By Dennis Archambault
In 2008, the Pittsburgh Penguins and representatives of several community organizations, negotiated the city’s first community benefit agreement that allowed for the construction a new hockey arena — Consol Energy Center — in the Hill District, in exchange for a much-needed quality grocery store, community center, and neighborhood partnership program, and job guarantees. The agreement resulted in more than $8 million in community reinvestment and considerable good will between the sports team and the city.
By contrast, Olympia Development of Michigan will build a new hockey arena financed through $450 in bonds. The development will ultimately include an entertainment district covering around 40 blocks immediately north of the Downtown business district. There was no community benefit agreement, other than a verbal commitment by the developer to assure hiring local workers.
Roderick Miller, president of Detroit Economic Growth Corporation, told the Detroit Free Press earlier this year that community benefit agreements add a later of bureaucracy to an already complex development process requiring developers to deal with “autonomous groups not responsible to anybody.”
Michigan House Bill 4052, introduced in May by Rep. Earl Poleski, would ban creation of community benefit agreements and ordinances, specifically referencing contracts that regulate employment policies involved with the development.
Jonathan Heller, co-founder of Human Impact Partners and keynote speaker for the 2015 Population Health Forum in Detroit, noted that community benefit agreements are useful tools for achieving a favorable exchange between massive developments that invariably benefit from public investment and the immediate community hosting the development. Often developments occur in low income areas — or areas that have long been neglected, like Detroit’s Cass Corridor where the Detroit Red Wings hockey arena is being built.
Community benefit agreements are more than “entitlements,” for local contractors and workers, as Michael Finney, head of Michigan Economic Development Corporation, referred to them in the Detroit Free Press. They are legally bind agreements for assuring social equity for communities affected by development that involves tax incentives, tax abatements, and public land.
In some respects, opposition over community benefit agreements will make efforts to implement health in all policies that much more difficult. Developers are likely to echo Roderick Miller in that health impact assessments add “a layer of bureaucracy to an already complex development process.” That’s only if you disregard the principal of social equity.
Free market advocates are likely to oppose anything that hinders their efforts to make a profitable deal. Every regulatory element adds time, and often cost, to their project. In some cases, they may conclude that the project isn’t worth the cost.
Economic development is integral to a healthy community. Communities have the right to determine if economic development is detrimental to the its health — even to the point of losing the development. In cities like Detroit, that may seem like economic suicide.
Of course, in business, Latin still has relevance: quid pro quo. You sometimes have to give something to get something; and sometimes, you discover opportunity along the way.
The Pittsburgh Penguins got what they wanted and so did their city. Arguably, both are better off for it. The $8 million spent in developing the grocery store, community center, neighborhood partnership program firmly established the “Consol Energy Center” as a “catalyst in the revitalization of the community.” Appropriately, it won honors as the first National Hockey League arena to achieve LEED Gold certification through its conservation of materials, sustainability, and environmental quality.
Dennis Archambault is director of Public Affairs for Authority Health.