PH ED Item 1
November 7,2011
Worksession
MEMORANDUM
TO:
FROM:
Planning, Housing and Economic DeVelopment Committee
~Chael
Faden, Senior Legislative Attorney'
Worksession:
Bill 33-11, Urban Renewal and Community Development ­
Community Benefits Agreements - Large Retail Stores
SUBJECT:
Bill 33-11, Urban Renewal and Community Development - Community Benefits
Agreements Large Retail Stores, sponsored by Council President Ervin and Councilmembers
Navarro, Rice, Riemer, and EIrich, was introduced on October 11, 2011. A public hearing was
held on November 1 at which 39 speakers testified. See selected testimony, ©xx-xx.
Summary of Bill
Bill 33-11 would require the owner or operator of each large retail store ("big box" store,
as defined in the Bill) located in the County to enter into a community benefits agreement (CBA)
with 3 or more recognized civic organizations or demonstrate to the County Executive or the
Executive's designee that it has made a good faith effort to negotiate such an agreement.
Misconceptions
From various testimony at the hearing and other comments, it appears
that many advocates (both for and against this Bill) are not clear on what it does and does not do,
and sometimes (in our view) have exaggerated its benefits and detriments. So that the discussion
of issues below and in Committee is based on what the Bill actually does, rather than what
someone hopes or is afraid it does, we offer the following specific points.
• This Bill would not require any owner or operator of a proposed store to sign any
agreement. It only would require them to negotiate in good faith with a small number
of civic organizations. (We discuss below what we understand "good faith" to mean
and how it can be shown.)
• This Bill would not supersede or interfere with the County's current land use process.
Its requirements operate separately from that process (unlike in some other
jurisdictions, as described in the law review article noted in footnote 2). Just as an
applicant for a zoning change or subdivision plan now can negotiate an out-of-court
settlement with opponents of the project, so could the applicant negotiate a CBA.
IThe economic analysis and land use sections of this memo were written respectively by Jacob Sesker, Council
Senior Legislative }\nalyst, and Jeff Zyontz, Council Legislative Attorney. They are not responsible for the rest of
this memo.
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This negotiation can take place before, during, or after the current land use process is
completed (although if it is done after, it could require some modification of an
approved subdivision or site plan).
• This Bill would not require a CBA to include any specific provision.
It
contains a
broad list of provisions that a CBA
could
include. That was done so as not to limit
the scope of negotiations by the parties, who would decide what issues to bring up or
not bring up.
• This Bill would not by itself block any store from opening. No civic organization or
individual has a "veto power". This process is not "zoning by plebiscite". Any
planned store can go forward (subject to otherwise applicable land use requirements)
unless an official of County government finds that the developer or operator of the
store did not negotiate in good faith with local civic organizations.
Background
Community Benefits Agreements/Economic Analysis
What is the history of community benefits agreements (CBA's)?
The community benefits agreement that is often cited as the first significant community
benefits agreement was signed in connection with the development of the Staples Center in Los
Angeles in 2001. The project included a significant expansion of the convention center, a 7,000
square foot theater, retail uses, a housing component, and a 45-story hotel. The project was
supported by $150 million in public subsidies and the by the use of eminent domain. In that
instance, the developer agreed to fund an assessment of the community'S park needs, make
reasonable efforts to see that 70% of the new jobs pay living wages, adopt certain hiring
preferences, construct workforce housing, provide interest-free loans to non-profit housing
developers, provide funding for a residential permit parking program, and other benefits.
What community benefits are typically bargained for in negotiating a CBA?
In a typical community benefits agreement, the developer agrees to provide certain
benefits to the community (e.g. higher wages, affordable housing) in consideration for
community support or acquiescence during the development approval process. The benefits that
are the subject of the agreement vary depending on the needs and desires of the local community,
and the extent to which those benefits are obtainable through other existing processes. A 2010
law review article
2
described the benefits as follows:
The benefits developers offer through a CBA vary with the particular development and
community. Common promises include commitments to use local residents or businesses
for the labor and material needed for the project; assurances that a certain number or
2Community Benefits Agreements: A New Local Government Tool or Another Variation on the Exaction Theme?
Been, Vicki. 77
U.
Chi.
L.
R 7, Winter 2010 http://lawrevicw.ucllicago.edu/issues/backissucs/y77i77
Un:l:
Vicki(~~;"}OBecn-CQmmnnitvBcllefitsAgrcemelH§J1.Qf
This article contains a very helpful basic summary and history
of CBA's around the country, as well as several relevant policy recommendations.
2
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percentage of housing units will be affordable to low- or moderate income workers;
agreements to pay living wages (or other benefits) to workers employed on the project;
stipulations that the development be designed and constructed in an environmentally
friendly fashion; and promises to correct existing environmental problems. In return
coalitions of community groups promise the cooperation or forbearance necessary to
allow the developer to get through the government approval processes as expeditiously
as possible.
What requirements would
Bill 33-11
impose?
Bill 33-11 addresses effects of big box retail development by requiring certain large retail
stores to enter into good faith negotiations with recognized civic organizations in an effort to
achieve a community benefits agreement that addresses any of the following subjects:
1)
Hiring practices and training programs for County residents, including potential
preferences or incentives to hire residents within a certain distance of the store;
2)
Design, operating hours, deliveries, security, traffic mitigation, environmental
impacts, use of open spaces, noise and lighting, and other operating effects;
3)
Assistance to community organizations and programs;
4)
Affordable and workforce housing; and
5)
Any other issue that is relevant to the operation of a large retail store or the
community near that store.
What economic impacts of big box retail might be remedied by a CBA negotiated
under Bill 33-11 ?
Bill 33-11 is not limited to developments receiving public support.
3
Instead, Bill 33-11
would apply to all retailer stores that would exceed a specified size. Public sentiment in favor of
regulating "big-box" retail is typically tied to both the land use impacts and the actual or
perceived economic harms caused by large footprint, chain retailers. Discussions of the
economic hanns tend to focus on two issues: first, local versus non-local businesses, and second,
impacts on employment and wages.
In discussing the regulation of big-box retail, it is not uncommon to touch on the
perceived benefits of locally-owned retail. For example:
• A greater portion of the money spent at local retail establishments will remain in
the local economy. This is both because profits do not leave the community and
because more ofthe inputs are local.
4
3Id at 16. "Communities complain that they have even less input into the land use approval process when their local
government's nonnal processes are preempted because the project involves the county, state, or federal government
or special authorities. In those situations, the processes for approval often do not provide the local community an
opportunity to participate that the community finds satisfying."
4
See, e.g., "Thinking Outside the Box," Civic Economics, 2009. This study compared one 4-block stretch of a
traditional business district in New Orleans with one Super Target in New Orleans, both of which had 179,000
square feet of retail space. The traditional business district consisted of about 100 individual businesses, and
generated $105 million in sales. Of that amount $34 million remained in the local economy. The Super Target, in
contrast, generated only $50 million in annual sales, only $8 million of which remained in the local economy.
3
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• A shift in spending from national chain retailers to local retailers results m
increases in employment and wages.
5
As was the case in the Staples Center CBA already mentioned, wage levels and local
workforce development are issues that often arise in CBAs. Big box retail establishments are
rarely unionized, and are often associated with low pay and poor employment/post-employment
benefits. Studies have tended to focus on specific retailers, such as Wal-Mart, rather than
focusing on retail establishments of a particular size. Examples of these arguments include:
6
• Low wage Wal-Mart employees increase strain on social safety net programs.
• New Wal-Mart employees lead to reductions in overall retail employment and
wages.
7
While the studies already cited paint a very negative picture of the economic impact of
big box retail, not all studies reached the same conclusions. For example, the Federal Reserve
Bank of Minneapolis concluded in 2008 that the presence of a Wal-Mart had little overall effect
on a local economy.
8
Among the conclusions of that study were:
Firm growth, employment and total earnings were somewhat stronger in counties
with a Wal-Mart. In some cases this was even true in the retail sector. While
retail earnings
per job
fell in virtually every county studied, they actually fell by
less in counties that had experienced the introduction of a W
al-
Mart.
Poverty rates improved (declined) in most counties during the period studied, but
the rates improved by less (declined less) in Wal-Mart counties. By other
measures, Wal-Mart had no noticeable effect.
Wal-Mart's presence (or lack thereot) has little or no predictive power regarding
the economic success or failure of a county.
Land Use implications and alternatives
How does Bill 33-11 relate to current County zoning?
Under Article 28 §8-101(b)(2) of the Maryland Code, County zoning laws may regulate:
5See, e.g., "San Francisco Retail Diversity Study," Civic Economics, 2007. That study concluded that every $1
million spent at local bookstores created $321,000 in additional economic activity
in
the area, including $119,000 in
local wages. In contrast, $1 million spent at chain bookstores generated $188,000 in local economic activity,
including only $71,000
in
local wages. Similarly, $1 million in sales by independent local toy stores create 2.22
local jobs, while the same $1 million in sales by chain toy stores create just 1.31 jobs.
http://www.civiceconomics.com!SF!SFRDS Mav07,pdf
6"Hidden Cost of Wal-Mart Jobs: Use of Safety Net Programs by Wal-Mart Workers
in
California," Dube and
Jacobs, 2004. One conclusion of the study was that if other large retailers adopted Wal-Mart's wage and benefits
standards the annual cost to California taxpayers would be an additional $410 million.
http://laborcel1ter. berkelev. edul retail! walmart. pdf
7"The Effect of Wal-Mart on Local Labor Markets," Neumark, 2007. The study concluded that each new Wal-Mart
employee replaced 1.4 existing retail employees, and that the opening of a new retail store led to a reduction of 1.3
%
in wages earned by retail workers countywide. http://www.nber.org/papers/wlI782
8
"The Wal-Mart effect: Poison or antidote for local communities," Fitzgerald and Wirtz. Fedgazette, January 2008.
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(1)
(2)
(3)
(4)
(5)
(6)
the location, height, bulk, and size of buildings, other structures, and units
therein, building lines, minimum frontages, depths and areas of lots, and
percentages oflots which may be occupied;
the size oflots, yards, courts, and other open spaces;
the erection of temporary stands and structures;
the density and distribution ofpopulation;
the location and uses of buildings and structures and units therein for
trade, industry, residence, recreation, agriculture, public activities, and
other purposes; and
the uses of land, including surface, subsurface, and air rights therein, for
building, trade, industry, residence, recreation, agriculture, forestry, or
other purposes.
This list identifies zoning powers.
It
is by no means a list of all the County's powers to
regulate in the interest of protecting the health, safety, and general welfare of County residents,
as the General Assembly acknowledged in Article 28 §7-109(e)9.
Bill 33-11 is appropriately outside of zoning because some subjects within the scope of
the community benefits agreement, as well as its approval process, are outside the County's
zoning powers. Building design, operating hours, use of open spaces, lighting, affordable
housing, and landscaped buffers can be the subject of zoning; however, zoning powers can only
be effective when the Council adopts specific zoning regulations. Hiring practices, training
programs, and assistance to community programs are not within the scope of the County's
zoning powers. Fear of competition, an issue raised by some speakers in the public hearing, is
not a problem that can be addressed by zoning.
10
How do other local jurisdictions regulate big box retail stores?
Several nearby jurisdictions regulate large retail establishments, commonly known as big
box stores, in a variety of ways that are different from other commercial uses. The most
9
Article
28 §7-1 09(e)
Construction of Commission powers. -- The powers granted to the Commission and district
councils pursuant to this section shall not be construed:
*
*
*
(2) To restrict the Commission and district councils from exercising any power granted
to the Commission and district councils by other public general or public local law or
otherwise;
I°Article 28 §7-109 (c) acknowledges that zoning can have an anti competitive effect if the legislation has a
legitimate public purpose:
Effect on economic competition.
-
To achieve the public purposes of this regulatory scheme, the
General Assembly recognizes that local government action will displace or limit economic
competition by owners and users of property.
The Maryland Court of Appeals has found that the prevention of competition is not a legitimate public purpose of
zoning. See
Lucky Stores, Inc. v. Board ofAppeals,
270 Md. 513 (1973);
Kreatchman v. Ramsburg,
224 Md. 209
(1961); Bryniarski v. Montgomery County Board of Appeals,
247 Md. 137 (1967);
Aspen Hill Venture v.
Montgomery County Council,
265 Md. 303 (1972).
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common regulation is to require the approval of a special exception. Big box stores are
distinguished from other uses because they produce more vehicle trips, more truck trips, and
more trips from further distances than other uses. Their large floor plates create uninviting
places for pedestrians that fonn a barrier to extending the urban character of some communities.
Communities regulate large retail stores on the basis of their gross floor areas or the footprint of
their buildings, in addition to regulations that govern the density allowed in the zone.
