Community Benefits Agreement
Encyclopedia
A Community Benefits Agreement ("CBA") in the USA is a contract
signed by community groups and a real estate developer that requires the developer to provide specific amenities and/or mitigations to the local community or neighborhood. In exchange, the community groups agree to publicly support the project, or at least not oppose it. Often, negotiating a CBA relies heavily upon the formation of a multi-issue, broad based community coalition including community, environmental, faith-based and labor organizations. A similar agreement in the United Kingdom
is known as a Section 106 agreement.
projects are often heavily subsidized by taxpayer dollars, but there is usually no guarantee that a project's “ripple effects” will benefit current residents. Developments can cause inner-city gentrification
, pushing out low-income residents as housing prices rise, or they may create only low-wage retail and service sector jobs
. As a result, many metropolitan regions continue to experience problems related to poverty
and housing
, despite major investments in economic development.
Responding to these problems, the CBA model was created in the late 1990s as a way for the communities most impacted by economic development projects to participate in the planning process and seek to ensure that development benefits will accrue to existing communities. For developers, negotiating with community representatives can be an attractive way to gain community support and help move their projects forward. Participating in CBA negotiations can eliminate surprises in the development approvals process and allow developers to work with a unified coalition rather than having to engage community organizations one by one.
patterns, the community benefits movement emerged to challenge conventional thinking and offer a broader vision. Related to smart growth
and environmental justice
, the community benefits movement aims to ensure that the main purpose of economic development is to bring measurable, permanent improvements to the lives of affected residents, particularly those in low-income neighborhoods and communities of color. Organizations allied with the community benefits movement have pressured the public sector to play a more strategic role in land use planning and urban growth, and to leverage economic development subsidies toward the creation of good jobs, affordable housing, and neighborhood services that improve the quality of life for all residents.
Although the community benefits movement began in Los Angeles, it has spread rapidly to other cities, including Atlanta, Denver, Milwaukee, Minneapolis, New Haven, New York City
, Philadelphia, Pittsburgh, San Diego, San Francisco, San Jose
, Seattle, Syracuse
, Washington, D.C.
, and Wilmington
. Leading organizations include The Partnership for Working Families http://www.communitybenefits.org/, Los Angeles Alliance for a New Economy ("LAANE") http://laane.org/, Strategic Actions for a Just Economy
("SAJE")http://www.saje.net/, Georgia Stand-Up http://www.georgiastandup.org/, and Pittsburg UNITED http://www.pittsburghunited.org/.
CBA advocates contend that the community benefits approach improves the development process for the community, developers and local officials by creating an overall win-win-win scenario. Some of the principles and goals that CBA advocates seek to promote include:
Inclusiveness. The CBA negotiation process can provide a mechanism to ensure that community concerns are heard and addressed. While some cities do a good job of seeking community input and responding to it, many do not. Low-income neighborhoods, non-English speaking areas, and communities of color have historically been excluded from the development process. Laws concerning public notice and participation are often poorly enforced, and official public hearings are frequently held at times and places that are not neighborhood-friendly. Having a CBA negotiation process can help to address these problems, providing a forum for all parts of an affected community.
Enforceability. A CBA can ensure that a developer’s promises regarding community benefits are legally enforceable. Developers “pitching” a project often make promises that are never written into any project approval documents, and even when they are, they may not be monitored and enforced by the relevant government agencies. By creating an enforcement mechanism or expanding the class of parties who can enforce these promises, CBAs can make enforcement much easier.
Accountability. CBAs enable citizens to hold governments accountable for the use of tax dollars by giving them a voice in how development subsidies are distributed.
Elected officials or government agencies often play an active role in CBA negotiations. In California and other jurisdictions where development agreements are authorized, government representatives may be formal CBA signatories. In other cases, government officials may play a more informal role by facilitating CBA negotiations and encouraging cooperation.
are required to incorporate community benefits through a development or funding agreement.
programs, and affordable housing requirements.
Other benefits include, among other things:
The range of benefits offered by a CBA has been explored extensively in the scholarly literature, as well as conferences, in an effort to raise awareness about the benefits of CBA's for developers, local government, and struggling communities.
regarding the validity and enforceability of CBAs. Donald Trump's
1993 CBA-like contract relating to the New York City Riverside South project was the subject of a 2008 New York Appellate Division opinion, but the court held that the contract's terms were expired.http://www.nycourts.gov/reporter/3dseries/2008/2008_10229.htm
may also weaken the effectiveness of CBAs.
