. Berkeley may not alter RUI’s lease at will just because the City Council, rather than the City’s procurement staff, approved the changes. Berkeley abused its sovereign prerogatives to gain an advantage in a lease it entered into in its proprietary capacity.
Second, the Supreme Court has repeatedly expressed its suspicion of retroactive laws because they are “generally unjust,” Eastern Enterprises v. Apfel, 524 U.S. 498, 533, 118 S.Ct. 2131, 141 L.Ed.2d 451 (1998) (O’Connor, J., plurality) (citation omitted), and “deprive citizens of legitimate expectations and upset settled transactions.” Romein, 503 U.S. at 191, 112 S.Ct. 1105. Accord Boiuen v. Georgetown Univ. Hospital, 488 U.S. 204, 208, 109 S.Ct. 468, 102 L.Ed.2d 493 (1988). Although the Court frequently tests retroactive legislation against the Due Process Clause, it has noted that the Contract, Bill of Attainder, Ex Post Facto, and Takings Clauses specifically codify the “antiretroac-tivity principle.” Landgraf, 511 U.S. at 266, 114 S.Ct. 1483.
Narrowness or retroactivity alone does not offend the Contract Clause. A municipality may require a prescribed wage of all employers, including its lessees, through a law of general applicability, such as a minimum wage law.10 Alternatively, a narrow but prospectively applied provision would allow lessees the opportunity to bargain for different terms. A comparison of the original LWO and the Marina Amendment makes plain these differences.11 Unlike the Marina Amendment, the original LWO was both prospective and generally applicable. It applied to parties doing business with the City everywhere in Berkeley, rather than just those in a narrow geographic area, and it applied to contracts entered into after the date of its enactment, rather than to already bargained-for contracts. Consequently, if RUI were challenging the original Living Wage Ordinance rather than the Marina Amendment, it would have no objections based on the Contract Clause. However, because the Marina Amendment is neither generally nor prospectively applicable, I believe it is not a valid exercise of police power and that it contravenes the Contract Clause.
5
The majority further reasons that RUI and Berkeley agreed that RUI would abide by future law, including, presumably, the Marina Amendment. Maj. op. at 1153-54. Paragraph 25 of the lease specifies that the lessee shall “comply with all applicable ... ordinances ... of the *1168City....” RUI’s contractual promise to comply with applicable city ordinances is not the equivalent of agreeing that the City may amend the lease at will, so long as it does so through an ordinance. The provision is simply a boilerplate promise to obey the law — a provision common in leases between private parties — the violation of which would be grounds for Berkeley to seek contractual remedies for breach.
We have previously held that such provisions are not open invitations to government parties to alter their contracts. In S. Cal. Gas, 336 F.3d 885, the gas company and the City of Santa Ana had entered into a contract in 1938 that provided the City could demand payment for the cost of repairs to public property caused by gas company operations. 336 F.3d at 887-88. The contract also provided that the gas company would comply with “all of the ordinances, rules and regulations heretofore or hereafter adopted by [the City] in the exercise of its police powers.” Id. at 888. In 2001 the City adopted a “trench cut ordinance” requiring advance payment, without consideration for actual damages or the quality of the repairs. We rejected the City’s argument that the parties had agreed future ordinances could alter the lease and found that Santa Ana had violated the Contract Clause. Calling the City’s interpretation “absurd,” we held that the contract could not be read “in such a way that reserves to Santa Ana the power to unilaterally alter the terms of the agreement.” Id. at 893. See also Cont’l Illinois Nat’l Bank, 696 F.2d at 698.
RUI surely did not consent to have the City make whatever changes to the lease it wished. The fact that the City effectively amended the lease by legislation — a narrow and retroactive ordinance — cannot relieve Berkeley of the duty to comply with the Contract Clause.
B
Because it erroneously concluded that RUI’s lease was not impaired, the majority did not reach the subsequent steps of the Contract Clause analysis. Once RUI demonstrated that Berkeley substantially impaired its contract, the state must show that a “significant and legitimate public purpose” justifies the law and that it does not merely “provid[e] a benefit to special interests with its police power.” Energy Reserves, 459 U.S. at 411-12, 103 S.Ct. 697. I would conclude that the Marina Amendment does not serve such a purpose and that it is unreasonable and unnecessary.
1
