St. Paul’s minority contracting practices under scrutiny

Mike Thomas, president and CEO of Cornerstone Community Realty, was an early member of the Equal Access Working Group.
Photo by Anna Pratt

Brian Conover, owner of locally based Abel Trucking, recently affixed a “for sale” sign on the dump truck that is parked outside his Maplewood home, which he uses to haul tons of rubble from various construction sites. Conover, who started his business in 2000, can no longer afford to pay for fuel, insurance, and other rising costs to keep it going; soon, he’ll be behind the wheel for another trucking company.

The entrepreneur says he’s been unable to find enough work. Despite numerous attempts, he’s never received a bid for a City-funded construction project in St. Paul, where he resided for many years.

Conover’s experience falls in line with scores of minority business owners who claim they have been kept at arm’s length from some St. Paul developments, deliberately or otherwise. The City’s pool of contractors, largely made up of big companies, has long drawn heated debate.

In 1997, the City endorsed the minority vendor outreach program, or “chapter 84,” to counteract discrimination. Some maintain it has failed to adhere to its principles, even though one-third of the city’s population belongs to communities of color, leading to several lawsuits.

Following ongoing complaints from minority business owners, a City-appointed taskforce called the Equal Access Working Group (EAWG), comprised of community stakeholders, called for an in-depth examination of how St. Paul doles out contracts and other economic opportunities to minorities.

The St. Paul City Council gave the go-ahead for the audit of the minority vendor outreach program, among other things, to Milwaukee attorney James Hall on Thursday, April 18. The Saint Paul Foundation, Bremer Foundation, and the City are funding the three-to-four-month-long investigation that comes two years after its proposal.

Also underway in conjunction with the audit is a disparity study, the third since 1995 to analyze the climate for minority-owned business in the city. In contrast to an audit, a disparity study looks to other factors beyond city hall doors to detect bias, according to City officials.

Ward One City Council Member Debbie Montgomery, who voted against the audit when it was first brought before the council, said the review is a step in the right direction. “The goal is to get down to where the problem is, find where the disparities are, and figure out how deep they are,” she said.

Montgomery is optimistic that the audit and disparity study will complement each other. Together, “They’ll give the City direction to make sure everyone is included and can receive viable contracts,” she said.

Barriers to minorities

All too often, Conover said, he’s unaware of an upcoming construction project until it’s too late and positions have already been filled. Once, he paid for a subscription to a City bulletin that provided regular, up-to-date tidbits about future developments, including labor and material needs. Sadly, these leads always turned out to be dead-ends, he remarked.

As a result, his credibility with the people he usually works with has deteriorated to the point that he has been forced to unload his equipment. “Now I’m at the point where I would have to rebuild and win back people’s trust to re-establish myself. Otherwise, I’m just talking,” he said.

Meanwhile, “Another billion-dollar project will sweep through the city and go to the same people again and again,” he said, his bass-like voice resounding with regret, pointing out that most contractors getting jobs in the area aren’t certified as minority owners (and need not undergo the process of achieving that status).

Others echo Conover’s discontent; their bids are turned down for unclear reasons, or they simply don’t have relationships with the most competitive companies.

Mike Thomas, president and CEO of Cornerstone Community Realty housed in a building with a brick facade facing Selby Avenue in St. Paul, has been an outspoken critic of a system that rarely allows for newcomers. He cited the $1 billion Housing 5000 project that broke ground during former Mayor Randy Kelly’s tenure, which led to the construction of thousands of new housing units — but left minorities out of the process.

Thomas, who served on the EAWG early on, has charged that the City lapsed in its responsibility to the minority vendor outreach program in a federal lawsuit he filed against the City in 2004 (still under litigation).

At a recent community gathering in the sanctuary of St. Paul’s Mount Olivet Baptist Church, Thomas expressed concerns that the framework for the audit has been altered and watered down to resemble the working plan for the disparity study. He wants the audit and disparity study to be kept separate, so that one doesn’t interfere with the other and original goals remain intact.

“It’s about economic development and social justice. So much is at stake. We need more eyes and ears at the table,” he said. “Part of what’s missing is outrage for what’s taking place in a long, long history in St. Paul.”

Given that history, the implications for future generations are difficult for many to foresee. “It’s hard to tell a child he or she can do anything without having any role models, mentors or opportunities to look to,” Thomas said.

A means for change

The City’s benchmark for participation of minority-owned, women-owned and small businesses in City contracts is 15 percent every year, or five percent from each group.

Last year, minority-owned firms achieved nearly four percent of City contracts, or over $3.6 million, down from 7.4 percent of City contracts in 2005, but up from one percent the year before. Women-owned firms accounted for 3.6 percent of City contracts, while small businesses saw six percent of City contracts.

In 2005, small businesses were awarded eight percent, and women-owned firms gained five percent according to City information.

That indicated progress considering that a previous disparity study pinpointed only .8 percent minority-availability in construction, compared to 18.2 percent availability in professional services and 5.9 percent availability in goods in the Twin Cities, according to Angela Burkhalter, co-manager for the minority business development and retention that’s housed in the City’s Planning and Economic Development (PED) department.

Burkhalter, who performs all kinds of outreach to women-owned, minority-owned and small businesses, said she’s proud of the City’s accomplishments. About $150,000 is available in loans to help finance fledgling enterprises, she said, and $250,000 is directed toward capacity-building, technical assistance, and small business development.

Burkhalter pointed out that those looking to do business with the City can access emerging market data, compliance documents, plus a variety of other resources on web pages launched last year: www.stpaul.gov/business and stpaul.gov/mbdr. Additionally, thanks to the expansion of the Regions Hospital in St. Paul, 250 to 300 new jobs will be created.

“While there are a lot of fingers pointing to what’s not being done, I know that I’m part of the change,” said Burkhalter.

Nancy Homans, policy director for Mayor Chris Coleman, underscored the City’s commitment to closing the racial gap. “We’re all concerned,” she said. “That’s why the audit and disparity study are underway. We want to get as much information and as much guidance as we can with respect to best practices. We expect all will help improve programs and procedures.”

Next week: more details about the scope of the audit, the City’s record for hiring minority contractors, and aspects of the City’s administrative process that critics say need improvement.

Anna Pratt welcomes reader responses to prat0073 [at] hotmail [dot] com.


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    Anna Pratt's picture
    Anna Pratt

    Anna Pratt (email annaprattjournalist [at] gmail [dot] com) is a freelance journalist living and working in Minneapolis.