New Orleans skyline, with mid-century modern landmark World Trade Center building at far left
Woodward Design + Build, a company with a history of racial discrimination and harassment allegations — interspersed with public-bid favoritism, conflict of interest and cronyism controversies — faces new community outrage. This time the controversy stems from allegedly closing its eyes to a serious lack of minority contractor participation in the former Iberville Housing Project’s three-phase $600 million redevelopment project, as reported by Louisiana’s regional newspaper the Advocate, breaking the story.
Separate from the Iberville project, a Woodward entity is mired in a cloud of legal troubles that continue for the City of New Orleans’ World Trade Center (WTC) lease deal.
New Orleans is known to be a politically motivated city, which sometimes leads to a tale of two cities.
Here’s the rub. Paul Flower’s Woodward firm was entrusted to enforce its subcontractor’s disadvantaged business enterprise (DBE) participation on “any and all tiered contractors.” But Woodward’s DBE certified contractor Nolmar is reported to have steered the bulk of work to non-DBEs. Woodward apparently never noticed, or at least never intervened to stop the suspected DBE hocus-pocus. Both companies will have an opportunity to respond to the Housing Authority of New Orleans (HANO).
Flower’s related Woodward Interests and Richard L. Friedman’s Carpenter and Company are the respective master developer and co-developer of the planned WTC redevelopment. A 33-story Four Seasons Hotel and Private Residences, New Orleans is planned for the vacant high-rise. Nolmar is listed as a subcontractor.
The Four Seasons group issued a November 17 statement citing the DBE presentation contained in its WTC project plan as the “DBE program that was central to our winning proposal.”
Two Canal Street Investors Inc. first filed a comprehensive lawsuit against the city last April, to expose flaws in the city’s RFP process and stop the WTC project from going forward. This complex case against the city has no shortage of overlapping parts, including DBE.
The Times-Picayune reported that TCSI in June filed a notice in Orleans Parish Land Records Division against the WTC property, warning of a pending lawsuit with potential $500 million damages, a legal fight clouding the project and future development of the site. TCSI attorneys confirm the existing lawsuit against the city is being amended into a mega-lawsuit that names the City of New Orleans, New Orleans Building Corporation, Four Seasons, Woodward Interests, Carpenter and Company, Jones Lange Lasalle, Stone Pigman and other individuals involved in a civil conspiracy. The claims of collusion will be filed shortly.
TCSI is represented by minority-owned law firm the Davillier Law Group and co-counsel James L. Williams. The case against the city is not going away anytime soon, according to TCSI lawyers.
TCSI is also filing motions to dismiss the Four Seasons-Carpenter-Woodward group’s retaliatory suit filed against TCSI—a “Strategic Lawsuit against public participation” (SLAPP) lawsuit intended to censor, intimidate and silence critics of (in this instance) the city’s public bid process. Several jurisdictions have passed anti-SLAPP laws, with SLAPP-back penalties for trying to silence those who speak out on a substantive issue of public interest, social significance or governmental influence.
Way down in New Orleans.
“The simplest way to explain the case is that the city ran the procurement process, so the law requires them to award the lease to the highest bidder,” says Daniel Davillier, lead counsel for TCSI. “Instead of following the law, after several meetings with the mayor, the city consultants and members of the selection committee instead materially changed the bids to attempt to justify the mayor’s predetermined selection of Carpenter-Woodward [Four Seasons], who was in fact the lowest bidder by an incredible margin of between $1 billion and over $2.4 billion [over the course of the 99-year lease] in comparison to the other four bids. The details support the above statement.”
The Four Seasons-Carpenter-Woodward group’s entire selection committee total score for the WTC project lease award [including questionable DBE score] was tallied on “faulty analysis” and “very skewered scoring,” as the TCSI legal team has presented to the court. TCSI’s legal claims are supported by the extensive documentation of public disclosures, legal documents, transcripts, videotapes, emails and other discovery materials that reflect a breach of transparency, the violation of the public trust, and Louisiana law.
