Monday, July 28, 2014
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St. Paul is falling short on hiring minority contractors
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Contractor John Abulu's workers are building houses in a new subdivision in Brooklyn Park. He wonders why he can't get similar jobs in St. Paul. (MPR Photo/Marisa Helms)
The city of St. Paul has had a law on the books for more than a decade to encourage minority and women-owned businesses to work on city-financed projects. Some minority businesses say they aren't getting fair access to lucrative city contracts, and the numbers seem to bear that out. The City Council may vote Wednesday on whether to study the issue.

St. Paul, Minn. — Contractor John Abulu and his team are building luxury homes in a subdivision in Brooklyn Park. Abulu, who is originally from Nigeria, points out to a visitor that the houses he's working on aren't cheap.

"The lowest price house here is $470,000. That house there and every house there is in the $500,000s," says Abulu.

Abulu's development and construction company has been in business since 1997. He says despite being an experienced contractor with dozens of development projects, his company has had no success doing business with the city of St. Paul. He says officials there rejected his two bids in as many years.

Abulu feels he was unfairly eliminated from the bidding, even though in both cases he did not ask for a public subsidy.

"I think there might be some discrimination going on there," Abulu says. "I don't know why, because I don't have any evidence for that. But I do have evidence, I presented a proposal that didn't want subsidy, but someone who came with subsidy was given the projects."

Community activists, including the St. Paul NAACP, say Abulu's story illustrates a persistent frustration. They say many minority contractors are denied projects. And they say, even when minority bids are accepted, their projects are needlessly stalled by city hall bureaucracy.

Clifton Boyd of the Association of Minority Contractors says it's nearly impossible to break into what appears to be a closed network of city projects.

"You seem to find out about them a day before they bid, or a few days after they've already bidded," Boyd says. "So, a lot of times you're not brought to the table until the deal is already cut. And that's where a lot of minority firms get left out of that process."

St. Paul officials admit to a spotty record of contracting with minorities. Deputy Mayor Dennis Flaherty says the city is committed to improving minority access to contracts.

"You know what? We probably haven't done the greatest job we could do, and we're concerned about doing better," Flaherty says.

The city has been working on the problem for at least a decade. A city-commissioned study in 1995 found that St. Paul wasn't doing enough to ensure minority contractors were getting a fair chance.

You seem to find out about them a day before they bid, or a few days after they've already bid. A lot of times you're not brought to the table until the deal is already cut.
- Clifton Boyd, The Association of Minority Contractors

The study prompted a new law passed in 1997, designed to encourage city departments to hire more minorities, small businesses, and women-owned businesses for construction and service contracts.

But many are questioning whether that law, called the Vendor Outreach Program, has yielded the hoped-for changes.

Some are even taking the city to court. One contractor has filed a class-action lawsuit, alleging St. Paul has not complied with its Vendor Outreach Program goals.

In 2004, minority vendors made up nearly 2 percent of total contract spending. That percentage is actually down from the year before. The minority population of St. Paul is 39 percent. Small businesses and women-owned businesses have fared much better under the Vendor Outreach Program.

A coalition of community activists including the Association of Minority Contractors, the Community Stabilization Project, and the St. Paul NAACP is calling for an in-depth investigation into why the law hasn't worked.

Community activist Vic Rosenthal of Jewish Community Action says a study of past and current city practices and policies is the only way to begin correcting the problem.

"This exam provides that opportunity to say to the community we're serious," Rosenthal says. "We're going to look at everything, we're going to re-examine everything, we're going to consider new laws, new policies, new reporting, new enforcement, because we don't want to get sued anymore."

The study Rosenthal and others are proposing has the support of at least two out of seven city council members. But Mayor Randy Kelly opposes it.

Deputy Mayor Dennis Flaherty says the city is already updating previous studies, and there's no need to launch another one.

Flaherty says Mayor Kelly hopes to share what the city learns with other metro-area cities.

"This is not a problem that is unique to St. Paul," Flaherty says. "This is an issue that is of concern to every municipality, state government, federal government -- to ensure that we're meeting our goals, and to ensure that we are doing something to level the playing field and attract all people, to give them an opportunity to do business with us."

Community activists say without taking a closer look into the past, the city will continue making the same mistakes, and won't make real progress for minority contractors.

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