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5 Responses to “The rise of real estate interests in Cleveland”

1. Betsey Merkel Says:
   July 14th, 2009 at 8:06 am

   We need to change our perspective to a meta view: The value of trading real estate on higher, global levels becomes exponentially profitable to just a few, or even only one when value is tied to natural resources (in Cleveland, our fresh water source) or human capital (think in terms of numbers and quality of brains). The enormous burden of fallout is carried by individual landowners – us – and is humanly catastrophic. This is a result of the sheer imbalance of engagement, one sided conversations, and an inability or inattentiveness – as you’ve pointed out here – to plan ahead and understand – okay, feel – how the consequences of inaction will personally affect us and those we know and love. Ironically, yet another result of a lack of education and meaning making experiences. Just my take on it.

2. Betsey Merkel Says:
   July 14th, 2009 at 8:40 am

   So, what are our next steps? I suggest we begin by building many open neutral spaces for the important conversations to take place, strengthen the creative integration of Web 2.0 tools, and invest in the adoption of Web 3.0 tools (the “semantic web”) available to us now. The bonus is every individual can have fun creating the conversations, be informed, and painlessly assume a pro-active approach to accountability. We need to move away from thinking this job is exclusive to paid public and private employees; too late for that, it is the role of the new servant of civilized society. We are beginning to take these first steps at I-Open with Midtown Brews, the Women’s Enterprise Network and in many other networked collaborative communities. It’s a long process, fortunately aided by the evolving practices and tools available to us in Open Source Economic Development, but what we should expect with the heights we have reached of imbalance. It’s a start, and a hope for our children. All our children.

3. John Polk Says:
   July 14th, 2009 at 5:53 pm

   Thirty years ago, Cleveland was second only to New York City as a headquarters city for Fortune 500 companies. In general,the leaders of these companies were residents of the community, and had grown through the management ranks in Cleveland, together with their management and leadership peers. The corporate community was a real community; peers knew peers, and leadership was personal.

   The civic landscape is far different today. Headquarters companies have moved, merged or evaporated to a very few. As your excellent article pointed out, the banking leadership has undergone profound change, and even the law firms which had been powerful for more than a century are managed locally by local “account executives” who are measured by their peers not by the amount of civic leadership they provide, but by how much revenue they generate for their partners. Their leadership positions provide a means to that end.

   For five decades, economic development in Cleveland was the purview of the local utility monopolies, who made major investments in economic development marketing and contributed in large measure to green field suburbanization. Now, those companies are largely gone as well.

   Today, the community’s largest employers outside of government are two non-profit health systems, whose two major emphases are on service delivery and real estate management. Even they are setting their sights outside the region for lucrative new opportunities; there’s a limit to the future of providing medical services for a population in precipitous decline.

   So, where 30 years ago the Chamber’s Board consisted largely of home-grown CEO’s and managing partners of headquarters companies, the Board today consists of lower-level regional or local “colonial governors,” who are either on their way up or on the way down their own corporate ladders; nonprofit CEO’s, whose positions largely depend on corporate institutional support, a few “token” entrepreneurs, be they women, minorities, or other heads of successful small businesses who are happy to be counted among the “corporate elite”…and the developers.

   For the better part of twenty years, therefore, the Chamber’s principal mission has been to lobby for public funding to promote both public and private development projects.

   Today, the Chamber has “outsourced” most traditional development activity to a much weaker “regional” partner, in order to focus on lobbying for convention centers, casinos, and other projects whose economic value have been largely debunked by the experience of other communities, but provide deeply-entrenched developers, plus the lawyers and investment bankers who enable them, with the revenues which flow from big public subsidies.

   For developers, the Chamber staff represents an excellent investment in their own self-interests. And in an environment in which other members of the Chamber’s Board are either focused on their own companies or afraid to provide any independent critical thinking because it might alienate a big supporter, there are few organizational checks and balances, and the staff and developers run amok.

   It’s a pernicious downward spiral, as anyone who might challenge the status quo is either ignored and frustrated or asked to leave the Chamber’s leadership. So smart people leave the leadership, the weak and self-serving stay, and the staff perpetuates itself in an organization whose leadership, because of the temporary nature of many of its members’ stay in town, turns over almost 100% every three years…except for a few deeply-entrenched, self-dealing insiders

4. Ed Morrison Says:
   July 17th, 2009 at 8:46 pm

   I’d like to extend your summary to the changing role of foundations in the city and the community. Increasingly, it seems, Cleveland’s foundations are moving from grant-making to operating foundations when it comes to economic development.

   I’m not sure this development makes a lot of sense for two reasons: 1) foundations by their nature are not really very good at reading market signals; and 2) by becoming more operational in their outlook, they tend, in my view, to dampen innovation.

   Northeast Ohio is approaching a foundation-led industrial policy. This development — like government-led industrial policy — makes little sense in the long run.

5. John Polk Says:
   July 17th, 2009 at 10:26 pm

   The one thought that has sort of nagged at me since I wrote the thoughts above is that much of development,as with any element of community leadership, is about people, and the personalities and interests they represent, and how their interests affect their behavior as they act through their surrogate organizations.

   It’s the decisions of people, acting through their various non-profit surrogates (pick one) who develop and advance the strategies which either empower or impede economic development in local communities.

   It’s unfair to blame the Chamber, or the foundations or the political process; they are simply instruments.

   Instead of “reforming” County government, elect some competent leaders and hold them accountable.

   Look carefully at who the people are who guide our economic development organizations…both volunteer and staff. Make sure we clearly understand the interests they represent as they fulfill their civic leadership roles. Get rid of the guys who have perpetuated the culture of civic kleptocracy, whether as interested parties or mere facilitators.

   People who are trusted with a lot of other people’s money have a public trust of sorts, and shouldn’t be able to hide behind their “private” non-profit interests. Grantmakers should be both examining themselves closely, and be closely observed, to help assure that they aren’t being used an instruments of corporate and institutional politics.

   We don’t have these conversations anywhere in Cleveland. Except maybe here.