The LWO, as originally enacted, serves a broad social purpose. The “living wage” is a relatively new and aggressive approach to problems that local jurisdictions have historically addressed through a combination of minimum wage laws and public assistance programs. Berkeley’s City Council included a number of legislative findings as a preamble to the LWO. The City found, for example, that “far too many people working in Berkeley and their families live below or near the poverty line,” that inadequate compensation “fails to provide service employees with resources sufficient to afford life,” and that the “privilege of using public property to operate a business should not be granted to parties that will exacerbate the problems associated with inadequate compensation of workers.” Berkeley, Cal., Ordinance 6548-N.S. (June 27, 2000), § 1 d, f, g. To the latter end, the LWO serves the purpose of instructing city negotiators and placing would-be contractors on notice that Berkeley will demand a living wage provision in all future contracts.
What is at issue here, however, is not the purpose of the LWO, but the legitima-*1169ey of the Marina Amendment. The Supreme Court has distinguished “generally applicable rule[s] of conduct,” Exxon Corp., 462 U.S. at 191-92, 103 S.Ct. 2296, that remedy “broad, generalized economic or social problem[s],” Spannaus, 438 U.S. at 250, 98 S.Ct. 2716, from enactments that have “a very narrow focus” and are “aimed at specific” parties. Energy Reserves, 459 U.S. at 412 n. 13, 103 S.Ct. 697. “The requirement of a legitimate public purpose guarantees that the State is exercising its police power, rather than providing a benefit to special interests.” Id. at 412, 103 S.Ct. 697.
The Marina Amendment, “imposing a sudden, totally unanticipated, and substantial retroactive obligation upon the company to its employees, was not enacted to deal with a situation remotely approaching the broad and desperate emergency economic conditions” described by the City Council. Spannaus, 438 U.S. at 249, 98 S.Ct. 2716. Several aspects of the Marina Amendment show that it does not serve a broad social purpose. Most obviously, as previously pointed out, the parties are uncertain as to how many employers are even subject to the Marina Amendment, but the number is probably fewer than five.12
Just as the living wage amendment narrowly assigns its burdens, it narrowly directs its benefits. The Marina Amendment covers only a modest number of workers, and many of these will not receive the living wage because a collective bargaining agreement exempts their employers, such as the Radisson and HS Lordships, from the ordinance.13 With so few beneficiaries the Marina Amendment falls well short of addressing a broad social problem and appears to address only the demands of Local 2850 members in the Marina Zone. Furthermore, any claim Berkeley could make for the need to remedy conditions among workers citywide is belied by the fact that Berkeley did not apply the LWO retroactively to other city contractors, nor did it apply the LWO to private employment contracts. The City has offered no explanation why employees at the Marina have any different needs or circumstances than other employees in Berkeley. In sum, “this law can hardly be characterized, like the law at issue in the Blaisdell case, as one enacted to protect a broad societal interest rather than a narrow class.” Spannaus, 438 U.S. at 248-49, 98 S.Ct. 2716.
Courts within our circuit have been skeptical of public contracts that furnish *1170benefits to a small class by retroactively impairing the contracts of another small class. In Ross v. City of Berkeley, 655 F.Supp. 820 (N.D.Cal.1987), the City of Berkeley enacted an ordinance that limited the grounds for eviction or lease non-renewal on commercial properties in a particular City district. Id. at 823-26. The acceptable grounds for eviction did not include owner occupancy. Id. Judge Patel found that the City’s ordinance “isolate[d] one group of commercial lessors ... and nullifie[d] a central aspect of their contractual rights.” Id. at 833. She disapproved of the ordinance’s narrow geographic definition, the severity of its impairment, and the limited significance of its social purpose. See id. at 835. “Unlike a broad rule of general conduct impacting incidentally on the leases in question, it applies exclusively and explicitly to the contractual obligations of the narrow group of lessors and lessees in the [particular] commercial district of the City, and confers a direct benefit on one class at the expense of the other.” Id. She concluded that Berkeley’s ordinance violated the Contract Clause. Id. at 835-36.
Similarly, the California Court of Appeals in Interstate Marina Dev. Co. v. County of Los Angeles, 155 Cal.App.3d 435, 202 Cal.Rptr. 377 (1984), distinguished a rent control ordinance that applied county-wide from a second ordinance that limited the permissible causes for terminating residential slip tenancies at the marina. Id. at 382. Both laws purportedly addressed the shortage of affordable housing in the county, id. at 381, 385, but the court found that only the rent control law served this broad purpose. “Unlike the [slip tenancy] ordinance, which aimed at giving only residential boat slip tenants the security of an indefinite term of lease, the County rent law was directed at remedying a broad social and economic problem.” Id. at 385. The court found that the marina ordinance “substantially impaired” the slip tenants’ leases, and it “failed to meet an important general social problem in that the group protected was small and loss of [the slip tenants’] rights would not substantially affect the housing supply of the County.” Id. at 442, 202 Cal.Rptr. 377. The County did not appeal the lower court’s conclusion that the marina ordinance violated the Contract Clause, id. at 442, 202 CaLRptr. 377, and the appeals court affirmed the lower court’s determination that the general rent control ordinance did not substantially impair the leases. Id. at 449, 202 Cal.Rptr. 377.
