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Campaign Victories |
Community Benefits Agreement victories |
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Community benefits agreements (CBAs) are legally binding contracts signed by developers and community coalitions that spell out a set of community benefits that the developer has committed to provide as part of a development project. Benefits are designed by local residents to meet community needs, and they often include living-wage jobs, affordable housing, funding for parks, space for community services, and programs for first-source hiring of local residents. In exchange, community groups agree to support the developer when the project goes to the city council for approvals and subsidies. Read more about community benefits agreements in the key reforms section. CBAs were pioneered by a Los Angeles community-labor alliance led by Strategic Action for a Just Economy and Los Angeles Alliance for a New Economy. They have since been achieved by coalitions in several cities across the country. CBAs are one of the most exciting developments in the economic development accountability movement because they ensure that subsidized projects create tangible benefits for local communities and give residents the power to shape projects to their needs. CBA campaigns require a significant investment of time and energy. Coalitions typically include dozens of community groups, labor unions, and religious organizations working together to define their common interests and bring developers to the negotiating table through community organizing and political pressure. Here we describe the Los Angeles coalition’s largest victory to date: the expansion of the Staples Center sports arena complex. We also profile two other exciting CBA campaigns involving a mixed-use development at the site of a former rubber plant in Denver and a redevelopment project on the site of a recently-demolished freeway in Milwaukee. These case studies are excerpted from Greg LeRoy and Anna Purinton, Community Benefits Agreements: Ensuring that Urban Redevelopment Benefits Everyone, Neighborhood Funders Group issue brief, August 2005, online at http://www.nfg.org/publications/community_benefits_agreements.pdf . Los Angeles Staples Center Expansion: The city’s 1997 plan to build the original Staples Center—home of such professional sports teams as the Lakers, Clippers, and Kings—was pushed through with little community input. The deal gained the support of organized labor when planners promised to pay a living wage and remain neutral in the event of a union organizing drive. The Hotel Employees and Restaurant Employees local union and the Los Angeles County Federation of Labor endorsed the proposal. Unfortunately, the unions never got the promise in writing. After the developers (among which were the L.A. Arena Land Co., billionaire Philip Anschutz, and media mogul Rupert Murdoch) got their subsidies and variances from the city, the Staples Center changed its tune, arguing that it was not subject to the living wage requirement. They stalled on signing a card check/neutrality agreement (such agreements hold employers neutral when workers are deciding if they wish to have a union), and they claimed that they had no authority to tell their tenants to sign one. Employers threatened to deny unionized employees with 20 to 30 years of experience the right to transfer to the new arena, forcing them to reapply for their jobs, lose their seniority and take a large pay cut. Only after the unions staged a second fight were the developers forced to keep their oral promises. The Staples Center’s neighbors were no happier. More than 250 residents, most of them low-income Latino immigrants, were displaced from their homes by the construction of a new parking lot. Once the center opened, the residents who remained were beset with a traffic and parking nightmare, night-time noise, and drunk drivers. Ominously, the arena was only the first phase of the development. The developers planned to transform an additional 27 acres into the “L.A. Sports and Entertainment District” that contained a 45-story hotel with at least 1,200 rooms; a 7,000-seat theater for musicals, concerts and award shows; restaurants, nightclubs and retailers around a plaza; a 250,000-square-foot expansion of the convention center; two apartment buildings with a total of 800 units; and a second, smaller hotel. A group called the Figueroa Corridor Coalition for Economic Justice (FCCEJ) organized to take on the developers. It grew out of the Coalition for a Responsible USC, an organizing effort that began in 1998 to support the University of Southern California’s food service workers and evolved to address development issues along the Figueroa Corridor, where the Staples Center and proposed entertainment district were located. The coalition eventually involved more than 30 organizations, including immigrant and tenants’ rights groups, health organizations, churches, community groups and environmental activists. Strategic Action for a Just Economy (SAJE) played a central role
