As the city of Birmingham continues to lose population— both black and white—at an alarming rate, the Birmingham City Council remains unfazed. The Council instead focuses on doling out tax dollars to city-affiliated non-profit organizations that don’t appear worried in the least that businesses are fleeing the city for municipalities that actually know how to manage commerce.
One such non-profit organization is the Entrepreneurial Center, a business incubator in downtown Birmingham. Among the items on the August 15 Council agenda was the center’s annual $116,725 commitment from the city. As earlier reported in Black & White, the Council has already pledged $200,000 yearly from 2003 to 2008 to aid in the $14 million renovation of the entreprenurial center’s new location, the former Sears Building. One year ago the projected renovation cost was reported at $12 million by the Entrepreneurial Center’s Executive Director Susan Matlock. In addition, the Council last year voted to fork over $1.5 million to purchase the blighted $3 million Sears property, with the local business community contributing the remaining $1.5 million, according to Matlock.
Serious questions remain about certain businesses supported by the Center taking advantage of the city’s generosity before moving out of Birmingham. However, some members of the Council appear mainly concerned with the percentage of minorities using the Entrepreneurial Center. Councilor Steven Hoyt was the first to inquire about minority participation. In response, Matlock ticked off the percentages. “We’re at 50 percent in minority participation right now in the Entrepreneurial Center. Of course, that’s all minorities. But I also checked African-American males. That’s 35 percent [participation].” Hoyt said he was satisfied with Matlock’s response, but Councilors William Bell and Miriam Witherspoon pressed the issue further.
“Ms. Matlock, what percentage of disadvantaged businesses, minority businesses are actually doing the contract work on the building itself?” asked Bell. Matlock responded that “we got it as high as 18 [percent] and then we ended up having to cut back some money on our roof [construction], and we lost two percent when we did that.” Matlock promised Bell that the Center was trying to increase the rate. (Council President Carole Smitherman later added that she was also “disappointed” with the minority participation on renovation of the former Sears Building).
Bell then asked Matlock what the annual $116,725 pays for. “We work with entrepreneurs who come to us for counseling to help them with strategic planning, to help them with business planning, to help them raise money,” she explained. “We do a lot of connecting with potential investors. But it also is the screening mechanism to identify companies who are looking to come into the business incubation center.”
Councilor Miriam Witherspoon was curious about the Center’s business recruitment efforts. “Fifty percent [being] minority-owned small businesses in your center may be impressive to you, but it’s not to me. Do you do recruitment or do they have to seek you out?” Witherspoon asked. “Oh, we do [recruitment[ all the time,” Matlock said. “We’ve been around for a while [since 1986], and we’re pretty well-known in the community. But we do a lot of going out and speaking to groups.” When Witherspoon asked what groups Matlock addresses, Matlock responded, “Anybody who invites us,” adding that she has spoken to neighborhood associations. When pressed for other groups, Matlock said, “All kinds of small business groups. It is a constant speaking opportunity, typically.” Matlock reassured the Council that she enjoys addressing organizations and promised Witherspoon that she would go to the western part of Birmingham “if I’m invited.”
Matlock could not answer Councilor Joel Montgomery’s query, which he has been asking for four years, about what the city receives in taxes from those businesses that have passed through Matlock’s program. “I do not track that. I do not get their specific information like that,” she explained. “What I do ask them for every year is what their gross sales are, what their gross investment dollars are, and what their employment is. And those are the numbers that we track. And from that we are able to look at economic impact.” She said that the economic impact on the community over the last five years is approximately half-a-billion dollars.
After naming two “success stories” affiliated with the Entrepreneurial Center, Councilor Roderick Royal admitted that his main problem with the business incubator was that many graduates of the program flee the city for greener pastures. “We can’t tell businesses where to locate, but certainly if they take advantage of city opportunities, we will want to encourage them to stay in the city,” said Royal. The councilor suggested that the Metropolitan Development Board and Operation New Birmingham might partner with the Entrepreneurial Center to help find space for businesses that outgrow the incubator as he praised the Center as a “good program.”
Councilor Hoyt concurred with Royal regarding businesses leaving Birmingham. Hoyt suggested that the contract be amended to require a report on the annual amount of taxes paid to the city by incubator participants. Royal refused to go along, instead urging the Council to simply allow Matlock to “agree” to provide the information on taxes. Matlock said she would be happy to provide the information but added that she was just following the procedure of other incubation programs around the country.
Adding that she is currently “mentoring an entrepreneur,” Councilor Carol Reynolds said, “Entrepreneurs are a different breed of people.” Reynolds urged area residents to drive by the Sears Building to check out the renovations at what has long been one of the city’s ugliest blights. “It is starting to be a new, vibrant, exciting, renovated facility that could spark economic development the rest of the way down First Avenue North into the western part of town.” She failed to add there is an abandoned field across the street from the former Sears property where vagrants congregate daily. A few months ago, a pair of vagrants was accused of burning down a warehouse two blocks from the Sears Building.
Councilor Valerie Abbott noted that Birmingham is recognized “nationwide” for its business incubator, which is “one of Birmingham’s big success stories.” That’s a far cry from her comments in last year’s Black & White article on the Entrepreneurial Center, when she said, “Once we’ve put as much heavy funding into something as we have the Entrepreneurial Center, they’re going to have to show they can come up with their end of the money. All taxpayers benefit from economic development but at some point these organizations need to fund themselves.” The City Council approved the Center’s funding, with Councilors Hoyt and Montgomery voting against.
Later in the meeting, the Council approved $527,456 to the Metropolitan Development Board “to provide services on behalf of the City of Birmingham which includes increasing and improving the economy of Birmingham through the attention of jobs and industry,” according to the wording of the resolution on the Council meeting agenda. The Council also voted $350,000 to Operation New Birmingham “to pursue racial harmony through racial justice and to coordinate planning and development of the City Center.” &