Comptroller Wants a Plan for Project Benefits

NEW YORK CITY-This city’s project-by-project approach to community-benefit agreements hasn’t always panned out in terms of communities actually seeing those benefits, while developers themselves have seen projects die on the vine during deadlocked negotiations over the agreements, says a report issued Wednesday by city comptroller John Liu. It calls for a comprehensive citywide approach on CBAs for projects that receive public subsidies, one that brings a broad array of stakeholders into the picture.

The report, prepared by a task force Liu convened in March, recommends a variety of measures to ensure accountability, fairness, transparency, feasibility and enforceability on CBAs. Among other things, the task force says the city should encourage “vigorous, broad-based and informed community participation” to make the agreements reflect community needs and potential project impacts. It says the city should make third-party experts available both to elected officials and community boards to help develop “strong terms of accountability and delivery of tangible benefits to the community.”

Since the primary purpose of a benefit agreement is to mitigate project-related impacts, the report says, the total value of a negotiated package of benefits should be proportional to the size of the development. The agreements should contain “clear, concrete terms” and a schedule for delivering on those terms. Moreover, the terms of an agreement should be incorporated into a legally binding regulatory agreement that can be enforced by the city or the New York City Economic Development Corp.

Monitoring of CBAs should be the purview of the city’s comptroller, the report says. He or she would issue an annual compliance report card. Additionally, the task force recommends that a community advisory board be established for each CBA.

“Benefit agreements are an unfortunate byproduct of the city’s failure to develop solutions for problems that demand a comprehensive citywide approach,” the report states. These agreements also arise “because the city does not effectively plan for its neighborhoods and insufficiently considers community needs.”

Rezoning applications that support major new developments move forward without adequate provision for public schools, transit and other essential supports, “and neglect to take account of or mitigate negative economic impacts on existing businesses,” according to the report. “But a project-based arrangement that ties benefits to a particular neighborhood is no substitute for a citywide process that evaluates current and prospective demands for better housing, jobs, health care, child care and schools, open space and transit.”

Liu says in a statement that in recent years, “public subsidies for private development have become more costly and pervasive.” He adds that the city has gotten into the habit of announcing “marvelous benefits” for the public, yet the promises “fail to materialize long after the private developers have received their special subsidies.”

In a report of its own, issued at about the time Liu convened the CBA task force, the New York City Bar said the Bloomberg administration must establish a policy on these agreements. “The city’s ad hoc approach is sending mixed signals to both developers and communities,” according to the NYCB report.

However, the report drew the line at making CBAs part of the land-use review process, as occurred when rezoning necessary for Related Cos.’ Kingsbridge Armory retail project in the Bronx was shot down by the City Council over the developer’s refusal to guarantee a so-called “living wage” for store employees. The NYCB recommended that all community boards and city officials—from the mayor on down—be prohibited from suggesting that developers seeking land use approvals enter into CBAs, and from considering a CBA when deciding whether to grant a zoning change.

Separately, the city’s Industrial Development Agency is funding a study of living-wage requirements and their effects on the city’s economy. To be conducted by Charles River Associates, it’s expected to be concluded next spring.