There was no legal intervention at Woodward’s Iberville redevelopment project, unlike the WTC project. The Iberville DBE story has broken after the fact. If initial reports on the Woodward/Nolmar DBE debacle at the Iberville project prove correct, two phases of the project are already built. The damage is done. Those DBE jobs and financial benefits to minorities are gone.
It’s about public trust. People take their politics seriously in Louisiana. Politics and political storytelling, and those at helm of power, have played a dominant role in the development of Louisiana’s culture.
Regarding the Iberville project, Woodward/Nolmar may have to contribute to a “training program” as a “compliance alternative” for DBE violations. But several years of work lost to small, socially and economically disadvantaged businesses and tradesmen — racial minorities, women, veterans and the disabled — cannot be redone.
Woodward’s alleged lax role in overseeing its non-compliant DBE subcontractor at the Iberville project is worsened by the fact that Woodward actually owned 49 percent of the subcontractor entity it was tasked to supervise.
The takeaway? A fresh round of questions now plague the WTC deal with the city.
TCSI legal winning streak against the city now paves the way to a full-blown court trial in late 2016, court observers say. Prior to recent court rulings, the city and Four Seasons-Carpenter-Woodward pulled out all the stops to shutdown the lawsuit. Efforts to stop the TCSI court case failed.
Charline Gipson, one of the lawyers representing TCSI, says “a fatal flaw” in the city’s consultants’ calculations occurred when they estimated potential property tax revenues based on Four Seasons’ higher construction budget, rather than net operating income.
In addition to trial court motions, Louisiana’s 4th Judicial District Court has docketed the appellate court calendar for a panel of judges to hear specific TCSI legal team supplementary oral arguments against the city in January 2016.
TCSI’s claims that the city-controlled WTC “illegal public procurement” process “creatively devised a scheme” to circumvent state law to select the lowest bidder (Four Seasons-Carpenter-Woodward) to redevelop one of the city’s most valuable assets, the iconic Mississippi Riverfront WTC building.
A bevy of eleven real estate developer and investment teams vying for the WTC lease award were narrowed to five, vetted out as preapproved finalists, before the long-term lease was awarded in March.
Lawyers for TCSI say the significant preliminary legal triumphs against the city ensures the TCSI lawsuit will advance forward, having already crossed the most important legal hurdles. TCSI remains steadfast and committed to the long legal battle with a trial to be scheduled in 2016.
According to extensive legal pleadings and exhibits, court documents track key evidence the city and its city consultants “actively manipulated” and influenced real estate developer finalist proposal numbers in order to fix upon a “winner” for the five-member selection panel’s endorsement.
Designs and what the developers offered the city was considered during the prequalified vetting process and bidding period for the Edward Durell Stone 60’s building.
The TCSI proposal presented revolutionary new ways of doing business, with real DBE participation, during the bidding competition for the WTC skycraper lease. The TCSI team proposed to negotiate with local contractors and sub-contractors—opposed to “bidding out” subcontracts that have traditionally left local DBE’s out of the process. It doesn’t have to be that way.
The novel TCSI strategy was later emulated and adapted by the Four Seasons-Carpenter-Woodward group.
Importantly, the TCSI proposal offered an alternative supplementary bond protection insurance program to assure DBE’s the ability to bond their services. This program later became adapted as a Black Chamber of Commerce model program. TCSI’s innovative and far-reaching proposal set the bar for the history of New Orleans DBE participation. Why?
Competent DBE businesses that can perform the work required often cannot qualify for bonding. These subcontractors are systematically eliminated from participating in large projects—like the WTC and Iberville projects. Many companies chalk up failures in the DBE programs and move on, like what happened in the alleged Woodward/Nolmar Iberville DBE disgrace. Then they fund DBE training programs. Some ask, is this hand-slap “punishment” really sufficient for the continuing the Old World way of doing business?
Additional funding for more “training programs” is no substitute for the loss of real jobs, community DBE advocates say.
TCSI’s proposed DBE program was created to change the pervasive status quo discrimination against today’s contractors who are unable to qualify for bonds. With TCSI’s bonding program, financially challenged contractors who can perform the work but who have less than pristine financials or lack of collateral then becomes competitive. Character and work skills (not finances) are what is unwritten for the bonding. Businesses owned by blacks, Hispanics, women and other minorities then become competitive in the work place, versus exclusion from the inner circle of who gets jobs.
