What we can learn from Cleveland’s comeback
How Toronto can learn from Cleveland’s journey back from the brink
After decades of economic and social despair that once saw it named the poorest big city in America, Cleveland has become a model of revitalization, thanks to a unique “anchor strategy” that harnesses the immense wealth and power of the city’s public institutions. Now, Toronto wants to learn from the U.S. city’s model.
If you’ve ever imagined a worst-case scenario for Toronto, it probably looks something like this: a burst housing bubble, massive job losses, crumbling roads, rapid economic decline and spiralling inequality.
That’s the nightmare that Cleveland has already lived in spectacular style.
The silver lining? It survived, thanks in part to an ambitious undertaking known as the anchor mission, which harnesses the massive spending power of a city’s so-called “anchor” institutions, such as universities and hospitals, to keep business and opportunity closer to home.
Think of it as a live, buy and hire local project on a grand scale.
The strategy has been so successful at reviving the Rust Belt town, now affectionately known as Comeback City, that Toronto is taking notice.
The city has begun a yearlong partnership with leaders at some of Toronto’s largest public employers to explore what an anchor mission might look like in a Canadian context.
“People had all these big dreams,” says Denise Andrea Campbell, director of social policy for the City of Toronto, who is heading up the city’s efforts. “I was very inspired by that.”
During the mid-1800s, Cleveland came into its own as a manufacturing powerhouse, attracting business magnates such as John D. Rockefeller, who built flashy mansions along Euclid Ave.
A century later, the street once known as Millionaire’s Row found itself flooded with foreclosed homes and abandoned businesses, symptoms of broader social and economic turmoil.
Between 1980 and 2005, the city lost more than 100,000 manufacturing jobs. Its population dropped by more than 50 per cent as predominantly white residents fled to the suburbs, leaving a core of economically marginalized African-American communities.
By 2003, the U.S. Census Bureau had declared Cleveland to be the poorest big city in America.
But Euclid Ave. still had one thing going for it: it was home to some of the city’s finest anchor institutions, including Case Western Reserve University and two of the nation’s best hospitals: the Cleveland Clinic and University Hospitals.
The hospitals alone represented the region’s two biggest employers, and had $3 billion (U.S.) worth of spending projects planned.
Evidently, wealth remained. The question was how to harness it.
Anchor institutions, by definition, are those that are unlikely to leave the city, have significant resources and require a large workforce. The most common examples are universities, hospitals and other publicly oriented employers.
The anchor strategy is built on the premise that these institutions, by virtue of their economic heft and permanence, are uniquely placed to pump money into local economies through conscientious spending and hiring decisions.
With Cleveland, as is the case with most schools and hospitals across North America, it was common practice for its anchors to award contracts to the lowest bidder, and to buy goods and services with little regard for anything but cost.
Critics argued that the approach did little to support local jobs and businesses, which was ultimately self-defeating. Even the most prestigious establishments, they said, could not thrive if the communities surrounding them were failing.
“This wasn’t about charity, but how we could create a win-win for both the anchors and the neighbourhoods,” says India Pierce Lee of the Cleveland Foundation, the city’s influential philanthropic body.
The community-oriented foundation served as a neutral convenor between rival institutions, convincing them to support a new, expansive project to redirect spending. Its goals included greater efforts to buy and hire locally, investments in local infrastructure and community engagement.
Independent evaluations show that the city’s anchors now buy about a quarter of all goods and services from the surrounding area. At University Hospitals, any purchase greater than $20,000 must include at least one bid from a local, minorityowned business, and lucrative longterm contracts are now conditional on firms relocating part of their operations locally.
The anchors have also expanded efforts to employ neighbourhood residents, originally aiming for 500 new hires by 2022. They have already far exceeded that goal, hiring 539 locals in 2013 alone.
Along with the Cleveland Foundation and the City of Cleveland, the anchors also invested in a new rapid transit system, converted abandoned warehouses into business incubators, and created a workforce development centre to train underemployed locals for health-care jobs.
Mary-Beth Levine, vice-president of resource management at University Hospitals, says the strategy makes both moral and business sense.
“This matters to the people that we hire, particularly the new generation.”
eZ Exchange convenience store sits in a bare plaza on the edges of the low-income Hough neighbourhood. Inside, customers shake their heads when asked if the nearby hospitals benefit locals.
Instead, many worry that their expansion is pushing out the surrounding African-American population.
“They call that business,” snorts one local resident.
Cleveland’s anchors may be taking transformation seriously, but overcoming deep-rooted distrust is hard.
“It’s kind of like, how do you eat an elephant one bite at a time,” says Danielle Price, who works for the non-profit community-building group Neighborhood Connections.
Price’s organization, funded by the Cleveland Foundation, is a vital partner in the city’s anchor strategy. In addition to providing grants for local community projects, it communicates local residents’ aspirations to anchor executives.
Gwendolyn Garth has lived within a stone’s throw of these institutions her entire life. Real change, she argues, requires a strong partnership with those still confronting a history of exclusion.
“We need people who genuinely care,” she says of the city’s leaders. “It’s a spiritual thing that has to happen.”
Although concerns about gentrification remain, those spearheading Cleveland’s anchor strategy seem finely attuned to it.
“I think people came to a realization that, for Cleveland to ever totally excel, then everyone has to participate in our economy,” says Tracey Nichols, director of the City of Cleveland’s department of economic development.
To that end, the city’s anchor initiative brought on the non-profit Democracy Collaborative to design and launch three worker-owned co-operative businesses to provide livingwage jobs with benefits to 120 lowincome residents.
The co-ops provide in-demand services to nearby anchors and other clients. Its workers can opt in to an affordable housing program that provides low-cost mortgages on fourand five-year terms, and generally come from neighbourhoods with median incomes of $18,500 or less.
“We give everybody a shot,” says Sharon Kaiser, 28, who works at the Evergreen Co-operative Laundry. “Why not? There’s got to be second chances.”
Green City Growers, the newest of the three co-operatives, is particularly symbolic of Cleveland’s efforts to reinvent its so-called Rust Belt image. Located in one of Cleveland’s poorest areas on land that once housed an abandoned school, the coop is now the country’s largest urban hydroponic greenhouse, employing some 30 locals.
In communities facing an unemployment rate of 24 per cent, these numbers are still a drop in the bucket. Even the strongest advocates for Cleveland’s anchor strategy acknowledge that progress will need a lot of patience.
“I think it’s showing results,” says Ziona Austrian, a professor at Cleveland State University who leads the yearly evaluations of the anchor project.
“The thing is, the problems here are so deep. It’s definitely affecting hundreds of people. Is it affecting 50,000 people? Not yet.”
But the appeal of the city’s mission lies in slowly building a new precedent: one where community, not just cost, informs business decisions.
For Gwendolyn Garth, who is now artist-in-residence at Neighbourhood Connections, having a voice in that process is half the battle.
“That’s why I like it here,” she says. “It’s full of hope.”