Gloria Serrano, a former garment worker, has spent most of her 31 years
in Los Angeles outside the power structure.
She has
had little impact as others — gangs, cops, the University of Southern
California, the city redevelopment agency, and private developers —
shaped her low-income, predominantly immigrant Pico-Union neighborhood.
That started
to change when Serrano and her immediate neighbors banded together with
community organizers to fight mass evictions from the area's apartment
buildings three years ago. It changed for good when Serrano and her
neighbors joined a coalition of community groups, environmentalists,
religious leaders, and labor unions to negotiate a groundbreaking community
benefits agreement with the developers of the billion dollar hotel and
entertainment center project known as Staples Center Phase II.
The agreement
committed the developer (its service contractors and commercial tenants)
to a package that includes local hiring, living wages, affordable housing,
neighborhood parking, and public parks. The agreement means Phase II
will not have the same negative impact on the neighborhood that construction
of the Staples Center arena had — notably, the loss of hundreds
of affordable housing units.
Although
historic, the legally binding agreement between the LA Arena Land Company
and the Figueroa Corridor Coalition is not unique. Similar deals have
been or are being negotiated in San Jose, Denver, and elsewhere in Los
Angeles. Rather, the contract signals an emerging trend. Labor organizations,
community groups, and environmentalists in various places are now building
an "accountable development" movement.
"Development
is not just about a narrow strip of land, but about the communities
that surround it," says Sandra McNeill, organizing director for
Los Angeles's Strategic Actions for a Just Economy and lead community
organizer in the Staples Center coalition. "With proper planning,
development can be made to work for people in terms of good jobs and
affordable housing."
Advocates
of accountable development are pro-growth — but with qualifications.
"We are crafting agreements so the community can support projects
at the planning commission, at the redevelopment agency, at the city
council," says Beth Steckler, an affordable housing advocate with
Livable Places, a nonprofit advocacy group and housing developer in
Los Angeles. "We are creating a pro-growth-but-not-any-growth movement.
Development that creates minimum wage jobs and unaffordable housing
does not help the community. Development with good jobs and affordable
housing does."
While
advocates are negotiating with developers, they have their eyes on a
bigger prize. They want to open the planning process in redevelopment
areas to a broader set of stakeholders and win policy changes requiring
developers — particularly those receiving a public subsidy —
to meet community benefit standards. This has created some rancor in
Los Angeles and San Jose, where developers and business interests say
the regulatory structure, zoning laws, and permitting processes are
already biased against infill development.
Advocates
are sticking to their guns, arguing that developer buy-in can create
a win-win situation. They concede that developers would have to jump
through more hoops, but they note that accountability measures can lead
to pro-development coalitions. Organized labor agrees.
"Hell,
we're labor, we like to see things built, we like there to be new jobs,"
argues Bob Brownstein, executive director of Working Partnerships USA,
the policy arm of the South Bay Labor Council in San Jose. "We're
interested in processes that give neighborhoods more access early on
in the development or planning process. [Otherwise], projects get delayed,
and the possibility of compromise disappears."
A Movement
Takes Shape
Labor's
interest in urban issues and economic development strategies increased
during the 1990s. (See "Labor Embraces Smart Growth," May
2002.) "It is simply not enough for unions to react to downsizing
and layoffs with objections and protests," declared AFL-CIO President
John Sweeney in the late 1990s. "If workers are to have a voice
in our country's ever-changing economy, unions must play a greater role
in creating and retaining good jobs."
The labor
federation launched its "Union Cities" campaign, began to
assess ways to strengthen local labor councils, and created the Working
for America Institute to articulate labor's economic and community development
goals. Unions also supported Good Jobs First, a national nonprofit research
and advocacy group that helps create accountable development tools and
strategies, builds networks of activists, and draws links between accountable
development programs and a broader smart growth agenda.
Local
unions and labor councils have also built coalitions with community
organizations, churches, environmentalists, and small business. Labor
views this broader outlook as essential to its health.
"We're
under siege here; we're in hostile territory," says Chris Nevitt,
executive director of the Front Range Economic Strategy Center (FRESC),
an institute established by the Metropolitan Denver Labor Council. FRESC
conducts research for Denver unions and works to build labor-community
alliances. "We've had some success with issue-by-issue coalitions
in the past. Now we want to build long-term, strategic partnerships."
