Councilman Clorius Lay

Community Benefits law survives repeal effort

Contributed By:The 411 News

Following another long night of debate at Tuesday night's Gary Common Council meeting, the city's Community Benefits Ordinance is not going away.

In a 6-2 vote, city council members booted the proposal, CPO 2020-43, sponsored by Councilman At-Large Clorius Lay and Mayor Jerome Prince to repeal the law that requires developers to give something back to the community in return for assistance the developer receives from city government.

The new law, Community Benefits Ordinance No. 9305 was approved by the council in December 2019. Its first test and application is the 10-year tax abatement the developers of Broadway Lofts is being granted to construct a 38-unit affordable housing complex in downtown Gary. The site is the 700 blocks of Broadway and Massachusetts, and includes the land of the former Memorial Auditorium which is now under demolition.

The CBA calls for Broadway Lofts developer, MVAH Partners, to pay 15% of the $669,000 tax abatement to a project that would benefit the community. The law was drafted by a group of Gary citizens seeking to improve construction job training for Gary residents, improve hiring of Gary residents on construction projects, and enhance community development.

Carolyn McCrady, spokesperson for the Gary residents who drafted the law, told the council the CBA is an effort to change the climate where city administrations cater to developers. "We want to make developers accountable to Gary taxpayers."

"We have to think about development for whom and at what costs. We'll continue to have a 40% unemployment rate in Gary. We'll never be able to brag about our skilled workforce because we won't have one. Who needs a skilled workforce if developers continue to bring in their own workforce. We need to help our young people have a career," McCrady said and cited neighboring communities that have career centers with construction training as part of their curriculums.

McCrady said they have already agreed that the 15% could be less depending on the size and scope of the subsidy.

Supporters to repeal the ordinance argue the CBA hurts development in Gary. At an earlier council meeting, Mayor Prince said the Community Benefits Ordinance could apply to Broadway Lofts "but this is not the right time to apply it. The law needs to be rewritten."

Councilmembers agree that the law needs revisions.

Councilman Lay's concerns resulted in an ordinance proposing to amend the original law and was cosponsored by Mayor Prince. That ordinance, CPO 2020-39, remains in the council's Planning Committee.

Changes to the ordinance now in discussion in the Planning Committee include setting a $1,000,000 floor to the value of city assistance granted a developer. That would exclude the CBA from being applied to Broadway Lofts $669,000 tax abatement.

Another change would give the council the option of applying an amount lower than the 15% set by the original Community Benefits Ordinance asking the developer pay to a community benefits project.

Currently, Broadway Lofts' tax abatement language includes returning 15% of the developer's tax savings to Gary's Economic Development Corporation. Lay said asking developers to return 30% of their tax savings "will absolutely kill development in Gary and hurt Gary citizens."

Also in the ordinance amending the original law is the creation of the Commission for a Gary Community Benefits Agreement with members appointed by the city council and mayor. The city council favors bringing in some of the Gary residents who drafted the ordinance.

Whichever members the council appoints, Councilman Lay said, "They must submit resumes and go through an interview process."

Debate on changes to Ordinance 9305 will continue between the council and administration at the next Planning Committee meeting scheduled for September 8.

City council members have taken the stance of not repealing the law until they can come up with a replacement.

Story Posted:09/02/2020