The Michigan Black Chamber of Commerce, Inc. (MBCC), with access to more than 72,561 African American businesses in Michigan and 32,490 in the city of Detroit, endorses the adoption of a Community Benefits Agreement (CBA) ordinance into the Detroit City Charter to establish trust, reduce economic disparities and increase government and private sector accountability to Detroiters and local entrepreneurs.
Although an increase in the number of development projects in Detroit shows promise for the city’s future, it is crucial to make sure local residents and community stakeholders share in the economic benefits of these large-scale projects. CBAs are designed to do just that, according to the American Planning Association.
“CBAs ensure that large scale development provides for local hiring, procurement opportunities, neighborhood services and a qualified community voice in the development process itself,” said Ken Harris, President and CEO of the Michigan Black Chamber of Commerce.
Detroit’s proposed CBA ordinance seeks to ensure that communities affected by large, often government-subsidized developments or public-private partnerships would be guaranteed benefits in the form of contracts with local developers; these contracts would provide specific procurement goals, services or hiring obligations in the footprint or general area of the proposed development.
Despite negative opinion-driven reactions to the proposed CBAs from some of Detroit’s leadership, CBAs are not just effective in providing economic protection to local communities, but also in energizing the local economy. Detroit’s proposed CBA is designed to stimulate job growth, innovation and entrepreneurship, but most importantly, minority, underserved and economically disadvantaged communities and neighborhoods. Detroit is a majority minority city with more than 80% African Americans in population and 90% ethnic minorities and women.
The MBCC believes Detroit’s proposed community benefits ordinance would also benefit developers by establishing a clear framework and expected outcomes for businesses and residents to interact.
Across the country, CBAs have proven effective in both ensuring local employment and boosting local economies that are experiencing major or large developments with a clear oversight and monitoring policy.
There are already clear models for successful CBAs in city centers nationwide. One notable success comes from Los Angeles, when major airport renovations, with the implementation of local hiring requirements, increased the local employment rate in 2006. Since then, numerous instances in the CBA movement have demonstrated that economic development works better with community members at the table. CBA models have been implemented in many other urban centers, including Baltimore, Portland and Milwaukee.
“Without a CBA, large-scale development projects do not guarantee jobs to local residents and contract opportunities for Detroit-based businesses,” Harris said.
Marathon Oil, for example, received tax abatement worth $175 million in exchange for producing only 11 jobs for Detroiters in 2012. In the future, several large-scale development projects – which will utilize public subsidies, tax abatements and the acquisition of public land – are going to take place in Detroit’s underserved and impoverished communities.
“It’s time to move away from personality-driven leadership by adopting policy-driven benefits that help to foster economic development and job growth for Detroit’s local residents and small business owners,” said Harris.
Today, the MBCC calls on Mayor Duggan, the Detroit City Council, Detroit-based Businesses and the Detroit Economic Growth Corporation (DEGC) to support the adoption of a CBA ordinance into the City Charter.
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