(pictured: Rashida Tlaib) While Michigan lawmakers are seemingly reluctant and at times scrambling to find ways to fund broken roads, the lame duck session appears to have an appetite for an issue that resonates in the Detroit business community as well as in the neighborhoods.
The lame duck session is taking a swipe at a proposed ordinance, the Community Benefits Agreement (CBA), which has been the focus of recent heated debates on the Detroit City Council ensuring that businesses getting tax abatements from the city identify ways in which the community can benefit from business deals including hiring practices.
The Detroit Economic Growth Corporation (DEGC) warned against a CBA, indicating that it would drive business away instead of making the city inviting to an investment group.
(pictured: David Nathan) On the other hand, advocates of a CBA believe to the contrary, noting that the city has a history of business deals that have failed neighborhoods and in some instances scanty jobs were provided after the deals were pushed through.
Now, Republican Earl Poleski, state representative from Jackson, has introduced HR 5977, which passed in the House Competitiveness Committee in an 8-7 vote to basically stop any city from adopting a community benefits agreement. It is without doubt that the legislation introduced as a bill “to limit the powers of units of local government to adopt, enforce, or administer certain local mandates for employers; to prohibit local minimum wage, benefit, or leave requirements; to prohibit certain ordinances regulating the development of real property within units of local government; and to void local requirements that are adopted in violation of this act,” was inspired by the ongoing fight at city council over the CBA. It has supporters of a benefits ordinance riled up over the issue.
(pictured: Ear Poleski)“I am convinced that my colleagues in Lansing are being used and worse, being lied to by a group that is manipulating them on behalf of very controlling and greedy people. House Bill 5799 is setting a dangerous precedent that allows special interest groups, like Detroit Regional Chamber, to run to Lansing to stop actions being taken by city councils across the state that may not always agree with their position on various issues,” said outgoing State Rep. Rashida Tlaib. “Lansing’s meddling is going to take us through the same path that led Detroit to bankruptcy and population decline. Lansing will never see that they played a significant role in the challenges our city faces today. They paralyzed us back then and ae trying to do it again. But I guess it’s easier to blame the mayor in jail.”
The Detroit Regional Chamber has not gone public in supporting the legislation and communication director Jim Martinez had not returned a request at press time.
However, Tlaib said Detroit City Council President Brenda Jones have been working on the CBA for the past two years, and that a legislation like the one introduced now in Lansing will circumvent the work of the Detroit City Council.
“Lansing will take away any leverage that Detroit City Council would have over big tax breaks that developers receive,” Tlaib said. “All the community wants in exchange is to be a true partner in creating good paying jobs and helping the neighborhoods who host these projects grow long after the projects are complete. Only when our neighbors are employed and our neighborhoods are taking care of is when Detroit will truly thrive.”
Tlaib, who has been a fearless lawmaker during her tenure in the state capitol, taking on economic titans like Matty Maroun, owner of the Ambassador Bridge, said there has been a lot of misinformation regarding the current CBA before the city council.
“The community benefits ordinance as written currently would only apply to future projects, not the new hockey stadium or M-1 rail which have consistently been used as examples. More surprising is that it would not apply to all developments, but only the ones who ask for a tax break of $300,000 or more and it has to be a $15 million or more project (again these terms within the community benefits ordinance are still being discussed at Detroit City Council and not final),” Tlaib said. “The ordinance also has what I would call a ‘catch- all’ provision that requires that all terms of a CBA be ‘practical,’ thus protecting developers from having to do the impossible or unreasonable.”
Detroit City Council Member Raquel Castaneda Lopez has been an advocate for a CBA.
“Local governments are better equipped to determine the economic needs of their communities. HB 5977 would undermine these efforts by creating a blanket policy,” Castaneda-Lopez said. “HB 5977’s attempt to create economic uniformity throughout the state is shortsighted and will be detrimental to Michigan’s economy. One size rarely fits all.”
Roderick Miller, the new head of the DEGC, raised eyebrows when he took a swipe at the CBA as he was just settling in as CEO of the city’s economic agency. Miller, appearing before the City Council, said a CBA will undermine Detroit’s economic progress and serve as a hindrance to business growth.
But Tlaib said the angst over a lack of a CBA is due to some instances in the past that lend themselves to a need for greater accountability with business deals. She cited the Marathon deal in Southwest Detroit as an example.
“What I think triggered the formation of the coalitions for CBAs and the amazing funding support of foundations for community benefits agreement work was the experience we had with the Marathon Refinery expansion,” Tlaib said. “When Marathon was given a $175 million tax break, they promised that 51 percent of the estimated 200 jobs would go to Detroit residents. According to a report by city officials, only 15 jobs went to Detroit residents. They didn’t even come close to their promise.”
Another Detroit state rep, David Nathan, slammed the bill as an example of dictatorship.
“This overreach into the dealings between employers and their employees is nothing more than the state trying to control local governments,” Nathan said. “The governments of these cities and towns should be able to decide for themselves how to structure their contracts for local tax breaks. They are the ones that need to benefit from the investment of tax dollars and public resources in economic development.”
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