Changing Gears is a public media project about the future of the industrial Midwest. Each week, reporters Dan Bobkoff in Cleveland, Niala Boodhoo in Chicago and Kate Davidson in Ann Arbor cover issues of interest to the Great Lakes region. Changing Gears also sponsors public events and conversations.
Gasification fight Cleveland Mayor Frank Jackson wants to turn the city’s trash into energy. But environmentalists have raised concerns about emissions from the “gasification” process. And the city council is not sold on the idea.
The part that’s not so Super It’s Super Bowl weekend in Indianapolis. Cities that host the Super Bowl are usually hoping for a big economic boost. But there’s one kind of economic activity that Indiana officials are hoping to avoid: sex trafficking. Reporter Michael Puente from partner station WBEZ had a look at the city’s efforts last week.
Land for sale If you’re looking to buy some land, you might want to check in with Cleveland-based the Forest City real estate company. The company, which built its empire on land purchases, is now looking to unload more than 6,500 acres of land.
700 jobs short Google is celebrating its fifth birthday in Ann Arbor. When the company first opened its Ann Arbor office in 2006, it was huge news for the state. The company said it would hire 1,000 workers in the first five years. The actual number is closer to 300. (We tried asking Google: “Where are the rest of our jobs?” The search didn’t turn up anything useful.)
Soul Train was a big influence on generations of American teens (and their younger siblings and older relatives). So, the news today of host Don Cornelius’ death is jolting many people, no more so than here in the Midwest. Famous people, ranging from Jesse Jackson to Quincy Jones, are paying tribute.
Soul Train began as dance parties at local schools, then became a local program on Chicago television. It featured dancing and performances in the mode of American Bandstand, but with an urban flair exemplified by Cornelius’ deep, smooth voice. And of course, the highlight of every show was the Soul Train line dance, along with Cornelius’ sign off: “Wishing you peace, love and souuulll.” Continue reading “RIP Don Cornelius, From Chicago to Peace, Love and Soul Train”
Talking Points Memo, an influential political blog, is estimating that as much as $100 million could be spent on the recall fight involving Wisconsin Republican Gov. Scott Walker.
It quotes analysts saying spending could be two or three times the $44 million that candidates and their supporters spent during state Senate recall races last year. Walker, at least, is getting ready for a pitched battle. He raised $4.5 million in just over a month, and has more than $2 million on hand, according to TPM.
Flint Plan: Michael Brown, the emergency manager of Flint, Mich., unveiled his plan yesterday for reducing an $11.3 million deficit. Not surprisingly, one of his top priorities is to overhaul bargainingagreements with city unions, something an emergency manager is allowed to do under Public Act 4, passed last year by the Michigan Legislature. Brown also wants to reopen the city jail, which closed in 2008.
Wisconsin Candidates: Democrats are raising their hands for the opportunity to challenge Wisconsin Gov. Scott Walker, who appears to face an almost certain recall election this fall. Former Dane County chief executive Kathleen Falk said the 1 million signatures submitted by opponents to Walker on Monday convinced her to run. State Senator Tim Cullen of Janesville also plans to enter the race.
Toyota Milestone: It may be hard for car buffs to believe, but Toyota’s plant in Princeton, Ind., will turn 14 years old this year. And this week, it built its 3 millionth vehicle. The factory, in southwest Indiana, makes the Sienna minivan, which was the best selling family van in the United States last year. It has 4,100 workers and an annual payroll of $288 million.
Rock Hall: Dead Heads, listen up: the Rock and Roll Hall of Fame in Cleveland will celebrate the Grateful Dead this spring with an exhibit called The Long Strange Trip. It opens April 12, giving you plenty of time to launder your tie-dye t-shirts and get out your Jerry Garcia ties.
Here’s one way an economy can begin to turn around: a business person sees an opportunity. Maybe it’s a building that’s been sitting empty, or a block corner that’s looking run down. The business person gets together with investors, and maybe lands some government tax incentives. It becomes a public-private partnership.
But sometimes, an economic turnaround starts not with investors or public money. It starts with philanthropy. Dustin Dwyer recently reported for Changing Gears from Grand Rapids, Mich., on the role that philanthropy is playing there, and elsewhere in the Midwest.
To the east, up Monroe Avenue Northwest is what’s called Medical Mile. $1 billion dollars went into building the medical and bio-research facilities over there – much of that in the form of private donations.
Without these developments and without philanthropy, Grand Rapids’ downtown would seem pretty empty.
Given the rise of ATMs and online banking, it’s probably not a surprise that the number of brick-and-mortar bank branches has been declining nationwide. But a recent analysis from SNL Financial finds they’ve been closing faster in poor neighborhoods than rich ones. And, when they close, not only does it mean less access to credit, but higher default rates too. That’s one more setback for our region’s struggling neighborhoods as they try to rebound.
A former branch of Ohio Savings Bank on Cleveland’s east side is quickly becoming an eyesore in Lynne Alfred’s neighborhood.
“There’s litter and trash around. And, the paint is peeling,” said Alfred, who runs a shop down the street.
The branch closed a year ago — a rent dispute the bank said. Its $23 million in deposits were transferred miles away to other locations.
With its red brick and white columns, the branch served as a kind of local landmark.