The following table of regulations in nearby jurisdictions goes from the most restrictive to the
least restrictive.
I
Anne Arundel County
Alexandria
Arlington County
i
I
Rockville
Loudoun County
Fairfax
Prince George's County
I
Howard County
Retail establishments in some zones are limited to 25,000 square
I
feet (SF) of gross floor area (GF A); in other zones, the store's,
gross floor area is only limited
b~
the maximum floor area ratio.
Any retail establishment with 20,000 SF or more GF A must be
I
approved by special exception.
Any retail establishment with 50,000 SF or more of floor area on .
any 1 level, or that requires 200 or more parking spaces, must be
approved by special exception.
No retail establishment may be more than 65,000 SF of GF A on
any level. No absolute limit on the size of a retail establishment.
Any retail establishment with 75,000 SF or more GFA must be
approved by special exception.
Any retail establishment with 80,000 SF or more GF A must be
approved by special exception.
Combination retail stores (department, grocery, and drug stores)
with 125,000 SF or more GFA must be approved by special
exception.
No specific big box store restriction
!
The special exception process is designed to produce development that is compatible with
neighboring property. The process can control hours of operation, setbacks, screening, use
limits, pedestrian and bicycle circulation, the location of passenger vehicle access and truck
docks, lighting, and noise. The special exception process allows neighbor and community input.
An application can be denied when the attributes of a particular location make the non-inherent
attributes of the use a detriment to surrounding properties.
How does this County now regulate big box stores?
Unlike all nearby jurisdictions except Prince George's County, this County does not
regulate all large retail establishments.
I I
Currently, any combination retail establishment
I2
larger
IIThis was a significant issue when the restrictions on combined retail establishments were adopted
in
2004. The
Planning, Housing, and Economic Development Committee recommended a broader definition of covered retail
stores. The Council found, based on data from the Institute of Traffic Engineers, that combination retail stores have
increased traffic impacts to neighboring communities and should be regulated differently than other retail uses. The
Council also found that membership stores which sold bulk goods did not have the same impacts as other
combination stores.
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than 120,000 square feet of OFA is only allowed in the C-2 and C-3 zones with special exception
approval. Any combination retail store that is 120,000 square feet or more is not allowed in any
other zone.
13
Special exception approval is not required for any other big-box retailer that is not
a combination retail store.
The County zoning law currently includes specific standards in the special exception
process for combination retail stores.
§59-G-2.15. Combination Retail Store.
A special exception for a combination retail store may be granted, subject to the
following requirements:
(a) The building must be designed in a way that reduces the buildings massive scale
and contributes to its visual interest. Long building walls should be broken-up
with projections or recessions or other effective treatments that improve building
design.
(b)
Parking areas must provide safe, convenient, and efficient access, and landscaped
to define vehicular drives and pedestrian areas.
(c) The site must have direct vehicular access to an existing arterial or major highway
and the streets and roads adjoining the site must be adequate to accommodate the
in~eased
traffic generated. The applicant must provide a traffic impact study to
demonstrate that acceptable peak hour levels of service will result after taking into
account existing and programmed roads, and any improvements to be provided by
the applicant.
(d) The site must be screened from any abutting residentially zoned property by the
natural terrain or by a solid wall or fence, not less than five feet in height, together
with a three-foot wide planting strip on the outside of the wall or fence, planted in
shrubs and evergreens three feet high at the time of the original planting.
(e) Product displays, parked vehicles and other obstructions that reduce visibility at
intersections or at entrances and exits to and from the site are not permitted.
(f)
Lighting must not reflect, or cause glare, on any property located in a residential
zone.
In some commercial zones, large retail uses might require site plan approval. For
example, in the C-4 zone, site plan approval is required above .25 floor area ratio; in CR, CRT,
and CRN zones, site plan is required for the addition of 10,000 square feet of gross floor area.
14
What possible County zoning alternatives would be similar to the big box store
zoning in surrounding jurisdictions?
as "a department or retail store that exceeds 120,000 square feet and that includes a pharmacy and a full
line grocery store. A club or membership store that charges a membership or access fee and sells primarily bulk
merchandise is not a combination retail store."
l3
A store with less than 120,000 square feet of gross floor area does not meet the definition of a "combination retail
store" and is allowed in other zones without a special exception if the specific retail use is allowed in the zone.
14
The Planning Board generally prefers that design details be determined at site plan even if a special exception is
required.
12
Defined
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1)
2)
3)
4)
Reduce the minimum size of a combination retail store that requires a special
exception, now 120,000 SF, to a size similar to surrounding jurisdictions.
Apply the requirements and restrictions currently imposed on combination retail
stores to every large retail store.
Set an absolute limit on the footprint of a large store or combination store.
Set an absolute limit on the gross floor area of a combination store or large store
in some zones.
Any zoning solution must be tailored to a description of the problem. Large retail stores
generate car and truck traffic, require large parking areas, and impede pedestrian traffic. Large
stores may not be compatible at every location where the use is permitted. Most jurisdictions
have required special exception approval to resolve community concerns for stores much smaller
than 120,000 square feet.
Under County Code §59-G-l.22 (b) a special exception may trigger a requirement for site
plan approval if the Planning Board finds that it is necessary to ''regulate the impact of the
special exception on surrounding uses because of disparity in bulk or scale, the nature of the use,
or other significant factors." Site plan approval could be required instead of a special exception.
This could resolve some design concerns. Design concerns may vary with the location of the
site; for example, a site along a highway may not have compatibility concerns while a site within
a half mile of a Metro station may be envisioned as a walkable area. Zoning requirements can
vary with those concerns. This notion is consistent with the recent changes in the CR zones that
allowed for limited uses that trigger site plan approval under certain circumstances.
Major issues for Committee discussion
In
this section we outline the major policy issues the Committee should consider before
deciding whether to go forward with this Bill in concept. Various parties have proposed detailed
amendments to this Bill; we reserved those for a later discussion at the Committee's direction.
1) Should the County require developers/operators of big box stores to attempt to
negotiate
CBA's?
This discussion might be started by asking: Do big box stores pose sufficiently different
problems, or have sufficiently different impacts on the surrounding community, to warrant
special legal requirements? The County zoning law has already answered this question yes, at
least for a limited category of big box stores, as already noted. (This Bill would cover a broader
set of stores, as discussed below.)
While further tightening the zoning standards for large stores (as we discussed earlier) is
certainly an option, proponents of this Bill argue correctly that specific concerns that are
important to them are outside the reach of County zoning (e.g. wages and hiring practices,
needed affordable housing, certain aspects of store operations). Rather than directly regulate
those issues, this Bill would open them up to negotiations between the store operator and civic
organizations.
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The question then becomes: Is that negotiation process likely to result in tangible or
intangible benefits, and if so to whom? What benefits would this requirement bring to the
County? To the community near a big box store? To the store's developer or operator?
One option, which we believe is used elsewhere, is to require the developer of a proposed
large store to fund a community impact assessment, done by a consultant approved by County
government or the Planning Board. That assessment would yield an independent view of the
store's potential negative effects on the community, which the Planning Board and other
decision-makers could use in the land use process and in considering any County financial or
land assembly assistance.
2)
If
negotiations are required, what kinds of stores should the requirement apply
to?
As introduced, this Bill would cover any store that is the primary occupant of a building
with a footprint of at least 75,000 square feet. (Council staff drafted it that way to avoid quibbles
about what is included or not included in a given store for example, are the bank, pharmacy,
tire center all separate stores?)
It
may be advisable to use gross floor area, as the zoning law
does, rather than footprint, for clarity, to be more inclusive, and not to favor 2-story buildings.
As already mentioned, the zoning law's definition of combination retail stores is larger
but narrower than this Bill's scope. The zoning law provision is limited to stores that include a
pharmacy and a "full1ine grocery store", but does not cover membership stores that sell in bulk
(e.g. Sam's Club, Costco, BJ's). This Bill simply covers all stores over a given size.
Representatives of Westfield and White Flint mall proposed amendments to exempt any
store in a regional mall, arguing that those are governed by site plan requirements and do not
present the same issues as free-standing stores. At the least, existing regional malls could be
exempted because whatever impacts those developments will have on the community arguably
have largely happened already (although residents near Westfield Wheaton mall might dispute
that conclusion).
Beyond the regional malls, other stores that are well along in the development process
could be exempted ("grandfathered"). For example, any store with a site plan already approved
or a building permit already issued, while not necessarily vested under County land use law,
would seem to be at a point where certainty is needed.
3) Which civic organizations should be given seats at the table?
This Bill broadly defines the organizations that are eligible to negotiate with the
developer or operator of a big box store. This was drafted so as not to exclude any legitimate
civic group in the vicinity of the proposed store. Eligible groups could include homeowners'
associations, PTA's at local schools, neighborhood organizations (which mayor may not be
registered on the list the Planning Board keeps), and virtually any other group that is composed
of residents and businesses located within a 5-mile radius of the proposed store as long as the
9
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group is not controlled or funded by, or otherwise affiliated with, any large retail store (not
limited to the proposed store). (Council staff concurs with the Kensington Heights Civic
Association testimony on ©12 that this radius should be reduced to 2 miles.)
Critics argue that this definition is so overbroad that virtually any group could qualify,
and the developer would not know who it had to deal with. Council staff agrees with the first
conclusion, but not the second; the breadth of this definition allows the developer/operator to
pick and choose among qualified organizations - which itself is good or bad, depending on one's
viewpoint.
In other jurisdictions community groups that have negotiated CBA's have been criticized
as unrepresentative, unaccountable, not free from conflicts of interest, or all of them.
IS
As
everyone knows, some civic or neighborhood organizations in this County meet often and
effectively represent their members and geographic areas; others are organizations in name only.
Beyond requiring that the group must have already existed for, say, a year before the store files
for any necessary government approval (an amendment that Council staff recommends), we are
not sure what further qualifications are guaranteed to achieve those goals.
We would not recommend that the law authorize anyone in County government to select
which groups are eligible to negotiate. Among other reasons, that might involve the County to
the degree that any obligation a developer agrees to could be considered an exaction that is
subject to the Supreme Court's nexus and proportionality tests.
16
4) Which topics should be subject to negotiation?
The list of possible CBA topics on ©2, lines
9~18,
as already noted, was drafted to be
deliberately broad so as not to exclude any relevant issue. We do not interpret this to mean that
any particular developer has to negotiate with any group on all these issues. Like any other
negotiation, the parties first decide which are the issues to negotiate about. Here, as in the rest of
the negotiation, the "good faith" standard would apply.
5) How is "good faith effort to negotiate" defined and assessed? Who should decide
whether someone negotiated in good faith?
While this could be spelled out further in the law, we suggest that, as in other contexts,
"good faith" would be measured by assessing the totality of the circumstances. The elements to
analyze could include who negotiated with whom, how the deVeloper/operator selected its
negotiating partner, what offers and counteroffers were made, what process and timing was
followed, and any other pertinent facts.
Under the Bill, the County Executive or his designee is assigned to review, in any
dispute, whether an operator made a "good faith effort to negotiate". While Council staff
the Been University of Chicago law review article cited in footnote 2, at pp. 21-24.
16Council staff believes those tests would not apply under this Bill as introduced because the government does not
require any particular exaction, or even that the developer must agree to any exaction. We realize this conclusion is
not free from doubt.
JSS
ee
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understands that the Executive does not desire that authority, there is no other likely decision­
maker and in our view an administrative, non-quasi-judicial process is preferable to having to
resolve this issue in a court oflaw.
This packet contains:
Bill 33-11
Legislative Request Report
Memo from Council President Ervin
Fiscal impact statement
Selected testimony:
State Senator Roger Manno
City of Rockville
Kensington Heights Civic Association
CASA de Maryland
.
Interfaith Works
UFCW Local 400
Danila Sheveiko
Attorney Michael Kroopnick
Joseph Horgan
Montgomery County Chamber of Commerce
Greater Silver Spring Chamber of Commerce
Attorney Robert Brewer for White Flint Mall
Attorney Patricia Harris
Attorney William Kominers for Lee Development Group
Aspen Hill Civic Association
Westfield Wheaton and Montgomery
New York Times
article re CBA's in land use process
F:\LAw\BILLS\1133 Community Benefits Agreements\PHED Memo.Doc
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Bill No.
33-11
Concerning: Urban
Renewal
and
Community
Development
Community Benefits Agreements ­
Large Retail Stores
Revised: 10-6-11
Draft No.
