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The Southern magnet.

In Atlanta, business is the bottom line. Over the past 20 years, no other American city has done a much to position itself as a vibrant economic hub and to attract industry to its midst. Led to the forefront by two, two-term African-American mayors, business, including black business, has flourished and prospered. Dubbed the new city of opportunity by corporations, entrepreneurs and professionals, Atlanta seems the place to be in the '90s.

"Atlanta is the place to be," says Vernon Skipper, senior vice president of marketing for Grimes Oil Co. Inc., a $36 million Boston-based BE 100s petroleum firm. Last October, the company established a regional branch in the city. "It made sense to position ourselves now to be ready as things unfold. We're here for the count," says Skipper.

Atlanta's economy is characterized by diversity. In the past decade, the Atlanta Metropolitan Statistical Area, comprising the city and 18 surrounding counties, experienced its greatest economic growth, becoming the fifth fastest-growing urban centr in the country. Between 1983 and 1991, the area attracted 1,403 new businesses including 339 international firms, adding more than 400,000 new jobs. Service industries provide 26% of the nearly 1.5 million jobs in the area. Retail trade is next, with 17%, followed by government (16%), manufacturing (12%), sholesale trade 99%), transportation (9%), finance, insurance and real estate (7%) and miscellaneous, including contruction (4%). From 1980 to 1990, Atlanta's population increased by almost one-third, growing from 2.1 million to 2.8 millio, making it the 12th largest metropolitan area in the country.

The city catapulted itself into the nationalspotlight when it snagged the 1988 Democratic National Convention. In 1990, Atlanta played host to nearly 2,000 conventions, attended by 1.8 million delegates who pumped over $1 billion into the local economy and created more than 20,000 new jobs. And, as the piece de resistance, the city will host the 1994 Super Bowl and the Summer Olympic Games in 1996.

But is Atlanta really all it's cracked up to be? In some ways, yes. In others, the city faces tough challenges to its progress.

Black Economic Development

Atlanta's reputation as a black business mecca began to develop at the turn of the century when W.E.B. DuBois came to Atlanta University (AU), now Clark Atlanta University (CAU), to teach and continue research for his sociological studies on African-Americans in 1898. One phase of those studies, which focused on black entrepreneurs, created a surge of interest in black economic development. As a result, business courses were lauched at AU, where some of the city's earliest black entrepreneurs were educated.

Since the early 1970s, Atlanta has enjoyed the reputation as a mecca for black economic development. Perhaps the most significant boost to this image came when the city elected its first black mayor Maynard Jackson, who served two terms from 1974 to 1981, ushered in 18 years of black political leadership at city hall and helped create owned companies tripled, from 3,961 in 1977 to 11,804 firms today. Atlanta now ranks sixth among U.S. cities in the number of black-owned businesses. Between 1982 and 1987, the city ranked first in the average annual growth rate for black-owned firms at 13.4%.

In 1976, focusing on what he called the "politics of inclusion," Jackson established a 25% minority participation goal on construction at Atlanta's Hartsfield Internation Airport. later, he called for a 30% goal for all City of Atlanta contacts. Jackson also met periodically with decision-makers at majority firms to discuss the merits of affirmative action. His message: Doing business with minority firms is good business for the city of Atlanta.

In 1982, Jackson passed along the reigns of power to Andrew Young, who became the city's second, elected, two-term black mayor. During the Young administration, Atlanta's minority participation goal was increased to 35% on all city contracts. By this time, the city's Minority and Female Business Enterprise (MFBE) program was a model for the nation: Not only because it created greater access to public work, but because it paved the way for Atlanta's minority-owned firms to do business in the private sector as well.

Between 1973 and 1988, the City of Atlanta awarded almost 1,600 contracts to 612 minority-owned firms. The average of those contracts was more than $300,000. During the same period, minority firms received 38% of the $283 million in joint-venture contracts awarded by the city.

