Date: February 7, 2016

Crosstown Concourse construction exceeds minority contract ‘commitment’

A five-man crew from A1 Electrical worked Friday installing some of the new conduit, wiring and 1,002 LED light fixtures for the four-level parking garage at Crosstown Concourse.

A1 Electrical is among 32 minority and women-owned businesses that received, in total, 29 percent of the construction spending, project leaders revealed last week.

That share exceeds the project goal of at least 25 percent going to minority and women-owned firms.

While the small volume of minority contracting has created controversy elsewhere in Memphis, the $200 million renovation under way in Midtown at the old Sears tower shows minority businesses are open and ready to work.

A1 Electrical’s job foreman Rolando Jones lent a hand as journeyman electrician Ronnie Hampton threaded wire through metal tubes attached to the ceiling of the third level. Then Jones instructed apprentice electrician Mike Nash to run more tubes through a threading machine.

Jones has been on the Crosstown Concourse job five months. “It’s a little more tedious” than typical jobs, he said. “You’re dealing with rigid pipe … you got to actually thread the pipe itself, make all your measurements, all your bends, and you got to put it together piece by piece. It’s like putting a puzzle together.”

Likewise, the Crosstown Concourse development team pieced together a plan to not only exceed its minority contracting commitment, but to hire an unusually large number of smaller minority firms.

“The number of women and minority business enterprises and individuals who were impacted, that’s the bigger point,” said Crosstown Concourse’s co-leader McLean Wilson.

The project received local tax incentives and was obligated to make a best-faith effort to spend at least 20 percent of the $130 million in hard construction costs with minority firms. (Professional fees, furnishings and fixtures bring the total construction budget to $200 million.)

Even in renovating more than 1 million square feet of mixed-use space at 495 N. Waktins, 32 is an unusually large number of minority- and women-owned businesses to be involved, said Brett Grinder, vice present of the general contractor Grinder, Taber & Grinder.

“Normally, you might have three or four big ones to make your goal and move on,” he said. “We tried to make sure we had a lot more people at the table and have a lot more businesses get a piece of the pie.”

The developers have divided the entire project into 11 different sections so that the jobs are not too big for smaller contractors.

The leaders used the natural boundaries formed by eight or nine additions made over the decades to the 89-year-old building, plus the site work and the renovation of the four-level garage.

The organizational and planning effort added three or four months to the pre-bid preparation, but was worth the extra work and expense, Wilson said.

“We’re really proud of it, especially in light of some of the articles that have come out this week,” he said.

Wilson referred in part to a Shelby County Commission disparity study that found businesses owned by African-Americans received 5.8 percent of Shelby County’s contract dollars while firms owned by white men received 88.3 percent.

In response, City Council member Berlin Boyd has asked the Economic Development Growth Engine (EDGE) board to suspend its tax incentive program for businesses while EDGE works out a new plan to increase minority and women-owned participation.

Thanks to Grinder, Taber & Grinder breaking up the Crosstown Concourse work into 11 sections, A1 Electrical was able to bid on three different jobs and win one of them, said Michael Eskridge, senior project manager for the seven-year-old firm that employs 38 people.

“One of the few times I could honestly say we had three bites at the apple for one project,” he said.

“That was a testimony to Grinder, Taber & Grinder in how they approached the bid process,” Eskridge said. “That was a key ingredient in our firm being successful on the parking garage phase of it.”

The Crosstown Concourse leadership not only committed to exceed 25 percent minority contracting, but substantial local participation. “We ended up with almost 100 percent local,” Grinder said. “A really amazing feat.”

The project’s size would overwhelm the capacity for many local contractors, which drove Grinder, Taber & Grinder to consider dividing the work by the old building phases and additions.

“They could choose which section they wanted to bid on, knowing what capacity they could fit in their year,” Grinder said. “That was very effective.”

The contract opportunities won’t end with the renovation of the Crosstown Concourse shell. Tenants will $50 million to $75 million more building out their respective spaces.

One of them is Methodist Le Bonheur Healthcare, which will spend $3 million finishing the 100,000 feet it will occupy on the sixth floor for functions like bill collections, patient financial services, procurement and its construction division.

Methodist Le Bonheur will strive to spend at least 30 percent of its construction budget with minority contractors, the same goal it sets for all its construction projects, chief executive Gary Shorb said Friday.

“This big $275 million addition we’ve got (at Methodist University Hospital), we’ve got a 30 percent target on that,” Shorb said.

” … We’re very intentional about it.”

Wilson, the Crosstown Concourse co-leader, used the word “commitment” instead of “goal” or “best effort.”

“It’s a real commitment,” he said. “It takes time and takes money. But the developer … we’re in control of making that happen and forcing the issue, or not.”

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