Builder credits city's programs and hard work for his ascent

THE BALTIMORE SUN

At last fall's groundbreaking for the Marriott Residence Inn in downtown Baltimore, Mayor Martin O'Malley spotted a bearish, gregarious man who has become a familiar face at such events.

"Are you in this one too?" the mayor recalls asking.

"Yep," replied Ronald H. Lipscomb.

At 48, Lipscomb is one of the city's most prominent black builders and, lately, developers. Thanks in part to a system meant to create opportunities for minorities, he holds stakes in projects from Harbor East to South Baltimore to midtown and beyond. The latest is a proposed Four Seasons "urban resort," where he is thinking of buying a seven-figure penthouse.

During his rise to multimillionaire status, Lipscomb has become close to some of Baltimore's most powerful people - and those ties have helped propel him still higher in business circles.

He has sipped wine with mega-developer C. William Struever on Tide Point's deck. He has been brought into an elite partnership by John Paterakis Sr., the bread mogul who is redefining Harbor East. He is a good friend of City Council President Sheila Dixon and went to the Bahamas with a group last year for her 50th birthday.

Until now Lipscomb has kept a low profile, shunning all but cursory news media attention. But he recently agreed to be interviewed, at a time when he has been thrust into the public eye by U.S. Attorney Thomas M. DiBiagio, who has subpoenaed Lipscomb and others as part of an investigation of the City Council and the city's minority business development program.

Fans in high places

No one has suggested wrongdoing by Lipscomb, and he has fans in high places. O'Malley, who has received $8,670 in campaign donations since 1999 from Lipscomb, his wife and his contracting firm, said: "In the years I have known him, I have never heard anything but good things about his character, his professionalism and his integrity."

And while Lipscomb declined to discuss DiBiagio's probe, as did DiBiagio's office, he made it clear he feels he has nothing to hide from prosecutors.

"I have never done anything inappropriate from a business point of view, absolutely not," he said. "You may not believe me, but I've been a standup guy my whole career."

To his admirers, that 25-year career is a textbook case of the good that can come when hard work and ambition are given a spark by government programs aimed at ensuring a larger share of the construction pie for minorities.

Yet now he wonders whether those achievements are under a cloud because of his race. DiBiagio requested records of income, loans and grants Lipscomb received from the city and any gifts he gave Dixon, according to sources familiar with the probe. In at least one case, Dixon has said she "twisted some arms" in city government to aid a $25 million Lipscomb-led housing development.

"If there's a small amount of success in the minority business community, it's still out there that there must be something wrong with it or somebody else behind it," said Lipscomb, who lives in Mitchellville in Prince George's County. "Very rarely do people attribute it to hard work or good business acumen."

For Lipscomb, being African-American has always been something of a double-edged sword, working for and against him.

He recalls two biting insults on his first day at Rogers-Herr Junior High School in Durham, N.C., where his mother was a homemaker and his father was a schoolteacher. It was the South in 1968, and he was one of four black students.

First a clerk at a convenience store near the school accused him of trying to steal a snack. Then a white student spat at him in a stairwell as he walked to class. Lipscomb said he refused to get angry or respond.

"I just tried to move forward," he said. "What I always try to do is answer hostilities with success and hard work."

At Rogers-Herr, he scored well on the PSAT standardized test. That became his ticket to the rarefied world of the Woodberry Forest School, a wealthy, mostly white boarding school in Virginia. He received a scholarship from a foundation set up by a tobacco heiress to integrate prep schools.

If the incidents in junior high girded him for racial discrimination, Woodberry Forest taught him another lesson - the ability to forge connections with people very unlike himself.

His classmates included a DuPont, a member of the Hanes underwear family and Marvin Bush, son and brother of two future presidents. It was intimidating, Lipscomb said, "but after the first couple of years, everybody was like everybody else. It helped me so much in my business because it became ordinary."

