Minority workers get short shrift at Riverbend

Buffalo’s African-American community is starving for jobs, while the ongoing construction of the SolarCity plant in South Buffalo is employing hundreds upon hundreds of construction workers.

Yet state officials agreed to cut the project’s diversity hiring goal – included on state contracts to ensure minorities get a fair share of work – from 25 to 15 percent.

That’s lower than on other high-profile publicly funded projects, such as the Buffalo schools reconstruction program and the University at Buffalo Medical School. It’s also significantly lower than the 25 percent minority workforce goal that was stipulated in the sales agreement that transferred the land from the city to the state and touted in several press releases by Gov. Andrew Cuomo.

Erie County Legislator Betty Jean Grant called the reduction in the minority hiring goal “absolutely devastating.”

“The African American community has been left out of its share of the billion dollars to Buffalo,” she said.

Dr. Henry L. Taylor, a professor at the University at Buffalo’s Center for Urban Studies, said by lowering the goal the state was playing a “game that attempts to make you think progress is occurring when it’s not, and people who play that game ought to be ashamed of themselves.”

It’s unclear whether the lower goal is being met because of the obfuscation of state officials and the project’s developer.

State records obtained by Investigative Post through a Freedom of Information request appear to show that minority participation the first year of construction at Riverbend fell far short of the 15 percent goal. Minorities accounted for an average of only 6 percent of the workforce, according to quarterly reports that cover the start of construction in May 2014 through March of this year, the latest period for which the state will release figures.

The project developer, LPCiminelli, insists that the project is meeting the state goals.

“We’re hitting our minority percentages, so we’re going to be right where we’re supposed to be,” said LPCiminelli spokesperson Kevin Schuler.

But he refused to provide details or documents to back this up.

Schuler also took exception to data contained in state records that appear to show that LPCiminelli lags behind the other contractors in hiring minorities over the first year of the job. The company’s minority workforce participation ranged from zero to 10 percent over that time, the records show.

State records suggest that workforce diversity is also lagging on another Buffalo Billion project, also headed by LPCiminelli, that involved the addition of a seventh floor to the Conventus building on the medical campus.

There, minorities accounted for between 6 percent and 8 percent of the workforce from October 2014 to March of this year. State officials refused to release documents or answer questions regarding any hiring goals set for that project.

This story is based on interviews with more than 20 contractors, labor leaders, and construction workers involved in the work at Riverbend. Empire State Development, the agency monitoring aspects of the project, refused to release more up-to-date records or grant interviews. And while ESD did release other records requested under the FOI Law, the agency took up to six months before providing them.

A lost opportunity?

Riverbend is the most expensive construction project in Western New York’s history. The state, through the Fort Schuyler Management Corp., is spending $350 million to build and $400 million to equip the sprawling 1.2 million square foot facility – the size of six Walmart supercenters. The factory will occupy 23 acres along the Buffalo River on the former site of Republic Steel.

The plant is scheduled to begin operation in the first quarter of next year, with up to 400 workers, and is projected to create 1,460 high-tech jobs. Under its contract with the state, SolarCity is also required to set up a supply chain that will employ 1,440 people.

Around 450 construction workers were onsite over the summer and their numbers are expected to peak at about 1,500 this fall.

The reduced minority hiring goals come in the face of high poverty and unemployment among minorities in Buffalo and Erie County.

At 11 percent, the African-American unemployment rate in the Buffalo metro area is more than twice that of whites, according to data from the 2014 American Community SurveyThat data also shows 33 percent of African-Americans and 42 percent of Hispanics live in poverty, compared with 10 percent of whites.

One recent analysis ranked Buffalo 46th of the nation’s 52 largest metro areas in creating economic opportunity for African-Americans.

Black community leaders have long been concerned that the economic opportunities created by the Buffalo Billion are not being fairly distributed.

Last April, seven black pastors and other community leaders wrote an open letter to Gov. Cuomo in The Challenger newspaper, noting, among other complaints, that “there are very few African-American men and women working on the construction sites” at state-funded projects in the city.

“The developers … and other corporate interests are prospering, but the poor and the African American communities are not,” they wrote.

The construction jobs at Riverbend are for skilled, union workers. A project labor agreement between the local construction unions and LPCiminelli requires that union workers be used on the project and sets diversity goals for both construction workers and contractors.

Still, critics of the reduction in the minority workforce goal see it as evidence of the state’s failure to prioritize diversity on publicly-funded projects. They also argue that the higher goal of 25 percent originally established would have given the construction unions an added incentive to recruit more minorities, something they have historically struggled to do despite efforts at outreach.  

Goals lowered, quietly

The 15 percent minority hiring goal at Riverbend is lower than on many other major publicly funded projects. The $1.3 billion schools reconstruction project, for instance, had a goal of 23 percent. The UB medical school under construction at the Buffalo Niagara Medical Campus has a 20 percent goal. And the Buffalo Sabres agreed to a minority hiring goal of 25 percent for HarborCenter when they bought the land for the building from the city.

The 25 percent minority workforce goal announced last year for Riverbend was included in two agreements signed when the state bought the land for the factory from the city.

In a more recent document, however – a Project Labor Agreement between the local construction unions, construction manager LPCiminelli and the state – that goal was cut to 15 percent.

The change is clear in the signed version of the document, where the 25 percent goal has been crossed out and replaced with 15 percent.

The workforce goal for women remains at 5 percent, and a goal to give apprentices – of any race – 10 percent of the work, has been added.

The original 25 percent goal was touted in two press releases issued by the governor’s office last summer, with Mayor Byron Brown praising the state for “embracing” diversity goals that the city had asked be included in the sale agreement.

