Search for a New Identity Paying Off : Cleveland Fighting Back From Industrial Decline

It’s an old joke: What’s the difference between Cleveland and the Titanic? Cleveland has a better orchestra.

Today, another difference is apparent. Nobody has figured out how to refloat the Titanic, but Cleveland is bobbing back. No longer the joke of the Midwest, this one-time national symbol of industrial decline, municipal chaos and urban decay is beginning to shed its ragtag image.

Big business, foundations, universities and government are working in unusual harmony to help predominantly blue-collar Cleveland find a future and a new identity in the post-industrial Midwest. Six years of cooperation, study, planning and investment are beginning to show results.

“The city is blooming,” said David C. Sweet, Cleveland State University urban affairs dean. “There is a restored sense of confidence.”

However welcome, confidence, by itself, will not be enough to solve Cleveland’s deep-rooted problems. The city’s economy was built on a foundation of heavy industry in a country where manufacturing is on the decline. Cleveland is a city from which the middle class has largely fled, a city with a troubled school system and a city where racial tensions still flare.

But, perhaps even more than other Midwest industrial cities, Cleveland is striving mightily to escape the legacy of its past.

On the east side of town, where 20-year-old scars of violent urban riots still disfigure the Hough neighborhood, almost 200 new privately financed brick town houses have just gone up. Hundreds more are planned. “It is an affirmation that things are really starting to change,” Cleveland Foundation Director Steven A. Minter said.

Downtown, the city’s skimpy skyline is sprouting new high-rises. Nearby, along the banks of the Cuyahoga River, developers are transforming sooty, abandoned warehouses into apartments, restaurants and trendy shops.

In City Hall, where red ink flowed like water and political acrimony silenced reasonable debate as the decade began, bureaucrats now boast of balanced budgets and cooperation between a Republican mayor and a Democratic City Council.

Neighborhood ‘Adopted’

A disheveled mile-square neighborhood where prostitutes and drug dealers once lined the curbs is being cleaned up after having been “adopted” by more than 250 businesses, unions and social service agencies.

Conversion of three 1930s downtown movie houses into legitimate theaters has triggered a redevelopment of one of the central business district’s most rundown areas. Since the project began six years ago, 80 new businesses have moved into the area and rents have almost doubled, reflecting a demand to locate there.

This spring, Cleveland was selected to be the site of a new national shrine--the Rock and Roll Hall of Fame--after a national competition. Promoters predict that it will bring $25 million annually into the local economy. (It was at Cleveland’s 1952 Moondog Coronation Ball that disc jockey Alan Freed is said to have coined the term rock ‘n’ roll. )

City Honored

And, in April, for an unprecedented third time in five years, Cleveland was named an All-America City. The National Municipal League award honors the city’s success in reversing its decline.

“We’re out from under the rock and on a roll,” three-term Mayor George V. Voinovich said.

Nevertheless, that roll could be up a steep hill because of the weakness of the city’s public schools. “Unless we have a decent quality school system,” Voinovich said, “Cleveland will never achieve its potential.”

“I think the school system is a drag on the overall revitalization of the city,” Joseph G. Tegreene, Board of Education president, agreed.

Revitalization, both economic and social, is what Cleveland is about these days.

“Cleveland is a city in transition from something it knew to God knows what,” according to Homer C. Wadsworth, former director of The Cleveland Foundation.

As a town that typified the muscle and might of the Midwestern hearthland, Cleveland was a center for making the big machines that powered American industry.

In the 1920s, Cleveland produced $3 out of every $100 worth of all manufactured goods made in America. Today, that figure is down to $1.25 out of every $100. Since 1979, metropolitan Cleveland has permanently lost 65,000 jobs and has lost wages totaling $1.5 billion annually.

Republic Steel was the city’s biggest employer a decade ago. Its mills spread over acres of the city’s smoky industrial belt, providing daily work for thousands, who added to the nation’s wealth by turning rock into steel. Today, the city’s biggest employer--and perhaps its biggest single business--is the Cleveland Clinic. The sprawling medical facility covering dozens of city blocks manufactures nothing--but it employs more than 8,400 workers and pumps $300 million annually into the local economy.

“This was the industrial heartland. Now, the biggest economic resource is a not-for-profit, service-based business,” Frank Weaver, director of corporate development for the Cleveland Clinic, observed.

This trend, away from manufacturing and toward more service businesses, is likely to continue. Case Western Reserve University economist Michael S. Fogerty predicts that the area will permanently lose an additional 26,000 manufacturing jobs by the year 2000 but will gain almost 60,000 new, but lower paying, service industry jobs.

Economics are dictating Cleveland’s transition from dependency on manufacturing to a more diversified mix of business enterprises. But the city’s comeback from the days when truckers called it “the Mistake by the Lake” and it was a national laughingstock is no accident.

The 1978 embarrassment of being the first major city to default on bank loans since the Great Depression and the coinciding political turmoil during the administration of boyish and pugnacious Mayor Dennis J. Kucinich started a series of events that put Cleveland on the comeback road.

“That was a psychologically devastating time,” the Cleveland Foundation’s Minter recalls. “And the private sector made a decision that they had to step in.”

