With big deals in the works, some want changes to Detroit's community benefits ordinance | Michigan Radio
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With big deals in the works, some want changes to Detroit's community benefits ordinance

Jun 20, 2018

With big new development projects like Ford’s overhaul of Michigan Central Station in the pipeline, some Detroit groups are calling for an overhaul of the city’s community benefits ordinance.

That ordinance, passed in 2016, gives groups called Neighborhood Advisory Councils a chance to engage with the city and developers, and craft community benefits agreements for neighborhoods hosting developments that meet certain public investment thresholds.

At least, that’s the idea. But some who have been involved in the process say that in reality, it doesn’t give communities enough genuine say in the process, and the resulting agreements aren’t enforceable.

The Equitable Detroit Coalition put out a report with a list of amendments it suggests making to the ordinance. Among them: lower the public subsidy threshold required to trigger the CBA process; lengthen the CBA process and make sure a wider swath of the community is included in Neighborhood Advisory Councils; and make the resulting agreements legally binding.

Some Equitable Detroit Coalition members made that case to the Detroit City Council this week. Member Miguel Pope says Council should consider amending the ordinance because the current process is “not effective.”

“There’s a real weak engagement process involving people impacted by the development, which means they’re not being notified of meetings and things like that,” Pope said. “There is not a real measurable outcome of, what does the benefit look like at the end of the day?”

Pope said that too often, the conversation around community benefits is steered toward specific measures without asking residents what they really think is needed. And he says that even when the community secures commitments from developers, there’s no way to make sure they're honored.

Pope says the agreements should be binding, and developers who don’t honor them should see their public subsidies revoked. He cited the recent development of Little Caesar’s Arena, which was under construction prior to the community benefits ordinance, but which was fined for not meeting city requirements that Detroiters receive at least 51% of the jobs attached to the project.

“What if the agreement had said if you don’t comply, we’re going to take back some of those benefits that the city has given you in terms of tax abatements and tax credits?” Pope said, suggesting such “clawbacks” should be in the city’s enforcement toolkit. “That would probably have a significant effect on how developers start to do business in the city.”

Some Detroit City Council members agree the ordinance should be amended.

Council member Raquel Castañeda-Lopez says too many community benefits agreements ultimately come out looking like reports with “recommendations,” rather than agreements that “translate into any tangible, measureable outcomes.”

“It seems like a superficial process that engages the community, tells them to come, asks them for their ideas, but ultimately…[doesn’t] really give the community much voice or power to make any changes,” Castañeda-Lopez said. “And then there’s no real teeth as it relates to enforceability.”

Council President Pro-Tem Mary Sheffield agreed.

“I do think some changes need to be made,” Sheffield said. “I think making sure that we have a legally binding document between community and the developer is essential to the process as well when you talk about enforcement.”

But any effort to amend the current ordinance is likely to face pushback from Mayor Mike Duggan’s administration and the city’s business community, who have warned in the past that benefits agreements that are too cumbersome could have “unintended consequences” and thwart the city’s resurgent development. They argue the city has enough protections and requirements in place to ensure that community interests are protected.

There are six projects that have qualified for the community benefits process since the ordinance kicked in, all in or near the city’s downtown area. According to the Equitable Detroit Coalition and Detroit City Council, the projects represent more than $2.4 billion worth of investments, with state and city subsidies and incentives totaling over $832 million.