Community Benefits Agreement News Weekly Roundup

September 3, 2014 -- Partnership for Working Families



Can Chinese Millionaires Save San Francisco's Poorest Neighborhood?

Huffington Post

Matt Sheehan

August 21, 2014

SAN FRANCISCO -- When Sir Paul McCartney rocked out for 49,000 fans at San Francisco’s historic Candlestick Park last week, it marked the stadium’s final public event before its demolition. McCartney closed the show with an emotional rendition of the Beatles classic “The End.” But for the surrounding communities, the occasion signals something of a new beginning.

Candlestick’s demolition will kick off the next stage in San Francisco’s largest redevelopment project ever. Over the next 15 years, the San Francisco Shipyards project will create more than 12,000 housing units, hundreds of acres of parks, 800,000 square feet of retail and 3.1 million square feet for office and commercial research and development, much of it in the chronically impoverished neighborhoods of Bayview-Hunters Point and Candlestick Point. The predominantly black neighborhoods in the area have been labeled the only part of San Francisco experiencing “extreme poverty,” and local homicide rates have been nearly five times the city average.

Candlestick Park will be demolished to make way for San Francisco's largest ever redevelopment.

The Shipyards project, funded by hundreds of wealthy Chinese investors, aims to change that. The money flowing into the project is part of a recent infusion of Chinese capital breathing life into long-dormant development projects in the Bay Area. Developers, city planners and community groups hope the Shipyards project will bring much-needed construction and retail jobs into this geographically and economically isolated corner of the city, but some local residents fear it may signal the beginning of a new wave of gentrification -- this one funded by detached foreign investors.

In exchange for their investment, the Chinese hope to attain American green cards through the federal EB-5 program, which allows foreigners to obtain the residency permits for themselves and their families in exchange for investments of $1 million -- with the threshold for high unemployment areas, like the Shipyards, set at $500,000.

In the aftermath of the 2008 financial crisis, leveraging the $8 billion needed for the Shipyards project required the developer, Lennar Urban, to tap into Chinese markets still overflowing with capital.

“We’re very grateful for the monetary support that our Chinese friends have lent to the city and county of San Francisco to make projects like the Shipyards happen,” said Dr. Veronica Hunnicutt, chairwoman of the local Citizens Advisory Committee, which advocates for community interests on the project. “It’s a model program for the community, city and really the nation.”

The Shipyards project has been decades in the making, but at a crucial juncture following the financial crisis, it was money from China that paved the way forward.

“The housing markets, the whole capital markets collapsed, which certainly slowed down access to credit to begin any vertical construction,” said Kofi Bonner, regional vice president for Lennar Urban and head of the Shipyards project. “We found that land development capital was very, very difficult to find in the U.S. … which led to our first foray into the Chinese capital markets.”

Initial plans involved a $1.7 billion loan from the state-owned juggernaut China Development Bank, but when that deal fell through in early 2013, Lennar began to lean heavily on money raised through its EB-5 partner organization, the San Francisco Bay Area Regional Center (SFBARC). Over the past two years, SFBARC has tapped into a groundswell of Chinese interest in the EB-5 program, raising $200 million to date. It plans to raise another $250 million in the coming year.

“The homes that are being sold right now at The Shipyards were financed by EB-5,” explained Ginny Fang, CEO of SFBARC. “Would they have been built without EB-5? Maybe. But the fact is there was a major gap and we came in with funds mostly from China to fill that gap.”

Though the EB-5 program is open to all foreigners, in recent years it has been dominated by an explosion of interest from wealthy Chinese looking for a route to citizenship abroad. Between 2007 and 2013, annual issuance of EB-5 visas multiplied more than tenfold to 8,567, and many predict that growth from China will soon cause the program to hit its maximum annual quota of 10,000. Fang says that more than 80 percent of SFBARC’s clients are Chinese, many of them looking to move their children away from the toxic air and stultifying education system in many Chinese cities. According to Fang, SFBARC’s investors in the project have had a 100 percent success rate in their green card applications.

