Before this summer, it's likely that only the most engaged followers of local politics were aware of a community benefits ordinance, or CBO, in the works. The proposal, appearing as Prop A on the November ballot in Detroit, was put forward by a coalition of community groups, with an assist from a few council members and a nonprofit law group.
It's safe to say the spunky little ordinance never had friends in high places — but all of a sudden it's as if the proposition had a kick-me sign on its back. It's the clear underdog in a David-and-Goliath battle, going head- to-head with a full-spectrum campaign waged by state politicians, trade unions, public-private partnerships, both daily papers, undisclosed funders, and shrill paid advertisements boasting sky-is-falling rhetoric, all taking aim squarely, if not exclusively, at Prop A.
The proposal is opposed by the DEGC, Detroit Department of Neighborhoods head Charlie Beckham, trade unions, and a swirl of dark money that's funding television ads arguing that Prop A will reverse the city's comeback. At a showy, well-publicized protest on Oct. 11, representatives of police, firemen, laborers, and carpenters unions declared that Prop A "will stop Detroit's job growth in its tracks."
If that weren't enough, as soon as the proposal made the ballot, a councilman who opposes it threw his support behind a second, less controversial version, and November is turning into a duel for votes to see which proposal will win.
Of course, signs of this war were evident last year, when the editorial board at The Detroit News all but accused CBO backers of promoting a "shakedown tax." But this month the Detroit Free Press came out against both proposals as well.
What is it that aligns these powerful forces so rigidly against a proposal that asks developers who take public funding to sit down with the community they want to work within? For that, we have to take a long look back at the way business gets subsidized in Detroit.
Detroit has a long tradition of subsidizing businesses in the name of promoting economic growth. The story goes like this:
Wealthy corporations are interested in Detroit, and want to make wonderful things happen by spending their money and employing people. The city smooths the way by sweetening the deal with subsidies; when new developments set up shop, the increased payroll taxes help fund the city's rebirth. Everybody wins.
But lingering questions about what benefits Detroiters enjoy, and at what cost, are another local tradition. Observing the city-funded demolitions, lawsuits, and land acquisitions in Poletown to make way for a new General Motors plant in 1980, Detroit City Councilman Mel Ravitz estimated it cost Detroit $200 million to produce 6,500 jobs. More recently, Detroit's Marathon Refinery received $175 million in tax abatements, and yet only 30 employees are listed as Detroit residents. About a month ago, it was reported that contractors building the new hockey arena downtown had fallen short of goals to hire Detroiters, despite about 60 percent of the stadium's funding coming from public sources.
This is the part of the story that riles a lot of Detroiters. The city's police may be underfunded, the city's streetlights may not always be on, but it's always Christmastime for Detroit's capitalists, in the form of tax breaks, below-market-rate land, direct subsidies, and city-funded demolitions. These powerful players are happy to accept the help of taxpayers in the poorest big city in the country. But when they fall short of their stated goals of benefiting Detroiters, there's often no way for residents to hold them accountable.
It's out of these sorts of frustrations that community organizers in Detroit have been discussing community benefits. And the urgency of those discussions has only grown as local officials have gone on a spree of granting developers large subsidies, and frequently letting the wealthy and politically connected off the hook on any of the good faith promises they made.
The agreements enforcing these benefits are still relatively new in this country, but they've been around since at least the 1990s, helping ensure neighborhood residents benefit from economic development projects that are heavily subsidized by taxpayer dollars. In many parts of the country, it's not at all controversial to expect developers accepting subsidies to sit down with communities to hear their desires, mitigate their concerns, and win them over as allies of new developments.
In Detroit, the idea seemed to bubble up from many places at once. But many trace it to a 2010 citywide meeting held by several community groups to discuss CBAs. Linda Campbell, the Detroit project director for the Building Movement Project, recalls, "We really started thinking about CBAs when we attended that meeting. But we weren't the first ones to initiate it. Folks in Southwest Detroit had been fighting for community benefits for years. Folks on West Grand Boulevard have been trying to get that kind of engagement with Henry Ford Health Systems. Wherever you find development happening now, you will find community groups trying to organize coalitions and engage the corporate players."
