October 3, 2022

Around the State- Northeast- June 2002

Florida Staff | 6/1/2002
Economic Racism?
A lawsuit challenging a set-aside policy could tarnish Jacksonville's image.

By Herb Drill

A contractor group's lawsuit challenging Jacksonville's minority set-aside policy could delay projects the city wants finished before it hosts the 2005 Super Bowl and could hurt its cultivated pro-business image.

The city has had a policy with goals for minority contractors since 1993. But the set-asides didn't become a hot-button issue until the voters approved Mayor John Delaney's Better Jacksonville Plan, a $2.2-billion initiative funded through a half-cent sales tax, in 2000. That plan, designed to fix roads, preserve land, encourage economic development and build libraries and other public facilities, includes a provision awarding 16% to 20% of the projects to minority firms.

Members of the Utility Contractors Association, who work on water and sewer line projects, say the set-aside figure reaches 25% to 30%, and they claim in a lawsuit that the Better Jacksonville Plan's policy is unconstitutional because it awards work based on racial and gender preferences.

While UCA officials have agreed to meet with the city at the urging of former Mayor Jake Godbold, who is heading peace-making efforts, UCA President Ryan Schmitt says the association decided to sue now because "talks since 1996" with the city to eliminate or modify the policy have ultimately failed.

Others see more venal motives in the lawsuit. Rev. Tom Diamond, speaking for minority firms, says the suit's timing is tied squarely to the billions of dollars to be spent on Better Jacksonville projects. An angry Delaney, who fathered the Better Jacksonville Plan, says it's a matter of greed. "You've got rich contractors who've been getting a lot of business. They want it all."

Delaney defends the policy as fair given the city's history of excluding minority businesspeople: "In Jacksonville, I don't think anyone can say there wasn't racial discrimination."

A worst-case scenario for the city would involve a long, ugly legal battle that could mar its image during the runup to the 2005 Super Bowl in Jacksonville. Overturning the set-aside policy, says the north Florida chapter of the National Association of Minority Contractors, would "devastate" minority businesses. "It's economic racism," says Diamond. Early court victories by the contractors also could stall construction on many Better Jacksonville projects.

Defending the policy will be costly. Delaney has asked for a study to support the policy that could cost $750,000, and the city expects to spend another $400,000 on legal fees, says Cindy Laquidara, city deputy legal counsel. And the outcome is uncertain: Valle Simms Dutcher, general counsel for the non-profit Atlanta-based Southeastern Legal Foundation, which handles public interest cases, observes: "Not one (such policy) has withstood the scrutiny of (federal) courts" recently.

Delaney is sticking to his guns, however. Sharon Ashton, the mayor's press secretary, says: "The mayor believes we will win this suit and will fight it vigorously. We will be doing business as usual until the courts tell us otherwise."

In the News

Jacksonville -- Winn-Dixie Stores (NYSE-WIN) is pulling out of Texas and Oklahoma, selling or closing 76 stores, a distribution center and a dairy plant. The restructuring, which affects 5,300 employees, will cut annual sales by about $630 million.

The Economic Development Commission approved $2.4 million in incentives for several downtown projects, including $1.8 million to SteinMart (Nasdaq-SMRT) to offset leases for more parking at its Southbank headquarters. The retailer will stay at least seven years and employ 300. Also, the Marks Gray law firm received a $210,000 grant to build a $7.2-million headquarters in Riverside-Brooklyn, a designated economic development zone.

Benco Dental Cos., a dental office equipment distributor based in Wilkes-Barre, Pa., is planning to open a distribution center/retail showroom in the Westside Industrial Park. The company plans to lease about 35,000 square feet and expand to 50,000 square feet, with 24 jobs now and 52 by September 2004.

HomeBanc Mortgage Corp. plans to open a Jacksonville office in the second half of this year. The Atlanta-based company is projecting $1.3 billion in statewide loan closings this year.

Jacksonville-based Educational Community Credit Union received state regulatory approval to accept members in Flagler and Putnam counties, in addition to Duval, Baker, Clay, Nassau and St. Johns. ECCU has nearly $600 million in assets and 12 branches in northeast Florida.

National Grange Mutual Insurance Co. plans to open a headquarters operation in Jacksonville later this year. The insurer, with $500 million-plus in premiums, will employ 16 in Jacksonville and retain a headquarters in Keene, N.H. Its Old Dominion Insurance Co. subsidiary is already based in Jacksonville.

Miami International Forwarders signed a four-year lease for space at the Jacksonville Port Authority's main office. MIF has offices in Miami and Orlando and employs 300. The Jacksonville site will be a full-service forwarder/broker of freight for northeast Florida.

Live Oak -- As part of its bankruptcy reorganization, Kmart is closing its Live Oak store, which employs 70. The troubled retailer is closing 14 other Florida stores, laying off 1,164 statewide.

Marion County -- About 250 residents in the Stonecrest community are asking county commissioners to vote against allowing Wal-Mart to use a service road in the area. Construction on the road ended in 1999 after residents raised concerns about heavy traffic on the small road. Wal-Mart's proposed 1.2-million-sq.-ft. warehouse at U.S. 441 and County Road 326 is controversial because residents claim it would tarnish the area's horse-country ambiance.

Orange Park -- Hutson Land Co. is planning a 6,400-acre development called OakLeaf Plantation for Orange Park. The community will include 11,000 homes -- ranging from $100,000 to $400,000 -- and a regional mall bordering Clay and Duval counties. Construction of phase one, which will include an elementary school, began earlier this year.

Ponte Vedra -- Kendrick, Pierce & Co., a Tampa-based investment-banking firm, has applied to the Department of Banking and Finance to form Legacy Trust Co., a wealth-management company that would be based in Jacksonville. Kristin D. McLauchlan, former first vice president/trust officer with SunTrust Bank, would be Legacy's president.

Home on the Golf Range
ST. AUGUSTINE -- The Neighborhoods of World Golf Village posted a record $60 million-plus in home/residential closings last year. This year, more than 95 homes are under way, ranging from the $190,000s to well above $1 million. Golf course frontages cost $145,000 to $323,000.

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