When Amazon launched a national search to find a home for its second headquarters, the corporate giant said it was looking for a site that could offer access to major highways, a population of more than one million people, tax breaks and other financial incentives.
Cities across North America, including Pittsburgh, spent weeks and money ($300,000 to $400,000 in Pittsburgh’s case) to formulate pitches that would stand out to Amazon as a suitable HQ2 location.
A group focused on equitable development in Southwest Pennsylvania believes it should be a two-way road. If members of the Community Power Movement had it their way, the city would be demanding just as much in return from Amazon as the company is requesting from the applicant cities. No one really knows what regional officials have asked for in return, other than the implied infusion of jobs and development.
But the mission of the Community Power Movement doesn’t only start and stop with Amazon. The group, formed last summer, wants to institutionalize community benefits in Allegheny County, so that any company or developer receiving public subsidies must also agree to certain conditions that mitigate its effects and improve the area it’s inhabiting.
“If you’re going to give public subsidies to a corporation, the community is supposed to get a benefit, and that should be in an agreement, not just in vague promises,” said Jules Lobel, a University of Pittsburgh law professor and member of the Community Power Movement.
Other cities have taken similar measures to formalize community benefits — conditions to which a developer must agree before the local government approves the project. The benefits can include agreements to pay living wages, contribute to an affordable housing fund or give hiring preference to residents.
The group’s goal in advocating for community benefits is to ensure new development doesn’t exacerbate Allegheny County’s existing inequalities. In a county that lacks thousands of affordable housing units, has significant wage gaps for women and people of color and where residents have been displaced by gentrification, the group fears new large-scale development could intensify these problems.
In Seattle, Amazon has contributed more than $30 billion to the economy, created 40,000 jobs and occupies more than 10 million square feet of office space — about one-fifth of the city’s total. Yet it has also brought challenges to the city, like soaring home prices and heavy traffic. The company has sponsored some philanthropic programs, but critics argue Amazon hasn’t done enough for the Seattle community.
Earlier this month, the company hit pause on new construction in Seattle and threatened to stop its expansion there after a tax was proposed that would have cost Amazon about $20 million annually. City officials reevaluated the tax and, ultimately, scaled it back. Revenue from the tax will support affordable housing and homeless services — problems that have increased since Amazon’s arrival.
If Amazon HQ2 comes to Pittsburgh, how can Allegheny County enjoy the same benefits Seattle did without facing the drawbacks?
As regional officials advocate for Pittsburgh to become Amazon’s new home, media outlets, including PublicSource, have made attempts to obtain the city’s proposal. The Community Power Movement is adding to the mix by circulating a petition with two demands: that the city’s proposal to Amazon be made public, and that all public subsidies include community benefits.
The petition has more than 600 signatures so far, and the group plans to present it to city council, the mayor and county officials in mid-June, which raises new questions: What would a community benefits requirement look like? And how effective would a county-wide mandate be?
Mayor Bill Peduto’s office did not address the idea of formalized community benefits directly, but did restate that residents would not be left behind should Amazon come to Pittsburgh. "Mayor Peduto firmly agrees that the greater Pittsburgh community would have to benefit from Amazon or any other large employer that could receive public subsidy,” Timothy McNulty, spokesman for Peduto, wrote in an email. “That is why Pittsburgh's headquarters bid was called 'Future. Forged. For All.' He wants opportunities to be available to everyone whether they have a Ph.D. or a GED, and for that opportunity to be a bedrock part of any agreement with any business."
Amie Downs, communications director for Allegheny County, said it would be inappropriate to provide comment, given that she has yet to receive the petition from the Community Power Movement.
Allegheny County District 3 council member Anita Prizio agrees with the Community Power Movement that community benefits should be required for all publicly subsidized projects in the county. “Will Amazon address the issues currently faced by Seattle, such as lack of affordable housing and increased homelessness? I understand that local construction and service jobs will naturally flow from such a large influx of jobs and investment, but are the astronomical economic incentives from local government justified? The county must insist that Amazon partner and collaborate on transit, infrastructure, workforce development and other initiatives that would benefit both the community and the company,” she wrote in an email.
Pittsburgh’s first CBA
Community benefits agreements, or CBAs, are an increasingly common mechanism for ensuring community benefits and equitable development. A CBA is a contract signed by a developer and a coalition of community groups, and sometimes includes local government entities. The agreement is usually reached before a new development project begins and requires the developer to grant specific benefits to the community.
CBAs are not new to Pittsburgh — and the first one, designed to benefit the Hill District, is both a cautionary tale and an illustration of their potential.
In 2008, the CBA was negotiated between the Pittsburgh Penguins, several city and county agencies and the One Hill Neighborhood Coalition, which represented almost 100 groups in the Hill District at the time.
In exchange for the right to build a new arena in the neighborhood, the contract provided the Hill District $8.3 million in monetary contributions to community development projects as well as non-monetary benefits. The CBA included $2 million for the establishment of a grocery store, prioritization of Hill District residents when hiring and funding for a master development plan, among other benefits.