Another group, Equitable Detroit, grew out of the subsidies granted to Whole Foods to locate in Detroit. Other organizers were reacting to the deal which gave businessman John Hantz thousands of acres of land on Detroit's east side for "pennies on the dollar."
Similarly, residents of the North End had been excited about the original plans for M-1 Rail to pass through their neighborhood on its way to Eight Mile Road. The Rev. Joan Ross, who runs the Storehouse of Hope Food Pantry in the North End, was such a big supporter of the plan that she says, "People teased me that I would probably have the first lifetime pass on the M1, because we were just that geeked about it."
After those plans were dramatically scaled back, Ross says she realized community groups needed more than a handshake. A group of female transit riders that attend her food pantry began to organize around the issue.
"To give a little history," Ross says, "it did start with the fact that we're two Detroits, that we didn't see any benefits trickling down. So it really started as an opportunity for everybody to get a seat at the table, a say in the process of what was going on."
Ross and her group reached out to Detroit City Council's Brenda Jones, who suggested that, rather than letting the proposed ordinance get caught up in Detroit's overburdened law department, the wording could be a product of meetings held by nonprofit Sugar Law meeting with Detroit community groups and other stakeholders, including an umbrella organization called Rise Together Detroit. Work group sessions were held for an entire summer, not just with community groups but with developers, including, Ross says, people from Quicken Loans, who hoped to be "educated around the issue."
Wayne State University assistant professor Eric Williams says there were many meetings: "A lot of community groups, a lot of people sitting in a big ol' space over in the North End."
Ross stresses that it wasn't the community meeting with lawyers to craft a poison pill for developers and the DEGC. "The DEGC attended those meetings. Quicken Loans attended those meetings," Ross says. "So it wasn't just community input, there was input from a lot of groups, a lot of organizations and businesses across the city. To think that this was just something community hatched, that's not true. We did meet with them a long, long time. So there was a lot of input."
In fact, Williams has nice things to say about some of Detroit's corporate players, including Dan Gilbert. "You have to give Dan Gilbert credit, for other than below-market transfers, Gilbert does pretty much everything with his own money ... He has a vision. You may not agree with his vision, but at least he's creating his vision on his own dime. So, there's a spectrum of how they do it and so I think community actually ought to take that into account."
After more than two years of meetings small and large, the broad coalition of community groups decided to throw their weight behind a community benefits ordinance. It would set thresholds for subsidies and the size of the total investment, and when both were met, it would set in motion a process where the developer and community would negotiate a binding contract.
One Prop A supporter, Detroit poet Kim Hunter, points out, "When Ilitch or Gilbert or anybody has subcontractors do work, they have 'deliverables.' They sign a contract. And God help you if you don't make those deliverables. But when community gives money — a $175 million tax abatement to Marathon, hundreds of millions of dollars for a new stadium — there's no agreement. It's all a handshake. You know, we're literally relying on the kindness of strangers. And that's not how they do business. I mean, if their model is, 'When we give you money you sign the contract,' when we give them money, they should sign the contract too."
The CBO strategy also bypasses Detroit's political culture, which often forgives subsidized businesses when they don't make good on their promises, with direct negotiations between community and corporation. While there's nothing the law does that City Council can't already do, as Williams puts it, "After so many experiences with the city failing to negotiate, monitor, and enforce agreements ... it's obvious that even major developers recognize that city council could do these things. They are choosing not to."
Prop A organizer Gregg Newsom says, "Sometimes direct democracy is necessary to compensate for the shortcomings of representative democracy. And that's what this is. Representative democracy has shown itself to be too vulnerable to money. And the remedy for that is direct democracy — and that's what this is."
But the idea of the community making its own deals and sidestepping Detroit's power brokers provoked a strongly negative reaction from those you'd suspect it would. In October 2014, DEGC head Roderick Miller predicted the ordinance would "abruptly stop the economic momentum we have built over the last five years." He was quoted in the Detroit News editorial that called the CBO a "shakedown tax."
Campbell says, "That slam against community coming from Detroit News is so unbecoming of serious Detroit newspaper commentary. Alright, you don't agree with our movement: That's fine. But do you have to slander us in that way? It just buys into that ongoing narrative that really has some racist undertones that you can't trust black people in Detroit to negotiate fairly, in an above-board and honest way. It really smacks of that kind of dog-whistle politics. And it's very disappointing."