“It was a magnificent gateway to the Larchmere neighborhood,” Alfred said.
Alfred and her husband have lived in the area for years. She remembers when they needed a loan, they used to just walk to the branch.
“We’d sit down and talk about it and we’d fill out the paper work and that was it,” she said. “It was very easy, very friendly. We knew them and they knew us.”
Emre Ergungor is a senior research economist with the Federal Reserve Bank of Cleveland. He said this kind of relationship reminds him of a movie shown a lot this time of year: It’s a Wonderful Life, with George Bailey and his Building and Loan Association.
Conventional wisdom these days is that online banking and credit scores make this kind of George Bailey-style relationship obsolete. But in research he’s done looking at branch closures in the Cleveland area, Ergungor finds that’s not always the case.
“Those kinds of relationships still matter in a small corner of the lending world and that’s where the low income individuals live,” Ergungor said.
Ergungor was surprised to learn how much losing a bank branch affects a lower income neighborhood like Larchmere, where half of all residents make less than $50,000 a year. Not only do locals find it harder to get loans, but loan defaults go up too.
“It’s a no-win situation,” he said.
Ergungor thinks this is because credit scores are no substitute for the judgment of a local banker. A banker may know so-called soft information: like how a loan applicant’s employer is doing? Or, how they’ve handled unexpected expenses like emergency medical bills. That helps the bank make a better decision about who should get a loan. People can have the same credit score but completely different approaches to repaying their debts.
But here’s the thing. Even though it can be riskier for a bank to rely on credit scores alone, they often lose less money on defaults than it costs to keep a branch open.
“The only thing that goes through bank management’s mind is: can we make money on that branch?” said Bill Mahnic, who teaches banking and finance at Case Western Reserve University.
Many in the Cleveland’s Larchmere neighborhood believe their business should have been enough to keep their bank open.
As their Ohio Savings branch was closing last year, one man collected 300 signatures protesting the move. That led to this group of fifteen or so community members who meet regularly in churches or libraries to figure out ways to bring a brick-and-mortar bank back to their neighborhood.
Some like Alanna Ferguson worry not just about access to credit, but about the elderly and disabled who can’t get to other branches. And, worse, she worries the shuttered bank signals that the community is on the decline.
“Perception is everything,” Ferguson said. “And, if people perceive that there’s no money in the community, or no real concern about home improvement or maintaining property, or doing financial transactions, then certainly it can give that kind of perception.”
African-American Influence: The number of African-American households earning $75,000 or more grew by 64% between 2000 and 2009 — 12% faster than the overall population’s earning growth, a new survey by the Nielsen Co. shows, according to Crain’s Chicago Business. African-American women, particularly, are boosting their earning power. The percentage of black women who attended some college or earned a degree increased to 53%, compared with 44% for black men. Though the numbers are national, they signal a socioeconomic shift for cities with significant black populations, such as Chicago and Detroit, Crain’s said.
Detroit Light Rail Aftershock: Business leaders in Detroit are feeling the aftershock of the government’s abrupt decision this week to cancel a light rail project, the Detroit News said. The leaders say they were not consulted by the Transportation Department, which scrapped the $500 million project in favor of high-speed buses. Given the time and effort that city businesses and leaders committed to the project, they were owed a discussion before the announcement was made, the Detroit Downtown Development Partnership said in a letter released today.
New Cleveland Flights: Delta Air Lines is adding 10 new daily flights between Cleveland’s Hopkins International Airport and LaGuardia Airport in New York City. According to the Cleveland Plain-Dealer, the flights begin July 11. The first will be at 6:45 a.m. and the last at 7 p.m. The Delta service joins five flights a day by American Airlines, and 12 a day by United Airlines, which assumed Continental Airlines’ hub in Cleveland when the airlines merged last year. Delta said its creation of a LaGuardia hub is the largest single airline expansion in New York in more than 40 years.
Detroiters were more than a little perplexed this week at the news the city wouldn’t be getting a long-sought light rail system. Instead, the Transportation Department has recommended a high-speed bus transit system for the Motor City, even though $25 million had already been allocated for light rail.
Fast buses? Like the one in the movie Speed? Well, not exactly.
High-speed buses run in dedicated lanes that bring to mind streetcar tracks, except much cheaper and easier to install.
They’re operating just a couple hours’ drive away from Detroit, in downtown Cleveland, one of a growing number of American cities that have installed them. There, HealthLine buses glide along Euclid Avenue and out to the famous Cleveland Clinic.
Rather than hail a bus, and pay as they enter, riders buy tickets, then hop on and hop off. The platform is the same height as the bus, making the ride easier for the elderly or disabled. The buses have their own traffic lights, which allow them to avoid snarled traffic.
Our Dan Bobkoff took a look at Cleveland’s transit system earlier this year for Marketplace. In Cleveland, the rapid bus system cost $200 million; a light rail system would have cost $800 million.
But proponents of light rail systems say they can do more for development than rapid bus systems — something that Detroit can definitely use.
“There’s a distinction between public transit as economic development — which was the great hope for light rail — and public transit as a basic service to move people from homes to jobs,” Stephen Henderson, the editorial page editor of The Detroit Free Press, wrote this week.
Would you have preferred to see light rail for Detroit? How do you feel about rapid bus transit?