Back In Business ‘Civic Entrepreneurship’ Helps To Return Prosperity And Hope To Cities Hit Hard Be Recession

When the farm crisis hit Iowa in the early 1980s, 1,500 people moved out of Cedar Rapids almost overnight, beginning a downward slide that was once a familiar story in urban America. Now Cedar Rapids is growing so fast it is building new schools to keep pace.

“I’ve been digging in this town for 35 years,” said construction worker Chuck Lnenicka the other day as he maneuvered his backhoe through the muddy site where a new Catholic high school is rising.

“There was a slow time, but now I don’t know where all the people are coming from.”

The signs of revival are not just in Cedar Rapids. From Cleveland to Denver to Detroit, an impressive collection of cities have figured out ways to attract new residents, entice new businesses and, ever so gradually, begin to turn around their fortunes.

While the problems that bedevil U.S. cities - concentrations of poverty, poor schools and crime - are by no means eradicated, some unexpected places are beginning to make a comeback. Their specific methods are as varied as the cities themselves, but urban specialists see in their solutions a common theme: a desire to unite civic, business and community leaders in search of creative solutions.

It is what some scholars call “civic entrepreneurship,” and it is taking form around the country. In Cleveland, a group of business, political and community leaders is being credited with redeveloping downtown and drawing in new residents. In Denver, city and suburban politicians worked with the metropolitan area business community to attract new jobs and housing to the region, agreeing not to fight each other for the same businesses. In Macon, Ga., city leaders have pulled together to use historic preservation laws to revitalize neighborhoods that once seemed on the verge of becoming ghost towns.

“In every place where we have seen some level of success, we have seen new groups step forward and find ways of working together and using the collaborative process,” said John Melville, co-author of the civic entrepreneurship bible, “Grassroots Leaders for the New Economy.”

The words “civic entrepreneurship” have never passed the lips of the leaders of Cedar Rapids, but they have made the city ground zero in the struggle to employ the creative techniques behind the idea. They have assembled an unusual collaboration of private corporate and civic leaders who work hand-in-glove with the city to diversify their economy, attract new jobs and lure new residents. Raising $1.8 million privately and anonymously, they have dispatched a paid professional staff to scour the globe for business. Many businessmen go on recruitment trips on their own dime, and with dramatic results. In the past 10 years, the city has attracted more than 90 new firms from as far away as Korea, Finland, Germany and the Netherlands to locate plants in their city.

“In the early ‘80s, we were almost exclusively an agriculture-based industrial city,” said Lee R. Clancy, the city’s popular second-term mayor and former civic activist. “Then the farm crisis struck this city broadside, and we lost people, businesses and jobs. A group of business leaders said never again, and people have put aside their parochial interests for the greater good of the community. It sounds Pollyannaish, but it is true.”

At a glance, Cedar Rapids is not an obvious candidate for a comeback. It has no mountains, no seashore, no warm climate and no big natural or man-made recreational amenities.

It is generally lacking in architectural distinction and its downtown smells faintly of roasting breakfast cereal, an odor that drifts over from the nearby Quaker Oats plant.

The city’s problems became acute in the 1980s, when business after business closed and laid off workers and the entire state of Iowa slipped into near depression. Jack Evans, now president of a foundation that supports local causes, remembers the day 15 years ago when a crane manufacturing plant closed on the outskirts of town.

“I don’t have time and place like I do with Jack Kennedy’s assassination,” he said as he remembered the gravity of the day, “but I do remember the sadness.” The closing emptied a 50-acre plant site and vacated three factory buildings almost overnight. It also wiped out thousands of blue-collar jobs that paid top wages.

Within days, Evans and other community leaders had founded the Committee of 100 and set off to try, futilely, to lure a General Motors Saturn plant to the city. Soon they realized that a more professional and systematic approach would be needed to arrest the city’s slide.

