A Community Benefits Agreement (CBA) in Cleveland is a legally binding pact between the city and a developer or company receiving subsidies for a project. The goal is for residents to directly benefit from the project.
Benefits can include apprenticeships or jobs for residents as part of the project – and contracts for underrepresented businesses, such as those owned by women and people of color. Neighborhood improvements, including new curbs, street paving and sidewalks, can also be included in an agreement.
Community Benefits Agreements should address wealth disparities and create meaningful opportunities for Cleveland, for Clevelanders, for people of color and for women.”
City Council President Blaine Griffin
Cleveland requires CBAs for projects receiving at least $250,000 in city financial assistance. It is a two-tiered system in which projects of at least $20 million are required to offer more benefits than smaller ones.
Why does Cleveland have Community Benefits Agreements?
Cleveland’s CBA ordinance is based on a fundamental premise. If a project receives public money, the subsidy should contribute to the common good of a diverse city that has consistently ranked among the poorest municipalities in the United States, said City Council President Blaine Griffin, who championed strengthening the city’s CBA requirements.
In 2023, Council and Mayor Justin Bibb’s administration worked together to strengthen Cleveland’s CBA requirements. At that time, the city had been using CBAs for more than a decade. Many – including residents, minority-owned businesses and public officials – said that most CBAs weren’t benefiting the businesses and residents they were supposed to help. Complaints ranged from these agreements not being specific enough about hiring and other goals to CBA contracts lacking the teeth for the city to hold developers accountable.
Griffin was among those concerned that the old CBA program was not responsive to community needs. He said the reality is that Cleveland often has to offer economic incentives to spur development. However, it is crucial that residents get something for their tax dollars being used in this way, he reasons.
“Community Benefits Agreements should address wealth disparities and create meaningful opportunities for Cleveland, for Clevelanders, for people of color and for women,” he said.
The new ordinance was shaped by input, including from community development corporations, the business community and consultants.
Since the ordinance took effect, the city has signed dozens of CBAs with companies, according to documents the city provided Signal Cleveland. The city’s Office of Equal Opportunity (OEO) oversees CBAs.
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Are Community Benefits Agreements new?
No.
CBAs go back to the 1970s, but it wasn’t until about 25 years ago that their use started increasing, said Matthew Rossman, a Case Western Reserve University School of Law professor whose expertise includes community and economic development and has studied CBAs. Early on, CBAs were more apt to be between community groups and developers – and not a municipality, county or other government agency. As they became more popular, municipalities were often party to the agreements. Government agencies, he said, brought something that community groups couldn’t – public funding.
There is still debate among experts about whether government agencies should be taking the lead with CBAs since the agreements are “really, truly meant to be responsive to needs that a particular community has articulated,” Rossman said.
“The question becomes: Is the municipal agency able to really articulate those benefits in a way that community members and community organizations may be able to?” he said.
How did Cleveland’s use of CBAs change in 2023?
The 2023 ordinance addressed concerns that earlier CBA requirements needed to be beefed up by creating measurable goals, reporting requirements and penalties for companies that broke conditions in their contracts. It seeks to expand the pipeline of workers and businesses that have often been underrepresented in construction and related fields. These include city residents, local small businesses, Minority Business Enterprise (MBE) and Female Business Enterprise (FBE) companies. The ordinance aims to increase the participation of those groups by requiring developers take part in apprenticeship and mentor/protege programs.
The ordinance notes the small percentages of Cleveland’s prime contracts that were awarded to minority-owned and operated and female-owned and operated businesses in 2021. At the time, minority-owned businesses accounted for 6.5% of those contracts and female-owned and operated businesses represented 21%. Far more, 45%, were awarded to small businesses in the area.
What are developers required to do under Cleveland’s current CBA ordinance?
Developers of all CBA projects, regardless of size, must meet baseline requirements, which include:
- Creating a plan and meeting participation goals for local small businesses and minority-owned and run and female-owned and run businesses.
- Creating a plan and meeting goals to hire Cleveland residents and low-income residents
- Participating in mentorship programs for certified local small businesses and minority-owned and operated and female-owned and operated businesses.
