New York City needs a more transparent and accountable system for implementing community benefits agreements with private developers that receive public subsidies,
“Public subsidies for private development have become more pervasive and costly in recent years,” Comptroller John Liu said in a press release. “Too often, however, the promises fail to materialize long after the private developers have received their special subsidies.”
Community benefits agreements can involve promises to community organizations that the developer will create jobs for area residents, fund local groups, or build affordable housing. In return, the organizations support a project as it goes to the city for public subsidies, which can include tax-exempt bonds and for any zoning variances the project might require.
These agreements have been criticized from various viewpoints. Some see them as illegal takings from developers who have to provide unrelated services in return for land-use agreements, while others complain they are unenforceable and lack transparency, the report said.
It also said community organizations may not be in a good position to negotiate with more sophisticated developers.
The task force said agreements should be legally binding between the developer and the lead agency or the City Council. Other recommendations included making all agreements publicly available, restricting the size of benefits in proportion to the development, and having the comptroller monitor all benefit agreements and issue an annual compliance report. Mayor Michael Bloomberg’s office was reviewing the report, according to a spokesman.
The task force didn’t reach consensus. Four members quit and four declined to put their names on the report, which was released with 29 names of people drawn from unions, community groups, and the real estate industry.
“We understood from the beginning that not everyone would agree on everything,” said Liu spokesman Scott Sieber. “But the comptroller was insistent that doing nothing or keeping the status quo was not an option.”
