42-XI COMMUNITY BENEFITS

ARTICLE XI. COMMUNITY BENEFITS

42-258 Short title.

This article shall be known and may be cited as the “City of Pontiac Community Benefits Ordinance.”

(Ord. No. 2485, 11-10-25)

42-259 Purpose.

It is the policy of the City of Pontiac that discretionary public support for private development shall be accompanied by tangible, measurable, and enforceable community benefits that advance attainable housing, local employment and workforce development, local procurement and small business inclusion, and transparency in decision-making. The purpose of this article is to:

(a) Ensure proportional public return when City resources, land, tax abatements or other incentives are provided;

(b) Promote hiring and training opportunities for Pontiac residents;

(d) Preserve and produce attainable housing;

(e) Provide monitoring and enforcement mechanisms sufficient to ensure compliance with commitments made in connection with public support.

(Ord. No. 2485, 11-10-25)

42-260 Definitions.

For purposes of this article the words and phrases defined in this section shall have the meanings given unless the context otherwise requires.

Area median income or AMI means the most recently published median family income for the metropolitan area in which the City is located as published by the U.S. Department of Housing and Urban Development, adjusted for household size.

Community benefits means specific measurable amenities, commitments, payments, hiring and procurement obligations, programs, or other obligations a developer agrees to provide in exchange for public support.

Community benefits agreement or CBA means a legally binding agreement between the City and the developer, or enforceable conditions incorporated into a development agreement, that set forth community benefits, performance metrics, monitoring requirements, and remedies for noncompliance, and that run with the land by recordation.

Developer means any person or entity that applies for or receives public support.

Director means the Director of the City’s Economic and Community Development Department or his or her designee.

Financial incentive means cash or near-cash assistance provided on a discretionary basis by the City, including but not limited to tax abatements, forgivable loans, grants, gap financing, PILOTs, expedited fees or other direct subsidies.

Impact area means the geographic area determined by the Director to be materially affected by a project and may include census tracts, block groups, or a defined radial area.

Project means the development, redevelopment, expansion, or rehabilitation for which public support is sought or provided.

Public support means any financial incentive, the conveyance or lease of City-owned land at less than market value, or other discretionary concession provided by the City that meets or exceeds the thresholds set forth in section 42-262.

Qualified Pontiac resident means a person whose primary residence is located within the municipal boundaries of the City of Pontiac and who is certified pursuant to procedures established by the City for purposes of local hiring commitments.

Recordation means recording the CBA or other instrument in the county register of deeds so that obligations run with the land.

Tier 1 project, Tier 2 project, and Tier 3 project have the meanings given in section 42-262.

(Ord. No. 2485, 11-10-25)

42-261 Applicability; capture of major projects; tax abatements and redevelopment programs.

This article applies to any project for which public support is sought or provided on or after the effective date of the ordinance codified in this article.

Notwithstanding any tier thresholds set forth in section 42-262, the requirements of this article, including execution of a CBA containing the minimum CBA standards set forth in section 42-264, shall apply to any project where public support includes a tax abatement, tax exemption, or tax increment capture provided under any State-authorized incentive programs. Such programs may include, but are not limited to, the following:

(a) The Obsolete Property Rehabilitation Act (OPRA), Public Act 146 of 2000 (or successor statute) (commonly referred to as “OPRA”);

(b) The Neighborhood Enterprise Zone Act, Public Act 147 of 1992 (as amended) (commonly referred to as “NEZ”);

(c) The Plant Rehabilitation and Industrial Development Districts Act, Public Act 198 of 1974 (sometimes referenced as “P.A. 198” or the Industrial Facilities Exemption);

(d) Brownfield Redevelopment Financing Act, Act 381 of 1996 (or any successor Brownfield or tax-increment capture authority); and

(e) The Residential Housing Facilities Act (Residential Housing Exemption), Public Act 237 of 2022 (or successor statute) (commonly referred to as “PA 237” or the Residential Housing Exemption).

The Director shall so treat other State or local tax abatement or exemption programs that effectively reduce a project’s tax burden where the City authorizes the benefit. The City finds that tax abatements and tax capture mechanisms materially change the public fiscal relationship to a project and therefore shall always trigger the CBA requirement regardless of whether the monetary threshold in section 42-262 would otherwise be met. The Director shall coordinate with the City Attorney to ensure that CBAs and their enforcement are compatible with State program requirements and that any required State approvals or filings are obtained.

(Ord. No. 2485, 11-10-25)

42-262 Tiers and thresholds.

