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Office of Equal Opportunity

Community Benefits Ordinance

Overview

The City of Cleveland has been utilizing Community Benefit Agreements (CBAs) for development projects for over a decade. Official legislation, the Community Benefits Ordinance (CBO), passed by the City Council in June of 2023, outlines a legal framework for how CBAs are applied, the process for how they are developed, and the kinds of benefits the City would like developers to prioritize. This ordinance also outlines expectations for publicly reporting contracting and workforce data. The CBO legislation went into effect officially in September of 2023.

The City of Cleveland recognizes its unique role in ensuring that development projects directly benefit the communities in which they are built and that public dollars benefit the entire community, including historically underrepresented minorities, women, and small businesses. While the baseline for a CBA includes meeting the MBE/FBE/CSB and local workforce targets the City has required for years, a strong CBA can build from that base and help impact our City in a myriad of other ways. An investment in time to discuss community benefits early in the project can create a more meaningful and impactful project for the community, the developer, and the City.

The City of Cleveland has designated two types of Community Benefits Agreements - Standard CBA and Expanded CBA.

A Standard CBA is for all projects receiving $250,000 or more in City assistance and under $20 million in cost (including residential tax abatements for projects under $75 million in total cost); the CBO outlines a set of mandatory community benefits.

An Expanded CBA is for all projects receiving $250,000 or more in City assistance with a project cost of over $20 million (including residential tax abatement projects over $75 million in total cost). An Expanded CBA consists of the mandatory community benefits listed in the Standard CBA; it must also be coupled with additional community benefits to be considered for legislative approval. The CBO provides a great deal of flexibility in determining the appropriate additional community benefits related to the project. The CBO offers categories, suggested considerations of additional community benefits, and associated requirements that must be met.

This ordinance also requires Developers to meet with community members to ask for their feedback on the project and any additional benefits they might like to see included in the agreement.

Once a set of community benefits is agreed upon, City Representatives will present the development project’s incentive package with the associated community benefits for first review by the Cleveland Citywide Development Corporation (CCDC), an advisory nonprofit board that helps the city with its real estate deals, and then to Cleveland City Council for legislative approval. CBAs must be presented at the same time the City administration presents the financial incentives for legislative approval.

Based on the CBO, City Council will not approve any development project incentives, nor can the City close on any incentive agreements or contracts until all community benefits are agreed upon. Therefore, the preference is to begin the conversation about community benefits early in the process; however, the Administration will not engage in the process until the Developer has a firm development project that will move forward. Before meeting with the Administration, the Developer should have a proforma for the project along with a site plan and development timeline.

It is critical that The Developer does not begin construction on the project until both the project incentives and community benefits have been fully approved. Doing so may result in the City disapproving or pulling back the incentive.

The Developer must submit their Community Benefits Plan (CBP) via the online submission form on the OEO website. The specific objectives the Applicant commits to in its Community Benefits Plan (CBP) in quantifiable terms with S.M.A.R.T. milestones – Specific, Measurable, Achievable, Relevant, and Timely – and timelines wherever possible. If the S.M.A.R.T. method is not applied, the application may be rescinded. Applicants are strongly encouraged to clearly and concisely respond to each answer in the space provided.

The Developer must submit contracting, workforce data, and all other community benefits compliance information to OEO, who will then be required to share quarterly updates of this information with City Council and the public, via a public data dashboard.

Lastly, this ordinance outlines penalties that may be included in the CBA for possible non-compliance, up to and including termination of city financial incentives.

Mission, Vision, & Purpose

Mission

Our unwavering mission is to create a vibrant, inclusive community that embraces diversity and empowers all residents to thrive. Through our steadfast commitment to providing affordable housing, growth opportunities for businesses, high-quality employment, public amenities, civic engagement, public health, fair allocation of resources, and fostering community connections, we will continue to build a better tomorrow for all.

Vision

Our vision is to create a brighter and more sustainable future by building an innovative and efficient physical environment that harnesses the power of public and private resources. Through collaboration and joint efforts, we aim to inspire sustainable positive change that encourages continued equitable growth to ensure that all can participate in the City of Cleveland’s economy.

Purpose

Community Benefits Agreements (CBAs) are legally binding documents that allow residents to benefit from development projects. CBAs can provide economic opportunities for residents, leading to economic growth and mobility. To ensure transparency and accountability, a Community Benefits Ordinance (CBO) is crucial, as it regulates and monitors developments that use public funds.

The Process

In order to initiate the development process, it is advised that the Developer arrange a meeting with either the Department of Economic Development or the Department of Community Development.

