Big union pension fund wants a piece of Playa Vista; fund managers willing to help finance stalled project, but lead developer not biting.

With all the high-visibility parties pushing the proposed Playa Vista development forward, the construction trade unions have gone relatively unnoticed - but that may be about to change.

Construction trades have long sought a piece of the long-stalled Playa Vista project, and their pension funds now have a legitimate shot at securing a key seat at the table, according to Richard Slawson, executive secretary of the Los Angeles and Orange Counties Building and Construction Trades Council.

"Playa Vista is the premier and largest development our funding arms have attempted to participate in anywhere in the country," Slawson noted.

He added that "we're doing everything possible" to assure that union pension funds help finance Playa Vista and that contractors hire union labor.

Washington, D.C.-based Union Labor Life Insurance Co., which invests building trade pension money, is one of the principal partners in a well-heeled team negotiating to finance Playa Vista.

Teaming up with Beverly Hills financier Gary Winnick's Pacific Capital Group and real estate investment firm J.E. Robert Cos., Union Labor Life wants to infuse millions of construction pension-fund dollars into Playa Vista.

Meanwhile, the current Playa Vista property owners need a lot of cash to jump-start the massive development's first phase - slated to be anchored by the DreamWorks SKG corporate headquarters campus.

And DreamWorks, which has also agreed to become a partner in Playa Vista, has indicated that it wants the Pacific Capital team, with its union participants, as a partner in the venture.

But Playa Vista lead developer Maguire Thomas Partners continues to pursue various alternative funding options as the DreamWorks campus development falls further and further behind schedule.

Rob Maguire, managing partner of Maguire Thomas, has said he is pursuing arrangements with at least six major investment groups that do not include the Pacific Capital team.

Slawson remains optimistic that the construction trade unions will get two key benefits from Playa Vista: a profitable long-term pension-fund investment, and union-scale construction jobs.

Ideally, Union Labor Life Insurance representatives would secure seats on the board of the company that will ultimately own and develop much of Playa Vista, Slawson continued.

"And they would help make the key decisions about development of future phases," he added, noting that Union Labor can't invest in a project unless construction labor contracts are "100 percent union."

Construction trade unions have invested into hundreds of real estate development projects. Locally, union pension money recently helped finance a major mixed-use development in Brea.

Union pension investments are also being utilized to finance the 600-unit Normont Terrace residential community redevelopment just getting under way in Harbor City.

Additional funds are slated to finance the planned L.A. Metromall retail center at the San Diego (405)/Harbor (110) freeway interchange.

Slawson acknowledged that the pension fund trustees - as fiduciaries for all those current and future pensioners - can't be lured to invest into Playa Vista simply by the prospect of all those high-paying union construction jobs.

"The trustees of our funds have to take risk into account and only invest into good projects," Slawson said. "But we believe Playa Vista pencils out. The interest that DreamWorks will generate will make it a high-demand property, and we think it looks good from every angle: the rental and for-sale housing as well as the commercial elements."

Rocky Tarantello, a real estate finance expert at USC's School of Business Administration, said the trustees' dual motivations - sound pension fund investment and creating union jobs - places them "in a difficult position."

"They're charged with handling capital of the (members) and retirees who have invested into the pension fund, but at the same time they feel an obligation to current workers to do what they can to generate more work," Tarantello added.

Trustees must view any investment in the context of an investment portfolio's risk diversification, he said.

They shouldn't invest unless they can realistically expect "a substantial premium" in terms of the return on investment compared to other alternatives, Tarantello said.