Mind on business

Even then, business was on his mind. His adviser, Travis Tysinger, recalls him as a "very good, very bright" student, but Lipscomb said he was indifferent. He wanted to go into the world and build a business. He attended Duke University and the University of Minnesota, and in 1979, at age 23, headed to Baltimore to start a career.

His uncle, Cusic Q. Cotten, had invited him to work for his company, which began as a dirt hauler and added excavation and site work. Cotten proved an able teacher, Lipscomb said, as did Bill Callahan of Potts & Callahan, a firm with ties to Cotten specializing in bulk excavation, grading, paving, site utility and demolition.

In 1994, Lipscomb, by then married and the father of two, left Cotten to go on his own. He called his company Doracon, a word he made up using letters in his name; he did not want it to be Ronald Lipscomb Inc.

Last year, Doracon Contracting of Maryland - there's now a Washington offshoot - did $29 million in construction, demolition and earth-moving business, Lipscomb said. What began as a two-employee subcontractor now has 112 workers and a large headquarters in East Baltimore.

'Going to be successful'

Lipscomb has a gentle Southern twang and an infectious laugh. People who know him speak of his charisma, and he has used it to his advantage, such as the time in 1994 when he met with Jamie Alban, a Caterpillar equipment dealer.

Lipscomb had virtually no assets and worked from his den. Somehow he persuaded Alban to sell him a bulldozer, a loader and an excavator costing more than $1 million.

"It was a risk, but it was a calculated risk," Alban said recently. "You bet on people. We felt like he was a guy who was going to be successful."

Lipscomb credits the city's minority business law over the years with aiding his ascent. Under it, contractors must agree to meet "goals" of hiring minorities and women subcontractors on city contracts or projects receiving city financial assistance.

But Lipscomb also says he has done good work and won repeat business. One of his frequent business partners has been Struever Bros. Eccles & Rouse, which has made its mark reviving faded buildings across the city.

"If he committed to get something done you could count it done," Struever said. "We're proud we had some small role in helping them get established in business."

The two men are close friends now, sometimes grabbing dinner on a Friday night after a glass of wine at Tide Point, just across the channel from Fells Point. "We talk about everything with each other," Lipscomb said.

Struever Bros. hired Doracon early on to help renovate the grounds at the Basilica of the Assumption based on Lipscomb's work at Cotten. Lipscomb in time decided to model his business on Struever Bros. He liked the idea of vertical integration, with everything from general construction to development done in-house.

In the late 1990s, Lipscomb made his first big foray into development with Frankford Estates, a $25 million project to build 176 new houses on the site of vacant apartments in far East Baltimore. In 1999, former Mayor Kurt L. Schmoke's administration chose through competitive bids a team consisting of Lipscomb and a Struever Bros. unit.

"Ron is a very charismatic guy; he's the kind of guy you can have fun with and the kind of guy you want to help grow to new levels," said Ted Rouse, his partner at Frankford Estates. Rouse said that "there's a limited number of MBE [minority business enterprise] partners to partner with" and that he wanted to nurture a minority homebuilder.

The plan hit two glitches in 2000. One, the incoming O'Malley administration was not convinced the houses would sell. Two, the project had a funding gap of several million dollars, meaning the developers needed city help.

Several elected officials, including Dixon and Del. Talmadge Branch, an East Baltimore Democrat, lobbied O'Malley, recalled Raymond M. Lowder, then president of the Frankford Improvement Association.

During her re-election campaign last year, Dixon made a point of saying she "twisted some arms" on behalf of Lipscomb and Rouse. And O'Malley said a year ago that "Sheila prevailed in convincing me that the market values are such that new housing would prevail in that area."

But O'Malley now calls her voice one of many. "Everybody wanted that project," he said.

To make the numbers work, the city agreed to put in $800,000 that might have to be paid back. Officials also provided $3.9 million to be financed by the city's sale of bonds and repaid using new taxes generated by the housing - an approach called tax-increment financing, or TIF.