New Orleans is a city three hundred years in the making, but there is always room for growth and change.
It is easy to understand how valuable DBE training programs represent nothing but hollow promises and empty commitments—if DBEs do not get tapped for real work, opportunity and paychecks. The labor force must have a paycheck and a purpose, is a common rallying cry among community leaders.
TCSI’s proposal made a pledge to true-life DBEs to actually perform the work, versus the “good old boys network” Rolodex of favored non-DBE subcontractors landing the contracts and jobs. DBE work is not supposed to be funneled to non-DBEs—like what has allegedly been happening at the Iberville redevelopment mixed-housing project that Woodward was responsible for the administration of DBE compliance.
Nolmar Executive Vice President and General Manager Al Wallace did not deny the Iberville noncompliance claims but did say it is difficult, at times, for his firm to find capable DBEs to employ.
“There’s some trades that don’t have as much DBE capability,” Wallace said, as reported by the Advocate. That work may or may not go to DBEs, depending on the trade, he added. When asked about the monitoring of DBE compliance, he replied, “That’s in the eye of the beholder.”
Minority jobs siphoned on construction projects before the ribbon-cutting ceremony do not come back afterwards.
Woodward has a checkered track record of coming under fire for questionable business dealings, as newspaper headlines reflect, with respect to substantial high-dollar government-public-bid contract awards such as the Louis Armstrong Airport renovation.
Another Woodward/Nolmar DBE controversy erupted when Woodward received the “highest score” as a selection committee’s recommended contractor in an Orleans Parish School Board (OPSB) public bid competition. This particular public bid award exploded into scandal and litigation once allegedly inappropriate “close family member” ties within the governmental-controlled bid process were discovered. No one figured this out when the bid was first submitted, or no one said anything. The bid was re-reviewed for a conflict with Louisiana law and ethics. The Woodward/Nolmar group was rescored and axed from the job. Woodward was not allowed to resubmit a reconfigured bid.
The Woodward DBE past performance appears to have a pattern of black marks.
During one heated meeting, the Advocate reported OPSB board member Leslie Ellison stated about the Woodward award of the school contract “Challenges the integrity of the district’s bidding process.” The critic of the award called it a “direct assault on our DBE program,” and added, “above all, it hurts our children and the families we serve.”
Not one to go willingly or easily from mega-dollar construction jobs, Woodward sued the school system but lost.
An advocate for minority interests in contracting and construction jobs, Pat Byrant, also verbally accessed the Woodward award at a public school board meeting. He suggested the OPSB call in the U.S. attorney or the FBI to investigate the situation and find out “who did what, who knew what, when … call in the cavalry.”
In March, the Four Seasons-Carpenter-Woodward group claimed nearly $130 million (in the WTC project) would be invested in minority and women-owned businesses, a figure now reported at $100 million. However, these figures are contingent on an unverified construction budget. The city negotiated a WTC lease with the Four Seasons group, with no minimum construction budget guarantee.
Any DBE figure would also be slashed by another 90 percent—if 90 percent of the DBE work were bundled up and redirected to non-DBEs, like what allegedly happened at Woodward’s Iberville project, under the leadership of Flower.
When it comes to DBEs, as the New Orleans Tribune succinctly points out, another concern is increasing businesses “where the overwhelming majority (if not all) of the ownership genuinely lies in black hands.” The community is tired of “businesses fronting as DBEs because somebody’s wife’s or daughter’s name is on the paperwork or because the slight majority (51 percent) of the company is owned by a minority who has joined with white partners all too eager to get their hands on contracts and money as DBE participants. These arrangements are disingenuous. They undermine the spirit and weaken the goals of DBE programs.”
Regardless of the lingering facts and protests about Woodward’s alleged poor treatment of women and minorities, the company and its partner Carpenter continue to gloss up their WTC project DBE plan.
