Gains, Lingering Pain : Minority-Owned Contractors See Progress, but Not Enough
Heat, dust and the whining of saws did little to dim the smiles Thursday as Taco Bell and a coalition of minority contractors announced that a new Compton store was being built by a black-owned contractor employing community residents.
But underlying the goodwill was continuing frustration that black and other minority contracting firms have won far too little of the construction work that resulted from the riots’ devastation and the subsequent pledges of rebuilding from large corporations.
“We’re still not getting our fair share,” said Al Williams, founder of the United Minority Contractors Assn., a group of 600 contractors formed in the wake of the riots to help members find work.
Still, corporations have repeated their commitments to hire minority firms.
Vons Cos. says it will involve minority firms in its goal of spending $100 million to build 10 to 12 new stores in the inner city. Thrifty Corp. has announced that it chose a consortium of black-owned contractors to rebuild a store at Crenshaw Boulevard and Rodeo Place and that it is committed to hiring at least 50% minorities to rebuild two other stores.
Atlantic Richfield Co. said it has spent $1.2 million on contracts with minority vendors to perform repair work on 40 gas stations damaged in the riots. Of that money, about $736,000 went to black-owned firms and $502,000 to other minority firms, it said. Arco is now taking bids on a major rebuilding contract for a service station destroyed at Hobart and Wilshire boulevards, and several minority contractors are in the bidding.
Black and Latino subcontractors and general contractors were used in the construction of virtually all of seven stores that Chief Auto Parts has built in the last few months, said Simon Smith, the retailer’s regional manager.
But Williams and other critics say that minority contractors have won too few of the general contracts from such companies. More often, minority firms win smaller subcontracting jobs, he said.
The Taco Bell project exemplifies both the difficulties and the opportunities facing minority contractors seeking to win a piece of the work needed to rebuild and revitalize riot-ravaged areas.
The UMCA was instrumental in winning the $250,000 Taco Bell external-construction contract for one of its members, black-owned Solid Construction Co. of Compton.
Construction on the store was scheduled to begin a year earlier in the Compton Renaissance Plaza shopping center. But the company was persuaded to seek out African-American-owned contracting firms in part by plaza co-owner and community activist Danny Bakewell, head of the Los Angeles Brotherhood Crusade.
Last year, Bakewell headed demonstrations at construction sites where no blacks were employed, leading to confrontations with property owners and the often Latino-dominated crews that were working there.
“This was an opportunity for me to put up and to show that I’m not just talking about this on other people’s sites,” he said.
For Taco Bell, the problem was that most minority-owned construction firms were too small to meet the company’s normal bonding and financing requirements.
Solid Construction had never worked on a job larger than $60,000, owner Winston Dabbs said. That was far too small to qualify for the $250,000 bond required to bid on the Taco Bell project.
Moreover, Solid would have needed to win a bridge loan of $70,000 to $80,000, financing that it had little chance of finding on its own.
The solution: UMCA approached Taco Bell and persuaded it to alter its qualifications to assume more of the risk for the project, allowing Solid to qualify for a bond. In addition, the association guaranteed that its members would complete the project if Solid could not.
UMCA also worked with black-owned Founders National Bank to win Solid the bridge financing it needed to get work started, in part because Taco Bell agreed to make payments in the form of a two-party check, payable to both Solid and Founders.
The Taco Bell project was one of four major contracts that UMCA has been able to win for its members in a similar way. All told, the efforts have resulted in about 745 jobs and about $2.6 million in contracts.
The group also runs a training program for former gang members and other disadvantaged youth, and requires that member firms employ them on projects.
But much remains to be done, some of which will require changing the guidelines for hiring contractors so that smaller firms can compete, said Lorraine Stone, a contractor and executive director of construction for the UMCA.
“You can’t just throw a $50-million contract on the table and say, ‘We want minority participation, but nobody showed up,’ ” she said.
For its part, company executive Jose Cofino said, Taco Bell was unaware that its policies were making competition difficult for minority firms. “We had to fundamentally change the way we did business,” he said.
Winning a building contract can give a small firm a shot in the arm.
Max Davis is the black co-owner of Davis Reuss Construction, a Woodland Hills firm that has won $350,000 worth of Arco work since June. As a result, he said, he has been able to grow from a mom-and-pop operation to one with six employees (including four blacks, three of whom live in South-Central Los Angeles).
“We believe it’s like a foot in the door to some major construction work,” he said. “This is just the beginning for us, we hope.”
But he adds that many other minority-owned firms have had trouble finding rebuilding work. That’s not always racism, he added. He pointed out that his firm is 49% owned by Alex Reuss, who is white.
“Even for most non-minority contractors, it’s hard to get contracts with big corporations like this. . . . They get comfortable with the ones they have,” he said.
It’s also a bad time for construction in general, Davis noted. “It’s a business thing, you know what I’m saying? There’s just not enough work to go around.”