2
Even if the Marina Amendment satisfied a legitimate and significant government interest, it is neither reasonable nor necessary to Berkeley’s stated goals. Ordinarily, we would defer to the City Council on the question of an ordinance’s reasonableness and necessity, but “we are ‘less deferential to a state’s judgment of reasonableness and necessity when a state’s legislation is self-serving and impairs the obligation of its own contracts.’ ” Univ. of Hawaii Prof'l Assembly, 183 F.3d at 1107 (quoting Condell v. Bress, 983 F.2d 415, 418 (2d Cir.1993)). Accord U.S. Trust, 431 U.S. at 26, 97 S.Ct. 1505.
Berkeley offers several unsatisfactory explanations for the reasonableness and necessity of the Marina Amendment. The City Council declared that the privilege of using public Marina lands should not be afforded to parties exacerbating the inadequacy of worker compensation and that a portion of the revenues generated from operating a business at the Marina’s unique location should be used to compensate employees. Berkeley, Cal., Ordinance 6583-N.S. (Sept. 19, 2000), § 1, A, B. However, if Berkeley wanted these contractual terms, it could have negotiated such assurances when it leased the Marina in 1968 or *1171upon the 1996 renegotiation. Berkeley declined to do so. Berkeley also argues that the City improved the Marina area after the lease began and that these improvements justify RUI paying its workers additional compensation. When Berkeley renegotiated lease conditions in 1996, it knew the Marina location possessed special qualities, the potential for generating revenues, and what additional enhancements Berkeley would likely make to the Marina in the future. “[A]n impairment is not a reasonable one if the problem sought to be resolved by an impairment of the contract existed at the time the contractual obligation was incurred.” Univ. of Hawaii Prof'l Assembly, 183 F.3d at 1107 (quoting Massachusetts Cmty Coll. v. Commonwealth, 420 Mass. 126, 649 N.E.2d 708, 713 (1995)). Having neglected to negotiate those terms, Berkeley’s insistence on additional lease conditions is unreasonable.
The City expressed concern that the public’s knowledge that Marina workers are not paid a living wage will deter the public from patronizing Marina businesses. Berkeley, Cal., Ordinance 6583-N.S. (Sept. 19, 2000), § 1, C. The Marina’s success controverts this speculative claim. Also, Berkeley’s solicitude for the sensibilities of the Marina’s patrons is undermined by its failure to address the patrons of the City’s other contractors who must wait for Berkeley to negotiate those contracts in the future.
Finally, Berkeley argues that higher wages will improve the quality of service provided at Marina businesses. Id. § 1, D. This assertion is, at best, conjectural. There is no evidence that Marina service does not meet ordinary industry standards; in fact, the success of the Marina businesses would suggest that the service was satisfactory. The 1968 lease already obligates RUI to “maintain adequate personnel for the efficient service of customers.”
Even if the Marina Amendment’s goals were appropriate, “the contract clause of the Federal Constitution limits the ability of the State, or subdivision of a State, to abridge its contractual obligations without first pursuing other alternatives.” Univ. of Hawaii Prof'l Assembly, 183 F.3d at 1107 (quotations omitted). An impairment is unnecessary if “an evident and more moderate course would serve its purpose equally well.” U.S. Trust, 431 U.S. at 31, 97 S.Ct. 1505. More moderate alternatives “include raising revenues through higher taxes or preserving funds through budget restrictions.” S. Cal. Gas, 336 F.3d at 897. Such a showing is indeed a “heavy burden,” id. at 896, because since the Supreme Court’s decision in U.S. Trust, “no Ninth Circuit or Supreme Court case has found a statute or ordinance necessary when the law in question altered a financial term of an agreement to which a state entity was a party.” Id. at 897 (citations omitted). In order to prevail, Berkeley must show that it cannot alleviate the financial conditions of workers through other means, such as by offering tax incentives to complying employers or by subsidizing the wages of Marina employees. This it has not done.
C
