In a 6-5 decision, the board that governs the Ernest N. Morial Convention Center on Wednesday deferred a vote to hire a master architect for its $557 million capital improvement plan. It’s the second time in two months that the board has punted on the decision.
At a November board meeting, Convention Center staff recommended that the $4 million architecture contract go to the Missouri-based firm Populous. The initial proposal would have split the cost, with the Convention Center paying $2 million and other firms working on the project paying $2 million.
The vote was stalled due to concerns about the contract’s legality. Board member Ryan Berni questioned whether the Convention Center could force other businesses involved in the project to hire Populous as a subcontractor. The board also questioned the lack of participation from minority and small, locally owned businesses in the contract.
The legal questions were reportedly resolved; the Convention Center plans to pay the full $4 million fee. But concerns remain over the lack of inclusion of disadvantaged business enterprises, or DBEs — minority and women owned-firms — as well as small and emerging businesses, or SEBs.
Populous is not minority-owned. And it’s not a state-certified small entrepreneurship. The certification program is for Louisiana-based businesses with few employees and low annual revenues. Kansas City-based Populous is a large architectural firm that does business throughout the world. The company didn’t offer to partner with a DBE or SEB for for the executive architect job.
The Convention Center expects to collect $66 million in tax dollars generated in New Orleans next year, and it currently has over $200 million in cash reserves. It is those reserves that allows the Convention Center to pursue a half billion dollar renovation.
In recent years, the board has been working to make DBE and SEB participation a more concrete consideration when doling out public dollars. The Convention Center created a SEB/DBE committee, which has made efforts to move the center toward the stricter standards employed by city hall. But the road there hasn’t been all smooth.
“We created the SEB committee for a purpose,” Board member Dottie Belletto said on Wednesday. “The process is broken right there. I felt that we had an understanding that going forward this was going to be a priority.”
Board member Ronald Guidry lamented that not only was the firm not minority-owned, it was from another state.
“If this was a company that was in New Orleans or anywhere in the state of Louisiana, I wouldn’t have as much of a problem with it,” he said.
While the vote was for a single contract, the debate broadened to how the Convention Center approached DEB/SEB participation in general, and how that process would play out for the remainder of the capital improvement plan. As of last month, The Convention Center had only spent $45 million of the $557 million it plans to spend within the next five years. On Wednesday, the Populous contract served as a conduit to discuss how the remaining half-billion dollars would be awarded.
Board President Melvin Rodrigue and Convention Center General Manager Michael Sawaya both defended the Populous contract, arguing that it didn’t get in the way of the board’s DBE/SEB goals. Rodrigue explained that the $4 million contract only represented a fraction of the $22.5 million the Convention Center expects to spend on architecture services for the overall capital improvement plan.
After the misgivings in November, the staff came back on Wednesday with a new goal: 30 percent of that $22.5 million would go to DBEs and SEBs. But that didn’t fully satisfy the critics.
“This is a long way from where this was,” Board member Bonita Robertson said. “I understand there is a goal set for 30 percent. However we don’t know what those contracts are going to look like. Right now, we’re talking about this particular contract.”
Robertson explained that regardless of the new goal, she was concerned about the process that led the staff to choose Populous. She pointed out that when the center put out a request for qualifications, or RFQ, for an executive architect, it didn’t ask for specific DBE/SEB goals, instead asking firms to put a “good faith effort.”
Berni submitted the motion to defer the vote on the Populous contract. He said that “until we know what the plan is to hit the DBE goal, I don’t know if there’s support on the board” to approve the contract. He suggested that in order to make the 30 percent goal more assured, they should create a “set-aside” for SEBs and DBEs.
During its 2019 session, the state legislature passed a bill that created the legal foundation for the Convention Center to reserve, or set aside, a certain percentage of contracts for minority contractors. Berni argued that this would be a more concrete way to assure the board that minority businesses would be included down the road.
Jade Russell, a Convention Center advisor for DBE/SEB policies, said that the staff decided to go with a goal, rather than a set aside, because of past legal challenges with explicit set asides. She added, however, that “I think a set aside program would be appropriate.”
Rodrigue and Sawaya argued that either way, it was ultimately up to the board whether they were going to achieve the 30 percent goal or not, and that a formal set aside wasn’t necessary.
“I believe in this board that’s sitting up here,” he said. “And I believe if we say we’re going to do the 30 percent, then we can do it. It really sits on our shoulders.”
But Berni argued that a set-aside would not only ensure the 30 percent goal, it would allow the board to have more control over whether DBEs and SEBs were hired as prime contractors or as subcontractors.
“Most of the time the DBEs come in as subs rather than primes to begin with,” Berni said.
This has been a consistent criticism of the Convention Centers DBE/SEB efforts. Steven Kennedy is the founder of REO LLC, a real estate advisory firm and registered DBE. He is a regular attendee of Convention Center board meetings, and supported Berni’s idea of creating a firm set-aside for DBEs and SEBs.
He said that DBEs are often brought on as subcontractors when the prime contractor is applying for business, only to be dropped later on.
“You can game the system,” he said. “It feels like SEB committee is just a sham on this community.”
He also pointed out that DBEs aren’t able to build up experience and their portfolios as a subcontractor, experience they could use to get future jobs.
According to Alita Caparotta, the center’s vice president of finance and administration, the Convention Center actively reached out to DBEs and SEBs when putting out the RFQ.
“It required experience in convention centers of our size,” Sawaya said. “So that universe is very small. And that’s a national universe, not a local one.”
However, one of the founders of the architectural firm Hewitt-Washington and Associates was present at Wednesday’s meeting. He said that he didn’t know about the RFQ, and that his firm would have made an effort if he had. Lonnie Hewitt Jr. said that his firm was the oldest black-owned architecture firm in the Gulf South, and that he had worked on the Convention Center’s phase three expansion in the early 2000s.
“I didn’t know about it,” Hewitt told The Lens. “Nobody reached out to us. If you put an RFQ and your intention is to get certain participation, it seems to me you have to go out and get it. You can’t sit back and wait for someone to call.”
He said that if he had known about it, his firm might have applied or tried to team up with one of the other firms vying for the contract. But ultimately, he left the meeting feeling good about the debate.
“I found it encouraging that there even was a conversation,” he said, adding that the conversation didn’t exist when he worked on the Convention Center expansion.
After the meeting, Sawaya told The Lens that it was his job to bring recommendations to the board, and that it was ultimately up to the board to make a final decision.
“It didn’t work out, but that doesn’t mean it won’t get done,” he said. “I think we deserve the best and brightest from anywhere in the country.”