Community Benefits Agreements: PES Case Study

By Winn Costantini

Posted July 21, 2022

 

In 2019, a series of explosions at the PES oil refinery led to efforts to permanently close the oldest refinery on the east coast, and prevent the sale of the site to a company that would continue to use it for refining fossil fuels. Shortly after, PES filed for bankruptcy and the 154 year old refinery was officially closed. 

Environmental justice organization, Philly Thrive, began organizing to fight the health and environmental impacts of the 1300-acre PES refinery in 2015 with their Right to Breath campaign. The neighborhoods surrounding the refinery site are home to mostly Black residents, with a majority living below the poverty line. These residents also experience disproportionately higher rates of cancer, asthma, and other health issues due to pollution from the refinery, which was found to include higher-than-permitted levels of benzene, a known carcinogen.

Following the closure, advocates demanded that the PES site be restored to the public for the development of community-owned renewable energy. The site was instead sold to Hilco for $225.5 million in 2020. Hilco released their initial master plan in July 2020, which consists of leveling and lifting the site’s soil above sea-level and constructing eleven million-square-foot warehouses to serve as ”logistical centers” and employ an estimated 10,000 people. Advocates still proclaimed the sale to Hilco as a victory, which sparked the next phase of organizing to ensure that Hilco proceeded with accountability toward local residents regarding both remediation and development of the site. 

In February 2021,16 community organizations came together to form the United South/Southwest Coalition for Healthy Communities with a focused mission to achieve a Community Benefits Agreement with Hilco to ensure the new residents have an official seat at the table. Such an agreement could protect residents from displacement through preservation of affordable housing, create living-wage jobs and training programs, create and improve community resources such as recreation and child care centers, and ensure thorough clean-up of pollutants and enforced environmental monitoring systems. 

 

What are Community Benefits Agreements?

Community Benefits Agreements (CBA) are a legally enforceable contract signed by community groups and a developer, which detail a list of negotiated community benefits that the developer agrees to provide as part of a project. In exchange for these benefits, community groups agree to support the proposed project before the government bodies that provide the necessary permits and financing. CBAs can serve as a mechanism for social justice and delivering economic opportunities and equitably distributed public goods to marginalized communities that would otherwise be harmed by the development project. 

Without a CBA, non-governmental groups (such as community neighborhood organizations, environmental organizations, affordable housing organizations, and unions) have little to no direct communication with developers. Instead, all developer commitments are drafted and agreed upon only by the developer and government and community groups cannot enforce these commitments. With a CBA, a coalition of community groups uses their collective power to collaborate with the developer – community and developer representatives work together through a transparent and inclusive process to draft the contract and community groups can then enforce these commitments. In order for these commitments to be effective, CBAs must include plans for continued communication and community oversight, as well as clear timelines and measurable deliverables. 

 

CBAs in Action

In 2007, the One Hill coalition was formed in Pittsburgh to advocate for a CBA alongside the development of a new Pittsburgh Penguins stadium. In order to access public funds for this investment, advocates demanded that the project address the lack of access to fresh food, social services, and high-quality, union jobs.The successful CBA resulted in $8.3 million in neighborhood improvements beyond the cost of constructing the new arena. In addition, the CBA resulted in a series of citywide policies that made equitable development the standard for publicly subsidized developments moving forward.

Here in Philadelphia, City Council passed a law in 2019 requiring CBAs for projects that receive City support or financial assistance. However, CBAs have been a part of development in Philadelphia prior to this legislation. For example, Cedar Park Neighbors, a community organization, signed a CBA with the developer of a 76-unit apartment building on the border of West and Southwest Philadelphia. Local residents, community organizations, and Councilmember Jamie Gauthier strongly opposed the development due to the development’s potential to exacerbate gentrification and displacement in the Squirrel Hill neighborhood. However, Cedar Park Neighbors agreed to support the development and the developer agreed to include 15 affordable units for 50 years with an income cap of 40% area median income. 

 

Next steps for Hilco Development

By late 2021, Hilco had indicated a willingness to negotiate with the United South/Southwest Coalition for Healthy Communities, now with 22 member organizations, and by early 2022 Hilco committed to a monthly meeting with coalition representatives. In an open letter in March 2022, the coalition reiterated their commitment to forging a partnership with Hilco, as well as their demonstrated support from Mayor Kenney and Councilmember Kenyatta Johnson

The coalition put forth specific requests for a structured negotiation process: a jointly-issued public statement from Hilco and the coalition committing to negotiating a CBA, continued monthly meetings, Hilco’s provision of concrete information such as redevelopment plans and workforce development data, and commitment from Hilco to participate in a structured community engagement process that will inform the CBA. 

On July 28th, the United South-Southwest Coalition will host a virtual public meeting for an update on the development of a Community Benefits Agreement and the meeting schedule to get the CBA over the finish line. Learn more and get involved! 

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