Introduced changes to how developers and builders do business in Cleveland
March 12, 2023
The council recently introduced two laws that will change the way developers and builders work in Cleveland.
The Community Benefits Arrangements Ordinance would set a minimum amount for the benefits developers provide to Cleveland — apprenticeship, internship and mentor-protegé programs, community meetings, neighborhood improvements, minority businesses, women’s businesses, small businesses in the Cleveland area, and goals for hiring residents – when they apply for financial assistance from the city through:
- loans or grants
- Land transfers below market value
- Improvements in development-related capital infrastructure
- Multifamily Tax Reductions and Tax Increase Financing (TIF)
Entering into a “legally enforceable agreement” is important for a number of reasons. First, the city’s provision of financial support for development projects should produce tangible benefits for Cleveland residents and neighborhoods. Second, front loader Negotiations with developers for community benefits and early involvement of local residents in the neighborhood builds community support and strengthens local partnerships.
CBAs begin when city support is at least $250,000. Beginning at this level, all projects must establish a plan to meet the goals of minority, women-owned and small business owners in the Cleveland area and the employment goals of residents and low-income residents.
For large development projects over $20M, developers work with a “menu” of additional community benefits that they can deploy or set up, as well as other benefits based on community input. “What is enough?” is determined by the department head in consultation with the developer using a scorecard evaluation and recommendations from the Cleveland Citywide Development Corporation from the community and departments.
This regulation will improve the reporting and transparency of employee and community benefits data by directing the Office of Equal Opportunity (OEO) to develop a publicly available data dashboard. OEO will also send quarterly reports to the Council and copies of CBAs for inclusion in the legislative act. The council will hold multiple committee hearings on the legislation, involving developers, business and corporate leaders, employment officials and others to discuss the regulation. Order no. No. 297-2023
Legislation on Community Benefits Agreements will be coupled with Council legislation asking voters to approve an amendment to the Building Reform Charter to give developers more tools and methods for project implementation Options when conducting public improvement work in Cleveland.
Contracts are currently awarded to whoever submits the “best proposal”, but future projects would go to whoever submits the “lowest price proposal”.
The proposed bylaw change also specifies what delivery methods the city might use on public projects, such as: B. Tenders or Design-Build. Design-build and other types of project delivery are already used by the city, but the bylaw amendment would clarify and detail these methods. And if approved, the council would no longer have to pass an ordinance stating what type of method the city must use on a particular project. The vote on the amendment to the statutes is expected to take place this fall. Order no. No. 298-2023.
These two ordinances are endowed with $10 million in American Rescue Plan Act funding for workforce development, ARPA funding for minority and small contractor relief, and professional services to develop a scorecard evaluation process to determine community benefits. The council recently passed legislation on this financial support.
Together, these initiatives and legislation will maximize the benefits to Cleveland’s neighborhoods and residents, and also build capacity and meaningful opportunities for MBE, FBE and CSB contractors in development projects.