The Most Entrepreneurial City In America

Welcome to Visalia, California -- a city that could teach most companies a thing or two about good management.

Ted Gaebler watched with admiration as the trap sprang shut, although he found himself in its jaws. Only weeks before, the California legislature had voted to return $338 million to local governments. Visalia, the city Gaebler managed, was to get $1.4 million -- almost exactly the amount the local school district needed to build a new school and stave off double sessions. In the six years since Proposition 13, the district had been unable to finance any major construction, so Gaebler expected an immediate raid on his treasury. Sure enough, there it was in the evening paper: "City Should Fund New School."

Gaebler's choices were obvious: Hand over a check for $1.4 million, or earn the wrath of every parent in town. But Ted Gaebler isn't your typical city manager. I've never forgotten when I worked at Columbia [Me.]," he tells audiences, referring to the "new town" built by James Rouse, the legendary developer who also did Boston's Quincy Market and Baltimore's Harborplace. "We would be wailing and gnashing our teeth about some horrible social problem, and Jim Rouse would come in and muse philosophically, 'How can I profit from this problem?"

When the school district sprang its trap, Gaebler asked his staff the same question. Months later, after a series of negotiations and land purchases, a four-parcel swap and sale left the district with $1.2 million and a prime site for its new school -- and the city with commercial property that it expects to sell for a tidy profit.

The deal was without precedent elsewhere, as far as anyone in Visalia knows. But for Gaebler and his staff, it was not unusual. This is a city, after all, that stepped in and ran a minor-league baseball franchise for six years -- the only municipally owned professional baseball team in the United States at the time -- after the Mets pulled out and no private buyer turned up. It is a city that won the scramble to buy an Olympic training pool last summer, at a savings of $400,000, because, after hearing about the deal on a Thursday, it was able to cut a check the following Monday.

Visalia, in other words, is what Don Borut of the International City Management Association calls "one of the most entrepreneurial cities in America." Borut may not have taken a scientific survey before bestowing that honor, but from all the evidence, he could not be too far off. At first glance, "entrepreneurial government" seems a contradiction in terms. Many entrepreneurs consider government, by its very nature, to be inefficient, unwieldy, and bureaucratic -- the antithesis of entrepreneurial. Hence the widespread belief, in business circles, that the government is best that governs least. Ted Gaebler and his colleagues have proven that there is another way.

Gaebler, whose glasses and deadpan delivery bring fleeting images of a taller Woody Allen, is a fanatic on the subject. He speaks in rapid, precise bursts, with the zeal of an apostle. If an entrepreneur is someone who knows there is a better way and will risk everything to prove it, Gaebler fits the definition perfectly. He does not think dof the city manager's position as a job, he says, but as part of a mission "to change the nature of city government." He took that mission to new frontiers last month, when he became city manager of San Rafael, Calif., the seat of affluent Marin County.

Gaebler first arrived in Visalia a decade ago, after a career that included The Wharton School, two years under Rouse in Columbia, and service in five city governments. He could hardly have landed in a better spot. Visalia boasts a 30-year tradition of farsighted city councils and managers, and its people fairly burst with civic pride.Clean, well laid out, and tree-lined, it sits like a green oasis on the eastern edge of the San Joaquin Valley, in the shadow of the High Sierras. Its population, fueled by an influx of refugees from overcrowded coastal California, has doubled since 1970, to 59,000. But rather than succumbing to sprawl, its leaders have adopted a managed-growth plan and stepped up their beautification efforts, preserving Visalia's reputation as "the jewel of the Valley."

The new city manager took office a month before Proposition 13, which drained local California coffers of $7 billion during its first year alone -- and ended forever, Gaebler believes, the era in which people looked to government for more and more services. Proposition 13, he says, showed that "we're not going to go the Swedish route and let government take 50% of our pay. We're going to put a limit on at 38%." That means the fundamental mission of government must change, from providing services to facilitating them, making sure they are provided by others.

"Be a catalyst," Gaebler urges other government officials. "Be a broker. Don't be a doer. My ideal concept of city government is a $150,000-a-year city manager and five $100,000-a-year assistants. Period. They do nothing but broker the community's services."

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