Ed Morrison · Common sense takes a holiday

November 13th, 2010

First it was a change in the Ohio Constitution for a casino (turning the Constitution into a zoning ordinance). Now it takes an Act of Congress to build a parking lot.

Who are the bright lights behind this mess?

Cleveland casino wants to narrow river to make room for more parking

Tuesday, November 9, 2010 08:44 AM

CLEVELAND (AP) – The developer of a casino in Cleveland wants to slim down the city’s river shipping lanes to make room for more parking.

The idea emerged in talks between the casino company controlled by Cavaliers owner Dan Gilbert and the Army Corps of Engineers. The military branch controls navigable waterways.

The casino company has proposed pushing out by 29 feet the Cuyahoga River bulkhead, similar to a seawall. The location is adjacent to the river’s 180-degree turn that cargo carriers must slowly traverse.

Shippers tell The Plain Dealer that pushing out the bulkhead would reduce the clearance for ships to 2 feet. The Corps of Engineers says it would take an act of Congress to move the bulkhead. (Emphasis added.)

Cleveland casino wants to narrow river to make room for more parking

Add that to the risks that the Medical Mart will falter — the risks growing each day — and it looks like Cleveland has a really goofy strategy going on right now.

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3 Responses to “Common sense takes a holiday”

  1. John Polk Says:
    November 13th, 2010 at 1:25 pm

    Doesn’t matter; The Men Behind The Curtain got what they wanted. Whether the consequences impede actual commerce is not even a consideration. None of THEM rely on convention business or commercial river traffic…that’s all somebody else’s problem. What’s important is that the developers, their lawyers and bankers, and construction companies get paid. At the end of the day, the only economy they’re really interested in developing is their own. Anything else, for good or ill, is coincidental…

  2. Ed Morrison Says:
    November 14th, 2010 at 9:08 am

    John:

    Greed and corruption trump development every time. The best example is Louisiana, where the state’s extraordinary endowment of natural resources has been squandered by a self-absorbed political and economic elite for generations. (The prevailing economic development ethic: “If it ain’t mine, kill it.”)

    A generation of business leaders headed to Cleveland briefly in a period of resurgence after its bankruptcy. The construction of the new Brown Stadium marked the collapse of this brief period of public-private partnership. Now, a new ethic prevails, as you point out.

    It’s difficult to see how Cleveland can now return to a more productive path with the current set of leaders and organizations. Of course, there are some bright spots. But the Cleveland Clinic an BioEnterprise cannot remake an economy. JumpStart will never achieve the scale needed for regional transformation. It’s one component in the needed pattern of investment, but only one piece.

    (JumpStart’s move toward building networks across the region is a step in the right direction. But, designing and guiding collaborative networks that can do anything is a tricky business. As the Fund for our Economic Future has probably learned by now, collecting a bunch of signatures and logos on a plan is far easier than designing and implementing the deep collaborations needed for complex, transformative initiatives.)

    More than anything, what’s missing is coherence.

    Now that we have the battle over the location of a new convention center finally decided after more than a decade, and the casino, also product of a multi-year obsession, we can begin to evaluate the results of a piecemeal strategy that the “men behind the curtain” have put in place.

    First things first. Both Cleveland and Cuyahoga County face a precarious financial future. In the case of the County, major structural deficits loom. The continued loss of population means only one thing: government faces a painful period of restructuring.

    Sadly, neither the casino nor the Med Mart will turn out to be projects that can put the City or the County a different trajectory. The casino is not likely to be a positive economic impact, if we include hidden, but very real social costs. A superficial analysis will point to the jobs the casinos bring, and the revenues generated for the government. A more complete picture will look at the incomes transferred to the owners of the casino and the far more serious social costs. The inner city location of the casino — next to some of our poorest neighborhoods — will amplify these downside impacts.

    Cleveland’s casino is late in the game. The likelihood that we will generate much traffic from beyond northern Ohio is low. There’s growing national evidence that the casino market is overbuilt. To be a positive economic generator, casinos need to attract at least 60% of their patrons from outside the region. With a soft market, it’s hard to see how a casino provides anything distinctive to Cleveland.

