The Cleveland community development system was an evolving public-private partnership or, more accurately, a governing coalition of co-operating interests with unequal contributions to a shared goal of neighborhood revitalization. The coalition agreed that significant private investment and new neighborhood development capacity, along with improved public services, and school district reform were needed requiring a collaborative effort.
In the early 1980’s, there was no effective neighborhood infrastructure or strategy in place to reverse decline and disinvestment. The system had to be built from the ground up; it also had to be based on creating new community capacity to finance and develop housing, retail and community fabric. The goal was inclusive neighborhoods of choice that could compete with the suburbs to attract and retain residents and supporting services. The operating premise was that a mix of private investment, government subsidy, foundation risk capital and grass roots initiative would lead to neighborhood market recovery. How the scale of the problem and the resources needed were underestimated. Nonetheless, Cleveland was exceptionally productive in making the most of available resources as evidenced by overall investment, leverage, real estate development, civic infrastructure, placemaking, best practices, and its resilient responsiveness to challenges.
The starting point for this retrospective assessment is that no harm was done. Unlike urban renewal, welfare reform, highway construction and red lining, the newly created cd system did not accelerate decline, undermine family structure, or keep people from working. This is a low bar, but without this base line, the situation would be much more dire.
The system that evolved from this basic understanding—the strategy, tactics, programs—has been described earlier. My assessment of what was accomplished during the period described, how it was accomplished, and the limitations of that system follow.
From 1985 to 2008, local foundations invested over $78.5 million in CDCs and their neighborhood projects, much of it through Neighborhood Progress. This leveraged over $750 million in additional investment through national foundations (Ford, Enterprise LISC, the National Community Development Initiative and others), along with federal government special purpose grants, bank loans and private investment through a mix of tax credit programs for low-income housing and historic preservation. The combined investment resulted in over 400 neighborhood projects yielding 6,443 housing units and 2.5 million square feet of new and renovated commercial/industrial space. Cleveland CDCs have helped retain over 100 local businesses that have created or retained more than 3,200 jobs. Equally important was the creation of an effective network of community development corporations, their supporting organizations and leadership.
For a city the size of Cleveland, these are impressive figures. They could not have been achieved without a system staffed by committed professionals and neighborhood activists working on hundreds of projects throughout the city.
Before the sub-prime meltdown, Cleveland’s median housing value had increased by 40 percent in the 1990s and had narrowed the gap with the suburbs. In 2007, the median sales price for single-family homes in Cleveland was $84,000 versus $118,000 in Cuyahoga County. Sales prices in a few Cleveland neighborhoods exceeded the county average. At its peak in the late 90’s, the Cleveland system produced 500 new homes annually. The sub-prime real estate meltdown of 2016 that disproportionately affected neighborhoods on Cleveland’s eastside reversed much of this progress though results would have much more dire absent the response of the community development system described in this account.
Place making projects as described in the previous section were key to the City’s redevelopment strategy and were successful in many instances though less so in connecting to anchor institutions and building the foundation for the neighborhood economy. While housing market appreciation did not address the broader neighborhood social agenda, it helped transform and stabilize neighborhoods, promoted diversity, provided needed services and rewove community fabric. Some places look better and are more livable neighborhoods of choice; these were and are competitive with the suburbs. Most of these are urban life-style communities with a mix of professionals, hipsters, empty nesters, and gay and first-time home owners without kids. These are neighborhoods like what you’d find in Seattle or Portland—just fewer. Ohio City, Detroit Shoreway, Tremont, North Collinwood, Central, Wade Park, Larchmere, and Downtown are attractive and affordable places that benefited from the redevelopment of the last 25 years. In a few neighborhoods like Tremont, displacement and gentrification are only now emerging as issues.
In general, the neighborhoods that have done better had more assets to build on–proximity to downtown and lake front, cultural amenities, better housing stock, stronger social fabric and community organization.
Neighborhood Civic Infrastructure
As important as bricks and mortar was creation of an effective, resilient and innovative civic infrastructure to address neighborhood issues.
The 33 CDCs in the community development system created local capacity to plan and address neighborhood issues, linked to block clubs and community organizations. A network of supporting local intermediaries, a Baklava financial network, and proactive foundations, as well as local institutions like the housing court and the land banks have proved responsive to emerging community issues and have endured. Non-profit housing programs include the Cleveland Housing Network, Neighborhood Housing Services, and the Cleveland Restoration Society.
Innovation and Best Practice: The Cleveland Lab
Over the years, Cleveland has pioneered innovative approaches to restore neighborhoods that have proved effective and have endured, shaping local culture and providing an infrastructure for action. The following list briefly describes some of the highlights of the Cleveland Lab.
- Equity Planning: More Choices for those who have few. This is the approach to City Planning first developed by Norm Krumholz that informed the culture of many community development professionals both in government and the non-profit, sector both in Cleveland and nationally.
- Housing Court: Established in 1980 as one of two specialized in the State of Ohio. Under the leadership of Judge Raymond Pianka, the court creatively addressed a range of landlord-tenant problems, housing code violations, and abandoned property issues. It also responded proactively to the mortgage foreclosure meltdown.