Dixon helped shepherd the bond sale through the city approval process, said Branch, who represents the Frankford area. "She stepped in right at the point of the TIF bonds. That's what was needed to close the gap to the project."

It was during discussions on Frankford Estates that Lipscomb said he began talking to Dixon. The two became friends by 2002, he said. Last winter, he journeyed to the Bahamas with 30 or so others to fete her on her 50th birthday, said a person familiar with that trip.

"We are good friends," Lipscomb said. He is also a contributor to her campaigns - $8,900 since 1999 from him, his wife and Doracon, according to state election records.

In recent weeks, Dixon's office said she would not discuss Lipscomb unless questions were provided in advance. When a reporter approached her July 20 after a Board of Estimates meeting, she refused to discuss Lipscomb and said nothing as she walked out of the room, down a corridor and onto an elevator.

But in early June, Dixon took the unusual step of calling a news conference to say she did nothing wrong in supporting Frankford Estates, which is under construction.

Lipscomb said that while he - like most business people - gives money to politicians, and while his projects have received tax breaks or other subsidies, he does not seek special favors.

'Political magic'

There is at least the perception that he does tap those connections. In July 2002, a planned South Baltimore restaurant called Nick's Fish House seemed at risk when the state demanded the city repay $560,000 for earlier state-funded improvements. Lipscomb was a Nick's investor.

"We'll let Ron Lipscomb work his political magic if necessary to see if we can get this agreement to go away," wrote JoAnn Copes, then assistant city housing commissioner, in an e-mail to her colleagues.

Lipscomb laughed when told of the e-mail and said he did nothing of the sort. In the end, the state backed off when the city promised public access to a boat lift. Nick's is now open.

'A big day'

Of all the big moments in Lipscomb's career, few have been as momentous as the day in April 2002 when Paterakis, among the wealthiest people in Baltimore, invited him to join his exclusive development partnership in Harbor East.

"That," Lipscomb said, "was a big day."

Paterakis said in an interview that he first noticed Lipscomb when Doracon did a good job in the mid-1990s moving earth on the Sylvan Learning Systems building, one of the first to rise on Paterakis-controlled land between Fells Point and the Inner Harbor.

Lipscomb and Paterakis were introduced by a common friend, Anthony J. Ambridge. Lipscomb met Ambridge in the early 1980s when Ambridge ran a Charles Street sandwich shop, before he served on the City Council and as city real estate officer until 2000. Today, Ambridge and Lipscomb do development deals together as Lambda Development. DiBiagio's subpoenas to Lipscomb and others ask about any gifts to Ambridge, according to sources familiar with the investigation.

Lipscomb was shocked Paterakis admitted him to the partnership, for $3 million, giving him a stake in several Harbor East properties. Lipscomb has since teamed with him and others on two big projects at the end of President Street: the $90 million Spinnaker Bay condominium and apartment tower, which received a 20-year tax break from the Dixon-chaired Board of Estimates; and the planned $130 million Four Seasons.

"John can do no wrong by me; he's really the real deal," Lipscomb said.

Paterakis said: "You just take to certain people in life. I took naturally to Ron because he's a straight shooter. I've always found him to be honest."

Not that Lipscomb's race was irrelevant, he said.

"You understand [that] the city, state, federal government likes to see minority participation in some of these projects," Paterakis said. "When you look around, there is plenty out there, but there [are] not too many that want to put up the money."

Just as Lipscomb's rise in the past five years has been impressive, Lipscomb predicts even more success in the next five. Eventually he hopes people stop thinking of him as a minority businessman and just as a businessman:

"I'm a pretty good business guy. I can't shake minority."

Profile

Name: Ronald H. Lipscomb

Age: 48

Home: Mitchellville, Prince George's County

Family: wife Zaiafanice; daughter Stephanie, 14; son Ronald K., 11

Education: graduated from Woodberry Forest School in Virginia; attended Duke University and the University of Minnesota

Businesses: Doracon Contracting, a leading minority-owned construction, demolition and excavation company; Lambda Development

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