New York Times
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.
The coalition argued that since the mall would get public subsidies, the workers should be able to earn enough to support their families. But Related said dictating to retailers what they must pay workers would make it impossible to find tenants or financing.
Over the years the Bloomberg administration’s view of community benefits agreements has evolved from warm support in connection with a number of projects, including Yankee Stadium, to adamant opposition. In the case of the armory, the city said that community groups had been given ample opportunity to shape the document soliciting redevelopment proposals and that no benefits agreement was warranted.
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.
“It is our recommendation that the city announce that it will not consider C.B.A.’s in making its determinations in the land-use process,” the bar association said in the report last month. The report, which was in the works long before the armory proposal was defeated, also urged the city to declare that it would no longer play a role in “encouraging, monitoring or enforcing the agreements.” The report acknowledged that there was no way to prevent developers from making deals with community groups. But it said the city should get involved, if at all, only when the developer was seeking a public subsidy.
John C. Liu, the city comptroller, has formed a task force to examine community benefit agreements and other issues related to subsidized economic development projects. He said he understood why the bar association wanted to rid the zoning process of the agreements, but he said its approach was idealistic rather than practical. “My emphasis is on what kind of mechanisms exist to make sure that the promised benefits are delivered,” he said.
Community benefits agreements have proliferated around the country in the last decade, easing the way for development projects. Many, like the one proposed for the armory, have emphasized wage minimums and local hiring.
As one member of Mr. Liu’s task force, Julia Vitullo-Martin, put it, a “new weird principle” had been grafted onto the “perfectly legitimate” idea that a developer should try to mitigate the effects of gentrification.
“The original concept got lost,” said Ms. Vitullo-Martin, a senior fellow at the Regional Plan Association, an independent research group. “Why should the developer be responsible for the wages paid by retailers? That has nothing to do with the land-use process.”
In recent years, city officials have opposed these private agreements on the ground that the city review process provides ample opportunity for community groups to seek concessions from developers. But previously, the Bloomberg administration championed or helped foster the agreements for projects like the Atlantic Yards development in Brooklyn; the Gateway Center at Bronx Terminal Market, a Related Companies project; and the expansion of Columbia University.
While acknowledging that many residents believe that the city’s formal zoning process, known as the Uniform Land Use Review Procedure, or Ulurp, “fails to adequately consider or protect their interests,” the bar association report raised these and other questions about the private agreements:
*Do the groups involved in the C.B.A. truly represent the community or are they simply seeking advantages for themselves?
*Are they experienced enough to strike a good bargain with the developer, or will they sell out too cheaply?
*Could benefits that require public subsidy — like affordable housing, for example — be awarded to a particular neighborhood to win acceptance of a project rather than on the basis of where these benefits are needed most?
“Our feeling was that the process wasn’t satisfactory from anybody’s point of view,” said Kenneth K. Fisher, a partner at Cozen O’Connor and chairman of the bar association’s land-use committee. Mr. Fisher said the bar association was particularly concerned about the potential for corruption. Creating affordable housing might be a worthy goal, he said. “But it’s another thing for a council member to tell you which affordable housing group should be developing it,” said Mr. Fisher, a former city councilman.
In February, City Councilman Larry B. Seabrook was charged, among things, with helping a close associate win a contract to install boilers at Yankee Stadium. A Yankees spokeswoman said at the time that the boiler contract was “of a type that had been encouraged by the community benefits agreement.” Mr. Seabrook has pleaded not guilty to the charges.
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 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.”
Mr. Masyr said he did not object to agreements that required developers to plant trees, for example, or limit their hours of operation or try to hire local residents. A bigger problem — and the potential for abuse — occurs when the developer is asked to write a check, he said. In 2006, for example, the city asked Mr. Masyr to help the West Harlem Local Development Corporation negotiate a community benefits agreement for the Columbia expansion. He got the university to agree to give the community $76 million in cash.
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.