When Developers Promise Community Benefits, Who Holds Them Accountable? 

One big problem with Community Benefits Agreements (CBAs), experts say, is that they’re not laws, but rather private contracts between a developer and community groups. And if those groups aren’t around to hold a developer accountable—or the developer isn’t around and there’s no successor clause—there’s little anyone else can do to enforce an agreement.

This story is the second installment in a City Limits’ series exploring the role of Community Benefits Agreements (CBAs) in New York land use and development. Read the first installment here.

When developer Forest City Ratner (FCR) was in the midst of seeking final approval in 2008 for what would become Brooklyn’s Barclays Center and Pacific Park development complex, its officials pointed to the promises of housing, jobs, and other items that were contained in the project’s community benefits agreement, or CBA.

Moreover, FCR Executive Vice President MaryAnne Gilmartin promised at the time, “All of the Agreement’s commitments have teeth in the form of substantial legally enforceable penalties for a failure by FCRC to fulfill its obligations.”

Fourteen years later, those teeth are hard to spot, as the Atlantic Yards community benefits promises are a patchwork of maybes and might-have-beens.

The confusion surrounding the Brooklyn project points up one big problem with CBAs: They’re not laws, but rather private contracts between a developer and community groups—in the case of the arena project, groups that were not only hand-picked by the developer but in some cases funded by him. And if those groups aren’t around to hold a developer accountable—or the developer isn’t around and there’s no successor clause—there’s little anyone else can do to enforce an agreement.

CBAs are less common today in New York development deals than they once were, tied to major past projects like the new Yankee Stadium, the shopping mall built at the former Bronx Terminal Market and Columbia University’s campus expansion in 2009. But the agreements are still touted today as a tool for ensuring communities get a voice in neighborhood-changing projects: Residents are pushing for a CBA as part of a developer’s plan to rezone four blocks of Brooklyn’s Broadway Junction, and a 14-story building in Sunset Park was approved by the City Council last year thanks to the developer’s agreement to include a portion of affordable units, set aside space for commercial businesses and create 150 bike stations, among other benefits.

But it can be tough to guarantee the pledges made in CBAs are fulfilled, particularly for projects built out over many years, like Barclays Center/Pacific Park. Start with the housing provision of that agreement: While roughly half of the housing completed to date has been designated as affordable to low- or moderate income families, as promised, construction has lagged: About half of the project’s proposed buildings have not even broken ground yet. And the vast majority of the “affordable” units that have been built are moderate-income apartments that are allowed to cost upwards of $3,000 a month.

The benefits package also required the Barclays Center arena to be made available to community groups for at least 10 events a year “at reasonable rent.” The arena does not publish a list of these events. In 2017, Norman Oder, who for the last 17 years has followed the project for his Atlantic Yards/Pacific Park Report blog, asked Barclays Center VP for Community Relations Roland Guevara about how many community events had been held; Guevara replied, “I don’t have the number offhand, but I’ll get the number.”

Wrote Oder: “That didn’t happen. I spoke to Guevara afterward and said I’d email him the next morning, which I did. I haven’t heard back.” He never did. City Limits’ calls and emails to Barclays Center went unanswered.

Much of the rest of the community benefits—such as promises that public housing residents and low-income community members would get precedence for both construction jobs and permanent jobs on the site—remain largely conjecture, because no one has been forced to report on how much progress has or hasn’t been made. Forest City Ratner, the project’s original developer, promised to hire an independent compliance monitor to oversee the community benefits requirements. But despite the CBA promising that a monitor would be put in place “as soon as reasonably practicable,” one never appeared.

Shanghai-based Greenland Group, which first invested in the project in 2014 and took control of the non-arena portions of the site four years later, replied to City Limits’ questions with a laundry list of benefits it says have been provided as part of the massive development. They include a project labor agreement, “more than 1300 units of affordable housing built or completed,” a new health care center and a new school, and such in-progress measures as new parks and renting retail space to female- and people-of-color-owned businesses. “Generally in terms of accountability this project continues to report to the public through a bi-monthly ‘quality of life’ meeting” held by the state Empire State Development corporation, writes Greenland spokesperson Jeremy Soffin.