- Participating in apprenticeships, internships and networking opportunities for Cleveland’s young people, students and adults
- Creating a plan for a community engagement process to get residents’ views on the development project
- Submitting quarterly compliance reports to the city office that oversees the agreements
Developers of projects of at least $20 million must meet other requirements, including:
- Creating joint-venture, co-development, owner’s representative and associate partner opportunities for local small businesses, minority-owned and run and female-owned and run businesses.
- Hosting job fairs and contractor information and networking sessions about upcoming contracting opportunities
- Facilitating access to bonding, financing, insurance and other capacity-building assistance to local small businesses, minority-owned and run and female-owned and run businesses.
- Providing neighborhood infrastructure and safety improvements, including but not limited to parks and greenspace, public art, lighting and security cameras, multi-purpose and bicycle paths and pedestrian traffic-calming measures.
- Using Cleveland Public Power as the preferred electricity provider for the project, to the extent feasible
Why are hiring and contracting so important?
Cleveland’s CBA ordinance aims for a more diverse workforce to reflect the city’s demographics and to get residents into more good-paying construction jobs, Griffin said. The contractors, subcontractors and other businesses working on projects should also be diverse, he said.
About 46% of Cleveland’s population is Black and about 36% white, according to Census data. About 13% is Hispanic and nearly 3% Asian. More than half – 51.5% – of the city’s population is female.
The ordinance doesn’t note workforce statistics. Nationally, Black workers make up 5.1% of those employed in the construction industry, according to Census data. White workers make up 60.9%. Hispanics comprise 30% of the construction workforce and Asians comprise 1.8%. Women make up about 11% of those employed in the construction industry, according to the U.S. Bureau of Labor Statistics.
Since Black people, women and some other workers of color are underrepresented in construction and construction-related fields, finding diverse workers and contractors has often proven challenging, Griffin said.
“We have to train up more workers and businesses so that we can create a larger pool of people we can draw from and give them more opportunities to create wealth for themselves and their families,” Griffin said.
For decades, many on council have complained about city residents not getting their fair share of work on construction projects in Cleveland – even those that received city funding. One attempt to address this was the Fannie Lewis Law, named for the late council member who promoted hiring residents on publically-funded projects.
That 2003 law required companies with contracts over $100,000 to hire city residents for at least 20% of the project’s total construction hours. In 2016, the state legislature invalidated the ordinance by passing a law saying that municipalities and other public entities couldn’t require workers on publicly-funded projects to live within a specific geographic area. A 2019 Ohio Supreme Court said that the Ohio General Assembly had authority to enact such a law.
Cleveland’s CBA ordinance added public tracking of goals for transparency
The ordinance requires the office that oversees CBAs to develop and run a publicly available dashboard that includes workforce data as well as information on participation in projects by local small businesses and minority-owned and run and female-owned and run businesses and other data relating to CBA projects. Signal Cleveland has asked the administration for the status of the dashboard. We will update this article with the administration’s response when we receive it.
Do Cleveland’s Community Benefits Agreements work?
It’s hard to say. The ordinance requires the Office of Equal Opportunity (OEO) to send quarterly compliance reports and data to Council’s Finance, Diversity, Equity and Inclusion Committee for review. There are no records of Council ever having received such reports, Griffin’s office said.
Signal Cleveland contacted the Bibb administration regarding whether the office has submitted quarterly compliance reports and data to the Council committee. We will update this article with the administration’s response when we receive it.
Cleveland’s CBA ordinance holds promise for several reasons, Rossman said.
It has baseline CBA requirements for all projects, but requires additional requirements for those expected to be $20 million or more. Those types of requirements include unbundling construction work into smaller bid packages that make it easier for local small businesses, minority-owned and run and female-owned and run businesses to compete. This is among the ways Rossman said the ordinance has specific objectives and benchmarks that are easy to measure and “meaningful to the communities that they’re meant for.” It is also important, he said, that the ordinance includes a clawback provision in which the city can take back the funding from a developer who breaks the terms set out in the ordinance.
“I think there’s reason to be optimistic around it because it’s a creative approach to handling Community Benefits Agreements,” Rossman said of the ordinance. “You can have the greatest statute in the world, but if the government agency isn’t keeping an eye on it and acting to really ensure that the terms are being abided by, then it’ll just be a bunch of language – and you won’t see the yield.”