Introduced:
October 11! 2011
Expires:
April 11, 2013
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
_N!...:.o~n.!.::e:..__~
_ _ _ __
Ch. _ _, Laws of Mont. Co. _ _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President Ervin and Councilmembers Navarro, Rke, Riemer, and Eirich
AN
ACT
to:
(1)
(2)
(3)
(4)
(5)
require certain retail businesses to enter into, or negotiate in good faith with certain
organizations for, community benefits agreements;
prohibit the operators of certain retail stores from opening the stores to the public
under certain circumstances;
direct certain departments of County government to furnish assistance to certain
organizations regarding community benefits agreements;
prohibit County financial assistance to certain businesses under certain
circumstances; and
generally provide for the formation and enforcement of community benefits
agreements.
By adding
Montgomery County Code
Chapter 56. Urban Renewal and Community Development
Article VIII, Community Benefits Agreements
Boldface
Underlining
[Single boldface brackets]
D--.O.U.ble underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law
by
original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deleted from existing law or the bill by amendment.
Existing law unaffected
by
bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL NO.33-11
1
2
Sec. 1.
Chapter 56 is amended by adding Article VIII, Community
Benefits Agreements:
Article VIII, Community Benefits Agreements.
56-35
Definitions.
3
4
5
6
7
As used in this Article:
Community benefits agreement
means
f!:
document that binds
f!:
ill!tlY
to take
one or more actions for the mutual benefit of the parties regarding any of the
following subjects:
8
9
ill
hiring practices and training programs for County residents,
including potential preferences or incentives to hire residents
within
f!:
certain distance of the store;
10
11
12
ill
design, operating hours, deliveries, security, traffic mitigation,
environmental impacts, use of open spaces, noise and lighting;
and other operating effects;
l3
14
15
16
17
18
ill
ill
ill
assistance to community organizations and programs;
affordable and workforce housing; and
any other issue that is relevant to the operation of
f!:
large retail
store or the community near that store.
19
20
21
Large retail store
means any single site of
f!:
business that:
ill
ill
derives more than 50% of its revenue from the sale of goods
directly to the public; and
is the primary occupant of
f!:
building with
f!:
footprint of at least
75,000 square feet.
22
23
24
25
26
Recognized civic organization
means an organization, including an
unincorporated association, that:
ill
is composed of residents of and businesses located within
~
miles
of
f!:
lar~e
27
retail store, or other organizations that represent those
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BILL NO.33-11
28
29
30
residents or businesses; and
ill
56-36
is not controlled or funded
~
or otherwise affiliated with, the
operator or owner of any large retail store.
Requirement.
31
32
33
34
{ill
The operator of each large retail store that is located in the County must,
before the store is open to the public, either:
ill
ill
enter into
~
community benefits agreement with
;2.
or more
35
36
37
38
39
40
recognized civic organizations; or
demonstrate to the County Executive, or the head of
~
County
Department designated
~
the Executive, that it has made
faith effort to negotiate
~
~
good
community benefits agreement with at
least
;2.
recognized civic organizations.
(Q}
If the Executive or the Executive's designee finds that the operator has
not made
~
41
good faith effort to negotiate
~
community benefits
42
43
44
45
46
agreement, the Executive or the Executive's designee must:
ill
so notify the County Council and the Directors of the
Departments of Housing and Community Affairs and Economic
Development; and
ill
order the operator of the store to delay opening the store to the
public until the operator has met either requirement of subsection
@1
47
48
49
50
W
The Directors of the Departments of Economic Development and
Housing and Community Affairs must provide, on request, advice or
support to any recognized civic organization that will facilitate the
negotiation and implementation of
~
community benefits agreement.
51
52
53
54
@
Each community benefits agreement must be treated
~
all parties as
~
binding contract, for which consideration has been rendered, that
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BILL NO.33-11
55
56
57
58
59
60
61
enforceable in any court with jurisdiction. Each agreement is binding
on any successor in interest of any party. Each agreement is
~
public
document which is disclosable under the state Public Information Act.
ill
Each community benefits agreement must have an initial term of at least
~
years, and must be renewable for an additional
~
years.
ill
Each community benefits agreement must require the operator of the
large retail store to report annually to all other parties and to the
Directors of Economic Development and Housing and Community
=-===
on
62
63
64
the implementation of the agreement.
56-37.
Financial Assistance.
If the operator of
~
large retail store has not entered into
~
community benefits
65
66
67
agreement with
J.
or more recognized civic organizations; the Department of
the operator any financial assistance from the Economic
Economic Development and any other Department of County government must not:
68
ill
@
69
70
71
72
Development Fund or any other applicable program; or
continue any financial assistance from the Fund or other program to that
operator, or any other entity involved in the operation of the store,
unless the County is contractually obligated to continue that assistance.
73
74
75
76
Section. 2. Effective date.
This Act takes effect 91 days after it becomes law,
and applies to any large retail store, as defined in County Code Section 56-35, added
by Section 1 of this Act, which first opens to the public on or after that date.
Approved:
77
Valerie Ervin, President, County Council
Date
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LEGISLATIVE REQUEST REPORT
Bill 33-11
Urban Renewal and Community Development
Community Benefits Agreements ­
Large Retail Stores
DESCRIPTION:
Require the operator of a large retail store to make a good faith effort
to enter into a community benefits agreement with 3 or more
recognized civic organizations.
Large stores generally have large community impacts, some of which
may be negative, on residents and businesses in the surrounding area.
To require the operators of new large retail stores to make a good
faith effort to negotiate community benefits agreements that will
lessen negative impacts, and promote positive impacts, on the
surrounding community.
Department of Economic Development, Department of Housing and
Community Affairs
To be requested.
To be requested.
To be requested.
To be researched.
Michael Faden, Senior Legislative Attorney, 240-777-7905
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
. Not applicable.
F:\LAw\BILLS\1133 Urban Renewal And Community Devel\Legislative Request Report.Doc
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MONTGOMERY COUNTY COUNCIL
ROCKVILLE, MARYLAND
OFFICE OF THE COUNCIL PRESIDENT
Memorandum
To:
From:
Date:
Subject:
Councilmembers
Council President Valerie Ervin
September 30,2011
Community Benefits Legislation
V0
I am requesting your cosponsorship of the attached bill that would require
community benefits agreements for retailers locating in Montgomery County that have
indoor retail space of 75,000 square feet or larger. This bill would also codify'
community benefits coalitions, which are broad-based community groups made up of
individuals and entities that reflect the interests of the neighboring communities where
"big box" retail stores are seeking to locate.
As you may know, a community benefits agreement is a legally binding contact
between a community benefits coalition and a developer or a specific retail store that
establishes the benefits that the community will receive from the development. Benefits
can include provisions covering living wages, local hiring and training programs,
affordable housing, environmental remediation, funds for community programs, open
space designations, operating hours, security, deliveries, traffic mitigation and other
items.
Community benefit agreements ensure that development is equitable and benefits
the community, which eventually contributes to stronger local economies, livable
neighborhoods and an increase in public participation in the planning process. Once an
agreement is reached, community benefits coalitions often agree to support a project
through public hearing attendance and testimony and releasing any administrative claims
regarding a project.
Sleiia B.
v{ww.montgomerycountymd.gov
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Michael Siegel from Public and Environmental Finance Associates in Washington, DC
recently completed an evaluation of "big box" retailers in Montgomery and Prince
George's County. He identifies 35 "big box" retail stores currently located in the County.
Siegel details how "big box" retailers, such as Walmart, attempt .to be the
preeminent retailers in specific areas, and how this impacts surrounding businesses and
communities. "While this strategy may be directed primarily at other large competitors,
any retailer in the area, large or small, offering similar goods can be forced away from
offering similar merchandise, to downsize or close, andlor shift their focus." In
discussing the impact on mid-sized and local small businesses, Siegel notes, "Such stores
have little ability to compete against far larger companies with the resources and ability
to saturate a particular market area or distribution center territory."
Community benefit agreements are not a new concept. The first community
benefits agreements were negotiated in California in the early 2000s. Successful models
have been developed in Seattle, Pittsburgh and San Francisco. Closer to home, a similar
bill to the one I am proposing is currently before the Council of the District of Columbia.
In addition, I have explored the option of including community benefit
agreements in the zoning ordinance as part of the CR Zone discussion and zoning
ordinance rewrite. Legal staff has informed me that these types of agreements must be
done through legislation and not through the zoning ordinance.
The goal of this bill is to create a broadly inclusive and focused process that
involves key stakeholder groups, creates quality jobs and generates community benefits
in areas where "big box" retailers are looking to locate. Please note, that requiring
community benefits agreements would not prevent any company from locating in the
County but would instead ensure that such "big box" operations are compatible with the
needs of the surrounding neighborhoods.
I hope you will cosponsor this important piece of legislation. I welcome your
suggestions on the attached draft bill, which is scheduled to be introduced on October 11.
Attachments:
Draft Bill
Selected Issues Affecting the Potential Impact of "Big Box" Retail Stores on Montgomery and
Prince George's County, Maryland, Michael Siegel, Public and Environmental Finance
Associates, Washington DC.
c:
Mike Faden, Council Senior Legislative Attorney
Jeff Zyontz, Council Legislative Attorney
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ROCKVILLE, MARYIAND
MEMORANDUM
October 28, 2011
TO:
Valerie Ervin, President, County Council
Jennifer A.
Joseph F.
Beac~~;or
Bill33~
11, Urban
FROM:
SUBJECT:
HU-L~rector
Office
anagement and Budget
ent ofFinance
ommunity Development - Community Benefits
Agreements - Large Retail Stores
As
required
by
Section
2-S1A
ofthe County Code, I am infonning you that
transmittal of the fiscal and economic impact statements for the above referenced legislation will be
delayed because more time is needed to coordinate with the affected departments, collect infonnation,
and complete our analysis. We will transmit the statements no later than November 15, 2011.
JAH:dff
c: Kathleen Boucher, Assistant Chief Administrative Officer
Lisa Austin, Offices ofthe COWlty Executive
Joy Nurmi, Special Assistant to the County Executive
Patrick Lacefield, Director, Public Information Office
Joseph F. Beach, Director, Department ofFinance
Michael Coveyou, Department ofFinance
Amy Wilson, Office ofManagement and Budget
John Cuff, Office of Management and Budget
Alex Espinosa, Office of Management and Budget
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THE SENATE OF MARYLAND
ANNAPOLIS, MARYLAND 2.1401
Dim;a U/jier
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November 1. 20 I I
Honorable Valerie Ervin. President
Montgomery County Council
100 Maryland Ave
Rockville. MD 20850
Dear President Ervin:
I hope this letter tinds you well.
I write today to express my strong support for Council Bill 33· I I, Urban Renewal and Community Development
Community Bendits Agreements - Large Retail Stores (the
"Big
Box Community Empowemlent Bill"" as it has recently
come
to
my attention thm plans may be in the works
to
authorize a large big-box retail establishment in or around the
Aspen Hill Shopping Center in the 19
t11
Legislative District. which I represent in the State Senate.
While I understand and appreciate the need for increased economic development in the Aspen Hill area. I strongly
believe that community residents should have a greater voice in these critical development decisions. as would be
established under this important legislation. In addition, I wish to express my strong opposition to any big-box
establishment at this site that could in any way destabilize our fragite economic and workforce success in Aspen Hill.
As you are aware, the Aspen Hill Shopping Center serves as a greatly-needed and long-anticipated retail and
community anchor in our County.
It
is a point of enomlOUS community pride that the Aspen Hill Shopping Center has
become home
to
dozens of small and medium shops, many whom are family and minority owned. and has benefited from
the sizable capitaL community and political investments that have led to their success.
The dozens of t:1mily and small business owners and workers who occupy the Aspen Hill Shopping Center have
become members of our community family. I know tht!se people personally -- they are hard working individuals with a
deep sense of service and community that is irreplaceable in terms of the character and the soul of the new Aspen Hill.
As their Senator. I am immensely proud ortheir success, the diversification of establishmems that have flourished.
and their collaborative contribution to ollr economy. Their success, however. could be decimated by a large retail big-box
establishment located in the immediate vicinity, given the level of competition, proximity and probability that it would
destabilize our fragile yet vibrant local workforce and small business base.
While Council Bi1l33·11 would nm prevent such an establishment from locating in the vicinity of the new Aspen
Hill, it would, however, create the necessary community checks and balances to ensure that the voices of our residents.
workers. and small businesses are heard for years to come.
For these reasons, and many others. I thank you t{)r introducing this important legislation, and I respectfully
request a favorable report.
Very sincerely at your service,
~~~
l'vlarvland State Senator
19,h
'Legislative District
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Rockville
_ _ _ Ge:lntolt
III Maryland Avenue 1Rockville, Maryland 20850-23641240-314-5000
www.rockvillemd.gov
I
Good evening. I am Councilmember John Britton, and I am here on
behalf of the City of Rockville to submit the following comments on
proposed Bill 33-11 for your consideration.
In general, Rockville supports the intent of proposed Bill 33-11. Large retail
stores do have significant impacts on the surrounding communities,
particularly in already developed neighborhoods, and we agree that
additional regulation is warranted.