- Cuyahoga County Land Reutilization Corporation: Formed in the aftermath of the sub-prime meltdown to acquire vacant, abandoned and foreclosed properties and to repurpose them for productive use, and key to neighborhood renewal efforts. The State passed enabling legislation in 2008 and the land bank was incorporated in 2009. A joint effort of both the City of Cleveland and Cuyahoga County. (See cuyahogalandbank.org)
- Neighborhood Reinvestment Agreements: Mayor White and Chris Warren using the Community Reinvestment Act and the City’s depository agreements with local banks as leverage, negotiated a series of bank agreements to make credit available in city neighborhoods. Annual review kept banks at the table and accountable.
- Baklava Layered Finance System: Cleveland’s multi-layered approach to providing below-market, high-risk loan capital for neighborhood real-estate projects. It combined foundation program-related investments, recoverable grants, city loans, historic and low-income tax credits, and bank financing.
- Housing Receivership: Union Miles Development Corporation’s creative solution to address neighborhood housing abandonment that led to state-wide legislation. This allowed community organizations to take title to abandoned houses and make needed repairs, a great example of grass-roots policy and community organizing.
- New Urbanism: Duany Plater-Zyberk (DPZ) developed the architectural and land-use plan for the Central Commons housing community. Central Commons was among the first applications of new urbanist design principles to a poverty community. It was featured in HUD’s annual report.
- Re-Imagining Cleveland (Cleveland Land Use Pattern Book): Kent State/NPI response to the foreclosure crisis and a green strategy for reuse of vacant land, through community gardens, public space, and green infrastructure. The City Planning Department adopted recommendations and the book was nationally recognized. (See previous description)
- Vacant Property (VAPAC): County coalition of local government folks working on shared strategy for vacant property. NEO CANDO is a state-of-the-art data system at CWRU working with neighborhoods and the County Landbank.
- NEO CANDO data system: Created in 2004, with initial support and funding from NPI and Enterprise Foundation, Case Western Reserve University created the premier publicly-accessible data system in the United Stated, if not the world. Today it is an indispensable tool used by every housing advocate and community development professional in Cuyahoga County.
- ShoreBank: Community banking model. Its triple bottom-line (profit, community, green) approach helped shape community development investment approach nationally and in Cleveland. When the for-profit bank holding company in Chicago collapsed in the wake of the sub-prime mortgage melt down the non-profit affiliate, ShoreBank Enterprise Cleveland closed its doors. Too good to fail was not enough. Though VCC was a participant in ShoreBank funded projects, and I served on the Board of its non-profit, ShoreBank Enterprise, there was no integrated strategy, and ShoreBank was never able to take its focus on “ma and pa: rehabbers”, minority contractors and projects like the Enterprise Center to scale. ShoreBank Cleveland did not survive the financial meltdown of the Great Recession and was closed by the Office of the U.S. Comptroller. It did leave a lasting imprint on the community development culture of Cleveland and created strategies for private market investment in neighborhood projects.
- Cleveland Housing Network: A national leader in affordable housing partnering with local community development organizations. Its Lease Purchase Program was an innovative approach to providing homeownership for low-income residents.
- Wire-Net: A nationally recognized economic development organization that successfully linked workforce development and manufacturing improvements for small to medium sized companies with Cleveland westside neighborhoods.
- Neighborhood Progress Inc.: A nationally recognized, locally based foundation intermediary supporting community development, as described in this account.
Social Capital—It’s the People
Bottom line for the Cleveland system’s success was the people who made it happen, from the neighborhood block club to the corporate board rooms. Cleveland was fortunate to have a deep and committed number of civic leaders and staff who provided the vision, expertise and energy necessary—often without recognition or public thanks. This honor roll included community leaders, managers, and grass-roots activists who were motivated to do the right thing and make a difference. Much of the system was built upon the early pioneers who are no longer with us.
The Honor Roll Pioneers (RIP)
- DeForest Brown: Founding Director of Hough Area Development Corporation, the first Title 1 development corporation in Cleveland and a prototype for neighborhood-based revitalization.
- Steve Minter: Executive Director the Cleveland Foundation and godfather of community development in Cleveland.
- Harry Fagan: Catholic Diocese and the Campaign for Human Development. An early supporter of community organizing efforts that laid the foundation for the CDC system.
- Bob Wolf: Founding member of both Famicos and the Cleveland Housing Network. A retired engineer who put his time to good effect.
- Fr. Frascati: Pastor Our Lady of Mt. Carmel, a neighborhood anchor, and founding member of Detroit Shoreway CDC.
- Inez Killingsworth: Union Miles and People’s Action leader.
- Ray Pianka: Founding director of Detroit Shoreway CDC, City Councilman, Housing Court judge.
- Tanya Almond: Executive Director of Glenville Development Corp. and early NPI Board member,
- Nate Zaremba: Private developer of the Mill Creek housing sub-division that set the standard for market rate projects in the city.
- Danny Cameron: National City Bank VP who ran NCB’s community development corporation that partnered and financed much of the early neighborhood housing projects
- Daryl Rush: A Cleveland native who ran NPI grant programs for CDCs. Later City of Cleveland Community Development Director.
- Norm Krumholz: City Planning Director who pioneered the Equity Planning model and was a mentor and adviser to a generation of city planners and neighborhood activists.
