Commr:nityBenefitsl"awCenter A PROJECT OF T}IE PARTHER3HIP FOP Wq'XI}I3 FII'IILIET

Julian Gross
Summaryof Presentationto Associationof the Bar of the City of New York
Panef: Community Benefits Agreements: Time for Reform?
Monday, May17,2010

The CBA experiencein New York City: Havingworkedon manysuccessfulCommunityBenefitsAgreements(CBAs)

in othercities,I agreethat the CBAsin NewYork City havehad a negativeimpacton the land use process.The core
problemin NewYork,whichhas not occurredin otherlocalities,has beenexcesslyegovernmental involvement
in CBA
negotiations,both in designatingfavoredcommunityrepresentativesand in shapingthe substanceof CBAs. This
involvementhas preventedthe positiveimpactthat private,enforceable,
broad-based CBAshavehad in controversial
landuse debatesin othercities.

Appropriate roles of public and private actors: Experiencein othercitieshas shownthat CBAswork bestwhenthey
are trulyvoluntary,privateagreements.

granta subsidy,or on whattermsto do thesethings.

) Communitygroupsare perfectlywithintheirrightsto conditiontheirsupportfor a proposedprojecton a
developer'sentryintoa CBA.
) In decidingwhetherto granta subsidyor changethe lawgoverning a projectsite,it is clearlylegitimate
for
electedofficialsto considerthe levelof communitysupportfor a proposedproject. Differentofficialscan have
different
opinionsaboutwhichcommunity members'viewstheycareabout. But in general,if privateCBAs
buildcommunity support,and electedofficials
careaboutthatsupport,the dynamicis appropriate and
desirable.

Legal lssue of Enforceability:As a legalissue,the report'squestionof whetherCBAsare "legal"or enforceable

borderson frivolous;the samelegalanalysison enforceability appliesto CBAsas to any otherprivatecontract,and is a
non-issuewith a well-drafted
CBA. (See,e.9.,the Bayview-Hunters PointCBA,attached,and onlineat
http:/iwww.cornmunitvbenefits.oro/downloads/Bawiew%20Hunters%20Point%20CBA.odf)

Legal lssue of Takings: The otherlegalissuethe reportidentifiesis whetherCBAsconstitutegovernmentaction,and

thereforeare subjectto takingsanalysis;this legalissuewouldariseonly in narrowfactualcircumstances
that havenot
beenpresentin mostCBAnegotiations aroundthe country,andcertainlyare not intrinsic
to CBAs. In addition,
almostall
CBAshavebeenon subsidizedprojects,wherethe reportconcedesthis analysisdoesn'tapply.

Report's Recommendationon Non-SubsidizedProjects:The reportrecommends projects,

that on non-subsidized
the City"announce thatit willnotconsiderCBAsin makingits determinations in the landuseprocess,willgiveno 'credit'
to developersfor benefitstheyhaveprovided throughCBAs,andwillplayno rolein encouraging, monitoringor enforcing
the agreements."I agreewiththe thrustof this recommendation, in that the Cityshouldnot be requiringCBAsas partof
the landuse process,and shoulduse established channelsin the landuseapprovalprocessto imposerequirements it
deemsappropriate.However,as drafted,this recommendation is overbroadand unworkable.I wouldmodifythis
recommendationto simplyhave fhe City,at some point in the land use process,explicitlystatethat private CBAsare not
requiredas a conditionof approval.

Report's Recommendationon SubsidizedProjects:The reportrecommendsthat on subsidizedprojects,ratherthan

stayingout of the CBA process,the Cityestablishan elaborateregulatoryschemefor CBAs,in an attemptto impose
"standards[that]addressconcerns... regardingtransparency, representativeness,
accountability By
and enforceability."
increasinggovernmental involvement in CBAnegotiations, thisrecommendation movesin the wrongdirection.As with
non-subsidized projects,
the Cityshouldnot be officially
designatingcertaingroupsas legitimatecommunity
representatives, and shoulduse establishedchannels,ratherthan a privateCBA,to imposerequirements it deems
appropriate.Therefore,for subsidizedprojects,I recommendthat fherebe no formal,City-sanctioned CBA process.
The subsidyagreementbetweenthe governmentand the developershouldnot require the developerto enter into a
CBA. Electedofficalsof courseremainfree to weighthe viewsof communityrepresentatives as theywish,and
communicate theirvariousopinionsto developers as to whichcommunity viewstheyconsidersignificant.

Conclusion: The Needfor Citywide Policies: For all largeprojects,publicofficialsand staffshouldstay out of the CBA
business, allowingdevelopers to makeprivatelyenforceablecommitments to generatecommunity supportif theywant
to, and allowingeachelectedofficialto makehis or her own assessmentas to the significance of that support. On a
policy level, the City shouldensurestrong baselinesof communitybenefitsfor subsidizedprojects,includingliving wages
and localhiring. fhis wouldbe good policy,and wouldalso reducethe community'sperceivedneedfor CBAs,allowing
advocatesto focuson issuesthat are trulyspecificto that projectsite.

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