"Fair government created an environment for success for all people," says Herman J. Russell, chairman and CEO of H.J. Russell & Co. "I was ready to take advantage of opportunities when the doors opened. That's the key." Russell, who started his contruction empire in 1952, won $75.2 million in contracts through the city's MFBE program between 1980 and 1990. He is the only Atlanta entrepreneur whose company still remains on the BE INDUSTRIAL/SERVICE 100 after 20 years. In 1972, the company grossed $6 million; in 1991, it posted sales of $143.6 million.

There are now 10 Atlanta-based companies on the BE 100s. The other Industrial/Service firms are: The Gourmet Cos., a $34.3 million food services management company; The Thacker Organization, a $30.8 million construction and construction-managment company; Bronner Brothers, a $19 million hair care products manufacturer; Telephone Advertising Corp. of America Inc. (TELADCO Inc.), and $18.6 million firm that provides advertising at telephone kiosks; and Williams-Russell and Johnson, an $11.3 million construction waste-management and engineering company. On the BE AUTO 100, the Baranco Automobile Group posted $163.9 million in annual sales last year, while Citizens Trust Bank and Mutual Federal Savings and Loan of Atlanta, had $111 million and $36.2 million in assets, respectively, making the BE FINANCIALS LIST. With $140 million in assets, the 87-year-old Atlanta Life Insurance Co. makes the BE INSURANCE LIST completing the group.

Croson Derailed Black Business

Although business was booming in Atlanta and many African-Americans prospered, all was not well. In 1989, the Georgia Supreme Court struck down the city's MFBE program, following the U.S. Supreme Courts decision in J.A. Croson v. the City of Richmond. The program's demise brought the black business community's problems painfully to light.

In response to the court's decision, the City of Atlanta commissioned Andrew F. Brimmer, president of the Washington, D.C.-based Brimmer & Co. Inc. and former Federal Reserve Board governor, along with former U.S. Secretary of Labor, Ray Marshall, to conduct a study of the city's black businesses. In their 1,128-pager report, Brimmer and Marshall concluded that racial discrimation in Atlanta was "long-standing, deep-seated and continuous."

Further, the study found many of the city's black-owned businesses to be heavily dependent on public-sector work. While majority-owned construction firms derived 80% of their revenues from the private sector, black-owned construction firms obtained only slightly more than 7% from that source. In 1988, a year before the court decision, minority firms were awarded 34.6% of city contracts. But by the third quarter of 1989, minority procurement on public contracts had fallen to 14.5%--a 50% decrease.

Last fall with Maynard Jackson, architect of the city's first affirmative-action program and minority business enterprise back at the helm for his third term in office, the City of Atlanta passed a new ordinance to replace its invalidated MFBE program. Based upon documented levels of past discrimination, the new Equal Business Opportunity Program (EBOP) set participation goals of 30% for African-Americans, 3% for women and 1% each for Hispanic, Asian and Native American businesses. It also requires contractors who bid on city work to submit evidence of previous "good-faith efforts" to include minorities on both public contracts and non-city, private-sector projects.

The Atlanta Business League (ABL), a 350-member organization of primarily minority entrepreneurs, also is working to help these firms increase their business opportunities. Over the past 18 months, ABL has collaborated with the Atlanta Chamber of Commerce and the City of Atlanta to develop a Small Business Mentoring Program in which minority firms are matched with majority companies. The mission of the program is to increase the business acumen, long-range development and access of these companies to the broader marketplace. "While Croson may have set us back a step or two, we are moving forward in every way we can to form public and private partnerships, and to assist in getting the message across that doing business with black business is good business for our city," says ABL President Valerie Montague.

Forming partnerships between minority-owned companies and private-sector firms is the focus of the Georgia Minority Supplier Development Council (GMSDC). In 1990, 23% of the corporate and government members of the GMSDC spent $586 million with minority suppliers. Curtis Bull, vice president of sales and CEO of Sentry Plastics & Packaging Inc., says his $2 million distribution firm earns 80% of its revenues from private-sector companies that are sensitive to minority issues. Many of thos companies are members of minority purchasing coucils. "Membership in GMSDC afforded us a platform to get introduced to many of the companies we target for business," says Bull, who joined the council when he launched his company nine years ago and now serves on its board of directors.