Rockville's concern with inter-jurisdictional reviews of development
is the tendency to draw an artificial limit at municipal boundaries -- a virtual
Hadrian's Wall separating the County from the municipalities. This is
particularly true with respect to traffic studies.
With this in mind, we recommend that the definition of "recognized
civic organization" in the bill expressly include any and all such
organizations and unincorporated associations within a five mile radius of
the large retail store, regardless of the jurisdiction within which they are
located. Any large retail store located adjacent to or nearby Rockville's
boundary, or any municipality's boundary, will have an impact on the
Mayor Phyllis Marcuccio
I
Councilmembers John B. Britton, Piotr Gajewski, Bridget Donnell Newton, Mark Pierzchala
City Manager Scott Ullery
I
Acting City Clerk Brenda Bean' City Attorney Debra Yerg Daniel
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residents of the municipality, not just those outside its borders, and, at times,
greater and more adverse impacts than those on residents outside the
municipality's borders.
We also recommend that Bill 33-11 provide for an inclusion of a
municipality's Planning Commission, where there is one, in the review and
comment process on the community benefits agreement. This would ensure
that the local communities' quality of life issues -- traffic, noise, public
safety, storm water run-off and air quality -- are fully identified and
addressed.
Rockville will continue to monitor the progress of Bill 33-11, and may
wish to submit further comments when it comes before the PHED
Committee.
Thank-you.
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Kensington Heights Civic Association
(0
Your Neighborhood Association!
-
. www.KensingtonHeightsMD.org
Current Officers
President
W. Erl Houston
301-949-4530
November 1, 2011
Vice President
Adam Rosenbaum
301-946-7416
Comments of the Kensington Heights Civic Association with Regard to
Bill 33-11 , Community Benefits Agreements
The Kensington Heights Civic Association (KHCA) represents 711 single-family homes. My
name is Karen Cordry and I am the KHCA treasurer.
KHCA supports Bill 33-11, Urban Renewal and Community Development - Community
Benefits Agreements - Large Retail Stores. We commend the intent of the legislation, and
we commend Council President Ervin and Councilmembers Navarro, Rice, and Riemer for
sponsoring it.
Our concerns arise in large part from the history of the Costco development now proceeding
at the Westfield Wheaton mall. The community received no advance notice before a public
announcement was made that 1) the Costco warehouse would be built with County funding,
2} the store would be accompanied by
a
16 nozzle filling station (the largest in this area of the
County), and 3} Costco would refuse to proceed unless a zoning text amendment was passed
to exempt the gas station from the normal special exception process. Thankfully, after the
community was heard, the Council did not allow the ZTA to proceed.
It is only now, 18 months later, that Costco and Westfield (at the Council's direction) are
engaged in any detailed discussions with the community about the proposal. But, what is
clear is that those discussions are coming far too late to ensure a meaningful effect on the
overall deSign and structure of the new facility. To be worthwhile, these discussions must be
mandated to occur early in the process, not after all of the critical decisions have been made.
Moreover, they must be made under a decision structure that places real consequences on
the outcome of those discussions. We believe the proposed legislation is a good step in the
right direction but have suggestions that we believe will improve the final product.
KHCA recommends tweaking the legislation as follows:
Lines 24-28: Reduce to 2 miles the 5-mile area from which the three Civic Associations
would be chosen, and add the word "radius" to indicate a straight-line measurement. Add
wording similar to "Priority will be given to recognized civic organizations in closest proximity
to the new large retail store."
Rationale:
A 5-mile area would encompass too many groups with disparate concerns,
diluting potential benefits. For example, some civic associations within 5 miles of the Costco
store now being constructed in Wheaton might see only the benefits from the construction
without being affected by the issues that impact those located in close proximity to the store.
Indeed, some would likely prefer that, if a mega gas station is to be built such as that
proposed by Costco, that it should be located away from their neighborhood. Civic.
associations within 1-2 miles of the proposed site would generally be the most affected, and
pa,rticular care should be taken to ensure that their views are considered at a meaningful time.
We recognize, though, that some points, such as who will be employed at the facility, are
important to a wider area and warrant additional partiCipation. In general, though, 5 miles
covers an overly broad area, especially in the densely populated Downcounty and could allow
the proposed entrant to "cherry pick" the associations with which it deals.
Lines 9-18: Broaden the definition of a community benefits agreement in some fashion
to deal with issues arising from a large retail store proposing inclusion of facilities that are
subject to the Special Exception process such as the gas station proposed
by
Costco at
Westfield Wheaton.
.
Rationale:
Special Exception facilities, by definition, are those that can have
burdensome effects on the surrounding communities. When added to the impacts created
by
these large retail stores, the combination can create even greater concerns. These issues
should be taken into account at the early stages of the development and with the burden
Secretary
Abigail Adelman
301-942-6893
Treasurer
, Karen Cordry
301-933-3640
Parliamentarian .
currently vacant
Immed. Past President
Donna
R.
Savage
301-942-2447
Beautification
Abigail Adelman
301-942-6893
Jane Folsom
301-942-6918
Bylaws/Communication
April Gassier
301-942 -8599
Crime Statistician
Thomas Stanton
301-929-0757
Education
Laura Kervitsky
301-949-1429
Land Use
Donna
R.
Savage
301-942-2447
Online Newsletter
Barbara Ruben
301-946-4192
barbararu ben@verizon.net
Traffic and Safety
Andy Fraser
301-962-0787
Jane Harding
301-933-0513
Web site Coordinator
Jean Dowd
301-669-8184
jgowd@KensingtonHeightsMD.org
KHCA is affiliated with:
Allied Civic Group
Coalition of Kensington
Communities
MC Civic Federation
Wheaton Citizens Coalition
KHCA rI'JC<Jived the
1998
Whealon­
KenSington Civic Association Award
KHCA represents
711 single-family homes
in KenSington, Maryland.
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placed on the
applicant
to make good-faith efforts to resolve issues with the neighboring
communities. Leaving the community to deal with these issues in the Special Exception
process in opposition to the proposals of some of the largest corporations in the world creates
an uneven playing field. We do not have specific wording to suggest at this time, but trust
that Council and
staff
can create appropriate language and will be happy to discuss this with
them further.
lines 73-75: Ensure that Costco is included in this legislation,
Rationale:
While lines 73 to 75 appear to be clear that the new Wheaton Costco would
be included under this legislation, we ask the Council to ensure that Costco will be included.
Costco should not be "grandfathered." This is particularly important in view of the fact that the
demolition of the existing structure began at 4:30 am the day after the community held its
meeting with Costco regarding the gas station, started without notice to the community, and
was undertaken without compliance with the requirements for a Noise Suppression Plan.
These are precisely the unilateral actions that the legislation is intended to preclude,
Thank you for the opportunity to comment on this proposed legislation.
@
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CA5A·
DE
MARYLANn~
L'-JiJ"iADELANTEi
"YEARS
Submitted in Person
November 1,2011
Valerie Ervin, President
And Members
Montgomery County Council
100 Maryland Ave.
Rockville, MD
Dear President Ervin and Members, Montgomery County Council
CASA writes to provide its strong support and urge passage of Bill 33-11 , Urban Renewal and
Community Development Community Benefits Agreements Large Retail Stores. We
provide this supportive testimony on our own behalf as well as on behalf of the Fair
Development Coalition - a statewide coalition of advocates who support measures the create
quality jobs and sustainable healthy communities from government investments.
First, we write to provide a description of our· work. CASA has organized residents, small
businesses, and institutions in both Counties of the International Corridor to ensure that current
residents surrounding development are the beneficiaries of the public investments made in
communities. Good jobs and training for local workers, expansion of community assets such as
access to healthcare, and protections to ensure that existing residents and small businesses are
protected from displacement are necessary elements to ensure that our communities remain or
even better grow more diverse both racially and economically. Across the past several years,
we have brought community residents and small business to scores of community meetings,
public hearings, and more to participate in discussions of development. Together with the Fair
Development Coalition, we support the passage of statewide measures to insure, in particular,
that government money creates good jobs for diverse workers.
Government spending has the capacity to create long-term positive change in communities or
exacerbate existing inequities in development, jobs, and infrastructure spending. Maryland
must develop models for engaging low-skill, minority and disadvantaged workers on local
projects, and.frame development policy in a way that values the preservation and growth of
healthy communities.
When CASA and its partners discuss development requirements with entities that do business in
multiple states, the commitment is clear. A developer and large-scale operator will only build
and operate to the legal standard imposed on them by government. One multi state operator in
discussions with a coalition partner described directly that they put protections in place in other
states because those states require them to do so. Maryland, unfortunately, does not. A
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CA5A
DE
MARYLAND,,,
1"")
.6JfADELANTE!
c.:YEARS
proactive requirement that a developer negotiate a CBA is a big step forward
in
insuring that the
community is brought to the table early on, that development serves what can be varying local
needs, and, most importantly from our viewpoint, that the workers both constructing those
projects and ultimately working in them can afford to live in the community in which the
development sits.
As you know, some startling new information has emerged from the 2000 Census.
Montgomery County is, for the first time in history, majority minority (calling into permanent
question the very use of the term minority). Montgomery County is also poorer than it was a
decade earlier. . 33-11 is a step forward in ensuring that Montgomery County can be a place
nts can afford to both work and live.
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TESTIMONY OF MARIE HENDERSON, EXECUTIVE DIRECTOR, INTERFAITH
WORKS
In Favor of
Bill 33-11,
Urban Renewal and Community Development - Community
Benefits Agreements
Good evening. Thank you Council President Ervin and members of the Council for your time.!
am Marie Henderson, Executive Director of Interfaith Works. As you may know, we provide
social services to 35,000 low-income individuals every year. We address the immediate needs
that arise from poverty, but we also work towards ending the cycle of poverty through economic
and personal empowerment.
That is why I am here tonight to testifY in favor of Bill 33-1
L
This bill will help some of
Montgomery County's most vulnerable get that second lease on life, with a greater potential to
gain employment through local hiring guidelines in a community benefit agreement. In today's
economy, a job is a more than just a paycheck.
It
provides a sense of satisfaction and pride from
an honest day's work. For the clients we serve, ajob can mean a second chance.
According to the 2010 Basic Economic Security report data put together by Wider Opportunities
for Women, an individual needs to make an annual income of more than $47,000 in order to
meet his or her basic needs living here in the county. That means, for our clients looking for
employment, hiring locally is sound policy and a good first step to ending the cycle of poverty.
It
is also good for taxpayers, as it would help individuals transition off of social services and
become contributing taxpayers themselves.
Our clients who complete the Vocational Training program go through 30 hours ofjob readiness
and financial literacy classes and work intensively one-on-one with a vocational counselor at
least once a week to help them secure employment. Once on the job, our clients have the people
and problem solving skills necessary to do well in the workplace and advance in a company or
organization.
These employees can be found in local businesses and organizations throughout the county,
whether in hospitals or nursing homes, the neighborhood Rite Aid or Giant grocery store or at a
Marriott or Hilton HoteL We are proud of each of our clients who get hired and excel in their
jobs. Their success is a reflection not just on our training, but also the businesses who hire them.
It
speaks to their values as a company and a collective sense of social responsibility that
Interfaith Works shares.
In conclusion, I believe community benefit agreements are just another way we can promote
partnerships that foster a greater bond between our government, businesses, non-profits and our
residents. That way, we can continue to keep Montgomery County a great place to live and work
- for all its residents. I ask you to support Bill 33-11. Thank you for your time.
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United Food
&
Commercial Workers Union 6
Local 400
Thomas
P.
McNutt,
President
Chartered by:
UFCW International Union
Mark
P.
Federici,
Secretary- Treasurer
Serving Members in MD, VA, DC, WV, TN, NC, KY, OH
Testimony of L. Anthony Perez, Director of Legislative Growth Strategies
United Food and Commercial Workers, Local 400
CB 33-11: Big Box Community Empowerment Bill
Offered to: County Council for Montgomery County
November 1, 2011
Good Evening Madam President and members of the council my name
is Tony Perez I am the Director of Legislative Growth Strategies for the
United Food and Commercial Workers Union Local 400. In order to
preserve time I will keep my comments brief. UFCW Local 400 is in
total support of this legislation because we strongly believe that
communities should have a voice in the development of Big Boxes in
their communities. Our organization has witnessed hand shake deals
between Large Corporations and Communities fall by the waist side not
mention the loss of other businesses in the community. We've
watched other jurisdictions in the Metropolitan area pass legislation to
give local legislators more input in the process as it pertains to Big Box
Stores and Montgomery County has Taken a strong step in the right
direction by allowing communities to have input in the process as well
and on behalf of President Tom McNutt and the 40,000 members of
United Food and Commercial Workers Local 400 we commend you
President Ervin Councilmember's Eirich, Navarro, Rice and Riemer for
pursuing such progressive legislation. Thank You
Main Office:
4301 Garden City Drive, Landover, MD 20785-2298 • 301-459-3400· fax 301-459-2780
West Virginia Office:
412 Tennessee Ave., Suite 100, Charleston, WV 25332-2338 • 304-346-9679 • fax 304-346-9670
www.ufcw400.org
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5H£V£.rKO
From The Institute for Local Self Reliance
http://www.newrules.org/retaillkey-studies-walmart-and-bigbox-retail
Key Studies on Wal-Mart and Big-Box Retail
Below are summaries and links to key studies that examine the impact of Wal-Mart and other large
retail chains and, in some cases, the benefits of locally owned businesses. For ease of use, we've
organized these studies into the following categories, although they do not all fit neatly into one
category. (Also see the Research section ofthe News Archive for more detailed stories on some of these
studies).
