Daily Archives: March 18, 2010

What’s The Matter With Cleveland?: America’s Most Miserable City by Gregory Hilton

According to last month’s Forbes magazine, Cleveland, Ohio is now “the most miserable city” in America. In 1978 it became the first city to go into default since the Great Depression, and the present outlook for job growth and redevelopment is grim. Cleveland appears to be in a death spiral and is rapidly losing people, businesses and its middle class. The magazine says:

Cleveland nabbed the top spot as a result of poor ratings across the board. It was the only city that fell in the bottom half of the rankings in all nine categories. Many residents are heading for greener pastures. There has been a net migration out of the Cleveland metro area of 71,000 people over the past five years. Cleveland ranked near the bottom when looking at corruption. . . On the housing front Cleveland is dealing with thousands of abandoned homes. The city also has high unemployment, high taxes and lousy weather.

TV star Drew Carey is a Cleveland native and a home town hero. He has just completed a six part series which looks at the many problems plaguing the city. Carey is both the narrator and executive producer of the series which is sponsored by the Reason Foundation. The first installment, “Cleveland: The Decline of a Once-Great City” appeared online on March 15th.
Carey asks viewers why his home town is now known as the “Mistake On The Lake.” The city has a median household income of less than $28,000, which is far below the national average of $50,300. One out of every five homes in Cleveland stands vacant.
“As you know, I’m from Cleveland, Ohio. I love Cleveland and I based my whole career on being from the city,” Carey says in the initial episode. “And you also might know that Cleveland is going through some tough times right now. The economy is in trouble, schools are in trouble, and people have been leaving the city in droves for a long, long time.”
The actor’s ABC sitcom, “The Drew Carey Show,” was set in Cleveland and was on the air for nine years. He is today host of the game show “The Price is Right.” Carey served in the Marine Corps and could have easily walked away from the problems of a city he left long ago. Instead he lent his time and talent to an effort to make things better. Thomas Wolfe said you can not go home again, but you also never forget where you are from.
Carey emphasizes that 60 years ago, “Cleveland was a booming city full of promise, opportunity and people.” It was the sixth-largest city in 1950, and its growth rate was impressive in the decade after World War II. It had a business-friendly climate, and was home to many of the nation’s leading corporations.
Today the city’s population is less than half of what it was in its prime. The population has shrunk from almost one million to 450,000. It also ranks as one of the poorest big cities, and is now broke. Similar to many urban areas, Cleveland has had to endure corrupt politicians and inept city workers, but the problems are much deeper. Carey believes Cleveland needs less government, lower taxes and a reduction in the power of public employee unions.
What’s The Matter With Cleveland?
* The city has many problems but the most significant is that high taxes and burdensome regulations make it nearly impossible for new businesses to be established, or for existing companies to thrive. The pleas of the corporate community to cut taxes, simplify zoning laws and reduce red tape have been ignored.

* The public schools are failing and only 12% of them merit a rating of excellent or even effective by the state of Ohio. This has happened despite spending $14,000/year on every student. All parents who can afford it have been fleeing to the suburbs for decades.
The charter schools in Cleveland are booming. They are delivering quality education at a fraction of the cost of traditional public schools. “Your choice is to go to a Catholic school or get the hell out of town and raise your kids somewhere else. That’s not much of a choice at all,” says Carey. He is also fearless in taking on teachers unions, saying, “Maybe hiring teachers just based on seniority isn’t a good idea because just hanging around doesn’t make you good.”

* In an episode entitled “Privatize It,” Carey asks why should cities be in the business of running businesses ranging from convention centers to farmers markets? He asks “Why is the city in the grocery business?” Cleveland is losing money on both ventures. He urges city officials to sell off golf courses and contract out parking concessions to generate new revenue. The Cleveland Convention Center was built at a time when 40% of the convention space in America was not being used.

* Cleveland has spent billions on big-ticket urban redevelopment efforts including three heavily subsidized sports stadiums. The stadiums are for NFL, NBA and major league baseball teams, and they have failed to revitalize the city’s economy. Carey criticizes the stadiums and says the city should instead focus on bottom-up projects driven by residents and private-sector investors. This is the best way to build a vibrant city for the long haul, he maintains.
He joked that despite his desire for a championship in Cleveland, “If I had to trade, I would have every sports team in last place forever if we could have the best schools, the best business environment, and if all our kids were graduating and going to college.” He says Cleveland can have it all if it just gets government out of the way.

* Cleveland is tied with Birmingham, Alabama as the most racially segregated city in the nation.

What’s Right With Cleveland
* Cleveland is not without assets. Because of the construction of the stadiums and convention center, there has been a revival downtown with new bars and restaurants. The city has two of the best hospitals in the world, and the Cleveland Clinic is the largest employer in North East Ohio. The city has an impressive orchestra, museums and a bustling theater district. It also has respected institutions of higher education. It does not have significant traffic problems but it does have what many east coast cities lack, space.

Possible Solutions
* Many of Cleveland’s potential assets are not utilized. The city’s waterfront was once vibrant as a major shipping hub, but today there is no activity. There is considerable merit in the report developed by Bruce Katz of the Brookings Institute on waterfront redevelopment. The city has to decide what to do with its harbor, and the waterfront could be a fabulous asset if the private sector would take a lead role. Baltimore Harbor should be an example for them.

* Cleveland has shrunk because its job base declined. The city does not need subsidies to attract new businesses, but it does need lower taxes. Property, personal and corporate income taxes should be cut. A low sales tax results in more sales. City leaders need to resist the urge to cut the profitability of local businesses.

* The Drew Carey series contrasts Cleveland with Houston, Texas where there are no state or local income taxes, and almost no zoning restrictions. The attitude in Houston was expressed by urban-development expert Joel Kotkin who said: “You should be able to do what you want to do, unless there’s a really good reason you shouldn’t.’’ In contrast, Cleveland businesses have to constantly fight the city. In Houston the paperwork for a new business requires an afternoon to complete, but in Cleveland the regulations require a year and a half on average.

* The city should also initiate a crackdown on crime similar to what former Mayor Rudy Guiliani did in New York City. He transformed Times Square by ticketing every infraction, including jay walking.

* Cleveland has the impressive Euclid Corridor which sits between downtown and two of the best hospitals in the world. It is lined by hundreds of empty buildings. The city should give tax incentives and other breaks to medical companies to move into those buildings. Combined with the cities low cost of living, the one industry they can feature could result in high-end jobs coming to Cleveland.

The Future
* Will the city’s future be similar to the ruins of Detroit, which is ranked 4th on the list, or the thriving economy of Dallas. Detroit has also lost half of its population since 1950 and over one-third of the city is now abandoned with boarded up houses and empty lots. If Cleveland wants to be another Dallas, it must become a business friendly dynamic city that bends over backwards to attract corporations and jobs.