Staples Center
CBA, which has generally been viewed as a success.http://www.communitybenefits.org/article.php?id=1475 Other projects that have had CBAs include the Dearborn Street Goodwill
project in Seattle, the Consol Energy Center arena (for the Penguins hockey team
) in Pittsburgh, San Francisco's Bayview-Hunters Point residential development, the Gates-Cherokee redevelopment project in Denver, and the Ballpark Village development in San Diego.http://www.communitybenefits.org/article.php?list=type&type=155#cbaslist
The "CBAs" of some recent projects have not been accepted as legitimate CBAs by advocates of the community benefits movement. For example, the "CBA" for the new Yankee Stadium
has not been considered to be a "true" CBA because it was negotiated by elected officials, not community groups. The agreement did include significant community benefits such as $28,000,000 in grants and free tickets for local organizations. However, the CBA has not been smoothly implemented. In 2009, the former administer the community fund sued the Yankees' community charity, claiming that the fund had been mismanaged.http://www.nytimes.com/2009/04/01/nyregion/01bronx.html?_r=3
In preparation of the 2010 Winter Olympics
, the city of Vancouver
, Canada, awarded a contract to Millennium Development Corporation to build its 600000 square feet (55,741.8 m²), 600-unit athletes' village on south east False Creek. This development included a CBA with targets to create 100 jobs for locally sourced and trained inner city residents and to procure a targeted $15 million in goods and services from the inner city. It also included a $750,00 legacy fund to train inner city residents. The CBA included investment and support from the Canadian Federal Government, BC Provincial Government, the City of Vancouver and Building Opportunities with Business Inner-City Society Building Opportunities with Business
(a community economic development non-profit also known as BOB) these parties collectively are recognized under the Vancouver Agreement. The CBA also received support from Bell, VanCity, the Canadian Housing and Mortgage Corporation and the Vancouver Regional Construction Association. Building Opportunities with Business oversaw the use of the legacy funds, sourced labor and supported the inner city residents with training and aid while the VRCA oversaw the training of residents. Though the Olympic Village was widely criticized for going over budget, in a 2008 report to the City prepared by BOB the creation of 120 jobs with procurement closer to $50 million is cited. The report also admits that tracking the actual economic activity from the development was difficult and that the procurement is not exact. Regardless of the difficulty tracking procurement and the fact that the project went over budget the CBA is widely considered to be a success.
Ann updated examination into past, current, and future CBAs, can be found in this summary.
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
signed by community groups and a real estate developer that requires the developer to provide specific amenities and/or mitigations to the local community or neighborhood. In exchange, the community groups agree to publicly support the project, or at least not oppose it. Often, negotiating a CBA relies heavily upon the formation of a multi-issue, broad based community coalition including community, environmental, faith-based and labor organizations. A similar agreement in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
is known as a Section 106 agreement.
Purposes
Economic developmentEconomic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...
projects are often heavily subsidized by taxpayer dollars, but there is usually no guarantee that a project's “ripple effects” will benefit current residents. Developments can cause inner-city gentrification
Gentrification
Gentrification and urban gentrification refer to the changes that result when wealthier people acquire or rent property in low income and working class communities. Urban gentrification is associated with movement. Consequent to gentrification, the average income increases and average family size...
, pushing out low-income residents as housing prices rise, or they may create only low-wage retail and service sector jobs
Working poor
- Definition in the United States :There are several popular definitions of "working poor" in the United States. According to the US Department of Labor, the working poor "are persons who spent at least 27 weeks [in the past year] in the labor force , but whose incomes fell below the official...
. As a result, many metropolitan regions continue to experience problems related to poverty
Poverty
Poverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...
and housing
Affordable housing
Affordable housing is a term used to describe dwelling units whose total housing costs are deemed "affordable" to those that have a median income. Although the term is often applied to rental housing that is within the financial means of those in the lower income ranges of a geographical area, the...
, despite major investments in economic development.
Responding to these problems, the CBA model was created in the late 1990s as a way for the communities most impacted by economic development projects to participate in the planning process and seek to ensure that development benefits will accrue to existing communities. For developers, negotiating with community representatives can be an attractive way to gain community support and help move their projects forward. Participating in CBA negotiations can eliminate surprises in the development approvals process and allow developers to work with a unified coalition rather than having to engage community organizations one by one.
