A Beautiful Change in the Neighborhood: The Power of Community Benefits in Tennessee

By: Mariel Cuellar

The primary reason I made the decision to attend law school was to “make a difference” in the world around me. I know I am not alone in this pursuit, and I still believe that law can be an impactful tool to create tangible change. That said, as a law student, I can feel at a loss when I witness the hardship experienced by people in the various communities that I am part of. It is difficult to see how my work, which is often just a lot of paper, can make any real “difference” for these people, or even myself.

I have been advised, and have in turn advised others, that it’s important not to fall prey to the overwhelm of problems the world faces. Focusing on what you can do within your communities, building connections with those around you, or just talking to your neighbor, can lead to positive change. This may come across as tragically cliché. Yet, Community Benefits offer an incredibly encouraging avenue for change that validates this notion.

Community Benefits refer to several categories of agreements between community groups and developers established in connection to a development project.[1] Unfortunately, through amended legislation that went into effect in July, the Tennessee legislature has restricted the ability of developers to enter these agreements.[2] In turn, this restricts the ability of individuals to hold developers, which are often powerful corporations, directly accountable to the needs of the communities they profit from. However, this restriction is not an elimination. Therefore, Tennesseans should not hesitate to continue pursuing Community Benefits to take some of this power back.

Community Benefits Overview

Community Benefits include various agreements in which a developer provides meaningful benefits to the community where its project is located to resolve opposition or in exchange for support.[3] These agreements may take many forms. A Community Benefits Agreement (“CBA”) is “[a] legal contract between a community coalition and company starting a new development.”[4] Good Neighbor Agreements are similar but are signed after a project is established to hold developers accountable to the needs of the community.[5] Municipalities may also enact Community Benefits Ordinances, requiring developers to form CBAs as a condition to receiving economic incentives.[6]

The benefits included in these agreements are just as varied. Communities concerned with increased rent and housing costs in response to a new project may require a developer to make affordable housing commitments.[7] Communities concerned about unemployment may require developers to agree to local hiring once a project is established.[8] Funding for community services, environmental impact mitigation and monitoring, and enforcement processes are also commonly included benefits.[9] The critical factor is that the people most impacted by a developer’s presence are the ones who determine which concerns should be addressed. 

Community Benefits in Tennessee

            Developers in Tennessee are familiar with Community Benefits. In 2018, Nashville Soccer Holdings (“NSH”) signed Tennessee’s first CBA[10] with Stand Up Nashville (“SUN”) for construction of Geodis Park, the now-home of the Nashville Soccer Club.[11] Under the CBA, NSH agreed to provide various benefits including free after-school soccer programming for local youth,[12] affordable and workforce housing at the development site,[13] and a commitment to hiring qualified local residents at all levels, considering residents from Nashville’s Promise Zones (“NPZ”) first.[14]

            A six-person Community Advisory Committee comprised of residents of the NPZs closest to Geodis Park, SUN members, and NSH members, is responsible for enforcing the CBA.[15] Overall, it has been implemented effectively. In 2023, 180 individuals were directly hired by Nashville Soccer Club, eighty of whom were residents of NPZs.[16] Additionally, 160 affordable and workforce housing units were built.[17] However, some Community Benefits pursuits in Tennessee have not been as successful.

            In 2024, the Blue Oval Good Neighbors (“BOGN”), a community coalition, worked to form a CBA with Ford Motors, which was constructing an electric vehicle facility in Stanton, Tennessee.[18] However, Ford has yet to respond to BOGN’s coalition letter.[19] Instead, Ford has made an independent nine million dollar commitment “dedicated to community initiatives, workforce development, and environmental protection.”[20]

            Some of this money has been distributed through grants to public safety agencies and community centers.[21] While this funding is surely appreciated, it is not necessarily a cause for celebration. Instead, it comes across as Ford’s attempt to placate BOGN while evading the accountability that a CBA would bring.

A similar issue has occurred in Boxtown, a historically Black neighborhood in Memphis, Tennessee, where Elon Musk’s xAI company has built a data center “dubbed the world’s largest supercomputer.”[22] Boxtown residents voiced concerns over the data center’s impact on air quality, fighting the permit approval for xAI to install pollution-emitting turbines.[23] In an effort to assuage these concerns, Memphis Mayor Paul Young announced a proposed Community Benefits Ordinance.[24] However, the proposed ordinance would allocate benefits beyond Boxtown,[25] and would only distribute twenty-five percent of revenues collected from xAI property taxes.[26] Additionally, residents’ input regarding fund distribution has been limited.[27] Tennessee’s recently amended law may make it even more difficult for community members to make their voices heard.

