Fifteen months have passed since the Southeast Denton Neighborhood Association met with a Dallas developer to discuss a possible community benefits agreement. It related to a luxury development in a low-income area that planned for five three-story buildings, more than 300 apartment units and 448 parking spots.
Although the land was zoned for multifamily housing and wouldn’t require a zoning change, the developer met with the Southeast Denton Neighborhood Association in November 2022. They discussed a community benefits agreement and sought ideas from SEDNA members about what they might want for the community. A local grocery store was mentioned, affordable apartment units and possibly money set aside for local organizations such as the Small Business Association, the Minority and Women’s Business Enterprises and the Denton Black Chamber of Commerce.
The developer said he couldn’t do it in the first phase of the development, but future phases were a possibility. He then proceeded to donate $50,000 to five historic Black churches in Southeast Denton.
Now, SEDNA President Colette Johnson said the organization hasn’t heard anything else about the community benefits agreement and doesn’t know when those discussions may be happening.
The community benefits ordinance (CBO) that District 3 City Council member Paul Meltzer pitched to the council in late December 2023 would prevent what happened to SEDNA from happening to other neighborhoods in Denton.
Generally, a CBO would require developers that receive above a certain threshold of public subsidies from the city to negotiate a community benefits agreement with residents before building a development “to define a set of needs and standards the developer would meet to earn local support,” according to a 2019 report out of Detroit.
“CBOs already exist in other places,” Meltzer told the council in December. “My ask is for staff to help us learn what has worked and what hasn’t, under what circumstances, and what the different approaches have been, so council can evaluate whether a CBO might be a useful tool to help Denton develop in uniquely Denton ways with the guidance of Denton neighborhoods.”
On Jan. 12, city staff released an informal report with a list of pros and cons of the community benefits ordinance. To generate the list, they included information from a 2008 report and CBO ordinances and agreements from cities that included Cleveland, Detroit and St. Petersburg, Florida.
Cleveland, for example, received nearly unified support from city and civic leaders for its CBO, with minor pushback from developers and a unanimous decision by the council last summer to pass an emergency ordinance, according to Cleveland council staff who spoke with the Record-Chronicle on Thursday.
Not so in Detroit, the first city in the country to pass a CBO in 2016.
Linda Campbell from the Detroit People’s Platform, a grassroots organization, said it took communities coming together to put the CBO issue on the ballot in two forms: Proposition A, “the People’s CBA,” and Proposition B, which Campbell called “the corporate version of the proposal.” Prop B won voter approval.
It was amended in 2021 by the council to improve transparency and allow community members to have a seat on the enforcement committee, Campbell said.
“You really cannot leave it to the politicians to negotiate racial equity for folks. It really has to be anchored in a strong, organized community,” Campbell said. “Constituency must put pressure on elected officials and identify allies. It has to be community-driven. A lot of problems we have had is that [not doing so] undermines community control and puts more of that power on elected officials and the administration.
“We do have City Council allies. It’s tough to go up against the administration since they control the agenda for economic development, and council has to approve it.”
Denton’s report
In their Jan. 12 report, Denton city staffers found that CBOs and CBAs are most applicable to developments that seek zoning entitlements (e.g. zoning changes, specific-use permits), affordable housing projects and/or economic development projects where public subsidies are being sought by developers.
Some of the pros listed for the community include what CBAs provide:
- Job creation, local and diverse hiring and training commitments
- Support for local small businesses
- Improvements to open spaces
- Affordable housing and rehabilitation
- Support for senior centers and child care facilities
- Quality of life considerations, such as lighting, noise, traffic, construction hours and parking impacts
- Commercial tenant space that serves the neighborhood (provided market support)
“Community support may reduce risk for developers by limiting potential opposition to a particular project, particularly when zoning entitlements are needed by the developer,” staff wrote in the Jan. 12 report.
City staff offered eight cons to CBAs, including:
- Not all persons within the community may agree to the terms negotiated, limiting the community members’ bargaining power and tactics, and certain members may believe they were excluded from the negotiation process, thus potentially negating prior community effort.