in the coalition’s efforts, working to bring other groups
on board and organizing 300 tenants who lived in the area. This
grassroots base played a key role in winning the agreement, which
was oriented largely to their needs. It was also crucial for building
a long-term community development strategy in the Figueroa Corridor
that continues today. FCCEJ’s strategy was what LAANE Executive Director Madeline Janis-Aparicio describes as “using the carrot of potential support and the stick of potential opposition.” The project required city approval, unprecedented land-use rights and subsidies in excess of $75 million for the large hotel alone. With the stakes so high, its ability to influence the process gave the coalition considerable clout. The approval process also happened to coincide with a mayoral campaign. The campaign faced many challenges, from convincing billionaire developers to sit down for serious conversations with community members, to articulating and negotiating the coalition’s demands through a community-led process. Most of the coalition leaders were neighborhood residents; some spoke little English and most had never taken part in formal negotiations. In May 2001, after nine months of negotiations, the developers and the coalition signed a landmark Community Benefits Agreement contract. The developers agreed to implement a first source hiring policy targeting: a) people whose home or place of employment was razed by the development; b) low-income individuals living within three miles of the development; and c) low-income individuals from poorer census tracts throughout the city. Employers, including unnamed future tenants, would hold jobs open for three weeks during the initial hiring process while they interviewed applicants from the target groups. The developers also provided $100,000 in seed money for community groups to develop specialized job training and notification programs. They guaranteed that the development would include a certain amount of public open space, and they allocated more than $1 million that would be spent with community input to create and improve parks within one mile of the development. They created a residential street-parking permit system, to be financed by the developers for the first five years. They committed to construction of 100–160 affordable housing units, equal to 20 percent of the total project, which would be affordable for families earning below 50, 60, and 80 percent of the area’s median income. The developers also made $650,000 in interest-free loans available to local nonprofit housing developers. The developers agreed to notify the coalition 45 days before signing lease agreements, giving the community time to investigate and react to potential tenants. They would not agree to a binding living wage provision, but they did agree to a goal specifying that 70 percent of the 5,500 permanent jobs generated by the project would receive a living wage or be covered by a collective bargaining agreement. The developers signed separate card check/neutrality agreements with five unions and agreed to abide by the city’s worker retention ordinance. The agreement remains legally binding even if the property passes to new owners. A few months after signing the CBA, the developers took their proposal to the City of Los Angeles and the Los Angeles Community Redevelopment Agency—with the full backing of the coalition. Both entities approved the plan, and the CBA was integrated into the development agreement between the developers and the Community Redevelopment Agency, making the CBA enforceable by the city as well as by the community groups. Four years after the agreement was signed, construction has yet to begin on the entertainment district. Nevertheless, the agreement was structured so that substantial benefits have already occurred. The residential parking program is up and running; hundreds of local residents voted to spend the parks funding on a community recreation center and improvements to an existing park, with construction set to begin soon; the affordable housing seed money for zero-interest loans has been disbursed to two nonprofit developers; and the coalition is running job readiness programs with funds from the developers, aiming to have a pool of qualified local applicants ready when hiring begins. Coalition members report that their relations with the developers are good. A