November 7, 2019

To:  Bob Clark, Clayco and Maxine Clark, Build-A-Bear

First, let me say I love the concept of the Delmar Divine project.  This is an incredible move in the right direction for our city, for our industry, for diversity.  This is about as public an example of doing the right thing at the right time as I have ever witnessed.  The implications of this project extend into forever and I commend your commitment, your leadership and your vision.

As a non-profit consultant to the minority contracting community, I am working with many firms that will be a part of this project as well as many more firms that have high hopes of being included somewhere in the mix.  I am doing my part to make sure excitement is in the air over this project throughout the design and construction industry in St. Louis.  I will be preaching to many at my upcoming PEOPLE meeting to be held at the Tarlton home office on November 19th and my message will be for the minority contracting community to get involved and stake a claim in this project, be a part of its success.

I need your help though.  Through my PEOPLE (non) organization which i founded six years ago and through my mentoring and consulting work I perform in my retirement, I am associated with some seventy-five plus firms owned by minorities, which includes all races, woman owned firms, certified and non-certified, union and non-union.  They all have one thing in common; lack of available capital to support them in their current needs, let alone to fuel their growth.  This lack of capital keeps them from even thinking about getting involved in projects the size and complexity of Delmar Divine–they simply cannot afford to ride through the payment terms imposed on them by virtually every owner and GC in town. Payment terms that exceed 30, 60, 90 days and beyond stomp on the dreams of minority firms.  Quite frankly, these payment terms do not work for any trade contractor, minority or majority, but I will save that message for another day.  

I understand that special payment arrangements may be arranged on the Delmar Divine project for those that need them.  Well, let me clearly shout that ALL OF MY CUSTOMERS NEED THEM. 

Personally, I hate the thought of “special payment arrangements.”  This puts the minority firms in an exception position from the very start.  Plus, without a clear definition of what “special payment arrangements” are, it puts most firms in a difficult negotiating position–akin to begging, in my humble judgement.  I implore on the leadership of the construction effort on this project to define payment terms for trade subcontractors in a way that works for all.  The simplest solution–and one that worked for 45 years of my 57 year career in this industry–is for the GC to be paid by the tenth of the month, every month, and for the trade contractors to be paid shortly thereafter, no later than the fifteenth of the month.  Possibly on this project, all trade contractors may be paid on the tenth of the months as well, that would be my preference.  I would hope that a procedure could be established upfront where the participating minority contractors can pick up their checks at a set location on the tenth of each month or have the funds wired direct to their bank accounts.

This payment procedure would allow the participating firms to fund their payroll obligations, including Federal and state withholding taxes and all union benefits and obligations on a timely basis, void of any penalties and interest and damages of any sort.  This would also allow them to meet their obligations to their material suppliers and their equipment rental suppliers, most of which do not extend terms past thirty days to minority owned firms.

I see this project as a shining light on a huge mountain top sitting within our industry; an example for diversity beyond any example we have seen to date; a chance for minority owned enterprises to gain the confidence and the experience they need to advance to another level; to set themselves up for further success in our industry past Delmar Divine.  My understanding is that all involved in the leadership of this project desire the same results for all firms participating in this project.  You have taken some momentous steps to bring this project to reality; I respectfully request that you take one more step, maybe the most important step, and set some payment terms that will allow success to match your vision.

Some of the minority firms I work with will ask for special payment terms; some will not–they will simply dive in and fail at a later date.  Let’s set everyone up for success from the opening bell.  I have been looking for that one special situation; one special project in our industry that can turn around this crazy spiral we have created and accepted in regards to the way the buyers of construction services pay for their building projects and I see Delmar Divine as that project, that situation that can cause positive change.  I want to see all in our industry point to Delmar Divine as an example of what works for the firms I represent.  

I know that both of you want the same, so let’s make it happen.

Sincerely,

PEOPLE of Construction

Ronald J. Unterreiner

President