“We are here to ask if black workers are going to matter at the World Trade Center,” community organizer Colette Tippy asked of the project during a public hearing. She added, the city should be sure the promises are, in fact, commitments that can be enforced. The same Stand for Dignity Group previously vigorously opposed Woodward being awarded the public-bid airport job, which Woodward withdrew from.
The TCSI lawsuit against the city is all about transparency and fairness, aboveboard rules and regulation — without the elements of discrimination in favor of a preferred choice — much like a DBE sleight-of-hand.
The suit cites the RFQ/RFP process (designed to be transparent and fair) was breached with secrecy, fabrication, omissions and favoritism. The handpicked Four Seasons developer group named as the top choice for the long-term city lease offered $60 million less to the city short-term, billions less long-term, than all other competing bidders.
This fiscal robbing of the citizens of New Orleans is a direct violation of Louisiana Public Lease Law, according to TCSI attorneys and legal documents.
The selection committee in the WTC lease award process was comprised of city employees appointed and overseen by Mayor Mitch Landrieu’s administration. According to court papers, the committee accepted the consultant’s stacked-deck recommendation and chose the Four Seasons-Carpenter-Woodward group from five finalist hotel developer groups. In doing so, the city deprived its public coffers of a $65 million cash upfront payment in year one of the lease, instead taking the low-bid $5 million offer.
The WTC lease contract awarded through a competitive bidding process is incompatible with Louisiana law, without an exemption to the law.
The fallout? The city’s current wave of economic woes of multi-million dollar firefighter judgments and federal decrees leveled against it, budget shortfalls and de facto hiring freezes have led to proposed tax increases, parking fee hikes and the issuance of public bonds.
Landrieu is a mayor with seven deputy mayors; the mayor of New York City has three deputy mayors.
The WTC project now before the courts is billed in the press as a “$364 million project.” Again, this throwaway number of “$364 million” is unsubstantiated with no documentation to back such a claim, as court filings reveal.
The winning Four Seasons group first dropped their initial construction budget guarantee to a mere $200 million then executed a lease with the city that warranties no minimum investment. Correct. No minimum construction budget. The lease gives the group control of the city-owned property for 99 years, without even the most minuscule of a definite financial plan in place—guaranteed.
A recent Times-Picayune article notes the conspicuous absence of African-American men working at jobsites around New Orleans, despite the hustle-bustle of a landscape dotted with new construction jobs. The dismal state of unemployment persists. The sobering statistic of only 48 percent of working-age African-American men having employment flies in the face of the city’s ongoing recovery effort of the past decade.
An unacceptable stagnation of minority job opportunities continues for black workers in the community of New Orleans, experts say. Yet as new construction jobs are added, black unemployment rates remain level. This suggests that African-Americans are not reaping the benefits of being brought into the construction industry (if at all) at the same rates as whites.
The same story of pre-Great Recession level rates of unemployment for the minority labor force is playing out across the American economy. Black unemployment rates are double that of whites. Studies attribute the gaps to racial and class discrimination. Studies also suggest that favoritism, or the race of the hiring manager, as a contributing fact to racial disparity in the workplace as well.
In the WTC lease competition, the Four Seasons-Carpenter-Woodward group was voted the top scorer for their DBE track record and plan. Their WTC DBE proposal allegedly “scored” the highest of five applicants, with 467 points. This was despite Woodward’s previous negative DBE headlines. The WTC lease award legal challenge calls the group’s high DBE score “inflated.”
Woodward has been in the past news headlined as a “controversial contractor.” Prior to the latest DBE controversy, alleged racial issues and racial slurs used on yet another one of Woodward’s projects, contributed to Woodward bowing out of a half-billion-dollar lucrative job at the Louis Armstrong International Airport. Nolmar Corporation, longtime close associate of Woodward, dropped out of the mega-contract project as well.
A labor organization that advocates for minority participation in public contracts applauded the news that Woodward was no longer vying for the airport contract, the Times Picayune reported. The group spoke out against the company during the competition.
The Woodward team beat out the rival team for the airport job—before the award was taken away—in part because it scored higher for its DBE policies. In the 2010 lawsuit about racism that continues to haunt Woodward, the company’s supervisors and executives were accused of racial discrimination and harassment.
