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Published in Economic Development
From left: James Peacock III, Jamiel Robinson and Jennifer Burns. From left: James Peacock III, Jamiel Robinson and Jennifer Burns. PHOTO BY KATY BATDORFF

Municipalities and organizations play catch-up on diversity, equity and inclusion as minority business leaders seek resources

BY Sunday, May 09, 2021 06:00pm

It’s been a year since social media timelines were filled with Black Lives Matter hashtags, messages of solidarity with people of color, and promises to address racism as organizations responded to the national racial justice movement.

Jamiel Robinson, the founder of Grand Rapids Area Black Businesses (GRABB), isn’t holding his breath that many of these pledges will lead to lasting change.

“I think it was more of a self preservation thing for a good amount of those people that were making those statements,” Robinson said of businesses, government officials and other organizations. “Many made statements that were sincere, but at the same time, they may not know how to make those changes they promised.” 

Without minority representation in meaningful leadership roles at organizations, the act of sincerely wanting to be better isn’t enough and is more like “the blind leading the blind,” Robinson said. 

Robinson and other business leaders of color told MiBiz that — for the most part — they have yet to see meaningful changes in the way West Michigan institutions address racism, implicit bias and creating equity for minority-owned businesses.

“In Grand Rapids, we have a lot of well-meaning organizations that aren’t equipped to deliver results our community needs,” Robinson said. “Funders keep funding those that keep showing themselves to be ineffective. A lot of organizations have raised millions of dollars for equity goals, and a large part of that never makes it to a Black organization’s business or budget. A lot is absorbed by white organizations that say they want to do the work.”

Bing Goei — the owner of Eastern Floral and the Goei Center who serves on the board of the West Michigan Asian American Association Inc. — echoed Robinson’s comments. The lack of minority representation in leadership positions remains a key barrier to progress, he said. While many companies have funded studies and formed committees, they often fail to invest the time and money necessary to work to solve racial equity issues, Goei said. 

“We can do all the reports and do all these studies and create all these events, but what are you willing to invest to make it happen?” Goei said.

The past year has brought a flurry of workgroups and pledges involving diversity, equity and inclusion among the business community. Last month, the Grand Rapids Area Chamber of Commerce announced Black, Asian and Latinx business councils within its organization to better serve minority-owned businesses, which Goei called a “positive step.”

“I’m still waiting for what investments will be made to make sure this becomes a successful program,” Goei said. “None of us are asking for a handout, we’re asking for an opportunity to provide the skills and talent we have without being questioned and without being placed in a stereotype that our history has put us in.”

The city of Grand Rapids in particular had work to do before the pandemic. In 2015, Forbes ranked Grand Rapids as the second-worst U.S. metropolitan statistical area economically for African Americans. According to a 2019 study compiled by personal finance website WalletHub, Grand Rapids ranked 101 out of 182 cities across the nation for Latino entrepreneurs. 

“Businesses of color and women-led businesses were already having a hard time before COVID-19 and were experiencing unique challenges,” said Alita Kelly, co-founder of Southeast Market on the city’s south side. “I’m hoping we’ll see some continued support after COVID-19 in a way we didn’t before because it shouldn’t take these national protests for that to happen.”

Efforts being made

However, local officials clearly see a role in solving these long standing issues, and are taking varying approaches to do so. 

The Right Place Inc., the city of Grand Rapids, and the Grand Rapids Chamber are all pursuing goals or initiatives to increase diversity, equity and inclusion in their organizations. 

The Right Place — which serves as the economic development organization for the greater Grand Rapids region — recently partnered with several foundations to fund a Brookings Institution study to craft a vision for inclusive growth in the local economy. 

Recommendations formed out of the study include creating more quality jobs, having more concerted efforts around building diverse business ownership, and doing more research around inclusive economic growth, said Tim Mroz, senior vice president of strategic initiatives at The Right Place.

That means avoiding dead-end opportunities in workplaces and building connections with workforce development agencies, Mroz said. 