How and why were the goals lowered?

Those were among the questions state officials refused to answer, although Empire State Development Regional President Sam Hoyt, asked after a public meeting why the goals had been changed, replied: “I don’t recall that they have been.”

Mayor Byron Brown, through his spokesman Michael DeGeorge, refused to discuss the change or otherwise comment for this story.

Kevin Zammer, secretary of the Buffalo Urban Development Corporation, the nonprofit city entity that sold the land to the state, said the organization had no role in changing the goals, which “would be the state’s prerogative.”

Grant, the county legislator who represents portions of Buffalo’s east and north sides, chided those responsible for the lowered goals.

“I think they’ve been devious, I think they have not been fair to this community and I think they have done something that, if it’s not illegal, is certainly immoral,” she said.

Negotiations over goal

Schuler downplayed the significance of the change in the goals, saying that after conversations with the unions, the goals were revised to be “more realistic.”

But Sam Capitano, business manager for Laborers Local 210, said a goal of 25 percent minority workforce would have been “challenging but not impossible. It might have added more to the cost of the project and slowed down production, because we might have needed to take the time to train people,” he said.

Fast-tracking the construction work at Riverbend has been a priority for SolarCity. Under the terms of its contract with the state, the company can walk away from the deal if construction isn’t completed within three months of the agreed-on deadline in early 2016.  

Others argue that lowering the goal results in less opportunity for minorities to land jobs at the project. The Riverbend project offered an opportunity to work for much of the winter – unusual in Buffalo – as well as what one construction worker called “unbelievable overtime” in order to stick to the tight schedule.

“Everyone was clamoring to get onto that job,” said Norman Noon, president of Operating Engineers Local 17 . “People were quitting other jobs to go work there.”

Richard Cummings, chairman of the Black Chamber of Commerce, said that the goals matter because diversity in construction “won’t happen unless there are some goals.”

“Diversity brings about a little bit of feeling uncomfortable – so, you kind of have to be forced to be uncomfortable, you don’t volunteer,” he said.

Diversity shortfall

Schuler said the 15 percent minority workforce goal is being met so far. He refused, however, to provide any details or documentation.

The number of workers on site is expected to increase sharply by the end of the year, he said, making it hard to predict exactly how the contractors will fare in implementing the goals.

“There’s still a lot of big contracts to go so I’m always hesitant – it’s kind of like planning on going to the Super Bowl when you’re 1-0,” Schuler said.  

State records documenting the makeup of each contractor’s workforce show that diversity on the construction site got off to a slow start.

In the first two months of construction, from May through June 2014, all 14 workers on the job site were white. Reports for succeeding quarters show the share of minority workers grew from about 4 percent to 9 percent to about 11 percent for the quarter that ended in March this year.

Put another way, minorities accounted for only 35 out of 334 workers on the site from January through March this year, according to the state records.Twenty were Native Americans, who accounted for more than half of the minority employees. Nine were African-American, five Hispanic and two Asian.

Technically speaking, Schuler said, workforce diversity is measured not by counting employees but rather by the number of hours they work. The Investigative Post analysis is based on the employee headcount, regardless of hours worked, because those were the only records provided by the state.

Schuler said he had calculations based on hours worked, but would not share the details with Investigative Post. His calculations included April through July or August of this year, a period for which the state has refused to provide documents to Investigative Post.

State records also appear to show that for the first six months of construction, LPCiminelli did not employ a single minority among its 60-odd workers at Riverbend.

“That’s a misreading of the forms,” Schuler said. “We are a diverse company, and anything that would say contrary to that is inaccurate.”  

He didn’t offer any different numbers, though.

Success in meeting the goal is calculated by averaging the hours worked at the end of a project, so missing the goals in some months does not mean they can’t or won’t be met overall, Schuler said.

“If they’ve got to play some catch up, so be it,” he said.

Minority participation was similarly low for construction at the Conventus building on the Medical Campus, where LPCiminelli added a seventh floor that is leased to Albany Molecular Research Inc., as part of another Buffalo Billion initiative.

In six months of construction, minorities made up around 7 percent of the workforce, according to state records.

State officials refused to disclose the project’s diversity goals or otherwise answer questions.

Work has yet to start on a third project, led by McGuire Development, the conversion of a portion of Key Center’s South Tower into an IT hub to house IBM.

Goals, not quotas

A common complaint among minority leaders and construction workers is that diversity goals on state-funded projects aren’t aggressively enforced.

“We’ve been setting goals and people haven’t been meeting the goals and the contractors have not been punished for not reaching those goals,” said Frank Mesiah, president of the Buffalo chapter of the NAACP.

State law, however, mandates that diversity goals have to be “goals” rather than “quotas,” meaning that contractors who fail to meet them – or even flat out refuse to do so – cannot be penalized, according to state officials. 

Taylor, the U.B. professor, said the state’s diversity goals suffer from a lack of political will.

“If the governor took this seriously, we would be having a very different conversation,” he said.

“We do try to hold people accountable but we don’t have any sort of punitive measures,” Schuler said.

Attempts to recruit more minorities and women into the construction unions over the past decade have been largely unsuccessful.

Similar arguments are rehearsed each time the state undertakes a major construction project: contractors say the makeup of the workforce is dictated by the construction trades, who in turn say they are making their best efforts to diversify, while minority leaders say not enough is done by way of outreach and recruitment.

But minority leaders are adamant that this time round, with the unprecedented influx of state money fueling a construction boom, “business as usual” is unacceptable.

“If the Buffalo renaissance just happens among the good old boys club, it will have been for nothing,” Cummings said.