Economic Development in Three Urban Areas: Atlanta, Baltimore and Cleveland

Executive Summary

The following pages review the comprehensive strategies that have been used by the cities of Atlanta, Baltimore and Cleveland to improve their economic conditions. It should become apparent to the reader that the fate of each city is determined by many factors including historical events, the balance of power between stakeholder groups, the ability of the city to capitalize on federal programs and the relationships between the private sector and the community. Unfortunately, no clear winning strategy arose from each city's economic development efforts; they all caused both gainers and losers.

Atlanta is a city that is led by business leadership whose main priority is to promote business interests that are at times at odds with the communities' development. Baltimore, with very little private investment, relies heavily on its citizens' involvement whose collective bargaining and activism have hindered its political leadership's attempts at growth. Cleveland has fallen victim to "ivory tower" leadership that has led to financial mismanagement and increased community frustration.

I have attempted to review the last decade in each city, and in the context of that city examine the strengths and weaknesses of their actions. The scope of this project is large. To focus the reader's attention on the difficulty the cities have experienced in trying to meet their stakeholders' needs and expectations, I have chosen to focus on a few specific actions that were taken in each city to promote economic development. This discussion is by no means exhaustive; additional learnings can be gleamed from further research.

Atlanta

Atlanta's political and social structure and development has been characterized by what author Clarence Stone labels regime politics in his book Regime Politics: Governing Atlanta: 1946-1989. The regime's determining factor is the loosely formed coalitions and collaborations between the white Atlanta elite and the black middle class leadership. The partnership (although the power was not balanced between the groups equally) has its beginnings in the 1940's when astute white businessmen properly predicted the growth of a black middle class and a shifting in electoral power. Faced with two choices: to use their social and economic clout to fight the inevitable changes in political power or adopt more cooperative policies that permitted the growing minority freedom to participate and influence the political and economic process; they chose the former.

Sixty years later, Atlanta is still controlled by its business elite; however the complexion of the city and its power structure has changed dramatically. The urban area is predominantly African-American, although Hispanic neighborhoods are beginning to surface. The mayors of the last few decades have been African-American and there has been a steady growth of African-American businesses. Atlanta's response has been to increase its efforts to make the city more attractive to businesses in the hopes that the businesses will help Atlanta continue its growth. The following discussion reviews some of the strategic steps taken by Atlanta's elite to move it into the upper echelon of cosmopolitan cities that are capable of attracting Fortune 500 companies.

The Atlanta Project

The Atlanta Project (TAP) was created in 1991 by former United States President Jimmy Carter to facilitate discussion on problems in economic development, housing, education, children/youth, health, arts and the public safety for the half a million Georgia residents that live in Atlanta and the surrounding areas. Although TAP was crafted to be an intermediary from the very beginning (a result of meetings of leaders from Atlanta corporations, academic institutions and non profit organizations); there was a misinterpretation by the very public it wished to serve. Local residents believed that TAP, as an entity would solve their problems and began to pressure the organization to act on their behalf. As a result, TAP engaged in quick fixes to raise its public image but muddied the water's on its exact goal and was considered by many to be ineffective.

After nine years of lackluster performance, TAP was transferred to the management of Georgia State University (GSU). In the nine years under the Carter Center, TAP was responsible for immunizing 16,000 children and helped 1,100 Atlanta residents find housing and jobs, far short of the success most had imagined for it. Under GSU's Neighborhood Collaborative, TAP has shifted its emphasis to partnerships with the University to accomplish its community capacity building, which are in line with the university's focus on service learning opportunities. In addition TAP provides support services to the Community Empowerment Advisory Board, the resident comprised arm that advises the Atlanta Empowerment Zone Corporation.

Empowerment Zone

In 1994, Atlanta recognized the dire straits of fifteen percent of its urban residents and applied for designation in the initial round of the federal empowerment zones. Fifty five percent of its population had incomes under the poverty level with an unemployment rate of 17% and half of its residents in public housing.

Thirty neighborhoods in Atlanta over 9.3 square miles were designated as an urban empowerment zone at the end of 1994. Under the empowerment zone plan, over several years, Atlanta will receive $100 million in grant money and a variety of financing tools, including loan guarantees, tax-exempt bond financing, accelerated property depreciation, and wage tax credits to promote economic growth. To qualify for designation, it needed to submit a plan on how it would spend the funds allocated for its economic development. As part of the plan, Atlanta envisioned an "urban village" where residents work cooperatively to improve quality and emphasized development that is economically and ecologically sound. Its five point plan included: increasing employment opportunities and attracting new jobs, increasing public safety, reducing poverty and drug use, providing adequate housing and establishing an organization to govern the process.

The Atlanta Empowerment Zone Corporation (AZEC) was formed to oversee the implementation of the strategic plan. Its actions are governed by two boards: the executive board and the advisory board. The executive board is comprised of representatives of public agencies, service providers, the private sector and the community. The advisory board is comprised of representatives from each of the neighborhoods. It is the responsibility of the advisory board to represent the interests of the community