lead coalition organizer says that the developers have followed through on their commitments “to the letter and beyond” (quoted in Julian Gross’ CBA handbook, cited below). The coalition has stayed involved with the developers through quarterly meetings of the Oversight Committee, a structure set up by the CBA to provide an ongoing accountability mechanism. FCCEJ is now staffed by SAJE, which devotes many hours to facilitating the meetings and organizing the subcommittee work on implementation. Twenty-five member organizations remain active in the coalition. The coalition acknowledges that it still faces challenges, including developing community leadership and sustaining the involvement of member groups over the long term. But with the strong commitment of SAJE, LAANE and its many members, the odds are good that the coalition will stay organized and keep working with the developers to harvest the community benefits they have won. For more information on the Staples Center victory, see: Julian Gross with Greg LeRoy and Madeline Janis-Aparicio, Community Benefits Agreements: Making Development Projects Accountable, May 2005, online at http://www.goodjobsfirst.org/pdf/cba2005final.pdf The full text of the Staples Agreement is available in the CBA
handbook cited above, as well as on the LAANE and SAJE websites: Information on the current activities of the Figueroa Corridor
Coalition and the work of implementing the CBA are available on
SAJE’s website: http://www.saje.net/programs/fccej.php Denver’s Gates Rubber Project: CBA advocates in the Denver area began their work by forming an organization to educate local organizations about economic development and building a community-labor coalition. The Denver Area Labor Federation (DALF) created the Front Range Economic Strategy Center (FRESC) in January 2002 as its economic development policy arm. FRESC’s first project was to launch a public education campaign about CBAs and subsidy accountability, building a labor-community partnership that became the Campaign for Responsible Development (CRD). At present, the CRD has more than 50 members, as diverse as 9 to 5 National Association for Working Women, Capitol Hill United Ministries, the Colorado Building and Construction Trades Council, Save Our Section 8, Denver Area Youth Services, and Colorado People’s Environmental and Economic Network. Located in the heart of south central Denver and one of the largest pending projects in the city, the Gates Rubber plant redevelopment was the obvious target for the CRD’s first campaign. Tens of thousands of workers had once been employed making tires and other rubber products at the 52-acre site. Now it was an abandoned and polluted factory campus and a prime target for redevelopment. Cherokee Denver purchased the site late in 2001 and planned to create a mixed-use development with up to 4,000 residential units and 5.5 to 7 million square feet of office, retail and entertainment space, including a hotel. The developer projected that it could take up to 15 years to complete the project. The project was poised to receive a massive subsidy from the city (an early planning document put the subsidy request at up to $166 million), including sales and property tax reimbursements from a special tax district that could last up to 20 years. The CRD initiated contact with Cherokee Denver in early 2003 to probe for possible common ground. Early efforts to get the developer’s attention were aided by the fact that a public employee pension agency— the Washington State Investment Board—held an equity stake in Cherokee and encouraged the developer to sit down with the groups. The CRD made a proposal that included a 20 percent affordable housing set-aside; local hiring preferences and advanced training programs for low-income residents; an on-site childcare facility for up to 120 children; improvements to streets and lighting in nearby neighborhoods; environmental standards that went beyond the state requirements; living wage and health benefit requirements for commercial tenants; and a project labor agreement for the construction jobs. Cherokee proved willing to meet and listen but was unwilling to negotiate. It repeatedly told the CRD that it was too early in the process, that it lacked a firm estimate of its costs and therefore could not say how much it would seek in public subsidies. Cherokee stressed the positives, talking up its commitment to the idea of community benefits, but claimed it was unnecessary and unwise to enter into a binding agreement. It attempted to paint the coalition as unrealistically idealistic in its demands. Cherokee President Steve Moyski told The Denver Post, “They want 50 acres of labor utopia. I have always said, ‘We will respond reasonably