Community Benefits Agreements in the USA (Part 1)

December 3, 2019

This is one of a series of articles, based on a report commissioned by the Canadian Council for Public-Private Partnerships (CCPPP).

In the United States, private Community Benefits Agreements (CBAs) have become increasingly common in major infrastructure and development projects. Most CBAs in the USA are private agreements, driven by communities and involving private partners (and occasionally local authorities) who provide benefits in exchange for community support of the project, including communities agreeing to refrain from litigation.

Usually, coalitions of community groups lead these CBAs, organizing evidence-based campaigns to ensure the project meets a range of local needs. Developers agree to CBAs in exchange for local community support, often in a formal cooperation agreement. Community engagement allows the project to proceed quickly and easily through regulatory approvals, allows the addressing of community concerns from the outset, and forestalls litigation – all saving the developer money while enhancing the developer’s reputation as a responsible corporate citizen.

An analysis of eight major CBAs showed that the incremental costs of CBAs range from 0.5 to 2.5 percent of overall project cost.

In 2001, Los Angeles was one of the first cities to incorporate community benefits. Coalitions in Los Angeles have negotiated several CBAs since then, obtaining benefits ranging from living wage requirements to investments in parks and recreation. In 2012, the Los Angeles County Metropolitan Transit Agency adopted hiring measures for all projects as part of a 30-year, multi-billion transit initiative. The measures were adopted through a Construction Careers Policy and a Project Labor Agreement to allocate 40 per cent of construction jobs and provide training to low-income populations.

In December of 2004, a community organizations and labor unions in Los Angeles entered into the largest CBA to date, addressing the Los Angeles International Airport (LAX) $11 billion modernization plan. The benefits obtained through this CBA have been valued at half a billion dollars, including:

  • $15 million in job training funds for airport and aviation-related jobs;
  • A local hiring program to give priority for jobs at LAX to local residents and low-income and special needs individuals;
  • Increased opportunities for local, minority, and women-owned businesses in the modernization of LAX.

The LAX CBA has detailed monitoring and enforcement provisions. The administrator of the Federal Aviation Administration hailed it as a model for future airport development nationally

In 2011, San Francisco’s Public Utilities Commission (SFPUC) passed a community benefits policy that embeds community benefits criteria in Requests for Proposals (RFPs) valued at more than $5 million.

At the Park East Redevelopment Compact (PERC) in Milwaukee, 25 per cent of construction jobs in the redevelopment must originate from enterprises classified as Disadvantaged Business Enterprises/Minority Business Enterprises, plus five per cent from Women’s Business Enterprises. PERC also requires training and apprenticeships for low-income residents.

The City of Oakland, California, developed a CBA with the East Bay Alliance for a Sustainable Economy for the redevelopment of a decommissioned army base. Nearly half of the workers on the project are local, and one-quarter of the hours have gone to disadvantaged workers. The jobs centre enjoys a high placement rate. The Good Jobs Policy created of 3,000 living-wage jobs, includes protections for temporary workers, and makes it easier for the formerly incarcerated to find work.