Less dependent on the public sector for business, GMSDC minority firms tend to be larger than other black firms in Atlanta, earning a median of $1.8 million in annual revenues. Regardless of size, black business owners frequently cite a common obstacle to their continued growth and development--lack of capital.

"Atlanta's banks have never done anything for black businesses," says Herbert Hamlett Sr., president and CEO of TELADCO Inc. In the process of launching his 4-year-old firm, a pioneering concept that combines advertising and telecommunications, Hamlett got the cold shoulder from most Atlanta banks. Only one, NationsBank, extended him credit based on a five-year, $10 million performance contract he had with Southern Bell Telephone Co., one of the AT&T Baby Bells. Not until his company made the BE 100s in 1991 did other banks begin to pursue his business, says Hamlett.

Corporate Relocations Create Jobs

Attracted by the city's transportation network, which includes Hartsfield Atlanta International Airport-its relatively low labor costs and its aggressive, pro-business attitude, firms like United Parcel Service, Saab of America and Holiday Inn Corp. have recently relocated their headquarters to Atlanta, joining 19 other national companies including the Coca-Cola Co. and Turner Broadcasting Co. The city's largest employers--those with more than 5,000 workers--include AT&T, Delta Air Lines and IBM Corp., as well as city and county governments and school districts, the State of Georgia, the Department of Defense and the U.S. Postal Service.

Clearly an entrepreneurial town for African-Americans, Atlanta is gradually developing as a corporate town for blacks. Although gains have been steady, black advancement has not been extraordinary. In the '70s, companies were fairly willing to brag about their success at hiring and promoting blacks, particularly in upper-level positions. Now, many companies claim they don't track career progress and development by race. Others lump African-Americans into a broad "minorities" category that includes all ethnic groups and women. One corporate relocation specialist confides: "Tracking was a lot easier 10 or 15 years ago when companies were meeting their quotas."

According to the U.S. Department of Labor, fewer than 5% of the Atlanta black work force held jobs as executive managers and administrators in the mid-1970s. By 1990, 20.2% worked in those categories. Blacks in professional and technical areas also grew, from 7% of the work force to 11.8% during the same period.

While black political clout in Atlanta has helped provide access to corporate management jobs, it has done little to lift the glass ceiling or to broaden the scope of management responsibilities entrusted to African-Americans. Observes another black manager, "Where you've got VPs, they are more likely to be in a staff role, an equal opportunity role, or in a role dealing with their own community. Very seldom are they in operational level positions."

Although Atlanta has lured many who seek jobs and better career opportunities, black unemployment has been 9% and higher, consistently twice the rate of white unemployment. Neither has the city's economic prosperity nor its black political clout shrunk the size of the group working in low-paying service and clerical positions. Even during the '80s boom, the black labor force was made up of more than 40% of the jobs whose wages are in the $5- to $8-an-hour range.

Searching For A Better Quality Of Life

Enamored by the Atlanta lifestyle, many blacks opt to accept lesser positions rather than chase managerial jobs in other cities. Atlanta's allure owes much to that ethereal commodity known as quality of life. It has a moderate climate and rustic charm, being the most heavily forested of the major cities. Spring comes early here, with mint-green pine trees, pink azaleas and white dogwood blossoms splashing the hilly landscape with color. Autumn sometimes lingers until Christmas. Taking its cue from nature, the city blends small-town charm with big-city chic, setting an easy, smell-the-flowers pace for itself.

Home to more than 30 colleges and universities and 60 hospitals, Atlanta has a full complement of art galleries and museums, theater and ballet companies and a Grammy award-winning orchestra. The city calls itself the "Cultural Capital of the Southeast." Highly ranked in other ways, Atlanta is the 15th least expensive city in the United States in which to live. According to the WEFA Group of Bala-Cynwyd, Pa., the 1992 estimated median price for a home in Atlanta will cost $96,582 compared with a national price of $104,570.

