New Tool Empowers Citizens To Negotiate Directly With Developers
Residents can often feel powerless when wealthy developers propose big projects in their neighborhood. But over the last two decades, citizen-led groups in a number of cities are turning to Community Benefits Agreements to influence publicly-funded developments. Could it work in Richmond? WCVE’s Catherine Komp has more in our series Where We Live.
It happens in cities across the country. Developers, sometimes owned by big corporations, propose a large scale project - often a pricey sports and entertainment complex, with retail, upscale apartments, maybe a hotel. While there might be community meetings to discuss the development - the public usually doesn’t have much of a say in negotiations.
Miya Saika Chen: Typically development projects happen behind closed doors.
Miya Saika Chen is a staff attorney at The Partnership for Working Families, a national network that works on economic and environmental issues. She points out that a lot of these developments include public subsidies, like tax breaks and land giveaways.
Saika Chen: And because these are public resources, we believe that the community and the residents most impacted by development should be part of the development process.
That’s where Community Benefits Agreements or CBAs come in. They’re legally-binding contracts negotiated between local citizen groups and a developer. And they’ve been used in places like L.A., New York, Pittsburgh and most recently Nashville to secure local hires, living wages, job training and affordable housing.
Richard Schragger: It has been generally negotiated by community groups who use their potential leverage in the land use process to extract concessions from developers. There's sometimes some governmental interactions as well, but the deals are negotiated usually between private parties.
University of Virginia Law Professor Richard Schragger says CBAs are a tool for citizens to offset the gentrifying impacts of developments. And he says, they can also be used to win higher pay in places where state law prevents localities from raising the minimum wage.
Richard Schragger: And the reason they can do that is because they're not regulating it as a city, they’re just making a deal as a private actor. And that's a way of say obtaining a living wage at least on that project even though the city might not have the authority to impose such a living wage more generally. So it is important to think about CBAs as ways to regulate things that local governments often don't have the power to regulate directly.
The Community Benefits Agreement signed this month in Nashville is for a new $275 million soccer stadium and an adjacent development with a hotel, housing, office and retail. Organizers say it’s historic.
Odessa Kelly: First of all, it's a very new concept in the South, Community Benefits Agreements.
Odessa Kelly is a co-chair with Stand Up Nashville or SUN, which negotiated the CBA with Nashville Soccer Holdings.
Kelly: One of the biggest things we got was a $15.50 wage floor for the employees that will be working at the stadium.
That’s for janitors, ushers, maintenance and other service staff. Another big win: affordable housing, says SUN’s Anne Barnett.
Anne Barnett: We started at 60%, that was our original demand (laughs).
They ended up with 20% affordable units, and most importantly says Barnett - more than half will be for 0-60% of Area Median Income, or about $50,000 or less for a family of four. Developers also committed to a portion of those units having three bedrooms.
Kelly: We hear all the time that people are building housing, but they're not building housing that's appropriate for who's needing needing it and who's staying here. So the three bedrooms are really important.
The agreement includes a 4,000 square foot childcare facility with fees on a sliding scale, and another 4,000 square feet for “micro unit” retail space, offered to local residents at a discount. With a number of worker deaths in the last year, the CBA has provisions for job safety and training.
Barnett: This is historic in Nashville because it just sets a completely new tone for the way that development gets done. It's a new standard, that's the floor not the ceiling, right? To say to developers, if you want to do business in our city, you're going to have to make sure that the community benefits.
There are a lot of similarities between Nashville and Richmond, both have low rates of unemployment, but high rates of poverty; both are experiencing rapid gentrification. And both cities are restricted by the “Dillon Rule,” which limits the authority of local government to pass certain laws and ordinances without state approval - including inclusionary zoning which requires developers to include affordable units in their projects.
Could a Community Benefits Agreement like this work with the proposed Coliseum development in Richmond?
Ben Teresa: Probably richmonders have and people who live in the region at large, will have specific ideas and interests and how that area is redeveloped.
VCU Urban Studies Professor Ben Teresa asks who would make up the coalition to negotiate the CBA?
Teresa: In some ways, it’s kind of like everyone's a part of the redevelopment of that area and yet there's no one sort of immediately there to think about what benefits should this project deliver.
The Mayor’s office has been negotiating the Coliseum deal behind closed doors with the single respondent to an RFP, NH District Corporation led by Dominion CEO Tom Farrell. The City requested any proposal include a mix of [housing] units targeting different income levels” but it doesn’t lay out what percentage, the specific income level, or number of bedrooms. The RFP, which states Richmond is “emerging as a leader” among peer cities like Nashville, also doesn’t specify living wages or benefits. For local hires, it says the respondent should “endeavor to provide a portion” of jobs to Richmond residents.
Teresa and his students at VCU’s Wilder School have studied the RFP. He says the goals that stand out are making the area revenue-generating, building Richmond’s “brand,” and creating jobs.
Teresa: I think that you could say that the mayor and the city is trying to secure what we might think of as community benefits sort of without that specific coalition or constituency that would directly negotiate in the case of a CBA. But the city sort of will have then all these competing goals, which is not unusual for a city to have to struggle with - how to maximize revenue on public property, at the same time addressing some of the major goals of the city overall, and for this administration in terms of reducing poverty, so a lot always for a city to have to juggle.