    So in the end, the casino will not turn Cleveland around.

    The Medical Mart offers no better hope. Indeed the operating deficits will place a drag on County budgets for years to come. Of course, no one is quite sure how big these deficits will be, since we do not have a business plan for the Medical Mart/Convention Center. Rather than being a sound investment project, the Medical Mart emerged as part of the ugly tug-of-war where to locate the convention center. (Having a bunch of tired old men spitting on each other is not a good approach to developing a coherent strategy.)

    It seems to me, the common thread in both the casino in the Medical Mart is the rescue of Tower City. Unlike the Simon’s downtown mall in Indianapolis, Forest City’s Tower City was never well-designed or executed.

    For years, it has been a shopping mall in search of anchor tenants. The parking experience is simply dismal (and frightening, with signs warning, as I recall from my first visit, that no hand guns are allowed.)

    How Forest City got Tower City so screwed up is anyone’s guess, but the long-term cost to Cleveland and Cuyahoga County will prove to be enormous. When its all added up, Tower City will have cost the city nearly two decades of development time.

    To fix Tower City, Ohio now has a constitutional amendment to place the casino on a really bad site that forces the developer to get an Act of Congress to build a parking garage. Go figure.

    Add on top the simply goofy idea that the City should sign a sole source contract with an LED manufacturer that nobody has heard of — while at the same time turning its back on General Electric — and you simply have to laugh at the folly.

    These mistakes are, in a sense, understandable. When you look at the people who have been organizing and controlling Cleveland’s strategy, they have no record of having pulled off a complex regional strategy. So, in many ways, we are seeing some beginner’s mistakes.

    At the same time, we have a darker dynamic at work…one that you have articulated well. Cleveland’s business leadership is self-absorbed. They see the public sector as a piggy bank, and little else.

    Across the country, I have encountered that attitude among business leaders before. It’s a sure sign of collapse. Some years ago, Feagler wrote a column with the headline, “Vultures feeding on a dying town.” At the time I thought the verdict was a bit harsh. Not any more.

    In contrast, other cities have generated turnarounds by focusing on the investments that matter: education, innovation, and developing quality, connected places for creative people and dynamic companies.

    Last week I had the opportunity to introduce the president of Oklahoma State University, Burns Hargis to a conference of University economic developers. I’ve known Burns for 15 years. He was part of a small group of business and political leaders with whom I worked to develop a turnaround strategy for Oklahoma City.

    We began in 1993. We persevered through the bombing in 1996. We combined portfolio of investments into a coherent strategy. Now, people are pointing to Oakland City as a model to follow.

    Cleveland is missing any coherence to its strategy. And it is not clear how this coherence will emerge. As a result, the City and the County will continue to drift until a new generation of leaders emerges who are willing to break with the past.

  3. John Polk Says:
    November 14th, 2010 at 3:30 pm

    Excellent analysis, Ed, as always. It’s always…comforting to find independent validation of one’s viewpoints. We may be equally deluded…but probably not.

    As a member of the Growth Association’s “comeback team” of the ’80’s-mid-’90’s, one of the biggest challenges in moving forward was focusing on community and priorities while still accommodating the agendas of narrower interests. This was relatively successful until Mike White’s second term. The informal mantra of the White Administration was “Time for US to get paid.” And corporate Cleveland was cowed into giving away the store in the name of peace and “preserving the process.”

    The circumstances you describe above are what has made me vary skeptical about the potential for county government “reform.” There are many kinds of corruption; often the most egregious forms are perfectly legal…or at least, not specifically IL-legal.

    Changing the elected/appointed official structure without addressing the root causes of official corruption is re-arranging the deck chairs on the TITANIC. But the Men Behind The Curtain are dug in like ticks. It would take a truly incorruptible presence to resist the temptation to just shut up, play ball, and take the money. And unfortunately, that disqualifies virtually any politician with ambition for higher office.