March 12, 2023
Council recently introduced two pieces of legislation that will change how developers and builders operate in Cleveland.
Community Benefit Agreements The ordinance establishes a floor for benefits developers can provide to Cleveland — internship, internship and mentoring protégé programs, community meetings, neighborhood improvements, minority business, women’s business, Cleveland-area small business and resident employment goals — when seeking city funding:
- Loan or grant
- Land transfers below market value
- Capital infrastructure improvements related to development
- Residential Multifamily Tax Abatement and Tax Increment Financing (TIF)
Establishing a “legally enforceable agreement” is important for several reasons. First, city funding for development projects must produce tangible benefits for Cleveland residents and neighborhoods. Second, front loading Negotiating community benefits with developers, and including neighborhood residents early in the process, builds community support and strengthens local partnerships.
CBA’s begin when the city grant is at least $250,000. From this point forward, all projects are required to plan to meet the Minority Business Enterprise, Women’s Business and Cleveland Area Small Business goals, as well as resident and low-income resident employment goals.
For large development projects over $20 million, they develop a “menu” of additional community benefits that developers can offer or establish, as well as provide other benefits based on community input. “Adequacy” is determined by the department director in consultation with the developer using a scorecard evaluation and Cleveland Metropolitan Development Corporation’s recommendations from the community and departments.
This provision directs the Office of Equal Opportunity (OEO) to develop a public dashboard to improve the reporting and transparency of workforce and community benefits data. OEO sends copies of quarterly reports to the House and CBAs in the legislative file. The House will hold several committee hearings on the bill, bringing together developers, corporate and business leaders, labor officials and others to discuss the rule. Or. No. 297-2023
The Community Benefit Agreement Act, combined with a House bill requiring voters to approve a building reform charter change, gives developers more tools and a project submission mechanism. Options for doing public improvements in Cleveland.
Contracts are currently awarded to whoever submits the “best proposal,” but future projects will go to the person with the “best value proposal.”
The proposed charter amendment also specifies what delivery methods the city can use for public projects, such as competitive bidding or design-build. Design-build and other forms of project delivery are used by the city, but the charter amendment makes those methods clearer and describes them in more detail. And, if approved, the council would not need to issue an ordinance that dictates which method the city must use on a particular project. A vote on the charter change is expected to take place this fall. Or. No. 298-2023.
These two ordinances are packaged with $10 million in the American Rescue Plan Act for Workforce Development, ARPA for Minority and Small Contractor Bonding Relief, and Professional Services to develop a scorecard review process to determine community benefits. The House recently enacted legislation regarding this funding.
Together, these initiatives and legislation will enhance benefits for Cleveland neighborhoods and residents and build capacity and meaningful opportunities for MBE, FBE and CSB contractors in development projects.