Developers may soon be required to give back to Philly neighborhoods where they build

Real estate developers who are seeking to build large-scale projects may soon be required to provide amenities and services to nearby residents, according to a bill that advanced out of a City Council committee Wednesday.

The Rules Committee unanimously approved legislation sponsored by Council President Darrell L. Clarke and Councilman Kenyatta Johnson during the summer, requiring that developers of “high-impact” projects sign community benefits agreements with neighborhood groups. The agreements, known as CBAs, typically promise that a developer will provide job opportunities, affordable housing, or new parks, for example, in exchange for residents’ support for the project.

As Philadelphia has rapidly changed, and large-scale projects have sprouted in lower-income neighborhoods, CBAs have increasingly been used as a tool by residents to ensure that they see direct benefits from development. Many such agreements have happened organically over the years, with developers and residents successfully reaching contracts.

But in other cases, CBA negotiations have fallen apart, or overlapping neighborhood groups have disagreed on what they want. Philadelphia does not keep count of CBAs, and the city has not played any role in enforcing them.

Clarke’s bill aims to create a structure for CBA negotiations by dictating whom developers should negotiate with, what kinds of benefits residents can ask for, and which projects require CBA negotiations. The bill is not prescriptive — if a community has developed a successful negotiation process, it can continue to operate that way — but tries to establish more transparent guidelines.

“It provides a framework for developers and community organizations,” said Joe Grace, a spokesperson for Clarke.

According to the bill — which awaits a final vote by Council — CBAs are required whenever they are “feasible" for “high-impact development projects." A project is considered high-impact if it results in at least 100,000 square feet of “earth disturbance” or will have at least 250,000 square feet of gross floor area. The legislation allows developers to request from the city an exemption from a CBA if they can demonstrate that a community’s demands make an agreement “infeasible.”

While the legislation was largely supported by the real estate community, residents who testified Wednesday argued that more should have been done to keep developers accountable. According to the legislation, developers who do not negotiate with local residents or who do not comply with a CBA’s terms may lose the city’s “support or financial assistance” for that project — including grants, loans, bond financing, rezoning efforts, or city land that was transferred to the developer for below market value.

Developers do not, however, face monetary fines or more severe penalties.

“The penalties for noncompliance should include a stated, documented recourse. There should be financial penalties,” said Gail Loney, a North Philadelphia resident and block captain. “So having a CBA, yeah, that sounds good, but if you’re not going to give it any power or any teeth or any real consideration for the people that have been really disenfranchised, then this ain’t no better than what they have already been dealing with.”

Others said the bill was a good start.

“Far too many citizens in low-wealth urban neighborhoods are subject to … large, urban developments while having limited access to the opportunities that these projects provide,” testified Tonnetta Graham, president of the Strawberry Mansion Community Development Corp. The bill will “decrease the adversarial relationship that often arises between developers and communities, like Strawberry Mansion, that have suffered from decades of disinvestment.”

The legislation, including an amendment this month, also received letters of support from the Development Workshop, a collection of real estate professionals, and the Chamber of Commerce for Greater Philadelphia.

In an interview, Gary Jonas, treasurer of the Building Industry Association, said the legislation will “help everybody get a better feel about when it’s appropriate to have a community benefits agreement.”

Jonas said the trade group also supported the bill’s guidelines for creating a five-member “Host Community Board” within neighborhoods, which can be established to negotiate with developers on behalf of all residents. According to the bill, the board would have one member appointed by the district Council member, one member appointed by the Registered Community Organizations where the project is located, one member appointed by the city’s director of planning and development, and two members appointed by the other three members. At least one person, the bill stipulated, should be a longtime resident. Additionally, one should live within 250 feet of the proposed project.

The legislation does not apply to projects that have public benefits, such as hospitals or libraries, or projects where more than 50% of the units are devoted to affordable housing. Projects developed by a governmental or quasi-governmental agency, or by a state-regulated utility, are also exempt.