Projects for which public support is sought or provided on shall be categorized to ensure proportional application of this article as follows:

(a) A project shall be a Tier 1 project if any of the following apply:

(1) Contemplated private capital investment of $10,000,000.00 or more;

(2) Financial incentives requested or projected to inure to the developer in an amount of $2,500,000.00 or more over the incentive term; or

(3) Any transfer to the developer of City-owned land parcels that have a cumulative market value of $10,000,000.00 or more, as determined by the City Assessor or independent appraisal, without open bidding and priced below market rates where allowed by law.

(b) A project shall be a Tier 2 project if any of the following apply:

(1) Contemplated private capital investment of $5,000,000.00 up to, but not including, $10,000,000.00;

(2) Financial incentives requested in an amount of $500,000.00 up to $2,499,990.00; or

(3) Any transfer to the developer of City-owned land parcels that have a cumulative market value of $1,500,000.00 or more, as determined by the City Assessor or independent appraisal, without open bidding and priced below market rates where allowed by law.

(1) Contemplated private capital investment is less than $5,000,000.00;

(2) Financial incentives requested are estimated to be $250,000.00 up to $499,990.00; or

(3) Any transfer to the developer of City-owned land parcels that have a cumulative market value of $250,000.00 or more, as determined by the City Assessor or independent appraisal, without open bidding and priced below market rates where allowed by law.

(Ord. No. 2485, 11-10-25)

42-263 Community benefits agreement required; preliminary approvals.

Except as provided in section 42-270 (Exemptions and waivers), no final City approval of public support shall be effective until a community benefits agreement satisfying the minimum standards of section 42-264 has been executed by the developer and the City. City Council may grant preliminary approvals conditioned on execution of a final CBA.

(Ord. No. 2485, 11-10-25)

42-264 Minimum CBA standards.

Each CBA shall be a legally enforceable instrument and shall contain, at a minimum, the following provisions:

(a) An express statement that the CBA binds the developer, its successors and assigns, and shall be recorded to run with the land unless and until the City executes a release;

(b) An identification and valuation method demonstrating proportionality between the public support and the community benefits;

(c) Measurable performance metrics, baseline data, numeric goals, delivery timelines, and assigned responsible parties for each community benefit;

(d) Monitoring, reporting and record-keeping requirements, including periodic submission of payrolls, hiring data, and contract award data sufficient to verify compliance, subject to legal privacy protections;

(e) Enforcement mechanisms and remedies for material breach, including but not limited to claw back of financial incentives on a pro rata or specified basis, acceleration or revocation of tax abatements or exemptions where lawful, monetary penalties, liquidated damages where lawful and reasonable, suspension of City approvals, and temporary or permanent debarment from City contracting;

(f) The CBA shall include mortgagee protection language permitting a holder of a mortgage to cure a developer default within 60 days after notice to protect the holder’s security interest; any exercise of remedies that affect mortgage priority shall be subject to applicable law and, where necessary, lender consent.

(g) A requirement that the developer be current on City taxes, fees and assessments at the time of final CBA execution or that any delinquencies be addressed in a manner approved by Council;

(h) A description of the duration of affordability, hiring or procurement commitments and the duration of reporting obligations;

(i) Procedures for the submission, public posting and review of the annual compliance report;

(j) Complaint intake and investigation procedures for community-initiated allegations of noncompliance;

(k) Obligations regarding remediation of environmental contamination and compliance with State and Federal environmental law; and such other terms as are necessary to effectuate the purposes of this article.

(Ord. No. 2485, 11-10-25)

42-265 Required community benefits categories and tier-based minimum commitments.

Subject to the proportionality requirement and the minimum CBA standards in section 42-264, each community benefits agreement shall include the category commitments listed below. City Council may approve alternatives to the default Tier commitments within their sole discretion if expressly documented in writing in the CBA.

(a) Tier 1: Major Projects. For Tier 1 projects, each CBA shall include the following minimum commitments unless Council approves alternatives in writing:

(1) Attainable housing. Reserve not less than 20 percent of new residential units as affordable to households at or below 80 percent of AMI for a minimum term of 30 years, or where on-site units are infeasible, and after the developer demonstrates in good faith that on-site units and reasonable alternative measures cannot be met, the developer shall make a mandatory contribution equal to one percent of total project cost to the City’s attainable housing fund, youth recreation fund, and workforce development fund, or a combination thereof as directed by the City. CBAs shall specify income verification, deed restrictions or regulatory agreements, marketing and tenant selection procedures, and monitoring protocols.

