On the verge?

Cleveland. The Mistake on the Lake. The Comeback City. Depending on whom you talk with, inside or outside of Northeast Ohio, you’ll hear it called either or both.

Over the last 30 years, the Northeast Ohio region has seen a burning river and three new state-of-the-art sports stadiums. Our teams have gone from worst to first and every stop in between. Everything from funding to the administration of Cleveland’s public schools has been called into question. And we’ve watched companies pack up and leave, while at the same time bragging about the ones that remained.

The fact is, the city’s population has decreased 5 percent since the 1970s and we lost 11 public companies in the ’90s. This is due in part to the fact that the steel industry’s employment rates alone have fallen 75 percent since the late ’70s, and man-hours per ton of steel have decreased from 10 to 3.5.

The long and short of it is, Cleveland and Northeast Ohio fell victim — as did many other cities and regions — to a host of post-WWII problems that included and centered around the decline of the heavy industrial and manufacturing industries.

But there was that comeback. As a result, we now have the Rock and Roll Hall of Fame and Museum, Gateway and Gund Arena and the new Cleveland Browns Stadium, and the river hasn’t caught fire in more than two decades. Really, these are big things. And perhaps that is part of the problem. We like big things, like big steel, that are no longer viable in today’s new economy.

Clevelanders may lack the confidence of New Yorkers, but they don’t lack passion. Start a conversation about the city’s past, present or future, and there is no dearth of opinions and ideas. In a town where most people are sure they could do a better job coaching the football team, you’ll find schemes ranging from the ridiculous to the sublime.

A lot has been said — and not said — about where we are and what we need to do. SBN rounded up a handful of business owners and executives, none of whom are running for office, and asked them what, if anything, is wrong with Cleveland and what we should do about it.

They are:

  • Michael DeAloia, director of business development at SS&G Financial Services. He specializes in high-tech companies.
  • Tim Dimoff, former Akron narcotics officer/detective and current president of corporate security firm SACS Consulting and Investigative Services Inc.
  • John Gorman, music/program director of WMMS from 1970 to 1983. Founder and current president of Radio Crow, an Internet radio portal.
  • Grant Marquit, director of entrepreneurial education at Enterprise Development Inc. (EDI) and Cleveland Bridge Builders Class of 2000
  • Tom Slavin, entrepreneur and co-owner of Burke Lakefront Airport’s MillionAire

The Cleveland contradiction: It’s a great place to live, but …
If you talk to anyone from the area, you’re bound to hear things like, “We don’t have this.” “There isn’t enough that.” “Why can’t we be more like them?” “What we really need is … ”

Of course, if pressed, the majority of those same people who catalog every Cleveland deficiency will tell you it’s a great place to live and they don’t plan on leaving any time soon.

Ironically, what this area has is a huge population of people who seem to love to hate and hate to love where they live.

“Today, we are a second-tier city. The single biggest problem is that Cleveland and Cuyahoga County didn’t become the same thing. With a larger region, you have more people involved in the development of the city. The other problem with Cleveland is that it is in love with its own mediocrity. I don’t know what it is about this region … we always settle for less. There is this idea that this is as good as we could do.” — John Gorman, Radio Crow

With the stagnation the region has experienced through the last few decades, one of the questions it may be time to ask is whether it’s possible to effect change with the existing political, social and economic structures in place.

“We have an inferiority complex. We aren’t A-No. 1 right now but look at our progress. We should showcase those things that we have done well. We worry about comparing ourselves. We are playing catch-up … but this city is about function over form.” — Grant Marquit, EDI

Cleveland remains the 15th largest market in the United States. Numerous large companies are headquartered in the area and the city is within 500 miles of more than 50 percent of the nation’s population. We have fresh water, great hospitals, good universities and a bunch of new sports arenas.

But it is not enough. We are losing businesses faster than we are replacing them, and quality jobs and the tax base disappear along with them.

Conventional wisdom says that we can’t rely on old economic models for growth. According to the Center for Regional Economic Issues’ third report, entitled “Innovation for Regional Advantage,” it’s a brave new world, and the area isn’t in step with the times. REI’s report relies heavily on research by the Progressive Policy Institute (PPI) and a study called “The Metropolitan New Economy.” The report used a set of 16 economic indicators to assess the 50 largest metropolitan areas in terms of post-industrial growth.

The conclusion is straightforward: Not only are the factors that drive growth very different in the new economy, but the entire definition of economic success has changed. Traditionally, the strategy has been to keep taxes down and appear business-friendly. But now the emphasis lies in creating viable, higher-paying jobs with infrastructure-based investment.

“Cleveland is not en vogue right now. The question is, how can we affect and rejuvenate the community to bring it en vogue because there is something that makes you feel good when things are happening. For us, it seems recently there are too few circumstances that reflect dynamism — we reflect dysfunctionality.” — Tom Slavin, MillionAire

Steel vs. tech
The bad news is that Northeast Ohio is losing big manufacturing and failed to jump on the dot-com bandwagon quickly enough.

