Disadvantaged businesses have training and opportunity to help build a new downtown Knoxville baseball stadium. But with no nails to hammer or screws to turn, project delays might have caused interest from minority-owned businesses and workers to dwindle.

The stadium project has not yet met its goal for contracts with disadvantaged businesses to represent 17% of the stadium's full $113.95 million cost.

The group responsible for engaging disadvantaged business enterprises, or DBEs, on behalf of the stadium construction project, met with the Sports Authority Board at its March 28 meeting. Members of the group are hopeful to see more minority-owned businesses represented in the second and third tiers of subcontracting as construction moves forward.

"I never missed a diversity goal target, and I don't plan to start," said DBE leadership team member Edward Henley III, founder of Pillars Development in Nashville. "This is the foundation that's being laid."

Knoxville stadium sets goals for diverse businesses

Knox News reported earlier this month that 15% of the stadium's $101 million contract value has been awarded to disadvantaged businesses, defined by federal government as businesses "51% owned by a socially and economically disadvantaged individual(s)."

Disadvantaged businesses include businesses owned by women and certain minority groups, including Black Americans, Native Americans and Hispanic Americans.

Phyllis Nichols also spoke as a member of the DBE leadership team, despite retiring as CEO and president of the Knoxville Area Urban League last year.

"Very simply, delays in the project caused people who were looking for work and looking for engagement to move on," she said at the meeting. "There's not one DBE that any of you can name that we have not talked to on a personal level or met with. The reason that they chose not to engage was up to them. ... We cannot push them."

Just a fraction of DBEs saw bidding all the way through

As Nichols indicated, the committee got proactive and approached DBEs before the project started.

Of the 476 subcontractors invited to prequalify for the project when construction documents were finalized, 154 or 32.4% were classified as disadvantaged businesses.

But when it came time to bid, according to a quarterly progress report, 139 subcontractors were planning to bid. That included just 23 disadvantaged businesses.

Those numbers dwindled even more when it came time to participate; only 9 of the 84 subcontractors – 10.7% – who submitted bids were classified a disadvantaged. That's a "stark drop-off," Henley said.

The stadium development team will provide regular reports to the Sports Authority Board showing the involvement of disadvantaged businesses as more subcontractors are brought on board.

How high risks, delays discourage disadvantaged businesses

Dannis Mitchell is the director of community engagement for Barton Malow, a member of the construction management team. Mitchell said the first round and most lucrative contracts for large-scale projects are the most difficult when it comes to recruiting disadvantaged businesses.

"Historically, diverse businesses have not been able to get the ... financial capacity to carry out an entire contract," she said.

Disadvantaged businesses also might not be willing to take such a high level of risk, she said.

If a DBE can't or won't take on a multi-million-dollar carpentry contract, Mitchell said as an example, it can still carry out portions of that work as a subcontractor.

That's where minority involvement can increase, according to the leadership team, which has made clear to the first round of contractors that hiring DBE subcontractors is a priority.

Is Knoxville behind when it comes to diversity contractors?

Randall Turman, president of Elite Diversified Construction Inc., part of the stadium construction management team, suggested that requiring a certain percentage of disadvantaged business participation rather than just setting a goal might have encouraged more involvement.

This signals to applicants that the development team is taking diversity seriously. Fortunately, he said, Barton Malow and Denark Construction − both part of the construction management team − have a strong reputation in that regard.

However, Sports Authority Board attorney Culver Schmid told Knox News a mandate legally was not on the table. Courts have decided these types of mandates for publicly funded projects must first show historical discrimination exists in the community and that a narrowly tailored mandate would serve as a remedy.

DBE goals for a project of this magnitude is something new for Knoxville, and historical distrust exists in the city's Black communities. This is, in part, due to the displacement of these communities during urban removal.

While there's nothing stopping the DBE team from looking outside of Knoxville for disadvantaged business, Henley said, it can be hard to pull from places like Nashville that have an abundance of large-scale projects to bid on.

Project delays don't help the cause either, he said.

"My better opportunities came when I went to Nashville," Turman said. "And the reason why I did go to Nashville was because the DBE participation goals − and, plus, the benefits and income − was a lot better in Nashville than it was here.

"So, you can imagine contractors trying to come from Nashville to do work here − it would also bring a price tag with them that would not be feasible for a project like this."

Preparing for more diverse involvement

The DBE leadership team has hosted more than 50 community events in majority Black neighborhoods east of the stadium over the past two years, with trainings ranging from blueprint reading to construction financing.

Nearly 650 people attended these events in person, according to the quarterly progress report, with 1,339 people reached via livestream.

The next two events are some of the most important in terms of reaching diversity goals: a contractor matching session and a cultivating construction opportunities session, both scheduled for April.

While a "one-off project isn't going to change the culture," Henley said, the DBE team has a long list of disadvantaged subcontractors it plans to invite to these sessions.

Part of the goal, according to Mitchell, is that Black Knoxvillians will have the tools to participate in projects like this far beyond the life of the stadium's construction.

"We want to make sure the companies that are here and are DBEs ... are always taken care of," she said.

Ryan Wilusz is a downtown growth and development reporter. Phone 865-317-5138. Email ryan.wilusz@knoxnews.com. Instagram @knoxscruff. 

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This article originally appeared on Knoxville News Sentinel: Knoxville stadium needs more diverse contractors in Old City project