The law that determines Detroiters voices having an impact in the development of their neighborhood the topic of discussion in a recent meeting with the Detroit City Council.
The Community Benefits Ordinance [CBO] is a sometimes contentious topic that many in the Detroit community want to know, how will potential new changes to CBO impact them?
From a Black developer to a resident near an up and coming development, what’s to be gained from it all? The CBO and it’s potential updates were discussed during a Detroit City Council for a Virtual Committee of the Whole Discussion on January 12.
CBO in Detroit is a law that requires developers to be at the forefront and engage with local residents to see community benefits and address potential negative impacts of certain development projects. The ordinance was approved by Detroit voters in 2016.
Since its passage, City Council instructed Legislative Policy Division [LPD] staff to conduct a series of legislative staff work group meetings to provide a recommendation on 62 recommended revisions previously submitted to City Council last fall, City Council President Brenda Jones said in an online post. They discussed 17 revisions and voting on them at the meeting.
When projects involve the CBO process, a Neighborhood Advisory Council [NAC] is established, with nine representatives from the project’s impact area to work closely with the developer and establish community benefits, which are included in the final development agreement approved by the Detroit City Council, per the city website.
The over an hour-long Tuesday meet were to discuss the CBO recommendations including:
- A Tier 1 Development Project in the city that is expected to incur the investment of $50 million or more during the construction of facilities, or to begin or expand operations or renovate structures.
- Tier 2 Development Project means a development project in the City that does not qualify as a Tier 1 Project and is expected to incur the investment of $300,000 or more, during the construction of facilities, or to begin or expand operations or renovate structures.
- All residents over the age of 18 that reside in the Impact Area are eligible for nomination. Any person who is an agent, employee, or official of the developer must disclose their relationship to the developer before selection to the NAC.
- If the NAC receives less than nine nominations, the City Council Member in whose district contains the largest portion of the Impact Area may seek out individuals that live outside the Impact Area but within the City Council District or Districts where the Tier 1 Project is located.
According to the city’s website, since voters approved the CBO, residents have been positively impacted by developers for their communities. Key benefits for the community include:
- Having $2.5 million to build 60 outdoor basketball courts in parks across the city from the Pistons Practice Facility CBO process.
- The restoration of an abandoned school field for sports and recreation use, including a skate park and free programming for local youth from the Herman Kiefer CBO process.
- A commitment to providing more affordable rentals for low-income residents from the Wigle: Midtown West CBO Process.
Some residents and developers say that what is not working with the potential CBO changes include lowering the $75 million figure to $50 million because that could decrease the types of developments that come to the city.
Roderick Hardamon, CEO of Detroit-based URGE Development, a real estate development and business innovation firm, told the Michigan Chronicle that he would hope that CBO would facilitate and empower and increase economic activity and development not only in downtown Detroit but neighborhoods themselves.
“Changes to the CBO that disincentivize investments from large and small community developers ultimately negatively impacts every resident in the city of Detroit,” Hardamon said of the proposed amendment Tier One reduction to $50 million; the initial figure is at $75 million. “The $75 million talks about total development size and total project size. Reducing the number from $75 million to $50 million could have a negative impact because [for] one [it] signals to the world what Detroit considers to be a large development.”
Others echoed Hardamon’s thoughts during the public comment section of the meeting.
Some in the city also feel that the potential changes could impact how Black and brown developers are able to do business in the city with the ever-growing red tape surrounding CBO amendments that could push some away.
Detroit business owner Alisha Moss said during the meeting that she “supports Black and brown neighborhoods” and said that some of the CBO recommendations could be adding “yet another insurmountable hurdle to Black and brown developers.”
“If we’re not adding resources …. we’re adding hurdles that cannot be overcome,” she said.
Others said that because COVID-19 has impacted the economy, people should be careful “how we generate more revenue in our general fund.”
Commenter Linda Campbell, of the Detroit People’s Platform, said that she and others in the organization believe in a more diverse NAC that is “representative of the voice of Detroiters.”
Campbell also agreed with the recommendation to lower Tier 1 from $75 million to $50 million.
Another commenter asked the City Council to hear what the people are saying regarding the CBO amendments.
“Take into agreement what the city of Detroit is asking of you to put into this agreement,” the speaker said.
Several other commenters agreed with the $50 million figure instead of the $75 million and asked that the City Council make sure that the NAC is representative of Detroiters. Some said that “developers get all the breaks and residents live with the ill effects” after a development comes to the city. Others said that the City Council should ensure that there is no conflict of interest in future business deals for those involved in the NAC and developers.
City Councilman Scott Benson told the Michigan Chronicle that he and several other colleagues helped author Proposal B, which resulted in the ordinance.
“I am supportive of the current version and just concerned about any future changes based on how they might hurt the general fund,” he said. “I’m just concerned and watchful for any proposed changes.”
“Developments are the lifeblood of the city of Detroit and if you continue to change the rules of the game you are going to have a negative impact on our ability to attract development, create, jobs feed our people,” he said.
He added that there have been misconceptions on the proposed changes, too, including that the city is “giving money away” to developers, which is not the case.
Benson added that the city grows its general fund in four ways: utility tax, property tax, income tax, and corporate tax, and new developments typically hit all four of those categories.
“That is how we grow our general fund and the more obstacles you place in front of development [developers], they have choices; they don’t have to come to Detroit,” he said, adding that Black and brown female developers’ concerns were heard loud and clear tonight about wanting to be able to come to the city and set up shop.
During the meeting, the City Council voted to bring back the ordinance amendments to the table in four months. Also, they want to hear responses from the city’s new chief financial officer and Legislative Policy Division on the amendments.
Jones said that by then, she is looking forward to progress being made on discussing the amendments.
“For the record hopefully we can vote on something in four months,” she said.
“I am really looking forward to making sure whatever changes we make don’t make a negative impact on our general fund,” Benson said, adding that Detroit is the only city in the country with that ordinance. “We cannot put obstacles in the way of our ability to generate revenue.”
For more information or to view the video visit http://video.detroitmi.gov/CablecastPublicSite/watch/6?channel=1.