2024-002 Community Benefit Agreement January 12, 2024 Report No. 2024-002
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Community Benefits Agreement and Ordinance
EXECUTIVE SUMMARY:
"At its simplest, a CBA is a legal contract between a developer and a set of nongovernmental
groups whose support the developer considers necessary to obtain key public approvals or
subsidies" (Wolf-Powers,Laura(20 1 0)'Community Benefits Agreements and Local Government:
A Review of Recent Evidence',Journal of the American Planning Association,First published on:
23 February 2010 (iFirst)). Community Benefits Agreements are usually framed as a private
agreement between developers and resident groups, or coalitions directly affected by a specific
development project. These agreements can detail multiple benefits, such as local hiring goals,
living wage requirements, job training programs, and affordable housing requirements that the
developer will provide to the community. In turn, the community groups or coalitions involved
agree to support the project.
A Community Benefits Ordinance (CBO) is a specific ordinance that requires private developers
to proactively engage with the community to identify community benefits, address potential
negative impacts, and negotiate a Community Benefits Agreement with the community for
developer(s) to provide certain commitments associated with proposed projects. CBOs are most
applicable to projects that need zoning entitlements and/or public financing to make the projects
come to fruition.
The current City practice recommends developers conduct public engagement with neighborhoods
and community organizations related to development projects.
BACKGROUND:
On December 2, 2022, CM McGee made a 2-minute pitch for a Work Session regarding
Community Benefit Agreements that did not receive the four votes necessary to proceed.
"Community Benefit Agreements are a way to bridge the gap between developers and the
community in which the want to develop in. It gives all parties a say in building the
neighborhood they want to live in. I would like to have a work session on Community
Benefit Agreements, including Where have CBA's been enacted? What do they require and
for what size and scale of project?Do they work successfully? Could a CBO (Ordinance)
January 12, 2024 Report No. 2024-002
potentially be helpful in Denton or in parts of Denton,perhaps in vulnerable communities
like SEDNA?"
On June 6, 2023, CM Meltzer made a 2-minute pitch and received support for an Informal Staff
Report regarding Community Benefit Agreements "so council can evaluate whether a CBO might
be a useful tool to help Denton develop in uniquely Denton ways with the guidance of Denton
neighborhoods".
"With the intense development pressure in Denton, the objective of this pitch is to help
sensitive neighborhoods and developers get on the same side and formally agree, with
proper successors and assigns language, on how new development will benefit those
neighborhoods. In an individual case, it's called a community benefits agreement, a CBA,
and involves the two parties with no role for the city. Sometimes CBAs result in community
amenities like preserved green space and trails. Sometimes they result in a percentage of
rental units being made affordable, or local training and hiring. It could be an effort to
address a food desert. It's up to the parties.
The concept of a community benefits ordinance, a CBO, would be to require the developers
of a project that's a) above a certain scale and b) in a neighborhood that's under a small
area plan to make good faith efforts to achieve a CBA as part of their process. The other
party would be an existing neighborhood association or, if one doesn't exist, there would
be a process to assist an ad hoc association to be formed for that purpose.
CBO's already exist in other places. My ask is for staff to help us learn what has worked
and what hasn't, under what circumstances, and what the different approaches have been
so council can evaluate whether a CBO might be a useful tool to help Denton develop in
uniquely Denton ways with the guidance of Denton neighborhoods. "
DISCUSSION:
Staff reviewed Community Benefits Agreements: Definitions,Values, and Legal Enforceability
By Julian Gross(Journal ofAffordable Housing Vol. 17:1-2 Fall 2007/Winter 2008 pp.35-58) and
a CBA Toolkit adapted from this research . Staff also reviewed Policy, Ordinance and Agreements
from cities including Cleveland OH, Detroit MI, Philadelphia PA, Richmond VA, and St.
Petersburg FL.
While it is more common for local officials to encourage such negotiations,only a few jurisdictions
are experimenting with requiring such negotiations. An evaluation of the lessons learned are
provided below.
January 12, 2024 Report No. 2024-002
Definitions
• Community Benefit Agreements — Private agreements negotiated among community
groups and a developer that require specific terms in exchange for local support.
• Community Benefits Ordinance (CBO) — an ordinance that requires private developers to
negotiate a Community Benefits Agreement with the community for certain proposed
projects.