- Daryl Burrows: Quantum Leap maestro.
- Richard Shatten: First director of Cleveland Tomorrow and thought leader for corporate leadership that kept neighborhoods at the table and NPI an affiliate program.
- Henry Meyer III: CEO of Key Bank and 2nd Board Chair of NPI. Set the standard for corporate leadership.
Cleveland needs to encourage and continue supporting a new generation of leaders from all sectors if it is to prosper.
Issues and Performance
Cleveland developed a well-functioning system staffed by good people that slowed the rate of decline and improved or stabilized conditions in many neighborhoods. But things change, new problems arise, old approaches prove insufficient, and resource are diverted into other channels. How did the Cleveland system deal with this changing environment, and what are some of the issues that need to be addressed going forward?
Scale and Sustainability
To reverse fifty years of decline and national trends, the Cleveland coalition needed to develop a clear set of goals, metrics and related investment levels in order to achieve a transformative impact. Instead, the city settled for a good-faith effort and improvement. The end goal and progress were never quantified beyond the 1997 Hamilton Rabinowitz study for building a sustainable housing production system for Cleveland. In order to realize a goal of 500 for-sale units and 1,000 home improvement loans annually for 5 years, $49 million in additional non-market financing was proposed. While Cleveland substantially increased its level of financial support it was never able to generate either the financial or organizational capacity to realize this stretch goal. Whether the model/approach was scalable was never addressed.
There was no county-wide redevelopment authority, so neighborhoods made do with the resources available and adjusted goals accordingly. Transactions, not systemic issues, became the focus, and there were not enough deals to counter economic malaise. The bootstrap approach and reliance on private markets has its limits.
The investment and infrastructure requirements exceeded local resources of the coalition and the development capacity of the CDCs, the Cleveland Housing Network and New Village Corporation. These non-profit institutions were expected to hold the line until the private market came to the rescue—this, of course, has taken longer than anticipated, and was severely undermined/stalled by massive predatory lending and subsequent foreclosure of distressed properties.
In the sub-prime mortgage collapse Cleveland lost 2.9 billion dollars in homeowner equity between 2008 and 2014. (County Auditor estimate as compiled by NEO CANDO). Much of this occurred in African American neighborhoods on the east side. Uneven recovery has occurred, but outside real estate speculators are a major problem and counter measures are needed.
The German Marshall Urban Policy Story
In 2006, I was a German Marshall Comparative Urban Policy Fellow and for five weeks visited older European industrial cities. I interviewed a range of urban development professionals who were developing policy or managing programs and projects that related to the work I was doing at NPI.
My tour started in Brussels where I met with Anatassios Bougos, head of the Distressed Urban Areas program for the European Union. We struggled a bit to find common ground since Cleveland, public-private partnerships and foundation intermediaries did not figure in the EU’s approach to urban renewal. Of course, he said, renewal of distressed urban areas was the responsibility of government, and while non-profits and business could be helpful at the margins, they were not the drivers of an agenda which required significant resources and political will. This was the case with national funding of schools and the requirement that all private housing development include a set aside for social housing.
When I asked him about the budget for this effort (distressed area reclamation), he replied, that over 7 years the EU had committed 305 billion Euros supplemented by local and national government public funding. Co-ordinating the funding, planning and implementation was of course, he said, a complex undertaking involving a vast network of public sector professionals. I nodded in agreement, and we then discussed my itinerary and good restaurants in Torino.
The Public-Private Partnership and the Governing Coalition
Civic Vision and Leadership in a Legacy City
The Cleveland governing coalition managed the city’s decline while protecting their individual interests and doing the best they could to address the shared goal of improvement. This wasn’t the era of “I have a dream;” rather, in the words of former Mayor Frank Jackson, “It is what it is.” Neighborhoods were important to corporate coalition members but not a priority, and federal resources were lacking.
The legacy of the neo-liberal Reagan era and the Voinovich years–that government is the problem and that private market interests can better address deep inequities through trickle-down economics, balanced budgets and cultural uplift was accepted by both political parties. Likewise, the belief that the private sector, with appropriate subsidy, would be motivated and capable of doing the heavy lifting required to rebuild distressed communities was accepted as bed rock. There was little support for a strategy to reduce regional economic disparity (in which Cleveland/Cuyahoga County led the nation) or the impact of such an unequal system on regional prosperity. Within this framework, how did the coalition members contribute to the goal of neighborhood improvement?
City government was the main driver of neighborhood investment even in a period of declining federal funding. Each of the four mayors described in this account (Voinovich, White, Campbell and Jackson) put their personal stamp on how things got done but each operated within the limitations of a ward- based system, low property values, high poverty levels, a weak performing, segregated school system, regional sprawl and a dominate corporate sector. Making the best of this situation was the modus operandi for each Administration. The “glass ceiling” for mayoral advancement limited the incentive for visionary leadership. Only Voinovich was able to leverage his mayoral term to higher elected office.
