Community Benefits and Land Use

The NY Times takes an in-depth look at the Bar Association report on the relationship of community benefits agreements and the NYC land use review process-and begins, of course, with the defeat of the Kingsbridge Armory plan: "Mayor Michael R. Bloomberg suffered an embarrassment last December when the City Council rejected a major developer’s plan to spend hundreds of millions of dollars transforming an unused armory in the Bronx, the city’s poorest borough, into a shopping mall. The Kingsbridge Armory project collapsed — and the Bronx lost the prospect of hundreds of jobs — after the developer, the Related Companies, declined to require its tenants to pay a so-called living wage of at least $10 an hour and benefits. The wage minimum was one of several concessions sought by a coalition of 19 community, religious and labor organizations in exchange for supporting the project — to be formalized in a pact known as a community benefits agreement, or C.B.A."

But clearly, as we have commented on here and here, the process of crafting a community benefits agreement within the scope and time frame of the city's land use review is fraught with complications: "Now, in a report that is likely to have considerable influence on policy makers, the New York City Bar Association has urged the city to stop allowing community benefits agreements to be part of the zoning approval process. The report warns, among other things, that the agreements could create an opportunity for corruption."

Of course, corruption is always possible at any point in the economic development process-when the aforementioned Related Companies got a no bid contract for the Bronx Terminal Market the taint that was evident wasn't simply a typical Bronx odor; as former Deputy Mayor Doctoroff clearly rigged the entry of Related into the deal. So, in our view, the fact that the involvement of communities in the policy making could become corrupt is not a per se reason for knocking out CBAs.

In this opinion we are joined by our erstwhile jousting partner Jesse Masyr: "But the Related Companies’ lawyer Jesse Masyr said the agreements were ingrained in the land-use process and were not likely to be eliminated. “I don’t think it’s reasonable to assume that this genie goes quietly back in the bottle,” he said. “A better approach would be to have rules and policies as to what are the appropriate ways to handle this.”

And a better approach would be to find a way to disengage the economic decision making from ULURP itself-giving the city council a legitimate oversight over the business of the development and not just the land use component. If this were to happen, community benefits could be seen as a companion process to the overall development plan. But then again, as we have said before, community benefits for a development that does more harm than good-and involves subsidies for retailers competing with established store owners-simply cannot be offset by any CBA deal.

Still, the review process is flawed; and the city's resistance to CBAs along with its defense of the current process underscores just why reform is needed. Here's EDC attempt at a form of rather subtle humor: "The city has not responded formally to the report. But in an e-mail message, Janel Patterson, spokeswoman for its Economic Development Corporation, endorsed the principal recommendation, saying: “The city should not be a party to community benefits agreements. The city works with the developer and the community board, as the recognized and appropriate community representative, through the public review process (Ulurp) to ensure that a project delivers benefits for the community directly related to the project.”

But,as Comptroller Liu has pointed out, the tax benefits negotiated with the developer by EDC are often quite extravagant-and the purported concomitant, "benefits for the community," are not only questionable, but fail to consider the project's collateral damages-both environmental and from the standpoint of local business.

Such was the case with the flawed Armory plan, as we pointed out loudly and often: "The reality is that the tax subsidized malling will cannibalize existing neighborhood stores that are on life supports as it is-reducing employment and destroying the dreams of countless numbers of struggling entrepreneurs. But why should Mike Bloomberg care about these folks, none of whom will ever be caught hobnobbing with the mayor at one of the city's private clubs that he frequents? And given the callous disregard shown for small retailers, the mayor's referencing of the recession is particularly bad form: "Given the continued negative economic impacts of the national recession, including high unemployment and a scaling back of job creating development, the Kingsbridge Armory plan came at a particularly important moment...Disapproval of the plan serves as a particularly untimely setback to the fulfillment of these goals."

So, it was in the context of a flawed development plan that the Kingsbridge CBA-along with its living wage-gained traction. This fight underscores just how much the underlying economic impacts animate the land use debate; and why we need to pay more attention to this oversight. But EDC needs to be reined in, and a more thorough and independent review process-one that examines collateral damages-needs to be added to the city council's responsibilities. It is within these added parameters that community benefits should be positioned for discussion.

But the Bar is right on about one point-the current chaos and uncertainty needs to be addressed: "Vicki L. Been, a professor of land-use law at the New York University School of Law, and the prime author of the bar association report, agreed that community benefits agreements were inevitable, but she said the government did not have to participate. “I agree that developers will do everything they possibly can not to have the uncertainty and unpredictability of community opposition,” she said. “What can be stopped is the government’s role in that, to the extent that developers felt like they were being told, ‘You had better reach a C.B.A. before you come to the City Council."  Another of the report’s authors, Ross F. Moskowitz, a land-use lawyer at Stroock & Stroock & Lavan, said the city needed to address this problem to let developers know in advance what they would be expected to provide and to prevent the failure of another major project. “Hopefully, what will come out of this debate is a process that will provide standards and certainty,” he said."

But the standards that do emerge-and the charter revision discussions should address this as well-need to go beyond the issue of community benefits to encompass economic benefits and damages; as well as the corrupted use of house slave consultants who will tell the city or a developer anything they want to hear.