What Is a Community Benefit Agreement?

Community benefit agreements have emerged as a meaningful tool in the toolkit of community planning and local economic development, offering a pathway to engage communities and projects for mutual sustainability. These tools utilize a strategic approach to ensure that projects create direct benefits for impacted communities, outlining how a project will function within the community, align with its values, and support its resiliency (Patterson et al., 2017; Gross, et al. 2005; Mayor’s Office of Equal Opportunity, 2024). 

A community benefit agreement is an agreement, or contract, cocreated through a synergetic and collaborative process between a prospective developer and community representatives, outlining specific benefits that the developer commits to provide in exchange for the community's support of the proposed development (Been, 2010; Salkin, 2007; Cascadden et al. 2021). This tool engages in a process that strives to align the collective interests and values of project owners, governments and local communities. It is designed to be a collaborative and mutually beneficial process rooted in a belief that community and industry sustainability are interdependent, and that culture, natural resources and social capital are integral to economic development (Peredo & Chrisman, 2006).

These agreements can be voluntary or mandatory, and can be initiated by project owners, local government or communities (Been, 2010). They can be implemented on private and public land projects, where they may be particularly advantageous when paired with projects that are not captured within traditional tax generation systems (i.e. exempt from property taxes, receiving state tax abatements, etc.). Such agreements frequently arise when a developer announces plans for a major project and initiates work to address legitimate community concerns, such as impacts on land use, traffic, roads, housing, jobs and education (Salkin & Lavine, 2008; Been, 2010; Cascadden et al. 2021; Stephan, 2022). However, they can also be required by local ordinance through permitting or financial incentive processes and may outline the desired benefits as prioritized by the municipality (Mayors Office of Equal Opportunity, 2024).

Nevada industries can benefit from the community benefit agreement process to align values that generate community support for their projects, a desirable characteristic to a developer, particularly when seeking financial incentives or aiming for the timely approval of project permits (Salkin & Lavine, 2008; Been, 2010; Stephan, 2022;). Direct benefits may help a proposed project earn a social license to operate within a community, reducing public opposition and lowering hurdles during permitting, and positively impacting project economics (Been, 2010; Cascadden, et al, 2021; The CommWell Working Group, 2021; Stephan, 2022).

Nevada communities can harness the power of community benefit agreements to foster industry engagement while guiding a project’s community investment based on locally identified critical needs (Khalatbari, 2024). Projects can make social and economic investments (Gerber, 2007) to increase community capacity and well-being, cultivating supportive and responsive communities that in turn improve a project’s bottom line. This contributes to both community and project sustainability, demonstrating the mutually beneficial impact of the community benefit agreement process.

Types of Benefits

Each community benefit agreement should be unique to the project and community involved in the agreement (Been, 2010). One project could have multiple community benefit agreements, one with each community it impacts. The project owner would codevelop a separate community benefit agreement with each impacted community, reflecting their unique collaboration and identified needs.

The agreement can include provisions for financial and/or nonfinancial benefits. Financial benefits focus on money in the form of taxes, royalties and payments to towns or local municipalities (i.e. to fund initiatives). Non-financial benefits are more comprehensive and include civil and community infrastructure, workforce and economic development, housing, education, and emergency response (fire, emergency management services, etc.). (Loutit, 2016)

While the agreements are meant to be adaptable, researchers have found similarities among benefit provisions incorporated into these documents, including:

• Local hiring, contracting and materials
• Affordable housing
• Living wages and benefits
• Workforce development and training programs
• Education (including childcare, public elementary and secondary, community and higher education)
• Recreation
• Emergency management services
• Displacement strategies
• Funding for local initiative and scholarship accounts
• Environmentally friendly and sustainable practices
• Road maintenance and transportation
• Agreed to provide public support for the project by community organizers
• Monitoring committee to ensure compliance

(Been, 2010; Department of Energy, 2017; Gerber, 2007; Town of Riverhead, 2020; Stephan, 2022)

How Community Benefit Agreements Could Benefit Nevada

Within the context of Nevada, these agreements hold considerable promise as tools for promoting inclusive economic development, particularly in communities that lack community capacity due to being historically marginalized or having not fully benefited from economic growth. Nevada's unique economic landscape, characterized by a mix of urban, rural, frontier and tribal communities, presents both opportunities and challenges for the implementation of these agreements (Ho, 2007).