Yet despite those “substantial legally enforceable penalties,” baked into the CBA, neither Ratner, Greenland, nor the Barclays Center—which Ratner sold, along with the Brooklyn Nets, to Russian nickel baron Mikhail Prokhorov in 2009 and to Alibaba co-founder Joseph Tsai in 2019—has been at risk of any consequences for failing to meet the CBA’s requirements. That’s because, in an absurdist twist, the only person who would have been in a position to penalize any of the project’s developers is the compliance monitor they never hired. And that’s if it were even clear who counts as the responsible developer: The Atlantic Yards CBA lacks a successor clause indicating who would take on responsibility if the project was sold, making it nearly impossible to hold the current owners responsible even if someone tried to enforce the CBA’s provisions.

The poor results, Oder says now, should come as no surprise. “The rollout was deceptive and over-hyped, the structure fundamentally flawed, and the oversight—by the (absent) Independent Compliance Monitor and local officials/press, as well as the under-equipped signatories—inadequate,” he writes in an email. (Editor’s note: Oder is a freelance contributor to City Limits).

For Atlantic Yards, the deck was stacked against effective oversight from the beginning. Of the eight “community” signatories, most are now defunct or dormant. In particular, Association of Community Organizations for Reform Now, or ACORN, whose director Bertha Lewis was instrumental in setting up the CBA and its housing provision, was shut down in 2010 following secretly recorded videos by conservative activists that claimed to show ACORN workers endorsing child prostitution. Brooklyn United for Innovative Local Development, or BUILD, a group that received its startup funding from Ratner and was designated to oversee job training and placement provisions, shut down in 2012. Ten “pre-apprenticeship” trainees who never received actual apprenticeships sued Forest City Ratner and the by-then-dormant BUILD in 2014 alleging that the training program was a sham; the suit was settled for upwards of $300,000 the following year.

Other signatories have likewise vanished into the fog of development war. The Downtown Brooklyn Educational Consortium—which was tasked with “continuous oversight” of the CBA’s educational provisions—has not been heard from in over a decade. Public Housing Communities, a group of NYCHA residents, only filed nonprofit 990 forms in 2008, 2009, and 2018; its most recent filing showed about $120,000 in revenue, all from donations, and an equal amount of expenses, all on salaries and employee benefits, though all of the nonprofit’s officers were listed as unpaid. (PHC did not respond to phone calls left on its voicemail seeking comment.)

The Downtown Brooklyn Neighborhood Alliance, founded by Rev. Herb Daughtry of The House of the Lord Churches and run by his daughter Sharon, survives, as does the Mutual Housing Association of New York, which according to Soffin continues to work “on all affordable housing lottery and leasing” as a successor to ACORN. Neither DBNA nor MHANY director Ismene Speliotis, who helped design the housing provisions of the CBA while at ACORN, replied to calls and emails seeking comment.

Not having a strong community base to hold developers accountable makes it difficult to enforce CBA provisions, say development experts. John Goldstein, who has consulted on numerous CBAs, first as national program director for the Partnership for Working Families and since 2014 as an independent consultant, says the best way to have strong oversight is to rely on municipal agencies that have access to payroll and other records and can determine, say, if local hiring rules have been followed. In the case of the Detroit Red Wings’ Little Caesars Arena, he notes, construction contractors were fined more than $5 million for only using 25 percent local labor, rather than the 50 percent required.

But the most important factor in successfully upholding CBA provisions, Goldstein says, is good organizing. “Connecting deeply with the impacted communities means there will be a lot of neighborhood folks watching the outcome,” he says. “If there are periodic public reports required by the agreement, then local residents can help ensure the provisions are met.”

That can only happen, though, when the public reports are actually provided to the public—or written at all.