Later that year, Lansing's Republicans got involved when Rep. Earl Poleski introduced a bill essentially banning local governments from seeking community benefits.
Former Detroit state Rep. Rashida Tlaib — now the director of community partnerships and development at the Sugar Law Center — blasted Poleski in a statement to a local paper, saying "There should be a limitation with how Lansing meddles with how Detroit moves forward economically ... If local governments can't have community benefit agreements or ordinances, then they are at the mercy of developers. I've seen what happens in Detroit communities when developers come in and do whatever they want."
The state measure passed, and CBO supporters had to alter the proposal's wording to get around the new state rules. Williams says the law prohibited stipulations about jobs, "but we can still ask for environmental protection, safety protection, housing, [and] protecting small businesses."
By June of this year, the CBO was scheduled to appear on Detroit's November ballot. If approved by voters, the proposal would institute a process for developers who are seeking support for projects at least $15 million in size that would receive at least $300,000 in tax abatements, direct subsidies, or transfer of land below market rates.
But the next salvo against the proposal wasn't to come from big business. It arrived courtesy of the Detroit City Council.
It came as something of a surprise to Prop A's supporters when, this July, a majority of Detroit City Council voted to put a community benefits ordinance introduced by Councilman Scott Benson on the November ballot. Newsom says, "We'd just worked our way around [Poleski's bill], reorganized, moved to the ordinance, and now what did they do? They come up with a copy of the ordinance that doesn't have any power and they put it forward."
Or as Campbell says of Proposal B: "The way we activists look at it, [Proposal B] is a reaction to Proposal A. As far as we can tell, Prop B didn't come on the scene until after we had done the hard work of gathering the petition signatures and moving to put our proposal on the ballot. Then we heard stirrings in city council of a competing ordinance."
Though Prop B is billed as an "enhanced" ordinance, Prop A's backers would beg to disagree. Some even see it as a spoiler proposal designed to confuse voters and monkeywrench all the hard work Prop A's supporters have put in. Note well that Melvin "Butch" Hollowell, Detroit's corporation counsel, has said that, of the two competing proposals, the one that gets the most votes will prevail. So Prop A's organizers have had to shift gears a bit, urging a "yes" vote on A and a "no" vote on B.
For his part, Benson seems to be sincere in his objections that Prop A has language that won't pass legal muster, that the threshold for negotiations is too low, that the city needs a seat at the table. He has emerged as the most outspoken backer of Prop B and opponent of Prop A in special public events, splashy editorials, and on WJBK-TV's "Let It Rip." For Prop A's supporters, however, these last-minute complaints have a hollow ring.
Campbell says she's not sure what Benson's motivation was, but she offers that "during three years of educating and meeting with council, Councilman Benson's sticking point was always about the trigger investment amount. He consistently wanted $100 million as the trigger for the CBA. And, based on our research and the research from city council, that seemed completely unreasonable. Because when you go back and look at the history of investments of $100 million, they are few and far between. Maybe one or two in a decade. That just seemed like a nonstarter. So in that regard he's being completely consistent, because he now weighs in on his ordinance for the $75 million trigger for a 'tier one' project."
As thresholds go, $1 million in subsidies for a $75 million project would leave most deals involving government subsidies out of bounds. Reviewing a list of 55 developments staffers in Brenda Jones' office researched, Prop A planners found that their ordinance would apply to 11 of them. Prop B would have applied to only one: the redevelopment of Brush Park.
And even then, Proposal B wouldn't establish a process that put the community on the same level as the subsidy-seeker.
"There's not a single thing under proposal B that can't happen now," Williams says. "I mean, literally, it doesn't change anything. It basically hides the status quo under this facade of change. The only thing it does is create a couple of administrative bodies that really don't have any authority. One of them being a neighborhood advisory committee that has nine members, seven of which are selected by the city."
If Williams sounds disappointed in neighborhood advisory committees, he's in a position to judge, as he's a member of the advisory board for the new Little Caesars Arena.
"I'm the vice chair of it, and I can tell you it's a joke," Williams says of the advisory board. [Prop B] creates something that is similar to that, and it's only about every year-and-a-half that they're required to actually report back on their compliance ... It creates these bodies that have no power ... and gives the community no new right to engage.