The various mayoral administrations kept the lights on, the city solvent, and were more managers of decline than innovation leaders. (Mayor White pushed the envelope during his first term.) Tax abatements during the White administration were used for new and rehabilitated housing as well as economic deals outside of downtown. This was a major departure from the Voinovich years when tax abatements were largely used downtown. Despite minor corruption, Cleveland had no fiscal crisis and has retained a decent bond rating. There is no visual sense that things are out of control; the street lights work (unlike in Detroit), trash is removed, vacant lots and buildings are maintained, city services are adequate. There were no municipal lay-offs. Not so good, the Police Department has been operating under two Justice Department consent decrees for practices that violate residents’ civil liberties, and for the police murder of Tamir Rice, which remains an open wound.
City government was and is the major vehicle for neighborhood investment and is much improved from the early days of the Community Development Block Grant, when repaving sidewalks was a top priority. Although Cleveland has a ward-based city council with 17 Council seats that lobbies for constituent services, Council follows the mayor when it comes to policy and city priorities including infrastructure, projects, and planning. The ward system means that public investment seldom provides sufficient resources to be transformative in any neighborhood.
Despite these limitations support from City government has been integral to stabilization in a weak market city. Without public subsidy most of the projects described in this account would not have happened. In addition, infrastructure investments to improve Kinsman Road and the Shoreway were essential to jump starting redevelopment efforts. And despite my reservations about Opportunity Corridor, the City pressured ODOT to ensure that it was made a boulevard not a freeway by-pass connecting the Forgotten Triangle to both the Cleveland Clinic and the airport. Whether the adjoining neighborhoods will benefit remains to be seen, but the potential is there.
The White administration support for neighborhood projects included tax abatement on new construction, early Community Reinvestment Act challenges to local banks and later community benefit agreements, city investment of federal subsidy dollars in flexible and varied forms in many NPI projects; Council helped CDCs through a city-wide competitive operating support program. This agenda continued under subsequent administrations. NPI was seen by the City as a useful resource that could get deals done and provide gap funding when needed but was never seen as an agenda-setting organization.
The main achievement of the public-private partnership during the White Administration was the $850-million Gateway Sports and Entertainment Complex. This was more of a suburban/tourist agenda with little thought to creating a livable downtown residential community, and it was not linked to any substantive neighborhood reinvestment plan.
Public support for big ticket capital investment projects focusing on downtown and University Circle continued under Mayor Frank Jackson with the Convention Center, the Medical Mart, Opportunity Corridor, the refinancing of the Gateway sports venues with questionable community benefit.
The loss of home rule based on an Ohio Supreme Court ruling, and a general shift to an anti-urban State government has limited the City’s ability to set its own policy agenda although Mayor Jackson’s unwillingness to create alliances with other Ohio mayors and push a more aggressive regional agenda limited prospects for new approaches that might mobilize untapped resources and support. Newly elected Mayor Bibb seems intent on reversing course and building an expanded set of relations both within the State and nationally.
Federal funding for cities and poor people declined over the last 30 years and shifted to tax-credit programing as neo-liberal policies continued under both political parties. The programs that did come to Cleveland, in large part due to the clout of Congressman Lou Stokes, were a mixed bag—Supplemental Empowerment Zone, Homeownership Zone, Promise Neighborhoods, and Hope VI—and have been assessed by others. (See Further Reading) Neighborhoods benefited from CDBG funding, though at reduced levels. Community Development Finance grants from Treasury and tax-credit investment programs were important, but these programs and funds were not sufficient to counter effects of the federal crime bill, welfare “reform” of the Clinton era, and financial deregulation of the Obama years which devastated minority and poverty neighborhoods.
The promise of the Obama administration never recovered from its timid response to the mortgage foreclosure crisis which favored the banks and not homeowners. The creation of the Office of Urban Affairs staffed by centrist policy wonks focused on metropolitan strategies and better coordination of existing federal programs and agencies to break down governmental silos. Helpful but not transformative. The resources never matched the rhetoric especially after the Republicans recaptured Congress and programs such as the Promise Neighborhood program based on the Harlem Children’s Zone were never able to go scale, as was the case in Cleveland.
Trump was a train wreck for neighborhoods and affordable housing with the Opportunity Zone tax credit scam a fig leaf for the massive tax cut legislation. A new approach will be tested by President Biden with the $1.9 trillion American Recovery Act and the proposed infrastructure bill. This will be a big deal for Cleveland, among the poorest major cities in the country, provided we can get the local politics right and develop an inclusive delivery system of benefit to those who need it most.
Lack of vision and political will for equitable development policies at the County level combined with the regional planning priorities of the North East Ohio Coordinating Agency for highway construction, along with suburban zoning restrictions, and other measures intended to preserve property values by keeping “those people” in the ghetto, fueled sprawl and moved resources, services, and people out of the city. The fact that social service anti-poverty programs are funneled through the County makes coordinating a comprehensive neighborhood recovery strategy more challenging. In the wake of widespread public corruption in 2008, County government was re-organized in 2010 with the creation of a County Council representing 11 districts with a chief executive officer. There is little evidence that these reforms improved conditions for Cleveland residents. On a more positive note, the creation of the Cuyahoga Land Bank has been a great asset for Cleveland’s distressed neighborhoods. Whether the County/City imbalance is systemic or the result of a lack of political leadership and vision capable of advocating effectively for an equitable development agenda is an open question. The election of a new County Exec with extensive community development experience in Cleveland is promising. Time will tell.
