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Privately Funded Developments and Construction at Risk in CA

By John S. (Rocky) Miller and Dwayne McKenzie

Landlords that construct their premises in California need to be aware of a recent decision that may affect their construction costs. On Dec. 21, 2010, the Second Appellate District of the California Court of Appeal issued a decision in Azusa Land Partners v. Department of Industrial Relations, (2010) 191 Cal.App.4th 1, that greatly expands the reach of California's Prevailing Wage Law (Labor Code ' 1720, et seq. (“Prevailing Wage Law”), to cover private works of construction that have never before been deemed “public works” subject to the Prevailing Wage Law. As a consequence, developers and builders will have to consider closely how they structure their developments and agreements so as to avoid unnecessarily and inadvertently imposing Prevailing Wage Law requirements on privately funded construction.

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