Contractor Andrew Gross said, “The idea that Woodward can be counted on to ensure fair minority participation in this large contract [airport] is simply preposterous.” Gross produced email documentation in court proceedings showing crude racial epithets coming from Woodward management. Further affidavits in Gross and Dawn Taylor’s lawsuit documented the company’s jobsite superintendent using racist language and berating workers.
Before departing the New Orleans airport facility project, Woodward was the cornerstone of the joint-venture team originally set to build the new terminal. The team “won” an RFP public bid procurement process but a “losing bid” rival team then challenged the validity of how the city’s selection committee scored the competition and contract award. The Hunt-Gibbs consortium said the process was flawed.
In the Woodward airport bid controversy and snafu, the competing Hunt-Gibbs team’s attorney’s argued the committee failed to properly evaluate and score the team’s proposal in the first place. Had it done so, the “losing bid” Hunt-Gibbs team would have been the clear winner from the beginning. The city’s New Orleans Aviation Board voted to scrap all the proposals and start over. Hitting the reset button meant, the thorny issue of “was the bidding process fair?” got sidestepped.
TCSI’s lawsuit disputes how the evaluation committee scored all areas of the competing bids, including the DBE portion. Discrepancies have already been found in discovery as to the Four Seasons DBE scoring being transposed, causing the score to balloon higher than normal.
The New Orleans Tribune has reported that institutional racism may be responsible for creating and maintaining an environment in which there is not one [New Orleans] black-owned general construction or design and build firm with the capacity to bid on a major project. The paper goes on to cite how local economic opportunity and equity is diminished by the commonplace phenomenon of construction sites filled with Mississippi license-plated cars and vehicles with non-Orleans Parish [suburban community] decals.
Roadblocks to DBE programs are considered to be particularly prominent, as it relates to the construction industry.
The Crescent City’s citizens are looking for real minority-owned businesses, legitimate black-owned businesses and real DBE programs in the city, and economic parity.
Black jobs matters. Particularly in New Orleans, an economically challenged city that ranks in the nation’s top ten cities for the highest percentage of African-American residents. Census studies say New Orleans is more than 60 percent black. Yet the overall black-white job gap and disparity between workers isn’t closing. Blacks don’t just struggle to open the door and get jobs, like women, they also fight to get paid the same as their white peers. Figures from a 2007 study cite 28.9 percent of the city’s businesses are black owned and 30.4 percent of businesses are woman owned.
Many of these minority-owned businesses that seek economic prosperity are systematically denied opportunity by being bled out of DBE participation.
Meanwhile, the Four Seasons-Carpenter-Woodward billionaire group [now a Delaware corporation Two Canal Owners LLC, registered as foreign corporation in Baton Rouge, Louisiana] is airing a splashy multi-media campaign of paid DBE advertisements.
Social media ads and email blasts boast of the Four Seasons group’s DBE prowess and reiterate their “commitment” but announce that the city itself will now monitor the WTC project DBE program.
Big Oil spokesperson Greg Beuerman has also recently issued press releases for the Four Seasons group and serves as the press contact. Beuerman and his firm specialize in crisis communication and litigation communication. He has a long history as a spokesperson for oil and gas companies Shell, Chevron and BP.
The trial court will rule if city had the legal right to let down it’s taxpaying citizens to the tune of a large fortune, by accepting a lowball offer for the WTC site, to the apparent benefit and profit of the Four Seasons-Carpenter-Woodward group.
Court watchers say that the landmark courtroom battle, with key city officials and other power brokers on the witness stand, promises to deliver plenty of colorful fireworks, details and testimony. The plot thickens.
Louisiana is state known for colorful, controversial and confusing court cases, politics and politicians. It’s a part of Louisiana’s living traditions.
MEDIA CONTACT:
Adam Farragut
PR Firm: The Publicity Agency
Email:
Phone: 813-708-1220 ext. 7778
Website: www.thepublicityagency.com
SOURCE: Two Canal Street Investors, Inc.
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