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Urban Affairs

Community Benefit Agreements: NYC Should Establish Policy

April 2010

New York City should establish a clear policy for considering Community Benefit Agreements negotiated in connection with development projects, according to a report released by the New York City Bar Association.  The report, a comprehensive look at the use of such agreements in New York, urges the City to refuse to consider Community Benefit Agreements in the land use approval process, and, if it wishes to utilize these agreements as consideration for granting subsidies or another valid purpose, to set the standards for doing so clearly and up front. 

"City leaders must establish a policy regarding the use of these agreements,” said Kenneth K. Fisher, Chair of the City Bar’s Land Use Planning and Zoning Committee, which authored the report.  “The current ad hoc approach is sending mixed signals to both the community and developers. On the one hand, it's good for residents to be engaged in decisions affecting their neighborhood. On the other, there can often be the perception of 'zoning for sale.' The City must take the lead in putting an end to the confusion."

Community Benefit Agreements are a recent phenomenon in New York City development, and have grown in prominence with agreements on high-profile projects like Atlantic Yards in Brooklyn, Columbia University and Harlem Park in Manhattan, Yankee Stadium and Gateway Center in the Bronx, and the Mets’ Stadium in Queens. These agreements are provided by developers to earn the cooperation of community groups with proposed projects, often conceding to include affordable housing, public resource development, employment practices, and environmental standards with the intent of benefiting the community.  As private agreements, however, these deals pose a number of procedural, ethical, and enforcement issues.

According to the report, legal and policy issues posed by CBAs include:

Issues of Representation: Which community groups really represent the community?  With such private deals, there are no requirements for public hearings, community votes, or mechanisms for gauging public opinion during the brokering of a CBA. Often CBAs are criticized for not representing the wishes of the larger community.

Appropriateness of Bargain: With a private deal, there is no guarantee that the agreement brokered by community groups will be wise, as some communities may be hampered by inexperience, lack of resources, or individual conflicts of interest.

Questions of Scope: Issues addressed in CBAs, like affordable housing, could be better addressed on a citywide basis, rather than in the narrow scope of an individual project.  Inclusion of these issues in CBAs can tie the hands of city officials reviewing the project, who might have bargained to get a more appropriate benefit.

Legality of CBAs: If the ‘leverage’ community groups have to convince developers to enter into negotiations stems from an explicit or implicit requirement that the landowner agree to a CBA before seeking government approval, courts could find such negotiations to be improper.  Furthermore, elected officials suggesting they will not consider proposals without a CBA could be found by courts to be exceeding their authority.

Smart Development: As discussed in the U.S. Supreme Court case Nollan v. California Coastal Commission, 483 U.S. 825 (1987), communities that have strict regulations that are waived in exchange for benefits may lose sight of genuine land use goals, leaving the community unprotected.

Chilling Development: Insistence on CBAs could deter developers from pursuing projects in a certain neighborhood.

Enforcement of Deals: As highlighted by past high-profile CBAs in New York, these agreements are often vaguely written, with little or no timeline, and sometimes lack monitoring provisions. While they may be legal contracts, it is currently unclear what the legal remedies are for a breach of these contracts.

Finally, the report recommends reconsideration of community involvement in the land use approval process. “The advent of CBAs can be seen as an important signal that neighborhoods do not believe that current land use processes are adequately protecting their interests.  We urge the City to take the opportunity provided by the economic downturn to thoughtfully consider that dissatisfaction and to refine the City’s land use approval process to ensure a more effective and satisfying role for community input early in the approval process.”