Detroit — Mayor Mike Duggan’s administration on Friday expressed concern over a proposed ordinance that would require developers to commit to certain benefits for residents and city-based contractors.
The proposed “Urban Development Agreements” ordinance is intended to ensure that Detroit neighborhoods share in the benefits of major development projects, but critics fear it will drive business away.
For decades, Detroit and other American cities have factored such agreements into development projects, but the new ordinance is among the first of its kind in the nation that would strengthen them, imposing regulations and penalties for non-compliance.
Duggan’s administration contends the city already has orders on the books to “show our commitment” to benefits that favor city communities and businesses. The local law, they say, would be negative for Detroit if passed, creating too many hurdles that could discourage development.
“Our concern is that what we are seeing right now is something that could have a lot of unintended consequences,” Alexis Wiley, Duggan’s chief of staff told reporters on Friday, as she sought to dispel misconceptions about the mayor’s position on the proposal.
“We believe that there are development agreements (in Detroit) that have been structured properly and that we can structure them properly to make sure there is a true community benefit, and it has a positive impact on their neighborhoods, rather than negative.”
Duggan’s concerns mirror those of Detroit Economic Growth Corp. CEO Rodrick Miller, who issued a letter to the City Council this month, urging members to scrap the ordinance on claims it would “undermine our economic progress.”
The legislation, initiated by Council President Brenda Jones more than a year ago in her prior term, would require developers on certain large-scale projects to partner with neighborhood groups to negotiate for jobs and other health and welfare guarantees.
The measure is still being revised and slated to be discussed in a committee session on Thursday. Members have said they hope to vote on the proposal before year’s end.
Wiley on Friday lauded Jones’ commitment to the community and the city, saying Duggan has the same priorities even though his view on the ordinance differs.
“We’re not always going to agree on how to get there, but our goals are the same,” Wiley said. “It’s just for us right now, the question is just the path.”
The ordinance, as drafted, would apply to development projects with a public and/or private investment of more than $15 million during construction, or the investment of more than $3 million to begin or expand operations or renovate. The projects must involve either the transfer of city-owned land or subsidies.
A violation could result in the loss of public subsidies or tax abatement. Officials stress, however, that the ordinance would not be one size fits all and would have exemptions.
Those advocating for the measure say it’s a proactive way to engage parties before a project is developed to avoid headaches and delays.
Councilwoman Raquel Castaneda-Lopez, who participated in work group sessions to craft the measure, says it would create a framework to resolve concerns before a project starts — and that not having one in place is “short-sighted.”
“The intention is to benefit everybody,” Castaneda-Lopez has said. “It would create a win-win for residents and the local developer.”
Portia Roberson, Detroit’s group executive of ethics and civil rights, says community benefits have been factored into various development projects over the last decade, including casinos, the new Red Wings arena, M1-Rail and Henry Ford Health Systems.
On Friday, she noted her department is tasked with ensuring developers comply with commitments to employ residents and city-based contractors.
“We do it,” Roberson said. “Give us the opportunity ... to make sure people are living up to the agreements.”