Several
local trends have fostered broad coalitions. First, community groups
seeking input in development were overpowered by developers, the business
community, and in some cases construction unions, and they were being
ignored by the redevelopment agencies. Second, the fastest growing unions
in many cities represent service workers, the very residents of low-
and moderate-income communities impacted by redevelopment projects.
Third, community organizations and labor unions have worked together
in many successful living-wage campaigns.
Forging
Agreements
Labor
also uses Workforce Investment Boards, the local boards that oversee
the distribution of $4 billion in federal workforce development funds,
to set higher job standards. But living-wage campaigns brought unions
and community groups closer to an accountable development strategy.
Most living-wage
laws require public entities and contractors to pay a wage considerably
higher than federal and state minimums. Advocates have long wanted to
expand coverage to include subsidized development projects, but while
they have had some success (Westchester County, New York, requires firms
receiving $100,000 or more in county economic development assistance
to pay living wages), applying the policy to service contractors and
commercial tenants at subsidized sites has been difficult.
Some community
organizers emerging from living-wage fights hardened their positions,
and became even tougher when seeking accountable development agreements.
The Los Angeles Alliance for a New Economy (LAANE) moved directly from
campaigning for a living wage to a broader agenda, which included a
push for accountable development.
The movement
for accountable development required a new set of tools. For example,
community benefits agreements bear a striking resemblance to project
labor agreements (or project-stabilization agreements), in which construction
unions guarantee labor peace in return for pre-negotiated project standards,
and good neighbor agreements, which typically require the mitigation
of environmental problems brought on by development.
L.A.
Hotbed
Accountable
development has found a home in Los Angeles, where change permeates
planning and development practices. The city has revised its zoning
codes to allow for greater density along transit corridors, invested
in redevelopment, transit, and affordable housing, and created neighborhood
councils to increase local input into decision making. And L.A. has
a large population of working-poor immigrants and an "hourglass"
social structure (bulging at the top and bottom, narrow at the waist).
In the
late 1990s, before the economy dipped into a recession, close to one
in five residents of Los Angeles County lived in households earning
less than the federal poverty rate. LAANE, using a stricter needs-based
definition of poverty, described 43 percent of the county's population
as poor. By the year 2000, the wealthiest residents of the area earned
four times what middle-income Angelenos earned.
The shrinkage
of heavy industry, especially aerospace, hit hard at the middle class.
Most new employment took the form of low-wage custodial, hotel and restaurant,
retail, garment and nonunion jobs. These trends helped spur the dynamic
labor and social movements that are helping to reshape Los Angeles.
"Los
Angeles is growing up as a city in more ways than one," says Eric
Garcetti, who represents Hollywood and nearby communities on the Los
Angeles city council. "We've come to realize that the status quo
works for no one — not for the residents, not for the developers
— so we have to take action to define development on our terms.
We have to say to developers: 'Yes, we want you. Yes, we want growth,
but we want you to think outside the box, to be part of our transformation
into real cityhood and not just a vast collection of suburbs.'"
Sometimes
this is relatively simple. In Hollywood, Garcetti helped negotiate with
Walgreens to orient a new drugstore to pedestrians, not motorists. But
when projects are larger and concerns stretch beyond design issues,
the process becomes tougher.
Nevertheless,
neighborhood activists, working with LAANE, the L.A. County Federation
of Labor, and sympathetic officials and city staff have succeeded in
negotiating community benefits agreements with the developers of several
of the city's largest projects, including the Hollywood and Highland
entertainment, shopping, and hotel development, the mixed-use North
Hollywood Commons, the newly announced $200 million Hollywood and Vine
project, and Staples Center Phase II.
"Over
the last few years, no major subsidized projects have gone through without
some sort of agreement," notes Roxana Tynan, LAANE's accountable
development director.
"We
have much more intelligently planned development than we would have
without community benefits agreements," adds Garcetti, who helped
negotiate the Hollywood deals. "There has been a boom in Hollywood
development that hasn't been hurt by local hiring requirements, living
wages, or affordable housing. [The developers involved] understand that
if they're taking public tax dollars, the money doesn't come with no
strings attached."
