St. Louis Park considering diversity benchmarks for developers

St. Louis Park is considering racial equity and inclusion goals for developers that could result in a policy requiring projects to meet diversity benchmarks in order to break ground.

The initiative, first discussed during a City Council study session Monday evening, would combine two of the city's strategic priorities — affordable housing and racial equity.

Some city leaders said that diversity goals will be challenging to enforce. Still, the council has directed staff to begin researching policy revisions for developers that the council will consider adopting.

"Just because it's difficult doesn't mean we shouldn't try to do good," said Council Member Tim Brausen, who worked with the Minnesota Department of Transportation on a coalition before joining the council to create goals for hiring minority contractors for state road projects.

He said the challenge for MnDOT was a lack of diverse workers with the right skill set.

The Star Tribune reported earlier this month that the construction industry, including MnDOT, rarely meets workforce diversity goals. Over the past two years, there have been dozens of instances when companies contracting with the state didn't employ a single woman or person of color as part of their construction team.

Council Member Lynette Dumalag, who is a commercial real estate broker, said generational, family-owned developers should be asked to expand their networks to include diverse companies with the intent of using real estate as an opportunity to create upward mobility.

"This is not just about hiring minority-owned businesses," she said. While the state and Hennepin County set similar goals and their work serves as a benchmark, Dumalag believes the work of St. Louis Park "delves deeper" and the city's initiative "is going to be one of the first."

Mayor Jake Spano said in his day job working on minority entrepreneurship and workforce diversity as deputy secretary with the Secretary of State's Office, he knows companies struggle to change the makeup of staff on executive levels while it's easier to do at entry-level positions. Spano was supportive of the council considering diversity goals that he eventually would like to see as a requirement for developers, but he said the idea needs more fine-tuning.

Spano said a "treasure trove" of resources is available through the Secretary of State's Office, which lists every business in the state owned by women, people of color or recent immigrants, and it would be valuable to point contractors in the direction of that list.

He also encouraged staff in its research to talk with the National League of Cities to see how St. Louis Park can learn from other cities in implementing and enforcing the goals.

He said there is enough support to move forward and have staff research the provision for developers. Part of the potential policy changes would look at requirements for developers requesting tax-increment (TIF) financing.

Council Member Nadia Mohamed, who initiated the discussion along with Dumalag, said she wants to ensure that when the city approves tax-increment financing that the developers "are prioritizing racial equity the same as we are" and that the city is "putting our money where our mouth is."