Many involved in the Shipyards project describe it as a showcase of how to leverage Chinese funds for urban renewal. Chinese money is now behind the two largest redevelopment projects in the Bay Area. Oakland’s massive Brooklyn Basin project had languished for lack of funding before Beijing developer Zarsion Holdings Group came in with a pledge of $1.5 billion last year. Like the Shipyards, the Brooklyn Basin project will transform a dilapidated industrial waterfront into a mix of residential, retail and park space.

“This massive influx of Chinese investment will put thousands of Californians to work and dramatically improve Oakland’s waterfront,” Gov. Jerry Brown (D) said at a signing ceremony for the Brooklyn Basin deal. “This project is just one example of what’s possible when business leaders in two of the world’s most dynamic regions connect.”

In the case of the Shipyards project, Lennar Urban signed an extensive community benefits agreements in exchange for being gifted over 700 acres of public land. That agreement, negotiated between Lennar, the city and the Citizens Advisory Committee, stipulates tens of millions of dollars for job training and sets high goals for local employment in all phases of the project. It also provides for 30 percent of the future housing to be priced below market rates, and requires Lennar to completely rebuild the notoriously dilapidated and dangerous Alice Griffith Housing Project located on the site.

Lennar has pledged to completely rebuild the Alice Griffith housing project for current residents.

But despite those pledges of assistance, some Bayview-Hunters Point residents remain wary of a looming wave of foreign-funded gentrification, saying that after years of work on the site, the community has still yet to feel the promised benefits.

“I haven’t seen nothing yet. That money flows back to where it comes from,” said resident Bob Pinkard, who has owned nearby Surfside Liquors for more than 40 years. “We’re just going to let these folks come in and buy the land right out from under us –- straight cash and no money trail.”

Charles Gadeken, who has run an industrial art collective down the street from the Shipyards project for more than 15 years, echoed Pinkard's fears of displacement.

“Our lease is up in five years and I assume at that point they’ll be building condos and we’ll be kicked out,” Gadeken said. “This is the last true industrial art space in San Francisco and it’ll be gone. It’s sad but it’s inevitable.”

Concerns over displacement run especially high in Bayview-Hunters Point, which many residents describe as the last predominantly black community in San Francisco. And looming large in any conversation about redevelopment is the history of San Francisco’s Fillmore district, a once thriving black community that was known as “the Harlem of the West.” In the 1950s the city’s redevelopment commission labeled the area “blighted,” and the ensuing redevelopment plan displaced and bankrupted hundreds of black businesses and homeowners, contributing to the prolonged exodus of the city’s black population that continues today.

Local leaders have specifically pledged not to repeat what happened in the Fillmore, stressing that the Citizens Advisory Committee has spent nearly two decades shaping the project so that it benefits the community.

“I think we’ve learned the lessons from what happened in Fillmore,” said Shamann Walton, Executive Director of Young Community Developers, a group that has partnered with Lennar in training local youth for jobs in the trades and construction. “We’re preparing for the upcoming opportunities, and things like the rebuild of the Alice Griffith project mean everyone will be able to stay.”


For the bridge to go up, we must do right by the community it will run through

Michigan Radio

By Jack Lessenberry

August 28, 2014

Last week, I went to see Douglas George, Canada’s top diplomat in Detroit, mostly to talk about where things stand with the New International Trade Crossing Bridge over the Detroit River. The bridge is now almost certain to be built, but there are a few hang-ups, and one is the concerns of the residents in the Delray neighborhood where the American footprint of the bridge will land.

Those who live there want to make sure they aren’t trampled on. Now, they finally are having their voices heard, thanks in part to Detroit’s new system of electing council members by district. Exactly a month ago, Detroit City Council was expected to approve the sale of 301 city-owned parcels of land in that neighborhood to the state of Michigan. Michigan would then buy them with money provided by the government of Canada, and transfer the land to the new International Authority, which is to oversee bridge construction.

But the land sale was delayed.

New city councilwoman Raquel Castaneda-Lopez represents the area where the bridge will be built. It is a fascinating and diverse district with about equal numbers of Hispanic and African American citizens.

Castenada-Lopez told me she wasn’t opposed to the bridge; she just wanted to do what was right for the people she represents. She said, “We need to recognize that there is a viable community there, and that they have rights.” What she wants and they want is an agreement to see that there are some community benefits for the more than 2,000 residents of Delray. 