(2) Local employment and workforce development. Target not less than 15 percent of on-site construction labor hours to be performed by qualified Pontiac residents. For permanent employment, target at least 15 percent of newly created permanent positions to be filled by qualified Pontiac residents during initial hiring. The CBA shall require posting of vacancies through City workforce partners, documentation of outreach and referral efforts, and periodic reporting of hires and hours.

(3) Local procurement and small-business inclusion. Target not less than 20 percent of construction and operations subcontracting and purchasing value to certified Pontiac-based minority-owned, women-owned, or small business enterprises, conduct pre-bid vendor sessions, maintain a vendor registry, and document outreach and bid opportunities.

(4) Allocation for City initiatives. Contribute not less than one-half percent of total project cost to City initiatives such as attainable housing, workforce development, or community infrastructure; provided, however, that if the developer demonstrates in good faith that other CBA funding commitments (including on-site affordable units, procurement, or workforce investments) cannot be met, the contribution to the City’s attainable housing fund, youth recreation fund, and workforce development fund shall be mandatory and payable as set forth in the CBA.

(5) Verification and remedies. Include verification procedures, periodic compliance reporting schedules, record retention requirements, and remedies for material noncompliance consistent with section 42-264 (Minimum CBA standards).

(b) Tier 2: Medium Projects. For Tier 2 projects, each CBA shall include the following minimum commitments unless Council approves alternatives in writing:

(1) Attainable housing. Reserve not less than 15 percent of new residential units as affordable to households at or below 80 percent of AMI for a minimum term of 20 years, or where on-site units are infeasible, after the developer demonstrates in good faith that on-site units and reasonable alternative measures cannot be met, the developer shall make a mandatory contribution equal to one-half percent of total project cost to the City’s attainable housing fund, youth recreation fund, and workforce development fund, or a combination thereof as directed by the City. CBA terms shall address verification, restrictions, marketing and monitoring.

(2) Local employment and workforce development. Target not less than ten percent of on-site construction labor hours to be performed by qualified Pontiac residents. For permanent employment, target at least ten percent of newly created positions to be filled by qualified Pontiac residents. The CBA shall set out posting, outreach and reporting obligations.

(3) Local procurement and small-business inclusion. Target not less than 15 percent of construction and operations subcontracting and purchasing value to certified Pontiac-based M/W/SBEs and document outreach and award activity.

(4) Allocation for City initiatives. Contribute not less than one-quarter percent of total project cost to City initiatives; provided, however, that if the developer demonstrates in good faith that other CBA funding commitments (including on-site affordable units, procurement, or workforce investments) cannot be met, the contribution to the City’s attainable housing fund, youth recreation fund, and workforce development fund shall be mandatory.

(c) Tier 3: Small/Local Projects. For Tier 3 projects, each CBA shall include the following minimum commitments unless Council approves alternatives in writing:

(1) Attainable housing. Reserve not less than ten percent of new residential units as affordable to households at or below 80 percent of AMI for a minimum term of 15 years, or where on-site units are infeasible, after the developer demonstrates in good faith that on-site units and reasonable alternative measures cannot be met, make a mandatory flat contribution of $25,000.00 to the City’s attainable housing fund, youth recreation fund, and workforce development fund, or a combination thereof as directed by the City. CBA terms shall specify verification and monitoring requirements.

(2) Local employment and workforce development. Target not less than five percent of construction labor hours to be performed by qualified Pontiac residents or provide a documented local training investment in an amount specified in the CBA. For permanent employment, target at least five percent of new positions to be filled by qualified Pontiac residents or provide equivalent workforce investments. The CBA shall include reporting obligations.

(3) Local procurement and small-business inclusion. Target not less than ten percent of contracting and purchasing value to certified Pontiac-based M/W/SBEs and document outreach and award activity in compliance reports.

(4) Allocation for City initiatives. Provide a negotiated flat contribution of $10,000.00 to $25,000.00 or equivalent in-kind community benefits as set forth in the CBA. If the developer demonstrates in good faith that on-site affordable units and other funding commitments cannot be met, the City may require the mandatory contribution be directed to the City’s attainable housing fund, youth recreation fund, and workforce development fund as specified by the City.

