Community Benefit Clause Signals New Opportunities For Social Enterprises
11 February 2011 at 4:46 pm
The introduction of community benefit clauses into the tendering process for new buildings has great potential for Not for Profit organisations and social enterprises, according to Social Trader's Nina Howard.
In 2009 the Victorian Government's land development agency, VicUrban, had the foresight to insert a community benefit
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| Nina Howard, Social Enterprise Navigator, Social Traders |
clause into their bid document to develop a new eight-storey Government Services Office in central Dandenong. This clause was not prescriptive, but as a condition of being awarded the building contract it required developers to demonstrate the community benefit they would provide above and beyond the construction of the building. This is an example of the growing number of government, corporate, and other purchasers that are realising the enormous potential they have to add social and environmental value to their purchasing processes.
Grocon was selected via a competitive tender process to build and own the Government Services Office. When completed in late 2011, the Office will locate several Government offices in one new building located in the heart of the 170 hectare Revitalising Central Dandenong (RCD) project area. The RCD initiative is being delivered by VicUrban, in partnership with the City of Greater Dandenong.
This week Grocon, Australia's largest privately owned construction and development company, is calling for Expressions of Interest from social enterprises to a ground-floor retail space in the new Government Services Office. The successful social enterprise/s will have the opportunity to enjoy substantially reduced rental rates for a period of up to three years.
This is not Grocon's first foray into creating community value in their building construction and development activities. In 2010 Grocon completed the 11-level Common Ground Building in Elizabeth Street Melbourne “at cost”, passing this financial benefit on to the social housing developer Yarra Community Housing. Common Ground is a supportive housing model that tackles homelessness, and Grocon is also completing similar projects in Sydney and Brisbane.
Grocon's engagement with VicUrban and social enterprise in Dandenong illustrates the powerful opportunities available to private companies to directly benefit the economically disadvantaged areas, like Dandenong, where they do business. This business strategy further enhances Grocon's reputation as a socially responsible and ethical company and employer, building its competitiveness in the wider construction development market segment.
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| Grocon's the new Government Services Office in Dandenong. |
Grocon's Dandenong development offers for social enterprises a unique opportunity because it will assist with limiting the costs involved in the financially challenging set-up phase (though it?s important to remember, that cheap rent alone is not enough to make a social enterprise work).
In the case of Dandenong, the benefits will lie in the social and economic development value generated by the social enterprise tenants.
In a similar vein, philanthropic groups and others have helped social enterprise by giving them access to operating spaces. Donkey Wheel Foundation owns an old iconic Melbourne CBD building (Donkey Wheel house) and leases space to social enterprise tenants, while Yarra Community Housing deliberately targets social enterprises to occupy their retail space and provide benefit to their tenants.
This trend towards government, corporates and smaller not for profits quarantining rental spaces for social enterprises at reduced or no rental rates seems to be gaining momentum.
The Government Services Office is one of the first major developments in the 15-20 year revitalisation of central Dandenong and VicUrban will continue to consider local social and economic benefit when assessing future development proposals within the project area.
The partnership between VicUrban and Grocon demonstrates how government and other buyers can use structures like community benefit clauses to encourage developers to identify and deliver initiatives that will benefit the community – through this partnership a social enterprise 'incubator' model has been adopted.
Who knows what community benefit ideas other developers might have planned for Dandenong and other regeneration sites? Could this mean social enterprises operating from the base of every new building in Dandenong? And what does this mean for other constructions across the country?
For more information see:
Social Traders online Social Procurement library: http://www.socialtraders.com.au/social-procurement
National Social Procurement Report: http://www.socialtraders.com.au/sites/www.socialtraders.com.au/files/SP%20in%20Australia_0.pdf
One would think that increasing the engagement that for-profit enterprises have with social enterprise would be a good thing. If done well it should deliver some benefits for both parties, but I wonder how many social enterprises are looking for retail space in a regional CBD area?
As the article states:
… enhances Grocon’s reputation as a socially responsible and ethical company and employer, building its competitiveness in the wider construction development market segment.
But is that the most it can do for the for-profit? Be a lapel badge saying that it helped a social enterprise?
What I’d like to see is a for-profit entity integrate community benefit into one of their product lines or services. This will obviously be different for each business.