The good news? Northeast Ohio is losing manufacturing and failed to jump on the dot-com bandwagon quickly enough.

Manufacturing has always been the region’s backbone. No one will argue that. But many believe it has also kept us from developing a new economic base and caused us to waste much-needed resources that could have been deployed elsewhere.

“I know the reasons to save LTV, but (WL Ross) will only make it half of what it used to be. We have to pick the right fights. We should be spending money on providing free rent downtown for high-tech businesses instead.” – Gorman

“We are producing the same amount of steel with a 90 percent reduction in work force. LTV was wasting money. But because of its huge economic impact, local and state governments never let the company die a proper death. It’s been a political football.” — Tim Dimoff, SACS Consulting

The questions facing regional leaders today are whether to improve the existing manufacturing and industrial factories, court new businesses or walk away from what some consider an Old World economy and look toward new frontiers.

“Wherever possible, we should leverage some of the historical strengths of the region. Entrepreneurial companies could also be given access to professional services that are provided pro bono or at a substantial discount. Manufacturing is part of the new economy, but it is a different type of manufacturing. It’s not tubing and steel. It’s pharmaceutical, packing (and) medical devices. There is no reason why Microsoft’s manufacturing shouldn’t be in Cleveland.” — Michael DeAloia, SS&G

Many have adopted a “good riddance” attitude toward heavy manufacturing. Their answer to Cleveland’s woes is found in the possibility of creating a regional biotech mecca. Unfortunately, our efforts at attracting high-tech and biotech firms have been about as successful as throwing plastic beer bottles was at getting a bad call overturned at a Browns’ game.

“There (was) a law that didn’t allow professors to have ownership or equity in commercial inventions. Ohio recently overturned that. That has been a big factor in why Ohio was behind. Also, our money base doesn’t have a good understanding of what biotech is. They are too conservative.” – Dimoff

Conservative Cleveland — Brain drain
There’s been a lot of conjecture about what it means to lose LTV and TRW, and a lot of talk about biotech, lakefront development and preventing brain drain. The questions are big because Cleveland and Northeast Ohio have to make some very real and very big endemic changes.

Unfortunately, we are bogged down, not only in a tendency to worship the past, but in deciding in which direction to go and the means of getting there.

The other problem, the really big one, is money. Everything has a cost, and we need to come to terms with this fact, and soon.

So we have the brainpower and the money to create new technologically and medically advanced products and services, but we haven’t done it. Many blame it on the environment. Cleveland has a reputation, more internally than elsewhere, of stagnant conservatism.

“We have not built a good basis for creating and keeping business. We’ve become a funnel for other places in the world. There is so much opportunity for new products and new business to be created, but for some reason we don’t have the right attitude. We have to bring elements together and create an excitement.” — Dimoff

Just imagine if Bill Gates and Michael Dell had grown up in Cleveland. Would they have picked a local garage to start their business in or would they have joined the throngs of young, educated Clevelanders and left the city for perceived greener pastures?

“We have a reaction nature rather than a creating one. Young people are not given the responsibility like they are in other cities.” — Marquit

Come to Cleveland, get a great education, then leave. In the midst of talking about attracting entrepreneurs, we sometimes forget that not only are we not attracting outside talent, we’re not even retaining some of the best educated scientists and biomedical students in the country that we’re producing here at home.

“Right now, no leaders are being trained. Can you point to a 30- to 35-year-old and say, ‘There is the next leader of Cleveland?’ We need a renaissance of thought. We need to stop the perception that Cleveland doesn’t have opportunities. And we need to offer living grants for college graduates to stay in Ohio.” — DeAloia

The entrepreneur battle cry is not surprising from a town that to this day touts its old economic connections to the Rockefellers and Carnegies. But that may just be the point. Have we been so enamored for so long with those industrial giants of yesteryear that we would not even notice, let alone support, a modern-day Rockefeller?

“We are not bringing in high-end businesses. We are bottom feeding again, and part of the problem is that we don’t have the ability to express harmony between business and government. We think if we ask nicely, they (high-tech companies) will come. But you don’t attract state-of-the-art business if you don’t have state-of-the-art facilities.” — Slavin

All we need is a plan
Different people have different opinions on what Cleveland is and should be, but one of the most resounding and consistent things you’ll hear — from those brave enough to say it in public — is that the city, and the area in general, lacks strong leadership.

“There is no direction, and it’s not that people don’t care. There was a lot of turnover in politics over the last decade. We lost a lot in terms of talent. We need someone to bring leadership and work on projects that can be accomplished. We need someone to say, ‘Our next five projects are …'” — Slavin

If you think agreeing on what’s wrong is difficult, imagine what it is going to be like trying to agree on the solution. We need a plan — a plan to develop downtown, to bring in business, to grow business, for education, on how to get a plan. This is going to be one hell of a plan.

