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Community benefit agreement will cripple waterfront

Published:July 6, 2010, 6:37 AM

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Updated: August 21, 2010, 7:04 AM

On the surface, the call by activists to impose community benefit agreements (CBAs) on economic development projects in Buffalo looks appealing, promising a living wage plus benefits for workers, minority and female hiring scales, mandated local hiring and set-asides for locally owned small businesses.

But CBAs seldom deliver all that they promise. What they really do is increase the costs of development tremendously— and often halt it altogether. Take, for instance, the much-praised example of Milwaukee, an old industrial city that is comparable to Buffalo. In 2002, Milwaukee announced plans to demolish a spur of the Park East Freeway, opening up 26 acres of prime downtown real estate for development. Using tax increment financing, the city planned a $500-million mixed-development project. Much of this has since been built without a CBA.

The county, however, imposed a CBA on future development on its adjacent property, requiring prevailing wages, elaborate apprenticeship and training programs, minority hiring standards, green design principles and mandated affordable housing — all admirable goals. The result: the county’s site remains a large gravel-covered lot.

Or take the huge, Romanesque, triple- landmarked, but long vacant Kingsbridge Armory in the Bronx, a borough that suffers under a 13.4 percent unemployment rate, up 4 percent from last year. The immediate Kingsbridge neighborhood has an 18 percent unemployment rate, with one-third of its families living below the poverty line. The Bloomberg administration’s plan was sensible: Sell the Armory to a major developer, the Related Companies, to convert into a $310-million shopping mall.

Yet in the name of benefiting poor and unemployed residents, a coalition of community groups and the Bronx borough president’s office urged the City Council to vote the project down because Related had rejected a CBA that would require retail tenants leasing space in the Armory to pay their employees $10 per hour with benefits or $11.50 without. The vote was 45-1.

Related is a union company, so this wasn’t a union dispute. Rather, it was about Bronx Borough President Ruben Diaz’s contention that successful retailers should be willing to pay wages high enough to get families out of poverty. Or, in the words of the placards held by protestors: “Say no way to poverty pay.”

Ironically, retail has long been the low-paid but ever-present entry point of unskilled, inexperienced workers into the labor force. Policies like CBAs will simply encourage retailers to eliminate jobs, getting by with fewer workers and enhanced technology, a trend that has already been happening all over the country. Buffalo’s $300 million waterfront project is an admirable one that relies on a retail strategy to bring jobs, people and money to a formerly derelict area. Don’t listen to those who urge the path of the Bronx.

Julia Vitullo-Martin is a senior fellow at the Regional Plan Association and director of its Center for Urban Innovation.

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