Labor Code section 1720, subdivision (a)(1) of the Public Wage Law ("PWL") defines " 'public works'" to mean: "Construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds . . . ."  When public funds end up in the hands of private entities, it is not always clear whether the PWL applies.  In Hensel Phelps v. San Diego Unified Port District (July 26, 2011), the Court of Appeal (Fourth Appellate District, Division One) had no trouble following the money trail.  The Court considered whether a hotel construction project on land that the San Diego Unified Port District (the Port District) leases to the hotel owner qualified as a public work within the meaning of the PWL where the lease specified that the Port District would provide what the lease refers to as a "rent credit" in the total amount of $46.5 million during the first 11 years of the lease.  Characterizing the "rent credit" as a source of public funds flowing to the private hotel project, the Court concluded that the PWL applied:

In assessing CCCC's argument, we note that no case law exists interpreting the phrase "rents . . . that are . . . reduced, . . . waived, or forgiven" in section 1720, subdivision (b)(4). However, when interpreting a statute, "'"[t]he words of the statute should be given their ordinary and usual meaning and should be construed in their statutory context." [Citation.] If the plain, commonsense meaning of a statute's words is unambiguous, the plain meaning controls.' " (People v. King (2006) 38 Cal.4th 617, 622.) Here, we agree with CCCC that the phrase "rents . . . that are reduced" has a plain everyday meaning that is clear and unambiguous. Under a plain commonsense meaning, rent is reduced when the amount of the rental obligation is set at a certain amount by agreement or by operation of law, and a discount is given from that amount. Under a plain commonsense meaning, rents are waived or forgiven when a party agrees not to impose or demand rents.

Applying this plain commonsense meaning, we agree with CCCC that rents were reduced, waived or forgiven by the Port District. The Lease sets forth a monthly and minimum annual rent amount that OPB is obligated to pay to the Port District. The rent credit constitutes a reduction in that payment obligation. In addition, the 100 percent rent credit during the first 34 to 36 months of the Lease is not only a reduction, but also could be considered a waiver of the rent because no rent at all is due in that period.

Slip op., at 23-24.