(d) Cross-cutting provisions. CBAs for all tiers shall require reasonable documentation and reporting to verify compliance with local-hire, apprenticeship, procurement, affordability and sustainability commitments; shall include reasonable remediation, claw back and enforcement provisions; shall bind successors and assigns and be recorded to run with the land unless and until the City releases such obligations; and shall permit the Director to require third-party verification or audits for Tier 1 projects at the developer’s expense as set forth in section 42-269. All monetary contributions required under this section shall be paid to the City and allocated to the City’s attainable housing fund, youth recreation fund, workforce development fund, or other City initiative, or a combination thereof, as specified in the CBA; where the CBA permits alternative in-kind benefits, such alternatives shall be expressly approved by City Council in writing and documented in the CBA.

(Ord. No. 2485, 11-10-25)

42-266 Process; public participation; community benefits report; Community Benefits Advisory Committee.

The Director shall coordinate the CBA process and designate a staff liaison. A developer seeking public support shall meet the Director in a pre-application meeting to identify required materials (pro formas, environmental reports, market analyses, renderings). For Tier 1 and Tier 2 projects the developer shall coordinate and participate in not fewer than two public meetings in the impact area; for Tier 3 projects the developer shall hold not fewer than one public meeting. The Director shall prepare and transmit a community benefits report summarizing developer responses, proposed CBA terms and the Director’s recommendation.

A Community Benefit Advisory Committee shall be established to provide community-centered review and recommendations to the City Council on community benefits priorities, proposed community benefits agreements (CBAs), allocation of funds under the tiered framework established in section 42-262, and related matters. The Community Benefit Advisory Committee shall facilitate public engagement, review community benefits reports prepared by the Director, and provide advisory recommendations to the City Council to inform Council decision-making.

(a) Composition and appointment. The Community Benefit Advisory Committee shall consist of seven voting members appointed as follows:

(1) Six members, each appointed by a City Councilmember, and each such appointee must be a resident of that Councilmember’s respective district; and

(2) One member appointed by the at-large member of the City Council, who may be a resident of any district within the City.

In addition to the seven voting members, the Mayor may appoint up to two nonvoting advisory staff members to serve in an advisory capacity only; such advisory staff members shall have no voting rights.

All appointments shall be subject to affirmation by a majority vote of the City Council and vacancies shall be filled by the same appointing authority for the remainder of the unexpired term, subject to Council affirmation.

(b) Eligibility; terms; vacancies. Appointees shall be residents, business owners, or community stakeholders with an interest in economic development, housing, workforce, or neighborhood issues; no appointee shall be a developer with a pending application under this article. Terms shall be two years. City Council may remove any appointee at any time for cause following a public hearing.

(c) Organization and bylaws. The City Council shall adopt bylaws within 90 days of adoption of the ordinance codified in this article. The bylaws shall include provisions governing the Committee’s procedures, including but not limited to meetings, quorum, officers, subcommittees, conflict-of-interest standards, attendance rules, and public notice. In the absence of Council-adopted bylaws, the Committee shall adopt basic procedural rules consistent with the City Charter, the Michigan Open Meetings Act, and applicable law.

(d) Duties and scope. The Community Benefit Advisory Committee’s duties are advisory only and shall include, without limitation:

(1) Soliciting and considering public input from residents and stakeholders in impact areas;

(2) Evaluating and recommending priorities for allocation of funds and community benefits under the tier structure (sections 42-262 and 42-265), including recommendations as to the City’s attainable housing fund, youth recreation fund, workforce development fund, and other designated funds or in-kind benefits;

(3) Making written recommendations to the City Council regarding proposed CBAs, alternative benefit proposals, public engagement strategies, and monitoring priorities; and

(4) Performing such additional advisory tasks as may be requested by the Director or City Council related to the implementation of this article.

(e) Timing of recommendations. The Community Benefit Advisory Committee shall provide written recommendations to the City Council and the Director within 30 days of receipt of an application under this article so that a full application, including the recommendation of the Committee, may be considered by Council prior to any final Council action on public support or execution of a CBA. The Director shall include the Community Benefit Advisory Committee recommendations in the community benefits report transmitted to Council under section 42-266.

(f) Staff support; compensation. The Director shall serve as staff liaison, provide administrative support, prepare meeting materials, and ensure timely posting and distribution of Community Benefit Advisory Committee materials. Committee members shall serve without compensation but may be reimbursed for reasonable, documented expenses as authorized by Council.

(g) Records and reports. The Community Benefit Advisory Committee shall produce a written record of recommendations and shall file the record with the City Clerk. The City shall make Committee recommendations and meeting materials available to the public consistent with the City’s public records policies and the Freedom of Information Act.