The Developer needs to have a well-defined project proforma, site plan, and development timeline before requesting a meeting with the administration. Doing so will enable the Administration to make well-informed decisions and facilitate a seamless and successful development process. The proposed terms of the development project will be subject to a thorough review by the respective department staff, who will subsequently determine whether or not to proceed with the incentive allocation process.

Before meeting with the Administration, the Developer should have: 

  • Proforma for the project
  • Site plan
  • Project development timeline

Types of projects:

Please contact the appropriate department before submitting your Community Benefits Plan to the Mayor's Office of Equal Opportunity (OEO). Adhering to this procedure will help ensure your submission is processed efficiently and eliminate additional unnecessary delays.

The Mayor's Office of Equal Opportunity does not control the timing of your project.

Once the Developer has been instructed to proceed with their project, please submit the Community Benefits Plan (CBP) to the Mayor’s Office of Equal Opportunity.

Community Benefits Resource Guide - Revised Apr 2024

FAQs

A Community Benefits Agreement (CBA) provides a framework for developers and community representatives to work together constructively toward the common goal of creating better and more equitable development projects. By establishing clear and enforceable obligations, CBAs encourage transparency, accountability, and collaboration, helping to build trust and foster positive relationships between developers and communities. Through this process, CBAs can play a vital role in promoting shared prosperity and ensuring that development projects deliver meaningful benefits to the communities they serve.

  • Developers - The Developers seeking support for a new project are always involved in the negotiation of and are a party to the CBA.
  • Community Coalitions - Community coalitions are a necessary party to any CBA to ensure that the community itself is engaged in the negotiation of a CBA and will benefit from the development.
  • City Administration - City administration can assert their inclusive leadership by (1) being transparent about the project; (2) insisting on gaining broad community support for project approval; and (3) actively encouraging CBA negotiations without any attempt to influence them.

The length of the community benefits agreement process is dependent upon effective and timely communication between all stakeholders, developers, and city administration. The City of Cleveland is committed to operating at the speed of business to ensure that all parties are progressing toward a final CBA closing date.

A CBA is required whenever a Developer is awarded a city financial incentive that equals $250,000 or more. For projects that have a total cost of 20 million or more are considered large projects are which required to have additional community benefits.

To find a list of City of Cleveland certified vendors, please visit the City of Cleveland website under the Office of Equal Opportunity webpage and click “Certified Vendor Directory” located in the Resources Links section.

  • Certification requirements
    • Ready, willing, and able to perform work in the area it seeks certification
    • Located in the Cleveland market area
    • Owned and controlled at least 51% by a minority or female
  • Required documents
    • Affidavit of Certification (New)
    • Identification
    • Federal tax returns
    • Articles of Organization or Incorporation certificate copy
    • NAICS Codes

Note - Other documents may be required depending upon the type of business and the business structure.

  • Community:
    • Job creation
    • Local and diverse hiring and training commitments
    • Living wage and other benefits
    • Education partnerships between developers and community schools
    • Support for local small businesses
    • Improvements to open spaces, parks and playgrounds
    • Affordable housing and rehabilitation
    • Support for senior centers and child-care facilities
    • State and/or local economic incentive packages
  • Developer:
    • Community support reduces risk for developers by fostering cooperation between government and community groups
    • Developers get needed public subsidies and/or government approvals more reliably
    • Community coalition agrees to support the project with public testimony and written statements
  • Administration:
    • Keep lines of communication open to ensure consistency with the city's policy goals
    • Creates a fair and open process for establishing achievable targets within the community
    • Creates transparency with community on development projects within the City of Cleveland
    • Creates an opportunity to improve the local economy through dedicated job creation and small business utilization

If the City determines that the Owner/Developer has failed to fulfill each of the required elements of this Agreement, the City is deemed to have been damaged. If the Owner/Developer does not cure such failure to the reasonable satisfaction of the City within 30 days after receiving such notice, the City may assess a penalty against the Owner/Developer up to 25% and/or including denial or termination of all city financial assistance.

For optimal success, it is imperative that all designated parties maintain an open line of communication. This will help lessen any chances of receiving future penalties for failure to comply, enable the City representatives to provide assistance and help the City Administration determine the severity of any applicable penalties for non-compliance. The goal is to address any unforeseen issues as soon as possible rather than at the end of the project. Good faith efforts and other accommodations may be taken into consideration as long as the Developer makes City Administration aware well in advance.

