Minn. Stimulus Dollars Bypass Black Businesses

Transportation millions flow to the white ‘status quo’

New America Media/Minnesota Spokesman-Recorder, News Report, Charles Hallman, 

Editor's Note: This story, which originally appeared in the Minnesota Spokesman-Recorder, was produced as part of NAM's Stimulus Watch coverage and was funded with a grant from the Open Society Institute. Charles Hallman is a staff writer for the Minnesota Spokesman-Recorder.

The American Reinvestment and Recovery Act (AARA) called for $50 billion to build and repair the nation’s roads, bridges, railways and ports “to preserve and create jobs” and “to assist those most impacted by the recession.” It explicitly states that investments should prioritize those hit hardest by the recession — those in distressed communities who have a high percentage of low-income households or high unemployment rates.

According to U.S. Department of Transportation records, nearly 2,000 contractors have been awarded stimulus money for highway and bridge projects. However, the Federal Procurement Data System reports that only one federal transportation contract has gone to a black-owned business (in Nevada). 

Minnesota received almost $600 million in AARA transportation funds: $487 million for highway improvement; $94 million for public transportation; and $15 million for bike and pedestrian paths. All total, the Minnesota Department of Transportation (MnDOT) has approved 110 transit projects. Nine projects with estimated costs at over $91 million are located in the Twin Cities’ outer suburban ring. These include:

* 42nd Avenue North bridge work: $13.5 million ($10 million in AARA funds)
* Highway 7/Wooddale Avenue interchange: $12.3 million ($3.4 million in AARA funds)
* Interstate 494 lighting replacement: $5.8 million ($5.3 million in AARA funds)
* $1.8 million rebuilding lighting system on I-494 in Edina, Minn. ($1.7 million in AARA funds)
* $1.3 million Winnetka Avenue reconstruction ($834,000 in AARA funds)

No black-owned businesses in Minnesota have received any federal transportation contracts in Minnesota. According to the National Black Chamber of Commerce (NBCC), black contractors only obtain 1.1 percent of federal highway contracts each year. Seven contracts, or 0.2 percent, were awarded to black contractors in Minnesota for fiscal year 2008.

“I thought there was a real opportunity for us to make some inroads and to share in an equitable economic upturn that we were going to see in the economy. It didn’t happen,” says Thor Construction Company Chairman Richard Copeland, who added that his firm has not received any MnDOT work or stimulus-funded work this past year. “I don’t know of [any blacks who] got any work from MnDOT.”

Neil Copeland started a small paving business in 2009. “We had a good $100,000 tied up into it,” he recalls. Along with his uncle, “We made the investment because we thought MnDOT would come through with some stimulus [funds].”

He submitted 20 to 30 bids on projects that included “anything from trucking in material, hauling out material, [and] excavation work,” continues Neil Copeland. “Anything we could get our hands on, from small to big — we were prepared to do anything that came our way.”

Neil Copeland says an estimated 50 people could have been hired as a result. “The people I had lined up…these were people coming directly from North Minneapolis and South Minneapolis, guys waiting to work. This would have been a good thing all the way around.”

However, “People at MnDOT aren’t very approachable,” says Neil Copeland, who didn’t win any transit bids and eventually shut down his business in December 2009. He now works for his father, Richard Copeland.

Maple Grove, located west of the Twin Cities, is the Minnesota city where most MnDOT work is performed (over $73 million worth). Meanwhile, the 5th congressional district, with Minnesota’s highest proportion of blacks and other people of color, received the lowest amount of transit work ($3.8 million) among the state’s eight congressional districts.

As a result, community and advocacy groups argue that federal stimulus money — “new money” — has not reached the areas with the highest percentage of blacks and other people of color across the state or within the Twin Cities. 

“The way the stimulus money was set up, it was set up to go out fast,” says Rev. Paul Slack of Brooklyn Park, Minn., a leader of the local faith-based social justice organization ISAIAH. “In order for it to go out quickly, it had to go out through the current systems of delivery we have in Minnesota.

“Our systems are not set up to do that in an effective way — in any way, really," says Slack. “Because when you look at the contracting and construction industry, most of the people are not African American, not low-income and not women. I think that’s the biggest reason.”