(h) Advisory status. The Community Benefit Advisory Committee shall have no authority to bind the City, approve CBAs, or waive any legal requirement; final decisions regarding public support, CBAs, and enforcement shall remain the exclusive responsibility of the City Council consistent with this article.

(Ord. No. 2485, 11-10-25)

42-267 Monitoring, reporting, Enforcement Committee and remedies.

Tier 1 projects shall require, at a minimum, annual compliance reports and may require more frequent reporting. CBAs shall require developers to retain records (payrolls, certified payrolls, contract award documentation, proof of payments, unit affordability records) for verification and to make them available to the City subject to applicable privacy law.

In the event of a failure to meet a material CBA obligation, the developer shall repay financial incentives on a pro-rata basis computed as: (a) the ratio of the unmet obligated benefit value to the total agreed CBA benefit value multiplied by (b) the total financial incentives received, plus interest at ten percent per annum. The City may recover such amount by suit or offset against future payments.

No enforcement action for alleged material breach shall be taken until the City provides written notice to the developer specifying the alleged breach, a reasonable cure period of not less than 30 days (60 days for complex financial breaches), and an opportunity for administrative hearing before the City Council.

The City Council may, in its discretion, establish an Enforcement Committee composed of City staff to monitor compliance with CBAs, receive and review reports, request documentation, and oversee enforcement actions under this article.

(Ord. No. 2485, 11-10-25)

42-268 Interaction with State incentive programs, redevelopment-ready communities, and capture of benefits.

For projects participating in State incentive programs or municipal redevelopment-ready community initiatives, the CBA shall identify any required State approvals and the interaction between State program requirements and CBA terms. The City’s designation of redevelopment-ready communities or site readiness status shall not exempt a project from CBA requirements; rather, such designation shall be used to facilitate negotiation and to identify community-priority benefits to be captured in the CBA. Projects that propose capture of tax increment or other tax revenues through Brownfield or similar structures shall be required to address in the CBA how captured revenues are allocated, the portion of capture that returns to the developer as reimbursement for eligible costs, and the community benefits tied to those funds. Any CBA or CBA provision that conflicts with controlling State law or the terms of a State incentive program shall be interpreted and applied in a manner consistent with such State law or program; where such compliance requires modification of CBA terms, the Director shall seek required State approvals prior to recordation or enforcement.

(Ord. No. 2485, 11-10-25)

42-269 Fees; third-party verification; audits.

The City may require developers of Tier 1 projects to pay reasonable third-party monitoring and audit fees to verify compliance with CBA terms; such fees shall be set forth in the CBA and payable by the developer. The City may contract for independent audits of compliance with CBA terms and require the developer to reimburse reasonable audit expenses as provided in the CBA, with protection for confidential or proprietary information consistent with law.

(Ord. No. 2485, 11-10-25)

42-270 Exemptions and waivers.

City Council may, by resolution and according to the voting threshold required by the City Charter, exempt a project from one or more requirements of this article where the developer demonstrates that compliance is infeasible or that equivalent community value will be delivered through other binding and enforceable means. Requests for exemptions must be submitted in writing and include documentation of alternative benefits.

(Ord. No. 2485, 11-10-25)

42-271 Data privacy and public records.

Information submitted to the City under this article shall be public records subject to disclosure under the Michigan Freedom of Information Act unless exempted by law. The City shall redact personal identifying information where required. The developer may identify portions of submissions believed to contain confidential business information; the City’s FOIA process shall determine final disclosure.

(Ord. No. 2485, 11-10-25)

42-272 Severability.

If any provision of this article or its application is adjudged invalid by a court of competent jurisdiction, such judgment shall not affect the validity of the article as a whole or any other provisions or applications.

(Ord. No. 2485, 11-10-25)

42-273 Repeal.

All ordinances or parts of ordinances inconsistent with this article are repealed to the extent of such inconsistency.

(Ord. No. 2485, 11-10-25)

42-274 Savings clause.

The adoption of this article shall not affect any action or proceeding instituted, pending or completed under prior ordinances; all such actions shall be continued and completed in accordance with prior provisions.

(Ord. No. 2485, 11-10-25)

42-275 Availability.

A copy of this article and standard CBA templates shall be available at the office of the City Clerk and posted on the City’s website.

(Ord. No. 2485, 11-10-25)

42-276 Effective date.

The ordinance codified in this article shall be published and shall take effect in accordance with the City Charter and applicable law.

(Ord. No. 2485, 11-10-25)