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Success and scrutiny grow

The Baltimore Sun

When Ronald H. Lipscomb founded Doracon Contracting two decades ago, he owned no construction equipment, had no political contacts and was running the company out of his living room, which had no furniture.

Now Doracon is one of Baltimore's most prominent contractors and investors in high-profile developments. With the city's minority contracting program as a springboard, Lipscomb has amassed a resume of upscale hotels and residential properties - from the Hilton convention center hotel downtown to the buildings towering over Harbor East.

He is also an ally and donor to politicians, including Mayor Sheila Dixon and Gov. Martin O'Malley, having made hundreds of thousands of dollars in donations to political candidates over the past several years. He has established relationships with many of the city's most important developers, from C. William Struever to John Paterakis Sr.

But his entry into the city's elite hasn't come without questions. The company was fined three years ago for exceeding campaign contribution limits and, more recently, has been the focus of federal and state subpoenas. In late November, the company's offices were raided by the Maryland state prosecutor as part of an inquiry into spending practices at City Hall.

Lipscomb's supporters say the story of his rise is a simple one: The city's minority contracting program, which encourages larger companies performing city work to hire smaller contractors owned by minorities, gave him a chance. He took the opportunity and made it count.

"Ron and his teams have won most of the major land development deals in the city," said Wayne Frazier, president of the Maryland-Washington Minority Contractors Association, a group that lobbies for minority participation. "He's even beat the teams that I have put together. But when I looked at it, his proposals were better than mine."

Arrival in 1979

Lipscomb, 51, came to Baltimore in 1979 and began as a site developer, grading lots and positioning underground utilities for new buildings.

He started work with his uncle's company, which had ties to another well-known demolition and site development firm in Baltimore, Potts & Callahan. Lipscomb, who attended Duke University and the University of Minnesota, created his own company in 1988. He named the company using letters in his name, according to a 2004 profile.

Charles Holub, president of Potts & Callahan, recalled meeting Lipscomb early on and teaching him some of the business. Holub became friends with Lipscomb and described him as someone eager to help others. Holub said Lipscomb used the program the way it was intended to be used, to lift up small, minority-owned companies.

"If Baltimore City and the state and federal governments are going to dictate a percentage of the project [be set aside for minority firms], someone is going to do it," Holub said.

Baltimore has had affirmative action requirements on contracts since the late 1970s, according to a recent consultant's report prepared for the city. Under the current program, adopted in 2000, the city will attempt to steer 27 percent of construction contracts to certified minority-owned businesses.

Large firms bidding for city work are required to hire minority- and women-owned firms as subcontractors. When there is no legal requirement, as is the case with certain land development deals, the city still encourages the involvement of minority-owned firms as a way to compensate for discrimination the city says those companies would ordinarily face.

Many of the city's best known developers who have worked with Doracon - such as executives at Struever Bros. Eccles & Rouse and H&S; Properties Development - declined to comment for this story. Those who did speak said Doracon relied on city and state programs to get started but said the company got repeat business by doing good work.

Growing success

In the past decade, Doracon has become more than a subcontractor and is now just as likely to oversee all facets of a development, or to be an investor in projects. The company partnered with two firms recently to act as a construction manager on the $302 million Hilton convention center hotel. That project, expected to be done this year, is being financed with city bonds.

Lipscomb also invests in developments. In 2002, he was expected to put up to $2 million into Harbor East, the upscale complex being developed by H&S; Properties Development. City officials said they are not certain whether the investment was made.

"He's grown slowly, and he's developed a reputation as someone whose word is golden," said Mark Dambly, president of Philadelphia-based Pennrose Properties, which has partnered with Doracon on a number of projects. "He's maintained his commitments, and he gives back to the city. I think he has been successful for all the right reasons."

Although Doracon now competes with large, nonminority companies, it continues to enjoy its status as a certified minority subcontractor with the city. Until recently, the city code required the mayor's office to establish an income threshold at which large companies would graduate out of the minority-business program. That threshold was never set.

It is not clear whether Doracon would have been forced to graduate from the program had the city set the income cap. But in May, the company voluntarily withdrew from the state's minority contracting program, which does set a revenue limit that varies depending on the type of work being completed.

By its own account, Doracon now takes in $50 million in revenue annually. According to its Internet site, the company has 200 employees.

Doracon has grown to where it is often the one looking for minority sub-contractors to hire. Lipscomb's supporters point to his commitment to passing on his good fortune as one of the most admirable qualities of his success, but in one case it also brought the company significant unwanted attention.

Frankford Estates

Doracon and an entity affiliated with Struever were chosen in the late 1990s to oversee a $25 million development known as Frankford Estates. Dixon has acknowledged that years later, as City Council president, she "twisted some arms" to move the project along.

The development received a package of tax breaks and subsidies from the city and state.

Shortly after the incentives were approved, Lipscomb hired Union Technologies, also known as Utech, to perform $344,000 of electrical work at Frankford Estates. Utech came under fire last year when The Sun reported that the company employed Dixon's sister and that the then-council president voted on a number of contracts involving the firm despite a provision in the city's ethics law that prohibits elected officials from taking part in contracts that benefit relatives.

Utech withdrew from the city's minority program after The Sun reported that the company had not performed the work but rather hired another company. Such pass-through contracts are not permitted by the city's minority business law.

Lipscomb's lawyer declined to comment or make Lipscomb available for an interview. In the past, his attorney has said Lipscomb has done nothing wrong and that he has no idea why investigators searched his offices Nov. 28.

Political ties

Despite the state and federal inquiries, Lipscomb has maintained relationships with not only the city's largest developers but also with its leading politicians. Lipscomb traveled with Dixon to the Bahamas in 2003, along with about 30 others, to celebrate her 50th birthday. He, his wife and his company have made at least $248,000 in political contributions since 1999.

Dixon, O'Malley, members of the City Council and the Democratic Party have all benefited from the contributions. In 2005, Doracon was fined $10,000 by the state prosecutor for exceeding campaign finance contribution limits in two consecutive election cycles.

Lipscomb's supporters dismiss the investigations, campaign finance irregularities and news coverage as unfair attacks on a contractor and developer who has had remarkable influence in shaping the city's growth over the past decade. One of those supporters, Anthony J. Ambridge, said Lipscomb's success is all his own.

"He's very hard-working - has always been very hard-working," said Ambridge, a former city councilman who is Lipscomb's partner in another development firm.

"All I can tell you is Ron Lipscomb is one of the best men I know."

john.fritze@baltsun.com james.drew@baltsun.com

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