Cleveland lost “home rule” authority, and state support for cities was reduced during this period. Republican domination of State government resulted in an anti-urban conservative agenda with less state resource/policies to match. Biennial state bond allocations for capital investments were targeted to downtown and the major institutions of University Circle. Cleveland did well in Low-Income Tax Credit allocations, in large part because the Cleveland Housing Network and a small cadre of private developers were particularly adept.
For corporations, the bottom line for civic engagement was maintaining profitable business operations, social peace, good corporate and civic PR. Corporate social responsibility for addressing neighborhood needs was not a primary concern nor was it the lens through which management was evaluated internally.
Access to credit and bank financing for resident homes and businesses was a key component of neighborhood recovery in part due to Mayor White’s community benefits agreements and CRA where an unfavorable rating would jeopardize mergers and acquisitions for local banks. For corporations that kept operations in Cleveland and needed public sector support, doing good contributed to the bottom line.
Lending to CDC projects and later, low-income tax-credit investments in addition to serving on non-profit Boards – NPI being the main example- was the primary form of engagement. Annual philanthropic support with the exception of BP tended to go through United Way in support of social service organizations.
Cleveland had the sixth-largest number of corporate headquarters in the country in 1980. Corporate engagement declined as Cleveland became a minor player in the global economy, with mergers, acquisitions, emphasis on shareholder value, just-in-time global supply chains, and algorithm-driven decision-making. Local corporate assets were acquired by hedge funds and global behemoths, facilities were consolidated, and jobs were eliminated. Old industrial sites, many with major environmental issues, were left behind. Golden parachutes became the new corporate perk as business relocated to the Sunbelt or became a division of a global corporation or hedge fund.
Mergers, acquisitions, and hedge fund restructuring decimated corporate Cleveland. In 1998, BP joined the corporate exodus. It moved its headquarters to Chicago after it acquired Amoco, leaving behind the Claes Oldenburg stamp sculpture and a nearly empty office tower on Public Square. Eaton Corporation (Operations in Cleveland, headquarters in Ireland for tax purposes), Sherwin Williams, and Key Bank remain.
The Greater Cleveland Growth Association was the longtime regional Chamber of Commerce that lobbied for business interests, provided health insurance and related services and later established the Cleveland Roundtable to address race relations and minority business growth.
In 1981, Cleveland Tomorrow was created based on a strategic plan developed by the McKenzie Corporation as a membership organization of the CEOs of the fifty largest corporations. In 2004, the Growth Association, Cleveland Tomorrow, and the Roundtable merged to form the Greater Cleveland Partnership (GCP) more akin to a glorified Chamber of Commerce, than a CEO organization of the powerful.
More directly related to our narrative purposes, is that the hollowing out of the corporate infrastructure meant that NPI ceased to be an affiliate organization of Cleveland Tomorrow charged with realizing a higher impact neighborhood agenda and become more a manager of detail of projects and plans that were of interest to Cleveland Tomorrow and their investment arm, Cleveland Development Advisors. Staff not Board leadership began setting priorities and competing for resources as was the case with securing a CDFI designation from Treasury rather than working through Village Capital.
This history of corporate engagement and the rhetoric of the public private partnership speaks to the need for agreements that spell out community benefit when public resources are given to private interests. What are the metrics? Did they achieve outcomes in exchange for tax abatement, regulatory relief, infrastructure investment, and direct subsidies? Legacy issues like lead paint housing and Sherwin-William’s role in remediation have not surfaced in discussions about plans for a new downtown corporate headquarters.
The odds that major corporations in the future will locate their headquarters in Cleveland are highly unlikely and should inform efforts to re-build a civic leadership structure. New partnerships and corporate leaders are needed to link Cleveland to a global economy that builds on our legacy of achievement and the lessons learned.
Ed and Meds
In accounts of the prospects for legacy cities nationally, Eds and Meds are often seen as the foundation for a new economy and as anchors for inclusive placemaking. Cleveland, apart from Metro Hospital, not so much.
The Cleveland Clinic is a tax-exempt, city-state with its campus located in one of the most distressed areas in Cleveland. According to a recent report by the Lown Hospital ranking Index 2022, the Clinic had the fourth highest fair share deficit among nonprofit US hospitals at $611 million. The fair share deficit is the difference between the estimated amount a hospital receives in tax breaks versus the amount it directly invests into its community. There is no agreement with the City for annual contributions—ether financial or services—in lieu of city taxes as is the case with Pittsburg or Boston for example.
It’s likely the Clinic has a ten-year plus land-use plan for the area, but it is not shared, though we can surmise that it calls for maintaining a manageable level of neighborhood distress to keep land acquisition costs to a minimum.
Surrounding neighborhoods, Fairfax, Hough, and Glenville, have the highest poverty and health-care disparities, and the lowest housing values in the city. Multi-million-dollar public infrastructure projects–Opportunity Corridor, and the Health Care Transit Line (Euclid Ave.) are designed to connect the Clinic’s campus to downtown, the airport and freeway system with little attention to neighborhood benefit. Major community initiatives such as the Greater University Circle Initiative, Evergreen Co-op, and the employee mortgage assistance program have had high public visibility but little impact. When compared to cities like Pittsburg, Baltimore and Philadelphia Cleveland comes up short in linking the eds and meds to a larger community agenda.