• Economic Impact of Local Businesses vs. Chains
Studies have found that locally owned stores generate much greater benefits for the local
economy than national chains.
• Retail Employment
These studies examine whether the arrival of a superstore increases or decreases the number of
retail jobs in the region.
• Wages
&
Benefits
Studies have found that big-box retailers, particularly Wal-Mart, are depressing wages and
benefits for retail employees.
• Existing Businesses
These studies look at how the arrival of a big-box retailer displaces sales at existing businesses,
which must then downsize or close. This results
in
job losses and declining tax revenue, which
some of these studies quantify.
• Poverty Rates
Counties that have gained Wal-Mart stores have fared worse in terms of family poverty rates,
according to this study.
• Social and Civic Well-Being
This study found that Wal-Mart reduces a community's level of social capital, as measured by
voter turnout and the number of active community organizations.
• City Costs
These studies compare the municipal tax benefits of big-box development with the cost of
providing these stores with city services, such as road maintenance, police and fire-finding that
cities do not always come out ahead.
• State Costs
Because many of their employees do not earn enough to make ends meet, states are reporting
high costs associated with providing healthcare (Medicaid) and other public assistance to big­
box employees.
@
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• Subsidies
The expansion of big-box retailers has been financed in part by massive development subsidies
and tax advantages provided by local and state governments. These studies document those
subsidies and their failure to produce real economic benefits for communities.
• Consumers & Prices
Are chains better for consumers?
• Traffic
How do vehicle miles traveled and trips increase as a result of big box developments?
• Charitable Contributions
Small businesses donate about twice as much per employee to charitable organizations as large
businesses, according to this study
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My name is Michael Kroopnick and I am an attorney who practices land-use law throughout the
state of Maryland and the District of Columbia. 1'd like to the thank President Ervin and the
Members ofthe Montgomery County Council for giving me an opportunity to testify. I am here
this evening to speak in favor of Bill 33-11.
Big-box stores enter the market with a significant advantage over its competitors, particularly
local businesses, because it can sell similar products at much lower prices. Local businesses are
forced to downsize or close as a consequence. Often, the jobs local businesses create do not
return to the community. To the extent that big-box stores do create jobs, they are at lower
wages, fewer hours, and reduced benefits because of diminished competition. Due to their size,
big-box stores further pose unique traffic and environmental challenges to the community.
The virtue of Bill 33-11 is that it strikes a sensible balance by, on the one hand, not prohibiting
big-box development, and on the other, seeking to equalize the playing field by requiring big-box
developers to work with the community such that they do not have an unfair advantage over
local businesses. In
turn,
there is a much greater likelihood that the excesses that stem from big­
box developments will be addressed. This bill gives voice to community concerns that arise after
a development's approval and which may not otherwise be addressed effectively at the
neighborhood level. They include, but are not limited to, the loss of local businesses, reduced
wages and benefits, and the burdens imposed on the environment, traffic, and public services.
This Bill represents sound public policy and
~i.ll
serve as a template for similar legislation being
considered by municipalities throughout the country. Like in other areas of legislation, such as
inclusionary zoning, Montgomery County will be a leader in the area of responsible big-box
development by enacting this bill.
Thank you.
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Testimony of Joseph Horgan on Bill 33-11, A Bill Relating to Community Benefit Agreements for
Big-Box Retailers in Montgomery County, Maryland.
November
1, 2011
My name is Joseph Horgan. I am a resident of
Kensington~
MD and a small business owner. I live in
the Homewood Neighborhood, close to Wheaton, Westfield Mall and the Costco site, as well as the
Kensington Safeway. I've paid close attention tei the Westfield taxpayer giveaway and the proposed
Costco gas station, and I've learned that even when there is an active civic group, accountability and'
full
community participation is more often than not absent.
It's time to retire the term
"Railroaded,"
to mean
"the community got bilked."
Today, the term
"Big­
Boxed"
more accurately describes that sentiment.
I am here to offer qualified support for the Community Benefits Agreement Bill,
33-11.
Qualified,
because the bill as now written sets up a pieceineal process in which corporate big boxes could pick
communities which are weakest, or have the least expertise, or the lowest participation. The bill should
be revised to set a Countywide Benefit Agreement that's in the best interests of the residents and small
'
businesses of Montgomery County.
What's best for Montgomery is minimal countywide standards for large retailers that include:
1.
Project Labor Agreements for the construction phase - The Big-Box Retailer
is
required to
pay the prevailing union wage to all of its workers.
2.
Card Check for the operational phase Require union recognition as soon as a majority of
workers have signed a card requesting union representation.
We are told by Big Box promoters that they worship at the altar of job creation. We know
this is a pretend game. Montgomery County needs to insist that these jobs pay better than
the current poverty minimum wage. We want quality union construction and good-paying
jobs that won't require taxpayers to supplement the failure of these big boxes to pay fair
wages.
3. Environmental requirements:
a) Environmental Site Design compliance: on-site retention of stormwater using green
roofs; rain gardens, permeable pavement, and similar practices, with no waivers and no
grandfathering sweetheart deals; and
b) Shade tree plantings with soil volumes that ensure the trees will last
50,
not
13
years.
c) Air Quality requirements
d) Noise abatement requirements - going beyond compliance with our noise ordinance, and
without waivers or exemptions from our noise ordinance.
4.
Combined Reporting of State corporate income taxes. Using states like Delaware and
Nevada as local tax havens, corporados hide their profits from Maryland taxes, pretending that
the money they earned in Maryland was made in Nevada and Delaware. It's a corporate shell
played with shell companies. For
let's say big box retailer MegaloweMart,
in Texas, wants
to
open a
County. First, tll.e set up a
Delaware
(usually no more
vvhich doesn't
tax
_
u
subsidiary
the
rights over
S2t
up
in
Montgomery
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County. The store in Maryland has to pay the shell subsidiary for the use of trademarks.
Coincidentally, the cost to the Maryland store for using the trademarks is equal to what would
otherwise be taxable profits. We need to insist that corporate retailers' earnings made in
Maryland are taxed so that they pay their fair share. Maryland taxpayers and small businesses
shouldn't have to pick up the slack of their playing pretend shell games with shell subsidiaries.
5. Full compliance with the zoning, environmental, and other laws and regulations on the
books
I support the concept behind [33-11] because in my experience, too often communities have been
stearnrolled and disenfranchised by corporate retailers' claims and promises that turned out to be
hollow. But, precisely because of this "David and Goliath" situation, we cannot assume that civic
groups have the transparency, expertise, and democratic representation that would be needed to
negotiate effectively on behalf of their communities. That's why we need minimal countywide
standards; then if a competent and accountable community group exists in a give!l proposed big-box
neighborhood, they could negotiate for additional community mitigation measures on top of the
countywide minimum big-box mitigation standards.
Compliance with all laws is currently not the norm for Big Boxes
in
Montgomery. For example,
the morning after the October 25,2011 community meeting with Costco on their proposed 16-bay gas
station in Wheaton, at 4AM of October 26, the demolition of the old Hechts space began. Citizens.
have not found evidence of a"noise suppression plan, or a noise ordinance exemption for this project.
Frankly, I'm wondering where the need is for another Montgomery big box. Big boxes have proven to
be net negatives to the communities in which they have aJready located. We already have 35 big boxes
here in Montgomery County. What is the community need for a new WalMart or Target? What is the
need for the proposed Costco gas station in the Transit-Oriented Development zoned Wheaton? My
answer: there is no need for either the Costco gas station, or more generally for big-boxes. That's why
Bill 33-11 must require countywide mitigation standards - to mitigate the economic and environmental
~arm
that these retailers normally wreak upon local communities.
There are 7 Principles of Accountability.
If
a Big-Box happens to meet one of them, it's probablv by
accident. These are from the December 2005 Statement of the Montgomery County Accountability
Project. As an outgrowth of the planning debacle in Clarksburg, Montgomery residents of all political
stripes signed a Call for Accountability with these Principles:
1) Consistency and Accountability
2) Transparency
3) Fairness
4) Due Process:
a. degree of documented community support;
b. Master and Sector Plans with clear,unarnbiguous terms;
.c. compliance with and furtherance of environrnehtallaw, regulation and policy;
d. compliance with and furtherance of open space, farmland, parkland, and
historic preservation law, regulation and policy.
5) FlllDn
Portidpari:OTI
S)
7)
'01
B.nrlCVTT1::cti:DB
pm1b}f\llis.
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If
you want to be a big box, you have to be a big boy and stop pretending that you have no impact on
the community. John Maynard Keynes once wrote that we
must pretend that foul
is
fair and fair is
foul, for foul is useful and fair is not.
It's time
to
stop pretending. Foul is foul and not fair or useful,
unless you're trying to externalize the negative impacts -and expenses-- onto the community.
Thank you for the time to be heard before you. I look forward to working with each of yoU: on this and
other issues.
Joseph P. Horgan
3102 Edgewood Rd
Kensington, MD 20895
301.933.1210
References:
www.goodjobsfirst.org
LeRoy, Greg.
The Great American Jobs Scam: Corporate Tax Dodging
&
the Myth of Job Creation.
Berrett-Kohler, San Francisco: 2005.
Slashing Subsidies, Bolstering Budgets:
How
States can Save Money by Targetting Ineffective
Economic Development Programs.
Philip Mattera, Leigh McIlvaine, Thomas Cafcas and Greg LeRoy
http://www.goodjobsfirst.org/sites/default/files/docs/pdf/slashingsubsidies.pdf
Shifting the Burden for Vital Public Services: Walmart's Tax Avoidance Schemes.
Philip Mattera
http://www.goodjobsfirst.org/sites/default/files/docs/pdf/walmart shiftingtheburden.pdf
Skimming the Sales Tax:
How
WalMart
&
Other Big Retailers (Legally) Keep
a
Cut of the Taxes
We
Pay on Everyday Purchases.
Philip Mattera with Leigh McIlvaine.
http://wv,,'W.goodjo bs first.o rg/sites!de fault/ files/do cs/pdf/skimming. pdf
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The Voice of Montgomery County Business
TOM McELROY, CHAIRlHAN
OR! REISS, CHAIR-ELECf
GEORGETI'E "GIG!" GoDWIN, PRESIDENT
&
CEO
MOI\JTGOMERY COUNTY COUNCIL
NOVEMBER 1, 2011
TESTIMONY BY JUDY STEPHENSON
MONTGOMERY COUNTY CHAMBER OF COMMERCE
ON COMMUNITY BENEFITS AGREEMENTS BILL
Good Evening.
My name is Judy Stephenson; I chair the Small Business Committee for the Montgomery
County Chamber of Commerce and am speaking on behalf of the Chamber in opposition to Bill
33-11.
It is our position that this legislation is
fundamentally flawed
because it targets one
category of retailer by mandating a universal set of unnecessary and unclear requirements for
all large retail businesses.
Many of the retailers we look to attract to the County fall under this definition of a large
retailer, which according to this bill is 75,000 sq/ft and above. For example, the new Whole
Foods in White Flint, Nordstrom in Montgomery Mall and Macy's in Wheaton Plaza all occupy
space that is much larger than this. Forcing retailers to engage in the proposed legally binding
agreements with civic organizations will be a disincentive for them to locate in our County.
Additionally, the
existing planning and zoning process
provides innumerable safeguards to
insure the community's voice is heard with regard to uses and density in our neighborhoods.
This bill would give civic organizations veto power over businesses looking to locate to the
County.
The bill is also
undear
on
essent[a~
points.
For exam
the "good fa
effort" alternative
described in the bill is undefined and ripe for abuse. \Nhat constitutes a business negotiating in
.([j)
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good faith? Is there a defined standard for good faith? Where else does this standard apply
and how is it determined? Furthermore, how do businesses determine a {{recognized" civic
organization? How can a business that is new to the area, make this determination if it is not
even clear to us?