to reasonable things’” (Mark P. Couch, “Citizens group to fight tax breaks for Gates developer,” The Denver Post, June 15, 2003). The CRD had begun work early enough in the development process that Cherokee still had to gain city approvals for several aspects of its plan before construction could begin. The coalition focused on an early approval the developer needed: the rezoning of the property. Worried that the developer would build a big-box grocery store, the CRD had included a ban on such a component in the proposed CBA. The two sides eventually agreed to a narrower provision that blocked construction of a low-wage big-box grocery without nixing large-scale retail developments altogether, assuring that the site will never be home to a Wal-Mart Supercenter. That agreement was signed in April 2003. In June, the coalition reciprocated by testifying in support of the developer’s rezoning application. The discussions with Cherokee on the larger CBA proposal continued through the fall of 2003, but friction grew as months of talking generated no progress. The departure of the head of Cherokee, the election of a new mayor, a 75 percent turnover in the city council and a vacancy in the planning department’s directorship all became both real obstacles and excuses for the developer’s inaction. The CRD hit a low point when it staged a big public meeting but, due to misunderstandings about the meeting’s goals and the media’s presence, the developer failed to show up. It was a bad PR situation for Cherokee and a sign of weakness for the coalition. By early 2004, environmental issues had emerged as the biggest problem with the Cherokee-Gates project. Solvents and contaminants had leached into the soil and groundwater during decades of tire production. Tests found very high concentrations of TCE (trichloroethylene) on site and suggested the strong likelihood of off-site migration into nearby neighborhoods. The CRD gained access to state Health Department records and discovered that the developer had resisted— and eventually avoided performing—off-site environmental tests recommended by the state. The CRD also found that the Health Department had been on the verge of tightening its standards on TCE, but had been pressured to drop that effort by business interests, including a company close to Cherokee Denver. The CRD focused its energy on the Health Department. With support from local environmentalists and a toxics expert on the FRESC staff, it convinced the state to strengthen its TCE standards late in the summer of 2004. The CRD also organized the Voluntary Clean-Up Advisory Board (VCAB) to give neighborhood residents a voice in the clean-up process. The VCAB obtained commitments from the Colorado Department of Public Health and the Environment as well as Denver’s Department of Environmental Health to provide resources, attend meetings and consider residents’ input. In March 2005, the VCAB held its first big public hearing, winning an agreement by Cherokee to participate in the VCAB’s efforts. Meanwhile, the coalition continued to push the larger CBA agenda. Cherokee hired a new chief executive in the summer of 2004, enabling talks with the coalition to resume. The coalition redesigned its proposal, doing what FRESC Policy Director Chris Nevitt describes as “a reality check” and “peeling away of the Christmas-tree stuff.” In October, it outlined a proposed CBA that included a list of benefits that was still impressive, including living wage jobs with health benefits and family-friendly policies; first source hiring and training; protections of workers’ rights; convenient and affordable childcare; affordable and accessible housing; and commitments on construction practices and community investment. Cherokee’s chief still refused to negotiate, insisting he agreed with the spirit of the proposal but didn’t want to be bound by the specifics. In so many words, the company argued: “We’re a good corporate citizen. Let us know what you want and we’ll do our best.” Rather than becoming discouraged, the CRD once again focused on a particular CBA component crucial to moving the project forward: the affordable and accessible housing commitments. Cherokee Denver subcontracted the housing planning work to a consultant who is currently developing an affordable housing plan. The coalition hopes to maximize community participation by forming a working group that will advise the process, and it has won a strong initial commitment from the developer that CRD representatives will be closely involved throughout. The CRD is also concentrating its energies on maximizing job opportunities
for local residents, pressing Cherokee Denver for commitments to
go beyond the city’s policy for local hiring and job training.
