Comeback City

For many years, San Bernardino has reflected most of the problems of Southern California--and even of the state and the nation.

It has a blighted downtown, higher-than-average unemployment, higher-than-average crime, a much higher-than-average percentage of its population on public assistance. It has suffered from the aerospace downturn, urban flight and strategies for economic renewal that proved mistaken.

And yet its day in the sun is going to come again.

“The prosperous economy is heading this way now,” says Mayor Judith Valles, a 64-year-old retired community college president who won election to lead the city of 205,000 this year.

In five months in office, Valles has introduced change. She has brought small-business owners into City Hall for meetings, lobbied Washington to expand a housing program and recruited manufacturing firms to bring jobs to her hometown.

With unemployment at 8.7% of San Bernardino’s 79,200-person work force, jobs are a primary concern. “It is incumbent upon the leader to create jobs,” Valles says.

But she realizes that for San Bernardino to reverse decades of decline, traditional job recruitment approaches won’t work. The city is going to need innovative solutions.

So she is starting by pushing a housing program to clean up blight in the central city. The aim is not beautification but homeownership, stable neighborhoods and accommodation for families who will provide employees for companies attracted to the city’s ample and inexpensive industrial space.

San Bernardino has 800 foreclosed homes, more than half of them belonging to the Department of Housing and Urban Development. In the past, such housing was sold off in bulk lots to landlords who rented the dwellings to welfare clients. The cheap housing made San Bernardino a mecca for welfare recipients from throughout the region.

“The poverty problems belonged to all of Southern California but they wound up dumped in San Bernardino,” says John Husing, the leading economist of the Inland Empire.

But under a 2-year-old program called Acquisition, Rehabilitation, Resale, developers now can buy the houses--most of them boarded up--from HUD, using loans from private lenders that are guaranteed by the city’s Economic Development Agency. Developers then rehab the houses and sell them to first-time home buyers, who can get assisted loans under Community Redevelopment Act terms.

The houses, which cost developers roughly $30,000 each, can sell after rehab for about $80,000. Developers are limited to an $8,000 profit on such a sale. HUD Secretary Andrew Cuomo “thinks the program can be a model for the nation,” says Jaime Alvarez, a San Bernardino developer.

A model maybe, but only a good start so far. In two years, 96 houses have been rehabilitated.

Valles is pushing to expand the program because clearing blight is important for many reasons. Businesspeople thinking of locating in San Bernardino are put off by boarded-up housing and stores. The transient population of many of the houses do not form a trainable work force. For years, as its economic base sank with the closing of Norton Air Force Base in 1992 and the departure of other businesses, San Bernardino concentrated on helping retail stores to preserve downtown. But with fewer jobs in the community, the stores declined too.

Now Valles is trying to recruit manufacturing, offering inexpensive space on 140,000 acres the city controls at the old Norton site--now San Bernardino Airport--and training assistance through the city’s schools.

Santa Barbara Aerospace, a small company that renovates airplane interiors, is expanding into the manufacture of aircraft engines in San Bernardino. The company will get training for its employees through a partnership with San Bernardino Valley Community College, where Valles once taught and served as president. She also was president of Golden West Community College in Huntington Beach, Coastline College in Fountain Valley and Oxnard Community College.

Valles has instituted a program at the city’s high schools through which students can get part-time work experience.

Still, how much can a single politician do to revive a down-at-the-heels city?

Valles is reaching out for the answer. She meets with small-business owners--”small business offers a city more stability than relying on a few large employers,” she says--and with university and government officials from nearby communities.

“I ask the businesspeople what your biggest obstacles and stresses are for the next five years,” Valles says. “Then I ask them to come up with solutions. I’m not going to solve the problems by waving a magic wand, but we can resolve them together.”

Such meetings, which build confidence in the business community, are important, says economist Lee Hanson of Cal State San Bernardino. “Development people from other areas look at San Bernardino and see an ‘inferiority complex,’ ” Hanson says. “Valles has the charisma to tackle the inferiority problem, if anyone can.”

Why did Valles, daughter of immigrants from Mexico--”the first girl in my family to go away to school”--leave a comfortable retirement for the mayor’s job?

She got tired of hearing her hometown run down, she says, and read a book by John Gardner called “Self-Renewal, the Individual and the Innovative Society.”

“It told me not to think that I deserved to just relax and let go,” Valles says with a broad smile.

The city she is trying to help, it should be noted, is not all poor. San Bernardino has spawned such high-tech start-ups as Optivus Technology, which has developed an advanced treatment for cancer, and Garner & Holt, which makes attractions for theme parks.

“It’s a city with all the possibilities. What it needs most of all is leadership,” says Husing, who lives there and believes Valles will provide that leadership.

Cities everywhere have a stake in her success. Because if renewal can come to San Bernardino, it can teach lessons to them all.