Will Cleveland Merge With the City Next Door? – Next City

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Will Cleveland Merge With the City Next Door?

A decision in the next month could put the two on a path to regional cooperation. Here’s what’s in it for them.

Story by Erick TrickeyTwitter

Photography by Walter Novak

Published on Sep 12, 2016

Nine years ago, Trevelle Harp made a fateful choice. He bought a house in the town where he grew up: East Cleveland, Ohio, once the home of John D. Rockefeller, and now Cleveland’s troubled neighbor. “I love East Cleveland,” Harp says, “but it was the worst financial decision I ever made.”

Harp was a single, 30-year-old machinist when he bought his 1916 brick colonial with elegant stained-glass windows. He’d just spent a summer renting a flat in East Cleveland, next to a drug house where unfed dogs barked all night and an addict often begged for a fix. His downstairs neighbors were a single mother and her smart, inquisitive daughter. “I thought, how can this girl grow up in this situation and have opportunity?” Harp says. Others would’ve left, but Harp’s conscience called him to plant roots in his hometown. “I wanted to be part of its renaissance,” he says.

Today, Harp is married and raising two kids of his own in East Cleveland. He’s the executive director of Northeast Ohio Alliance for Hope, a community organizing group that focuses on improving East Cleveland’s future. But after years of struggle, Harp is convinced that the city is no longer capable of saving itself. Harp and NOAH have embraced a radical idea that would’ve been unthinkable in this proud town of 17,800 just a few years ago. He wants Cleveland to annex East Cleveland.

“I really think it is a matter of life and death, as far as quality of life,” Harp says. His house is worth two-thirds of what it was before the Great Recession, and his mortgage is underwater. He’s also coping with the hidden costs of living in East Cleveland, including damage to his car from the city’s enormous potholes. After two break-ins, his homeowner’s insurance rates have more than tripled.

“I’m not only looking at the numbers, but I’m looking at my family, my kids, the quality of life we gotta have,” Harp says. “I don’t want my wife to say, ‘You can stay here, but I’m moving back with my mama.’”

East Cleveland is the Cleveland region’s version of St. Louis’ East St. Louis or Detroit’s Highland Park, a troubled big city’s even more troubled neighbor. After 50 years of disinvestment, with little industry and no downtown to stabilize its tax base, East Cleveland is near collapse. Its insolvent government has seen its annual revenue plummet from $16.5 million six years ago to just under $10 million this year. It’s laid off half its workforce since then, including almost half of the police force. Drivers must navigate an obstacle course of broken streetlights and traffic signals, and they avoid certain crumbling roads for fear of blowing a tire or busting an axle.

This April, Mayor Gary Norton asked Ohio’s tax commissioner to approve a petition for Detroit-style Chapter 9 bankruptcy. It’d be the first in Ohio’s history — yet even Norton acknowledges it’d be merely a temporary fix. “Bankruptcy would not solve East Cleveland’s problem,” says Norton. “Its real problem is generating revenue.”

So in August, East Cleveland City Council appointed three commissioners to negotiate annexation terms with its big-city neighbor. Cleveland City Council has until early October to decide whether to do the same.

But annexation is no sure thing. Clevelanders are divided about whether taking in East Cleveland would be a good investment or just a burden. East Clevelanders, after decades of abandonment, tend to be deeply distrustful of outsiders, and many still don’t want to give up control of their town. Last month, East Cleveland’s council approved an extravagant list of demands for special treatment after annexation, then dropped them after Cleveland flatly rejected them. If negotiations ever succeed, both cities’ voters would still have to approve annexation — and it could fail on both ballots.

East Clevelanders who want to remain independent argue that nearby neighborhoods on Cleveland’s East Side are in bad shape too. That brings up an issue that resonates across the country: how troubled cities are increasingly left to fend for themselves. White flight, black flight and capital flight are the biggest reasons Cleveland and East Cleveland are struggling, as residents leave the urban core. But Ohio’s 2011 cuts to local government funding are a factor too. So far, the state has followed up those cuts only with an oversight panel that gives East Cleveland stern advice, leaving the locals free to decide among choices that range from bad to worse.

A huge decrease in population has led to vacant houses throughout East Cleveland.

Annexation, on its own, would have an impoverished big city bail out its even more impoverished neighbor. So the state auditor, who says East Cleveland’s fiscal emergency is the worst in Ohio, has proposed that the legislature give East Cleveland $10 million in state infrastructure aid — but only if it agrees to be annexed. Neither Gov. John Kasich nor the legislature has embraced that idea yet, and officials in Cleveland and East Cleveland say $10 million isn’t enough to fix the problem.

So in the next several months, Cleveland and Ohio will struggle with a dilemma that more cities and states may face before long. When a city can’t survive, who saves it?

