Economic injustice?

Report shows city spending with minority-owned businesses has dropped nearly 48 percent since 2014

Jeremy M. Lazarus | 7/26/2018, 5:59 a.m.
From the mayor’s office to key positions at City Hall, African-Americans continue to play big roles in Richmond’s government. But …

From the mayor’s office to key positions at City Hall, African-Americans continue to play big roles in Richmond’s government.

But the issue of city spending with black businesses and the promotion of black inclusion, inexplicably, appears to be taking a backseat to other priorities, with Mayor Levar M. Stoney having publicly spoken little about inclusion and economic justice during his 18-month tenure.

Evidence of the City Hall retreat on black business inclusion can be found in the annual reports on the share of city spending with minority businesses.

Four years ago, City Hall reported buying 15 percent of its goods and services from minority businesses, the largest percentage in years, according to a review of city data dating to the 1990s.

But since that 2014 peak, businesses owned by African-Americans, Asian-Americans, Latinos and Native Americans have seen their share of city procurement slide backward, dropping to 9 percent in 2017, the most recent year for which city data is available.

Mayor Stoney’s first year in office also was 2017.

In actual dollars, the city’s spending with minority businesses declined from $54.2 million in 2014 to $28.2 million in 2017, a nearly 48 percent drop, data from the city’s Office of Minority Business Development show.

African-American-owned businesses, which yearly win 70 percent to 80 percent of the city’s spending with minority businesses, have seen city purchases from their businesses drop by 43 percent, according to the OMBD data.

African-American businesses were awarded $36.4 million worth of city contracts in 2014 or about 10.3 percent of the city’s $352.2 million in procurement spending that year.

In 2017, city spending with African-Americans had dropped $16 million from the peak. That year, the city awarded $20.6 million worth of contracts to African-American businesses, or 6.8 percent of the city’s $304 million in spending.

The decline in such spending came despite the work of the OMBD. Patricia Foster, who directs the office, stated, “OMBD’s programs and services are focused on increasing MBE participating and helping minority businesses grow.” That includes providing technical assistance classes, hosting business conferences, conducting outreach events and advocating within City Hall on behalf of those businesses, she stated.

Still the evidence that city spending with minority business is shrinking only adds fuel to concerns about inclusion and economic justice that executives from three African-American-owned businesses raised at Richmond City Council on Monday night.

They came to breathe new life into a issue that dates back to the 1980s and led the U.S. Supreme Court to strike down a city requirement that 30 percent of all its procurement be awarded to black-owned businesses.

All three are members of the Black Business Alliance of Virginia, a Richmond-based group led by A. Hugo “Al” Bowers that is revving up a campaign to lobby City Hall for greater inclusion, particularly in construction projects.

David Harris Jr., vice president of Liquid Inc., an excavation, paving and landscaping company, said the city is not doing enough to ensure inclusion in the projects it backs.

A 2013 audit scolded city officials for continuing to award contracts to companies that have broken pre-bid promises to include minority businesses. Instead, they should be barred from bidding, according to the audit.

So far, Mr. Harris and others believe that the city has done little to address that situation. His company was promised about one-third of a $14 million street construction project in the East End but ended up being awarded only about 3 percent of the work.

He did not mention that contract in his remarks to City Council, but instead called on the council to take action.

“The City of Richmond should be a model for others when it comes to minority business inclusion,” he said.

Lauren Melton Glasper, vice president of Ty’s Hauling and Paving, a site work, demolition, paving and hauling firm, recalled former Mayor Dwight C. Jones setting a goal of having minority businesses undertake 40 percent of the work involved in the construction of four new schools a few years ago.

“But that never happened,” Ms. Glasper said.

She said the council has failed to monitor to ensure that such goals are kept and is allowing general contractors to make excuses and bypass qualified local contractors. She said the Black Business Alliance should have a “seat at the table” when the city discusses development to ensure that a significant chunk of the spending will go to African-American-owned companies.

For Julian James Bowers, vice president of the Hyperion Group, a commercial air conditioning, heating and ventilation company, and one of Mr. Bowers’ sons, said it felt like déjà vu to raise the issue again.

He recalled attending a City Council meeting with his father 11 years ago to talk about the need for more inclusion of black-owned businesses. But he said he has seen little change in city actions since then.

“Don’t make us wait 11 more years,” he told the council, adding a line from Sam Cooke’s famous song: “Change is gonna come. Oh, yes it is.”

In a follow-up interview, Al Bowers said that Richmond’s black population may no longer be a majority of city residents, but it is still the largest ethnic group in the city.

“We are still not receiving our fair share of city business. It doesn’t matter who is in charge,” he said. “That’s a fact that never seems to change. It’s time that it did.”

He said the lack of inclusion is all too evident. He cited a current city proposal to provide a $4.5 million subsidy for a development in South Side, but “the city has not included any requirement for minority business inclusion. This is exactly why we need to be involved. The city should not be proposing to support development without that kind requirement.”

Mr. Bowers said BBAVA is getting involved “because if we don’t speak up for ourselves, who will?”

He noted, for example, that the council-appointed Minority Business Advisory Council, which is supposed to focus on inclusion issues and city procurement, has met only twice in the past two years, with little to show for it.

During Monday night’s meeting, none of the nine City Council members and no administration officials responded to the executives’ comments.

But there is some evidence of the mayor and the government’s interest. Most notable is the proffer from the nonprofit NH Foundation and its development arm, NH District Corp., the nonprofit that is seeking city support to develop a new coliseum in Downtown and generate up to $1.2 billion in new development on the land near City Hall to support it.

In its proffer, NH indicted that it was willing to ensure that 20 percent to 30 percent of the construction work would be done by minority businesses. Mayor Stoney has indicated that he wants that percentage to be as high as possible.

In other business Monday night:

• 9th District Councilman Michael J. Jones followed through on his promise to introduce a resolution that would have the council urge state lawmakers to give the city control of all wartime statues, including the Confederate statues on Monument Avenue. Currently, a state law bars the city from removing or altering those statues.

Council also:

• Approved a resolution requiring Chief Administrative Officer Selena Cuffee-Glenn to provide recommendations for local funding strategies for the city’s public schools by Oct. 15;

• Voted 5-4 to rezone the historic Westhampton School and other property that Bon Secours owns and controls around the school at Libbie and Patterson avenues, allowing the hospital corporation to move ahead with plans to develop a medical office building and find a developer to renovate the Westhampton building that dates to 1917;

• Allowed the administration to accept two grants totaling $6.4 million for improvements to Main Street Station;

• Approved a plan to redevelop the former Herod Seed Building in Shockoe Valley into 163 apartment units for people with annual incomes of $46,800 or less, including allowing the Richmond Redevelopment and Housing Authority to issue $15 million in bonds to support the development; and

• Delayed action again on a proposal to modify a city regulation requiring most top city officials to live in the city.