These efforts have revealed that existing city policies in these
areas fall short and have prompted city officials to accelerate
their own process of policy reform, with the goal of rolling out
new training and hiring standards by the end of 2005. The CRD’s
suggested enhancements have helped to set the city’s agenda
for these reforms. Its recommendations include tightening the geographic
scope of training and hiring programs so that neighborhoods closest
to a development benefit most; working As of late 2005, the Gates Rubber fight is far from over. The city council is scheduled to vote on tax increment financing for the project by the end of 2005, two years behind schedule. (TIF is a diversion of future property taxes generated by the redevelopment.) If the CBA campaign continues to prevail, the redeveloped site will be far cleaner, safer, more affordable and more effective as an economic engine for neighborhood residents. For more information on the Gates Rubber victory: Milwaukee’s Park East: In late 2002, the City of Milwaukee announced its plans to tear down a spur of the Park East freeway. The demolition would open up 26 acres of prime downtown real estate for redevelopment. The two-mile stretch was located just north of the city center, between a primarily low-income African-American neighborhood and downtown revitalization projects already underway. City officials forecast a thriving mixed-use development with offices, retail space and housing built with $250–$500 million in new investment. The redevelopment efforts would be subsidized by the city through a tax increment financing district that would pay for road and utility improvements. Milwaukee residents had heard talk of economic development panaceas before, but the benefits of too many deals had bypassed lower-income and minority communities. Determined not to let that history be repeated, Milwaukee County Labor Council President John Goldstein and Kathleen Mulligan-Hansel from the Institute for Wisconsin’s Future began to organize what became the Good Jobs and Livable Neighborhoods Coalition. Eventually, more than 30 community groups and unions would join. The campaign focused primarily on living wage jobs for local residents. Goldstein and Mulligan-Hansel knew they needed a strong coalition to pull off the campaign, and they made a conscious effort to bring labor, community and faith-based groups to the table. Some had worked together before, but never in a coalition as large or diverse. Thanks to Goldstein’s early involvement, many local unions were on board from the start—with the exception of the building trades. While not opposed to the plan, the building trades were skeptical of the campaign’s potential and were absorbed in another campaign. When the CBA campaign gained momentum, the building trades groups finally threw their support behind it. The church-based organizing group Milwaukee Inner-city Congregations Allied for Hope (MICAH, a Gamaliel Foundation affiliate) led the community organizing effort, drawing on its strong membership base in the neighborhoods surrounding Park East. Other groups also mobilized their base, including 9 to 5 National Association of Working Women and the Interfaith Conference of Greater Milwaukee. The Institute for Wisconsin’s Future devoted significant resources to coordinating the coalition’s efforts and served as an umbrella group in the early stages. It also provided research capacity with the help of a local graduate student. Additional coalition members included the Sierra Club, several neighborhood associations, the Milwaukee Minority Chamber of Commerce, the Milwaukee Area Technical College, and a range of community and advocacy groups. While Los Angeles’ CBA work inspired the Milwaukee campaign, the structure of the Park East project made it impossible to follow the Staples Center model exactly. Park East was slated to be broken up into small parcels, each with its own developer and development agreement. Since negotiating 20 CBAs with 20 developers would be next to impossible, the coalition decided to approach the city about incorporating community benefits into the development plan, creating binding requirements that would apply to every developer. The coalition’s first victory came in late 2002, when it successfully stopped the Park East plan from being pushed through the city’s Common Council with no community input. During early 2003, the coalition huddled to develop its CBA demands and reached out to developers, businesses, aldermen and county supervisors serving the Park East area. By March, the coalition had the city’s attention. The Common Council’s Steering and Rules Committee formed a subcommittee to examine how to incorporate elements of the CBA into the Park East plan. In April, the coalition publicly unveiled its Community Benefits proposal at a large gathering at one of MICAH’s member churches. Members of the Milwaukee Symphony Orchestra set the tone with a performance of Aaron Copland’s “Fanfare for the Common Man.” More than 500 people cheered as the demands were placed before Common Council members. The demands included a 20 percent inclusion of or set-aside for affordable housing; 75 percent of permanent jobs paying a living wage plus health insurance; a goal that all construction contracts would go to locally owned, union businesses paying prevailing wages, with at least 25 percent of construction jobs filled by minorities and 5 percent by women; at least 50 percent of permanent jobs going to local residents through a first source hiring program; linkage fees to help subsidize childcare for low-income parents; and environmentally-friendly features such as bike trails, green construction and