The Marina Amendment also represents the very type of failure in the political process that the Contract Clause is designed to prevent. Energy Reserves, 459 U.S. at 412, 103 S.Ct. 697 (citing Spannaus, 438 U.S. at 247-48 & n. 20). “The principal danger addressed by the contracts clause is that the government will favor one determinate set of persons over another.... ” Michael W. McConnell, Contract Rights and Property Rights: A Case Study in the Relationship Between Individual Liberties and Constitutional Structure, 76 Calif. L. Rev. 267, 289 (1988). The Supreme Court long ago cautioned *1172that when a government burdens a numerically small class, it may distort the democratic process. Where a rule of conduct applies to more than a few people, the people are “equally concerned,” and the matter is especially well-suited for legislative action. Bi-Metallic Investment Co. v. State Board of Equalization, 239 U.S. 441, 445, 36 S.Ct. 141, 60 L.Ed. 372 (1915). But where, as here, “[a] relatively small number of persons [are] concerned,” id. at 446, 36 S.Ct. 141, a danger exists that the legislature acted less out of concern for the general good than for special interests or even its own interests. This risk is heightened when the legislation is given retroactive effect because a retroactive statute “may be passed with an exact knowledge of who will benefit from it.” Charles B. Hochman, The Supreme Court and the Constitutionality of Retroactive Legislation, 73 Harv. L.Rev. 692, 693 (1960) (quoted in Landgraf, 511 U.S. at 267 n. 20, 114 S.Ct. 1483). The Supreme Court counseled that we must examine Contract Clause challenges for “circumstantial evidence” that “a small number ... were singled out from [a] larger group” and search for “any indication that the ... political process ha[s] broken down.” Energy Reserves, 459 U.S. at 417, 103 S.Ct. 697.
The Marina Amendment bears all of the hallmarks of special interest legislation. The original LWO applies to future city contracts and to existing contracts as they come up for renewal. The original LWO therefore covers RUI’s lease when it comes due for renewal. Within a month of the passage of the LWO, Local 2850 urged the Mayor and City Council to make the LWO retroactive to the Marina’s employers. It sent faxes to the Council members and mentioned specific employers. Appel-lee Local 2850 frankly confessed in its brief that Berkeley “used geographic location ... as a proxy for ability to pay,” and it acknowledged that other Berkeley employers could not afford to pay the living wage. These facts strongly suggest that Berkeley aimed the Marina Amendment at particular employers and meant to benefit particular parties.
Even more importantly, the Marina Amendment advances the City’s own financial self-interest. The City may benefit in two ways. First, to the extent that the Marina Amendment raises workers’ wages to a living wage, it reduces their dependence on public assistance programs. The Marina Amendment thus shifts the burden of public assistance programs from the City to RUI and its customers. Berkeley is relieved of the responsibility for the worker’s public assistance and those funds are freed for other public purposes. The Marina Amendment operates similarly to an unfunded mandate because it accomplishes the City’s goals through off-budget means.14 Cf. Printz v. United States, 521 U.S. 898, 930, 117 S.Ct. 2365, 138 L.Ed.2d 914 (1997) (“By forcing state governments to absorb the financial burden of implementing a federal regulatory program, Members of Congress can take credit for ‘solving’ problems without having to ask their constituents to pay for the solutions with higher federal taxes”); id. at 957-58 (Stevens, J., dissenting) (suggesting that such actions represent a failure of “political safeguards”).
Second, depending on RUI’s elasticity of demand, RUI’s gross receipts may go up under the Marina Amendment. If RUI *1173raises its prices and its gross receipts increase, the amount of rent that RUI pays will increase as well because the lease defines the amount of rent as a fixed percentage of its gross receipts. In sum, the Marina Amendment may actually generate revenues for the City’s coffers — at little or no political cost to Berkeley’s elected officials.
Regrettably, the majority’s failure to recognize this Contract Clause violation has significant implications for employees far from Berkeley’s Marina. Under the majority’s holding, contractual silence authorizes a municipality to impose additional terms on particular contracting parties — so long as the municipality cloaks the additional requirements in the form of a legislative enactment. Even more than the obvious unfairness of such unfettered license, it erodes democratic accountability by allowing governments to foist the costs of special interest legislation onto politically weak groups. See Bi-Metallic, 239 U.S. at 445-46, 36 S.Ct. 141. As described earlier, the Contract Clause has most often protected public employees from the opportunism of financially-strapped state and local governments. See sttpra at nn. 8-9. The majority’s opinion provides financially troubled governments with the license to extract more stringent terms from public employees whose collective bargaining agreements necessarily lack express terms on every aspect of the employment relationship. Such a result can hardly be categorized as aiding “the plight of its own working poor.” Maj. op. at 1141.
III.
Berkeley’s Marina Amendment substantially impairs RUI’s lease, unnecessarily and unreasonably, without advancing a broad social purpose. I would hold that it violates the Contract Clause. I respectfully dissent.