You might ask why small business would be taking a position on this bill... simple - in general,
big
businesses represent many opportunities for small businesses and proximity is key
for
small businesses.
Also, small businesses have a vital interest in the County creating an
economic and regulatory
climate that is business friendly.
This bill does not support that objective.
Finally, we encourage County Council to consider unintended consequences that might result
from this bill. When you start legislating corporate community involvement, the result is very
likely to be less rather than more.
The Montgomery County Chamber of Commerce opposes the Community Benefits
Agreements bill in principle as it requires a set of unnecessary and unclear requirements of all
large retail businesses based on feelings toward a specific business. This bill runs counter to
the fundamentals of due process of law and representative government.
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SILVER
SPRING
CHAMBER OF COMMERCE
GREATER
Testimony of
The Greater Silver Spring Chamber of Commerce
Public Hearing -
Bill 33-11,
Community Benefits - Large Retail Stores
Montgomery County Council
Tuesday, November 1, 2011
Council President Ervin, members of the Council, good afternoon. For the record, my name is Jane Redicker
and I am President ofthe Greater Silver Spring Chamber of Commerce. I am here today to express the
Chamber's strong opposition to Bill 33-11, which would require new retail businesses occupying more than
75,000 square feet to negotiate a Community Benefits Agreement with at least three community groups on a
range of issues including these:
Hiring practices and training programs
Design, operating hours, use of open space, traffic mitigation, noise, and so on.
Assistance to community organizations and programs
Affordable and workforce housing.
And, of course, any other issue relevant to the operation ofthe store or the community near the store
Really?
The first question this Bill brings to mind is: what is the problem you are trying to solve? Is the Council really
trying to limit the number of large employers in the County? Does the Council really think the current planning
process is insufficient to assure that the community has a voice in development in the County? Is the Council
trying to encourage greater philanthropy among County businesses, or only those over 75,000 square feet?
Should County government really dictate whom a business should hire, and where its employees should live?
The Greater Silver Spring Chamber of Commerce believes this Bill is beyond objectionable, politicizing as it
does development and economic development issues that should rightly remain under the purview ofthe
County's established,
if
imperfect, planning and development process.
Time does not allow me to delineate all of our objections and criticisms. I'll leave most of those to my written
testimony and offer instead our perspective on the Bill's most ill-conceived requirements. But I appreciate the
opportunity to highlight a few ofthis Bill's many lowlights.
First of all, this Bill expects private business to do things that even the County doesn't do.
In
the area of hiring
practices and training programs, the Council should have no jurisdiction over whom a private employer should
hire, how an employee should be trained, or where an employee should live. Yet that's exactly what the Council
wants to do with this Bill.
The County doesn't give hiring preference to residents living within a certain distance from County offices. The
County doesn't even give preference to County residents. How many ofthe Council staff live within a certain
distance from COB or in their districts? How many teachers, police, firefighters live within the certain distance
from their employer? If the County doesn't place such mandates on its own employees, how or why should it
legislate such requirements on private businesses and not even all businesses, at that?
On the issue of design and use of open spaces, and on environmental impact, all of which would
be
restricted
under this Bill: isn't that the Planning Board's job? Under current regulations and policies, the community
already enjoys more than ample input through the established planning process.
860 I Georgia Avenue, Suite 203. Silver Spring, jvlaryland 20910
Phone: 301-565-3777
-
Fa.,;: 301-565-3377
-
info @gsscc.org
_
www.silverspringchamber.com
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Greater Silver Spring Chamber of Commerce on 33-11
Page 2
The community is already able to voice its opinion on the County master plan and its amendments, and it will
have the opportunity to provide input on any new site plan. So why does this proposed Bill mandate further
community input? Where
is
the need? And if this Bill is enacted, where will we go next? Will businesses with
a footprint of 50,000 square feet, or 20,000 square feet, suddenly fmd themselves included among those the
County does not want?
Finally, regarding this Bill's unprecedented requirement that private businesses negotiate a binding community
benefits agreement with what it calls "recognized civic organizations." Does the Council really want to get in
the business of picking winners and losers?
There are more than 7,000 non-profit organizations in the County. Which of these would be considered
"recognized," under this Bill? Who gets to choose which are recognized? What are the criteria for legitimacy?
The Bill does not say anything about the creation of new non-profits. What if a group were formed with the
express purpose of keeping a retailer out - or ensuring a retailer is permitted to locate in the County? Would
these new groups constitute recognized organizations under this Bill?
On the issue ofthe community benefits agreements called for by this Bill: how much is enough? Who decides
what a sufficient agreement is? Can a large retailer give $lK to three organizations and be done? $5K? Who
decides?
The Bill calls for an "agreement" between parties, but it appears that agreement binds only one ofthe parties.
Do the organizations have no obligations? If, for example, the Bill calls for fmancial support of an organization
that makes it possible for that organization to provide a specific service, is that organization bound to provide
that service, or could the organization use the funds for whatever it chooses?
My time is up, so I'll allow my written testimony to explain our many other objections to this Bill. But please
know that the Greater Silver Spring Chamber of Commerce, whose membership predominantly comprises small
retailers and businesses, strongly opposes this Bill as unwarranted, unnecessary, unworkable, anti-business, and
frankly, unbelievable.
Thank you.
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Greater Silver Spring Chamber of Commerce Opposition Points
County Council Bill #33-11 Community Benefits - Large Retail Stores
OVERVIEW OF THE BILL
This Bill basically requires new retail businesses over 75,000sfto negotiate a Community Benefits
Agreement with at least three community groups on issues including:
Hiring practices and training programs
Design, operating hours, use of open space, traffic mitigation, noise, etc
Assistance to community organizations and programs
Affordable and workforce housing
Any other issue relevant to the operation of the store or the community near the store.
The Bill also requires Department of Economic Development and the Housing and Community Affairs
offices to support the community groups in negotiating the Community Benefits Agreement.
OVERVIEW of GSSCC OPPOSITION
The Greater Silver Spring Chamber of Commerce opposes Bill 33-11 for many reasons.
• This bill is anti-business and sends a clear message that Montgomery County continues to be a
difficult place to do business.
• This Bill makes it harder to business in the County by requiring another unnecessary step for
employers prior to creating jobs.
• It
is unclear what problem this Bill is trying to solve.
• This bill expects private business to do things that even the County doesn't do.
• The County Council currently does not have the authority to legislate hiring and training practices
of a private employer.
• The County Council currently does not have the authority to require private employers to provide
or subsidize housing.
• The Bill further politicizes the development process.
• Portions of this Bill are redundant with the formal planning process in the County or existing
regulations.
• The Bill creates the potential to pit various community groups against one another resulting in clear
winners and losers.
• The Bill places an undue burden on DED to support the community in negotiations between a large
employer and community groups, when the role ofDED role should be to support business.
SPECIFIC POINTS of OPPOSITION or CONCERN
What is the problem the Council is attempting to solve?
• Is the problem too many "big box" stores in ylontgomery COLmty? Is this bill aimed at keeping
"big box" stores out of fvlontgomery County? All "big box"
or just certain ones? "Vby?
Don't these retailers provide jobs County residents? Don't they provide economical shopping
alternatives for County residents strapped by the current economy? Has the County considered that
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some "big box stores" become destination stores, bringing more shoppers to the area, much the
same as anchor stores bring shoppers to the smaller stores in a mall or shopping center?
Is the concern the level of wages offered to employees? This Bill does not address that concern.
Is the concern that certain large retailers do not meet some standard for retail? Does that mean that
the Council will now screen all businesses to see if they "fits" with what the County stands for?
Is the concern about the dislocation of small businesses? This Bill does nothing to address issues
of dislocation.
Is the concern regarding philanthropy or community engagement by our large employers? If so,
that concern is unwarranted. Montgomery County already enjoys a very engaged business
community that supports many non-profit and civic organizations. Does the County Council really
want to get into regulating philanthropy? If so, who decides which philanthropies are worthy and
which are not?
Is the concern that the community will have no voice when a large business comes into a
neighborhood? Is the current Planning Process not sufficient to assure that the community has a
voice in development projects?
What gives the County Council the authority to legislate hiring and training practices of a
private employer?
• GSSCC believes it is far beyond the jurisdiction of the County Council to tell a private employer
who they can hire. Federal laws govern hiring practices.
• If the County is concerned about making sure any jobs created go to residents near a large retail
store, then who decides the size what is an acceptable "distance of the store." Just because one
county resident lives near a retail store and another does not, should the individual living closer be
given preference just because of geography?
• The County does not give hiring preference to residents living near County facilities. How many
teachers, police, firefighters live within the certain distance from their place of employment? The
County doesn't even give hiring preference to County residents.
Why isn't the Council focusing on measures that make it more attractive to do business in
Montgomery County, measures that
will
create jobs?
• Montgomery County has a reputation for being a difficult place to do business. Prior to the
recession, there was a strong slow-growthlno-growth contingent in the County. After the recession
most people realized that we need economic development to maintain the level of services and
quality of life in the County. Just last week, the Montgomery County Business Development
Corporation presented a status report to the Council in which it reiterated the need for a business
friendly environment in the County. Most Councilmembers are on record as agreeing with the need
to bring jobs to the County. However, in this event, actions speak louder than words. This Bill
sends the message that the County Council is more interested in creating roadblocks to business
than creating jobs.
Why does Council seek to add yet another layer to the already burdensome planning process in
Montgomery County?
• Businesses corning into Montgomery County face an expensive and time consuming development
processes that provides for community input time and time again at various stages. There is the
preliminary plan,
plan, pennitting, environmental restrictions.
PAMR,
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impact taxes, developer amenities, existing ordinances for noise, lighting and the like. Do we really
need ANOTHER obstacle to doing business in the County?
• This bill is redundant with the current planning process and regulations regarding design, use of
open space, traffic mitigation, environmental impact, noise, lighting.
• What if the desires and wants of the selected community organization or organizations are in direct
opposition to the Planning Board's regulations concerning, for example, use of open space? What
if the community organizations selected have differing views on these matters? Who picks the
winner?
What is an eligible civic organization? How are the civic organizations selected? How can three
groups possibly represent the entire community?
• The Bill includes a definition, but the only limiting factor is that the "organization" be composed of
residents of and businesses located within five miles of the business. Does it include all
homeowners associations? All non-profits? All citizens' groups? Citizens' Groups? All the ad
hoc groups that form to fight or support specific issues, in specific neighborhoods? This could
include hundreds of organizations that have competing agendas. What about County-wide civic
organizations that are not located within the five mile radius?
• What if there are several homeowners associations with differing, perhaps competing, agendas?
What if there is a business group, a citizens' group and a homeowners association, all with
differing agendas? What about the other groups in the neighborhood? Who decides which of these
groups "wins" and becomes one of the lucky three?
Who decides whether a Community Benefits Agreement is sufficient?
• Is it sufficient for the incoming business to simply agree to give money to three organizations?
How much money? What if the business provides literacy training for workers and nothing else? Is
that sufficient? What if the community organizations with whom the agreement has been signed
are not satisfied? Does that mean the store doesn't open? The Bill includes no process, no timeline.
Under the Bill, negotiations could go on for years. Who says enough is enough?
• The Bill calls for an "agreement" between parties, but that as it is written, that agreement binds
only one of the parties. Do the organizations have no obligations? If, for example, the bill calls for
financial support of an organization that makes it possible for that organization to provide a
specific service, is that organization bound to provide that service, or could the organization use the
funds for whatever
it
chooses? Who regulates this?
The role of the County Department of Economic Development should be to attract and retain
business and create jobs in the County. This Bill runs counter to that mission.
• The Bill required the Department of Economic Development (along with the Department of
Housing and Community Affairs) to "provide, on request, advice or support to any recognized
civic organization that will facilitate the negotiation and implementation of a community benefits
agreement." This is not the role of the Department of Economic Development. DED needs to
have a positive relationship with the business community_ DED should be an advocate for
business, not an advocate of the civic and community organizations. The reporting requirements
create a potentially adversarial relationship with the very businesses they are trying to attract and
retain.
It
The Bill requires the retailer to report annually to
on implementation of the community
another task to take away from its
benefits agreement. Does the Council really \-vant
to
®
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primary mission of building the commercial tax base in the County? Isn't the latter more
important?
How can each agreement be "binding on any successor in interest of any party"?
• If a community benefits agreement is in place and the original store goes bankrupt, does the new
tenant have to abide by the terms of the agreement? What if the community organization goes out
of existence? Does the agreement transfer to another organization? Is the retailer relieved ofthe
obligation?
Why should the community of the County have the authority to become involved in "any other
issue that is relevant to the operation of a large retail store"?
• The Bill includes in the definition community benefits agreement "any other issue that is relevant
to the operation of a large retail store or the community near that store." This is way too broad.