During the period described, Metro Hospital did not have a significant neighborhood partnership, but this has changed in the last period and Metro has become a model for community engagement. The elements of this partnership are outlined in chapter 8.
The two major universities in town, Cleveland State and Case Western Reserve, had a mixed record in supporting neighborhood recovery efforts. Early on, the politically connected Dean David Sweet of the Levin College at CSU recruited Norm Krumholz the City Planning director to create the Center for Neighborhood Development with seed funding from the local foundations and biennial allocations from the State of Ohio through the Urban University consortium. Cleveland State as the lead university received 50% of allocated funding. As a result, The Center for Neighborhood Development was able to hire a number of talented planners who were an integral part of the support network for the nascent CDC industry, most notably Pat Costigan, Bill Whitney, Mary Ann Simpson, Janice Cogger, and Phil Starr. In addition to State funding, the Levin College and Dean Sweet was able to attract a number of prominent urban planning faculty like Krumholz, Dennis Keating, Tom Bier, and along with visiting senior fellows like Phil Clay, and Kermit Lind of the Law School, the College was able to establish itself as an important player in community development both locally and nationally.
When the Republican party captured the Ohio State Legislature, support for the Urban University consortium and CSU Center was eliminated, The College was unable to fill the gap through local foundation sources and the Center for Neighborhood Development was shut down. CSU’s role declined accordingly, and its influence has waned, though the Campus District development activity remains viable. The Cleveland Urban Design Collaborative in partnership with Kent State University is a positive force, and the college’s urban planning program still provides graduates to staff both City and CDC positions.
Case Western Reserve University is a different story that underscores the difficulty in overcoming the silo mentality that prevents the development of a unified strategy for neighborhood renewal. The major neighborhood academic focus of CWRU focused on improving conditions for poor people not urban planning and neighborhood placemaking. The Mandel School of Applied Social Sciences was primarily concerned with developing a social work agenda to address poverty issues and training a professional cadre to staff the social work agencies. There was little effort made to coordinate the respective agendas and institutional capacity of the respective universities for placemaking and poverty alleviation. CWRU physical development agenda focused primarily on creating an Uptown university retail district for its student population. NPI’s attempt to create a neighborhood housing agenda for the area adjoining Case Western the University was unsuccessful due in large part to the lack of interest on the part of the University.
The lack of a unified research partnership and theoretical framework for neighborhood renewal by CSU and CWRU meant that NPI and the CDCs focused on program and deal making without the benefit of connecting theory to practice and using the outcomes to impact public policy.
In this environment, local foundations were and are essential in developing a community revitalization strategy for Cleveland, bridging the gap between federal programs and private sector finance while supporting social programs for the poor. They helped create a shared strategic approach toward community development and served as thought leaders, conveners, and catalysts. The collaborative funding model of the local foundations enabled Cleveland to create a system, through NPI, that brought the City and the corporations to the table to target resources for maximum impact. The fact that this system has remained intact and able to fund citywide redevelopment efforts over a 25-year period is truly remarkable and speaks to commitment. Without this support, there would be no Cleveland system.
That said, there are limitations to what philanthropy can do to address systemic issues of legacy-city decline absent a more robust and diverse resource base. Private foundations are creations of the Internal Revenue Services, wealthy individuals and corporations. They are neither subject to market corrections nor voter approval. The federal tax ruling requirement that foundations distribute a minimum of 5 percent of capital annually for private foundations (has become the ceiling, not the floor, regardless of the local level of distress. (Note: The Cleveland Foundation as a community foundation is not subject to the 5% rule but has a spending policy intended to preserve capital). Addressing long term structural problems like persistent poverty and underinvestment are not likely to be solved in three-year funding cycles absent a robust public sector commitment.
Each of the major foundations in Cleveland had their own unique internal dynamics and grant making priorities. There were four different types of major Foundations in Cleveland supporting community development, each with their own culture: a community foundation (Cleveland); a family foundation (Gund); a sole donor foundation (Mandel) and a corporate foundation (BP). Later a health care conversion foundation (St. Lukes) emerged but at the time was not part of the system described. In this environment, collaboration and a shared strategic framework is the exception not the rule. Support for NPI was one example of a successful collaborative effort, but funding was limited, and priorities varied.
The Cleveland Foundation is the sixth largest community foundation and the 47th largest philanthropy in the country. Fred Goff laid the foundation with wealth that was largely derived from banking. It has since grown through market appreciation and charitable donations to upward of 800 donor advised funds with current assets in 2021 of $3.2 billion. The Cleveland Foundation, from NPI’s inception over 25 years provided upward of $50 million in grants and program related loans to NPI and its affiliates and played a leading role in bringing other funders to the table. The Gund and Mandel Foundations are smaller with their own dynamics and priorities dictated by shifting family and benefactor interests.
When BP left town, the limitations of local foundations’ capacity to lead a multilayered redevelopment effort became more apparent. As BP was exiting, the Ford Foundation began moving away from place-based, CDC-focused strategies, and in 1991, Living Cities. the coalition of eighteen of the largest foundations and national financial institutions with their own agenda and priorities, began to evolve.
