Gotham Gazette https://www.gothamgazette.com/component/tags/tag/2813 Thu, 13 May 2021 15:35:33 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) Neighborhood Equity Ownership Plans: How Would They Work? https://www.gothamgazette.com/130-opinion/9032-neighborhood-equity-ownership-plans-how-would-they-work https://www.gothamgazette.com/130-opinion/9032-neighborhood-equity-ownership-plans-how-would-they-work marsh ave exped

(photo: Michael Appleton/Mayoral Photography Office)


[This article is a follow-up to Dr. Goodman’s August op-ed: Replacing Unsuccessful ‘Community Benefits Agreements’ with Neighborhood Stock Ownership Plans]

How can neighborhoods defend themselves against displacement, gentrification, and disempowerment in an age of corporate domination? How can communities fend off rezoning, upzoning, and the usurping of neighborhood identity? Most people agree that Community Benefits Agreements (CBAs) don’t work for communities facing dislocation. Historically, these agreements have been tools used by developers to attenuate neighborhood opposition to mega-projects like stadiums, shopping malls, and corporate hubs. Though they come in different forms – jobs, contributions to community nonprofits, free tickets – CBAs are all the same. They are handouts used to cool community opposition to a developer’s project. 

For decades, community groups, community boards, and public advocates have been victimized by the CBA strategy. These agreements force community leaders to jockey for ‘their’ benefits and to ignore the development of the community as a whole. But, the CBA model is ill-fitted to the contemporary development landscape of impact investors, opportunity zones, and a renewed sense of community empowerment. CBAs are unenforceable by the community, and to the developer, they are nothing more than the cost of doing business.   

I am proposing a new model for communities facing off with developers: the Neighborhood Equity Ownership Plan (NEOP), modeled on the employee stock ownership plans in the private sector where one out of every five workers owns stock or stock options in the business.

This new strategy can help communities compete with a developer’s hired guns -- lobbyists, public relations professionals, and community liaisons. As lobbyists strive for zoning variances, publicists attempt to create a development narrative and as liaisons try to co-opt indigenous leaders, neighbors can promote partnership and avoid being derided as NIMBYs.

The formula for a successful Neighborhood Equity Ownership Plan could be as follows: 51 percent of the project’s stock would be allocated to the developer; 24 percent of the stock would be held by the government; and 25 percent would be owned by those who live, work, own businesses or property in the neighborhood and by nonprofits.

The logic is simple. Developers want control and a return on their investment that is economically viable. But they need government and community partners. For developers, the government provides necessary infrastructure investments, regulatory oversight, permits, and zoning variances. For these expenditures it is entitled to an ownership slice. The host neighborhood will absorb the impact of construction marked by truck traffic, noise and air pollution. Residents and employees will suffer from the loss of public space. Businesses will likely experience a decline in foot traffic. Nonprofits will confront increased social disruption. Stock ownership will serve as a repayment for these and other disruptions to daily life.

Neighborhood equity options would be divided among residents, employees, business owners, property owners, and nonprofits. Here the distributions would allocate 5 percent of the stock to each shareholder category. Residents and employees would be entitled to purchase shares of the corporation based on the longevity of their ‘investment’ in the neighborhood. People who have lived or worked in the community for 20 years or more, for example, would be entitled to purchase twice as many shares as those who have ten years invested in the district. Business and property owners would receive shares according to their annual revenues or assessed value. And, finally, nonprofits would be ‘gifted’ 5 percent of the shares of the corporation based on the number of students, seniors, or clients served.

The proposal for a soccer stadium in the Bronx provides a great example of the benefits that could be derived for the community from a neighborhood ownership plan.

A River Avenue Stadium Corporation would be created with equity shares available as indicated above. When naming rights are sold, when broadcast fees are collected, when merchandising agreements are made, or when sponsorships and suites are sold, revenue would pour into the corporation and be distributed as dividends accordingly.

As it stands currently, the benefits of these revenue streams would bypass those most impacted by a home for a private corporation owned by the world's third wealthiest person, China, the Yankees, and Silver Lake Management, a private equity firm.

More than 30 million Americans already own part of their employer company through stock or stock options. They derive dividends, vote for directors, and profit from the business’ success. This formula, if applied to a changing neighborhood, could reinvigorate corporate-community relations. It could refocus developers towards a more expansive definition of profit. It would convert stakeholders to shareholders. With the government and the neighborhood as shareholders, the needs of the community can be safeguarded.