Ten years later, the CBA has mixed reviews. Although it accomplished many of its goals, such as the construction of a Shop ’n Save grocery store and the creation of a neighborhood master plan, some feel the Penguins didn’t contribute enough to the agreement. While the community received $8.3 million in benefits, the Penguins received $7.5 million in state funding per year over 30 years from the PA Economic Development and Tourism Fund, $10 million from the Commonwealth, and $5.5 million from the Sports Exhibition Authority [SEA]. In total, the team is set to receive more than $245 million in state subsidies.
2008 Community Benefits Agreement (Text)
“It’s still a win. I’m not saying it’s not a win,” said Carl Redwood, Hill District resident, board chair of the Hill District Consensus Group and a member of the Community Power Movement steering committee. “But you have to put it in perspective because the main subsidy and main benefit went to [the Penguins]."
Some cities are moving toward requiring CBAs for all development receiving public subsidies, rather than negotiating them on case-by-case basis.
In November 2016, Los Angeles passed Measure JJJ, which sets affordable housing mandates and local hiring restrictions for residential projects requiring a zoning change. The measure was created to help combat the city’s lack of affordable housing and homelessness crisis.
In the same month, Detroit voters passed a Community Benefits Ordinance, requiring developers to provide specific benefits to the community. For each project, a neighborhood advisory council made up of nine residents is created to negotiate the agreement and an enforcement committee composed of city officials ensures developers adhere to the agreements.
What sounds good on paper may not be the best path, though, said Ben Beach, legal director of the Partnership for Working Families—a national network of economic and environmental advocacy organizations that houses the Community Benefits Law Center. Once the government is involved, it can have a hand in the makeup of the coalition negotiating the CBA. When this happens, the engineered coalition is less likely to be truly representative of the community, he said, and they may not fight as hard or make strong enough demands. Therefore, it could result in a much weaker CBA than what an independently organized coalition may have produced.
How is Detroit’s ordinance playing out?
“The current ordinance has not been terribly effective in representing community interests or getting substantive community benefits in these projects,” said Sam Butler, executive director of D4, a Detroit community development coalition. The ordinance has affected about six projects thus far, he added. Because the ordinance does not have a detailed hiring quota or other specific mandates, he said, the coalitions negotiating the benefits have not had enough guidance of what to ask for, resulting in less effective policies.
Jackie Smith is involved with the Pittsburgh Human Rights City Alliance and is a founding member of the Community Power Movement. Given the shortcomings of the Hill District CBA, she advocates for other methods of ensuring community benefits, which would include requiring developers to pay taxes to support schools, parks and other community assets; to reserve a portion of newly created jobs for current residents; and to make commitments to improve air and water quality.
Smith also called for the city to ensure, through a formalized agreement, that “the huge gender disparities evident in Amazon’s workforce in Seattle cannot be allowed to be reproduced here,” if the company chooses Pittsburgh among the 20 finalist cities.
“Our point is that all of this needs to be worked out as part of the agreement,” she said, “not left to be worked out once the company is here.”
The Community Power Movement isn’t the only group in Pittsburgh or the United States spearheading a preemptive action and asking Amazon to provide community benefits. In October, 73 civic organizations from more than 25 cities and states sent an open letter to Amazon CEO Jeff Bezos, titled “Our Amazon Wish List.” The letter called for Amazon to create family-sustaining jobs, pay taxes and agree to a transparent deal-making process that engages community stakeholders.
“We love jobs, we love technology, and we love convenience—but what you’re looking for will impact every part of our cities,” they wrote in the letter. “We built these cities, and we want to make sure they remain ours.” Local signatories included Pittsburgh United, the Pittsburgh Human Rights City Alliance and the UrbanKind Institute.
If Amazon does come to Pittsburgh, it is unclear if a community benefits requirement would even be possible. Although Peduto said there would have to be public hearings before city and county councils and the school board, if any local tax incentives are on the table, some community leaders believe the prospect is unlikely at best. The city has already submitted a proposal with unknown incentives. With so many cities vying for Amazon, it’s doubtful that the proposal asks for community benefits, said Jamil Bey, executive director of the UrbanKind Institute, a policy research and community engagement consulting firm.
“I think a CBA for Amazon is irrelevant anyway,” Bey said. “Whatever is in that proposal has already been… you’ve already made the deal.”
What comes of the Community Power Movement’s petition to require community benefits in Allegheny County remains to be seen.
Smith said the problem has deep roots.
“I think the way our government is currently set up and the way it operates neglects the voices and needs of residents, and that’s really where the crux of the problem is,” she said. “So, if we’re going to have more people-oriented development, we need to have politics that includes people's voices.”
Juliette Rihl is a freelance writer. She can be reached at JulietteRihl@gmail.com.
This story was fact-checked by Maria Rose.