While the concept isn’t new, we’re seeing community benefits agreements pop up in discussions of new and existing MLB ballpark funding discussions. Here’s a look at what’s involved.
The concept behind community benefits agreements is a pretty simple one: if there is public participation in the funding or financing of large projects–not just sports facilities–there should be measurable benefits to the community at large, not just the beneficiaries of the money. For instance, there’s a whole industry devoted to measuring the benefits of tax breaks for a wide variety of business segments. Recently, the Boston-based Lown Institute made headlines by announcing that its studies indicated that tax breaks extended to nonprofit health-care giants like the Mayo Clinic did not yield corresponding levels of community benefits. While the Lown Institute findings are disputed by these institutions and policymakers, the discussion of community benefits extend to developments like banks, housing developments, wind terminals and various other developments across the country.
These community benefits agreements generally cover things like construction wages, minimum employment, minority and local subcontractor goals, and art budgets. They can also fund community endeavors outside the project: the original sales tax financing for Target Field also funded measures outside of professional sports and the Minnesota Twins, including $2 million annually for extended hours at Hennepin County libraries and $2 million annually for youth activities and sports.
Community benefits agreements have been the subject of debate for new and extended sales taxes for Target Field and new Las Vegas and Kansas City ballparks. Spend some time in the development world and you run across plenty of discussions of community benefits agreements and commitments from deep-pocketed investors. The discussions of community benefits in the MLB world, however, tends to be a much higher profile thanks to the presence of billionaire team owners, making for a narrative that even the dimmest of daily-newspaper reporters can grasp.
In Minnesota, the extension of the sales tax financing Target Field construction bonds is set to sunset when those bonds are paid off early. But there’s talk of extending the 0.15 percent Hennepin County sales tax, which generates some $50 million annually (yes, there’s a surprisingly large payout from a very small sales tax), to cover ongoing Target Field maintenance to the tune of $9 million annually as well as $40 million annually to cover expansion of Hennepin County Medical Center, while funding the existing commitments to youth sports facilities and expanded library hours. This will require state approval, and there surely will be some pleas from Minneapolis officials to include other pet projects in the mix, it will likely pass in some form: extended an existing tax is an easier sell than initiating a new one.
We’re seeing a similar situation in Kansas City, where an April 2 referendum on the extension of a Jackson County 3/8th-cent sales tax devoted to the Truman Sports Complex will ask voters to approve proceeds for a new downtown Kansas City Royals ballpark and Arrowhead Stadium renovations for the Kansas City Chiefs. As part of the public debate, the Royals and Chiefs proposed a community benefits agreement that would create a county governing board administering grants to local nonprofits, funded to the tune of $3.5 million annually by the Royals and $2 million annually by the Chiefs. The grants would be focused in nine categories, including employment benefits, affordable housing, child care subsidies, workforce assistance, health care, education programs, public transportation and environment and sustainability. Also part of the community benefits agreement: hiring goals for minority- and women-owned businesses.
The teams and the city say that this proposal is in the top tier of community benefits agreements in professional sports. But a group representing local workers and community activists say the CBA doesn’t go far enough, lacking specifics, inadequate in funding levels, providing no community control on grants, and not committing to minimum levels of funding in specific areas. From Missouri Workers Center and Heartland Center for Jobs and Freedom:
What’s actually historic and unprecedented, despite what the Royals say, is the amount they are asking for relative to the benefit they will confer to poor and low-wage Kansas Citians. Not only will the Royals use most of our taxpayer dollars to pay off their debt; this is also a matter of billions of dollars in regressive taxation, which we know disproportionately harms poor and working people and communities of color. Nor does it account for the additional $700 million in public financing that the team will seek from Kansas City and the state of Missouri.
For over a year we have done everything in our power to win a fair deal for Kansas City’s working class, including by providing the Royals with a template for a strong CBA in the Milwaukee Bucks agreement. They walked away from the table and refused to negotiate. When they finally agreed to return to the table, they had a chance to earn our vote by delivering on a living wage, union jobs in the stadium and entertainment district, and truly affordable housing. They rejected each one of these demands.
They promised to deliver on a transformative CBA that would improve the lives of poor and working people, but all their “tireless efforts” only resulted in the team’s abject failure to get a Good Jobs CBA over the finish line by our March 19 deadline. That’s why we’re voting NO to Question 1 on April 2 and we encourage our community to follow suit.
(We can’t track down any references to affordable housing as part of the Fiserv Forum community benefits agreement, however, either in our Arena Digest coverage, other press stories or Bucks press announcements. And the development hailed in the Milwaukee Bucks CBA has not happened.)
Polling indicates the referendum results are too close to call.
In Las Vegas, the public discussions of a community benefits agreement have not been as contentious as seen in Kansas City, and the Athletics’ commitments are more modest than those proposed by the Chiefs and Royals. From the Las Vegas Review-Journal:
In the years the A’s ballpark is under construction, the team is required to fund a minimum of $500,000 in community benefits annually, with that jumping to $2 million per year, or 1 percent of ticket revenue, once the stadium is open.
Fifty-one percent of the workforce during the construction of the stadium will be required to be made up of women, minorities, veterans and disabled workers. The A’s will be required to contract 15 percent of work on the stadium to small locally-owned businesses.
Once the stadium is in operation, 60 percent of workers at the ballpark will be required to be women, minority, veteran or disabled. The A’s will be required to pay stadium workers a living wage and set up an employee relief fund to assist workers in times of need.