Cleveland is working toward changing its manufacturing-based economy to high-tech. But during the transition, factories will likely remain the city's bread-and-butter. Cleveland's coffers depend on the payroll and property tax dollars that come from its factories. There are about 2,000 manufacturers in Cleveland. Each has an average workforce of around 30 people. With so much money at stake, you might think the city is very accommodating to the needs of these companies. But many plant managers say it is not. ideastream's Mike West has the first of a two-part report on the challenges of keeping cleveland factories in the city.
Mike West: Bob Bertsch is the program director of the Cleveland Industrial Retention Initiative, also known as CIRI. It's where manufactures go to get help with their problems. The 8-year-old program is funded by taxpayers and has five representatives who must try and assist all parts of the city. He says many Cleveland factories are driven out because of their need to grow.
Bob Bertsch: I think the number one issue we find is just the lack of space to expand. Cleveland was originally... businesses were originally located near the rail lines, originally there was no zoning that took place, so there is residential houses right next to businesses, next to commercial storefronts and they were originally build with maybe warehousing on the upper floors, which is not really the case today.
MW: Bertsch says problems arise over matters as simple as getting permits to widen driveways to accommodate trucks. But neighbors also get mad when factories can't expand and residential streets become jammed with trucks and employees looking for someplace to park. Anyone who drives through some parts of Cleveland are bound to wonder what Bertsch is talking about. Broken-down factories and vacant lots are everywhere, especially in neighborhoods that look like they could use factories and jobs. But the expense of developing land in Cleveland makes the suburbs look very attractive.
BB: The cost of assembling enough land that you can similar to out in the suburbs is quite a bit more. To assemble one acre of land you might have to negotiate with 3 different property owners all of which would like to be compensated for their property and then have to pay demolition costs to clear those buildings you would have to pay for any environmental issues that may be are on that property, so to assemble just an acre of land it can cost maybe $400- or $500,000.
MW: For the same amount of money a factory can move to the suburbs, buy 10 times as much land and never have to worry about parking, or expansion again. So why would anyone stay? Some owners just love being in the city and say the rewards out weight the problems.
Stripmatic Products makes auto and truck parts in this Tremont factory. Their plant is over 100 years old. When owner Bill Adler bought the company a decade ago and realized he needed to expand, advisors told him to move out of Cleveland.
Bill Adler: Actually my board of directors that we put together to help us make these key decisions, their suggestion was to take the tax abatements and take advantage of those and move to a green field location in Lorain county, for example. My gut said I really wanted to stay where we were and I thought it was an opportunity to grow our business.
MW: Another thing (that) bothered Adler was leaving behind his workers who live close by. Stripmatic's location also favors the city because they must stay close to their customers and the mills that supply steel. On the down side, Adler feels City Hall could do a lot more for the manufactures it depends on for tax revenues and jobs.
BA: When we first did our expansion the process to get building permits, that was very time consuming, it was hard to get in touch with people. It really extended the time to get a project done immensely. I know they've tried to address that and we have not had a third expansion under way yet, but I'll find out hopefully soon if they have been able to streamline the process of getting approval for prints and variances done.
MW: The head of the Greater Cleveland Growth Association wants to work with the city to address these issues. President and C.E.O. Dennis Eckart say people have joked that Cleveland City Hall is a place where people have to wait in dozens of lines and write dozens of check to get things done. But he says the new mayor and her staff are trying to change the system and improve the way companies are treated.
Dennis Eckart: What Mayor Campbell and Tim Mueller, the Economic Development director, have already promoted and what we are going to work with them on is a community certification process, where we can evaluate "best practices." What are the communities around the United States doing? In which you can get permits quickly, in which you can move from idea to design to construction quickly.
MW: While the city is looking to other areas to learn what works, Eckart says a lot can be done by upgrading computer systems, a problem already identified as a priority.
DE: One-stop shopping, one-check writing, computer submission of blue prints, so that you don't have to drag large tubes around hallway to hallway and elevator to elevator to make a fundamental difference. The bottom line is that business need to be treated as neighbors and customers, as taxpayers and that government has to work for them.
MW: Progress is being made on the problem of space. A decade ago, Cleveland had no industrial parks. Now there are eight of them and CIRI officials say double that number could easily be filled. Creating additional room for industry is the challenge of the future. Meanwhile, there's plenty of empty space waiting for tenants outside the city. In Cleveland, Mike West, 90.3.