The Kansas City Tax-Increment Financing Commission has given H&R Block two weeks to respond to a report from the city concluding that minority participation was inflated during the construction of the company's headquarters in downtown Kansas City.
The TIF Commission will hold a special meeting in two weeks to make a final decision about whether an honest effort was made to include minority businesses in the construction. Virtually the entire cost of H&R Block's oval-shaped headquarters was subsidized by taxpayers.
A group of Hispanic contractors filed a lawsuit in 2005 alleging that J.E. Dunn had flouted the city's affirmative-action policy while serving as the general contractor on the Block project. In one instance, Dunn awarded a $2.9 million contract to a minority electrician who lacked the required expertise.
An investigation by the city's Human Relations Department substantiates the Hispanic contractors' claim that the electrician's contract was a joke. A bid for the work was withdrawn by a white contractor and repackaged by a minority business, Rodriguez Electrical, with the exact same terms. Rodriguez Electrical received a 2.25 percent cut of the contract, while an R.F. Fisher crew actually performed the work.
The city's analysis notes that Dunn used tactics throughout the project to "artificially boost" the reported amount of participation by minority- and women-owned businesses. In one instance, Dunn asked a drywall company, Heartland Specialty Contractors, to increase its minority participation. A minority-owned business ended up submitting the winning bid. The entire $2.4 million contract counted toward the minority-hiring goal, though the minority business, Skyline Construction, received only $536,000.
Attorneys for H&R Block and J.E. Dunn asked for time to provide the TIF Commission with more information -- a request reeking of desperation. The commissioners reluctantly agreed.
The TIF Commission has been sorting through the minority-participation numbers on the Block project for more than a year. Ron Yaffe, the chairman of the commission, said the matter needed to be decided. "The time for closure is now," he said at this morning's meeting.
Bill Torres, the president of the Hispanic contractors' group, was disappointed that the TIF Commission had acquiesced to Block's and Dunn's attorneys. Torres says the lawyers "keep hanging their hats on technical issues" in the face of evidence that Dunn had clowned its utilization of disadvantaged businesses.