Force big developers to offer community benefits? Philly’s Council President wants to make it law

Right before summer recess, Council President Darrell Clarke introduced new legislation that would force some developers to offer perks to communities.

Philadelphia City Council President Darrell Clarke. (Emma Lee/WHYY)

Philadelphia City Council President Darrell Clarke. (Emma Lee/WHYY)

This article originally appeared on PlanPhilly.

Council President Darrell Clarke wants to mandate community benefits agreements between real estate developers and neighborhood groups.

A handful of community organizations in Philadelphia secure these kinds of contracts already, negotiating with developers to win amenities or services in exchange for support of large projects. Clarke introduced legislation last week that seeks to make these negotiations mandatory for developments that are “high impact projects” or receive “city support.”

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“We decided to come up with a bill to require a CBA for developments such as casinos, stadiums, large residential commercial projects,” Clarke told WHYY. “There is [sometimes] discussion about some sort of an agreement but there is rarely any level of continuity, no consistency, so we want to make sure to set appropriate guidelines.”

The development industry reaction to the bill was muted, perhaps because Clarke introduced it on the second to last City Council session before the summer recess. That means it won’t receive a hearing until fall.

Like a similar law in Detroit, on which Clarke said he based his legislation, the bill doesn’t actually mandate a community benefits agreement be reached — just that the procedure for negotiations be followed.

Asked for their reactions, many developers said the legislation raised more questions than it answered.

The bill is targeted toward those who receive city assistance on “High Impact Development Projects.” That’s a very broad category, defined as a project “reasonably expected to produce disproportionately high and adverse human health or environmental impacts, including social, esthetic, economic, physical, chemical, or biological impacts.”

Clarke’s bill doesn’t define these adverse impacts or clarify who would decide what those might be.

“No comment for now till we learn more and get a better definition of high-impact development,” said Jim Maransky, president of the influential Building Industry Association.

Who gets to negotiate the benefits?

The bill also doesn’t offer much clarity about which groups developers would have to reach an agreement with. The “host communities” that developers should negotiate with is described as ones “within the census tract(s) where the development project is physically located” — and maybe also “within adjacent census tracts.”

Negotiating partners would no doubt be picked from the city’s system of Registered Community Organizations (RCOs), neighborhood groups that developers must meet with when they request zoning variances.

But the RCO process is far from straightforward. Many neighborhood groups have overlapping boundaries, while some parts of the city have no such groups at all. Some RCOs are simply political wards associated with the local Republican or Democratic parties, while others exist only on paper.

Council President Clarke acknowledged that overlapping jurisdictions might pose a problem. An amended version of the bill could address more specifically which groups developers should negotiate with, he said.

“We’ve seen places where there were community benefits agreements with multiple RCOs,” said Clarke. “We need guidelines so that it’s done in a way that is defensible if there are lawsuits and to make sure it benefits the host community.”

That’s why Clarke introduced the bill right before summer recess, he claimed — to allow plenty of time for discussion before it gets a preliminary hearing.

“We shouldn’t dictate the specifics, being a legislative body we have to get a consensus,” he said.

The bill does provide a list of examples of benefits that “may be considered on a voluntary basis.” These range from support for local schools to providing employment opportunities to the community to supporting neighborhood improvements like “blight removal.”

For developer Ken Weinstein, who largely operates in neighborhoods outside the booming core of the city, the legislation seems problematic. He already provides benefits to the neighborhood, he said — things like low-interest loans for aspiring developers or donations to community development corporations.

“I think it is wrong to legislate CBAs — many developers, including me, do not wait until we need community support to start improving the community,” said Weinstein. “Should we stop our pre-project support in order to offer them up as a bargaining chip?”

Taking back power from private interests

Experts say the legislation is part of a larger national trend. Professor Ted De Barbieri, of Albany Law School, said that as the federal government has retreated from urban policy in recent decades, CBAs are one of the tools local officials and community groups have tried to use to tilt the balance of power away from private interests.

“The ordinance certainly is vague. Defining community is tough — so is [the meaning of] adversely affected,” wrote De Barbieri, who has studied CBAs and helped negotiate a few as well. “That’s why I would imagine that some city agency would need to write rules to implement the program. The fact that the City Council would consider such a bill demonstrates the desire among local groups to influence and shape local economic development.”

Clarke said his legislation could provide uniformity. Currently, the city doesn’t track CBAs, because municipal authorities are not involved in the negotiations.

Many highly-visible projects have engaged in the process recently. The massive redevelopment of the shopping plaza at 23rd Street and Oregon Avenue in South Philadelphia has a CBA that includes funding for local RCOs, one-for-one parking for new apartments being constructed, and design characteristics for new buildings that match the surrounding neighborhood.

Another agreement, at Washington Avenue and 23rd Street, was reached between developer Noah Ostroff and the South of South Neighborhood Association. It guarantees local hiring at retail outlets and opportunities for minority-owned businesses.

However, that community benefits agreement, hailed as a success by all sides two weeks ago, left developer Noah Ostroff of Philly Living feeling less enthusiastic when a zoning remapping bill tailored to his project got held at a City Council Rules Committee hearing last week.

The reason for the delay? Another community group reviewed the agreement, retained legal counsel, and wanted to make tweaks. Now the project won’t be able to move forward until the fall.

“I have learned recently that even with a CBA, the councilman still may not support your project if a few neighbors put up enough of a fight and threaten litigation against the councilman,” said Ostroff. “If the goal of City Council is to slow down development then this bill will surely help to achieve that goal.”

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