It
goes way too far. Will the store's choice of wholesale vendors be subject to negotiation? How
about the color of employees' uniforms? How about where those uniforms are cleaned? How
about which bank a store chooses to use? Which telephone service provider? All of these are
relevant to the operation of a large retail store. The language is far too vague, and allows the
community and government to meddle in the way business does business.
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SUITE 460
I
3 BETHESDA METRO CENTER
I
BETHESDA, MD 20814-5367
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ATTORNEYS
November 1, 2011
By
Hand Delivery
Honorable Valerie Ervin, President
Members of the Montgomery County Council
100 Maryland Avenue
Rockville, Maryland 20850
Re:
Bill33-11
Community Benefits Agreements
Dear Ms. Ervin and Council Members,
Our firm represents White Flint Mall, owned by the Lerner and Abramson families.
We write in opposition to Bill 33-11 for a myriad of reasons. We urge the Council to
withdraw or reject the Bill as written.
In summary, the Council should reject this Bill for at least the following reasons:
• This Bill will add yet another unnecessary layer of expense and time onto an
already overburdened land use regulatory process;
• This Bill will deter retailers from entering our market and/or expanding here;
• This Bill surely will cement the business community'S view of the County as
inhospitable and not business friendly;
• The Bill is redundant to existing land use regulations and processes; any problem
sites easily can be addressed by the Council under long established land use
mechanisms;
• The Bill does not promote transparency, consistency or certainty in the
development process;
• The Bill assumes that large retailers represent inherently evil land uses, and that
contracts with civic organizations ameliorate that evil; and,
• The Bill has a multitude of drafting anomalies, nuances and vagaries that must be
addressed before it can be seriously considered.
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ATTORNEYS
Honorable Valerie Ervin, President
Members of the Montgomery County Council
November 1,2011
Page 2 of4
As all of you know, White Flint Mall was an active participant in the White Flint
Sector Plan process. With its mixed-use zoning, it is poised for the long term redevelopment
of its property with 5.2 million square feet of mixed-use development, including multi-family
residential, office, hotel and retail uses.
It
has been working for more than eighteen months
with architects, engineers and planners to create a Sketch Plan for consideration by the
Planning Board. The community meeting to unveil the Sketch Plan is scheduled for the
evening of November 16,2011, with a projected filing date a few weeks thereafter.
This Bill could well jeopardize the planned redevelopment of White Flint MalL
Although the current footprints of Bloomingdales and Lord
&
Taylors are less than 75,000
square feet, there are modest additions planned for both buildings that could exceed this
threshold. Further, there are opportunities at the Mall to develop buildings partially below
grade which may well exceed the 75,000 square foot threshold. The Mall cannot and will not
invest hundreds of millions of dollars for redevelopment of this site if its ability to plan for the
redevelopment is adversely affected by this BilL
The summary of reasons why this Bill should be defeated is long and broad. As
compelling as all of these reasons is the absence of any reason why this Bill adds value to the
County's land use regulatory process. Instead of adding value, this Bill adds complexity,
time, expense, uncertainty, opaqueness and a fair degree of SUbjectivity into a well established
process. In so doing, this Bill runs entirely counter to a more progressive, transparent and
constructive land use regulatory process that has been emerging in recent years, e.g. the \Vhite
Flint Sector Plan process, the CR zone process, required pre-application community meetings,
timely electronic dissemination of relevant information, etc.
Moreover, with the County's commitment to growing quality jobs and its economic
base in an increasingly competitive regional, national and international economy, this Bill
sends the entirely ""Tong message.
It
represents the epitome of an anti-business attitude that
distrusts the integrity, value and function oflarge retailers in our economy. Singling out one
particular segment of our economy is unfair and unjustified. If the County does not wish to
bestow economic incentives or promotional funds on such businesses, that certainly is its
prerogative-but it need not consign all large retailers into the maelstrom of contract
negotiations with widely varying civic organizations as the price for doing business here.
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ATTORNEYS
Honorable Valerie Ervin, President
Members of the Montgomery County Council
November 1,2011
Page 3 of4
Should the Council nevertheless be determined to enact legislation like this Bill, it
must consider a variety of amendments to restrict the scope of the Bill and to clarify its intent.
A summary of amendments follows:
1. The Bill should exempt large retail stores located in mixed-use developments in Metro
Station Policy Areas. This would enable the redevelopment of the Mall to proceed,
and would recognize that such stores would be designed in a development and through
a process designed to assure their compatibility in the communities in which they are
located.
2. The definition of large retail stores should be amended to increase the footprint size to
at least 100,000 square feet, to more accurately reflect the size of department stores,
the growing size of traditional grocery stores, and other similar factors.
3. The Council should establish qualifying criteria for civic organizations eligible to
negotiate with large retail stores. The criteria should include minimum sizes,
recognized organizational structures, representativeness of membership/participation,
and other similar criteria. The Council should certify conforming civic organizations
as a prerequisite for their eligibility to participate in community benefits agreements.
4. The criteria for civic organizations should be amended in section 56-35 to allow civic
organizations to be recipients of funds from large retail stores, as long as the funding
is not substantial or represent a material part of the civic organization's budget. An
example of this would be a PTA organization, which regularly receives donations
from retailers (in fact, those donations are frequently solicited by such organizations);
the PTA should not be disqualified from serving as an eligible civic organization
simply because it solicited/received funds annually from large retail stores.
5. The range of remedies for non-compliance with the Bill by large retail stores should
be expanded to include alternatives to denial of occupancy permits. Alternatives may
include binding arbitration before a qualified arbitrator between the store and the
affected civic organizations, monetary penalties, etc.
6. Adjustments should be made to section 56-36 (e) to contemplate performance by a
large retail store of a one time action, such as a monetary payment. The current
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ATTORNEYS
Honorable Valerie Ervin, President
Members of the Montgomery County Council
November 1,2011
Page 4 of 4
language requiring a minimum five year agreement, renewable for five years, does not
contemplate that possible performance.
7.
An
exemption should be added to the Bill for large retail stores that are either
successors to or retrofits of existing large retail stores (whether or not the existing
store was required to enter into a community benefits agreement).
8. An exemption should be added to the Bill for large retail stores approved as part of a
Sketch Plan or Site Plan prior to the effective date ofthe Bill.
The Council should not rush its deliberations on Bill 33-11. As drafted, the Bill raises
a plethora of legal, regulatory and practical issues. To spare everyone the time and expense of
these time consuming deliberations, we respectfully suggest that the Bill be withdrawn by its
sponsors now. Failing that, the Council's Planning, Housing
&
Economic Development
Committee must carefully and not hastily consider the purposes of the Bill, its language
deficiencies, the suggested amendments, and the long term implications that its adoption will
have.
For all of these reasons, we urge the Council to withdraw or defeat this Bill. If despite
all of the reasons advanced against it, the Council is determined to enact the Bill, we request
its favorable consideration of the amendments outlined above. Thank you very much.
Very truly yours,
cc:
Mike Faden, Esq.
Ms. Sonia Healy
Mr. Gary Abramson
Mr. Alan Gottlieb
Arnold Kohn, Esq.
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TESTIMONY OF PATRICIA HARRIS
MONTGOMERY COUNTY COUNCIL
BILL
33-11
COMMUNITY BENEFITS
AGREEME~S-LARGE
RETAIL STORES
PUBLIC HEARING TESTIMONY
November 1, 2011
Good evening. Pat Harris with Lerch Early and Brewer, speaking tonight in opposition to
proposed Bill 33-11. As a land use and zoning attorney with more than twenty years of
experience in Montgomery County, I am familiar with the myriad of issues that must be
addressed when a use - any use -- seeks establishment within the County. These issues include
compatibility of the proposed use with the surrounding community, the adequacy of public
facilities and traffic impact.
The Montgomery County Land Use approval process be it a Preliminary Plan, Site
Plan, Sketch Plan, Development Plan, Project Plan, Schematic Development Plan is a
comprehensive and thorough process which requires community outreach. The process provides
ample opportunities for civic organizations to comment and participate.
As structured, the process ensures that the County's decisionmakers have considered the
community's perspectives, deliberated the merits, and balanced their concerns with the public
interest in reaching final outcomes. The County's existing processes are, by design, engaged,
attentive, non-arbitrary, and fair. The result is that the concerns and issues of the community are
taken into account in the conditions of approval imposed by the governing authorities.
Bill 33-11 threatens to undermine the important procedural rights, obligations and
safeguards that are afforded by the existing regulatory processes (which benefit the public as
well as the applicant). In essence, the proposed Bill would impermissibly delegate the authority
of accountable decisionmakers over matters involving land use and the public welfare to
unaccountable groups representing varying interests. These groups would then be free to impose
limitations, restrictions, and conditions on the use of private property without Due Process
obligations or constraints, such as the public notice and comment and evidentiary requirements
that are involved in the existing regulatory processes. This is "zoning by plebescite," which-as
a fundamental principle of land use and zoning jurisprudence-is unconstitutional.
The legislation tests the boundaries of constitutional jurisprudence in other ways as well.
For example, land use regulations must possess an "essential nexus" between perceived harms
and proposed remedies. However, mandating agreements or good faith negotiations with civic
organizations does not guarantee the advancement of a legitimate state interest. Rather, such
agreements may benefit individual groups rather than the broader public, resulting in outcomes
that are arbitrary or even undesirable.
Land use regulations must also be roughly proportional to the local impacts that such
regulations are intended to address. Regardless, the proposed Bill has no mechanism to ensue
that any obligations pursuant to a Community Benefits Agreement will be proportional to the
particular impacts of any given project. This is especially true in situations where benefits are
derived from a particular use, which offset any impacts.
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If adopted, various unintentional consequences are foreseeable. Because the timing of
mandatory negotiations would frequently overlap with the County's approval processes, it is
likely that the County's processes would be beholden to the progress and outcomes of such
private negotiations. This may ultimately interfere with the County ability to obtain benefits for
the general public from such private projects, as the concessions made in connection with such
agreements may limit an applicant's resources. Furthermore, despite the County's well­
documented interest in attracting new businesses and employers, it is foreseeable that mandating
private negotiations with civic organizations may discourage appropriate or desirable businesses
from locating in the County. Such a result could be detrimental to County residents, who might
otherwise benefit from the range of employment opportunities and consumer choices that such
business would bring.
For all of the reasons stated in my testimony, I strongly urge you to not adopt Bill 33-11.
Thank you for the opportunity to speak this evening.
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Attorneys at
Law
3 Bethesda Metro Center, Suite
A60
Bethesda, MD 2081
A-5367
www.lerchearly.com
William Kominers
Tel.
(301)
8A 1·3829
Fax [301)
3A7·1783
wkominers@lerchearly.com
ideas that work
Bill No. 33-11-Community Benefits Agreements
Testimony of William Kominers for Lee Development Group
(November
1,2011)
Good evening President Ervin and members of the Council. My name is Bill
Kominers, with Lerch, Early and Brewer in Bethesda. I am here tonight on behalf of Lee
Development Group to testify in opposition to Bill No. 33-11.
There has been much discussion recently about a ten (10) acre property owned by
Lee Development Group in Aspen HilL The site is currently improved with an office
building of approximately 265,000 square feet. The building was built in 1964 for a
single user, Vitro Corporation, now BAE Systems, who occupied it for all 47 years. BAE
vacated the site in 2010.
Lee Development Group has vigorously marketed the property for office use for
the past four years with no success. There is no office market today for sites like this one
no Metro, no transit-oriented development, no other office uses in sight. Instead, the
area has proven to be a retail destination. Given its size and location, the site lends itself
to house a retail use that will exceed 75,000 square feet. (After all, the existing office
building is almost four times that size). The owner has received interest in the property
from retail users, principally large scale, broad-based merchandise retailers. But,
regardless of which retail user eventually builds, doing so will likely require. a master
plan amendment and a rezoning. These are very public processes that also provide
opportunities for organized public debate about how a use fits into the community, and
what else can, or should, occur in conjunction with that use.
This site, and others like it in the County, should be allowed to shift to alternative
uses and users. Many members of communities such as Aspen Hill want to see
redevelopment and revitalization in their neighborhoods that have suffered significant
economic decline in past years. The proposed Bill No. 33-11 will be yet another
impediment to this effort and will encourage stagnation, or worse cause deterioration, in
certain areas of the County.
Discussing the Planning Board's Semi-Annual Report in October, the Council
noted the need to make the minor master plan process more readily available --
in
order
to allow properties in the County to be considered for more appropriate land uses and so
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November 1,2011
Page 2
as to be able to respond to changing times and economic development opportunities.
Councilmember Berliner wrote a Memorandum requesting that the Planning Board
develop a means to address this issue. Such is the dilemma that Lee Development faces
with its Aspen Hill property.
