CMU Checkoff concerns: Escrow terms, districting, and fund allocations

By Edward Antonini

While we have always supported the research, education, and promotion of concrete masonry units, Angelus Block Co., Inc. vehemently opposes the CMU Checkoff about to be voted on by the industry. Among the multitude of problems in the Department of Commerce’s proposed CMU Checkoff order and its associated one-cent per block collection, we find:

  • It mandates an escrow account, which holds 27 percent of all collections for 10 years. This means that $.27 of every dollar sits in an account unused for the actual purpose it was intended for: Promoting concrete masonry units. Those in favor of the Checkoff cite efforts underway to change the escrow account. However, the account is mandated by the federal government for this Checkoff with no possibility for reduction or elimination under any circumstances!
  • A clause in the proposed order prevents any disparaging marketing towards other products. The result of this clause is that the program cannot show the advantages of CMUs over other products, such as softwood lumber. This puts the industry at a large disadvantage because while we are beholden to the CMU Checkoff rules, other industries such as softwood lumber are allowed freedom in their advertising campaigns. The softwood lumber checkoff also has no escrow account or other similar financial restrictions.
  • In a best-case scenario, only 50 percent of collections paid by producers is guaranteed to fund programs in that producer’s geographic region—areas in the U.S. that were pre-determined by the Department of Commerce. The assignment of these geographic districts seems arbitrary and biased. For example, New York and Florida each have a district to themselves, but California—the largest state by population—shares a district with Hawaii and Nevada. Likewise, Texas—the second largest state by population—shares a district with Louisiana. This gives producers in New York and Florida greater and disproportionate representation on the Checkoff’s Concrete Masonry Products Board than other, more populous, states. 

In October 2020 comments submitted to the Department of Commerce regarding the proposed CMU Checkoff order and industry referendum, Angelus Block noted that the creation of districts and arbitrary assignment of states to these districts usurped Congress’ intended geographic regions. The proposed order stated only that the districts will “allow the Board to more easily manage the program.” That summary justification was very thin and did not explain what it is about the district system that makes the program more manageable, or why and how the system was cumbersome to manage in the first place. We also informed the Department how:

  • We disagreed with the proposed order’s observation that most industry producers “acting alone do not have the resources to efficiently market the value of the product or conduct the research and education to promote market growth.” While it may be true for some smaller producers, the statement does not reflect the reality of producers as a whole. Angelus Block and many other producers, for example, retain architectural representatives and engineers that contribute to the education and public knowledge of the benefits of concrete masonry construction. 
  • Diverse and differing regional market needs and construction codes drive different research, education, and promotion priorities. There are already four national and 39 state or regional concrete associations that meet these needs. Angelus Block is a founding member of the Concrete Masonry Association of California and Nevada, which has effectively advanced the research, education, and promotion of concrete masonry construction since 1978.
  • Our product offerings have diversified and grown alongside the increased sophistication of Southern California’s seismic structural design and architecture. Concrete masonry has always been a key functional, if unsung, structural element. Visionary designers have come to recognize the aesthetic potential and power of concrete masonry—making units as important now for their decorative appeal as for their stout utility. Keeping pace with this evolution to the point where aesthetic form is as important as utilitarian functionality, Angelus Block has developed an expansive palette of CMU shapes, textures and color options worthy of numerous award-winning projects that have stood the test of time such as Dodger Stadium, Staples Center, the Los Angeles International Airport, Los Angeles Memorial Coliseum, and hundreds of miles of freeway walls in Southern California.

Because of our long history, dating to 1946 under continuous family ownership and operation, and devotion to constant improvement of our products and product lines, Angelus Block is committed to the future health of our nation’s entire concrete masonry industry. While we wholeheartedly support industry promotion, we conclude the Department of Commerce’s proposed Concrete Masonry Products Checkoff widely misses the mark. We encourage all stakeholders to carefully read the proposed order, register to vote and vote a firm NO.

Edward Antonini is president of Angelus Block Co., Inc., in Sun Valley, California, the largest producer of concrete masonry, pavers, and dry mix products in California.