Nevada could leverage these agreements to direct public funds towards areas in need (Marantz, 2015). By strategically incorporating them into development projects, Nevada can proactively address critical community issues of housing shortages, childcare deserts, lack of rural health and emergency medical access, local food insecurity, and workforce development gaps, fostering more equitable and sustainable economic growth. Addressing these critical community needs contributes to resilient host communities where the project will be operating and relying on its local labor force. This in turn contributes to the bottom line and long-term sustainability of their project.

These agreements can serve as a mechanism for ensuring that development projects align with local values and priorities, reflecting the diverse needs and aspirations of Nevada's communities. The adaptability of the community benefit agreement model allows for its application in various situations, making it a versatile tool for shaping public benefits negotiation processes (Ho, 2007). The negotiation process hinges on local interests and relationships, emphasizing the importance of tailoring the agreements to the specific needs of each community (Ho, 2007). This ensures that the agreements effectively address the unique challenges and opportunities present in different Nevada communities. Agreements can also be used to promote broader community, social and economic development goals, such as encouraging community-based entrepreneurship and supporting local businesses (Mathie & Cunningham, 2003; Peredo & Chrisman, 2006). Nevada can also benefit from the experiences of other states and cities that have successfully implemented these agreements adopting best practices to suit its unique context and priorities.

Community Benefit Agreements with Private and Public Land Projects

The application of community benefit agreements extends to both private and public land projects, presenting distinct opportunities and considerations in each context. On private lands, these agreements can be utilized to mitigate the potential negative impacts of development projects, such as increased traffic, environmental degradation or displacement of residents (Sotolongo, 2024). In such cases, the agreements can serve as a mechanism for developers to demonstrate their commitment to their environmental, social and governance principles, while fostering positive relationships with local communities and enhancing their reputation (The CommWell Working Group, 2021).

Incorporating the agreements on public land projects may be particularly useful when they are not captured within traditional local tax generation systems. Developers of public land projects may benefit from the ally development that occurs through the collaborative agreement process, cultivating local support and reducing obstacles. Earning a social license to operate within a community, by cultivating their support, may positively impact a project’s bottom line with reduced opposition and speedier approval processes (Been, 2010; Cascadden, et al. 2021; The CommWell Working Group, 2021; Stephan, 2022;).

The agreements may be especially useful in bridging gaps when federal or state goals conflict with local public priorities (Ho, 2008), such as land stewardship, preserving community culture and heritage, increasing social/community infrastructure, and creating access to recreational opportunities.

It is also important to have diverse community representatives on agreement work committees that are committed to avoiding conflicts of interest that occur when land use, economic development and direct benefits intertwine (Been, 2010).

Community Benefit Agreements in Conjunction with Tax Abatements and Exemptions

When businesses receive tax abatements or exemptions, the agreements can be strategically implemented to ensure that communities directly benefit from these incentives. In such instances, the agreements can mandate that businesses receiving tax breaks invest in local infrastructure improvements, workforce training programs or locally relevant initiatives (i.e. childcare, hospital, housing), offsetting the potential loss of tax revenue. The negotiation of the agreements in these scenarios can also provide an opportunity for community members to voice their concerns and priorities, ensuring that development projects are responsive to local needs (Stephan et al., 2022). Community benefit agreements can also include provisions for ongoing monitoring and evaluation, allowing communities to track the progress of development projects and hold businesses accountable for fulfilling their commitments (Cascadden et al. 2021). Targeted benefit policies, such as business tax credits and property tax abatements, can lead to resource misallocation and potentially outweigh short-term economic benefits (Coyne & Moberg, 2014). Community benefit agreements may help capture direct benefits when businesses receive such tax abatements or exemptions. 

With effective agreement methods in place, Nevada may better capture the value of economic development projects and ensure that the benefits are shared equitably across communities. The use of these agreements can foster greater transparency and accountability in the allocation of state resources, promoting good governance and building trust among government, businesses and communities (Cascadden et al. 2021). By requiring businesses to demonstrate a clear public benefit in exchange for tax incentives, these agreements can help ensure that economic development projects serve the broader interests of society.

Case Studies of Successful Community Benefit Agreement Implementation

Examining successful implementation of community benefit agreements in other regions can provide valuable insights for Nevada communities seeking to utilize this tool. For example, the Los Angeles International Airport expansion project provides a compelling case study of how the agreements can be used to address community concerns related to large-scale infrastructure development (Sotolongo, 2024). In this instance, a coalition of community, environmental and labor groups negotiated an agreement with the developer, Los Angeles World Airports, to mitigate the negative impacts of the expansion, including noise pollution and traffic congestion (Sotolongo, 2024). The agreement included provisions for noise mitigation measures, traffic reduction strategies, and job training programs for local residents, demonstrating the potential of community benefit agreements to deliver tangible benefits to communities affected by development projects (Marantz, 2015).