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Dr. Cary Goodman holds a post-doctoral certificate in development from The United Nations and is the executive director of the 161st Street BID.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Neighborhood Equity Ownership Plans: How Would They Work? Wed, 08 Jan 2020 05:00:00 +0000
Replacing Unsuccessful ‘Community Benefits Agreements’ with Neighborhood Stock Ownership Plans https://www.gothamgazette.com/130-opinion/8737-replacing-unsuccessful-community-benefits-agreements-with-neighborhood-stock-ownership-plans https://www.gothamgazette.com/130-opinion/8737-replacing-unsuccessful-community-benefits-agreements-with-neighborhood-stock-ownership-plans yankees nycfc stadium

(photo: Michael Appleton/Mayoral Photography Office)


When Jeff Bezos, the world’s wealthiest man, and Amazon sought to locate a major campus in New York City, they ran into a buzzsaw of opposition that derailed the project. Despite the promise of tens of thousands of jobs and millions of dollars in local investments, members of the community reacted to the company’s planned arrival with fear and fire. Rallies against the tech giant occurred weekly. Elected officials orchestrated public hearings where they criticized the corporation. Lots of bad press accompanied the news that Bezos would have his own helipad.

Neither Governor Cuomo nor Mayor de Blasio could put this Humpty Dumpty deal together again. After months of disgrace, Amazon withdrew.

Now, the world’s third-wealthiest man, Mansour bin Zayed, owner of the New York City Football Club, wants to build a soccer stadium in The Bronx. And, like Bezos in Queens, he’s likely to run into a storm of opposition from that community. What can be learned from the Amazon issue that can help both the neighborhood and the stadium project?

The collapse of the Amazon move into Long Island City signaled the end of the era of the “Community Benefits Agreement” (CBA). The benefits agreement strategy has been used by neighborhoods for decades to confront gargantuan development projects like sports arenas or corporate expansions. But decades of unfulfilled promises made by corporations and government officials to communities have sullied the reputation of CBAs. New York City neighborhoods have become suspicious of agreements that can be (and have been) ignored by behemoths like Amazon, Forest City Ratner, and politicians.

The Barclays Center was created with a CBA. The new Yankee Stadium came with a CBA. And, the current talk about a Bronx professional soccer stadium includes conversations focused on perks promised to the host neighborhood, like jobs and housing for local residents. But the promise of perks never convinced Queens that the Amazonian tech giant and the world’s wealthiest man were worthy of their support.

Civic groups in Queens like those in the Bronx and Brooklyn have become disillusioned because these benefits agreements lack enforcement. At Yankee Stadium, members of the community board who opposed the new ballpark and its CBAs were removed from the board. In Brooklyn, small businesses feel ripped off by the developer whose community benefits promises lacked the force of law and transparency. In Queens, local elected officials were left out of the negotiations by the mayor and the governor.

New York City neighborhoods need a new strategy to safeguard their integrity and create a partnership among residents, local businesses, nonprofits, government, and developers.

I propose a new approach, a Neighborhood Stock Ownership Plan (NSOP), modelled after employee stock ownership plans (ESOPs).

ESOPs have been around since 1956. Across the country, there are nearly 7,000 ESOP companies covering more than 14 million participants. In ESOPs the workers earn the right to buy shares in the company at a discount rate based on the number of years they have worked there. These worker-shareholders have a seat on the company’s board. Profits are shared with employees through dividends and increases in the stock price. Transparency abounds, and so does workplace satisfaction.

The ESOP model can be modified to reflect and reinforce lots of different stakeholders, not just employees. It can become a mechanism by which residents, local businesses, employees, and civic organizations become partners with, not opponents of, a developer.

This is how a Neighborhood Stock Ownership Plan could work: those who live, work, or own a business in the development area will be given stock options based on the length of time they’ve lived, worked, or operated a business in the project district. Nonprofits in the vicinity would also be gifted shares based on their membership. Instead of agitating, NSOP members will be aggregating money, based on the revenues of the company and its stock price.

This NSOP will protect communities from having to settle for corporate hand-outs. It will tie the community and the corporation together so that revenue for the company automatically means money for the community.

If a soccer stadium were built in the Bronx, for example, an NSOP would mean that broadcast fees, stadium naming rights, and merchandising deals benefit those whose transportation, trash, and tranquility will be impacted by the sports venue. Using an NSOP framework would give neighbors and newcomers a common ground to discuss corporate policies and procedures. With an NSOP, the dynamics of patron and patronage that created hostile environments for Amazon, Barclays, and likely a new soccer stadium could be avoided.

Whatever is good for the community will be good for the corporation and vice versa.

Will the stadium developer, the team owners, the mayor and the governor have the foresight to reject the old “community benefits” strategy and try a new approach? Will they see the soccer stadium project as a chance for social innovation and community support? Seems to me like a good goal (pun intended) for everyone.

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Dr. Cary Goodman is executive director of the 161st Street Business Improvement District at Yankee Stadium.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Replacing Unsuccessful ‘Community Benefits Agreements’ with Neighborhood Stock Ownership Plans Thu, 22 Aug 2019 23:27:03 +0000