Developing an Opportunity for Diversity

Bill Hart and Maria Rojo de Steffey own stakes in state-certified Minority Business Enterprises involved in the building industry, but are short on development experience because of lack of opportunities and know-how.

However, that is changing for Hart, African-American principal of Portland-based Carleton Hart Architecture, and Steffey, Hispanic president of Portland-based ALMAR Contracting. As partners in Multi-Cultural Development Group LLC, they are learning how to develop projects and mentor others. They’re also contributing to the effort to secure extraordinary MWESB participation on an $8 million affordable housing project in Northeast Portland. The Miracles Central development will have 47 units of affordable housing for low-income individuals recovering from drug and alcohol addiction. Hart and Steffey are part of the development team that includes Portland-based Guardian Real Estate Services and Tualatin-based LMC Construction.

“I consider this experience as a way to untap the knowledge that comes in these larger projects,” Hart said. “If you’re doing something with a public project and it’s affordable, there are a lot more regulations and ways to control costs that are new and different to me.”

One of the challenges for an MBE developer, Hart said, is to secure financial backing, particularly for affordable housing projects where government reimbursements are made after goals are met. While money was not an issue for Hart or Steffey, other minority business enterprises can struggle to fund their investments, Hart said.

A bigger challenge for him was understanding regulations for income requirements, utilities and how much can be charged for rent.

“You’re doing something different with a public project, and there are a lot more regulations on how to control costs,” he said. “That’s new and different to me.”

Steffey, meanwhile, is hoping to pass on what she learns – first to her younger partner, Alfonso Elias, who will be able to take over the business at some point, she said.

“We’re hoping to build a minority-owned company that can do more of this development,” she said. “We are thrilled to be a part of it.”

Steffey also will share her knowledge from gaining state MWESB certification with firms that could potentially earn project contracts, she said. The process requires detailed accounts of financial records and verification of investment of time and money by qualifying parties. Steffey needed seven months to navigate the process, she said.

“There are other minority vendors who would love to get certified, but it’s a tough process,” she said. “I know how to get through it.”

The development team’s diversity will help it pursue a goal for 50 percent minority participation, said Dan Steffey, Guardian’s senior vice president of development and Maria Rojo de Steffey’s husband. Miracles Central, chosen by the Portland Housing Bureau over two other proposals, will be owned and operated by the Miracles Club and Central City Concern, Dan Steffey said.

“I think what you’ll hear when you talk to city folks is getting beyond 20 percent minority contracting is tough,” he said. “It’s always been a concern of mine that we’ve always had policies for minority participation, but we’ve never moved the needle.”

LMC Construction has worked with Guardian for 10 years, and achieved minority participation rates upwards of 35 to 40 percent, LMC President Chris Duffin said. This project is different, he said.

“We are taking it one step further,” he said. “Not only are we focusing on high turnout participation, but we’re also putting together a team that is as diverse as our subcontractor pool.”

The project, now in the design phase, will go out to bid in November. The partners are identifying potential minority-owned and women-owned firms to be placed on the preferential bidders list, Duffin said. Those firms will receive direct invitations to bid, he added.

“We’ll spend time with them before the project goes out,” he said. “We make sure their bids are complete. If they need help estimating or understanding prevailing wage, we will offer up our help and expertise.”

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