I talked at length to Simone Sagovac, who is the voice of the Southwest Community Benefits Coalition.

I found what she had to say quite reasonable. The coalition is not demanding luxury swimming pools, she told me. That, in fact, was one of the lies spread by agents of rival bridge owner Matty Moroun, who has fought the bridge for years. Nobody I’ve met in Delray has anything good to say about Moroun, whose minions once panicked some residents by attaching phony, official-looking eviction notices to their front doors. 

“What we are concerned about,” Sagovac told me, “is both air and noise pollution.” She doesn’t live in Delray herself, but near the Ambassador Bridge two miles away. She’s been there 23 years, and knows about the effects of thousands of trucks.

Delray is also a district that has seen better days. Those who live there think a little bit of green space isn’t too much to ask. They’d also like some of the jobs that are going to be created. Sagovac wants to know that residents whose homes are taken or cut off for the new bridge will not be taken advantage of.

Kevyn Orr, Detroit’s emergency manager, plans to again ask the council to approve the land sale next month. Meanwhile, Sagovac told me her group is trying to get a meeting with the new International Bridge Authority to present their concerns. Canada has a history of doing right by communities in the path of civic projects, and Canadian money is paying for all of this bridge. It would seem only right that we do right by the people of Delray as well.


Democratic primary foes debate city issues

WBFO- Buffalo, NY

By Mike Desmond

August 20, 2014

Democrats are fighting over State Legislature seats in Buffalo. The candidates debated Tuesday night in the Burchfield Penney Art Center during an event sponsored by the Buffalo Association of Black Journalists.

State Senator Tim Kennedy narrowly won the seat two years ago against a low profile and thinly-financed challenge by County Legislator Betty Jean Grant. They are back at it this year, with the incumbent having campaigned hard since his narrow victory. Some of that bad feeling showed last night as the two squared off before three questioners and a crowded auditorium.

Asked how much a Democrat can do in a Senate controlled by an alliance of Republicans and Independent Democrats, Kennedy pointed to getting UB 2020 passed. "It was passed nearly unanimously. We then sent a letter from the Democratic Conference to our colleagues in the Democratic Assembly saying this was strategically important to the future of the City of Buffalo and Western New York," Kennedy told the audience. "People would be investing hundreds of millions of dollars in our community because of the piece of legislation before us and we got it passed resoundingly and we got the governor to sign it."

Grant says Kennedy is friendly with the rebel Democrats in the Senate, as he was when the two were in the County Legislature with Kennedy cutting deals with Republican County Executive Chris Collins. "We have one caucus and that would be the Democratic Caucus which I would be a member of come January 2015," Grant said. "I want to say too, the woman leading, (Senate Democratic Leader) Andrea Stewart-Cousin, she wants to work with me and I want to work with her."

The other debate Tuesday night was for the seat now held by Assemblywoman Crystal Peoples-Stokes, who is being challenged by former Senator Antoine Thompson and community organizer Veronica Nichols. There was some disagreement among the three about the benefits in the district of the Buffalo Niagara Medical Campus. Nichols says the Fruit Belt wants a Community Benefits Agreement and a voice.

"UB came up with the concept of Open Buffalo to do a medical campus Community Benefits Agreement. Well, that issue that came up with us is that you can't have a community benefits agreement without a community. So, we're forcing the issue that we need to be part of that planning process and someone from our community that they choose," Nichols said.

Peoples-Stokes says there is a push to move some residents away from the benefits of the development. "The Buffalo Billion is about developing jobs. It's about enticing businesses from all over the world to come move their company to Buffalo. and, quite frankly they have been doing that. The thing that's real critical for us The East Side used to be the east side of Main Street and now it's the east side of Fillmore," she said.

Thompson says some of the money should be sliced away from big projects and put into Renaissance Neighborhoods across the city. "We need to make Empire State Development do on Jefferson and Broadway, Fillmore and Bailey what they do in Niagara Falls. In Niagara Falls, they have a development subsidiary called USA Niagara. And, they provide grants and low-interest loans to Third Street and Main Street in Niagara Falls and we need to push them to do the same thing in Buffalo," Thompson argued.

The primary vote is September 9.