GGCC Adamantly Opposes Bill Requiring Retailers to Negotiate Community Benefits

OVERVIEW OF MONTGOMERY COUNTY BILL 33-11

This bill basically requires new retail businesses larger than 75,000 square feet to negotiate a Community Benefits Agreement with at least three community groups on issues including:

• Hiring practices and training programs
• Design, operating hours, use of open space, traffic mitigation, noise, etc
• Assistance to community organizations and programs
• Affordable and workforce housing
• Any other issue relevant to the operation of the store or the community near the store.

The bill also requires the county's Department of Economic Development and the Housing and Community Affairs offices to support the community groups in negotiating the Community Benefits Agreement.

OPPOSITION-OVERVIEW 

The Gaithersburg-Germantown Chamber of Commerce adamantly opposes this bill for many reasons outlined below. However the most important factor is that the Chamber does not believe that the County Council has, nor should they have, the authority to govern hiring preferences, training practices, employee compensation, and philanthropy of a private business. Furthermore, these complex issues should certainly not be relegated to civic groups.

OUR CONCERNS

• This is an extremely vague bill and it is unclear what problem the bill is trying to solve.
• The County Council currently does not have the authority to legislate living wages or local hiring and training programs of a private employer.
• The County Council currently does not have the authority to require private employers to provide or subsidize housing.
• This Bill makes it harder to start a business in the county by requiring another unnecessary step for employers prior to creating jobs.
• This Bill sends a strong message that the county continues to be a difficult place to do business.
• Portions of this Bill are redundant with the formal planning process in the county or existing regulations. 
• The procedural framework in this Bill does not make any sense and could possibly create unfair outcomes and pit civic groups against one another.
• The Bill places an undue burden on DED to support the community in the negotiation, when their role should be to support the businesses.

We have outlined detailed support for our objections below and consider proposed Bill 33-11 to be fatally flawed. We do not think this bill should be amended, we are asking that the bill be withdrawn.

WHAT IS THE PROBLEM?

• If the concern of the Council is the level of wages offered to employees, this Bill does not address that concern. That is a larger discussion that should be more transparent. If the Council were to engage in the discussion of living wages, it should certainly not be relegated to unspecified community groups to negotiate.
• If the concern is that Walmart is a non-union workforce, does that mean that the county will no longer allow any non-union business in MC or just large non-union employers? Again, that is a much larger discussion that should be much more transparent.
• If the concern is that Walmart does that meet some standard for retail, does that mean that the Council will now screen all businesses to see if it “fits” with what the county stands for? Where is the line drawn?  Does that mean that Target is OK, but not Walmart; Wegmans is OK, but not Shoppers? Would we be having the same discussion if this were Nordstroms?
• If the concern is about the dislocation of small businesses as stated in the accompanying memorandum to the Bill, this Bill does nothing to address issues of dislocation or any remediation to potentially impacted small businesses.
• If the concern is philanthropy or community engagement by our large employers, the concern is unwarranted. We already have a very engaged business community that supports many non-profit and civic organizations.

LIVING WAGES, HIRING PRACTICES AND TRAINING PROGRAMS 

The County Council currently does not have the authority to legislate living wages or the hiring and training practices of a private employer.

• It is beyond the jurisdiction of the County Council to tell a private employer who they can hire and how much their employees should be paid.  There are Federal and State laws governing compensation and hiring practices.
• Logistically, what is an acceptable radius for hiring “within a certain distance of the store.”  Are we now pitting one neighborhood against another? What if my neighborhood falls just outside that radius and I am equally qualified for the job? What if I live within the radius and an equally qualified member of a protected class lives outside the radius, does the employer go against the CBA or Federally mandated hiring requirements.
• How can the county require private employers to do something that the county itself does not do? What percentage of teachers, police, firefighters live within a specified distance of their place of employment? There are advantages to having firefighters, police officers, and teachers live in communities where they work. How would those unions react if the county required that to be part of the union contract?
• Does this bill only impact non-unionized Big Box stores? If Walmart were a unionized facility, would the UFCW now be required to negotiate their contract with the community?

AFFORDABLE HOUSING

It is unclear why any private employer would be required to negotiate with HCA. This does not make any sense.  Is it the Council’s intention to now require large employers to subsidize housing for their employees?

• As a major employer, why doesn’t the county provide affordable housing to its employees? Because it is untenable.  The county is again asking a private employer to do something that it is not doing. The County Council does not have the right to require private employers to provide or subsidize housing. Employers provide their employees Federal/State mandated wages for the work they do. Without additional legislation, the county cannot require the employer to provide additional compensation.
• Why should private employers have more burden than MCPS or the county? Why just big boxes – what about other businesses with lower wage earners?