S.M.A.R.T. (or SMART) is an acronym used as a mnemonic device to establish criteria for effective goal-setting and objective development: Specific, Measurable, Achievable, Relevant, and Timely. This method is required because it helps the Administration understand the full scope of what the Developer proposes to eliminate ambiguity.

Key Terms / Definitions

B2Gnow - a web-based contractor certification and contract compliance monitoring system used by the City of Cleveland Office of Equal Opportunity to monitor compliance on City contracts

Bidder - a Person offering to contract with the City in response to an invitation to bid

City - the City of Cleveland

City Financial Assistance - any grant, loan, tax increment financing, residential multi-family tax abatement in compliance with Ordinance No. 482-2022, Section 3, below market-value land transfer, and/or City-funded capital infrastructure improvements associated with a development project

Cleveland Area Small Business or “CSB” - a Business Enterprise certified under division (a) of Section 187.03. that has its principal office located physically within the municipal boundaries of the City

Contract - a binding agreement executed on or after the effective date of this Cleveland Area Business Code by which the City either grants a privilege or is committed to expend or does expend its funds or other resources or confers a benefit having monetary value including, but not limited to, a grant, loan, interest in real or personal property, or tax incentive in any form for or in connection with any work, project, or public purpose

Contracting Department - includes any administrative department under the charge of the Mayor or any office, board, or commission treated or construed as a department of City government for any purpose under the city's Charter or ordinances for the benefit or program of which the City enters into a particular Contract.

Contractor - a prime contractor, a subcontractor, or any other business entering into a contract with the Developer related to the use, maintenance, or operation of the Project or part thereof

Community Benefits Agreement or (CBA) - a legally enforceable agreement between the City of Cleveland and the Developer that provides community benefits

Community Benefits - the amenities, benefits, commitments, or promises described in Sections 191A.02 and 191A.03 of this Chapter

Community Benefits Plan (CBP) - a set of specific objectives that the Developer commits to fulfill in order to meet the requirements of the CBA. The CBP should be presented in quantifiable terms with S.M.A.R.T. milestones - Specific, Measurable, Achievable, Relevant, and Timely - and timelines wherever possible. If the SMART method is not applied, the application may be rescinded.

Construction Worker Hours - the total hours worked on a Construction Contract by Skilled and Unskilled Construction Trade Workers, whether those workers are employed by the Contractor or any Subcontractor. In determining the total Construction Worker Hours to be furnished at the construction site, there shall be included the number of hours devoted to all tasks customarily performed on a construction site, whether or not such tasks are, in fact, performed on the construction site. Construction Worker Hours excludes the number of hours of work performed by non-Ohio residents

Developer - any person, firm, partnership, limited liability company, corporation, joint venture, proprietorship, or other entity that proposes a Development Project, excluding public improvement projects, in the City of Cleveland

Development Project - new construction of and alterations to buildings and structures located in the City

Female Business Enterprise or "FBE" - a Business Enterprise owned, operated, and controlled by one or more Females with 51% ownership. One or more Females must have operational and managerial Control, interest in the capital, and earnings commensurate with the percentage of Female ownership. To qualify as a Female Business Enterprise, the Business Enterprise shall be located and doing business in the Cleveland Contracting Market

LCPtracker - the online labor compliance monitoring software suite that allows contractors and subcontractors to complete, certify, and submit certified payroll reports to OEO electronically

Low-Income Resident - means a City Of Cleveland Resident who, when first employed by a contractor, is a member of a family having a total income equal to or less than the "Section 8" Low-Income limit established by the United States Department of Housing and Urban Development. Low-income family is defined as a family whose annual income does not exceed eighty percent (80%) of the median family income for the area in which they reside, as determined by HUD. Income limits are adjusted for family size. A Resident who is not a member of a family shall be considered as a one (1) person family for this purpose. A Resident shall retain "Low-Income Person" status for a continuous five (5) year period starting upon the OEO's written acknowledgment that the Resident's family income does not exceed the above-stated limit, provided the Resident remains a Resident during the five (5) year period.

Minority Business Enterprise or "MBE" - a Business Enterprise owned, operated, and controlled by one or more Minority Persons with at least 51% ownership. The Minority Person(s) must have operational and managerial Control, interest in capital, and earnings commensurate with the percentage of ownership. To qualify as a Minority Business Enterprise, the enterprise shall be located and doing business in the Cleveland Contracting Market

OEO - the Mayor’s Office of Equal Opportunity of the City of Cleveland

Proposer - any Person proposing to contract with the City in response to a request for proposals or other similar solicitation

Resources

Community Benefits Ordinance Legislation