By Kathy Ralston, summer 2015 intern for CDAD
On Friday June 5, over 100 individuals from communities all over the state of Michigan attended the Statewide Community Benefits Conference: Justice for Our Neighborhoods. The all-day event was held here in Detroit at the Federal Reserve Bank on East Warren. The conference featured an impressive array of speakers and facilitators who shared their insights on Community Benefits Agreements (CBA) happening in several cities around the country and the facts behind the myths surrounding the Community Benefits Ordinance (CBO) currently proposed to Detroit City Council. Break out training sessions provided opportunities for attendees to network and discover new strategies to launch an effective local CBA campaign including outreach, communication and volunteer coordination. This was the first event organized on a statewide basis for community benefits advocates to gather and share their accumulated knowledge and wisdom gathered from years of working to help neighborhoods thrive. Sponsoring organizations for the event included Equitable Detroit Coalition, Sugar Law Center, Economic Justice Alliance of Michigan, CDAD, Engage Michigan and the Michigan Black Chamber of Commerce. For myself, and I’m certain for all those in attendance, the event was a positive and energizing experience as participants shared ideas and strategies to empower communities.
The Honorable Brenda Jones, Detroit City Council President, began the day with opening remarks explaining the many reasons she chose to introduce the CBO legislation to city council and why she strongly supports its adoption. Wayne State Law Professor Peter Hammer delivered the opening session talk, ‘CBA Ordinance: Putting People, Not Property, at the Center of Development.’ Professor Hammer is the Director of the Damon J. Keith Center for Civil Rights at Wayne State University Law School and teaches a variety of courses focusing on civil rights social justice issues, health care policy and economic development.
Professor Hammer explained what a CBA actually is and what the CBO proposed for Detroit would do. The importance of having a CBA process is to provide a voice at the table for the people who live in the community. Detroit and urban communities across the nation have a long history of supporting large scale developments through public subsidies such as tax abatements and tax breaks. But while developments such as the Hantz Farm project and soon to be constructed Red Wings hockey stadium here in Detroit will profoundly impact neighborhood residents for years to come, residents have historically been completely left out of those development decisions.
A CBA is a contract that is negotiated between the host community and the project developer to ensure that neighborhood residents have a voice at the table when large scale development projects are proposed for their neighborhoods. These agreements have taken on many shapes and forms in cities across the country. What the agreement ends up looking like depends on the circumstances of the particular development and the unique needs of the community entering into the agreement.
A CBO, such as the one proposed to Detroit City Council, is a law that holds large scale developers receiving public subsidies accountable to the communities its developments will most directly impact. CBOs contain the elements that must be included in CBAs that are entered into within that municipality. A common misconception regarding CBAs and CBOs is that they would affect all developments. This is not the case. Agreements would only apply to large scale developments that are expected to incur the investment of $15 million or more and only those that are made possible through the use of public resources such as tax breaks, tax abatements or public lands.
Another common objection to the adoption of CBOs is that they are not flexible and will, as a result, discourage development. However, the proposed CBO is not a rigid one size fits all ordinance, as it contains exceptions that would allow developments to move forward if it can be shown that both parties have negotiated in good faith. The law allows developers and communities to design agreements that fit the specific needs and address the specific concerns of both parties. Provisions within the final agreement are as varied as the communities themselves. Almost all CBAs contain some form of First Source Hiring provisions. This is a provision within the agreement that requires the developer to consider the people in the development area first when it’s time to hire for the project. If a project will negatively impact the environment, a CBA would likely contain provisions that the developer take steps to mitigate that environmental damage. CBAs can also include provisions for job training, targeted job recruitment, living and prevailing wage standards, environmental mitigation and cleanup, affordable housing, access to public transportation and more.
John Philo, Executive and Legal Director for the Sugar Law Center here in Detroit, shed more light on the nuts and bolts of achieving legally binding CBAs between community groups and developers. He stressed that the process need not be an adversarial one because each party has something to gain. By entering into a good faith negotiation effort leading to an agreement, developers achieve credibility and support from that community and a predictable process. The community gets accountability from the developer with respect to benefits that have been promised and negotiated for.
President and CEO of the Michigan Black Chamber of Commerce (MBCC) Kenneth Harris was our lunchtime speaker. The MBCC publicly supports the adoption of the Detroit Community Benefits ordinance while the Southeast Michigan Chamber Alliance and the Detroit Economic Development Corporation remain opposed. Mr. Harris explained that he and his organization support the ordinance because it would build relationships between developers and local small businesses as provisions can be included within CBAs giving local businesses contract precedence in development and/or operational phases.
Legally binding CBAs are just one important tool on the way to necessary economic and political policy change. Among international scholars in the field of economics, it is widely agreed that the policies of the last fifty years, including deregulation, fiscal austerity, tax and spending cuts and widespread disinvestment in and privatization of government services, do not produce economic growth and prosperity and instead perpetuate inequality. As cities of the United States have long adhered to these traditional economic policies, so has Detroit. An argument that these policies have worked to bring economic growth and prosperity to Detroit residents would indeed be difficult to support.
Opponents argue that the community input process will damage the development process but the evidence suggests otherwise. Community input helps to build better and more economically successful developments because it is the residents who understand what will best serve that community economically. It is the residents who best understand what resources are needed to improve the quality of life in their neighborhoods. Economists around the world are finding that communities where residents are more engaged in local economic and political decisions enjoy more economic growth and success than communities that are less engaged. The CBA process automatically shines a light on local development decisions and also provides an avenue for greater community inclusion.
Read the most recent draft of the CBA Ordinance: 3Revs.FinalDRAFTLaw.LPD_CBAO_-_10-30-14 (1)