In 2006, the New York Yankees agreed to provide local businesses with “employment and growth opportunities” as part of an agreement related to construction of its new stadium that landed the team owners more than $200 million in city money to tear down and replace public parks, plus $70 million from the state to build new parking garages. (Counting such things as federal and local tax breaks, the total public price tag was upwards of $1 billion.)

A 2017 investigation by The New York Times into the Yankees’ CBA spending found that it had “operated with little oversight or public accountability, neglecting those who live near the stadium and instead sending money to other, often wealthier parts of the Bronx that were not affected by the construction.” Though the CBA promised annual reports of the fund’s spending, none have ever been made public; fund administrator Veronica DeJesus told the Times that they were submitted solely to the Yankees, who insisted they were not authorized to make them public.

Michael Drezin, who says he did the initial paperwork to set up the Yankees fund, served as its administrator from January 2008 to January 2009 and later sued it for mismanagement, says there’s a simple reason the reports were never made public: They didn’t exist.

“I know during my time, that they weren’t writing the reports,” says Drezin. “During my time, no reports were written.” (Emails to the Yankees and to the fund for this article were not answered.)

Other CBAs in New York City have faced similar implementation hurdles. After Columbia University agreed to give $10 million to the West Harlem Development Corporation to build affordable housing as part of the CBA for its city-authorized takeover of multiple blocks of Manhattanville for a campus expansion, only $100,000 of that total was spent in the first six years.

WHDC interim executive director Zead Ramadan says that the remainder of the money is ready to be spent, as soon as his agency can identify an affordable housing developer ready to take it. “Most of the development that’s happening in West Harlem has not been affordable housing, or we have not been approached by those developing it,” he says. “We’re chomping at the bit at supporting affordable housing in West Harlem.” WHDC, he notes, approved supporting a couple of local affordable housing developments, only to have the projects fall through.

As the only signatory to the Manhattanville CBA, it’s been largely up to WHDC to monitor follow-through on the agreement’s provisions. Community Board 9 vice-chair Victor Edwards, who heads a committee that has been looking into the CBA’s provisions, says the board has taken it upon itself to send questions to Columbia or dig through its regular reports to the state to ferret out what commitments the university has made and whether it has met them.

Oversight has been similarly limited with Related’s Bronx Terminal Market mall project, where the developer held CBA talks with multiple community groups, but ultimately chose just four as signatories, all organizations run by or close to the city: the Bronx Overall Economic Development Corporation, the New Bronx Chamber of Commerce, Mount Hope Housing Company, and Hostos Community College.

“Hostos is not going to sue the Related Companies,” says Gavin Kearney, who as a representative of New York Lawyers for the Public interest worked alongside other community groups that ended up refusing to sign the project’s final CBA. “So it all tied together into an ineffective mess.” (A Related spokesperson responded to City Limits’ previous article on the Bronx Terminal Market CBA with a list of “community activations” at the site including film screenings, toy giveaways, and neighborhood anti-graffiti campaigns; they did not reply to requests for further comment.)

The lack of proper CBA enforcement—or even mechanisms for anyone to enforce their provisions, if anyone could figure out which aren’t being met—is one reason why many community group members express frustration with benefits agreements. But when the agreements are poorly drawn in the first place, there’s often little that can be done after the fact.

“The Bronx delegation at the time—the assemblyman, the members of the City Council—were unique in that I don’t think any one of them were lawyers,” says Drezin. “I don’t really know if any of them consulted with lawyers prior to signing that CBA.”

Drezin still thinks CBAs can be a viable means of ensuring that a community gets what it wants in exchange for signing off on a development project in its neighborhood—if done right. “All a CBA needs is an enforcement mechanism: if you breach the contract, we get to take you to court,” he says.

Of course, that depends on there being a “we” around that has standing to sue. In the case of the Yankees CBA, the only signatories were then-borough president Adolfo Carrion and the members of the Bronx city council delegation—none of whom are still in office.

Have you been involved in a New York City development project where a community benefits agreement was signed or considered? We would like to hear from you. Contact us at [email protected]

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This story was made possible through the generous support of the Fund for Investigative Journalism.