A 9% Rule for Community Benefits Agreement Negotiations

I recently completed a case study of the Aggie Square project sponsored by the University of California, Davis next to a historic black community. The objective of the study was to answer a couple questions on how to measure and distribute economic benefits. My intended audience for the article was urban planners who have been asked to consider social equity in the planning process – but have not received objective standards from which to address this concern. In this article I lay out a proposed framework to measure the economic benefits of a project and suggest a pragmatic approach to identifying the portion of these benefits which could be shared. Then, for the case at hand, I measure what benefits were disclosed to the public and the amount that was eventually shared with the community. I’m looking forward to feedback on this approach from the peer-review process – and to eventually finding a home to publish this case study.

In the meantime, I’d like to share some of the noise I encountered during this case which often distracted me for short periods of time from my research questions. This is despite the sound advice from my methods professor who implored us to keep the questions on a sticky note on our computer screen.  In general terms, the noise that distracted me emanated from various strategic communications tactics employed by university communication specialists to promote the project and effectively hoard economic benefits for the university and its partners.  First, it was the publication of an economic impact report that touted immense benefits in raw numbers, while ignoring the relative insignificance of the impact in relative terms. Second, it was a series of made-up awards exchanged between city and university leaders and organizations driven by membership fees, to tout the excellence of all parties involved in driving the project. Finally, there were several instances where I documented leaders misrepresenting the project to their governing boards.

These noises were particularly irritating since I was attempting to test a framework which would give planners a tool to recommend a practical division of economic benefits – while seeing that the barrage of propaganda swirling around the case would make it professional suicide for a planner to suggest the tool.  I made note of this strategic noise during my study and circled back to its influence after I completed my findings and answered my initial research questions. Then, while drafting my conclusions I struggled with how to work around the professional suicide dilemma until I couldn’t. This led me to switch my audience for the article from planners to community activists.

My findings were that, for the first phase of the Aggie Square project, about $80 million in economic benefits could be shared with the community, approximately 60% of these benefits were disclosed in the public review process, and $10 million was eventually shared with the community. My recommendations shifted from suggesting how planners could be more transparent and propose more equitable splits, to how community activists could cut through the strategic noise and negotiate a better deal. I suggest activists use 9% of construction costs as a starting point to place a value on community benefits negotiations (communities netted a little over 1% from the Aggie Square Project). This is a proxy which cuts through the strategic noise and lack of transparency by planners and their leaders. Construction costs are readily available since they are the basis for the economic impact propaganda which often precede project advocacy. I worked backwards from my findings to peg the percentage at 9%.

Other recommendations that I suggest for community activists are to 1) Address misleading economic impact claims quickly by providing the media with the size of the regional economy – this will shrink the perception of the impact dramatically, 2) Fight upfront for a public interest model that provides communities funding to hire consultants to analyze and challenge claims of economic impacts and public subsidy requests by developers, and 3) If housing assistance is considered for part of the community benefits, ask for homeownership opportunities – not the opportunity to build equity for a rental housing developers.

More information on this current project of mine can be found under the Current Project tab. Also, I have a shorter version of this paper under my publications tab. In this draft essay I take a different slant on the study, comparing patterns of the planning process with Jim Crow era tactics.