NAACP Steers Project Toward Minority Firm
Under pressure from the local chapter of the NAACP, the Redevelopment Agency has rejected the recommendation of its developer selection committee and awarded negotiating rights for a major central city housing project to a minority-owned building company.
The selection committee had twice recommended that the agency negotiate with Guy Gagnon Construction of Long Beach for the last redevelopment project planned for the 12-year-old Poly High Redevelopment Area. The committee said Gagnon offered the best experience.
But a delegation from the NAACP scored a 3-2 upset Monday when it convinced the agency to instead give exclusive negotiating rights to Cherry Hill Development Co., one of three finalists.
Frank Berry, NAACP chapter president, had warned commissioners that “there are some very strong feelings coming from the black community” about the need for selecting a minority-owned firm. Berry said low-income residents help qualify Long Beach for federal tax money that helps support redevelopment projects.
‘Moral Obligation’
He called on the commission to recognize its “legal responsibility and moral obligation to use taxpayer money for the benefit of citizens.”
“In terms of . . . minority development in general, it’s been, ‘You come close, but you don’t quite make it,’ ” he said. “I’m saying that there is a broader issue at stake than experience.”
Commission Chairman Robert Calhoun said that “several” black developers have participated in projects in the Poly High Redevelopment Area, but the projects were “not major.”
The agency staff will negotiate with Cherry Hill Development for 90 days and try to reach an agreement to build a 40-unit town-house project on 1.2 acres owned by the agency just north of Poly High School. If an agreement is reached, it would be voted on by the Redevelopment Agency and City Council at a joint public hearing.
Larry Hathorn, president of Cherry Hill Development, is currently negotiating with the Redevelopment Agency to build a $15-million to $17-million office building near the corner of Broadway and Pacific Avenue in the Downtown Redevelopment Area. A public hearing on that development agreement is scheduled for Tuesday.
Future Monitoring
Hathorn said he expects the town-house project to be a $3-million to $4-million development.
Berry said that some members of the national board of directors of the NAACP has agreed to help the Long Beach chapter monitor future redevelopment contracts.
“We have been watching since the Poly High Project began,” Berry said. “We were not happy with the way a number of the projects have gone, and this was our opportunity to speak out.”
Berry and others from local chapter of the National Association for the Advancement of Colored People said they also intend to monitor Hathorn’s progress closely.
“We would not sit here and recommend a firm that is not able to respond satisfactorily to a given development,” said Joseph Brook, who is chairman of the newly established committee that plans to investigate awards of building contracts to the black community on behalf of the Long Beach NAACP.
The developer selection committee--composed of two agency members, an architect, a finance expert and a builder--chose Guy Gagnon Construction Co. because the firm was experienced, had a good design, realistic financial projections and was responsive to the committee’s concerns, said Roger Anderman, assistant agency director, in a report to the agency. Urban Pacific Development Corp. of Los Angeles was the third finalist.
Limited Experience
City records show that since 1982, Gagnon has built more than $10-million worth of condominiums in Long Beach. Cherry Hill’s experience in multi-unit housing has been limited to a nine-unit apartment building, which is under construction, and 10 town houses. Hathorn said he plans to break ground on a 16-unit apartment building in January.
Guy Gagnon, who sat silently through the half-hour discussion, said he was “somewhat surprised” by the agency’s choice. “If they feel that is what they want to do, we just wish them good luck,” he said.
Gagnon was first endorsed by the committee in October. The Redevelopment Agency asked the committee to reconsider the recommendation after Gagnon told agency members that the project he proposed might not be financially feasible and suggested a higher density. Agency members told Gagnon to stick with a 40-unit project and sent the project back to its committee, which again endorsed Gagnon.
Agency members Thomas Stewart, who was on the selection committee, and Chairman Calhoun voted against giving the negotiating agreement to Cherry Hill. Ernest Gualderon, Noel Gould and Luther Williams voted in favor.
Financial Assets Cited
Williams, who also sat on the selection committee, said that Cherry Hill should be given negotiating rights because the firm has good financial assets, revised its plans to accommodate the selection committee and has arranged for IDM Corp., a major Long Beach developer, to provide technical advice on the project.
He also said Cherry Hill originated the idea that the development should have a relatively low density, an idea the selection committee adopted.
Hathorn owns half of Cherry Hill, with David Tallichet, president of Specialty Restaurants Corp., which owns 75 restaurants, owning the other half.
Agency Director Edward Tewes said he would not recommend Cherry Hill for the project unless Hathorn finds a partner that is experienced in building and marketing condominiums.
Hathorn, founder of the Minority Business Council of the Chamber of Commerce, and a founding member of the Private Industry Council, predicted he will “work something out to the satisfaction of all parties.”
“I’ve been in this city doing business for 13 years,” he said. “I’ve done all the things that go hand-in-hand with being in business on the civic side. Now I want to balance it with being able to work on some major projects in the community.”