Additional Examples of Real-World Provisions in Community Benefit Agreements

• The Newmont Ahafo Mine agreement included a financial benefit sharing program that contributed to a community foundation, paying $1 for every ounce of gold sold, 1% of their net pretax income, and all gains from selling assets of $100k or more (Louit et al., 2016).
• The LI Solar agreement included funding $1.5 million to six town initiatives for community health and welfare, agricultural and open space, improvement of the environment, emergency management services, education, and employment (Town of Riverhead, 2020).
• The Staples Center agreement included a goal that 70% of the jobs created would pay the city’s living wage; required the developer to work with the local coalition on approving commercial tenants; require that of the housing units constructed, 20% (100-160 units) would be affordable housing; committed $1 million to community recreation needs and provided for a residential parking program (Been, 2010; Gerber, 2007).
• The Downeast LNG Liquid Natural Gas Import Terminal Project provided for establishment of an annual County Economic Trust Fund, 5% supplier goal for local qualified contractor 60% full-time workforce from local county, job training, school education support, road repair and transportation (Department of Energy, 2017).
• The Chevron Richmond Refinery Modernization Project included a $30 million investment over 10 years and included a scholarship program, workforce development training, skills building programs, youth workforce development community schools, solar systems and local hiring (Department of Energy, 2017).

Extension Resources

University of Nevada, Reno Extension provides community education and collaborates with partners on programming and research. It also hosts a digital library of publications on a range of topics impacting Nevadans. Additionally, this Economic and Community Development Education Series offers multiple publications relevant to this topic. Three related publications may be of particular interest to the reader, providing additional resources on community benefit agreements, permit ranking, and energy development (i.e. agrivoltaics, ecovoltaic). They are searchable through the link below, by author name.

• Extension library: https://extension.unr.edu/publications.aspx
• • Community Benefit Agreements: Resources for Communities, Government, and Industries (Economic and Community Development Education Series, No. 2) (Allen, 2025). This fact sheet is the second of the series, providing an overview of how communities, local and state government, and project developers can contribute to development of these agreements. It also includes resources for best practices and addresses potential challenges.
  • Community Benefit Agreements: Engaging Communities and Industries for Mutual Benefits (Economic and Community Development Education Series, No. 3) (Allen, 2025). This factsheet is third in the series, providing an overview of the agreements in an easy to read two-page handout-style document that can be used as a companion resource in conjunction with the first and second fact sheets of this series.
  • Pathways to Agrivoltaic and Ecovoltaic System Adoption in Nevada Counties (Economic and Community Development Education Series, No. 3) (Allen & Morris, 2025). This fact sheet is the third of the series, providing considerations for Nevada counties as they prioritize sustainable and responsible energy development through permitting processes. It includes concepts pertaining to co-priority solar projects, such as agrivoltaics and ecovoltaics, and community benefit agreements.

Conclusion

Community benefit agreements hold significant promise as a tool for promoting equitable economic development in Nevada communities. They are applicable to projects on both private and public lands, including with businesses receiving tax abatements. By incorporating provisions that prioritize local critically identified needs, these agreements can ensure that development projects generate tangible benefits that align with the values of the communities in which they are located or impacting. Successful implementation requires careful consideration of potential challenges, including issues of representation, transparency and enforceability (Been, 2010; Ho, 2007). By adopting best practices for design and implementation of these agreements, Nevada can harness the power of them, to create more vibrant, equitable and sustainable communities for all residents. Ultimately, these agreements ensure legal enforceability of a developer’s promises, while helping members of the public and government officials to understand a developer’s commitments (Marantz, 2015). These agreements provide the means for a community to have a stronger voice in shaping the direction of development that affects their neighborhoods (Marantz, 2015). These agreements can be viewed as organizing tools that give community groups a united voice at the negotiation table (Ho, 2007).