- The inexperience of community stakeholders increases the need for meetings and may be costly to the development and costly to the community needing legal assistance throughout the negotiations.
- If the project is built, yet not all provisions of the CBA are satisfied over time, then what happens to the built project?
Staff also identified challenges to CBOs and CBAs in cities such as Cleveland, Detroit and St. Petersburg, including:
- Complex negotiations: Large-scale projects often involve multiple stakeholders, including developers, local governments and various community groups. Coordinating and reaching a consensus among these parties can be complex and time-consuming.
- Administrative burden: Long-term commitment and monitoring are required.
- Limited resources: Smaller projects may have fewer resources, making it difficult to provide substantial community benefits.
CBOs in St. Petersburg and Cleveland
For seven years, the St. Petersburg City Council worked on the city’s CBA program “to create a process that takes into account the social and community impact of major development plans,” according to the city’s website.
Originally passed in 2021, the ordinance was amended by the council in October to give developers more flexibility in opting out of the affordable housing requirements while also elevating participation from minority-owned businesses, the St. Pete Catalyst reported.
According to the St. Pete Catalyst report, the CBA applies to development projects that receive at least $500,000 in public funds and requires developers to meet certain requirements that include:
- An affordable office component that meets 90% of the market rate rent.
- A residential project in a specific zoning district must allocate at least 30% of the units to serve people who earn 80% of the area median income.
- If the project is not in a specific zoning district, units will serve residents that earn 120% of the AMI, or the developer could pay $150,000 per unconstructed affordable unit in lieu of affording affordable housing units.
- At least 10% of small, women- or minority-owned businesses must participate in the construction of the development.
The Cleveland Citywide Development Corporation reviews community benefits commitments for proposed development projects based on community and developer input and prior to passage of legislation by the council that authorizes city financial assistance.
If the developer doesn’t comply with the CBA, they could lose financial assistance and face stipulated damages that will be deposited into a community equity fund, according to the ordinance.
As Denton city staff mentioned Thursday, Cleveland City Council President Blaine Griffin noticed the minority-owned businesses didn’t have a seat at the table when it came to large development projects. He was also frustrated by the lack of a meaningful CBA when it came to a new stadium, so he spearheaded the idea of passing a CBO.
“Developers and people doing these projects, whether they’re big or small, downtown or anywhere else, need to make sure that the citizens of Cleveland have a return on their investment,” Griffin told WEWS-TV in June. “So they have to put forth a menu of benefits. They have to make sure there’s inclusion in the workforce.”
Detroit’s CBO
In Detroit, Linda Campbell from the Detroit People’s Platform said CBAs have been executed in 14 development projects, and the city pointed out on its CBO website that since voters approved the ordinance, they have secured dozens of key benefits for communities that include:
- $2.5 million to build 60 outdoor basketball courts in parks across the city from the NBA Pistons Practice Facility CBO process.
- The restoration of an abandoned school field for sports and recreation use, including a skate park and free programming for local youths from a Herman Kiefer CBO process.
- A commitment to providing more affordable rentals for low-income residents from the Wigle: Midtown West CBO process.
Passed in 2016 and amended in 2021, Detroit’s CBO applies when a development is $75 million or more in value, receives $1 million or more in property tax abatements or receives $1 million or more in value of city land sale or transfer.
If a project triggers the CBO in Detroit, a Neighborhood Advisory Council with nine representatives from the impacted area forms to work directly with the developer to create a CBA that requires City Council approval.
“Whenever we speak to folks about the value of having the ordinance, one of them is you build an infrastructure that can support it,” Campbell said. “It’s not left up to the community members alone. It takes a lot of capacity to organize to bring rich corporate folks to the table. The value of having the city involved is the developers have to come to the table. There is a timeline, and there is a process they must go through to be in compliance.
“It is flawed, but there is a process that gives the community transparency around the process and the opportunity to cry foul when something goes wrong because it is an ordinance.”