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New York City Comptroller
John C. Liu
|Contact : Sharon Lee , (212) 669-3747||September 29, 2010|
TASK FORCE RECOMMENDS COMPREHENSIVE CITYWIDE APPROACH TO PUBLIC BENEFIT AGREEMENTS
Mechanisms to Improve Predictability, Participation, Enforcement
NEW YORK, NY – The Task Force on Public Benefit Agreements today presented to Comptroller John C. Liu a proposed framework for public benefit agreements in New York City that would create clear expectations, encourage broad-based participation and result in enforceable public benefits that comply with legal standards.
“Public subsidies for private development have become more pervasive and costly in recent years,” Comptroller Liu said. “The City fell into the habit of announcing marvelous benefits for the public, such as jobs and affordable housing, in exchange for granting special subsidies to private developers. Too often, however, the promises fail to materialize long after the private developers have received their special subsidies. The task force has studied this problem carefully over the last six months, and I look forward to reading the report they’ve issued today. I am grateful to all of the people who took part in this task force, made up of a diverse group of labor, business and community leaders, and am pleased by the broad, while not unanimous, consensus reached.”
Benefit agreements, whether in the form of Community Benefit Agreements (private contracts between developers and community groups that are difficult to enforce) or otherwise, have become an unfortunate byproduct of the City’s failure to develop solutions for problems that demand a comprehensive citywide approach. The report acknowledges the shortfalls of New York City’s existing project-based arrangement that ties benefits to a particular neighborhood, labeling it a poor substitute for a citywide process that evaluates current and prospective demands for better housing, jobs, health care, child care, schools, opens pace and transit.
Recognizing the need for preventing delays, deadlocked negotiations and derailed projects that have plagued New York City’s development landscape in recent years, the Task Force recommended specific methods for a more predictable development process.
“These recommendations eliminate some of the uncertainty in the development of large subsidized projects,” Barry Gosin, Task Force Co-Chair and Chief Executive Officer of Newmark Knight Frank, said. “Creating more transparency and clarity will help developers and the community understand the rules of engagement.”
“The Task Force took extra care with recommendations that would meet a community’s needs while not adding undue costs and delays to an already-lengthy and expensive land use process,” Priscilla Almodovar, Task Force Co-Chair and former President of New York State’s Housing Finance Agency and the State of New York Mortgage Agency, said. “If implemented, these recommendations will make development of large projects in New York City more predicable for all stakeholders, including developers, the City, the community and lenders.”
Also recognizing the need to make public benefit agreements more accountable and more responsive to community needs and potential project impacts, the Task Force recommended specific mechanisms for greater, informed participation from a broad base of stakeholders.
“The process we suggest will provide a number of entry points for community input by augmenting the role of community boards and local elected officials, as well as small businesses that have too often been an after-thought in the process,” Joyce Moy, Task Force Co-Chair and Professor of Small Business Management and Entrepreneurship at CUNY, said. “Stakeholders would be better-equipped with the assistance of subject-matter experts who can help develop delivery of tangible benefits and enforceable terms, and leading to real accountability.”
“A strong community benefits agreement should allow both the developer and the community to prosper from the project. I commend the task force for undertaking the responsibility of finding a standardized process that seeks a balance between the needs of both the community and developers,” Bronx Borough President Ruben Diaz, Jr. said.
Although CBAs in their current form appear to be unenforceable in New York, those incorporated into regulatory agreements in other parts of the country appear to have stronger track records of implementation. The Task Force recommended specific and proven enforceability mechanisms to improve the process for both the industry and communities in New York.
“I was pleased to be asked by Comptroller Liu to co-chair this important Task Force and represent organized labor and working people as we set about to help frame recommendations on best practices for a more effective and equitable process to guide public subsidized economic development projects in the City of New York,” Jack Ahern, Task Force Co-Chair and President of the New York City Central Labor Council, said. “As we finalize our report and present our findings to the Comptroller, I believe we have found the right balance between creating good jobs and fair economic development that will be beneficial to the community as well as business interests. We look forward to continuing our work until the process is fair and equitable for everyone.”
A diverse group of community leaders from across New York City served on the Task Force. The full report represents the contributions of the full Task Force. While a few points in the report may not be fully endorsed by every Task Force Member, the Task Force agreed that the report is an important step toward a more effective and equitable process to guide publicly subsidized economic development projects in New York City. The report in-full is available online at www.comptroller.nyc.gov/pba.
The recommendations issued by the Task Force include:
- Encourage vigorous, broad-based and informed community participation to make public benefit agreements more accountable and more responsive to community needs and potential project impacts.
- Better equip the respective elected officials and community boards with third-party subject-matter experts who can assist in developing strong terms of accountability and delivery of tangible benefits to the community.
- The total value of a negotiated package of benefits should be proportional to the size of the subject development, as the primary purpose of a benefit agreement is to mitigate project-related impacts.
- Contain within public benefit agreements clear, concrete terms and a schedule for delivery of implementation.
- Ensure enforceability by incorporating public benefit agreement terms into a legally-binding regulatory agreement between the developer and the lead agency and/or a restrictive declaration for review by the City Council.
- Monitoring by the New York City Comptroller all benefit agreements, related restrictive declarations and development agreements, and issue an annual public benefits agreement compliance report card.
- Have executed agreements publicly available to facilitate monitoring of implementation, discourage conflicts of interest and to inform residents of potential employment opportunities and other negotiated benefits.
Bettina Damiani of Good Jobs New York stated: “Time after time, we see press conferences announcing new multi-million dollar subsidized developments that pledge benefits to the community in the form of job creation and economic growth. Yet, down the road, evidence often indicates shortfalls on permanent job creation and tax-base growth. It is exciting to see a first plan to create a framework for holding developers accountable to the promises they make.”
Matt Ryan of Jobs with Justice stated: “The benefits of implementing standards to govern public benefit agreement should be readily apparent in the form of good jobs, affordable housing and economic development. This is an important step toward the sustainability of communities and the accountability of development.”
BACKGROUND ON TASK FORCE:
Comptroller Liu formed the Task Force as part of his commitment to examine City development deals that feature specific promises of affordable housing and job creation. Comptroller Liu charged the Task Force with reviewing best practices and drafting a framework on a more effective and equitable process to guide publicly subsidized economic development projects. Citing a need for more oversight on development projects that consistently fall short of expectations, Comptroller Liu asked the Task Force to submit a set of recommendations within six months of the first meeting in March.
The Task Force includes representatives from the public, business and labor, and was directed by the four Co-Chairs who have demonstrated leadership and commitment in finding innovative solutions to the City’s often intractable economic development problems.
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