A coalition of local advocates and the development adviser for the massive Broadway Corridor redevelopment have reached an impasse on negotiations for a community benefits agreement, and the coalition has asked Mayor Ted Wheeler to step in.

Negotiations have stretched on for months with development adviser Continuum Partners of Denver. Several disagreements remain, including whether construction workers on the project should have health care benefits.

“We want to be able to define what a responsible contractor is,” said Vivian Satterfield, spokeswoman for the Healthy Communities Coalition, a group that has been designated to represent local interests for labor and social justice. “Part of that is offering health care, and Continuum disagrees.”

Wheeler took part in negotiations early on. Now he’s being asked to return to the table as the massive redevelopment project hangs in the balance.

“Ultimately, I believe the responsibility is in the mayor’s office for this,” Satterfield said. “We are signaling that we may be at an impasse in this process. We want City Council to take notice and hear us that we will not participate in this process unless it is racially just.”

The impasse was by the Northwest Labor Press. Prosper Portland has been working to facilitate the negotiations between the Healthy Communities Coalition and Continuum Partners.

The coalition’s membership is comprised of multiple community advocacy organizations and labor groups, including the Pacific Northwest Regional Council of Carpenters, IBEW Local 48, Operating Engineers Local 701 and SEIU locals 49 and 503.

In addition to the community benefits agreement, which would set targets for minority participation, wage standards and benefits, Prosper Portland and Continuum Partners are also negotiating a disposition and development agreement and a master plan for the 32-acre property.

“We’re committed to getting it all done, and for us that means what does a win look like for each of the parties and how can we negotiate an agreement that works,” said Prosper Portland Executive Director Kimberly Branam.

Wheeler has not indicated whether he would intervene in the negotiations, although those involved said they believe Wheeler will come to the table. Asked directly whether Wheeler would re-engage in the process, spokesman Tim Becker issued a statement saying that Wheeler “is committed to the Broadway Corridor Project, and is working to find ways to see it through to completion.”

Wheeler has weighed in on large development projects before, including Zidell Yards. The South Waterfront mixed-use plan fell apart in 2018 after the city and the Zidell family could not agree on how much each side would pay for public infrastructure.

The COVID-19 pandemic has slowed the Broadway Corridor negotiations. On March 3, shortly before public shutdowns began, the two parties held a marathon negotiation at Prosper Portland’s office in Old Town Chinatown.

“We literally had breakfast, lunch and dinner there,” Satterfield said. “We were able to reach tentative agreement on so many provisions on the (CBA) term sheet.”

The pandemic “really shifted a lot of things at every level,” Satterfield said. “As a result of that … we all extended each other a lot of understanding and little bit of empathy.”

For the Healthy Communities Coalition, the CBA is an opportunity to help right past wrongs. In past large-scale redevelopments, Prosper Portland (under its former moniker of Portland Development Commission) displaced historical neighborhoods of color.

“This project has to be racially just because of the history of this site,” Satterfield said.

Old Town Chinatown has historically had significant Chinese-American, Japanese-American and Black populations.

In negotiating the CBA, the coalition is looking toward precedents set by other large redevelopments that had CBAs, including the Oakland, California, Army Base redevelopment and the Staples Center in Los Angeles. The coalition and Prosper Portland are working with a number of consultants, including Cecliia Estolano of California-based Estolano Advisors.

“CBAs are a thing,” Satterfield said. “There are some sideboards to what defines what a CBA is and what it’s not.”

Satterfield acknowledged the coalition has a “contentious relationship” with Continuum. The development adviser was selected in April 2018, in large part due to its commitment to inclusion.

Satterfield participated on the community committee that led to Continuum’s selection. “I specifically remember (Continuum CEO) Mark Falcone saying, “We are comfortable executing a community benefits agreement, of course,’” Satterfield said. “We were confident we had a partner who was there.”

Continuum has balked at some provisions demanded by the coalition, including health care coverage for construction workers. In a written statement, Falcone stated that the developer has “struck an appropriate balance.”

“Our unwavering commitment to have all construction jobs on the project pay at prevailing wage and the additional agreements we have reached with the (Service Employees International Union) for wages on janitorial and security are a substantial shift in the private development market for Portland,” Falcone stated.

Continuum is receiving a monthly retainer from Prosper Portland as the negotiations drag on.  “They continue to be active in all of the negotiations,” Branam said.