They assessed their community, focusing on the positives: It had good schools, a well-educated and productive work force, little traffic, a relaxed quality of life and a low crime rate. They decided they had something to sell and looked for a way to capitalize on it.

They assembled an economic development deal attractive enough to lure companies but not so expensive that it costs the city more money in tax incentives and other perks than it can afford to spend. In the fierce competition for new business, Cedar Rapids’ business enticement packages are judged only as “midrange” among the offers of increasingly desperate cities. Even so, they have not come cheap.

The city erected a giant new water tower and built roads. It has annexed land, pushed through changes in state law and given 5- to 10-year tax breaks to companies willing to relocate. It has moved gas lines and telephone cables and trained workers at public expense.

It also has created a climate that encouraged local entrepreneurship. A former high school teacher founded McLeodUSA, a multimillion-dollar telecommunications company employing 1,966 workers.

“We try to develop a relationship,” said Mark Seckman, vice president for the private group spearheading economic development. “If everything is equal or close, companies do business with people they feel comfortable with.”

Company by company, Cedar Rapids has rebuilt its business and population base over the past 10 years.

The huge building emptied by the crane manufacturer is running three shifts a day making printing presses. Abandoned department stores have been turned into offices.

But virtually every recruit has required a daunting infusion of time and resources. Korean-owned PMX Industries Inc. and civic recruiters exchanged some two dozen visits before the company agreed to locate a $300 million copper and brass recycling plant in the city.

Arrangements have been made to give 10-year tax breaks, construct a rail spur, provide job training, offer a grant to buy equipment and change the name of the street to the English translation of the Korean owner’s name. Finally, the chief executive of PMX’s parent company, Poongsan Metal Corp., flew in to choose among the competing U.S. cities, all of which had offered similar, or better, incentive packages.

The civic group threw a dinner at Brucemoor, a National Trustowned mansion in the center of the city. The mayor and the city’s leading businessmen were on hand as the CEO, a garden lover, was guided through Brucemoor’s 26 acres of Victorian flowers. After dinner, he was toasted in Korean and English and presented with gifts. The first, a large ginseng root widely believed to be an aphrodisiac, was admired and passed around. The second was something more rare: a bear’s gall bladder, also an aphrodisiac, but more potent. That went into his pocket. Moments later, he told his staff to cancel his visits to the other finalists. Cedar Rapids had won.

City officials say they believe it was attention to detail, the high-level turnout, the garden tour and the culturally meaningful gifts that cinched the deal.

Early last year, the group opened its mail to find two anonymous questionnaires about the quality of life in Cedar Rapids. Only later did they learn that the surveys came from Nordstrom, the upscale Seattle retailer looking for a new site for its Memphis, Tenn., catalogue distribution center.

The city promised Nordstrom a new road, water, sewer and electrical connections, a leveled-off site and rezoning. Officials also offered to set up a temporary taxing district that would allow the retailer to pay for the costs of improvements with its first few years of taxes. Nordstrom needed all these things accomplished in five months, and it wanted the city to help move about 35 Nordstrom employees from Memphis to Iowa.

So, earlier this year, Cedar Rapids asked the city’s AfricanAmerican Society to host a dinner to persuade Nordstrom’s Memphis employees to move. They arrived by bus for the weekend. Julie Stow, 32, California-born and single, is the company’s human resources director, and she said her family thought she was crazy to consider uprooting for Iowa.

It was the dinner that sold her. The City Wide Youth Choir sang, a minister whose real name is Elvis Presley gave the invocation, and Stow, who is white, turned to a friend, who is black, and said, “Do you notice something that never happens in Memphis? Everyone is mixing.”

Some Iowa State University scholars are concerned that the city’s very success in building new industries on old cornfields eventually will create serious problems of urban sprawl. That may happen, but it seems not to worry too many residents, or too many others following the city’s success.

“I know the Cedar Rapids people,” said Jeffrey A. Finkle, executive director of the National Council for Urban Economic Development. “They don’t operate in the amateur league on economic development.”