The Boston construction industry
Minorities fight for inclusion in the building boom
The proliferation of sleek office buildings and condo towers rising in Boston’s downtown neighborhoods attests to the fact that Boston is in the midst of its largest building boom since the stately mansions of the Back Bay rose from the landfill in the late 1800s.
For blacks in design, construction and related industries, Boston’s current building boom presents a unique set of opportunities and challenges.
“It’s all about relationships,” says Beverly Johnson, president and chairwoman of the board of the Massachusetts Minority Contractors Association. “As far as diversity goes, it’s not a priority.”
Although Boston has for the last 15 years been a majority-minority city, blacks, Latinos and Asians have had to fight for inclusion in the city’s economic sphere.
“We don’t have a large political base, and we don’t have enough of an economic base,” says John B. Cruz III, CEO of Cruz Companies, the largest minority-owned construction firm in New England.
The challenge for minority-owned firms is what developer Greg Janey calls the “chicken-and-egg syndrome.” Local black and Latino owned firms have not been part of the lucrative downtown projects, have little experience developing large projects and, therefore, haven’t acquired the requisite bonding capacity to bid successfully on those projects.
While few minority firms have ever broken into the lucrative and notoriously segregated world of downtown sky scrapers, many are building on their success in the city’s majority black neighborhoods of Dorchester, Roxbury and Mattapan, where vacant land abounds and pressure from the city’s booming real estate market is opening up new opportunities.
Projects under planning or development in Roxbury, Dorchester, Mattapan and others, are key to ensuring that minority firms are able to participate in the city’s building boom. The fact that they are led by black general contractors is perhaps the most important factor in ensuring that people of color in the construction trades are able to secure jobs. But the general contractors are not the only factor that ensures minority participation in the project.
“There’s a myriad of construction-related disciplines that can build wealth in the minority community,” Cruz said.
In pre-construction, development consultants like Beverly Johnson’s Bevco help manage the cumbersome process of obtaining permits and soliciting and obtaining the political and community approval that projects often require to get a green light from the city. Real estate professionals are also a key to the success of a project, helping to secure letters of intent from commercial tenants whose leases give banks the assurance that a project will be profitable enough to justify the loans necessary to finance the construction.
In the post-construction phase of a development, there are business opportunities for real estate brokers to lease remaining commercial spaces, as well as contracts for cleaning and maintenance.
In Boston, the many professionals of color who work in these fields depend mainly on development projects located in the city’s predominantly black and Latino neighborhoods.
“Most people in construction work with people they know,” Johnson says. “By the time they come before the Boston Redevelopment Authority to get approval, they already have their team in place.”
Getting it right
Ken Guscott’s Dudley Square project, among the largest ever undertaken by a black-led development team, includes Janey Construction Management and Consulting as the general contractor, Johnson’s BevCo as the project’s development consultant and Stull and Lee as the architects. Construction finance specialist Tom Welch is conducting cost projections for the project and Deborah Bernat is handling marketing.
Guscott’s approach — bringing in black designers, engineers and consultants at the project’s inception — is exactly how developers can ensure minority-owned firms can get a piece of the action, and often what doesn’t happen on the downtown projects.
“They set a great example for how to involve sub-contractors and general contractors,” said Janey Construction CEO Greg Janey. “It will ramp up our capacity.”
Janey Construction will work in a joint venture with Providence-based Gilbane Building Company on the development project, an arrangement that will help the growing Boston firm expand its capacity to work on larger projects, while helping Gilbane expand its reach into the lucrative Boston market.
Janey is also partnering with Gilbane on the Dearborn school project, which calls for the demolition of the existing building and the construction of a new, state-of-the-art STEM-focused school.
The partnership model Janey has undertaken with Gilbane is a common approach minority-owned firms have used to build capacity.
“It’s a path for us to grow,” Janey said. “It’s building our staff’s capacity so they can understand how large projects work.”
During the 1980s, such partnerships were more common, as developers working on city-owned parcels in downtown were required by city ordinance to partner with minority firms on projects in the Roxbury area. The ordinance, called parcel-to-parcel linkage, ended during the 20 years of the mayoral administration of Mayor Thomas Menino — a time period where many established black developers saw their stream of projects dry to a trickle.
Opportunity on the horizon
Janey and other firms in the construction field may soon get a crack at another major project in the downtown area. The largest black real estate developer in the U.S., the Miami and New York-based Peebles Corporation, has secured the rights to develop an 11-story mixed use development on the air rights over the Massachusetts Turnpike between Massachusetts Avenue and Bolyston Street.
The project, due to begin construction in 2018, will include a 156-room hotel, 88 condominium units, 85 luxury rental apartments, 20,000 square feet of street-level retail, 138 parking spaces and a $45 million renovation of the Hynes Convention Center Green Line MBTA station.
The Peebles Corporation regularly uses black-owned firms as general contractors on its projects, and has pledged to tap minority lawyers, architects and other pre-construction professionals for its Boston development, which is called the Viola Back Bay.
“Peebles has the opportunity to change the game,” Janey said. “They can put together models for inclusion that work. They can be creative and flexible to make sure minority firms have a major role.”