. As the majority opinion notes, Maj. op. at 1142-43, Santa Monica attempted to enforce

. These amounts represent a 69.6% increase for workers who had health benefits and previously received California's then-prevailing minimum wage, and a 97.7% increase for workers who had no health benefits and previously received California's minimum wage of $5.75. Cal.Code Regs., tit. 8, § 11000(2).

. RUI's lease does address other employer-employee issues. Paragraph 27 requires, for example, that RUI comply with Berkeley’s non-discrimination policies.

. See S. Cal. Gas, 336 F.3d at 892-93 (Santa Ana "trench cut” ordinance impaired 1938 agreement regarding utility companies payment for excavation); Univ. of Hawaii Prof'l Assembly, 183 F.3d at 1104-06 (Hawaii "pay lag" decision impaired implied payroll dates in public employees’ collective bargaining agreement); State of Nevada Employees Ass’n v. Keating, 903 F.2d 1223, 1227 (9th Cir.1990) (statute impaired the right of public employees to withdraw their personal contributions); Air Cal, Inc. v. City & County of San Francisco, 865 F.2d 1112, 1116 (9th.Cir.1989) (ordinance requiring 19 airlines to pay "prevailing rate of pay” at the airport impaired their leases with the city); Cont’l Illinois Nat’l Bank & Trust Co. v. Washington, 696 F.2d 692, 697-701 (9th Cir.1983), appeal dismissed sub nom., The Don’t Bankrupt Washington Comm. v. Cont’l Illinois Nat’l Bank & Trust Co., 460 U.S. 1077, 103 S.Ct. 1762, 76 L.Ed.2d 338 (1983) (Washington voter initiative imposing bond restrictions impaired state contracts with public utility); Sonoma County Org. of Public Employees, 152 Cal.Rptr. 903, 591 P.2d at 4 (statute prohibiting paying salary or cost-of-living increases impaired memorandum of understanding with public employees); Interstate Marina Dev. Co. v. County of Los Angeles, 155 Cal.App.3d 435, 202 Cal. Rptr. 377, 381-82 (1984) (ordinance prohibiting termination of marina leases except for specified causes impaired leases). See also Associated Builders & Contractors v. Baca, 769 F.Supp. 1537, 1549 (N.D.Cal.1991), affd on other grounds sub nom. Chamber of Commerce of the United States v. Bragdon, 64 F.3d 497, 502 (9th Cir.1995) ("prevailing wage” ordinance impaired private collective bargaining agreement); Ross v. City of Berkeley, 655 F.Supp. 820, 828-29 (N.D.Cal.1987) (commercial rent control ordinance impaired existing private leases).

. The majority states that "the rent provision, calculating rent as a percentage of gross revenues, before labor costs are deducted, is not affected by increased wage and benefit costs.” Maj. op. at 1148. This is true in the technical sense that Berkeley receives a fixed percentage of RUI’s gross receipts, and the Marina Amendment does not affect the percentage owed. To the extent the majority is implying that Berkeley’s rent (as a dollar amount) will not increase as a result of the Marina Amendment, this may not be true, as I discuss post, at 1172-73.

