Sunday, October 9, 2011 at 8:51 PM
In this era of low growth and high unemployment, Cuyahoga County's new governing body has made economic development a high priority. Several county projects - most notably the new Medical Mart and Convention Center - are carryover initiatives from the former government. In the second part in a series on changes ushered in by the new government, ideastream's Bill Rice examines how economic development efforts in the county have shifted focus, and how the change might affect current and future development.
From ground level it's hard to get an OVERALL sense of the size of Downtown Cleveland's new medical mart and convention center. You can peer through the fencing that surrounds the site and see some parts of the foundation taking shape in what is still just a 3 story hole in the ground.
But looking out from one of the surrounding high-rises – say, the eighteenth floor of the Justice Center… and the sheer size of that big hole – 15 acres, NEARLY as large as New York’s World Trade Center site - becomes more evident, and impressive.
The medical mart is a perfect example, County Executive Ed Fitzgerald tells a group of Cleveland west side residents, of old school economic development.
FITZGERALD: "All your eggs in one basket, one big project. And then you hope that that project has a transformative effect."
In the 90s, it was the city of Cleveland’s Gateway project that gave us what is now Progressive Field and the Q; then came Browns stadium, and NOW the medical mart and Convention center - big ticket developments that came at tax-payers’ expense, on the promises of politicians that they would provide a long-lasting jolt to the economy and thousands of jobs. The degree to which that materialized is still the subject of debate. Going forward, FitzGerald - in office for just nine months now - says he sees better prospects for economic revitalization by putting aside the "big project" approach.
FITZGERALD: "Most of the job growth that we get in this county is going to be a business that employs 20 people that ends up employing 30 people. I mean, these fortune 500 companies that we had in Cleveland didn't move here from somewhere else. They started here as small businesses."
And that's the focus of the economic development strategy called for in the charter approved by voters nearly two years ago. Joe Roman serves on the county's economic development commission, and as head of the Greater Cleveland Partnership was a strong a strong advocate for business interests as the new charter took shape.
ROMAN: "Throughout the whole campaign, in addition to the ethics and the transparency issues, a big motivation for changing out county government was around economic development. And the expectation was that, without raising taxes, we could gain efficiencies by downsizing and becoming more efficient with personnel, and reorient those dollars into economic development projects."
And OUT of that intention has sprung a plan to create a 100 million dollar economic development fund. While that's not nearly as much money as the 400-plus million dollar price tag of the Medical Mart, County Executive FitzGerald says with resources being what they are today, it's a major commitment to business development.
FITZGERALD: "It's going to be the biggest pool of money that's ever been available in this county's history for small to medium size businesses who want to expand and hire more people. And we're the only county that's doing that. And that's going to require, we estimate, an 8 million dollar payment to float a bond.
That’s 8 million dollars a year, until the bond is paid off.
FITZGERALD: We are not doing it by raising taxes. We're doing it through existing revenues that we have."
The idea is for the fund to secure loans for businesses – in large part from private lenders with the fund GUARANTEEING those loans against losses. Think of it in terms of parents co-signing a child’s loan – the money doesn’t necessarily go out, but it’s there if it’s needed. The hope would be that most of it won’t be.
While Joe Roman and others who pushed county government reform applaud this new focus on encouraging private business expansion, Matt Dolan, the Republican who ran AGAINST Ed FitzGerald to become the county's first Executive, sees at least one drawback: it violates a key free market principle, he says, by putting government in the position of picking winners and losers."
DOLAN: "If he's going to go that route I would, as an observer of Cuyahoga County Government and a resident of Cuyahoga County, demand that there be a very objective standard for the distribution of those dollars."
FitzGerald most certainly IS going that route. He says he’s confident it’s the right approach, and that continuous trimming of the government – so far about 5 percent since he took office – will be more than adequate to cover the 8 million dollar annual payment.
Bill Rice, 90.3.