Contracting diversity must grow for the city to prosper

CONTRACTING DIVERSITY – As construction projects go in Memphis and beyond, the construction and development of ServiceMaster’s innovation center, a $2.06 million job, was not the largest endeavor of its type.

But the project, the first stage of the home services company’s $27 million relocation of its headquarters from East Memphis to Peabody Place, raised the bar that businesses and local government entities can aspire to with $1.1 million — 54 percent of the total — going to minority- and women-owned business enterprises.

Give the company extra credit for exceeding the 20 percent MWBE goal established as part of its incentive contract with the Downtown Memphis Commission.

And give some credit to the Mid-South Minority Business Council Continuum, which has been working with ServiceMaster on achieving the spending goals.
This is a significant achievement in a city whose population is about 63 percent African-American and a county that is 53 percent African-American.

It surpasses the model for MWBE involvement in a city that was set when the $250 million FedExForum was built with an MWBE participation greater than 25 percent.

By the time that the relocation is completed in early February, ServiceMaster’s total MWBE spending for the project is expected to be about $9.6 million.

The company is being properly rewarded for its efforts – both in business incentives and well deserved accolades.

The project received $8.8 million in state and local grants, as well as tax reductions that will save ServiceMaster and its landlord more than $7.5 million in property taxes over the next 15 to 20 years.

Praise has spilled out as well.

“I think they are making a great effort to include all of the Memphis community in this project,” said Luke Yancy, CEO of the Mid-South Minority Business Council Continuum.

“(T)heir commitment to contracting diversity is unprecedented,” said Kirby Salton, president of Artizan Constructors, another local minority-owned construction company involved in the job.

“(ServiceMaster) has been one of the most transparent companies I’ve seen when it comes to reaching its diversity spend goals,” said Tim Weatherford, vice president and area manager of Flintco, the Native American-owned general contractor for the project. “We’re very proud to have over 50 percent inclusion in our packages.”

This success story, if it is repeated often enough, could dispel the perception among young African-American entrepreneurs in Memphis who flee to Atlanta or Dallas because they don’t see a lot of opportunity here.

And it widens much of the conversation about MWBE participation to include the private as well as the public sector

A lot of emphasis among promoters of diversity in contracting has been on government projects, where progress is being made.

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