Business and banking leaders drafted Republican Lt. Gov. Voinovich, a former county official, to challenge Kucinich in 1979, then supported the new mayor with fiscal and management experts to guide Cleveland out of bankruptcy and to restore order to a chaotic municipal government.

And they have helped in a variety of other ways. In the last six years, the powerful business community and the city’s two major foundations have started a series of initiatives that might serve as a model for other depressed, struggling industrial cities.

Those initiatives range from a tenacious $6-million business- and industry-financed public relations campaign seeking positive national news coverage of Cleveland to studies of the city’s infrastructure needs and governmental shortcomings.

Meanwhile, the League of Women Voters, in an effort to rid City Hall of chronic instability and contention, successfully campaigned to double the terms of office for both the mayor and City Council members to four years and to slash the number of councilmen from 33 to a more manageable 21.

Business climate problems were uncovered in a massive study commissioned by a group of chief executive officers of more than 40 of the metropolitan area’s biggest corporations.

Shrinking Tax Base

“The results were sobering and somewhat dismal,” said Ruben F. Mettler, chairman of Cleveland-based TRW Inc. and California Institute of Technology board chairman. “Cleveland was not participating in new growth industries. The tax base of the city was shrinking, neighborhoods had deteriorated . . . . We decided to band together as a private initiative to see what we could do in cooperation with the city, state and unions.”

Calling itself Cleveland Tomorrow, the clout-heavy organization, backed by a professional staff of business management experts and academics, has created an impressive record.

It set up a labor-management council designed to improve employee-employer relations and to increase the role workers play in company mangement.

Cleveland Tomorrow established a $30-million for-profit venture capital fund, providing money to create and expand businesses on the premise that the future of Cleveland may depend on new industry. “This sent the community a signal: If you have a penchant for entrepreneurship, this is the place to be,” Mettler said.

The venture fund is supported by consulting services for persons starting up companies. Experts come from Case Western Reserve University, the Greater Cleveland Growth Assn. and the state of Ohio.

The organization is also helping the city develop its first land-use plan since 1948 and its first overall plan for the central city in almost 30 years.

“Cleveland Tomorrow has taken the economic destiny of the city into their hands,” Voinovich said.

Despite its remarkable progress in the last six years, Cleveland still faces major problems.

The city is an island of poverty, second-rate educational opportunity and occasional racial tensions in a relatively affluent metropolitan area.

Its population has dropped from 914,000 in 1950 to an estimated 540,000 today, 55% white and 45% black. The city has almost no middle class. At least 42% of the city’s households have annual incomes below $11,000. It is estimated that more than a third of all individuals in the city live below the poverty line, more than double the number for surrounding Cuyahoga County. Overall, the median household income in the city is just $12,227, compared to more than $19,000 for the metropolitan area. Unemployment in the city runs close to 10%, compared to just over 6% for the metropolitan area. Almost 75% of all students in the public schools qualify for free school meals.

“The meals they get from us may be the only meals they get,” said Joseph Tegreene, school board president.

Poor Clustered in City

“What you have is a region doing pretty well, suburbs doing better than average and a disproportionate percentage of poor families in the city,” said Cleveland State University urban affairs expert Norman Krumholz. “I don’t think that should be papered over. There is a very narrow middle-class base and almost no wealthy people left and (a large group) of poor and struggling working-class families.”

Statistics tell a similarly grim story about the Cleveland public schools.

School enrollment has dropped from 150,000 in 1970 to 75,000 today. Almost 70% of the students are black, 26% white, 5% Latino and Asian. More than 40% of all students drop out by the time they should be in the 10th grade. Half of all graduating blacks need remedial reading help.

“While housing costs are very favorable in the city,” the school board’s Tegreene said, “young couples have reservations about moving into the city because of the school system. Forty years ago, the schools were a magnet that drew people into the city. The overall decline in the quality of education in Cleveland has caused black and white middle-class flight and is currently causing a reluctance (by other middle-class persons) to settle in the city.”

The same kind of turmoil that Voinovich purged at City Hall has continued at the board of education, where politicians have spent the last eight years defying a federal court order to desegregate. Last month, a federal judge ordered the state of Ohio to take over the schools and implement desegregation programs.

Continued resistance to desegregation reflects continuing racial tensions in Cleveland, tensions that exploded in violence last week. Eight persons were wounded when a black man fired a shotgun toward a group of whites gathered near a house rented to a black family on an otherwise white block.

The incident capped weeks of neighborhood tensions that began when the family moved in. “No civilized person can condone what happened,” Voinovich said. The Justice Department is investigating the incident and alleged white harassment of the black renters.

Despite the problems, Voinovich is optimistic about Cleveland, envisioning a city in the year 2000 “with more middle class.”

“By then, we will have adjusted to changes taking place in world markets,” he said. “Hopefully, we will still be a manufacturing town, but we will also be a service center. We will reflect the national standard of living, but (that standard) may not be as good as it is today. We will be competitive . . . . We will be a livable, viable city of 450,000 to 500,000 persons.”

Says the mayor: “We are building a new city where Cleveland used to be.”

Researcher Wendy Leopold contributed to this report.