Two locally headquartered firms rejected allegations in a lawsuit brought by Hispanic contractors.

H&R Block, Inc., and JE Dunn Construction Co. deny that they misrepresented the percentage of work done by minority companies in order to get financing for H&R Block's new world headquarters downtown from the city tax increment financing (TIF) program.

Block spokeswoman Linda McDougall declined to speak to Dos Mundos but issued the following statement by e-mail: "Reports filed regularly with the city since the start of our construction project show that we continue to meet, and often exceed, the TIF requirements for minority- and women-owned businesses. We believe this lawsuit is completely without merit."

Dunn senior manager on the Block project Lynn Newkirk said he could not respond to questions about the project without permission from Block. But Marvin Carolina, director of diversity at Dunn, issued a written response to the suit denying the allegations.

The statement read in part: "We believe that after reasonable inquiry it will be established that the claims are frivolous and that the factual contentions do not have evidentiary support."

According to Carolina, Dunn and its subcontractors "have made and continue to make best faith efforts to meet or exceed the project goals for participation by" minority-owned companies, and that through their collective efforts, participation by minority-owned companies meet or exceed established goals, which the city has confirmed.

But Scott Hofer of Foland Wickens Eisfelder Roper and Hofer PC, lawyer for the plaintiffs, said that of the approximately $26 million that should have gone to minority contractors on the Block project, there was less than $1.6 million as of June 5, 2005. "That's less than six percent," he said.

Hofer filed the lawsuit on March 31 in Jackson County Circuit Court on behalf of the Kansas City Hispanic Association Contractors Enterprise, Inc. (KCHACE); Armando Diaz, Diaz Construction Co.; Bill Torres and Torres Consulting Engineers.

The suit, naming Kansas City, Block and Dunn, alleges fraud in the operation of the city's affirmative action program on the $250 million Block corporate headquarters construction and claims Block and Dunn misrepresented the percentage of work done by minority companies in order to get financing for the project.

"It's really terrible what they've done," Hofer said. "The city promised the minority community participation in these jobs, but once the developer gets the funding, they turn around and ignore the minority participation requirements, in this case 22 percent, and the city ignores it."

He cited the Sprint Center project as a good example that this practice is business as usual. "It's ridiculous," Hofer said. "Kansas City's Fairness in Construction Board had set a project goal of 12 percent women-owned contractor participation and 20 percent minority-owned contractor participation on the $178.3 million arena project as a condition for millions of dollars in city financing, but there's very little minority participation.

The city has every right to shut down that job and force M.A. Mortenson (the construction manager) to comply. In fact, the city actually has all sorts of remedies to enforce minority participation. Instead, the city council chose to waive the minority participation condition."

A coalition of minority contractors unsuccessfully lobbied city council members ahead of the March 2 waiver vote requiring 32 percent minority participation on construction of the 18,954-seat multi-purpose arena set to open in the fall of 2007.

When minority participation allegedly fell short on the Block project, Diaz said KCHACE was compelled to challenge "business as usual. We're tired of the broken promises," he said. "When we consistently see minorities shut out, especially in this economic boom, we thought enough was enough. We just want a fair share of the opportunity."

Defendants have 30 days to respond to the lawsuit in writing or ask the judge in the case, Charles E. Atwell, for an extension. A status conference is set for May 10, but a jury trial won't occur anytime soon.

"There will be extensive discovery, fact-finding, depositions, things of that nature that will take months," Hofer said.

Newkirk said he couldn't provide a completion date for the Block project, but according to a Block employee who didn't want to be identified, the nation's largest tax preparer is set to start moving into their new downtown facility in early summer.

Despite the fact that construction on Block's headquarters will be history by the time a jury hears KCHACE's case, plaintiffs are determined to challenge a system that they say perpetuates institutional racism.

"The city gives these huge companies public monies on condition of a guaranteed level of minority contractor participation, but the developers are not complying, and the city is not doing its part to enforce it," Hofer said.