D4 Making an Impact on New Development in Detroit

June 24, 2014 -- Partnership for Working Families

Red Wings Arena

In February, the Detroit City Council approved the transfer of $29 million in public land to the Downtown Development Authority for the bargain basement price of $1. This allowed the Illitch Family (owners of Little Caesar’s Pizza, the Detroit Tigers, and the Detroit Red Wings) to proceed with the construction of a new events arena and additional economic development in a 45-block “catalyst development area”.  The total projected cost of $650 million includes $285 million in taxpayer funding with an additional $12.8 million in public monies each year thereafter. 

A coalition that includes the Corridors Alliance (CA),  Doing Development Differently in Metro Detroit (D4), a community benefits advocacy committee, and new City Council member Raquel Castaneda-Lopez succeeded in garnering some benefits for the local community: 1) the establishment of a Neighborhood Advisory Committee (NAC), 2) a developer-funded community needs assessment, and 3) local hiring and utilization of local businesses.

Neighborhood Advisory Committee (NAC)

A 16-member Neighborhood Advisory Committee (NAC) that includes 12 members elected from the community and four appointed by city council has been seated. The NAC will meet regularly for a minimum of five years and will provide advisory input on not only the new events arena but on future economic development projects in the catalyst area related to design and signage, development and construction, traffic/transportation/parking, security, historic preservation, post-construction hiring and small business support among other issues. To date, the NAC has adopted bylaws, established committees focused on various topics, and begun meeting with representatives of Olympia Development Management (ODM), the developer.  

Community Needs Assessment

The community assessment for the entire catalyst area will be conducted in consultation with the NAC. To be completed prior to the opening of the events center (projected for 2017), this is the opportunity to bring many of the issues to the table that were detailed in the community benefits “ask” presented to City Council in January by CA and D4. These thoughtfully crafted requests, which include measurable outcomes, are the result of CA’s ongoing outreach to residents and businesses within the larger impact area, input from local experts, and research on national best practices. Although not an exhaustive list, these requested benefits can form the foundation for the community to move forward in partnership with ODM to ensure responsible economic development in the neighborhoods adjacent to the arena. 

Local Hiring and Utilization of Local Businesses

ODM has committed to comply with Detroit executive orders that require 30% of the total value of contracts be awarded to certified Detroit-headquartered and Detroit-based businesses and 51% of the workforce and hours performed on the project be bona-fide Detroit residents. In addition, a contract has been awarded for monitoring these benchmarks, with penalties in place for non-compliance. 

There is also a commitment outlined in the land transfer agreement that states ODM will utilize available local training and workforce development programs to create a pipeline for jobs on the project. They are also encouraging their vendors to use the same training/workforce groups and will give special consideration to those vendors who hire Detroit residents and use Detroit businesses. Finally, ODM will use all commercially reasonable efforts to develop a robust apprenticeship program connected to unionized apprentice schools and other apprentice training programs that create job opportunities for Detroit residents. D4 and its labor partners are working to educate the community on apprenticeship opportunities while looking for strategies to link Detroit residents to pre-apprenticeship and other workforce training opportunities. 

CA and D4 are quite disappointed that to date, the community has not been successful at negotiating a strong community benefits agreement with ODM. However, the community is working to strengthen an ongoing campaign that represents residents’ and other stakeholder interests focused on the potential $200+ million in economic development planned for the neighborhoods surrounding the events arena. There are also still opportunities to negotiate with ODM regarding design, environmental concerns, small business set-asides and pedestrian/bike connectivity as the events arena moves forward. This is the role that the NAC, with community participation, can play to ensure ODM honors the agreement it signed for the land transfer.

West Grand Boulevard Collaborative Community Coalition (WGBC3)

WGBC3, with technical assistance from D4, signed an historic formal agreement with Henry Ford Hospital System (HFHS) on Friday, May 16th, 2014.   HFHS's vision is to create affordable and market rate housing, retail, and commercial space, while expanding on services that respond to the community's needs. WGBC3 represents over 20 local individuals, businesses, and community organizations and has long been a presence working to foster development and sustainability in their neighborhoods.  This formalized partnership can help transform the area in a way that reflects the needs and desires of the "host" community while supporting HFHS's proposed major investment projects.

Negotiations between both parties began in the fall of 2012 with a call by the community for a signed community benefits agreement (CBA) related to a proposed $25 million medical distribution center to be built by HFHS within their neighborhood. Sugar Law Center was invited to join the negotiation team from the beginning to also provide technical assistance and legal advice to WGBC3. Additional help from Perkins Law Firm and state representatives Fred Durhal and Rose Mary Robinson was critical in moving the negotiations to a conclusion.

Although the final agreement is not a CBA in the traditional sense, the document does outline responsibilities for both parties, calls for transparency and communication and sets the stage for a minimum of two years of active partnering. WGBC3 will work with HFHS and their project planners and developers to address issues related to ongoing economic investment in their neighborhoods including: environmental justice, socially responsible business practices, traffic routes, safety, and employment.

Moving forward, WGBC3 will be at the table assisting an anchor institution that has been in their community for almost 100 years. HFHS gains a partner that understands the needs of the community and can help address challenges while building on the strengths of this vital west Grand Boulevard area. WGBC3 and HFHS had their first “post LOA signing” meeting and community concerns and questions were addressed and answered. Ongoing meetings will be used to address pre-construction, construction, and post-construction issues, jobs and job training and future development in the area. 

This signed agreement is cause for celebration as it takes the community one step forward in the direction of negotiated benefits and the way to "do business" in Detroit!