Members of Black Chamber of Commerce unhappy with proposed terms of new airport deal

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KANSAS CITY, Mo. --  A revised memorandum of understanding from the company picked to build a new airport in Kansas City will be discussed Thursday.

Members of the Black Chamber of Commerce contend the revised memorandum of understanding with Maryland-based company Edgemoor doesn’t do enough to support minority workers and business owners in the city while building the projected billion dollar airport.

The Black Chamber of Commerce sent out their own memo asking the airport committee to reject the current memorandum of understanding based on four points of contention which include:

Edgemoor Makes No Substantive Investment in Kansas City
Edgemoor seeks to maintain the status quo
Edgemoor Changed Its Financial Terms
Edgemoor’s MBE Goal is insufficient

KC City Council member Jermaine Reed says he respectfully disagrees with the notion that only 20 percent of minorities will be involved. Reed says throughout this negotiating process, he and the council have made minority involvement a priority, and he believes the current memorandum of understanding does as well.

“Edgemoor’s commitment has been 35 percent from a minority perspective in three different areas: construction, workforce, and professional services on this actual contract," Reed said.

Reed says this is a very complex issue, and he and the council have seen more than 2,000 pages so far.

The meeting is scheduled for 9:45 a.m. Thursday, the committee could move it forward to the city council or hold it in committee for another week.

Read the full news release from the Black Chamber of Commerce below. 

"The Memorandum of Understanding (MOU) between Edgemoor Infrastructure & Real Estate and the City of Kansas City should be rejected because it is not transformative for this community.  Since July 2017, the Black Chamber of Commerce of Greater Kansas City, Inc., in consultation with the KCI Airport Urban Consortium, has advocated for a KCI Airport Project that would be transformative for the minority community and the City of Kansas City, Missouri.  This is an unprecedented opportunity to revitalize the minority community and to make the City a viable contender in competition with its peer cities for the 21st century.  The KCI Airport Project  should serve as the cornerstone for a new vision of progress for Kansas City where corporate leadership, labor, construction contractors - large and small, black and white - community groups, and our chambers of commerce and schools forge new relationships in developing sustainable minority enterprises and making workforce inclusion a top priority.

Unfortunately, throughout the process Edgemoor has failed to demonstrate a meaningful commitment to developing a single terminal airport project in a truly transformative manner as demonstrated by the following:

  1. Edgemoor Makes No Substantive Investment in Kansas City: The original Edgemoor submission was generally devoid of defined and substantive community benefits components and workforce composition goals. Even after members of the City Council insisted that the MOU include a robust Community Benefits Agreement (CBA), Edgemoor has still failed to make an investment toward a comprehensive CBA.  Under their MOU terms funding for most, if not all, of the measures are funded from project revenue, and are contingent on or subject to approval of the FAA.  Funding for Community Benefits should be a binding obligation of the developer from developer profits – not airport revenues.  Edgemoor’s plan, does not assist the community because the community has to pay for it.  Much of the funding cost for the programs envisioned appear inflated and some are for Clark Construction employee/consultant staffing positions.  These additional costs actually increase Edgemoor’s profit.  Any Community Benefit not borne in cost by the developer and subject to or contingent upon FAA approval is unacceptable.
  2. Edgemoor’s MBE Goal is insufficient: Edgemoor’s MBE goal of 20% is insufficient, not transformative, and significantly less than the 28% the City achieved in fiscal 2016 for construction services.  That is shameful. More importantly, MBE goals on this once in a generation project should exceed 28%, as an achievable transformative goal if the City and developer are sincere in their commitment to minority business development.  Arguments to the contrary are simply unworthy of belief.
  3. Edgemoor seeks to maintain the status quo: In its initial proposal and in the MOU terms currently proffered by Edgemoor and currently being considered by the City Council, Edgemoor fails to fully embrace the concept of a transformative project.  The lack of significant minority workforce goals is very troublesome. If history is prologue, without specific workforce composition goals most of the high paying jobs will be filled by white men and the few minorities hired will perform low paying tasks directing traffic and cleaning the site.  An MOU without workforce goals reflecting the demographics of the community is not transformative and therefore unacceptable.
  4. Edgemoor Changed Its Financial Terms: It appears Edgemoor has changed its financial terms from a guaranteed maximum price (GMP) to a lump sum in this new version of the MOU, which means they collect the contracted price if they under run the cost of the project rather than returning that money to the City.  The lump sum approach is far less transparent compared to GMP where every dollar is reported and accounted for.  Provided the project pays all the costs for Community Benefits, it is conceivable that Edgemoor could pocket another $29 million of profit. We believe that would be the ultimate community disservice for which we would never approve.

For the forgoing reasons it is clear that Edgemoor is not committed to transformative minority participation in the development of a new airport terminal.  The City Council should not partner with a company that is reluctant to invest in and do what’s best for the citizens of this great City.  We therefore, urge the Council to reject Edgemoor’s proposed MOU as non-transformative and immediately commence negotiations with the second ranked proposer in accordance with City procurement practices."