REACH for the Future
July 28th, 2016
Omaha is trying to help small and minority-owned businesses. But critics say one of the main programs itâ€™s using is actually counterproductive. In the first part of the series â€œReach for the Future,â€ KVNOâ€™s Ryan Robertson looks at that programâ€™s impact on local contractors.
Inside Omahaâ€™s old Liberty School on 60th Street, in a second floor classroom, Paul Ciechomski pushes a squeaking, 70-pound red roller over some old carpet that wasÂ recently re-glued.
â€œWeâ€™re just trying to re-attach it. They donâ€™t want to replace all of the flooring. Theyâ€™re just wanting to do repairs,â€ he said.
Ciehomski is foreman for Future Construction Specialties, a small company with a three-man crew. Ciehomskiâ€™s wife, Tina Diaz-Ciehomski, is the owner.
â€œWeâ€™re working with Sampson Construction Company. They brought us in here doing the flooring ,â€ Diaz-Ciehomski said. â€œTheyâ€™re going to be placing two schools here, Western Hill and Bell Ryan, so what weâ€™re doing is getting the floors ready so they can bring in the school equipment.â€
Diaz-Ciehomski has been in the construction business for 16 years, but said she just couldnâ€™t find a way to make Future Construction Specialties bigger. That all changed last year when she joined Omahaâ€™s new REACH program, and started getting sub-contracts through larger firms.
â€œIt gave us the opportunity to work with these larger contractors and lt them see what weâ€™re capable of doing and seeing our job performance,â€ Diaz-Ciehomski said. â€œIt [helps] getting our foot in the door with these bigger contracts.â€
REACH started as a way to help small contractors from poor neighborhoods like North and South Omaha, where many blacks and Latinos live.
Winsley Durand works for the Omaha Chamber of Commerce, and is the executive director of REACH.
â€œThe REACH Program is a comprehensive program of education for small and emerging businesses,â€ Durand said. â€œIt helps pull together resources, education, and access to capital so small businesses can be as successful as they can be.â€
Durand said the biggest challenge facing small businesses is access to capital; so as part of the REACH programming, the Chamber hosts classes on financial literacy and credit remediation. Durand said small businesses that donâ€™t qualify for traditional financing are also given access to special funding.
Â He said, â€œIf a contractor has an approved invoice, theyâ€™ve done some work but itâ€™s going to be 60 days before theyâ€™re paid, this program will provide them financing with that invoice being used as collateral to get them some cash flow to continue paying employees and purchase equipment.â€
Â In its first year, REACH helped secure almost $900,000 in financing for small businesses. All the contracts secured by REACH participants are worth about $3.5 million
Durand said so far, the REACH program has been more successful than heâ€™d initially envisioned for its first year.
But not everyone calls REACH a success. City Council President Ben Gray represents North Omaha, an area REACH is designed to help.
Before the program, there were 190 certified small and emerging businesses in Omaha. Now, there are more than 280. Gray said instead of helping existing contractors, REACH is flooding the market with inexperienced people. He said that goes against the spirit of the original small and emerging business ordinance passed by City Council members in 2010.
â€œ[The ordinance] was intended to provide opportunities to individuals who live in high poverty areas to help them gain work, build capacity on their jobs and to build wealth,â€ Gray said. â€œThat was the key, to build wealth. As you continue to increase the numbers, the pie gets smaller, and the ability to gain wealth wonâ€™t be there.â€
Gray said when the Council passed the original ordinance, he hoped around 30-40Â businesses would emerge as the go-to sub-contractors for the areaâ€™s larger general contractors. The idea, according to Gray, was build up a few businesses to employ more and more people, and possibly grow into a general contractor. But Gray said that hasnâ€™t happened.
â€œWhen you do things like weâ€™re doing now, when youâ€™re trying to get as many in the program as you can get in the program, thatâ€™s when mistakes happen,â€ Gray said. â€œThatâ€™s when people who really donâ€™t have the skillsets get on the job, mess it up, and then someone has to come in and do it over again. And in every single instance, thatâ€™s going to cost the taxpayers money.â€
But back in the classrooms at Liberty School, Tina Diaz-Ciehomski said REACH isnâ€™t flooding the market, but creating opportunities. Like when a contract she had through CHI Health went from $60k to $120k after CHI saw the quality of her crewâ€™s work and hired them on again.