Meanwhile, all sides acknowledge the economic downturn spurred by COVID-19 has changed the development calculus. Still, the opportunity to redevelop a large swath of close-in Portland is seen as an enticing job for any developer.

“The opportunity to build an entire new neighborhood on prime real estate in downtown Portland is still going to be attractive to the development industry,” Satterfield said. “It would be a shame if they walked away. But regardless of who the developer is, this is the way that massive development happens in the future. There will be a community benefits agreement. There will be community outreach. We’re not going back to where we were. “

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City officials are speaking out against efforts to employ a union-friendly policy tool to meet minority hiring goals on city projects.

Community Benefits Agreements, or CBAs, are contracts tying project developers and stakeholders to goals that support a project-affected community, notably the targeted hiring of women and minorities. But not everyone in Portland’s minority contracting community agrees they’re the best way forward.

CBAs will be the subject of a hearing on Thursday, at 2 p.m., at City Hall to evaluate their effectiveness and whether they should be incorporated into the under-development City Equity and Inclusion Plan, which would apply to all major city projects across all bureaus.

And now Fred Miller, head of the Office of Management and Finance, and Michael Stuhr, head of the Water Bureau, are publicly airing concerns about CBAs, citing issues that emerged during a testing CBAs on two Water Bureau projects.

“While the CBA provided benefits to the projects, the deficiencies identified in this report also had negative impacts on both the Kelly Butte Reservoir and Interstate Maintenance Facility Renovation Projects,” Stuhr wrote to the council in a report dated Sept. 2.

Stuhr wrote that the draft model CBA used on the pilot project should not be applied to future projects, citing outcomes identified in an independent report by consulting firm Framework LLC.

Miller listed issues he sees with CBAs when he wrote to the council in a . They include the appearance of conflict of interest and a $500,000 line item by the contractor for administration of the CBA pilot program.

Additionally, Christine Moody, the city’s chief procurement officer, and her boss, Ken Rust, the city’s chief financial officer, are renouncing a report given to the council last week by a volunteer commission supportive of CBAs – the Equitable Contracting and Purchasing Commission.

Moody defended some of her office’s equity efforts in a memo sent to ECPC Chairman Dante James, head of the Office of Equity and Human Rights. And she met personally with him Tuesday.

“We think the ECPC presentation included some information that was inaccurate and unclear,” she wrote in the letter obtained this week through a records request.

And in an email Tuesday to the city’s elected officials, Rust gave an overview of concerns raised in Moody’s report.

“We wanted to make sure council was aware of it, because the presentation was very confusing,” he told the 91��Ƶ today.

Rust said he didn’t want to take a position on CBAs, but felt the procurement office could have corrected errors in the ECPC’s presentation had it had a chance to review it. He suspected the errors were the result of inexperienced staffers transferring complex and incomplete information from one software program to another.

On Sept. 14, nearly a year after ECPC members met for the first time, they painted a dire picture of the city’s efforts to increase inclusion. Graphics showed white males dwarfing all other categories and backward movement in key areas.

“CBAs are a powerful tool for promoting the including of underrepresented people,” said Nicky Nicholson-Klingerman, an O’Neill Electric project administrator who addressed the council last week on behalf of the ECPC.

A coalition supportive of CBAs issued its own postmortem of the pilot project: “The Community Benefits Agreement: A Proven Tool for Advancing Portland’s Commitment to Equity in Contracting and Workforce Diversity.”

ECPC member Maurice Rahming told the council at last week’s hearing that union hiring halls are better able to respond to calls for a diverse workforce than contractors, who currently aren’t being held accountable where diversity is concerned. He said CBAs get better results, as well as detailed data for helping officials understand the depth of the problem.

“If you remove (CBAs) you see almost a non-utilization of women and minorities; the gap is that great,” he said. “The reason you see such a drastic drop in the data last year is because the CBA projects were winding down.”

Nate McCoy of the National Association of Minority Contractors’ Oregon chapter told the 91��Ƶ that the data the ECPC used in its presentation didn’t reflect what he’d seen when he worked as a construction manager in the Housing Bureau.

“We didn’t have CBAs and we always hit the numbers,” he said. “The biggest overarching issue is that minority contractors that are smaller still have to compete in a big-boy system that is this low-bid process.”

