City Councilor Hoyt argues for more minority participation in construction

The Birmingham City Council voted today 8-0 to approve two changes in a project funding agreement with the builders of a mixed-use development containing a long-awaited Publix grocery store in the Midtown area.

But before the vote took place, Council President Pro Tem Steven Hoyt used the occasion to press a vigorous discussion of the need for greater minority participation in construction in Birmingham.

“There are serious issues with minority participation in this city,” Hoyt said.

The council ultimately voted 8-0 to allow the developers, Dick Schmalz and Scott Bryant, to transfer previously approved city funding – a 10-year sales tax reimbursement worth an estimated $6,450,000 – to a new LLC that will be a single-purpose business entity.

Melissa Smiley of the city’s law department told the council that the developers were told to seek this change by their lender, Iberia Bank, before they could close on a $30 million construction loan.

And Mike Bell of the Birmingham Construction Industry Authority, after a delay, was able to provide Hoyt with some hard data regarding minority participation in the project, which is located at the northwest corner of 20th Street and Third Avenue South

Bell told Hoyt that the developers had “significant minority participation,” including in the construction of a previously completed first phase of the development – with a Starbucks coffee location – at the same intersection.

Out of a total budget exceeding $30 million, the minority participation – including black, Hispanic and women-owned firms – was nearly 35 percent, or about $14 million, Bell said.

The developers followed guidelines for minority participation on the first phase of the development containing the Starbucks even though they did not receive any city tax incentives for it, according to Lisa Cooper of the Office of Economic Development.

In a second change, the council also granted the developers permission to extend the deadline for completion of the development from Dec. 31, 2016, to June 30, 2017.

While the Publix is still expected to open by the original deadline, it may take a bit longer to complete the rest of the project, including some multi-family housing, according to Smiley

“None of the other terms of the agreement are changed, other than the name of the entity,” Smiley said.

Before hearing the details from Bell regarding minority participation in the project’s construction – this included firms owned by women, African-Americans and Hispanics – Hoyt had urged a one-week delay in the vote.

“That might get us an answers,” Hoyt said.

He made this recommendation over some strenuous objections.

“I don’t think we need to play Russian roulette with something that needs to happen,” said Jarvis Patton, Mayor Bell’s chief of staff

“I don’t play Russian roulette," Hoyt responded.

“This is a major project in the city of Birmingham (and) we want people to continue to want to do business with the city,” argued Councilor Patricia Abbott – who had originally suggested that the measure be placed on the  consent agenda. “Regardless of what the answer is (regarding minority participation), we want it to move expeditiously.”

But Hoyt said that council members “are not derelict or obstructionist to ask about minority participation.”

Councilor Lashunda Scales said that the issue “keeps coming up” (at council meetings) because there is limited access.”

“We need an administration that is serious about minority participation,” Hoyt said.

Scales and Hoyt both held up Atlanta as a model in this area. “In Atlanta, everybody participates,” Scales said.

Hoyt mentioned H.J. Russell, a large black-owned construction firm in Atlanta. “They’ve spun off about 20 black-owned companies,” he said.

Other business

The council also voted 8-0 to approve the issuance of $3.5 million in limited obligation revenue bonds by the city’s Private Educational Building Authority to fund the expansion and renovation of the gymnasium at Altamont School for use as a wellness center. The council, as part of its vote, also approved the appointment of three new members of the school’s board of directors.

The council voted 8-0 to approve its consent agenda, which included a resolution allowing Mayor Bell to make a land purchase necessary in the reconstruction and expansion of the badly needed Fire Station No. 8 in the Kingston neighborhood. The city will spend about $42,000 to purchase three parcels at 4120 and 4124 Richard Arrington Jr. Boulevard and 1002 42nd St. North from The First Colored Baptist Church of East Lake 77th Street.

As part of the consent agenda, the council also voted to amend the city’s grants fund budget for Fiscal Year 2017 to spend about $600,000 from the U.S. Department of Justice on body-worn cameras, or BWCs, for the police department. The grant also provides for storage, maintenance, docking stations, and technology and software upgrades.