A community benefits agreement (“CBA”) results from negotiations between a developer proposing a particular land use change or development, and community organizations or coalitions negotiating on behalf of the individuals and groups affected by the proposal. In a typical community benefit agreement, community members agree to support the project, or at the least, promise not to oppose it. In return, the developer agrees to provide the community with stipulated benefits such as local job creation, affordable housing, and infrastructure improvements.

CBAs are a relatively recent phenomenon, but they have their roots in the longstanding practice of a developer negotiating with, and providing amenities to, impacted local stakeholders. The first widely recognized CBA, the Los Angeles Staples agreement, was signed in 2001. The “Staples CBA” involved the $4.2 billion Los Angeles Sports and Entertainment District development, which abuts the Staples Center, home of the NBA’s Los Angeles Lakers. The CBA was negotiated by a consortium of developers and a local coalition of community groups and labor unions. The agreement secured a number of benefits for the surrounding neighborhood: construction of recreational space, creation of “living wage” jobs, affordable housing, and access to parking. Parties to the deal made the terms enforceable by integrating the CBA into the development agreement made between the city and the developers. In the years since, scores of CBAs have been negotiated across the country.

CBAs only began to appear in New York City in the last few years. At least four current developments in the City have included CBAs.

Atlantic Yards CBA

In June of 2005, developer Forest City Ratner (“FCR”) signed a CBA with eight community-based organizations in exchange for their public support for the controversial Atlantic Yards project. Through this agreement, FCR committed to provide a variety of benefits: job creation, affordable housing, community amenities, educational initiatives and environmental mitigation. While signatories considered the Atlantic Yards CBA a positive achievement, others complained that not all local groups received fair representation and that FCR utilized the CBA as a means to foster a false appearance of broad local support for the project.

Bronx Gateway Center CBA

In February 2006, the City Council approved the redevelopment of the Bronx Terminal Market, now known as the Gateway Center. During negotiations leading up to the City Council vote, then-Bronx Borough President Adolfo Carrion (D) and the City Council’s Bronx Delegation created a “CBA Task Force” to address concerns raised by unions and other local groups. The resulting CBA was signed immediately before the City Council vote. Through the CBA, developer the Related Companies agreed to a number of concessions, including support for job training programs, creation of living wage jobs and rental space for local small businesses. The funds would be managed through the Bronx Overall Economic Development Corporation (BOEDC), the economic arm of the Office of the Bronx Borough President.

Local groups including parties to the negotiations faulted both the process and substance of the CBA. Although 18 local groups were invited to participate in the task force, some claimed that they were unable to substantially influence the terms given the short time frame for the project and the lack of adequate guidance. The terms of the CBA also stipulate that the Related Companies would be fined a maximum of $60,000 for violating the terms of the agreement, with a lifetime cap of $600,000. In July of 2009 the BOEDC was accused of mishandling CBA funds and with an unexplained a shortfall of nearly $1.6 million. Bronx Borough President Ruben Diaz (D) called for a full investigation, and by September he had cleared the BOEDC of wrongdoing, explaining that most of the missing funds went towards the payroll of BOEDC employees assigned to the project.

New York Yankees Stadium CBA

In 2004, the New York Yankees proposed to construct a new stadium across the street from their current ballpark, not far from Gateway Center. Community groups feared that the project would result in a loss of parkland, increased traffic and pollution, and the use of public subsidies to fund the stadium. In the summer of 2005 the New York State legislature moved to “alienate” Macombs Dam and Mullaly Parks to make way for the project, and it quickly entered the ULURP process. In November that year Community Board 4 recommended that the project be rejected, largely on grounds excessive public funding and inadequate replacements for lost parkland. Despite growing opposition, the City Planning Commission unanimously endorsed the project the following February.

In 2006 the Yankees signed a CBA with then-Borough President Carrion and the Bronx Delegation to the New York City Council. The agreement, negotiated without the direct participation of community organizations, committed the Yankees to contribute funds to Bronx community groups, to donate equipment and tickets to needy Bronx groups, and to reserve stadium construction jobs for Bronx businesses. The agreement designated that funds would be managed by a trustee to be appointed by the same elected officials who signed on the CBA. Community groups denied a role in the process claimed that this amounted to a “slush fund” that would be doled out to politically favored causes.