Two major city projects now in preconstruction – Washington Park Reservoir improvements and the Portland Building reconstruction – have begun and aren’t employing “true” or “pure” CBAs.

This week, city Commissioner Nick Fish told the 91��Ƶ he supports a modified form of CBA – a community benefit plan – that features heavy union participation but is also open to minority-owned open-shop firms.

Fish, a former labor lawyer, said the timing for focusing on the CBA issue was “perfect,” with a new mayor taking over in January and several big-ticket city projects on the horizon.

“I think we have to rethink that commission and bring some new faces in,” he said of the ECPC. “I think that will be an opportunity for the new mayor.”

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Community Benefits Agreements: Contracts tying stakeholders of large projects to objectives that benefit a project-affected community, e.g., targeted hires of women and minorities.

CBAs are now a hot topic at the intersection of social justice and public contracting. Four years ago, the city of Portland established a pilot program to measure the efficacy of the emerging contract delivery method using two Water Bureau projects as test cases. Now, the results of an independent evaluation are in and they don’t portray a sweeping success.

Among the criticisms in the report: a community oversight board charged with disbursing “set-aside” funds that was burdened by too many responsibilities and that operated near the line of conflict of interest – with board members receiving more than 80 percent of the money allotted by the board. Another was the inclusion of a $500,000 line item by the contractor to administer the pilot program. Plus, “few” of the programs funded by set-aside dollars had anything to do with the two Water Bureau projects.

For the reasons outlined in the report, city officials are concerned about a repeat of the pilot project, and worry about using pure CBAs again.

Conflict building

Portland had business goals for hiring more women and minorities prior to a 1989 U.S. Supreme Court ruling striking them down and others like them. In 1994, the Portland City Council established the Workforce Training and Hiring Program under then-Mayor Vera Katz. Other efforts to crack a construction workforce almost entirely white and male followed, including the Sheltered Market Program in the late 1990s, and later the imposition of Good Faith Effort requirements.

Despite these efforts, observers note a stark lack of progress. Some have complained that through the current building boom the city has been able to hit its diversity targets only through increased utilization of minorities in the “peripheral” trades – hauling, flagging, custodial work, etc. – that pay less, are more dangerous, and, some say, reinforce damaging stereotypes.

Community Benefits Agreements were devised as a way to hold developers to promises they often make to governments to win project approval – through the use of contracts with stakeholders and regular check-ins.

In September 2012 the City Council resolved to test CBAs on two Water Bureau projects. Using best practices devised by the UCLA Labor Center as a guide, coalition members spent two years drafting the contracts used in the pilot project, according to Kelly Haines, a senior project manager with Worksystems Inc., an administrative entity involved.

For the $57 million Kelly Butte project, an above-ground 10-million-gallon steel tank was replaced with a 25-million-gallon reinforced concrete underground reservoir. For the $35 million Interstate Maintenance Facility renovation, a 28,000-square-foot building and a 38,000-square-foot building were constructed to replace an outdated bureau facility. Hoffman Construction was the general contractor-construction manager for both projects.

The CBA coalition was made up of community organizations, labor unions, minority business owners and pre-apprenticeship training programs. It was charged with overseeing broad aspects of the two projects, including the dispersal of 1 percent of total construction costs earmarked for CBA-related services (around $769,000). To distribute this money, it formed a group called the Labor Management Community Oversight Committee (LMCOC), which was made up of representatives of groups including the Urban League of Portland, Oregon Tradeswomen, Constructing Hope and Worksystems Inc.

Where the money went

The sole entity responsible for the management of funds and implementation of CBA programs was the LMCOC. According to the report, this arrangement led to numerous issues.

For one, the relatively small group of people who managed the CBA wrote the requests for proposals used on both projects. Though the report states that “no evidence” of actual conflicts of interest was found (members were said to have recused themselves when necessary), the LMCOC’s actions created the appearance of conflict of interest, according to the report by Framework LLC. The private evaluation, released in May, also found no evidence that LMCOC members ever signed conflict of interest statements – a standard move for leaders managing public funds.

