Big Project Agreements Yield Big Community Benefits
New approach makes sure urban redevelopment helps neighborhoods
Great Lakes Bulletin News Service
By Charlene Crowell
July 27, 2005
Tired of battling developers over projects that could harm their urban neighborhoods, some community leaders are embracing a new, more cooperative strategy that allows proposals to go forward but also assures that residents will benefit from them.
The new strategy uses what are called “Community Benefits Agreements” between developers and community leaders. The legally enforceable documents spell out specific benefits that developers agree to provide residents, institutions, and businesses located close to their proposed project — perks such as affordable housing, contributions to neighborhood schools, and job training. In exchange, community organizations publicly support the developers’ requests for the building, zoning, and other permits they need from local officials in order to proceed with their projects.
Carl Anthony, acting director of community and resource development for the Ford Foundation, which sponsored a national roundtable on CBAs, said they are becoming popular because they “reduce the unknowns for the community and developer alike. Conflicts can be anticipated, communities organized, and a legal instrument created that is also enforceable among city, community, and developer perspectives — that’s smart.”
Proponents of the new strategy say that government officials like CBAs, too, because they so often find themselves caught between two unrelentingly litigious groups when new projects are proposed. They find that CBAs can break up such legal logjams, facilitate more economic development, give local residents some share in the new project’s financial benefits, and not incidentally, make them into problem solvers rather than frustrated referees.
CBA proponents say that the new strategy is beginning to change the face of urban redevelopment around the country. The main reasons that the strategy works, they say, are that developers are more likely to invest in urban areas when they can count on local cooperation, and community leaders are increasingly eager to welcome private development capital because local, state, and federal investment in urban neighborhoods are dwindling.
And, CBA supporters add, such agreements are even more important when tax dollars are in fact funding new airports, stadiums, shopping centers, or residential developments. Such publicly funded projects may boost an entire region, they say, but they should also help as many nearby residents as possible.
“Even with the best intentions,” observed Mr. Anthony, “the table is unbalanced on large-scale projects. When it comes to major developments, the powerful and wealthy weigh in. But poor people have no avenue to become engaged. Community Benefits Agreements create a voice to gain measurable benefits.”
Stadium Deal Leads to Smooth Landing at Airport
Last July, community organizers from around the country attended the Ford-sponsored roundtable in New York City and exchanged tips on CBAs. Their stories illustrate the way the agreements are transforming how developers do business in cities as disparate as Los Angeles and Milwaukee.
Madeline Janis-Aparicio, executive director of Los Angeles Alliance for a New Economy, a leading advocate of CBAs,shared her formidable experience with the agreements in an interview with the Great Lakes Bulletin News Service. Working with UCLA researchers, local labor unions, residents, and the developers of the Staples Center, Los Angeles’s big new sports and convention facility, Ms. Janis-Aparacio said that LAANE helped turn community opposition to building a new stadium in its midst into a collaboration with many economic benefits for local residents. In fact, she said, the collaboration was so successful that it led to another, even larger, CBA connected to the expansion of Los Angeles International Airport.
In a precedent-setting contract, the Staples Center developers agreed to reserve 20 percent of new housing units for low-income households and pay “livable wages” for at least 70 percent of the jobs at the new center. The developers also agreed to give preferential hiring treatment to local and displaced residents, donate $1 million to community parks and recreation programs, and consult community leaders about all of the project’s commercial tenants.
Ms. Janis-Aparicio said the CBA is now widely perceived as a model for economic justice.
“We’re talking about changing the paradigm of economic development, changing the power imbalance between the public and private sectors,” she said.
And, she added, that success led to an even bigger one — a half-billion dollar CBA attached to the $11 billion expansion and modernization of Los Angeles International Airport. The Los Angeles City Council supported the agreement, designed to benefit the low-income communities of color located near the airport, in a 14-to-1 vote.
That CBA is a sweeping one. It includes a five-year, $25 million trades apprenticeship and job-training program affecting every company involved in building at the airport or doing business there. It also requires that all jobs generated by the project pay at least $9 an hour plus benefits and earmarks $200 million for local school improvements, including computers, long-distance learning technology, and new windows. Developers will also pay to soundproof the homes of some 300,000 residents in the neighborhoods surrounding the airport.The agreement even provides for “green” building practices that avoid the use of toxic chemicals and encourage energy efficiency; it also requires the airport to phase out its fume-spewing diesel equipment.
According to LAANE’s senior community organizer, William D. Smart Jr., the airport project received federal approval in May, setting the stage for the community benefits agreement to begin taking effect this month, starting with its job provisions.
The Road to Good Jobs and Great Neighborhoods
The story of another CBA, which was negotiated in Milwaukee, demonstrates that making such agreements work often takes a good deal of organizing, persistence, and patience.
The 2004 demolition of Milwaukee's Park East Freeway opened up 60 acres of land bordering the downtown. But it also sparked an alliance among poor people, faith-based organizations, unions, and public policy advocates concerned about what would happen to the big parcel. As the city council pondered the new fate of the land in 2002, 29 metro Milwaukee organizations formed the Good Jobs and Livable Neighborhoods Coalition and began pushing for downtown redevelopment governed by a CBA that included measures for affordable housing and living wages.
Opponents objected to the affordable housing requirements and wage standards in the proposed CBA, arguing that the market should determine rent and wages. Surprisingly, many minority business owners also expressed concerns about higher wages that, they said, would hurt their operations. After an 18-month struggle, the Milwaukee Common Council rejected the CBA by a 9-to-6 vote in June 2004.
Determined to continue, the coalition shifted its efforts towards Milwaukee County, which held title to a portion of the acreage. In October 2004, 11 members of the Milwaukee County Board of Supervisors introduced a resolution endorsing the CBA. By the time the measure came to a vote that December, it had gained wide public support. Before a standing-room-only audience, the supervisors approved the resolution by a 15-to-4 vote.
After the resolution passed, the Rev. Joseph Jackson, pastor of Evergreen Baptist Church and president of Milwaukee Innercity Congregations Allied for Hope (MICAH), the Coalition’s faith-based partner, said, “We have set a standard for all development in the city and this standard will benefit the entire Milwaukee community in the long run.”
However the coalition faced another roadblock when the county executive vetoed the action. But the Milwaukee County Board of Supervisors overrode his veto in February, 2005, with another 15-to-4 vote. Now the 26-acre mixed-use development will move forward, extending Milwaukee’s River Walk along Lower Water Street, transforming McKinley Avenue into a high-visibility boulevard that will serve as the new gateway to downtown, and adding housing, shopping and entertainment venues along Upper Water Street. Just as importantly, these new developments will go hand-in-hand with good jobs, affordable housing, childcare, an urban gardening site, and a bicycle trail for residents, all products of the CBA.
A Winning Strategy for Development
Greg LeRoy, executive director of Good Jobs First, a national resource center promoting corporate and government accountability, predicts that CBAs will become more common.
“It is inevitable for the appeal of CBAs to grow a lot,” Mr. LeRoy said, “particularly for the ‘back to the city movement.’ It is a losing strategy to just be against development. The political lesson is that if you only have a negative interest, you will be painted as anti-economic development.”
Ms. Janis-Aparicio emphasized that groups who want to successfully shape developments and their impact on local communities by using CBAs must first develop effective strategies.
“You have to decide what the carrot is, and what the stick is,” she said. “For the airport project, the carrot is the elimination of groups that would have mired the project in litigation and the prospect of getting approval from reticent council members. The stick is the potential for the project to fall apart if it does not develop a win-win approach.”