The Community Benefits Movement
As local governments grapple with their responsibility to shape development and land useLand use
Land use is the human use of land. Land use involves the management and modification of natural environment or wilderness into built environment such as fields, pastures, and settlements. It has also been defined as "the arrangements, activities and inputs people undertake in a certain land cover...
patterns, the community benefits movement emerged to challenge conventional thinking and offer a broader vision. Related to smart growth
Smart growth
Smart growth is an urban planning and transportation theory that concentrates growth in compact walkable urban centers to avoid sprawl and advocates compact, transit-oriented, walkable, bicycle-friendly land use, including neighborhood schools, complete streets, and mixed-use development with a...
and environmental justice
Environmental justice
Environmental justice is "the fair treatment and meaningful involvement of all people regardless of race, color, sex, national origin, or income with respect to the development, implementation and enforcement of environmental laws, regulations, and policies." In the words of Bunyan Bryant,...
, the community benefits movement aims to ensure that the main purpose of economic development is to bring measurable, permanent improvements to the lives of affected residents, particularly those in low-income neighborhoods and communities of color. Organizations allied with the community benefits movement have pressured the public sector to play a more strategic role in land use planning and urban growth, and to leverage economic development subsidies toward the creation of good jobs, affordable housing, and neighborhood services that improve the quality of life for all residents.
Although the community benefits movement began in Los Angeles, it has spread rapidly to other cities, including Atlanta, Denver, Milwaukee, Minneapolis, New Haven, New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, Philadelphia, Pittsburgh, San Diego, San Francisco, San Jose
San Jose, California
San Jose is the third-largest city in California, the tenth-largest in the U.S., and the county seat of Santa Clara County which is located at the southern end of San Francisco Bay...
, Seattle, Syracuse
Syracuse, New York
Syracuse is a city in and the county seat of Onondaga County, New York, United States, the largest U.S. city with the name "Syracuse", and the fifth most populous city in the state. At the 2010 census, the city population was 145,170, and its metropolitan area had a population of 742,603...
, Washington, D.C.
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
, and Wilmington
Wilmington, Delaware
Wilmington is the largest city in the state of Delaware, United States, and is located at the confluence of the Christina River and Brandywine Creek, near where the Christina flows into the Delaware River. It is the county seat of New Castle County and one of the major cities in the Delaware Valley...
. Leading organizations include The Partnership for Working Families http://www.communitybenefits.org/, Los Angeles Alliance for a New Economy ("LAANE") http://laane.org/, Strategic Actions for a Just Economy
Strategic Actions for a Just Economy
Strategic Actions for a Just Economy is a nonprofit economic justice organization. It was founded by Gilda Haas in 1996. Their current director is Paulina Gonzalez....
("SAJE")http://www.saje.net/, Georgia Stand-Up http://www.georgiastandup.org/, and Pittsburg UNITED http://www.pittsburghunited.org/.
CBA advocates contend that the community benefits approach improves the development process for the community, developers and local officials by creating an overall win-win-win scenario. Some of the principles and goals that CBA advocates seek to promote include:
Inclusiveness. The CBA negotiation process can provide a mechanism to ensure that community concerns are heard and addressed. While some cities do a good job of seeking community input and responding to it, many do not. Low-income neighborhoods, non-English speaking areas, and communities of color have historically been excluded from the development process. Laws concerning public notice and participation are often poorly enforced, and official public hearings are frequently held at times and places that are not neighborhood-friendly. Having a CBA negotiation process can help to address these problems, providing a forum for all parts of an affected community.
Enforceability. A CBA can ensure that a developer’s promises regarding community benefits are legally enforceable. Developers “pitching” a project often make promises that are never written into any project approval documents, and even when they are, they may not be monitored and enforced by the relevant government agencies. By creating an enforcement mechanism or expanding the class of parties who can enforce these promises, CBAs can make enforcement much easier.
Accountability. CBAs enable citizens to hold governments accountable for the use of tax dollars by giving them a voice in how development subsidies are distributed.
CBA Coalitions
At the heart of the community benefits strategy is coalition building. Organizing and maintaining a coalition, facilitating compromise and crafting a shared agenda is essential to creating a successful CBA. Coalitions can include a variety of community groups, such as neighborhood groups, environmental organizations, good government organizations, labor unions, and faith-based organizations. Coalitions are usually unincorporated, but member community groups may enter into an operating agreement to govern their relationship in the coalition. A model CBA Coalition Operating Agreement has been created by the Public Law Center at Tulane Law School.Elected officials or government agencies often play an active role in CBA negotiations. In California and other jurisdictions where development agreements are authorized, government representatives may be formal CBA signatories. In other cases, government officials may play a more informal role by facilitating CBA negotiations and encouraging cooperation.
CBA Negotiations
Typically, negotiations between a CBA coalition and a developer begin after a project has been announced but prior to governmental approval. However, there are examples of legislative CBA requirements attached to subsidies that impose community benefit standards on land within particular districts. For example, developers participating in the Atlanta Beltline project that opt to use tax increment financingTax increment financing
Tax Increment Financing, or TIF, is a public financing method which has been used as a subsidy for redevelopment and community improvement projects in many countries including the United States for more than 50 years...
are required to incorporate community benefits through a development or funding agreement.