Of the $769,651 from the 1 percent set-aside that went to CBA programs, 83 percent was awarded to members of the LMCOC. They include:

• Constructing Hope: $169,600
• Oregon Tradeswomen: $158,793
• WSI/CAWS: $111,687
• Portland Youth Builders: $96,200
• F.M. Burch & Associates: $61,743
• Emerald Cities-Portland: $37,310
• Urban League of Portland: $1,400

The city’s cost to administer the pilot program is estimated at $130,597, or 17 percent of the 1 percent set-aside. This includes staff time for the Procurement Services office, which spent an estimated 460 hours attending LMCOC meetings and preparing minutes and reports – at a direct cost of $25,000. Some of these services are already provided by the city for projects of this nature, according to the report.

Additionally, Hoffman Construction spent $542,000 to meet its workforce and contract diversity requirements, charging the costs to a line item titled, “CBA administration.”

“While some of these costs were related to LMCOC meetings and CBA reporting requirements, it is likely that most costs would have been incurred with or without a CBA,” the report states.

To this, Hoffman Construction Senior Vice President Bart Eberwein said the charges accurately reflect the cost to perform adequate outreach to minority communities and send senior staff members to regular meetings for three-plus years. He noted the pilot project achieved almost all of the city’s lofty diversity goals.

“They put their money where their mouth was,” he said. “I mean, this stuff doesn’t happen without a lot of time and effort. It’s to the city’s credit I think that they put diversity right up there with quality and schedule in terms of importance. And they had to put a little dough into it. And I think people should take their hats off to them.”

Beyond who got the money, there’s the matter of what work was completed. The report mentions that little of the 1 percent set-aside actually went to the Kelly Butte or Interstate projects.

“Few of the workers and firms participating in CBA-funded programs … were placed on or subcontracted to the two Water Bureau projects,” the report states.

In light of the issues mentioned in the report, Fred Miller, head of Portland’s Office of Management and Finance, has pushed to not employ a CBA on the upcoming Portland Building seismic upgrade/renovation, which his office is overseeing. The $195 million project is currently in preconstruction, and its own 1 percent set-aside has been the subject of scrutiny by the city’s Equitable Contracting and Purchasing Commission, and elsewhere.

Miller pointed to a portion of the report comparing the two pilot program projects against other contract delivery methods used by the city – Sheltered Market and Good Faith Effort.

“The aggregate results are not appreciably different from other projects,” he said.

Miller is pushing to use a modified form of CBA for the Portland Building project.

“I’m uncomfortable with a set-up where people don’t sign conflict of interest statements,” he said, “and the vast majority of the money is allocated to themselves.”

Target practice

It’s worth noting that in one important sense, the pilot project was a sure success: achieving its stated mission of meeting the city’s ambitious diversity targets. Fifty percent of apprentice hours for the Kelly Butte project were worked by minorities (the goal was 18 percent). A third of hard construction costs for the Interstate project went to M/W/DBE firms (12 percent was the goal). With the exception of women journey-level workers, all CBA targets for the two projects were hit.

The Framework report doesn’t tell the whole story, according to Haines. Her group issued a clarification following the report’s publication. In it, she wrote that LMCOC members recused themselves whenever their organizations were under consideration for contract awards. She notes that city staff members served on the committee, attended every meeting and prepared meeting minutes.

“If there was any concern about conflict of interest, they were able to voice those concerns,” she said.

Conflicts are hard to avoid in this arena, Haines said, because few groups in Oregon are qualified to perform the services requested by a CBA. Only four organizations in the region were qualified to provide pre-apprenticeship services for the pilot project, and one – Portland Community College – declined to participate.

“It’s kind of a small pool with few fish,” she said. “It’s hard when you want to work with qualified and experienced training providers, and there’s only so many in this area.”

Overall, Haines called the experience “a little bit frustrating.”

“That evaluation pulled out some lessons learned about the pilot program and how we can improve on it,” she said. “But at the end of the day, all the money’s accounted for, people recused themselves – so it was all appropriately managed. But going forward, there can be more formalities in place.”

Several major projects lie ahead for the city, including the Portland Building project, the Washington Park Reservoir project, and park renovations being paid for with a $68 million bond.

Faye Burch of F.M. Burch & Associates said the pilot project retained more minority subcontractors than she’d seen before. The city benefited from having experts like OTI, Portland Youth Builders and Constructing Hope involved with the CBA, she said.

“They helped us get the numbers that we wanted to achieve,” she said.

However, CBAs aren’t right for all projects, Burch said.

“I think they fit some projects, and some projects, they don’t,” she said. “I think you can do it without a CBA, but I think this CBA had some great results.”

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