Local foundations continued to support a range of activities and organizations that addressed some aspects of neighborhood health and vitality—from schools, to healthcare, the arts, economic development, and green infrastructure. Some of these investments were based on donor-advised funds and legacy commitments, others on foundation execs seeking new ways to make an impact. The need to consolidate grantees under the perceived need for efficiency has further diminished impact and community control.
Nevertheless, the range of neighborhood investments primarily by the Cleveland Foundation is impressive: The Poverty Commission, the Fund for the Future, ShoreBank, the Evergreen Co-op, the Neighborhood Connections small grant program and more. Whether these initiatives had the desired impact is beyond the scope of this account. They represented new approaches that depended heavily on limited foundation resources and were not linked to NPI and the mature community development system either organizationally or strategically. Can they meet new challenges in the post-pandemic environment when the federal government is pushing the boundaries on social justice and new approaches to addressing persistent poverty?
Foundation Intermediaries–The NPI Experience
I have given a great deal of attention to the role of Neighborhood Progress in this account as it’s integral to the community development system; and it provides some participant perspective about the motivation and dynamics of the public-private partnership in Cleveland.
NPI emerged as a system for foundations to wholesale their neighborhood grant making with the understanding that NPI would manage the process fairly and be responsive to both neighborhood needs and foundation requirements. Over time, NPI became an operating intermediary that extended beyond its original CDC grant-making function. Nonetheless, it still remained an intermediary tied to local foundation needs limiting potential scope and impact.
What was originally intended as a three-year experiment in Cleveland evolved into a 25-year commitment, spanning the administrations of four city mayors, the regime of four funding foundation CEOs, and involving over $65 million in direct foundation investment. Core funders consisted of four local foundations, the Ford Foundation, and the US Treasury, with support for special initiatives and projects from over twenty-five additional investors.
As described earlier, there was not a grand plan for NPI that was tied to long- term outcomes for neighborhood improvement – progress, rather than transformation was the goal. NPI grew operationally from supporting a select number of CDCs to include two subsidiaries (Village Capital Corporation and New Village Corporation) and various special projects and initiatives that were opportunity- and need-driven. It led to a more complex organizational structure that evolved over time within the overall budget constraints and our mission of supporting CDCs within the City of Cleveland. Progress and improvement not catalytic change continued to be the goal.
NPI was a well-run, efficient organization, as evidenced by a 10-to-1 leverage of funds invested, 25 years of clean financial audits, and no reportable negative conditions despite increasingly complex financial structures and partnerships. There were no scandals or organizational meltdowns. NPI was and is a resilient and entrepreneurial operation; it adapted well to changing conditions but pushed the envelope as a support organization for CDCs and a foundation intermediary which was both a strength and a limitation.
For local funding partners NPI was a nationally recognized model for supporting community development that got desired outcomes with minimum stress and organizational overhead. This allowed the foundations to budget long-term and address other important community issues and agendas as the landscape changed and new challenges emerged.
The Cleveland Tomorrow corporate partners where able to realize investment objectives and meet regulatory requirements (Community Reinvestment Act) without undue disruption to business operations.
The City was able to meet neighborhood needs with a flexible partner that could provide gap financing and technical support for projects as well as training and capacity building for neighborhood groups leveraging their CDBG funding. In the process a CDC industry was created with development professionals and neighborhood activists represented on the NPI board with a voice in how and where support would be given.
As an intermediary, NPI was joined at the hip to the agendas, budgets, and civic priorities of its foundation investors. Since this arrangement was a collaborative effort, agreement between partners often focused on the middle-ground consensus. NPI was always viewed through the lens of its partners’ overall agenda and priorities, which were primary. Despite years of successful performance NPI never graduated to an “Evergreen” relationship with its core funders.
Since its primary focus was supporting a CDC agenda within the City of Cleveland, NPI never went beyond these self- imposed limitations to expand its scope and impact by operating regionally, doing deals including LIHTC housing, and other fee generating projects and lending to private developers in stronger markets. The r&d function and public policy advocacy remained secondary priorities and never evolved into a core function or led to the creation of affiliate organizations. Whether NPI could have expanded its reach and impact was never tested and whether that would have made a substantial change in Cleveland’s prospects is a matter for conjecture. What is clear is that there was no appetite on the part of its core funders to move in this direction.
In its early years, NPI had the clout that went with a high-profile Board and civic consensus as to its role and mission. As Cleveland Tomorrow became the Greater Cleveland Partnership and BP America exited for Chicago in 1999, NPI’s leadership and funding base narrowed. New local foundation leadership viewed the organization as more of a program and project manager, not an innovator and agenda setter. Nationally, the foundation community was moving away from CDCs and place-based strategies. NPI lacked the political power and resource base to address a changing economic environment.
NPI responded to the subprime meltdown on various fronts, including a comprehensive housing strategy (Opportunity Homes) advocacy, lawsuits, redeveloping foreclosed properties, and vacant land reutilization, but wasn’t able to act as civic convener to secure the resources and collaboration necessary to mount an effective response of scale to the market collapse.