References

1. Allen, M. (2025).  Community Benefit Agreements: Engaging Communities, and Industries for Mutual Benefits (Economic and Community Development Education Series, No. 3). University of Nevada, Reno Extension. https://extension.unr.edu/publications.aspx
2. Allen, M. (2025).  Community Benefit Agreements: Resources for Communities, Government, and Industries (Economic and Community Development Education Series, No. 2). University of Nevada, Reno Extension. https://extension.unr.edu/publications.aspx
3. Allen, M., & Morris, L. (2025). Pathways to Agrivoltaic and Ecovoltaic System Adoption in Nevada Counties (Economic and Community Development Education Series, No. 4). University of Nevada, Reno Extension. https://extension.unr.edu/publications.aspx
4. Been, V. (2010). Community Benefits Agreements: A New Local Government Tool or Another Variation on the Exactions Theme? The University of Chicago Law Review, 77(1), 2. https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=5489&context=uclrev
5. Cascadden, M., Gunton, T., & Rutherford, M. (2021). Best practices for Impact Benefit Agreements. Resources Policy, 70, 101921. https://doi.org/10.1016/j.resourpol.2020.101921
6. Coyne, C. J., & Moberg, L. (2014). The political economy of state-provided targeted benefits. The Review of Austrian Economics, 28(3), 337. https://doi.org/10.1007/s11138-014-0274-8 
7. Department of Energy. (2017). Guide to Advancing Opportunities for Community Benefits through Energy Project Development. U.S. Department of Energy. https://www.energy.gov/diversity/articles/community-benefit-agreement-community benefit agreement-resource-guide
8. Gerber, S. (2007). Community benefits agreements: A tool for more equitable development? Federal Reserve Bank of Minneapolis: Retrieved 05/28/25 from: https://www.minneapolisfed.org/article/2007/community-benefits-agreements-a-tool-for-more-equitable-development
9. Gross, J., LeRoy, G., & Janis-Aparicio, M. (2005). Community Benefits Agreements: Making Development Projects Accountable. Good Jobs First and the California Partnership for Working Families. 
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14. Mathie, A., & Cunningham, G. (2003). From clients to citizens: Asset-based Community Development as a strategy for community-driven development. Development in Practice, 13(5), 474. https://doi.org/10.1080/0961452032000125857
15. Mayor’s Office of Equal Opportunity. (2024). Community Benefits Resource Guide. Mayor’s Office of Equal Opportunity, City of Cleveland Ohio. https://www.clevelandohio.gov/sites/clevelandohio/files/oeo/CBA-Resource-Guide-101524.pdf
16. Patterson, K. L., Ranahan, M., Silverman, R. M., & Yin, L. (2017). Community benefits agreements (Community Benefit Agreements): a typology for shrinking cities. International Journal of Sociology and Social Policy, 37, 231. https://doi.org/10.1108/ijssp-01-2016-0003 
17. Peredo, A. M., & Chrisman, J. J. (2006). Toward a Theory of Community-Based Enterprise. Academy of Management Review, 31(2), 309. https://doi.org/10.5465/amr.2006.20208683 
18. Salkin, P. E. (2007). Community Benefits Agreements: Opportunities and Traps for Developers, Municipalities, and Community Organizations. Planning & Environmental Law, 59(11), 3. https://doi.org/10.1080/15480755.2007.10394471
19. Salkin, P. E., & Lavine, A. (2008). Understanding Community Benefits Agreements: Equitable Development, Social Justice and Other Considerations for Developers, Municipalities and Community Organizations. UCLA Journal of Environmental Law and Policy, 26(2). https://doi.org/10.5070/l5262019560 
20. Sotolongo, M. (2024). Community Benefits Policy and Energy Justice. Initiative for Energy Justice. https://iejusa.org/wp-content/uploads/2024/07/Community-Benefits-Policy-and-Energy-Justice-June-2024_060524-2-1.pdf 
21. Stephan, H. P. (2022). Contracting with Communities: An Analysis of the Enforceability of Community Benefits Agreements. Minnesota Journal of Law & Inequality, 40(2), 281. https://doi.org/10.24926/25730037.646
22. The CommWell Working Group. (2021). Community Well-being and Mining Framework Overview.  The CommWell Working Group. Devonshire Initiative. Retrieved 05/28/25: https://www.devonshireinitiative.org/_files/ugd/420f7e_43e579da8d1d4917a8ee027b62ae23b6.pdf
23. Town of Riverhead. (2020). Riverhead Community Benefits Agreement. Town of Riverhead. https://www.townofriverheadny.gov/files/documents/RiverheadCommunityBenefitsAgreementcalendar960411501121520-023126PMb.pdf