Possible benefits
The CBA contract model allows each particular CBA to be tailored to the community’s needs, the size and type of the proposed development, and the relative bargaining power of the community groups and the developer. Benefits may be provided by the developer itself, or a CBA may require the developer to impose CBA provisions on its tenants, vendors, and contractors. Typically, CBAs include job quality standards, local hiringLocal hiring
Local hiring is a goal or requirement to hire people who live close to the place of work. This aim is often more specifically structured as a requirement for contractors awarded certain types of publicly-funded projects to recruit a certain proportion of the people working on the project from a...
programs, and affordable housing requirements.
Other benefits include, among other things:
- Living wageLiving wageIn public policy, a living wage is the minimum hourly income necessary for a worker to meet basic needs . These needs include shelter and other incidentals such as clothing and nutrition...
and prevailing wagePrevailing wageIn government contracting, a prevailing wage is defined as the hourly wage, usual benefits and overtime, paid to the majority of workers, laborers, and mechanics within a particular area. Prevailing wages are established by regulatory agencies for each trade and occupation employed in the...
requirements - Local hiring goals
- Job training programs
- Minority/women/local business contracting goalsSupplier diversitySupplier Diversity is a business program that encourages the use of: minority-owned, women owned, veteran owned, LGBT-owned, service disabled veteran owned, historically underutilized business, and SBA defined small business vendors as suppliers...
- Provisions prohibiting developers from hiring contractors that have violated labor or other occupational laws (known as "responsible contractor" provisions)
- Union neutrality requirements
- Retail/commercial space set-asides for small and local businesses
- Big box retail restrictions
- Green buildingGreen buildingGreen building refers to a structure and using process that is environmentally responsible and resource-efficient throughout a building's life-cycle: from siting to design, construction, operation, maintenance, renovation, and demolition...
requirements - Space set-asides for neighborhood organizations, community centers, child-care centers, and other non-profits
- Construction of parks and recreational facilities
- Provisions for community input in the selection of tenants
- Funding for community organizations/programs
- Mitigations in excess of those required under state/local law that address parking, traffic, increased pollution, and other environmental impacts
- Affordable housingAffordable housingAffordable housing is a term used to describe dwelling units whose total housing costs are deemed "affordable" to those that have a median income. Although the term is often applied to rental housing that is within the financial means of those in the lower income ranges of a geographical area, the...
requirements
The range of benefits offered by a CBA has been explored extensively in the scholarly literature, as well as conferences, in an effort to raise awareness about the benefits of CBA's for developers, local government, and struggling communities.
Monitoring
Community groups should consider how each provision in a CBA will be monitored and enforced. Although financial commitments and other one-time benefits may be fairly easy to monitor, other developer and tenant commitments, such as living wage and local hiring requirements, may be in place for decades and require long-term oversight. To address this issue, CBAs have included periodic reporting and disclosure requirements, complaint investigation mechanisms, and provisions establishing oversight committees. Where a CBA is incorporated into a development agreement, government agencies may also play a role in monitoring the CBA's implementation.Enforcement
As a CBA is a legally binding contract, it can be enforced only by the parties that signed it. CBAs that are incorporated into development agreements can be enforced by the government as well as by community groups. To date, there is no case lawCase law
In law, case law is the set of reported judicial decisions of selected appellate courts and other courts of first instance which make new interpretations of the law and, therefore, can be cited as precedents in a process known as stare decisis...
regarding the validity and enforceability of CBAs. Donald Trump's
Donald Trump
Donald John Trump, Sr. is an American business magnate, television personality and author. He is the chairman and president of The Trump Organization and the founder of Trump Entertainment Resorts. Trump's extravagant lifestyle, outspoken manner and role on the NBC reality show The Apprentice have...
1993 CBA-like contract relating to the New York City Riverside South project was the subject of a 2008 New York Appellate Division opinion, but the court held that the contract's terms were expired.http://www.nycourts.gov/reporter/3dseries/2008/2008_10229.htm
Concerns and issues
Although numerous CBAs have proven to be successful tools to improve the economic development process, a variety of criticisms have emerged. Perhaps the most significant criticism is that CBAs offer no way to ensure that they are truly representative of community needs and desires. The Atlantic Yards CBA, for example, has been criticized because it was negotiated by only a handful of community groups, all of which are receiving funding from the developer, while many other community groups were excluded from the negotiations. A report from the New York City Bar Association has also questioned whether CBA negotiators will drive appropriate bargains with developers, and whether CBAs will interfere with the planning process. Various legal problems relating to exactions and considerationConsideration
Consideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from...
may also weaken the effectiveness of CBAs.