â€œI think these small businesses should come in and really take advantage of these opportunities,â€ Diaz-Ciehomski said, â€œbecause you wouldnâ€™t get it any other way.â€
Â REACH contractors are doing work in all parts of the City, mostly in North Omaha. But in order to meet the long-term goals of the program, a new generation of contractors will need to be trained. Weâ€™ll have more on that side of the story in Part II.
Â A year ago, the Omaha Chamber of Commerce created the REACH program. The goal of the program is to help mostly minority owned businesses in North and South Omaha, by giving them the tools necessary to compete. Â In Part 2 of the special report â€œReach for the Futureâ€, KVNOâ€™s Ryan Robertson reports on how certain partners in the REACH program are developing new ways to educate tomorrowâ€™s contractors.
Itâ€™s Tuesday night at Metro Community Collegeâ€™s Express Campus in South Omaha. More than a dozen men and women are sitting around a table full of computers, waiting for class to begin.
Mario Alberto Hernandez is one of them.
Through a translator, Hernandez said, â€œI came here 15 years ago. I started working for a general remodeling company. After one of the last jobs I had with that company, I really liked Omaha and I wanted to stay here.â€
Armando Salgado was the translator helping me talk to Hernandez. Salgado also leads the class Hernandez and his classmates are attending.
â€œI used to do this a lot 1-to-1â€™s, you know just me individually meeting with 1-2 people,â€ Salgado said. â€œItâ€™s a lot easier to meet one-to-the whole classroom.â€
Salgado leads a 10-week course, called the Contractors and Business Academy. Itâ€™s put on as part of the Omaha Chamber of Commerceâ€™s REACH program.
Every week, the students, who are adults looking to grow or start their own businesses, are taught certain business fundamentals from area professionals.
The first five classes focus on things like accounting, financing, things useful to any entrepreneur. The second half of the course focuses on construction related topics-bonding, bidding, that sort of thing.
Salgado, an Omaha businessman in his own right, said he started teaching Latinos what he knows because they make up the fastest growing population and business sector in Omaha, but many are still living in poverty.
Even for people who are self-employed, like Mario Hernandez, navigating the business world is tricky, and mistakes costly. Which is why he was more than willing to pay the $100 tuition fee for the course.
â€œI initiated the business from what I learned from others. I really never had anything concrete, so thatâ€™s why I decided to take this course, to learn all the things to not only start a business, but maintain and grow a business.â€
Â Hernandez is part of the second group of students to go through MCCâ€™s Contractors & Business Academy. Several of the graduates from the first group have already started their own businesses.
But as Jim Grotrian, the Executive Vice President of Metro Community College explained, there are plans to expand the type and scope of classes MCC is offering as part of the REACH program.
â€œWeâ€™re going to have a new, 100,000 square foot building dedicated solely to the construction trade, in addition to the technology and other career services,â€ Grotrian said. â€œI like to mention that because the solutions today as we think about REACH are very programmatic, and weâ€™re taking advantage of what is available today. But once we have our new facilities open, our solutions and the potential will be exponential in how we will be able to contribute as an education provider.â€
Kiewit Building Group is constructing the new state of the art facilities, which represent an investment of around $90 million. The work is expected to be complete sometime this fall. According to Grotian, no other school in the nation offers a comparable construction education program.
Kyle Marler is Kiewitâ€™s on-site Project Manager. In other words, heâ€™s the guy making sure Metroâ€™s new buildings get built. But Marler doesnâ€™t just sit behind his desk delegating tasks. He also helps teach the Construction and Business Academy.
Marler said, â€œExpanding the sub-contractor base is always important for any area. Omaha is no different. We want to keep getting fresh contractors in to maintain competition.â€
Construction of MCCâ€™s new facilities started before the Business Academy courses did, but Marler said that isnâ€™t stopping Kiewit from reaching out to those students.
â€œPart of what we ask them to do is fill out an info sheet,â€ Marler said, â€œthat info sheet is passed along to our pre-construction estimating department, and that gets them on the notification list for things beyond this project.â€
Winsley Durand with the Omaha Chamber of Commerce said the relationship between Kiewit, Metro Community College, and some of Omahaâ€™s minority contractors is exactly the type of thing for which the REACH program was created.
â€œAs these small firms from our underserved areas are creating jobs and becoming more successful and hiring more people, they are helping the economies on a very, very localized basis,â€ Durand said.
Contractors from under-served areas, according to Durand, are more likely to hire people living in those areas. More people with jobs means more money for families and a greater chance of ending the cycle of poverty plaguing North and South Omahaâ€™s minority communities.
Put another away, by helping people where they live, we can all reach for a brighter future.
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