Detroit’s Community Benefit Ordinance Proposals

On November 8, 2016, Detroiters will chose between 2 community benefit ordinance proposals: Proposal A, brought before the voters by the petition process, and Proposal B, which originated with City Councilman Scott Benson. For reasons I’ll discuss below, it’s clear that Proposal B was created to limit community engagement rather than encourage it. Supporters of Proposal B – including the Mayor and some major developers – have raised some concerns about Proposal A that are just ludicrous if you give them any thought at all. You’d think it was the end of life as we know it. (This is one of the articles that I’ll pick apart next week.)  However, there are several critiques that are worth addressing, specifically regarding Proposal A’s definition of community, investment thresholds, and enforcement mechanisms. Over the next three weeks, I’ll address each group of concerns in turn. But before that, some background is necessary. And follow the links!

Community benefit agreements (CBAs) are a common feature of many – though by no means all – publicly financed developments these days. These agreements are usually between developers and a governmental body, such as a city, or, less frequently, a community organization.  In return for public support (e.g., tax abatements, public financing, or below market real estate) developers agree to provide the public with tangible benefits. Such benefits can include almost anything –  creating jobs, preserving historic buildings, improving parks, or funding job training.  These agreements, if done well, can bring real benefits to the developer and the community. (This is a scholarly article, but worth the read if you have time. For a quicker read, go here.)

While CBAs are common, Community Benefit Ordinances (CBO’s) are not. In fact, it appears that Detroit’s would be the first in the nation. A CBO is different because  developers working on certain projects must enter into a CBA if they want to receive public money.  Under both proposals, which projects require a CBA is based on the estimated dollar amount of the project and the amount of public support that it will use. (These are the thresholds mentioned above and they are very different under Proposals A and B.)

The idea of a CBO has been floating around Detroit for years with various degrees of support from the community groups, unions, and various members of city council.  Obviously, developers would prefer to use public money without any strings attached and their view has been generally supported by mayors who want to promote any development in the city at any cost. Mayor Duggan is no exception.

The logical first question is, “If the mayor believes CBOs are bad for development, why is he supporting Proposal B?”  This brings us to the rather odd way voters got the two proposals that will be on the November 8 ballot. Proposal A is the result of the collective efforts of community groups and city council, including the Brightmoor Community CBA Coalition,  West Grand Boulevard Collaborative, Equitable Detroit Coalition, and the Sugar Law Center for Economic and Social Justice. These groups, under the umbrella of Rise Together Detroit, worked with with members of Detroit City Council, to craft the language that ended up on a petition that was signed by over 5,000 Detroiters.

What brought them all together? Simple – dissatisfaction with the city’s handling of prior publicly financed projects.  Detroit’s history on this score is not exactly stellar; it’s filled with corruption, broken promises, and a perceived hesitation to fight for the public’s rights. Add to that increasing concerns about gentrification and racial divisions, and the argument that something different is necessary is pretty compelling.

Proposal B’s origins are a little more convoluted. Councilman Benson proposed it as a business-friendly alternative to Proposal A.  However, up till that point, the issue had been under the province of City Council President Brenda Jones.  According to Council President Jones, it is highly unusual (unprecedented in her tenure) for once council member to propose an ordinance under those circumstances. She also took issue with the fact that there was an attempt to put Proposal B out under her name. The Council President would later submit her own compromise version, only to withdraw it to avoid confusing voters.

After all this, both proposals were approved by council for submission to the Election Commission, which in turn approved both for the November 8th Ballot.  This post isn’t going to address the relative merits of the Proposals, but I will say this:  Proposal B doesn’t do anything to change the way development is currently handled in the Detroit.  In fact, it’s so weak, you have to wonder why it was proposed at all. The answer is lies in the options voters have. Voters can vote (1) yes on both, (2) no on both, or (3) yes on one and no on the other. To pass, one of the versions has to receive 50% of the yes votes. It’s pretty easy to see why adding any alternative, even a useless alternative (Proposal B) can dramatically decrease the odds of meaningful change (Proposal A).

Now I’m not a fan of change for the sake of change. I certainly don’t want to see development in Detroit grind to a halt. No one does. So why are opponents of Proposal A calling the death knell of development? And are they right?  That’s next week’s topic.

Next week, “Who is the Community?”

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