A group of Cleveland businessmen created neighborhood programs, driven by a new sense of what a business must do to survive in a troubled urban setting.
Cleveland, like Burbank or Trenton, is a place you have to live in to love. Mention the city, and someone will say: "The nice thing about Cleveland is that when it gets too cold there, they can always set fire to the river."
Natives claim that isn't true any longer, that they have cleaned up the Cuyahoga, which splits the city into east and west sides, at least to the point that it is nonflammable. Butcher-block-furniture stores, antique shops heavy on the Victoriana, and trendy lunch-hour restaurants are tenanting scrubbed-up warehouses along the downtown riverbank. Lake Erie, whose shore bounds the city on the north, is once again hospitable to fish.
All this may signal a renaissance of sorts. But the past decade hasn't been kind to Cleveland. Many of the industries that made the city great -- steel, aluminum, coal, and automobiles -- are shrinking or stagnant. The city's population dropped by 24% from 1970 to 1980. With the people went a lot of businesses. And the business climate wasn't helped by the financial disaster of 1978, when the city defaulted on its bank debt.
Many of those businesses that remained have had to take a sharply altered view of what it means to continue doing business in a troubled urban setting. Many of those that are hanging on have adopted attitudes and business practices that, in the vastly different perspective of the 1960s, might have been labeled "corporate responsibility." This change, however, was born not out of a sense of altruism but out of a new sense of what it takes to survive.
John W. Young, 46 and a Cleveland native, still does business in the neighborhood where he grew up, on the city's southwest side. To reach him from downtown you drive south on West 25th Street and cross the soot-blackened Brooklyn-Brighton bridge that spans Big Creek. Here, a little more than three miles from the excavation where Standard Oil Co. of Ohio is building its 45-story corporate headquarters, the creek twists through coal and scrap-metal yards before joining the Cuyahoga just beyond a sprawling Alcoa plant. John Young's maternal grandfather, John W. Speed, lived in a house on the south side of the creek valley, maybe a half mile east of the bridge. He ran his pest-control business from that house, then passed the house and the business on to Young's father. Since John took over in 1960, he has built the company from a one-man operation to one with 22 employees and gross annual sales that are within a shout of $1 million.
Speed Exterminating Co. now occupies a building Young bought for $25,000 nearly 20 years ago from the old man who owned the coal yard under the bridge. It is a storefront structure built in the early '20s that sits on Pearl Road, near the intersection of Broadview, the blue-collar neighborhood's principal retail and commercial center. From the front door you can look across Pearl, a half-block to the left, and see the Broadvue Theater where, as a child, Young watched cowboy movies for a dime at Saturday matinees.
Today, the Broadvue shows porn films, and its generous lobby is filled with peep-show booths and the kind of men who look sidelong at one another in the red-lit twilight. The theater operator rents the building from a corporation, of which John Young is both founder and director.
Young's relation to the skin-flick industry goes back only a couple of years, but to understand it, you must go back nearly 20, to when plywood began replacing plate glass on one and then another of the neighborhood storefronts. In 1970, the theater went porn. Then the adjacent bakery and candy store closed.
Says Young of the streets where he grew up: "I guess they were never beautiful, but they always looked all right to me." He was too close to them to note the incremental changes -- until 1972, when two local ministers called on him. "They said they were concerned about the quality of life in the neighborhood." Young listened to them, looked around, began to see what they saw, and agreed to help get some merchants out for a meeting.
"Before this, we'd never spoken to one another," Young recalls. "So, I sent out a flyer. We met in the all-purpose room of the Deaconess Hospital, and people did exactly what you'd expect -- they bitched: The parking is lousy; the Broadvue is an eyesore; crime is rampant. And then we organized some committees." Within a couple of years the informal group became the nonprofit Old Brooklyn Community Development Corp. with a one- (now three-) person staff operating in donated office space.
Since 1975, Old Brooklyn has collected dues from its members, taken donations, held raffles, and hustled foundation grants. It competes with other organizations in the city for federal (Community Development Block Grant) funds distributed by the city council. It has planted trees and flowers, thrown parties for the neighborhood kids, created a residents' forum, started a garden club and a community theater, and organized an auxiliary police unit whose members patrol the neighborhood outfitted in uniforms and armed with walkie-talkies. When the Broadvue Theater went on the market in 1980, Old Brooklyn members got up $10,000 in cash for the deposit, on two days' notice. They will evict the porn operator when his lease expires in 1984. "We've never moralized about the theater," insists Young. But he knows that his business will survive and thrive only if the neighborhood around it does. And for him, there seems no choice but to make sure that it does. "How far can we run?" he asks.
Across town, in southeast Cleveland, Austin Smith came to a similar conclusion, based on an entirely different motive: He wanted to make sure that no one like Dennis Kucinich ever was elected to office again. A populist rabble-rouser, Kucinich was the mayor in 1978 when Cleveland defaulted on its bank debt. He championed the little people. According to him, bankers were blood-sucking vampires; businessmen drove in daily from the suburbs to plunder the city's wealth and exploit its poor.
Smith, who does in fact drive in from the suburbs every day, owns a small metal-painting company in a Cleveland neighborhood whose population once was ethnic white but is now mostly black frequently poor. Where merchants used to do business on East 93rd Street, the main artery, there are now two or three bars and churches to a block: the Glorious Church of God in Christ Apostolic Faith; the St. James Righteous Church of God; and then, one beside the other, Our Redeemer Baptist Church, Divine Love Baptist Church, and Harvest Baptist Church.