. See John E. Nowak & Ronald D. Rotunda, 2 Treatise on Constitutional Law 636 (3d ed. 1999) ("During the Marshall years the Court used the provision to invalidate statutes that retroactively impaired almost any contractual obligation of private parties. The Court never used the clause to void laws that prospectively modified contractual Obligations.”); Michael B. Rappaport, Note, A Procedural Approach to the Contract Clause, 93 Yale L.J. 918, 925 (1983) (noting that substantive due process was applied to prospective legislation and arguing the Contract Clause applies only to retrospective legislation). See also Douglas W. Kmiec & John O. McGinnis, The Contract Clause: A Return to the Original Understanding, 14 Hastings Const L.Q. 525, 553 (1987) (distinguishing Contract Clause and substantive due process).

. See, e.g., Bd. of Admin. v. Wilson, 52 Cal.App.4th 1109, 1153-57, 61 Cal.Rptr.2d 207 (1997); United Firefighters of Los Angeles City v. City of Los Angeles, 210 Cal.App.3d 1095, 1109-1117, 259 Cal.Rptr. 65 (1989); California Teachers Ass'n v. Cory, 155 Cal.App.3d 494, 510-13, 202 Cal.Rptr. 611 (1984); Valdes v. Cory, 139 Cal.App.3d 773, 789-91, 189 Cal.Rptr. 212 (1983).

. Ass’n of Surrogates & Supreme Court Reporters v. New York, 940 F.2d 766, 773-74 (2d Cir.1991), modified at 969 F.2d 1416 (1992); Andrews v. Anne Arundel County, 931 F.Supp. 1255, 1264-67 (D.Md.1996); Fraternal Order of Police v. District of Columbia, 1995 U.S. Dist. LEXIS 20951 at 20-42 (D.D.C.1995); Marvel v. Dannemann, 490 F.Supp. 170, 175-77 (D.De.1980); Christensen v. Minneapolis Municipal Employees Ret. Bd., 331 N.W.2d 740, 750-52 (Minn.1983); Carmichael v. Workers’ Comp. Court, 234 Mont. 410, 414-15, 763 P.2d 1122 (1988); Opinion of the Justices, 135 N.H. 625, 630-38, 609 A.2d 1204 (1992); Cliff v. Blydenberg, 173 Misc.2d 366, 661 N.Y.S.2d 736, 739-40 (1997); Oregon State Police Officers’ Ass’n v. State, 323 Ore. 356, 375-76, 918 P.2d 765 (1996).

. At oral argument, Appellant's counsel agreed that if the living wage had been immediately and generally applicable throughout the city, RUI would have no claim. The majority mistakenly contends that this commonsense statement is a concession of RUI’s position. Maj. op. at 1153-54.

. The majority unconvincingly attempts to elide these differences by characterizing them as the manner in which Berkeley exercises its authority. Maj. op. at 1154. However, the majority cites no authority to support this proposition.

. The smallness of the burdened class results from the narrow geographic scope of the Marina Amendment. According to one living wage advocacy group, Berkeley's Marina Amendment was "the first area-based living wage policy in the nation.” Living Wage Resource Center, Living Wage Successes: A Compilation of Living Wage Policies on the Books, available at http://www.livingwage-campaign.org/victories.php (last visited May 25, 2004). The only other location-based living wage policy is Jack London Square at the Port of Oakland. Unlike Berkeley’s Marina Amendment, however, the Port of Oakland's location-based living wage ordinance applies only prospectively to contracts entered into after the provision's effective date. It reaches existing agreements only when they are "amended to benefit the business.” Port of Oakland, Living Wage Frequently Asked Questions, available at http://www.portofoak-land.com/ portnyou/livingwa.asp (last visited May 25, 2004).
The City of Santa Monica, California, passed a living wage provision that applied to the coastal tourist district. Voters repealed it by referendum in November 2002. Andrew Fix-mer, Hotly Debated Measure Defeated, Santa Monica Daily Press, Nov. 6, 2002, at 1.

. Berkeley’s expert estimates that approximately 350 employees work for the Marina lessees and that at least half of them earn less than the living wage. The record does not show how many of these 175 employees work for the Radisson or HS Lordships, both of which are exempted from the LWO because they have collective bargaining agreements.

. The LWO accomplishes a similar purpose, of course, but its mandate is prospective and conditioned on private parties entering into contracts with the City.