Growing existing minority-owned businesses is another key priority that emerged from the study. Prior to the COVID-19 outbreak last year, The Right Place initiated the New Community Transformation Fund LP, a venture capital fund that will invest nationally in minority-owned companies. The fund, which went public in January 2020, has raised nearly $10 million of a $25 million goal and is close to deploying its first investments.

The fund aims to invest in businesses that are either minority owned or have the potential to be minority owned, Mroz said. If a company that is going through an ownership transition identifies a minority professional to buy the business, it could tap into the fund to help make the transition successful, Mroz explained.

“We are also in the final throes of developing a region-wide minority business directory on our website,” Mroz said. “One of the challenges we’ve heard from purchasing professionals is they want to or are looking to diversify their overall contracting services.”

The growing list, which will be made available to businesses, will include vendors such as catering and printing services as well as suppliers of various commodities. Identifying minority owned companies has become easier since business owners applying for COVID-19 relief funding have the option to self-identify their race and other demographic information as part of the process, he said.

The city of Grand Rapids has a similar initiative to bolster its directory of minority, women, and micro-local contractors for developers seeking tax incentives on projects. Developers complete an inclusion scorecard that includes setting aspirational goals for diversity in contractors if they seek tax incentives. Although the city can’t legally mandate developers follow diversity targets on projects, officials hope to aid the process by presenting them with diverse options, said Jeremiah Gracia, the city’s economic development director. 

“I think we have four or five projects that have utilized this plan and it has been well received and meeting expectations in getting aspirational goals and commitments to building the involvement of diversity among contractors,” Gracia said.

The city is also expected to select a company proposal this month to operate its SmartZone business incubator with the goal of bringing more diversity and equity among tech startups, Gracia said. It’s part of the city’s broader plan to address DEI as it revisits contracts.

“If we do our job well with the SmartZone, we should be able to funnel those companies into being investable in the Transformation Fund,” Gracia said.

In August 2020, the city also updated its Brownfield Authority policy to intentionally prioritize neighborhoods of focus and projects that involve first-time developers. Under the new policy, these types of projects can receive up to 100 percent reimbursement for eligible activities to get a development started, Gracia said.

“As we were talking with our stakeholders, people were saying they would like to do projects but don’t have the capital up front to do the environmental work,” Gracia said. “This is a policy change that is important for us to educate so people understand and know about it.”

‘Radiate outward’

As institutions work to catch up with DEI initiatives, business leaders like Robinson have formed their own networks to help their communities. Construction on GRABB’s headquarters — which will also serve as an incubator known as District 2012 for Black-owned businesses — is expected to start in July at 2012 Eastern Ave. SE on the city’s south side. 

“Our ultimate goal is to create wealth and assist Black businesses in creating wealth … in the city of Grand Rapids,” Robinson said. “Our goal is to reduce any barriers to businesses, and one of them is having space available to meet with clients.”

Most Black businesses in the U.S. are single member LLCs or smaller startups with few employees, Robinson said. Creating a location that can offer shared resources and a physical space for Black business owners will help them grow so they are scalable, Robinson said.

Project organizers are also being intentional by spending at least 75 percent of the design and construction costs with minority-owned subcontractors, he said.

Black Wall Street Kalamazoo, which serves a similar purpose as GRABB in helping to connect Black business owners with resources, also recently secured its first physical space at 1311 Portage St. in the city’s Edison neighborhood. The nonprofit formed in 2013 with a goal to strengthen the lifespan of Black-owned businesses in the community, said founder Nicole Triplett. 

Many of the Black-owned businesses in Kalamazoo are startups without physical locations, Triplett said. Her organization’s new headquarters will take away some of the initial overhead for entrepreneurs with shared resources that include office space, wi-fi and printing services. By next fall, Triplett hopes to be running a training space for entrepreneurs out of the location, and eventually set up a marketplace for the businesses in the organization as well.

District 2012 and Black Wall Street Kalamazoo have a shared goal to act as a catalyst and a beacon to help the Black-owned business community grow.

“We want everything we’re doing internally in that building and hub to radiate outward into the other vacant storefronts in the area,” Robinson said.

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