Black in the Red

Everyone expected Charles Howze's Z Mart to be a model for minority-run businesses in Dade. In a sad way it was: It went bankrupt.

In recent weeks, the debate about boosting black business development has been informed by two lists that appeared in the South Florida Business Journal. One list shows the 25 largest Hispanic-owned businesses in South Florida. With 1993 revenues of $236,520,000, Sedano's Supermarkets of Hialeah is the top-ranked firm. Personnel One Inc., a temp agency that ranked 25th, showed revenues of $36,890,000.

The second list ranked South Florida's largest black-owned businesses. Toyota of Homestead topped the rankings with projected 1994 revenues of $35 million, lower than the 25th-place Hispanic firm.

"By and large I think it's a function of the lack of wealth in the black community," concludes John Copeland of Miami Partners for Progress, adding that the charts illustrate how difficult it is for blacks to compete for minority-designated funds.

Observes Knox: "Those lists are the most visible expression of truth I've ever seen about the state of the economy among the ethnic communities in Dade County."

Charles howze wasn't trying to save the world, not even a small slice of it. And he doesn't need all the newspaper articles and editorials and communal fretting and boardroom theorizing and Monday-morning quarterbacking that he and his enterprise have been subjected to.

"I didn't really want the burden of having to be held up as a business that the development of the rest of Liberty City rides on. It was an unexpected burden heaped on us right from the beginning," he grumbles. "I guess in a way I was naive. I guess I was sheltered by corporate life; I perceived this as a business venture to do something that's being done everywhere else. It's just a business, quite frankly. This is not a big project. It's no big deal.

"Somebody asked me, 'Well, what if the business isn't going to survive?' And I said, 'So what if it don't? Don't I have a right to fail?'"

Howze knows his failure might have a chilling effect on loans to other businesses, particularly black-owned businesses, that wish to locate in predominantly black neighborhoods. In fact, when he was applying for funding, at least one bank used the collapse of another black-owned business venture -- Long's Office Supply Company -- as a justification for not participating in the Z Mart project. (Long's was acquired by a local black businessman in the early 1980s with the support of several financial institutions, but filed for bankruptcy and liquidated a couple of years later.) "This bank said to me, 'We don't want to get into a deal like that because this might be another Long's,'" Howze remembers. "I said, 'What does that have to do with me?' It's amazing how big Miami is and how small people think when it comes to black business and, in general, business in Liberty City."

Howze's observation notwithstanding, some people are trying to think big. "In the private sector, we have an awful lot of failure. So one in Liberty City shouldn't scare anyone off," says attorney Roderick Petrey, who is also the executive director of Miami Partners for Progress. "It's going to, I'm afraid, but it shouldn't. It's too easy not to make investments in this field. We need 100 more experiments like Z Mart."

Petrey and others hope that along with Z Mart's endeavor, projects such as the hotels planned for Miami Beach and Overtown

signal a trend toward more ambitious black-owned developments -- "projects of scale" in business-speak. But they want even more. The Beacon Council's John Hall has a goal of a dozen in the next year, with the Beacon Council financing more than $50,000 per project.

While this will require new sources of funding, if not the opening up of traditional ones, it will also require careful planning -- or to employ another buzzword, "niche-ing." Explains BAC's Gregory Hobbs: "With limited sources of financing, it puts more pressure on the importance of technical assistance to define the niche for the black business owner, and says, 'You can survive in this niche, but you have to work this niche expertly.'"

In 1993 the Beacon Council undertook an effort to encourage black businesses by raising their public profile. The group created the Network 100, a list of the area's top 100 black-owned enterprises, ranked by revenue. "We were trying to create the aura, the personality in the black business community, that success is in and success is good," explains Hall. "We were also trying to identify candidates for either the black venture funds or other sources of funds."

The Beacon Council went even further, picking a Network 10 A ten businesses with the greatest potential to reach Black Enterprise magazine's "B.E. 100," a list of the top black-owned industrial and service companies nationwide. (Only two local companies figure in the magazine's current roster: Urban Organization Inc., a general contracting firm, and Solo Construction Corp., a general engineering construction firm, which rank 87 and 90 respectively.) Representatives from each of the Network 10 companies were enrolled in a minority-executive seminar at the University of Miami. In addition, each firm was given $10,000 worth of consulting services to design a five-year strategic plan, and assured of $250,000 in equity funding.

The money, unfortunately, only materialized for South Dade projects. And a spot on the list has been anything but a guarantee. At number fifteen on the Network 100, and included among the Network 10, was Z Mart.

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