Besides offering good job prospects and easy living, Atlanta is a city where African-Americans have had a chance to spread their wings, express their culture and flourish. The Atlanta University Center, home to six historically black colleges--Clark Atlanta, Morehouse, Morris Brown, Spelman, the Morehouse School of Medicine and the Interdenominational Theological Center--currently enroll some 11,000 students. It also serves as a cultural hub and fount of talent and ambition. Upon graduation, an estimated 25% of the center's graduates remain in the area.

For all its verve, Atlanta, to some, has not really developed a visceral personality--a distinctive character, deeply meaningful symbols or traditions. Meant to reinvigorate a languishing traditional downtown area, the revival of Underground Atlanta--a $142 million promenade and marketplace of shops and restaurants, which draw more than 10 million visitors annually--has had modest success. It was jampacked on a chilly autumn morning in September 1990 when Atlantans gathered for the announcement that the city had captured the 1996 Olympic Games. Thousands also assembel there each New Year's Eve when the city drops the Big Peach, Atlanta's version of the Big Apple in New York's Times Square. But, making Underground Atlanta a center of social life for the sprawling area has been a tall order. Because it has never been a big blue-collar town, Atlanta lacks a working-class presence that characterizes many cities. Socially, this has resulted in what amounts to a two-tiered strata: One whose uniform is a double-breasted suit with silk accessories, the other a waiter's jacket.

Some label black professionals pretentious and preoccupied with business networking. But every city has its conventions argues Eleatha D. O'Neal, whose company, Black Atlanta Transplants, counsels newcomers about how to make a smooth adjustment. "You don't just come here and try to change the rules," she says. Calling Atlanta "a who knows you" town, the relocation service president stresses to clients the advatages of volunteering as a way to make inroads. J. Veronica Biggins, executive vice president of corporate community relations for NationsBank, agrees that careers can be enhanced as much by civic involvement as by prowess in the workplace. "You've got to be willing to commit to this city," says Biggins. "If you're asked to serve on a committee and you decline, you can get left on the sidelines."

Nate Moore didn't wait to be asked. As soon as he moved to Atlanta from New York City in 1983--even before he landed a job--Moore started working on volunteer projects for the MLK Center for Social Change, the United Negro College Fund and the APEX Museum. He joined a church and established contacts with black professional organizations. "It was important for me to get grounded and to really understand the fiber of the city," says Moore who started Moore Little Inc., an advertising and public relations firm, in 1988. "Atlanta is an insider's town, but the door is not closed. If you knock on the door and bring something to bear that positively affects the lives of Atlantans, then the doors will be opened."

The value of such discrement and accomodation is not lost on black Atlanta homeowners. Much of the city's growth and development has kept its distance from black neighborhoods. Even fashionable middle-class and upper middle-class black communities find it difficult to attract sparkling supermarkets, sit-down restaurants, first-run movie theaters and upscale retail outlets that flock to comparable white neighborhoods.

Recently, residents of the 91% black Greenbriar community in southwest Atlanta were ecstatic when Cub Foods, a discount supermarket chain, announced plans to locate an outlet there. Residents hoped the groundbreaking would encourage tonier retailers to see the profits that could be made in the neighborhood, since 25% of the area's households earn more than $50,000.

Closer downtown, black residents of the West End section are struggling to attract retailers into their midst. Despite revitalization efforts and residents' visions, the area has not become Atlanta's answer to the Georgetown community in Washington, D.C. "One of the city's biggest challenges is to identify market opportunities in black communities," says Walter R. Huntley Jr., president of the Atlanta Economic Development Corp. (AEDC), a public-private development partnership chaired by Mayor Jackson. "Most data is grossly understated. Business do better than they expect to do in both areas."

The challenge, however, is to nudge developers beyond their stereotypical attitudes about black neighborhoods, including fears about crime and weak markets. Although assets include a solid infrastructure, lower property costs and easy access to the airport, many developers typically and consistently overlook the opportunities. To help reeducate skittish, would-be investors, AEDC anlyzes what mix of services underserved neighborhoods need, documents the buying power and stability in those neighborhoods, then seeks out companies to locate businesses there.