Impact of Tennessee’s Community Benefits Restriction

            Effective July 1, 2025,[28] businesses seeking certain economic development incentives are prohibited from entering community benefits agreements.[29] A community benefits agreement is defined as: 

[A]n agreement or understanding of any type between an employer and a community group, organization, or other third-party, other than the state, that: (A) [c]ontractually binds the employer to fund or provide specific attributes, services or amenities, mitigations, or anything of value to a community or organization; (B) [e]stablishes employment criteria of any type or form, including wage and hour criteria; or (C) [p]rovides for or requires the employer to utilize a trade union or other unionized workforce where the employees collectively bargain with employers for wages, hours, or working conditions.[30]

An economic development incentive is defined as a “capital grant authorized under the [State Building Commission chapter] . . . ” or certain FastTrack grants.[31]

            In Tennessee, there are three types of FastTrack grants available,[32] but the amended legislation only mentions two.[33] One is the Job Training Assistance Program which provides grant funding “to new or expanding companies . . . to support the training of net new full-time employees.”[34] The other is the Economic Development Fund which provides reimbursable grants to local governing bodies to offset the costs of a company’s relocation or expansion.[35] A project’s impact on the community must be significant to receive this funding, so it is only distributed in “exceptional cases.”[36] Still, more than a quarter of the forty-three FastTrack funded projects in 2024 received Economic Development Fund grants.[37]

            Limiting the ability of developers to form CBAs seems especially problematic in relation to the Economic Development Fund. A significant impact on the community is a condition for developers to receive these grants. Thus, the amended legislation takes agency away from both developers and community members to determine how that impact will be directed.

            However, Tennesseans should not abandon their pursuits for CBAs or other Community Benefits. FastTrack grants are not the only economic incentives available to developers, nor are they the only source of funding developers can rely on. The Geodis Park project, for example, received economic incentives from the city of Nashville rather than the state.[38] Therefore, the 2018 CBA would still be permissible under the amended legislation. Similarly, the xAI data center does not rely on state incentives and instead is funded through xAI’s own capital.[39] Thus, Memphis coalitions may still be able to form Good Neighbor Agreements with xAI.

            Even though the Tennessee legislature has limited some avenues for Community Benefits, there are still paths to establish them. Therefore, Tennesseans should be vigilant in tracking funding sources for new developments to determine what options are available to them. And, most importantly, Tennesseans need to work together.

While the advice may read as trite, it’s true. Talk to your neighbor. It’s more than likely that you share an interest in accessing a healthy environment, livable wages, and opportunities to get to know each other better. With that recognition, you should also realize that you have the power to hold developers accountable to gain that access.

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[1] FairShake, What Are Community Benefits? 2, https://static1.squarespace.com/static/52d06637e4b03daab13b67f6/t/66c4b312053ec4692e9579bb/1724166930549/Community+Benefits+101.pdf.

[2] See Tenn. Code Ann. § 4-3-739(b)(1)(D) (2025).

[3] FairShake, supra note 1; People, Places, Planet, Leveraging Corporate-Community Agreements for Environmental Justice: An ELPAR Article Spotlight, Env’t L. Inst., at 06:48 (May 28, 2025), https://www.eli.org/podcasts/leveraging-corporate-community-agreements-environmental-justice-elpar-article-spotlight.

[4] FairShake, supra note 1, at 3.

[5] Id. at 4.

[6] Rex LaMore et al., Community Benefit Planning and Agreements A Summary Overview 7 (2024), https://ced.msu.edu/upload/community%20benefits/Community%20Benefits%20Brief_FinalVersion.pdf.

[7] FairShake, supra note 1, at 6.

[8] Id.

[9] Id.

[10] Community Benefits Agreement, Stand Up Nash., https://standupnashville.org/historic-community-benefits-agreement-reached/ (last visited Oct. 13, 2025).

[11] Nashville MLS Soccer Community Benefits Agreement 10 (2018), https://standupnashville.org/wp-content/uploads/2020/11/18-09-03-FINAL-NSH-SUN-CBA-with-REVISED-Exhibit-A-SIGNED-00456717xAA7B8-1.pdf [hereinafter Geodis Park CBA].