Yet this Bill moves in the opposite direction. Bill No. 33-11 will add yet another
level of "process" in order to redevelop sites, like the Aspen Hill property. I suggest that
a master plan amendment, a rezoning, and later site plan review, probably provide
enough "process" already.
The Bill itself is very vague as drafted and thereby open to abuse. Requiring
negotiated agreements with three "recognized civic organizations" (whatever those are
and whenever they were formed), and without any governmental participation or
oversight, appears to be an abrogation of the County's role. While environmental
impacts, traffic mitigation, open space, noise, and lighting may be legitimately a part of
the land use process, there should be no place for imposing rules on hiring practices,
training programs, design, and the like. Especially when left to totally unaccountable
groups.
Large retail businesses will avoid this County if hiring practices and training
policies may be subject to modification by the whims of "three recognized civic
organizations." Many of the other items contained in the Bill, ranging from site design to
lighting, are already regulated, with extensive public participation, through the existing
multi-layered process for review and approval of development in the County.
To redevelop, the Aspen Hill site would have to be reviewed through very public
processes of a minor master plan amendment, then in a rezoning, and then in the
preliminary plan and site plan reviews. Each with public hearings. There would be
review of traffic by two County departments. There would be review of environmental
issues by two County departments. The public, including individuals as well as civic
organizations, are already included in these processes. Approval processes are open and
conducted as public hearings. Even if private agreements under Bill No. 33-11 are
reached, there is no certainty that such a negotiated agreement would be accepted by the
government in the course of regulatory review. This is not only inappropriate, but
unworkable for an applicant.
We urge you to vote against Bill No. 33-11. Just say "No." Don't try to fix it.
Don't
try
to salvage it. Just reject it. Support the review processes we already have.
They have a pretty good measure of public involvement and consideration of community
needs.
2
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P
If
II
-/ -//
November 1,2011
Montgomery County Council
100 Maryland Ave
Rockville, MD 20850
7:3
0
'p/Jr-­
Re: COUNTY COUNCIL BILL 33-11
URBAN RENEWAL AND COMMUNITY DEVELOPMENT
COMMUNITY BENEFITS AGREEMENT - LARGE RETAIL STORES
Dear Councilmembers:
The Aspen Hill Civic Association, Inc. is firmly opposed to Bill 33-11, requiring large retailers
(75,000 sq.
ft.
and larger) to enter into agreements with community organizations before they
may operate as a business in a given location. The proposed legislation will build yet another
restrictive layer into the approval process. A layer managed and driven by recognized civic
groups and unknown entities which may fonD. ad hoc, most likely with limited experience for the
process or special interest agendas. This unwieldy procedure may derail the positive momentum
of any project, and makes for an unattractive environment for nurturing business prospects and
growth. The legislation as drafted carries no proposed guidelines for negotiations, no time limits
to achieve mutual goals, and could be harmful and fracturing to neighborhood coalitions. In
essence, a retail store project may suffer years on the table before its doors can open.
That
scenario does not sound like a community benefit.
Montgomery County already has a process in place for development review through the M­
NCP&PC, and the County Council. The development process in Montgomery County is well
defined and provides ample opportunity for residents of a community to participate in the
approval process and articulate concerns. We expect a responsible developer and large retailer
would work to ingratiate themselves with the surrounding community if only to ensure a
successful transition and long-tenD. positive relationship.
If we continue to prevent retail establishments from expanding and creating jobs in our area, then
our community will suffer even more of the debilitating effects of a job-less recession. More
regulations and more restrictions are not needed. Big box retail is here, whether we like it or not.
Perhaps small store operators can readdress the meaning of specialty store retailing, and offer
goods and services benefiting broader choices for the consumer. Blocking targeted large retailers
is not going to save the small stores in the neighborhood. Residents will travel to surrounding
areas to shop the cheaper prices and selections of the large stores, costing us more in gas and
gridlock. And, we lose the
tax
receipts and employment that will ultimately come from large
retail operations.
Bill 33-11 is the type of legislation which gives Montgomery County a reputation for being a
difficult place to conduct business. If this bill passes a significant property in our neighborhood
may remain vacant for the foreseeable future.
That scenario does not sound like a community
benefit.
1
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Alexandra Minckler, President
Aspen Hill Civic Association, Inc.
Cc:
Ike Leggett, County Executive
Members of the Board of Directors, AHCA, Inc.
2
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Re: Bill No. 33-11, Public Hearing November 1, 2011
Clive Mackenzie Address to County Council
Westfield as the owner/operator of Westfield Wheaton and Westfield
Montgomery, both regional shopping centers in the County, opposes the adoption of this
bill.
There are four "regional shopping centers" in Montgomery County. The County
defines a "regional shopping center" as a center with a minimum of 600,000 square feet
and at least 50 stores. Nordstrom, Macys, and Sears at Montgomery and Target,
JCPenney, Macy's and Costco at Wheaton all exceed the 75,000 square foot anchor store
threshold in the bill. In the event an anchor store leaves a mall, any replacement or
reconfiguration of the anchor store or any potential expansion of the centers with
additional anchor stores could trigger the requirements of this bill. This bill would add
many unintended impediments to any potential redevelopment of our centers and impact
the economic stability of these regional centers and their future growth. In addition, this
bill would, if adopted make it very difficult to attract national anchors stores to
Montgomery County. This bill would create uncertainty for tenants and lenders as to
whether, when and how a store might open. The requirement to negotiate with
community groups for which no redress may be available is, in our view, an unworkable
and unwise policy, one subject to legal challenge.
We urge this body to reject this proposal so as to communicate your recognition
that this bill sends the wrong message at a time of great economic uncertainty - in an
economy struggling to recover.
If the Council moves this bill forward, we respectfully urge that you adopt
amendments making it clear that "regional shopping centers" are exempt from any
proposal adopted by the Council.
Finally, an update on the status of the Costco project: as you know, all construction
on the Costco facility was suspended last week as a result of the uncertainty created by
this proposed bill. After discussions with many Council members during which we made
our concerns on the bill clear, Westfield has ordered construction to proceed.
Thank you for consideration of our views.
Westfield Wheaton and Westfield Montgomery 10-31-2011
@
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Community Pacts Questioned in the Zoning Process - The New York Times
Page 1 of 4
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April 27, 2010
SQUARE FEET
Community Pacts Questioned in the Zoning
Process
By TERRY PR1STIN
Mayor MichaelR. Bloomberg suffered an embarrassment last December when the City Council
rejected a major developer's plan to spend hundreds of millions of dollars transforming an
unused armory in the
.l)ron~,
the city's poorest borough, into a shopping mall.
The Kingsbridge Armory project collapsed - and the Bronx lost the prospect of hundreds of
jobs - after the developer, the Related Companies, declined to require its tenants to pay a so­
called living wage of at least
$10
an hour and benefits.
The wage minimum was one of several concessions sought by a coalition of
19
community,
religious and labor organizations in exchange for supporting the project - to be formalized in a
pact known as a community benefits agreement, or C.B.A.
The coalition argued that since the mall would get public subsidies, the workers should be able
to earn enough to support their families. But Related said dictating to retailers what they must
pay workers would make
it
impossible to find tenants or financing.
Over the years the Bloomberg administration's view of community benefits agreements has
evolved from warm support in connection with a number of projects, including Yankee
Stadium, to adamant opposition. In the case of the armory, the city said that community groups
had been given ample opportunity to shape the document soliciting redevelopment proposals
and that no benefits agreement was warranted.
Now, in a report that is likely to have considerable influence on policy makers, the New York
City Bar Association has urged the city to stop allmving community benefits agreements to be
part of the zoning approval process. The report warns, among other things, that the agreements
could create an opportunity for corruption.
"It
is our recommendation that the city announce that it ,vill not consider C.B.A.'s in making its
determinations in the land-use process," the bar association said in the report last month. The
report, which was in the works long before the armory proposal was defeated, also urged the
city to declare that it would no longer playa role in "encouraging, monitoring or enforcing the
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Community Pacts Questioned in the Zoning Process - The New York Times
Page 2 of4
agreements." The report acknowledged that there was no way to prevent developers from
making deals with community groups. But it said the city should get involved, if at all, only
when the developer was seeking a public subsidy.
,John C. Liu, the city comptroller, has formed a task force to examine community benefit
agreements and other issues related to subsidized economic development projects. He said he
understood why the bar association wanted to rid the zoning process of the agreements, but he
said its approach was idealistic rather than practical. "My emphasis is on what kind of
mechanisms exist to make sure that the promised benefits are delivered," he said.
Community benefits agreements have proliferated around the country in the last decade, easing
the way for development projects. Many, like the one proposed for the armory, have
emphasized wage minimums and local hiring.
As
one member of Mr. Liu's task force, Julia Vitullo-Martin, put it, a "new weird principle" had
been grafted onto the "perfectly legitimate" idea that a developer should try to mitigate the
effects of gentrification.
"The original concept got lost," said Ms. VitullO-Martin, a senior fellow at the Regional :e.lal!
~§Q_G.ig.tiQJ1,
an independent research group. "Why should the developer be responsible for the
wages paid by retailers? That has nothing to do with the land-use process."
In recent years, city officials have opposed these private agreements on the ground that the city
review process provides ample opportunity for community groups to seek concessions from
developers. But previously, the Bloomberg administration championed or helped foster the
agreements for projects like the Atlantic Yards development in Brooklyn; the Gateway Center at
Bronx Terminal Market, a Related Companies project; and the expansion of Columhi<l
University.
While acknowledging that many residents believe that the city's formal zoning process, known
as the Uniform Land Use Review Procedure, or Ulurp, "fails to adequately consider or protect
their interests," the bar association report raised these and other questions about the private
agreements:
,Do the groups involved in the C.B.A. truly represent the community or are they simply seeking
advantages for themselves?
,Are they experienced enough to strike a good bargain with the developer, or will they sell out
too cheaply?
'Could benefits that require public subsidy - like affordable housing, for example - be
awarded to a particular neighborhood to win acceptance of a project rather than on the basis of
where these benefits are needed most?
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Community Pacts Questioned in the Zoning Process - The New York Times
Page 3 of 4
"Our feeling was that the process wasn't satisfactory from anybody's point of view," said
K~I..tI1CtJL.K,l'~isher,
a partner at Cozen O'Connor and chairman of the bar association's land-use
committee. Mr. Fisher said the bar association was particularly concerned about the potential
for corruption. Creating affordable housing might be a worthy goal, he said. "But it's another
thing for a council member to tell you which affordable housing group should be developing
it,"
said Mr. Fisher, a former city councilman.
In February, City Councilman Larry B. Seabrook was charged, among things, with helping a
close associate ""in a contract to install boilers at Yankee Stadium. A Yankees spokeswoman
said at the time that the boiler contract was "of a type that had been encouraged by the
community benefits agreement." Mr. Seabrook has pleaded not guilty to the charges.
The city has not responded formally to the report. But in an e-mail message, Janel Patterson,
spokeswoman for its Economic Development Corporation, endorsed the principal
recommendation, saying: "The city should not be a party to community benefits agreements.
The city works with the developer and the community board, as the recognized and appropriate
community representative, through the public review process (Ulurp) to ensure that a project
delivers benefits for the community directly related to the project."
But the Related Companies' lawyer Jesse Masyr said the agreements were ingrained in the land­
use process and were not likely to be eliminated. "I don't think it's reasonable to assume that
this genie goes quietly back in the bottle," he said. "A better approach would be to have rules
and policies as to what are the appropriate ways to handle this."
Mr. Masyr said he did not object to agreements that required developers to plant trees, for
example, or limit their hours of operation or try to hire local residents. A bigger problem - and
the potential for abuse occurs when the developer is asked to write a check, he said. In
2006,
for example, the city asked Mr. Mas)'T to help the West Harlem Local Development Corporation
negotiate a community benefits agreement for the Columbia expansion. He got the university to
agree to give the community $76 million in cash.
Vicki
1.
Been, a professor of land-use law at the
N~wj;~·QIlsJ)niY~Lsitv:
School of Law, and the
prime author of the bar association report, agreed that community benefits agreements were
inevitable, but she said the government did not have to participate. "I agree that developers will
do everything they possibly can not to have the uncertainty and unpredictability of community
opposition," she said. "What can be stopped is the government's role in that, to the extent that
developers felt like they were being told, 'You had better reach a C.B.A. before you come to the
City Council.' "
Another of the report's authors, Ross F. Moskowitz, aland-use lawyer at Stroock
&
Stroock
&
Lavan, said the city needed to address this problem to let developers know in advance what they
would be expected to provide and to prevent the failure of another major project. "Hopefully,
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Community Pacts Questioned in the Zoning Process - The New York Times
Page 4 of 4
what will come out of this debate is a process that will provide standards and certainty," he said.
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