Facing Problems, Facing the Future

What surprises many is that the economic boom has not contributed more to curing Atlanta's social problems. "It's like the tale of two cities," says Atlanta City Council President Marvin Arrington. "It's the best of times and the worst of times."

Atlanta has shed its 1970s title as the nations's "murder capital." In fact, last year its murders declined 11.3% from the previous year--to 205 slayings from 231, placing it fifth among major U.S. cities. Unfortunately, juvenile violence has tripled in the past five years.

Neither has the city been spared the familiar trend of a blacker, poorer, less-developed inner city. From 1970 to 1985, the number of jobs in the city of Atlanta grew only 12%, while the number of jobs in predominantly white counties north of the city grew five times as fast. That these same couties spurned MARTA--Metropolitan Atlanta Rapid Tansit Authority--coming into their areas reduced the chances for many inner-city blacks to participate in the greatest period of prosperity. As a result, 46% of the city of Atlanta's households earn less than $15,000 annually.

Even Mayor Maynard Jackson, a key player in the city's black economic development, admits that Atlanta is not perfect. "How can we possibly proclaim that Atlanta is the promised land when statistics sadly show that we are the second poorest major city in America."

The suburbanization of job combined with general outmigration have produced an evervating effect on Atlanta schools. The city's public high schools, for example, turned more than 90% black by the mid-1980s. Public school districts in the fastest-growing counties, Gwinnett and Cobb, have few black students, while subruban DeKalb County schoold, has a 64% black student population.

On March 31 of this year, the U.S. Supreme Court ruled to end federal court supervision of the DeKalb county district's efforts to integrate its schools. Finding that the schools were largely desegregated, the DeKalb school system will not be required to improve its racial balance. Housing patterns, the district argued, led to the racial imbalance. Plaintiffs contended that the county never was fully desegregated.

In housing, the city itself accounted for only 2% of the 32% growth of new housing starts in the ares from 1980 to 1987. More than 27% of the city's housing stock is deteriorating. "Gor a city its size and reputation, we are almost at the bottom for developing enighborhoods," says Hattie Dorsey-Hudson, executive director of the Atlanta Neighborhood Development Partnership Inc. A public-private group formed last year, its goal is to revitalize inner-city communities by rehabilitating low- to moderate-income housing through neighborhood-based community development corporations. So far, the Partership has helped community groups build 22 homes and a 30-unit housing complex. "We want to awaken the communities and have them share in the commitment," says Dorsey-Hudson. "They are the ones that shoud drive the revitalization process."

If not forcefully addressed, the city's social ills eventually could put a heavy drain on the area's economy and its quality of life. But more important, such problems represent a great loss of human potential. A new program, The Atlanta Project, launched by former President Jimmy Carter aims to rally a broad scope of leaders to make a more concerted assault on crime, poverty and hopelessness in 20 of the city's poorest neighborhoods. These concerns will not be easily ameliorated. Some, such as poverty, are the result of macroeconomic forces and social policies. Others, like poor, community economic development, can be linked to the complexities of racism and stereotypical attitudes.

Many of these same factors are at the root of problems that challenge the city's black business community. Even in a robust economy like Atlant's, ensuring access for entrepreneurs to mainstream opportunities and the ability of executives to climb through corporations is critical to continued black economic development. Opportunities cannot be guaranteed, of course. But clearly, in Atlanta the promise to blacks historically has been a climate of favorable circumstances and fair access.

"The greatest thing about Atlanta is that you don't have to reinvent the wheel of success," says Richard Branch, a partner in Branch Pennington & Associates, a $7 million real estate company in the city. "The sheer number of black role models here is outstanding. That has made it much easier for me to succeed."
COPYRIGHT 1992 Earl G. Graves Publishing Co., Inc.
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:includes related article on 1996 Olympics; Atlanta, Georgia
Author:Harris, Adrienne S.
Publication:Black Enterprise
Date:Jun 1, 1992
Previous Article:Management strategies: human resources advice for emerging businesses.
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