Here’s what Detroit’s proposed ‘Urban Development Agreements’ ordinance is about

The thought process was simple: If Detroit were to sell 301 tax-reverted properties to the Michigan Land Bank to facilitate the construction of a new bridge between Windsor and Detroit, then perhaps the community situated in the U.S. project footprint should receive some direct benefits — through a legally binding agreement.

Residents of Delray and some elected officials supported the idea of a so-called community benefits agreement. If Detroit would receive $1.4 million from the land sale, then why not support Delray with half that amount for being the host community of the bridge.

As Metro Times previously reported, construction, including an I-75 interchange and a 170-acre customs plaza, will consume a swath of the neighborhood, and increase the level of truck traffic in the community.

Detroit City Council crafted a resolution that would include a so-called Community Benefits Agreements (CBA) for the project, but that idea was shot down. Now, council has shifted the discussion toward an ordinance that would enshrine community benefits into Detroit's city charter. To say the least, not everyone is excited about it.

Why, though? If you ask Raquel Castaneda-Lopez, city councilwoman representing District 6, it makes perfect sense. For years, Detroit has done business the same way. Look where that got us.

"Many industrial cities traditionally have made similar mistakes," Castaneda-Lopez says, adding that the proposed "Urban Development Agreement" ordinance would "create a win-win situation for developers," as well as host communities for city developments.

Those host communities, like Delray with the bridge project, are "impacted on a different level," she says. "So ultimately ... it would guarantee that the people who are going to be directly affected by the development project would have some kind of way to mitigate any immediate impact ... and also make sure there's city benefits."

In its current form, the ordinance would apply to specific large projects in the city. Developers would be required to negotiate with the host community to establish quality of life protections and job opportunities for Detroit residents and contractors. Last year, after it was reported that Marathon Petroleum fell well short of hiring Detroiters as part of a $175 million tax abatement it received to expand its footprint, discussions began within City Council President Brenda Jones' office last year to figure out how to address such incidents.

Under the ordinance as drafted, any development project with a combined investment of more than $15 million, or a proposed expansion or renovation of at least $3 million would be inbounds for the ordinance. Any developers seeking city-owned land or at least $300,000 in public tax dollars to supplement construction costs would also be required to abide by the ordinance.

The Detroit Economic Growth Corporation (DEGC), an agency that has handled negotiations on development deals for the city since the 1970s, took issue with the scope of the proposed ordinance.

In a letter to City Council last week, DEGC president and CEO Rodrick Miller said it would create a red-tape nightmare of sorts for the city.

"We know from years of recruiting companies that Detroit still has big obstacles to overcome related costs, image, and workforce to compete against other cities and suburbs," Miller wrote. "... If we raise the height of the barriers with CBAs we will simply have to pay more in public incentives to get businesses to jump over them. We can't afford that."

Detroit Mayor Mike Duggan agrees with Miller, who could not be reached for comment. "The Mayor hasn't said much right now on the CBA because he is in ongoing discussions with City Council on the matter, however, he does agree with the concerns Rod Miller expressed in his letter to Council," says Duggan spokesman John Roach.

But that mentality gives every reason to consider other avenues for development, supporters of the CBA ordinance say.

As John Philo, legal director of the Detroit-based Sugar Law Center, puts it, the ordinance is drafted with "minimal costs to the city, and it's really very friendly to the city."

"With developers, it doesn't pose bureaucratic hurdles," Philo says. "What it says [to developers] is, you have to sit down and talk with the community and listen — and the community has got to do the same with the developer."

Philo and the Sugar Law Center are partners in the Equitable Detroit Coalition, a group founded three years ago after the Whole Foods Market development in Midtown was announced. An advisory group was established for that project to advocate for wider benefits for Detroiters. There was one problem: the advisory group had no teeth. "The deal was basically done when the advisory group was put together," Philo says.

Since then, the coalition has evolved, looking to address issues of equity and accountability in economic development, especially in instances where public tax dollars are used for a private project.

Peter Hammer, Wayne State University law professor and director of the Damon J. Keith Center for Civil Rights, another partner of the coalition, says the talking points pushed by the DEGC on the matter is simply "a lot of excuse making."

"If they could point to victories anywhere in the last 40 years, they'd have a much more credible stance," Hammer says.

That's the major point at play. For years, the city has touted the successes of large-scale developments like Comerica Park, Ford Field, the city's three casinos, and, more recently, the new $450 million Detroit Red Wings arena. But what has that done for all 139 square miles of Detroit?

"The truth is, the old model doesn't work," says Hammer.

As Joan C. Ross, director of the North End Woodward Community Coalition and the executive director of the Greater Woodward Community Development Corp., sees it, the DEGC has operated under the status quo since it was launched in 1978. "We've been sacrificed for the sake of development ... how much more do we have to be sacrificed before we get to have a say," she asks.

And while reports have framed this as an issue of being for, or against, development, that's not the case whatsoever, Philo says.

"This isn't a process that is against development," says Philo. "It's pro-development, but it's development in a different way."

Look to Pittsburgh as an example, supporters of the ordinance say. In 2008, the city entered into a CBA with local developers for a new Pittsburgh Penguins arena. As the Pittsburgh City Paper reported, with $750 million in public money at stake, the Penguins agreed to offer jobs ranging from $12 to $30 per hour, plus benefits; $2 million for a full-service grocery store with certain requirements to employ 95 percent people of color and 65 percent people who live in the host community; as well as a state tax-credit program that "could provide up to $6 million over the next 12 years for neighborhood support.

In Detroit, with the new Red Wings arena, the team's owner agreed to abide by a mayoral executive order only for the construction of the project: 51 percent of hires will be Detroiters, and 30 percent of contracts must go to Detroit-based businesses. The owner, Ilitch Holdings Inc., also agreed to establish an advisory board, similar to the Whole Foods project. No CBA was established.

As Castaneda-Lopez puts it, cities going through a financial crisis tend to think about development in the short-term "to address the immediate crisis." The Urban Development Agreements ordinance would change that, she says.

"It creates a framework," she says. "It's not just a one-size fits all," meaning it wouldn't be all-encompassing for every project. "There are exemptions built in for different scenarios, and ultimately council can also weigh in to whether there's a needed urban development agreement or not."

The ordinance is currently being considered by a City Council subcommittee. It could be taken up in the coming weeks by the full board.

And, Castaneda-Lopez says, although enshrining community benefits in a city charter would be an unprecedented move, that shouldn't deter Detroit.

"We need to think of long-term progressive solutions," she says. "And an Urban Development Agreement is a solution."

About The Author

Ryan Felton

Ryan Felton was born in 1990 and spent the majority of his childhood growing up in Livonia. In 2009, after a short stint at Eastern Michigan University, he moved to Detroit where he has remained ever since. After graduating from Wayne State University’s journalism program, he went on to work as a staff writer...
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