Kalima Rose, senior director of the Oakland, Calif.-based PolicyLink Center for Infrastructure Equity points out, “At the beginning of the stimulus money, it would probably flow through the usual channels, meaning that communities that have not gotten resources before probably would not get ARRA [dollars]. 

“I would say that…transportation is one of the most behind entities in terms of targeting inclusion in those programs. State departments of transportation haven’t moved as far as they need to. What you see in Minnesota is typical in lots of states.”

PolicyLink, joined ISAIAH, and Organizing Apprenticeship Project (OAP) a Minneapolis advocacy group in producing a recent analysis of ARRA transportation investments in Minnesota and their impact on low-income communities and communities of color. The study concluded that the highest levels of transit investments are not in areas with the highest poverty or unemployment rates, nor are they in areas with the highest percentage of people of color across the state of Minnesota or within the Twin Cities.

AARA funds only reinforced existing inequities, the study added.

Jermaine Toney, lead policy analyst of the OAP says the stimulus money “is deep, deep public investment dollars, but it was not a shift in the transportation policy itself. The suburbs got more transportation projects up and running, but did it benefit the most disadvantaged: blacks and people of color? No.”

“There is no difference in the outcomes we’ve seen from the stimulus than we would from the normal status quo in the transportation department,” says PolicyLink Senior Policy Analyst Shireen Malekafzali. 

The MnDOT defended its record in awarding stimulus contracts. “We were audited by the [federal] government on the AARA projects, and it was deemed that we were in compliance with that law," says Bernie Arseneau, director of the policy division. He says that his department is fully committed to increasing the number of black-, people of color- and women-owned companies getting transit contracts. 

First-term Minnesota State Representative Bobby Champion, one of two black state legislators, sits on the House Transportation Oversight Committee. “Based on what I’ve seen,” says Champion, “MnDOT has a lot of work to be done, and they need to do it in real time.” His committee “has held a record number of hearings in order to make sure that reporting [from MnDOT] is coming forward,” he adds. 

Some suggest that the Minnesota Legislature should put a hold on any remaining or future stimulus transportation dollars. Lennie Chism, a local black businessman, is circulating a petition formally requesting that the state immediately terminate all federally funded transportation contracts and that the U.S. Department of Transportation open an inquiry into whether MnDOT is doing enough to involve black contractors in transit projects that use federal stimulus dollars.

“Are [MnDOT officials] there for [blacks], or are they there to keep us out of it? Are they for inclusion or exclusion?” asks Chism, whose goal is to gather 1,000 signatures to send to MnDOT Commissioner Thomas Sorel, Minnesota elected officials, and U.S. Transportation Secretary Ray LaHood.

“I don’t want our attention just to be on the stimulus dollars alone,” notes Champion. “But I think we also need to hold state agencies accountable when it comes to state dollars. We don’t want to lose sight of the fact that there are state-only funded projects [and] city projects that are going on, where people of color and women are not being engaged quite the way they are supposed to be.”

However, since the Minnesota Legislature is currently dealing with a $1.8 billion budget deficit, freezing transit dollars, especially AARA funds, might not be realistic, Toney believes. “It looks like a real good solution, but will it work here?”

“Realistically, I don’t see that happening,” adds Neil Copeland. But if it did, it would get “a few eyes open,” he adds.

Among the MnDOT-approved projects is one to replace the Lowry Avenue bridge over the Mississippi River. Ten million of the $65 million project, which is located in North Minneapolis, is funded by stimulus money. And, state officials say a $1.6 million Highway 610 project is completely funded by AARA. 

Both of those projects would benefit the black community, says Slack, whose church is located in Brooklyn Park with a large population of blacks and African immigrants. However, he warns, “It’s not just about where the project is, but whether the companies make the investment [in the community]. We also need to do local hiring [so] the people who live in these communities get these jobs.”

The pastor, who has been involved in transportation equity issues for five years, concludes, “We need communities of color to stand up and demand from their representatives that they actually stand on the side of the people who have been left out and neglected for a long time, and demand that we have some real results.”

Slack wants change “not for one, two, three or four years, but we actually transform our communities. That means we have to pay attention, not just now and not just until we see a good number of African Americans hired in the transportation industry, but that we are there for the long haul.”