Community
benefits agreements please nearly everyone involved. "Quality jobs
and strong, balanced communities are vital to the future of Los Angeles,"
declares Ted Tanner, vice-president of the LA Arena Land Company and
chief negotiator for the developers of the Staples Center Community
Benefits Agreement.
But, as
Tanner noted, it was not easy reaching the agreement, which was incorporated
into the 2001 development plan for the site. "Our goal in continuing
negotiations was to win true support and advocacy for the project,"
Tanner, an architect with long experience in urban planning, told the
Los Angeles Times in 2001. "Their goal was the same — to see
if we could make this project better and improve benefits for the community."
Laying
the Ground Work
Advocates
began the hard work in 2000, long before negotiations got under way.
Community organizers working on the Figueroa Corridor and in the neighboring
Pico-Union district were fighting against displacement of tenants, while
labor organizers wanted to enhance job quality in the area — located
on the southwestern edges of downtown Los Angeles. Both groups knew
they would have to move quickly once the Staples Center Phase II project
was announced, and LAANE served as the vehicle that brought them and
other activists together. "We started going door to door, talking
to residents," recalls Sandra McNeill.
Land had
already been assembled, but numerous approvals were required, and the
developer wanted to complete the process before a new mayor was seated
in 2001. Organizers staged a series of community meetings focused on
accountability. During these meetings, neighbors, organizers, and members
of five participating unions assessed problems confronting the community
and discussed the development plan. "We started to talk not only
about the problems but about our vision for what would make this development
acceptable," McNeill recalls.
"What
was important was that all the groups joined together to go to the developer
and say, 'Let's make a deal,'" adds Julian Gross, the attorney
who represented the Fugueroa Corridor Coalition for Economic Justice
in the negotiations. The developer — LA Arena Land — soon
saw the advantage of working with neighborhood and labor groups, especially
after the local city council member intervened and others hinted that
concerns about environmental quality might lead to legal action.
At first,
talks were rough — neither side had much relevant experience —
but soon progress was being made in private negotiations held parallel
to the developer's work with redevelopment agency staff. By the time
the project came up for approval, the parties had signed a legally enforceable
contract.
This agreement
committed the developer to a $1 million investment in parks and to assist
the coalition in developing a residential permit parking program. It
mandated broad compliance with the city's living-wage policy and set
a goal that 70 percent of all jobs created by the project — including
jobs with service contractors and tenants — be living-wage jobs.
The developer agreed to use and support local hiring and job training
programs and implement a job retention program for service workers (protecting
jobs when contracts change hands).
LA Arena
Land also agreed to make 20 percent of the proposed 500 to 800 apartment
units affordable to low-income households, to finance additional housing
development by community-based organizations, and help find new housing
for families dislocated during the earlier Staples Center development.
The pact
commits the developer to more than $2 million in investments of low-interest
loans for items identified in the agreement (not including the 100 to
160 affordable housing units). Staples Center II — which includes
a 1,200-room hotel, a 7,000-seat theater, a 250,000-square-foot expansion
of the Los Angeles Convention Center, two apartment towers, and a second,
smaller hotel — is expected to cost at least $1 billion to develop.
The city's subsidy could exceed $75 million.
Ultimately,
the agreement was incorporated in the development plan for the project
area. Gross says this is important:"If the CBA has been folded
into a development agreement, then the developer's commitments have
been made to the local government as well, and a governmental monitoring
role is a natural fit."
As a result,
Staples Center II will have a lighter effect on the community than Staples
Center I, the 950,000-square-foot sports and entertainment center that
opened in October 1999. When the first project was being built, housing
advocates worked with 200 families needing relocation; the city's Community
Redevelopment Agency ultimately worked with 120 families.
Concept
Spreading
The ground
broken with the Staples II community benefits agreement and other early
pacts had an impact on development politics in Los Angeles and elsewhere.
"Terms of the debate have changed," Tynan observes. "The
language of community benefits is used by everyone. A few years ago,
this wasn't part of the discussion."
Gross
is now working with FRESC in Denver on the early stages of an agreement
with the developer of a mixed-use, high-density, transit-oriented, brownfield-remediation
project just south of downtown. "It's a good project, exactly what
should be built," says Nevitt. "We have four basic concerns:
quality jobs, affordable housing, best quality construction, and family-friendly
programs, like onsite daycare."
