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For Canal Side, a further complication
New approach to benefits prompts official to wonder whether 'this project could die'

In Buffalo, it's a new, first-of-its-kind idea, a notion that developers fear could hurt or even kill the city's grand plans for its waterfront.

On the other side of the country, in Los Angeles, it has become a common, almost accepted tool to protect taxpayer investment in public-private developments.

Community Benefit Agreements, legally binding contracts between developers and community organizations, may be new to Buffalo, but not to L.A., Pittsburgh, Seattle or Minneapolis.

"We realized it was better to work with developers, rather than simply support or oppose a project," said James Elmendorf, policy director for the Los Angeles Alliance for a New Economy.

Here in Buffalo, the idea of a formal agreement spelling out benefits such as jobs, housing and wages has run into stiff opposition.

Some of the push-back stems from the belief that a Community Benefit Agreement, or CBA, represents one more obstacle to getting Canal Side -- the latest step in Buffalo's long-awaited waterfront revitalization -- off the ground.

Others suggest that the problem is not the CBA, but rather the specific and some say extreme demands made by groups pushing it.

"People should look in the mirror. This is Buffalo," said Jordan A. Levy, chairman of Erie Canal Harbor Development Corp. "I believe, if we are required to meet all the standards they are proposing, this project could die."

The harbor development corporation has no interest in negotiating a CBA, Levy said, but it is willing to work with the Buffalo Common Council to address issues the Council wants addressed as part of the $294 million downtown development.

"We're moving forward," Levy said when asked about the potential for opposition. "We don't have to sign a CBA. We'll find agreement with the Common Council."

The groups pushing a CBA -- and there are dozens -- say the goal is to make Canal Side better by ensuring that the community benefits from the large public investment in the project.

They also believe that a formal agreement would ensure community support for the development and avoid opposition down the road.

"We simply want this to be a quality development," said Micaela Shapiro-Shellaby, an organizer for the Coalition for Economic Justice. "We never intended this to be contentious."

The pros and cons of CBAs have been debated since Elmendorf's group helped negotiate the nation's first in 2001, but even today, they are viewed as a relatively new tool.

One of the few independent reviews of their impact, good and bad, came from the Federal Reserve Bank in Minneapolis. Researchers at the bank looked at the benefits and limitations of CBAs and found a mixed bag.

On the plus side, the bank found, they can bring economic resources to neighborhoods in need and increase the likelihood of a development moving forward by ensuring community and governmental support.

On the downside, negotiating a CBA can be complex and time-consuming. They also can put developers in the position of making promises that, in the end, they may not be able to keep.

"The paradox of the CBA," Minneapolis developer Dale Joel told the Federal Reserve, "is that, as a developer, it sometimes leads you to take a position that's more conservative than you'd like because you're being asked to commit to so much before the development is done."

Unlike a lot of developers, Joel does see a benefit to the agreements. His company agreed to one as part of its Longfellow Station development in Minneapolis.

"The upside," he said, "is their ability to facilitate deeper involvement and more engaged relationships, with the possibility of creating a better project for the developer, the investor and the neighborhood."

Minneapolis and Los Angeles are not the only cities to use CBAs. Two years ago, Pittsburgh joined the growing list of communities with new agreements.

The deal centered on the construction of a new home for the Penguins, the city's National Hockey League franchise, and its impact on the adjoining Hill District neighborhood.

"It is the right approach for a community that feels it needs a voice," said Emma Lucas-Darby, a professor of social work at Carlow University and one of the leaders of the CBA effort in Pittsburgh.

After more than a year of protests and on-again, off-again bargaining, the Penguins joined the city and county in signing an agreement that set aside an estimated $8 million in resources for the Hill District community.

At the heart of the deal is $2 million for a new supermarket, as well as funding for a neighborhood master plan and new employment center.

Hill District activists say the need for a CBA grew out of the neighborhood's experience with the Penguins' current home, Mellon Arena. Built in 1961, the facility, known then as Civic Arena, displaced more than 8,000 residents and hundreds of businesses.

"It just devastated the community," Lucas-Darby said, "and that's what caused it to organize this time."

In Los Angeles, home to at least seven CBAs, the agreements have become a common tool in large-scale developments. But it wasn't always that way.

The first one, an agreement over a billion-dollar hotel and entertainment center near Staples Center, was reached in 2001, but only after a coalition of community groups threatened to oppose the project.

In the end, the developers, including media magnate Rupert Murdoch, agreed to provide money for park improvements and affordable housing. They also agreed that 70 percent of the 5,500 permanent jobs created as part of the project would pay a "living wage."

Here in Buffalo, CBA supporters are making a similar demand.

They want a requirement that all businesses with more than 20 employees pay a living wage. They point to the harbor development corporation's own estimate that the average Canal Side job will pay $22,500, well below the region's standard for a living wage.

"One-third of our jobs here in Western New York are low-wage," said Sam Magavern, co-director of the Partnership for the Public Good, one of the groups advocating a CBA. "We don't need more of those."

From Day One, CBA advocates have questioned the wisdom of spending tens of millions of dollars in public money, including $35 million for Bass Pro Shops, to create what they call "poverty-level jobs."

"You can't run a regional economy on that," said Lou Jean Fleron, co-director of the partnership.

CBA advocates are hoping that the Council, which has endorsed the idea, will use its leverage -- the city owns 12 acres of land the developers need -- to bring about a formal agreement.

Council members who support a CBA said they're concerned that without one, the project could result in lawsuits down the road.

"That's always a possibility," said Council Member Michael J. LoCurto of the Delaware District. "The more groups that sign on, the smoother the sailing."

Levy doesn't buy it. He thinks the groups' demands are extreme and said the requirement for a higher-than-expected "green" building standard alone would add $20 million to the price tag.

"What you have there now is a graveyard of rubble," he said of the downtown site. "If we want to attract people to downtown, which has been a wasteland except for office space, this is the last thing we need."

e-mail: pfairbanks@buffnews.com

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Impact of a CBA

A Community Benefit Agreement for the Canal Side project could include:    

*Job quality guarantees, including a living wage for those working at businesses that employ 20 or more.    

*A requirement that 75 percent of all retail space other than a Bass Pro store be preserved for local businesses.    

*The addition of affordable housing to the project.    

*A mandate that all buildings meet "green" building standards higher than developers normally use.    

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