buffers along the river. The meeting—run according to the principles set by pioneering community organizer Saul Alinsky, with community leaders explaining the demand and public officials only allowed to say yes or no—unnerved some of the invited officials. It also upset some of the coalition members, who were not used to such a confrontational approach and found it disrespectful. Luckily, the coalition had built a base strong enough to weather the storm, but the tensions indicated that the coalition was understaffed and leadership had not had enough time working together to develop a unified style. However, while the groups sometimes had a shaky understanding of each other’s tactics, they did appreciate each other’s self-interests well enough to keep the coalition together. The campaign faced another setback when some Common Council members reneged on their pledges of support. After suggesting in private meetings that they would vote for the CBA, some challenged its legality. When that failed, they attempted to tar the Good Jobs coalition as anti-development, saying its demands would deter development, raise costs and create administrative barriers so cumbersome that developers would flee. In chorus with powerful local developers, city development officials expressed general agreement with the principles of the CBA, but refused to be bound by specific requirements. Mayor John Norquist opposed the CBA proposal, but he was about to leave office. At the same time, the council was set to shrink from 17 members to 15, pitting several long-time members against one another for the remaining seats. Coalition leaders fought back. Citing elaborate urban design rules that the city had not thought too cumbersome to impose on Park East, they suggested that city officials cared more about the aesthetics of the project than the quality of jobs, housing affordability or other project outcomes. These concerns were informed by local history: one of MICAH’s pastors recalled that the land being redeveloped had originally been part of a flourishing African-American neighborhood before “urban renewal” bulldozed it for the construction of the highway spur. By the time the CBA proposal reached the entire Common Council, a prevailing wage provision for the temporary construction jobs was the only mandatory component left, and that lost by a vote of 9-6. The coalition persisted, looking for other handles. While the city owned four acres of the land, Milwaukee County controlled 16 acres. The coalition took its fight to the county board, which had been following the campaign’s troubles with the city and turned out to be far more sympathetic. The coalition kept the pressure on, with MICAH holding a prayer vigil and—an hour before the county’s Economic Development Committee hearing—declaring that Park East was “Holy Ground” for those working on economic justice issues. In December 2004, the county board passed the renamed Park East Redevelopment Compact (PERC) by a vote of 15-4 before a standing-room-only crowd. On February 3, 2005 the board passed it again by the same margin, overriding an executive veto. The PERC applies the county’s prevailing wage and Disadvantaged Business Enterprise policies to Park East developers; requires projects to include apprenticeship and training programs; sets goals for local and minority hiring; requires incorporation of green space and green design; and provides for the construction of affordable housing. The PERC also sets up a Community and Economic Development (CED, pronounced “seed”) Fund to provide gap financing for the costs associated with the PERC, and it creates a Community Advisory Committee to advise the County Board on its implementation and ensure the community benefits are realized. Leaders of several of the Good Jobs coalition’s core member groups were named to serve on the committee. The PERC created a highly public approval process for proposed projects. Developers submit proposals through a competitive bidding process that evaluates projects not on who is the highest bidder, but on the project’s ability to meet the terms the PERC sets for creating quality jobs and other long-term community benefits. The PERC remains in effect for the entire 27-year life of the TIF district. If the county sells any parcels, the new owner will also be obligated to abide by the provisions of the PERC. MICAH organizer Christopher Boston describes the coalition’s accomplishment as “an awesome display of what can happen when these groups—labor, community, faith—come together with a common interest and remain united through tensions and differences in philosophy to achieve a common goal.” The coalition’s goal now is to enforce the PERC and build its own capacity to sustain its work on this and other Milwaukee development projects. Efforts are underway to fund staff positions that can organize the coalition’s efforts full-time. City and county officials are currently accepting bids from developers. For more information on the Park East victory: The full text PDF version of the County Board Resolution (PERC) is available on the websites of both the Institute for Wisconsin’s Future and MICAH:
Institute for Wisconsin’s Future (IWF) maintains an archive of campaign documents on their website, including a summary of the project, coalition vision statement, community benefits agreement outline, list of coalition members, and the full text of the County Board Resolution (PERC): http://www.wisconsinsfuture.org/workingfamilies/econdev/index.htm Milwaukee Innercity Congregations Allied for Hope (MICAH) also has information about the campaign on its website: (http://www.micahempowers.org/)
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