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VOL. 131 | NO. 48 | Tuesday, March 8, 2016

Memphis Lags on State Minority Contracts

By Bill Dries

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The state of Tennessee did $400 million in business with minority- and women-owned businesses in 2015. It’s a share local minority business and civic leaders judge as a good number, considering the state spends $2.5 billion in contracts a year.

LEE HARRIS, BERLIN BOYD, DARRELL COBBINS AND BERNAL SMITH

But only $13 million of that $400 million went to minority businesses in Memphis, the only major city in the state where minority populations – both women and African-Americans – are majorities. That compares to $124 million the state spends with minority-owned businesses in Nashville, $88 million in Chattanooga and $72 million in Knoxville.

“Here we are the largest city in the state, the most need, the most challenges and the most folks who are ready and willing to really launch a business,” Harris said on the WKNO-TV program “Behind the Headlines.” “We have a long way to go.”

Harris has a bill pending in the Tennessee Legislature that would formalize guidelines used by Tennessee Gov. Bill Haslam, whom Harris credits with the overall spending amount.

“That’s a pretty good statistic,” Harris added. “And I think Gov. Haslam has done a good job of making sure we put our spending where our priorities and our values lie.”

Harris’ bill, sponsored in the House by Memphis Democrat Karen Camper, requires each state agency to “strive to ensure” at least 12.5 percent of all contracts are awarded to minority-owned small businesses or businesses owned by service-disabled veterans.

Harris and three other leaders of a nearly two-year-old renewed local effort to boost minority business growth and income talked about the efforts on “Behind the Headlines.”

The program, hosted by Eric Barnes, publisher of The Daily News, can be seen on The Daily News Video page, video.memphisdailynews.com.

Memphis City Councilman Berlin Boyd said local governments have enough programs to promote minority business.

“We have to start providing those programs in the communities where those businesses are located,” he said, adding the process of being certified as a minority business to bid on government contracts is “a daunting task” that is “intrusive and invasive.”

Boyd continues to cite minority goals set for the construction of the Ikea store in Cordova that were met when the contractor hired four firms owned by white women.

Boyd believes some non-minority businesses – those owned by white men – are transferring their ownership to show the business is owned by a woman.

“We’re getting beat at our own game,” he said. “I’m for equal opportunity. I’m not asking anyone to give my people and Hispanics and Asians … a special handout.”

Darrell Cobbins, the CEO and president of commercial real estate firm Universal Commercial, said Harris’ proposal should be the highest legislative priority for local leaders in Nashville.

Cobbins was among the organizers of a June 2014 press conference at the National Civil Rights Museum that kicked off the latest effort to improve minority business numbers.

“In environments of scarcity, I believe that business and commerce and the exchange of resources becomes a high-stakes game,” he said of the urgency of the effort. “There is nowhere to go but up.”

Bernal Smith, owner and publisher of the New Tri-State Defender, noted the city’s dominant black-owned businesses during the era of racial segregation by law.

“I think there is a value system that has not been established in our community,” Smith said. “How do we create an environment where there is equity and opportunity?”

The call for growth in minority business has included overtures to private business leaders, with the Greater Memphis Chamber working with its membership to make inroads in business-to-business spending.

The chamber is also part of a debate among private business leaders about whether government incentives and tax breaks should include requirements about minority business participation.

Harris said he believes government has to set the example and that there has been a “lack of leadership” to date.

“Bureaucrats, for the most part, make those decisions,” he said. “How bureaucrats, the people who work for government … hand out state and local spending – the way they make those decision is with the approval of whoever is the leader. If you come in and you set a culture that you want to see the people around you … actually seeking out and developing and making sure prosperity is there, that will happen. … We haven’t seen that in the city of Memphis.”

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 73 155 19,728
MORTGAGES 95 170 23,084
FORECLOSURE NOTICES 41 48 8,352
BUILDING PERMITS 200 338 40,366
BANKRUPTCIES 50 122 13,226
BUSINESS LICENSES 14 23 6,160
UTILITY CONNECTIONS 33 85 13,080
MARRIAGE LICENSES 28 58 4,900

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