In July of 2007 the advocacy group Good Jobs New York released a report accusing the project of replacing public parks with inadequately maintained spaces. Controversy also erupted in 2008 when the New York Times reported that the Yankees’ had not distributed any of the funds set aside through the CBA for local programs. The Yankees subsequently began funding programs in accordance with the CBA, but local groups allege that some terms in the agreement remain unrealized. The stadium officially opened in March of 2009.

The Yankee Stadium agreement highlighted a number of potential difficulties in the process and substance of CBAs. First and foremost, the agreement suffered from the absence of a transparent and impartial channel for the funds and guarantees of enforceability. The agreement also suffered from an aura of illegitimacy by denying participation to non-elected community groups. The project also highlights the disjoint between CBAs and the ULURP process, which still operate independently of one another.

Columbia University Expansion CBA

In 2003 Columbia University announced plans to build an extension of its Morningside Heights campus. The university established a broad 40 member “community advisory council” to allow input from local groups on the project. Columbia’s proposal conflicted with a 197-a community development plan developed through the local Community Board 9 (CB9). Through the course of negotiations with CB9 Columbia repeatedly expressed a willingness to “go to great lengths”--short of not expanding--to avoid conflicts with the community. In 2004 the advisory council issued a report calling for Columbia to sign a CBA to accompany the development, but negotiations never progressed. Some pointed to disarray and conflicting demands among council representatives, where others accused Columbia of failing to take community needs seriously.
In 2005 both Columbia and CB9 submitted their conflicting plans to the City Planning Commision (CPC) for review through the ULURP process. The CPC urged both parties to reach an agreement.
In the spring of 2006 a coalition named the West Harlem Local Development Corporation (WHLDC) formed to negotiate with Columbia on the project. This group included representatives from CB9, community groups, businesses, tenants’ associations, property owners and faith-based organizations, and was soon expanded to include a number of local elected officials. By December of 2007 Columbia reached a Memorandum of Understanding with WHLDC which included approximately $150 million in various concessions, including $76 million for a “benefits fund” that would be managed by a committee of WHLDC representatives. A formal CBA signed in May of 2009 provided more details on how this benefit fund would be used, including improvements to public housing, assessments of transportation and community health needs, and support for a clinic that provides legal services and housing advocacy for the local community. The CBA also committed Columbia to pay a living wage to all employees on the expanded campus and to adopt other hiring and contracting practices beneficial to the community. Negotiations for the Columbia University Expansion CBA thus concluded by successfully minimizing opposition after years of often contentious negotiations. Construction of the project began in the fall of 2009.

Kingsbridge Armory

In August of 2009. Bronx Borough President Ruben Diaz (D) and local groups released a draft-CBA to accompany the Related Companies’ proposed redevelopment of Kingsbridge Armory. Representatives of the Related Companies declared that a living wage clause would be a “deal killer.” In response, Diaz declared that he would only support the project if a CBA containing such a clause is signed. The resolution of this dispute will provide some indication of the future role of CBA’s in the New York City planning process.

Conclusion

Advocates of CBAs argue that the agreements give communities a more meaningful role in land use decision making and allow consideration of issues such as employment practices that are not typically addressed through the traditional land use approval process. From the developer’s perspective, CBAs can garner local support for a project and deflect criticism. The growing popularity of CBAs also poses a number of potential drawbacks. It may be difficult to determine which groups bear the authority to speak on behalf of local stakeholders, and these groups may not have the expertise to negotiate an appropriate bargain. Negotiations concerned with local needs may also result in a preemption of city-wide interests. Loosely defined CBAs also run the risk of crossing over from addressing legitimate community needs into a soft form of extortion, and the imposition of concessions that do not directly correspond to the adverse impacts of the planned development may be legally questionable. The legal status of CBA commitments is similarly uncertain, as the City has yet to see a legal challenge to demand enforcement of a CBA term.

CBAs are still a largely uncharted and unregulated practice, and do not have a formalized role within the planning process; because CBAs are relatively new, there is little evidence as to whether CBAs are a net benefit to the participants on either side of the table. Similarly, little is known about the impact CBAs have on individuals or community groups in the neighborhood of the development that are not parties to the agreement. Nor is it yet clear what effect CBAs will have on the land use process, or the City’s development climate.

Last Updated: January 19, 2010