• Development Agreements — Agreements negotiated between a municipality and a
developer that require specific terms.
When are CBO, CBA Most Applicable?
• All developments seeking zoning entitlements (e.g. zoning changes, specific use permits);
• Affordable housing projects; and/or
• Economic development projects where public subsidies being sought (such as city tax
rebates above a certain threshold; financial contributions by the City).
Pros
Potential Benefits to the Community
• CBAs may give neighborhoods a more meaningful role in the development process than
the opportunities the existing land use process provides for public participation; note that
when properties already have zoning entitlements in place the community's negotiation
power is lessened significantly.
• CBA's provide some certainty about benefits sought from the project.
• CBA's may contain considerations for:
o Job creation;
o Local and diverse hiring and training commitments;
o Living wage and other benefits;
o Support for local small businesses;
o Improvements to open spaces, parks and playgrounds;
o Affordable housing and rehabilitation;
o Support for senior centers and child-care facilities;
o Local economic incentive packages;
o Quality of life consideration such as lighting, noise, traffic, construction hours,
parking impacts; and
o Neighborhood-serving commercial tenant space (provided market support).
Potential Benefits to a Developer
• Community support may reduce risk for developers by limiting potential opposition to a
particular project, particularly when zoning entitlements are needed by the developer.
January 12, 2024 Report No. 2024-002
Cons
• The community may have challenges with organizing representatives to negotiate with the
developer.
• CBAs are legally contracted documents thus legal counsel for the community will be
necessary.
• The community may face the difficulties of legal enforceability such as who can enforce
what provisions of the agreement, the agreement may not be binding to all parties, and is
the agreement transferable.
• The community may have difficulties enforcing and monitoring agreements,as community
population evolves and priorities change.
• Not all persons within the "community" may agree to the terms negotiated limiting the
community member's bargaining power and tactics. In addition, certain members may
believe that they were excluded from the negotiation process thus potentially negating prior
community efforts.
• The inexperience of community stakeholders increases the need for meetings and may be
costly to the development,and costly to the community needing legal assistance throughout
the negotiations.
• If the project is built yet not all provisions of the CBA are satisfied over time, then what
happens to the built project?
• For affordable housing projects, requiring developers to negotiate certain requirements
affiliated with their project adds time and money to the project thereby increasing costs to
develop the project and reducing the number of affordable units. May create a scenario
where the CBA is used by NIMBY's to stall/weaponize projects.
Challenges identified in Cleveland OH,Detroit MI, Philadelphia PA, Richmond VA, and St.
Petersburg FL
• Communities not able to enforce CBA's
• Large scale versus small scale development.
o Complex negotiations: Large-scale projects often involve multiple stakeholders,
including developers, local governments, and various community groups.
Coordinating and reaching a consensus among these parties can be complex and
time-consuming.
o Administrative burden: Long-term commitment and monitoring.
o Limited resources: Smaller projects may have fewer resources, making it difficult
to provide substantial community benefits.
• Community coalitions require legal counsel to assist with negotiating CBAs, including
having to pay for counsel services.
January 12, 2024 Report No. 2024-002
• Who bears the program oversight and responsibilities to enforce CBAs and the costs
associated with monitoring and enforcement?
• Who are the agreed upon community members that can speak for the community residents
and commit to (or provide) the community support? Also, not all persons within the
"community" may agree to the terms negotiated, as well as certain members may believe
that they were excluded from the negotiation process thus potentially negating prior
community efforts.
• Potential denial of projects/zoning change requests lacking a CBA.
Current City Practices
• Inform community groups of proposed developments seeking zoning entitlements;
• Encourage developers to have neighborhood meetings regarding their proposed projects;
and
• Periodically negotiate community benefits in economic development agreements when
City incentives are provided.
STAFF CONTACT:
Tina Firgens, Deputy Director of Development Services Tina.Fir eg_nsgCityofDenton.com
Scott McDonald, Director of Development Services Scott.McDonald(kCityofDenton.com
Dani Shaw, Director of Community Services Danielle.Shaw(kCityofDenton.com
REQUESTOR: Council Member Meltzer
STAFF TIME TO COMPLETE REPORT: 12 hours
PARTICIPATING DEPARTMENTS:
Development Services
Community Services