"His argument is literally that [Prop A] will scare away developers," Williams says of Benson. "He says it's too difficult to do business in Detroit. And my response to that is that the hardest thing about doing business in Detroit relates to the red tape in City Hall. So why don't you clean that out?"
Perhaps what most troubles the Prop A people most is that Prop B is worded in such a way as ensure Detroit's old gatekeepers and deal-makers are seated at the head of the table.
Campbell says, "[Prop B] really isn't a CBA ordinance, because it negates some of the core elements of a CBA by transferring power and decision-making to city council, the planning director, and the administration. That's not what a CBA does or is."
A CBA is an agreement between the community that organizes itself and the developer, Campbell says — in other words, a community-led effort, and not one led by city council.
"That's the hallmark of it: A legally binding agreement between the community and the developer," Campbell says. Prop B, she says, "is an elaborate sort of engagement process. And many of us are becoming increasingly concerned about how this elaborate engagement negates any sort of community investment and decision-making."
Williams goes further and says that peddling platitudes about "engagement" isn't just counterproductive, but dangerous.
"It's dangerous because it makes it seem as though there is some kind of community engagement in place," Williams says, "and people act as though development is synonymous with gentrification. As if both are the same — and they're not. Gentrification is a particular kind of development. And you're more likely to have that kind of development when the people who are already in the place that is going to be developed have no say in what's going on."
Prop B aside, the most potent obstacle Prop A's backers face is countering what they call a program of fearmongering and misrepresentation. "They've come up with this whole parade of horribles about the potential impact of Proposal A on development," Williams says.
On some level, it seems only natural that the city's power brokers would bristle at Prop A, if only because it takes Detroit into largely uncharted territory. If there is a CBO on the books in any major U.S. city, Prop A's backers can't point to it. Lacking constructive examples, it's hard to persuade the powerful that communities are savvy and earnest enough to bargain in good faith.
"The fear of loss is greater than the possibility of gain," says the Storehouse of Hope Food Pantry's Ross. "So they start out with the fear. They say their business is going to fall, but they haven't even had a conversation yet."
While The News ran an editorial all but accusing CBO organizers of running a "shakedown" on developers, Prop A organizers says communities are really the ones being held upside down and rattled. As Mildred Hunt Robbins, president of the West Grand Boulevard Collaborative, wrote in response to the opinion piece, "If the word "shakedown" is to be used, it is more appropriate to describe the millions of taxpayer dollars given to developers in the form of grants, exemptions, tax abatements, land transfers and low-interest loans."
The Prop A people say they're just promoting a healthy development model. "One of the reasons it's healthy is because the communities will be engaged," Hunter says. "There are two things I think businesses want: They want stability, and they want people to be behind their projects. This provides a really stable, predictable framework for businesses to engage the community behind the projects."
And if the community can't get its act together, businesses taking public money also have options. "If it's too long and too drawn-out a process," Ross says, "it doesn't just say 'well, you have to stay and deal with this community until they come up with a resolution.' It puts time frames and limits on what community can ask ... They can't just drag this out. A lot of times, [the] community just wants to be informed and talked to ... One of our slogans is, 'If we pay, we should have a say.'"
While you expect The Detroit News to give any CBO a thumbs-down, the Free Press also urged voters to reject both proposals. The paper's reasons included complaints that the process laid out by Prop A lacks transparency.
Campbell disagrees, pointing out that everyone in the same census tract as a given development would receive notification of the project and a meeting where they can participate in the discussion.
"There's an assumption that those of us who are skilled and experienced in doing this kind of community organizing don't know what we're doing, that we don't have in our tool kits the
processes to bring people to the table in our community to help build the skills that people need to be effective in negotiating, to be engaged and to have a set of transparent and accountable processes that keep the community aligned with us," Campbell says. "I've been organizing for 40-some years. I think I kinda know how this gets done in a way that honors and invites participation from community in an authentic way."
Then there's the stiff resistance of trade unions concerned about jobs. First, you have to get past the irony of labor unions, recognized by employers to negotiate contracts for their workers, being opposed to communities wanting to be recognized by developers for contract negotiations. But behind all the screaming and yelling, Campbell sees potential support.