The developer
has agreed to negotiations but wants tax increment financing in place
first. This would reduce the leverage unions and communities groups
have in the process. "We supported him on rezoning, and we expect
him to continue negotiating with us," says Nevitt.
Class
Struggle on the Policy Front?
Not everyone
is happy about accountable development. Developers and some redevelopment
officials fear additional constraints on development in urban areas.
"When you're developing a billion dollar project like the Staples
Center, you can afford to spend a million on community benefits,"
argues a real estate lawyer active in downtown Los Angeles. "For
others, it can be a deal killer."
Jane Blumenfeld,
director of citywide planning for Los Angeles, is sympathetic to accountable
development but also understands developer concerns. "CEQA started
as a way for environmentalists to weigh into decision making, but it
turned into something different," Blumenfeld says of the controversial
California Environmental Quality Act, a law used by anti-development
activists to slow or block infill projects. "It's hard to create
structures that won't be abused, and it's already hard enough to develop,
and hard enough to build."
As with
activists elsewhere, Nevitt argues for a more open and inclusive process.
But how to open the process? In Los Angeles and San Jose, advocates
are pushing community benefits policies. In both cities, developers
who meet certain criteria — based on size of subsidies or projects,
location, or other factors — would have to file a community-impact
report. In San Jose, the proposed policy would also require the negotiation
of community benefits agreements.
Opposition
has been swift in both places and particularly bitter in San Jose, where
two opposite approaches to redevelopment are on the table. A coalition
of business groups led by the Chamber of Commerce has offered a counterproposal
that would streamline the permitting process, limit review of projects
conforming to the city's general plan, and place a moratorium on new
business regulations, including the community benefits proposal. The
business community calls the labor proposal a "job killer."
In San
Jose, business says it is at the center of all economic activity and
the proper arbiter of economic development policy, while labor positions
itself as the voice of the excluded majority. Although the mayor and
the city's largest newspaper are backing the Chamber of Commerce position,
Bob Brownstein believes the tone of the debate favors his side.
"If
business sticks to its position of keeping labor out of the process
and keeping the communities out of the process and we keep saying open
up the process, to giving labor and communities a voice, we win,"
he proclaims.
Staying
Practical
While
power struggles are also part of the story in Los Angeles, advocates
there try to keep the focus on practical issues. LAANE wants a policy
that would cover large projects whether they receive a subsidy or not.
Developers worry that filling out new reports would mean hiring new
staff, and they fret about the possibility of CEQA-style lawsuits.
"Why
is this so critical to the land-use process?" asks John Whitaker,
a lawyer who works for developers. Whitaker says opponents are not against
making information available to city staff, but he argues that most
of the information requested by advocates is already available —
an assertion that's disputed by Jane Blumenfeld as well as advocates
— and that additional reporting would be onerous. "It's just
one more burden that developers are going to have to carry,"
Whitaker adds.
It's true
that the ultimate goal is to win concessions from developers, but advocates
and supportive officials in both San Jose and Los Angeles say they've
been careful to avoid overburdening developers. In Los Angeles, the
resolution that would require community-impact reporting as part of
the planning process contains a "poison pill" that would nullify
the law if it were used for CEQA-style lawsuits.
And advocates
argue that opening the process early on will push projects through the
planning process by letting community groups and labor unions get on
board at the start. In both San Jose and Los Angeles, they say the information
tool they favor — the community-impact report — is a simple
addition to the planners' and developers' toolbox.
"Community-impact
report is the world's worst name," says Neal Richman, an urban
planner at UCLA who has been developing an online reporting tool for
the city's Community Redevelopment Agency, "but neighborhoods need
an assessment tool."
Richman
says information technology makes the reporting process quite simple.
His system provides information on a proposed project's fiscal impact,
neighborhood demographics and housing needs, market data, and wage and
benefit information for proposed commercial or business uses. "It's
a simple tool that can be used for site plan review, it can be used
by neighborhood councils to assess local impact, and by county service
agencies to plan service delivery," argues Richman. "Everybody
needs an easy-to-use information source."
A New
Social Compact
Although
policy talks have been bitter in both Los Angeles and San Jose, advocates
and sympathetic politicians stress that they are not anti-development.
"Developers complain legitimately about not getting a clear message,"
says Tynan. "It's a bad process for developers, and for the community
that ends up being adversarial."