HARDER TO DO BUSINESS IN MONTGOMERY COUNTY - This bill makes it harder to do business with Montgomery County.  There is already an extremely difficult development process in place that includes significant opportunity for community groups to weigh in on development projects. Do we need another layer? We already have Master Plan, sketch plan, site plan, permitting, environmental restrictions, APFO, PAMR, impact taxes, developer amenities, Existing ordinances for noise, lighting etc. Do we need ANOTHER obstacle to doing business in the county?

ANTI-BUSINESS MESSAGE – The county has a reputation of being a difficult place to do business. Prior to the recession, there was a strong slow-growth/no-growth contingent in the county.  After the recession most people realize that we need economic development to maintain the level of services and quality of life in the county.  On Oct. 26, the Montgomery County Business Development Corporation presented a status report to the Council in which it reiterated the need for a business friendly environment in the county. Most Councilmembers are on record as agreeing with the need to bring jobs to the county.  However, actions speak louder than word. This Bill will send the message that the County Council is not sensitive to the needs of business.

REDUNDANT WITH PLANNING / REGULATIONS

The Bill includes various aspects of the planning process in the list of options to be included in the CBA. Isn’t this the Planning Board’s job?  There are already processes in place for community input in the following:

• Design
• Use of Open Space
• Traffic Mitigation
• Environment Impact

What if the chosen Community Organization is in direct opposition with the Planning staff on the ways to mitigate traffic? What if CBA negotiates use of open space that is in opposition to the Master Plan? There is a very lengthy, complicated planning process in place that already addresses these issues, the Council can’t expect to add another layer of pleasing at least three potentially disparate community organizations prior to opening their doors.

As for Operating Hours, Deliveries, Noise, Lighting, etc. we certainly understand that large businesses need to be compatible with their surrounding neighbors. That is part of the lengthy zoning process, to make sure that land uses are compatible. When it comes to the actual operation of a facility, there are laws in place to regulate various aspects of the business included noise, lighting, signage, trash and recycling, etc.  If the current regulations are not adequate, then those specific regulations should be address in a transparent way.  While it is important to have community input on these regulations, it should not be three civic organizations who dictate the regulations governing business operations in the county.

PROCEDURAL FRAMEWORK  – The Devil is in the Details

WHAT IS AN ELIGIBLE CIVIC ORGANIZATION? Although there is a definition included in Bill, the only limiting factor is that the “organization” be composed of residents of and businesses located within five miles of the business.  That could be hundreds of organizations. Does this include ALL the HOAs? ALL the Non-profits? ALL the Citizens’ Groups? ALL the ad hoc groups that pop up to fight or support one specific issue, in one specific neighborhood.  In the case of Wegmans in Germantown, there are at least 50 HOAs, 500 non-profits, and who knows how many “civic” groups that would meet the definition.  What about county-wide civic organizations that are not located within the five-mile radius but have constituents throughout the county – like the Montgomery County Chamber of Commerce or Casa de Maryland? 

• HOW ARE THE CIVIC ORGANIZATIONS SELECTED?  How can three groups speak for the entire community? What if there are three HOAs? That leaves out the business community. What if there is one business group, one HOA, and one citizen’s organization? What about the voices of the other 497 groups? Again in the case of Wegmans, you might have one of the many Milestone HOAs, one of the many Waters Landing HOAs, and the Germantown Alliance.  Where does that leave the Boys & Girls Club right down the street, the CCT Coalition, the Chamber, Montgomery College Foundation, the SoccerPlex, the three High School Clusters in the five-mile radius?  What if the three organizations selected disagree on what the Community Benefit should be?  A transportation group may want to see funds invested in transit or road construction, this might be direct contract to a community organization that is fighting that same project.
• WHO ACTUALLY MAKES THE DECISION? Chances are this will be an exclusive arrangement where the more savvy organizations will get the Golden Ticket and the rest will be left in the dust. Are we really going to task DED / HCA to sift through the various groups and decide which three groups should represent the residents and businesses? Don’t they have more important things to do?
• WHO DECIDES WHAT IS SUFFICIENT? Can the incoming business simply give money to various organizations and be done with it? How much money? What if the business provides literacy training for workers and nothing else – are they done? What if the community organizations are not satisfied? Does that mean the store doesn’t open? Who says enough is enough? As one of the Chamber members said – this bill is so vague he does know whether he needs to fund the little league team or provide luxury townhomes to every employee.

DED ROLE

The Department of Economic Development (along with HCA) is required to provide, on request, advice or support to any recognized civic organization that will facilitate the negotiation and implementation of a CBA. This is not the role of DED. DED needs to have a positive relationship with the business community, they should be an advocate of the business, not the advocate of the civic organizations.  The reporting requirements create a potentially adversarial relationship with the very businesses they are trying to attract and retain. The Council should be trying to focus the scope of DED to attracting and retaining jobs – period.