The targets would apply to companies seeking city financial assistance for projects
Although state contractors have often failed to meet diversity targets in construction projects, St. Louis Park council members are moving ahead to set goals for developers who gain city financial assistance.
During an Aug. 16 study session, the council supported equity goals in development contracts with the city.
Following research into the goals set by federal, state and local governments for construction projects, St. Louis Park city staff proposed participation goals for women and people of color. They listed separate goals for “business enterprises” and for workforces. The participation goals would range from 6% to 20% for women and from 13% to 32% for people of color.
A city staff report acknowledged that the diversity goals staff members suggested “have proven challenging” in Minnesota. The report pointed to a Star Tribune article that reported that construction contractors in the state met diversity goals for women 12 times and goals for people of color 26 times out of 167 contracts completed last year valued at $100,000 or more.
Nevertheless, the city report says that establishing such goals will spur developers and construction companies that benefit from city financial assistance to seek to hire more women and people of color.
The St. Louis Park policy would apply to developers who receive tax-increment financing. With TIF, new property taxes generated by developments return to the developer for a period to pay for qualifying costs like site acquisition, demolition, environmental cleanup and infrastructure upgrades.
Developers proposing major projects in St. Louis Park frequently seek the financial assistance. The city has already created affordable housing and green building requirements tied to the assistance.
Councilmember Lynette Dumalag, who raised the idea along with Councilmember Nadia Mohamed, said, “The intent is to kind of check our receipts on our strategic priority – that is (being) a leader in racial equity.”
She indicated the move could provide an opportunity for professionals, contractors, vendors and developers who are people of color to partner with the city on developments.
Dumalag noted that many development companies are family-owned and found success because they established relationships with bankers, attorneys and other businesspeople who assisted them.
“Really, what we’re asking for them to do is expand their network of people that they do business with – that’s really the intent of this,” Dumalag said.
Referencing developers who come before the city, Mohamed added, “I really want to make sure that they are prioritizing racial equity the same way that we are and that we’re working with vendors and people who value racial equity.”
After Councilmember Margaret Rog asked staff to clarify whether achieving the goals would be mandatory, Community Development Director Karen Barton said staff realized the goals could be challenging to meet and could be “a bit more of a stretch” but that setting the goals would convey an expectation that developers would work toward meeting them.
“Although it won’t be a default of the contract if they’re not able to make these, we do want them to show us that they are making strides,” Barton said.
Councilmember Larry Kraft raised the issue of a practice known as “bicycling” in which companies move a few employees who are women or people of color to various sites in an effort to increase percentages for specific projects.
“If there’s a way we can construct this to prevent window dressing and to make it real, I’m really interested in that,” Kraft said. “I’m more interested in real gains rather than perceived gains that hit a number.”
Barton said city staff members would set expectations with developers that they would not shuffle people around repeatedly to meet goals. City staff would instead encourage developers to work with community colleges and other training programs to meet their needs.
Councilmember Tim Brausen noted he worked with the advocacy organization ISAIAH to encourage the Minnesota Department of Transportation to adopt diversity goals.
“It’s a marvelous idea and it certainly makes sense,” Brausen said. “The big issue we had always then after it was implemented was enforcement and implementation.”
Using a term that stands for Black, Indigenous and people of color, Brausen added, “There are issues with the availability of certain construction groups having sufficient BIPOC companies that have the skill sets to do some types of construction and other work.”
Regarding to the Star Tribune article about missed goals, he said of MnDOT, “They have real troubles meeting their goals on a regular basis because there’s not always enough available talent out there.”
Mayor Jake Spano suggested the city might have better success if it made meeting the goals mandatory. He pointed to results after the city mandated affordable housing in developments that receive city financial assistance.
While Spano said the city could start with goals to begin the process, he added, “My expectation would be at some point there would be a requirement that would be necessary to do business with the city.”
Dumalag suggested the city could provide an alternative way to meet city goals by focusing, for example, on how many professionals in senior leadership are people of color and other indicators of a company’s commitment to equity.
She noted she has often heard excuses in her industry in real estate about the lack of people of color available for positions.
“I heartily reject that thought,” Dumalag said. “There are plenty; we’ve just been iced out.”
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