To be
sure, advocates want to redefine the development planning process to
the benefit of their constituents — low-income communities, low-wage
workers, and union members — and this will entail some additional
costs for developers. But advocates argue their political support is
worth the social investment and, in the case of publicly subsidized
projects, it should be part of the price of doing business.
Various
parties say the planning process for redevelopment and infill needs
to be fixed. Advocates hope accountable development can be part of the
fix, and community benefits agreements show that developers and advocates
can work together when the benefits to both sides are obvious.
"We
can build a new coalition for urban redevelopment," says Richman.
"I'm pro-development. By making an informed discussion take place
earlier, faster, and more conveniently, we can see how issues can be
addressed."
That's
what happened in Gloria Serrano's neighborhood. But the struggles aren't
over. USC and numerous smaller property owners still have testy relations
with unions and their low-income neighbors, but the Staples Center agreement
showed what can be done. Talking rather than fighting led to a better
project and a surprising pro-development coalition.
Jim Goodno
writes about politics, policy, and urban affairs for several national
publications.
What's Happening in Other States
When Motorola
and Maytag announced they would close Illinois factories that had received
public subsidies just a few years earlier, a majority of state legislators
took note: They came to accept that development subsidies should go
hand in hand with enforceable accountability measures. During 2003,
various advocacy groups convinced the legislature to adopt some tough
new regulations on development subsidies.
"The
state had been burned in a number of high-profile instances," explains
Jeff McCourt, research director of Good Jobs Illinois, a local affiliate
of the national organization Good Jobs First.
Public
Act 93-0552, the State Economic Assistance Accountability Act, provides
disclosure and clawback requirements for corporations receiving state
economic development assistance; the law also requires that assistance
information be published on the Illinois Department of Commerce and
Economic Opportunity website.
Other
states have also taken steps to reduce the social costs and impacts
of development expenditures, especially public economic development
subsidies. Greg LeRoy, executive director of Good Jobs First, points
to cities as distinct as New York City and Spokane, Washington, as laboratories
for local accountable development strategies. Arizona activists are
up in arms over delivery of the state's second largest corporate subsidy
($36.7 million) to a Wal-Mart anchored retail development in Scottsdale.
And in Denver, alarm has been sounded over the suggestion that an aging
strip mall — occupied by a dozen Asian-owned businesses —
will be razed and replaced by a Wal-Mart supercenter. Wal-Mart, the
nation's largest retailer, might receive $10 million in subsidies from
the Denver redevelopment agency.
A recent
study by Good Jobs First found that at least 43 states, 41 cities, and
five counties apply some sort of job-quality — wage, healthcare,
or full-time employment — standards to subsidized economic development.
Every type of subsidy, including tax credits, training programs, industrial
revenue bonds, loan programs, enterprise zones, and tax increment financing,
is affected by these standards.
"Denying
taxpayer subsidies for poverty wages is truly an idea whose time has
come," LeRoy contends. "A decade ago, only a few jurisdictions
had wage rules. Now they're becoming standard practice."
Most of
the local standards apply living wage rules to some beneficiaries of
development subsidies. State programs — now totaling at least 116,
almost double the level of just three years ago — are more diverse,
and while the direct connection to infrastructure, land use, construction,
and other urban or regional planning issues varies with the type of
subsidy and regulation, taken together they have started to reshape
the context in which planning is carried out.
In Illinois,
where labor unions have lined up against suburban sprawl, the next step
for advocates might be towards incorporating transportation, housing,
and land use into the mix. Unionists, land-use advocates, members of
the Chicago business community, and others are working on "new
legislation to make location efficiency and affordable housing a factor
in incentives," says McCourt. "I wouldn't say there's a mass
movement, but a lot of groundwork is being laid."
Resources On
the web
Front
Range Economic Strategy Center: 303-477-6111; www.denverlabor.org
Good Jobs
First: 202-737-4315; www.goodjobsfirst.org
Los Angeles
Alliance for a New Economy: 213-486-9880; www.laane.org
San Jose
Silicon Valley Chamber of Commerce: 408-291-5250; www.sjchamber.com
Strategic
Actions for a Just Economy: www.saje.net
Working
for America Institute: 202-974-8100; www.workingforamerica.org
Working
Partnerships USA: 408-269-7872; www.wpusa.org