Recent examples
CBAs have been negotiated for numerous projects. The most well known CBA is likely the Los AngelesLos Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
Staples Center
Staples Center
Staples Center is a multi-purpose sports arena in Downtown Los Angeles. Adjacent to the L.A. Live development, it is located next to the Los Angeles Convention Center complex along Figueroa Street. Opening on October 17, 1999, it is one of the major sporting facilities in the Greater Los Angeles...
CBA, which has generally been viewed as a success.http://www.communitybenefits.org/article.php?id=1475 Other projects that have had CBAs include the Dearborn Street Goodwill
Goodwill Industries
Goodwill Industries International is a not-for-profit organization that provides job training, employment placement services and other community-based programs for people who have a disability, lack education or job experience, or face employment challenges...
project in Seattle, the Consol Energy Center arena (for the Penguins hockey team
Pittsburgh Penguins
The Pittsburgh Penguins are a professional ice hockey team based in Pittsburgh, Pennsylvania. They are members of the Atlantic Division of the Eastern Conference of the National Hockey League . The franchise was founded in 1967 as one of the first expansion teams during the league's original...
) in Pittsburgh, San Francisco's Bayview-Hunters Point residential development, the Gates-Cherokee redevelopment project in Denver, and the Ballpark Village development in San Diego.http://www.communitybenefits.org/article.php?list=type&type=155#cbaslist
The "CBAs" of some recent projects have not been accepted as legitimate CBAs by advocates of the community benefits movement. For example, the "CBA" for the new Yankee Stadium
Yankee Stadium
Yankee Stadium was a stadium located in The Bronx in New York City, New York. It was the home ballpark of the New York Yankees from 1923 to 1973 and from 1976 to 2008. The stadium hosted 6,581 Yankees regular season home games during its 85-year history. It was also the former home of the New York...
has not been considered to be a "true" CBA because it was negotiated by elected officials, not community groups. The agreement did include significant community benefits such as $28,000,000 in grants and free tickets for local organizations. However, the CBA has not been smoothly implemented. In 2009, the former administer the community fund sued the Yankees' community charity, claiming that the fund had been mismanaged.http://www.nytimes.com/2009/04/01/nyregion/01bronx.html?_r=3
In preparation of the 2010 Winter Olympics
2010 Winter Olympics
The 2010 Winter Olympics, officially the XXI Olympic Winter Games or the 21st Winter Olympics, were a major international multi-sport event held from February 12–28, 2010, in Vancouver, British Columbia, Canada, with some events held in the suburbs of Richmond, West Vancouver and the University...
, the city of Vancouver
Vancouver
Vancouver is a coastal seaport city on the mainland of British Columbia, Canada. It is the hub of Greater Vancouver, which, with over 2.3 million residents, is the third most populous metropolitan area in the country,...
, Canada, awarded a contract to Millennium Development Corporation to build its 600000 square feet (55,741.8 m²), 600-unit athletes' village on south east False Creek. This development included a CBA with targets to create 100 jobs for locally sourced and trained inner city residents and to procure a targeted $15 million in goods and services from the inner city. It also included a $750,00 legacy fund to train inner city residents. The CBA included investment and support from the Canadian Federal Government, BC Provincial Government, the City of Vancouver and Building Opportunities with Business Inner-City Society Building Opportunities with Business
Building Opportunities with Business
Building Opportunities with Business Inner-City Society is a non-profit organization that has been active in Vancouver's Downtown Eastside, Chinatown, Strathcona, Mt Pleasant, Gastown and Downtown South areas since October 2005...
(a community economic development non-profit also known as BOB) these parties collectively are recognized under the Vancouver Agreement. The CBA also received support from Bell, VanCity, the Canadian Housing and Mortgage Corporation and the Vancouver Regional Construction Association. Building Opportunities with Business oversaw the use of the legacy funds, sourced labor and supported the inner city residents with training and aid while the VRCA oversaw the training of residents. Though the Olympic Village was widely criticized for going over budget, in a 2008 report to the City prepared by BOB the creation of 120 jobs with procurement closer to $50 million is cited. The report also admits that tracking the actual economic activity from the development was difficult and that the procurement is not exact. Regardless of the difficulty tracking procurement and the fact that the project went over budget the CBA is widely considered to be a success.
Ann updated examination into past, current, and future CBAs, can be found in this summary.