"We've got other folks whose traditionally been our allies fighting to keep us away from the table," she says. "It's disappointing, but we're hopeful that once the ordinance passes, our brothers and sisters in labor will stand with us.
"I just feel that the world's not gonna end. The world will change. And I think our world needs to change in Detroit. And typically that change comes from community groups and community coalitions who stand up and say, 'Enough's enough.'"
The coalition of community groups, small business organizations, and non-trade unions supporting Prop A back it mainly for one goal: accountability. It's telling that they feel they can't stop the city from taking taxpayer money and giving it to big business and enterprise, so they want to mandate negotiations that could claw back some benefits for residents.
"Do you know some of these deals will carry the next 15 years?" Ross asks. "Do people realize that? It's not just some tax abatement today; some of these deals are structured to go on. And shouldn't we have a say? And shouldn't they be accountable? That's the way business operates, isn't it?"
A CBO establishing community-developer negotiations would be key to enforcing that sort of accountability. Campbell says the ordinance will "give community more of the leverage that they need to bring these folks to the table for authentic engagement — not just this ruse of engagement where communities spend months and years trying to hammer out a decent CBA only for that to be scuttled because there's no real intent on the part of some of these groups to have a real and meaningful engagement with the community."
As Williams points out again, talks that lead nowhere and advisory boards that can't demand accountability could push Detroit's stark divides to the breaking point.
"If you want to build something in a place where there are already people, if you're going to completely disregard them and go ahead and do what you want to do, and you're using their money to do it, eventually we're going to reach a point where that kind of development is going to destabilize our city. If you keep doing that, hoping that eventually these benefits are going to trickle down ... it's a vicious circle, and we're already seeing this increasing division. People don't talk about 'two Detroits' for no reason."
Hunter asks what's wrong with the community having a stake.
"It's their money. It's their lives. We've got to live with these projects, for God's sake. There's nothing wrong with the people in Brighton who meet Meijer when one of their megastores is coming, wondering how it's going to affect their community. That's democracy.
"Elected officials frequently talk about the need for voters to be engaged. Voters will be engaged. With the CBO, there's nothing wrong with us sitting down with mega businesses and trying to shape projects as they come to our communities. That's what democracy is supposed to be about ... The people are ready to engage these developers, and so that deeper democracy should be happening."
These points about direct democracy and community engagement, however, are being lost in the noise generated by a lopsided fight. Prop A's organizers estimate they're being outspent 500 to 1. They are waging their battle with handbills and volunteer canvassers while their opponents air a flurry of expensive TV ads.
Campbell offers one of the year's great understatements: "Do we have the big money people behind us? No we do not, and I think that's pretty apparent. I think that there is a tremendous disinformation that's being put out there about Prop A."
The proposal's passage wouldn't be the end of the world, Campbell adds. "It will not be the end of development in Detroit. It might be the end of development as we know it, where increasingly millionaires and billionaires siphon public money for private development with little or no benefit for the community. That may end. And I don't think there's a person out there who gets up and goes to work every day and struggles to survive in this city who won't be glad to see that happen."
Williams agrees, saying that if Prop A discourages "predatory development," then "in that case it's fine. I would like to think the result will be developers who aren't interested in that will recognize the benefits to themselves and the community by engaging the community and not just the immediate community but all the city of Detroit."
Does the little referendum without powerful friends have a snowball's chance in hell? Will enough Detroiters remain skeptical of the anti-CBO crusade to be persuaded to vote "yes" on Prop A — and "no" on Prop B? Will the general election hurt or help its prospects?
They're all valid questions, but organizers such as Campbell feel the time is right.
"It's a new day, all over the country," she says. "People are much more critical of the growing inequality in the country. People are much more critical of the 1 percent, and how they are in many ways bankrolled and supported by the rest of us. And there's a growing consciousness about the failure of the way we think about economic development in this country. And all of that applies to Detroit. I think we're using a model that it's outlived its usefulness."
Or as Hunter puts it, "When somebody comes in your community with a big ol' project and they're asking you for money, you should be able to say something about that ... Detroit needs to be a city for everybody, not the least for the people who stayed here and kept it alive for the revival. That's how we see it."