DEGC: 'Community benefits' ordinance bad for Detroit

Christine Ferretti
The Detroit News

Detroit — The head of the Detroit Economic Growth Corp. is asking the Detroit City Council to reject a proposed "community benefits" ordinance that it says will tie the hands of developers hoping to do business in the city.

The Spirit of Detroit statue at the Coleman A. Young Municipal Center in Detroit

In a Tuesday letter to council members, DEGC CEO Rodrick Miller stressed the city will only be self-sufficient as it emerges from bankruptcy if it builds a strong tax base of profitable businesses to generate jobs and investments in the city.

The DEGC, he said, has worked hard to recruit and promote business, create opportunities for Detroit residents, improve neighborhoods and generate revenues for the city.

But warned that passing the ordinance would thwart development and "undermine our economic progress well before our recovery has hit critical mass."

"The quickest way to undo all we have done to create a positive environment for new investment and to abruptly stop the economic momentum we have built over the last five years is to pass a Community Benefits Ordinance — in any form, or by any name," the letter says.

The ordinance, as drafted, would apply to certain large-scale development projects within the city. It calls for the developer to negotiate with the host community to ensure quality of life protections and opportunities for residents and Detroit-based contractors.

It 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 also call for either the transfer of city-owned land or subsidies.

The DEGC's two-page letter claims the agreements dissuade private investment, are costly to implement, take significant time to negotiate and represent "bad public policy."

"Simply put, businesses have options as to where they can expand and invest. We want and need those investments here in Detroit," Miller wrote. "The community benefits ordinance discourages the very thing we need most by constructing a huge barrier that businesses must overcome."

But council member Raquel Castaneda-Lopez says the ordinance is a solution to development concerns and not having one in place is "short-sighted."

The proposed "Urban Development Agreements" ordinance, which would be the first of its kind in the nation, aims to reduce potential headaches, delays and costs by allowing the city, community and developers to engage on the front-end, rather than later on, she said.

"This has positive impacts at a neighborhood level as well as the city level," Castaneda-Lopez said. "It reduces risk, because (developers) know up front what they are getting into, rather than having to go back later and change things."

"It's not bad to be the first and set precedent in this way," she added. "It shows Detroit is at the forefront of progressive policy."

A City Council work group began drafting the ordinance earlier this year. Residents, developers, businesses and DEGC officials have been involved in the ongoing conversations.

Even if all criteria are met, the ordinance is flexible and has exemptions, Castaneda-Lopez stressed.

Mayor Mike Duggan shares the concerns raised by Miller on the issue and is in ongoing conversations with the council, his spokesman, John Roach, said Tuesday.

The ordinance is slated to be discussed at the council's Planning and Economic Development subcommittee meeting on Thursday.