Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, February 22, 1994 TAG: 9402220146
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO I{ILLUSTRATION}
SOURCE: RAY REED STAFF WRITER
DATELINE: LENGTH: Long
The developer who won the city's contract in January is the Sampson Co., a young outfit bearing the name of a 33-year-old businessman who graduated from the University of Virginia in 1983 with a C-plus average in rhetoric and communications.
Ralph Sampson now speaks the language of big business. He puts deals together.
He had certain advantages - a 7-foot-4 stature at the lectern, decade-old memories of his basketball greatness at UVa, a bunch of $100,000 investors who are professional athletes, and a business team that included state Sen. Henry Marsh III of Richmond and a squad of lawyers, architects and contractors.
Ralph Sampson can talk the talk.
Just south of Lynchburg on U.S. 29, Payne Construction Co.'s neat white office building is an understated presence with well-appointed furnishings and an impressive business history.
From origins at Roanoke's old Lucy Addison High School in 1940, James Payne launched an entrepreneurial career beginning in New Jersey with construction work by day and further schooling by night.
By the late '60s he was a minority partner (40 percent ownership) in a black-owned construction company that was positioned for a huge opportunity after urban riots swept the nation in 1968.
Bell Telephone Co. needed a $3 million building and, for public-relations reasons, wanted it erected in a Newark ghetto by a black-owned company. Payne and his partner brought the job in under deadline and under budget.
James Payne formed Payne Construction Co. in 1971 and, over the next eight years, did projects on the Princeton University campus and elsewhere.
Those days are documented in a binder full of newspaper clippings and pictures.
"Crew 70 percent black erects Newark building," reads a New York Times front-page headline from Nov. 13, 1971. The story says the job was completed on time despite opposition from labor unions.
Similar acknowledgements are contained in clippings from the Daily Princetonian, the university's student newspaper. Library, kitchen projects and the refurbishing of Witherspoon Hall, a campus landmark, are among the credits.
When Payne Construction came to Virginia about 1980, it was an established general contractor moving closer to home. Those advantages didn't knock down all the barriers, though.
Many banks, bonding companies and subcontractors hesitated to do business with a black-owned company, Payne said.
Nevertheless, Payne-built commercial structures dot Virginia and neighboring states. The Veterans Administration Medical Center in Salem, Virginia Tech and the Radford arsenal have been sites for Payne jobs. Five Roanoke churches are on the Payne list: First Baptist on North Jefferson Street, Hill Street Baptist, St. Gerard's Catholic, Macedonia Baptist and Loudon Avenue Christian Church.
Not coincidentally, they're black or mostly black churches.
Payne Construction Co. has walked the walk.
In Roanoke, Ralph Shivers of Branch Highways Inc. views minority contracting from the standpoint of a majority-owned company that must comply with mandated set-asides. These are intended to assure minority involvement in government-funded construction projects.
Dealing with undercapitalized subcontracting companies, black or white, carries risks that deadlines will not be met or vendors won't get paid on time.
"We set in safeguards to catch problems early enough to mitigate costs," Shivers said. Branch Highways routinely guarantees that most subcontractors' suppliers will be paid.
Branch tries to get a list of all vendors and stay in contact with them to make sure payments are up to date, Shivers said. "In fairness, that goes on in non-minority contracting" as well, he said.
The hurdle for road builders is the percentage of the job that must go to minority companies. "Those percentages are hard to find and may not be available in normal circumstances," Shivers said.
As a result, minority companies sometimes receive subcontracts for work the prime contractor could do for itself - an expensive solution, Shivers said.
A consultant to minority companies said prime contractors can avoid a financial hit by carefully scheduling their own workers to be busy on projects it has under way elsewhere.
Shivers restricted his comments to the engineering aspects of minority contracting, and avoided the social aspects of set-aside programs.
Majority contractors on government projects are given a mandate to regrade the economic playing field.
The Sampson Co., Payne Construction and road builders reflect facets of an invisible barrier: Even after 40 years of legislated integration in the United States, minority contracting is an enterprise with birthing pains.
"There are a number of good minority contractors who are conscientious, competitive and successful," Shivers said.
Those who have succeeded overcame tall odds, the tallest of which usually is financing.
Sampson gets much of his cash from 17 or more professional athletes who rather easily can afford the investment.
Payne established his net worth, and credit, in New Jersey before coming to Virginia.
Minority builders trying to organize a company face additional obstacles - finding a lawyer, accountant and bank with whom they can have good relationships.
Payne, 71, said the problems thrown at minorities can be subtle, and yet direct. One year, a bank renewed his line of credit on non-letterhead stationery. He changed banks, finding the letter both insulting and a reflection on the document's credibility.
Suppliers and subcontractors can present other problems - refusing to establish a relationship with the company, being inflexible on changes or offering too-high prices. "Highball" bids are not racially exclusive, but black contractors get more than their share, Payne said.
Architects may fail to recommend black-owned companies to their clients.
Payne survives by keeping bookshelves full of the industry's latest prices for materials and labor, and using the newest in computerized estimating, drawing and planning equipment.
Only briefly, when his company first moved to Virginia, did Payne bid on any government projects that carried minority set-asides.
"We felt we needed to make it on our own," Payne said, referring to himself and the company's two vice presidents - Keith Payne, 37, his son, and Charles Price, his nephew.
Price, 46, who commutes from his Roanoke home, is chairman of the Roanoke Planning Commission and a coach and director of the Northwest Recreation Club.
In January, the Virginia Department of Minority Business Enterprise, a state agency that assists new companies, listed 216 businesses recently certified to bid on contracts. Only five are located west of U.S. 29 in Virginia, and none are general contractors.
Among road builders, three minority contracting companies in the Roanoke and New River valleys are approved for state road projects.
Statewide, about 500 minority- and women-owned businesses are certified by the as suppliers or contractors.
At the Richmond office of Associated General Contractors, an industry lobbying group, director Steve Vermillion listed three minority-owned general contractors besides Payne who are regarded as established and solid. They're in the Richmond and Tidewater areas.
The Sampson Co., formed less than a year ago, focuses on development and wasn't well-known to others in the industry.
Ken Farino, a lawyer and consultant with the Sampson Co., said its first venture was buying and leasing property in Shockoe Bottoms, an old Richmond neighborhood that's being redeveloped.
The city health center is the first high-profile Sampson project. The developer's role will include arranging the financing and hiring architects, engineers, a general contractor and lawyers. The Sampson Co. will coordinate the participants and oversee construction to the extent necessary, Farino said.
The 56,000-square-foot center, which will include clinics and other health-care outlets, will be the home of the Richmond Health Department. The Sampson Co. will lease it to the city for $21.50 per square foot, or about $1.2 million a year. Farino said the space is fully leased.
by CNB