Last week, the council postponed voting on the measures to further study them and seek additional concessions.
Council President Mary Sheffield was the lone no vote on the transformational brownfield plan, which is a state incentive package meant to spur large-scale developments under a rarely-used Michigan law approved several years ago. Sheffield had expressed concern over the course of the meeting that there was not a firm enough commitment from Olympia and Related to contract with disadvantaged businesses over the course of the development effort, the scope of which includes 10 projects with 1.2 million square feet of new office space, 695 residential units (nearly 140 of which would be considered affordable), 146,000 square feet of retail and 467 hotel rooms.
“I have supported pretty much every development project in this city after I have negotiated (with developers),” Sheffield said. “I truly believe this is an opportunity for equity, ownership, for Black businesses to have access to what is going on in our downtown Detroit area, and we can’t get clear language … on disadvantaged businesses.”
Ultimately, the council signed off on a community benefits agreement previously negotiated and approved by the Neighborhood Advisory Council with two changes. First, there is a new provision saying the development team agrees to comply with a 2014 executive order requiring 30 percent of spending on Detroit businesses, and a 2021 executive order requiring that 51 percent of the work hours performed on publicly-funded projects be performed by Detroiters. Another provision requires $350,000 per year for 10 years be contributed to the Affordable Housing Development Preservation Fund. Crain’s is seeking clarification on where that funding is coming from.
There was also an agreement to give Detroiters living in the city for 10 years or longer priority for affordable housing, followed by Detroiters with five years or longer of residency and then Detroiters with three years of residency.
In a joint statement Tuesday following the votes, Olympia and Related said: “We thank the Detroit City Council, Mayor Duggan, the Neighborhood Advisory Council, and all of the Detroiters who support the future of The District Detroit and the inclusive economic impact that this project will have on our city and state, including thousands of jobs and much needed affordable housing. We look forward to continuing our work with the Neighborhood Advisory Council, City of Detroit and the State of Michigan.”
Tuesday’s votes, particularly on the transformational brownfield plan, were needed so that Olympia and Related could get MSF approval at its April 25 meeting, thereby allowing the development team to get in the ground on its first proposed construction project — a new office tower — by July or August and not “lose this construction season,” said Nicole Sherard-Freeman, Mayor Mike Duggan’s group executive of Jobs, Economy & Detroit at Work.
At times it was a “messy” process on Tuesday, Sherard-Freeman said, with at one point a resolution on disadvantaged business hiring being drafted as the council was meeting only to realize that it would not have been enforceable. At other points, Detroit Corporation Counsel Conrad Mallett was advising members of the council that requests they were making about disadvantaged business hiring and connecting it to those businesses being based in Detroit were at odds with the state constitution and would trigger lawsuits.
“You simply can’t do it,” Mallett said. “‘Disadvantaged’ as a category, standing alone, is one thing; ‘Detroit-based,’ standing-alone, is another thing; and ‘Detroit-headquartered’ is a third thing. Connecting them limits the enforceability and it is a constitutionally infirm provision inside the agreement. We would be inviting litigation and it’s not to the advantage of the city of Detroit to continue to fight this particular battle.”
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