The Mayor’s Office and NH District Corp. didn’t answer questions about whether it would support a CBA directly negotiated between a community coalition and the coliseum developers. Both entities also refused to discuss the specifics of talks regarding any aspect of the coliseum proposal. But when asked about wages for jobs created by the deal, NH District Corp Spokesperson Jeff Kelley said “the market must determine wages.”
The Mayor’s RFP called for coliseum developers to “engage with community stakeholders to help inform the development of the proposal.” Kelley said NH Corp. held six meetings in January 2018, but he couldn’t say how many people attended. However, he said those meetings and an online survey combined reached 1000 people. Kelley would not disclose who NH District Corp. met with for “several small-group sessions with key community stakeholders,” and also couldn’t say whether they met with any former residents of the Navy Hill neighborhood or their descendents.
We couldn’t find any previous CBAs in the Richmond-area or elsewhere in the state. But one person has been bringing them up - hoping residents will take notice of their potential.
Montigue Magruder: I'm Montague Magruder. I am a community resident in the Manchester neighborhood.
Magruder’s active in community and political issues, including running for City Council and the House of Delegates as a Green Party candidate. He’s encouraged the Blackwell and Swansboro Civic Associations to draft a CBA for the proposed expansion of the Manchester Historic District.
Magruder: Because I felt like a Community Benefits Agreement would help shift the power back to the people and which they can directly have control over what's put in their community.
The proposed expansion is controversial. It was initiated by developers Michael and Laura Hild. They own dozens of properties in the area that would benefit from Historic Tax Credits and they threatened to stop millions of dollars in investment when a state vote on the expansion was delayed. Magruder says a CBA could include things the community needs, from a grocery store and bus shelters to protections from displacement of longtime residents.
Magruder: And what can also be included is penalty clauses that if the developer does not abide by the terms of that agreement, then they can be penalized and certain ways in which whoever will be negatively impacted by their actions would be able to receive compensation.
Both Magruder and Councilmember Ellen Robertson brought up CBAs at the last historic district meeting - but Magruder says he hasn’t heard of any movement on drafting one. Robertson told WCVE she hasn’t discussed an official CBA with anyone.
Envisioning what a CBA in Manchester could include, VCU’S Ben Teresa says a potential community benefit could be requiring a certain number of properties in the expanded historic district be transferred to the Maggie Walker Community Land Trust.
There are plenty of challenges for groups negotiating CBAs. Hunter College Professor Laura Wolf Powers says some projects just aren’t good for the community.
Laura Wolf Powers: So for example, if an agreement is going to have a negative fiscal impact or if the development is going to have a negative fiscal impact on the city. In other words, if the amount of subsidy that the city is providing is going to outstrip the amount of tax revenue that the city is going to gain then maybe we should be rethinking the project altogether or if it's going to involve displacement on a large scale. Maybe it's just not worth it, no matter how attractive the benefits are. So that's the first challenge, that the project shouldn't be going forward in the first place.
Another barrier, she says, is that some community groups aren’t powerful enough to demand meaningful benefits.
Wolf Powers: So that can turn into a tokenistic process where the developer doesn't really have to offer that much because they know they're going to have the political support they need with or without the community coalition.
Another issue is enforcement and who’s responsible for holding developers accountable. UVA’s Scharagger says he hasn’t yet seen any CBA litigation.Schragger: So I'm not sure what courts think of these things but you would want to be very clear about what the legal status is of these kinds of agreements. So that's a little bit tricky as well. And then what happens at a breach if the developer doesn't follow through is a real question also and on the front end you might want to spell that out very clearly.
Schragger warns about developers creating “fake coalitions,” to water down negotiations.
Schragger: So it's possible the developer could in some cases set up a group and then make a deal with that group which cuts out other interest groups in the neighborhood. So that's in the worst case, the CBA might just be a manufactured contract between a developer and a group the developer has essentially created.
For the groups in Nashville, having an ally on the City Council was key. The coalition initially tried to get a Community Benefits Agreement off the ground in 2017 for an airport expansion. They got started too late to influence that development, but their efforts laid the groundwork for educating the community about what a CBA was. When Councilmember Colby Sledge learned of the soccer stadium development, he let the coalition know.
Barnett: And he made it one of his demands that it have a Community Benefits Agreement on it. And so he really brought the developers to the table in enough time for us to actually negotiate a CBA before it passed through Metro Council.
Barnett and Kelly say negotiations, which started in March 2018, were intense and time-consuming - they say it’s much more than a weekend or part-time job. But they didn’t want to wait for somebody else to come up with solutions to Nashville’s biggest challenges - poverty and affordable housing.
Kelly: A lot of times we put our elected officials on pedestals or put everyone but ourselves on the pedestals. We think they have more worth and more right or more privilege to what happens in a place, in the space that you occupy as well. You know, you are worthy of how you feel and you have every right to go fight for what change you want to see. So go out there and actually do that, you know have an impact on your city and you know, your voice is just as important as the next person's.
The is is the first Community Benefits Agreement signed in Nashville and all of Tennessee. According to Nashville Soccer Holdings, the value of the community benefits in this agreement is about $75 million. Catherine Komp, WCVE News.