Smith's company occupies one of several scores of brick and cement-block industrial buildings that sit, solid and stolid, between East 93rd Street on the east and the railroad two blocks to the west. Most of them house family-owned businesses, none employing more than 100 workers.
"Kucinich must have cost this city untold jobs," Smith says, "because guys like me would listen to him and say, 'I've got to get out of here. This guy is going to kill us.' But I couldn't move. I'd put everything I could into making this a good building. Other people around here were in the same situation. They couldn't leave either. I thought, If we're going to protect our investment, we've got to do something. We need some allies in the city. I had an investment here that was larger than my house, and yet they said I didn't belong in the city. They said I didn't have any rights here."
So Smith visited his business neighbor, Sam Alesci, a sprightly, elfin Italian who had built a neighborhood grocery store into a company employing nearly 100 people. His bakery and commissary, both situated within two blocks of Smith's painting plant, supply pasta, pizza, cakes, cookies, sausages, and salads to his own retail stores and to supermarkets and specialty stores across the Northeast.
Alesci and Smith called a meeting. They met a lot of business owners with many of the same fears and frustrations they had -- neighbors, but strangers nonetheless.
The Southeast Improvement Association, as they now call themselves, contacted the local city councilman, a young man named Earle Turner. Turner gave them a sympathetic hearing, so they helped him raise a little campaign money. Now when Sam Alesci, Austin Smith, or someone else from the SIA calls, Turner knows who they are.
Turner took them downtown to the City's community planning department. He told the city officials that these people were providing jobs in his district and that he would appreciate any help the city could give them. Now the city officials know who Alesci, Smith, and the SIA are, and their neighborhood gets a little special attention from downtown.
An SIA member heard that residents were interested in starting an auxiliary police force, so the organization budgeted $500 to help them buy walkie-talkies. Now the regular cops and the neighborhood auxiliaries also know something about the SIA and its members.
A nonprofit development corporation that buys, renovates, and resells houses in the neighborhood didn't know about the SIA, and the SIA didn't know about them until a city planning official introduced them to each other. Now SIA members help market the refurbished houses to their employees.
All of this costs Smith and his colleagues a little time -- there is a monthly session of the board and sometimes a meeting downtown or with a local group -- and a little money. Dues and contributions to the SIA and occasional pass-the-hat collections -- at Christmas, for example -- add up to several hundred dollars a year.
"We try," Smith says, "to make the councilman look good. We try to make the planning department and the ministers look good. They look good, and we benefit. I'm not a civic booster. I'm just a small businessman who plans to work here and survive here."
"I hire people from the neighborhood for two reasons," Alesci says. "They live here. If my building's burning, they can see it. They've got a stake in it. They're also the first ones that could be a source of problems, you know. What we're doing may sound selfish, but it's good for everybody, too."
The fact is that Smith, Alesci, Young, and others in cities like Cleveland have relatively few options. Because their businesses are no more portable than an Iowa corn farm, they have to make the most of where they are. So, they have become pragmatists, willing to invest money and time in projects and causes in which the paybacks are frequently delayed and indirect but tangible nonetheless.
But they are also pragmatists on the other side of the equation. If they can get some help, they will take it. "Thank God for the [Community Development Block Grant] program," Young says. "If it hadn't come along we couldn't have done it. You can cuss federal spending all you want -- I'm as conservative as the next fellow -- but we saved a neighborhood where 40,000 people live. That's got to be worth something."
One of Alesci's industrial neighbors in southeast Cleveland is Gerald Lancaster, whose gray flattop haircut stands at stiff attention. He is a good Reagan Republican. If you work for Lancaster and go to college part-time, he will pay half your tuition -- a fine example of what people in Washington would call private-sector initiative. But Lancaster doesn't blanch at the idea of accepting some help himself.
His company, which manufactures specialty chemicals for industry and performs environmental testing, outgrew its plant in a particularly mean area of the city. He couldn't afford a shiny new plant in the suburbs, so he moved one block west. He got a federal loan at lower than market rate through the Urban Development Action Grant (UDAG) program, another loan guaranteed by the Small Business Administration, and a small relocation grant from the city government.
"The bottom line of any UDAG assistance," Lancaster says, "is to do something for the community. We had a payroll of 18 or 19. Within two years we had grown to 42. I think that more than compensated for any help we got. Here's something I put blood and tears into for years, and I saw a chance to make it big. The only option open to us was UDAG. So I took the help. So did Chrysler."
Leo and Brad Demsey, father and son, employ 25 people nearby, and maintain a no-layoff policy. Recently they used a federally subsidized $2 million industrial revenue bond (IRB) to buy and renovate a steel warehouse on the other side of the railroad tracks from Alesci's bakery. Demsey & Associates, a steel service center, buys rolled steel from the mills, inventories it, processes it, and sells it to users. Because Demsey & Associates and another, larger company have both renovated warehouses, thus becoming anchors in their immediate neighborhood, a third company is considering doing the same. "The only way we could afford the project was to get the interest rate down through the IRB," Brad Demsey says. "It's hard to say what we would have done without it."
It is hard to say what Cleveland would have done without the federal aid and without the Demseys, Lancasters, Smiths, and Youngs to make it work. "Not everyone," says Sam Alesci, "can move to Southern California, you know." With people like these continuing to operate in their own best interests, fewer people may want to.