NPI has since evolved and developed new approaches to community building in response to the changed environment which this account doesn’t assess. Whether Cleveland Neighborhood Progress is viewed as a central address for neighborhood reinvestment or one of many sources, is unclear.
NPI was periodically evaluated by national recognized consultants (Tom Burns, Tony Proscio, and Basil Whiting) prior to submitting its funding proposals for core support. These evaluations of work done, and opinions of grantees, funders, the city, and private sector partners, as well as leaders in community development nationally, together helped shape programming going forward and are available for review. (See Bob Jaquay, along with other related materials at the Western Reserve Historical Society).
In the interest of keeping a coherent big picture narrative of the Cleveland system, the preceding assessment did not attempt to summarize these consultant reports or provide a more granular account of the operational detail of how NPI went about doing its business. I have provided a fuller description of the contributions made by Board members and staff in the Appendix.
Neighborhoods and the CDC Strategy
More than many others, Cleveland is a city of neighborhoods, and neighborhoods are a defining quality of a legacy city. The governing coalition previously described was intended to improve neighborhood conditions by investing in community development corporations and their redevelopment efforts. Around this basic commitment, much of the infrastructure discussed above was constructed. So, neighborhoods and the CDC strategy are at the core of our assessment. Whether this approach was or is sufficient to counter the reality of suburban sprawl and the growth of virtual communities in the internet age is an open question and one requiring new approaches and strategies.
The Cleveland community development system was built on social fabric, sense of place, value-driven staff, and committed residents. Equity planning and a community organizing legacy supported a community land bank, CRA challenges, and a Housing Court. Keeping the community in community development was and is a core value. This contrasts with the urban renewal era when residents were removed in the interests of failed top-down planning. In the late 70’s and 80’s, the CDC strategy fit the fact situation. It provided a framework for action. Abandoned houses were being torched, banks weren’t lending, city services were sub-par. Something needed to be done. (See Randy Cunningham’s account of the early history of community organizing and its aftermath.)
Creating a CDC infrastructure was an outcome of this environment. The decision to form stand-alone organizations out of the community organizing coalitions–keeping organizing separate from development, and not aligning development with the existing social service organizations emerged without much thought of the long-term consequences.
Despite the subprime meltdown and collapse of the neighborhood housing market, CDCs have endured and provided a framework for rebuilding. There are currently 33 CDCs with professional staff community boards and a range of development capacities and community connections. Upward of 300 individuals are working in the non-profit sector in Cleveland to improve neighborhood conditions, and they play a critical role in maintaining community fabric and hope for the future.
As mentioned previously it’s all about the people and in the case of relatively small non-profits with a big agenda requiring both technical skills and neighborhood smarts, the CDC executive director is critical to successful performance. Cleveland has been fortunate in the depth and capacity of its CDC staff many of whom have gone on to play important roles at the City, foundations and private sector.
However, CDCs are not a panacea or the magic bullet for neighborhood recovery. Often times progress is episodic at best and personalities, the ward political system and market dysfunction can undermine the best of plans. A case in point is the Shaker/Buckeye neighborhood which figures prominently in Cleveland’s DNA. The CDCs were long supported by NPI but a corrupt City councilman, issues of race and class, and failure of private developers to manage a historic market district has meant that a vital Cleveland asset is in jeopardy. Fortunately the Councilman is now in jail, a new community partnership has emerged and a non-profit partnership has gained control of the Shaker Square retail center and is in the process of making needed repairs and developing a community plan for the area. (See Chapter 8 for further detail).
So CDCs are necessary but not sufficient. New organizational structures and alliances will be needed to address the challenges of building inclusive neighborhoods of choice in the current environment. In Europe, various housing agencies, many non-governmental organizations (NGOs) manage and develop thousands of units as well as coordinate a range of social services. Cleveland’s ward-based system has resources spread city wide. This has limited capacity to achieve the needed scale. A few CDCs such as Bell Burten Carr and Detroit Shoreway have managed to expand their footprint and development capacity. In the case of BBCDC they have also pioneered a new community resource with the launching of a radio station (WOVU 95.9 FM) which provides a vehicle to connect people to valuable information and resources through on-air broadcasting and associated social media platforms. This is one example of local initiative and a creative response to problems and opportunities. There are many others.
A place-based focus on real estate gives residents a voice and means to plan and respond to issues, but it is insufficient without links to community anchors, political leadership, and quality-of-life issues. Alliances and joint planning with neighborhood anchors are needed primarily with the school district, neighborhood centers and the faith based ministry, all of which are silo oriented and focused on their core agendas but there the potential for collaboration is there though episodic in the recent past.
The Cleveland CD system was able to develop a viable partnership and leverage significant investment to slow the rate of decline and create a foundation for the future. A civic infrastructure, both people and organizations was developed and has proved capable of responding to new challenges. The private sector is weaker and less able to provide the resources and leadership to deal with deep distress and market dysfunction. Foundations will continue to play a critical role in supporting innovation and providing gap financing for critical projects. Successful place based initiatives will require new partnerships engaging major neighborhood assets (schools and hospitals) that will need to move beyond their silos. New federal resources and a fresh approach to local government with newly elected mayor Bibb and County Executive Chris Ronayne offers prospects for greater impact. In the next chapter I offer some suggestions for moving forward.