[12] Id. at 2–3­.

[13] Id. at 4.

[14] Id. at 5. The Nashville Promise Zone is a federally designated area that provides “priority access to federal investments” to address the area’s high poverty and crime rates, low education rates, and poor infrastructure. The Nashville Promise Zone, Metro. Dev. & Hous. Agency, https://www.nashville-mdha.org/the-nashville-promise-zone/ (last visited Oct. 13, 2025).

[15] Geodis Park CBA, supra note 11, at 7.

[16] Cmty. Advisory Comm., Community Benefits Agreement Annual Report 1 (2023), https://standupnashville.org/wp-content/uploads/2025/04/Annual-Report-final-2023.pdf.

[17] Id. at 2.

[18] Ford, Do The Right Thing: Come to the Table and Negotiate a Community Benefits Agreement!, Action Network, https://actionnetwork.org/petitions/ford-do-the-right-thing?source=direct_link& (last visited Oct. 13, 2025).

[19] Blue Oval Good Neighbors, Tenn. for All, https://www.tn4all.org/ford-blueoval (last visited Oct. 13, 2025). See also Letter from Blue Oval Good Neighbors et al. to Bob Holycross, Vice President of Env’t, Sustainability and Safety, Ford Motor Co. (April 2024). https://drive.google.com/file/d/1RkI4kXA0qynQPkDMCbuvDUBf0BILOQpn/view.

[20] How Ford Good Neighbor Grants Strengthen Communities in West Tennessee, Ford From the Road, https://www.fromtheroad.ford.com/us/en/articles/2025/ford-good-neighbor-grants-west-tennessee-2025 (last visited Oct. 13, 2025).

[21] Id.

[22] Bracey Harris et al., Up against Musk’s Colossus supercomputer, a Memphis neighborhood fights for clean air, NBC News, (May 15, 2025, at 15:54 ET), https://www.nbcnews.com/news/us-news/musk-xai-colossus-supercomputer-boxtown-memphis-tennessee-rcna206242.

[23] Id.

[24] Paul A. Young, Facts over fear: Mayor Young explains his support of Memphis’ xAI project, Com. Appeal (June 12, 2025, at 05:04 ET), https://www.commercialappeal.com/story/opinion/contributors/2025/06/12/memphis-mayor-paul-young-refutes-criticisms-xai-project/84154960007/.

[25] City of Memphis, Ordinance Providing for the Allocation of Lawfully Available Funds of the City, in an Amount Equal to a Portion of Prop. Tax Revenues Collected by the City on Certain A.I.  Prop., to Certain Pub. Purposes Within Those Areas of the City Affected by the Dev., Use and Operation of Such Prop. § 1(f) (July 8, 2025), https://memphistn.gov/wp-content/uploads/2025/07/xAI-Allocation-Ordinance47043091-1.pdf.

[26] Id. at § 2(b).

[27] Katherine Burgess, xAI Neighbors Surveyed on How to Spend Company’s Tax Money, Memphis Flyer (July 22, 2025, at 08:13 ET), https://www.memphisflyer.com/xai-neighbors-asked-how-to-spend-companys-tax-money.

[28] Memorandum from the Fiscal Rev. Comm. of the Tenn. Gen. Assembly on SB 1074 – HB 1096 (Feb. 18, 2025).

[29] Tenn. Code Ann. § 4-3-739(b)(1)(D) (2025).

[30] Id. § 4-3-739(a)(9) (2025).

[31] Id. at § 4-3-739(a)(2) (2025).

[32] Incentives and Grants, Tenn. Dept. of Econ. & Comm. Dev., https://tnecd.com/advantages/incentives-grants/ (last visited Oct. 13, 2025).

[33] Tenn. Code Ann. § 4-3-739(a)(2) (2025).

[34] Tenn. Dept. of Econ. & Comm. Dev., supra note 32.

[35] Id.

[36] Id.

[37] FastTrack Project Database, Transparent Tenn., https://www.tn.gov/transparenttn/state-financial-overview/open-ecd/openecd/fasttrack-project-database.html (last visited Oct. 12, 2025).

[38] Cynthia Abrams, Checking in on ‘community benefits agreements’ in Tennessee—and the new law curbing them, WPLN News (June 16, 2025), https://wpln.org/post/checking-in-on-community-benefits-agreements-in-tennessee-and-the-new-law-curbing-them/.

[39] Young, supra note 24.