“We haven’t had a unified plan. In the past, each university functioned on its own. We have to create a passion, and we can’t be scared to invest in the underlying support system.” — Dimoff

As simple as that may sound, a plan of any sort has been conspicuously missing from the equation. Of course, there have been proposals, drawings of the lakefront, regional development studies and a bevy of articles on what we should and shouldn’t do. But the plans are usually vague outlines of some general direction. Even the highly touted Euclid corridor project has been through so many iterations that the general public has forgotten its purpose.

“You can’t just wave a magic wand and bring these industries here. We need a business model. We need a forum to talk about the plan. … We need to get happy about the plan. If we came out with a plan, it would turn the tide for tech.” — DeAloia

The general consensus is that downtown is the foundation of the city. Clearly, it has experienced significant development in terms of new stadiums and malls. But the fact is that there are still numerous and significant vacancies.

“Downtown is empty. There are parking lots where buildings should be. Downtown is so unfriendly. If you are over two minutes on a meter, you get a $20 ticket. They should put tickets on your car that say, ‘Thanks for coming downtown.’ What we have to do now is pick the right fights. We should be going after a different type of retail downtown.

”Cleveland is a practical area. We could be an outlet capital; forget the high-end stores.” — Gorman

Even if we can all agree that redeveloping downtown is a good thing, problems arise when deciding exactly what to do and what project to tackle first.

“The key to any development is creating repetitive income. We need to spend to create a consistent tax base. With retail and recreation and business, we can make a lot of money. The worst thing we can do with the Lakefront is nothing.” — Dimoff

“The cause celebre is to reposition the Shoreway, but this is a misplaced priority. What we need to do is work on downtown and create jobs. We can’t afford it when our infrastructure is falling down around us. All of these areas are competing with each other. We need to concentrate on what demand dictates. We don’t have a city master plan. We need successful projects that are done sequentially and link together. You need projects that have scale — you can’t just build shit.” — Slavin

If you could do one thing
There’s a great deal of work ahead for the area, including fostering regionalism, investing in infrastructure and developing downtown. But if faced with the challenge of being able to do one thing improve the situation or get the ball rolling, what would it be?

“The most important thing is to build a new convention center. The existing convention center lacks the ability to bring in real trade shows. We have to have a symbiotic relationship between the city, the Convention and Visitors Bureau and the entrepreneurial hotels. We need development that links downtown with other parts of the city and has scale.” — Slavin

“We have to be able to take advantage and create a couple of areas — polymers, biotech and software. We have to bridge the gap between academia and business. Those groups have to lead the way. Without them, nothing will follow.” — Dimoff

“What Cleveland needs to do is recruit entrepreneurs from the outside. We need to think about it like the Cleveland Indians. That, and support. I wish people would support entrepreneurs within their own businesses and encourage creative people to implement their ideas.” — Marquit

“Cleveland has to reinvent itself and find how to be important to the rest of the world. We need a young, aggressive voice. Everyone is going to have to lower their guard a little bit; this is going to have to be a bi-partisan effort. But look at the Warehouse district — people said you couldn’t have that many restaurants … but a rising tide raises all ships.” — Gorman

What does the future hold?
In the end, it seems we are nothing if not hopeful for the future. If Northeast Ohio is at a turning point, there are plenty of people ready to grab the wheel and help the area round the corner. As the late Richard Shatten wrote, “We have to imagine things that on one level are almost impossible to imagine but if we do, what we ought to be able to imagine and shape is a very different future for ourselves.”

“Five years ago, there was a wall between Cleveland and Akron, and Cleveland and Youngstown. But recently, those walls have been coming down. In the past, we didn’t see the tie-in between the cities, but now the mentality is becoming more Northeast Ohio, not a bunch of entities. The idea is that we are all in it together. Our mistake in the past has been that we are too segmented. We aren’t hurting ourselves anymore.” — Dimoff

“There is less of a culture gap between east and west. As long as people stay in their enclaves, we won’t get great ideas. There is more hope than there has been in a long time. Younger people are interested in cooperation. We are waking up and saying we don’t need conflict. One of the most promising things I’ve seen is business and activists working together. The leadership model is changing. It might take 20 years, but I see the old turf wars are disappearing. People are waking up and saying, ‘We don’t need the conflict.'” — Marquit

“We need a good discussion that comes from opposing views. We shouldn’t be frittering away our resources on pie-in-the-sky ideas and focus on the compelling issues that need addressed now. We want to have a legacy. We want to leave something better for the next generation.” — Slavin

So what kind of legacy will we leave? That depends on how soon we’re able to understand and accept where we stand and develop the kind of strategic plan that will lead us into the next phase of this regional economy. Without it, we’re doomed to remain stagnant.