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Community Benefits Agreements
The Community Benefits Agreement (CBA) is a legal
agreement between a developer receiving public subsidy
and community organizations that sets forth the specific
community benefits that the developer agrees to provide
the community. The CBA becomes part of the municipality’s
overall agreement with the developer. Communities
can organize for a CBA whenever a development is occurring
or when a development is occurring in a TIF district.
A CBA results from negotiation between the developer
and community representatives. In exchange for the
developer’s agreement to provide true community benefits,
the community group supports the proposed projects.
The CBA works in two ways:
- As a process towards mutually beneficial objects
- A mechanism to enforce promises of both parties
to the agreement
Each CBA is unique, reflecting the needs of particular
communities, but should address the following points:
Quality Jobs
Public financial assistance can be used to create
good jobs for our communities. This is one of the
most important ways new development can benefit disadvantaged
communities. To help create quality jobs, a CBA might
include some of the following provisions:
Living Wage Jobs
Any employment benefits should include wages
pegged no lower than those the City of Chicago requires
of its contractors in its Living Wage ordinance.
Career Path Tenants
A living wage is one step to a better life, but low-wage
workers need jobs that will reward hard work and dedication
with training that can lead them to a career. Developers
can help create more responsible developments by choosing
tenants that offer such career path jobs to the community.
Locally Owned Operators
The more local businesses in a community development,
the more the wealth created by the development stays
in the community.
Union Jobs
To the extent legally possible, the municipality can
encourage developers to maximize union jobs at a development.
Developers can encourage tenants to protect workers’
rights to organize by suggesting they sign card check
and/or neutrality agreements with appropriate unions
when possible.
Local Hiring And Job Training
Local hiring programs can help link job opportunities
to low income communities surrounding developments.
Employers can agree to hire from a specified source
like a community group or a One Stop Center or from
certain zip codes surrounding the development.In TIF
districts, incremental revenue can be used to fund
skilled job training services (for information on
job training subsidies in City of Chicago TIFs, see
NCBG’S fact sheet on TIFWorks).
Community Services
New developments offer an opportunity to provide much-needed
services to communities. Will the developer offer
free or inexpensive space or seed money that makes
it possible for community organizations to do the
rest?
Childcare
Childcare and jobs support each other. In Illinois,
TIF funds may be used for childcare for employees
of businesses located in the TIF district. Is the
developer committed to offering ways to make quality,
affordable childcare available to the community?
Filling Gaps in Services
Many communities do not have access to necessary services.
Is the developer (and municipality) willing to provide
incentives to such community service establishments
as supermarkets, laundry facilities, banks, and pharmacies
to locate in a development?
Community/Youth Centers
Developers can provide community space at the development
or, if that is not appropriate, off site.
Health Clinic
When appropriate, developers can offer reduced rent
or rent-free built out space for a health clinic to
help them better serve the community.
Neighborhood Investment Fund
In 1998 the Chicago communities of Englewood, West
Englewood and Chicago Lawn demanded a community benefit
program from CSX Railroad (formerly ConRail) when
it decided to build an intermodal rail yard on the
Southwest side. Community groups negotiated with
public officials and the railroad for a $1 million
initial payment and annual benefits of at least $300,000
per year for neighborhood improvements. The agreement
was codified in a City of Chicago Ordinance passed
by the City Council.
While this agreement did not involve a TIF district,
it does provide one type of model for ensuring that
private companies having an impact on neighborhoods
pay back benefits to those neighborhoods. In Illinois
TIF was initially intended to pay for infrastructure
improvements in TIF districts. In
other states, such as California, communities have
organized to persuade developers to pay into funds
dedicated to making infrastructure improvements.
Neighborhood investment funds can be structured in
a variety of ways, including having the fund administered
by the city, a redevelopment agency or a community
organization, dedicated to making improvements in
the community surrounding the project such as street
repair, sidewalk repair or construction, and street
lights.
Environmental
Because development may have negative environmental
impacts on communities, environmental considerations
will help protect the community from environmental
dangers. Developers can have a positive impact on
the environment in a community by providing parks,
construction and traffic management, mitigation of
negative neighborhood impacts, and green building
practices
Affordable Housing
Whenever housing is being developed, at least
20% of that housing should be affordable. However,
it is the definition of what is affordable
that makes or breaks true affordability – it must
be low enough to accommodate truly low income families.
Low or No Interest Housing Loans
Developers can take extra steps to help create affordable
units, including setting up a revolving fund to provide
low or no interest loans for affordable housing developers.
Linkage Fee
Developers can also agree to a linkage fee associated
with all commercial development. The developer would
pay a set amount per square foot of commercial space
into the city’s Housing Trust Fund.
Land To Build Housing
Developers could provide additional land at reduced
or no cost for a non-profit developer to build housing.
Responsible Landlord Policy
The developer could agree to deal only with developers
and management companies with no record of violating
federal, state and local housing laws.
Developer Contribution to Relocation Benefits
Relocation benefits provided by the municipality often
prove inadequate for displaced tenants. The developer
could contribute to additional relocation benefits.
Community Involvement
One of the best ways to ensure that the local community
benefits from new development is to involve affected
communities in the development approval process.
Community Input in Development Process
Community forums and other methods of informing and
involving the community in the development plans are
a good way to make sure the community responds well
to development. Developers, city council offices,
neighborhood councils or community groups can all
play roles.
Community Input in Selection of Tenants
If community members are involved when business tenants
are chosen, the tenants who are chosen are more likely
to meet the needs of the community. This, in turn,
ensures tenants that they will have enough business
to do well, leading to fewer turnovers and more stable
services for communities.
Community Support
It is best if a development has the support of the
community before it is approved by the municipality.
The steps outlined above should help to achieve this
goal.
Enforcing A Cba
A CBA is a legally binding contract and therefore
must be enforced by parties signing it. CBAs that
are incorporated into the development agreements that
developers sign with cities can also be enforced by
the municipality. All CBAs should include provisions
describing how commitments will be monitored and enforced.
The CBA should clearly spell out:
- The time frame for commitments to be fulfilled
- All benefits should have a clearly defined time
frame
- Who will monitor performance
- Reports from the developer to the community and
the municipality should be required at least once
a year
- How and when information on performance will
be available
- What will happen if a commitment is not fulfilled
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