JUGGLING THE BILLS TO SURVIVE

Even a few years ago, no one could’ve convinced East Clevelanders to give up their city. Though it’s lost more than half of its peak population, those who stayed have a fierce community pride and independence. Its deep, extraordinary history reflects much of the promise and heartbreak of 20th-century American cities.

“I would not want to see the annexation if I could help it,” says City Council President Thomas Wheeler, whose father, a top city official in the 1980s, has a street named after him. “This city has so much history, why would you want to? Only because we need the help.”

John D. Rockefeller, America’s first billionaire, was East Cleveland’s town father. Rockefeller, who grew up in Cleveland, built his summer estate, Forest Hill, in East Cleveland in the 1870s. Decades later, the Rockefeller family donated land from the estate for the town library, hospital and junior high school, as well as the 235-acre Forest Hill Park, split between East Cleveland and its neighbor, Cleveland Heights.

East Cleveland boomed in the 1910s and 1920s along with Cleveland, its streets filling with roomy, big-porched houses and elegant apartment buildings. Landmarks abound in East Cleveland, from its main street, Euclid Avenue, to the broad hill where Rockefeller’s home once perched: an 1895 church that has passed from Presbyterian to evangelical, the 1916 Carnegie library, a ruined observatory from 1920, and Nela Park, the headquarters of GE Lighting, in a century-old Georgian-revival industrial park.

East Cleveland’s modern history is the story of the lost black suburban dream — of African-Americans who moved from crowded city neighborhoods to seek a better life, only to see much of what they sought slip away. Since the 1960s, East Cleveland has suffered from toxic doses of America’s worst ills: racism, poverty, industrial decline, urban sprawl and political corruption.

Unlike nearby Shaker Heights and Cleveland Heights, which made racial integration a civic priority in the 1960s, East Cleveland experienced blockbusting and near-complete white flight. Its population went from 98 percent white in 1960 to 59 percent black in 1970 to 94 percent black in 1990. It’s common to hear older East Cleveland homeowners talk with pride about how they’ve lived in the city since the 1960s. They’ve held onto their homes while the city’s economy has deteriorated around them.

“We used to have some major companies right up Euclid Avenue, Fisher Body, TRW, Parker-Hannifin,” recalls Hank Smith, a 64-year-old retiree from the Department of Veterans Affairs and an East Cleveland homeowner since 1979. “A lot of the people that worked for those companies lived right here. But once those people started moving out, we lost a lot of residents.”

East Cleveland, like most city governments in Ohio, gets most of its revenue from local income taxes, so the job and population losses hit hard. The city’s government fell into a state-declared fiscal emergency in 1988 and didn’t emerge until 2006. Meanwhile, black flight followed white flight: The city lost nearly half its population between 1990 and 2010, falling from 33,000 to 17,800. Predatory lending swept through town in the 2000s, leaving an epidemic of abandoned homes and apartment complexes. A massive demolition effort, funded by the federal and county governments, has left many blocks eerily empty. Fast-food restaurants have become the anchors of the main commercial district, along Euclid Avenue.

A woman walks past a shuttered business in East Cleveland. (AP Photo/Tony Dejak)

Meanwhile, good political leadership has been scarce. Corruption scandals shook East Cleveland in the 1980s and again in the 2000s, when one mayor went to federal prison for pocketing bribes. Several mayors and city councils have feuded more than they cooperated. Elections and civic debates often turn personal and vicious.

“In distressed communities, you always find this spirit of cannibalism,” says Harp. “East Cleveland has a lot of passion, a lot of pride, but when challenges come to the community, often people respond emotionally.”

East Clevelanders have long pinned their hopes for a comeback on the city’s location. University Circle, Cleveland’s second-largest employment center, lies just on the other side of some railroad tracks. Case Western Reserve University, the Cleveland Clinic and University Hospitals are all a few minutes’ drive away. But so far, the only development to spill over East Cleveland’s border has been the CircleEast Townhomes, a 20-unit gated apartment complex that opened five years ago. In a sign of East Cleveland’s poor reputation, the complex is promoted with a Cleveland address.

“I can’t see any businesses coming into East Cleveland, because of all the dissension between elected officials,” complains Smith. “You can’t get anything done, so it’s hard for businesses to want to come in here and grow.”

Harp believes Cleveland’s economic development department could help bring new businesses and development to Euclid Avenue. “The government we have right now,” he says, “does not have the tools to do those types of things.”

Despite all the ills East Cleveland absorbed over 50 years, the city’s finances didn’t completely collapse until this decade. After years of skimping along with about $16 million in annual revenue, the city’s budget has fallen since 2010 to about $10 million a year. About one-quarter of the loss came when Gov. John Kasich and the Ohio legislature slashed revenue-sharing with local governments in 2011, cutting East Cleveland’s share from $3 million to $1.7 million a year.

That same year, the Cleveland Clinic closed and razed Huron Hospital, once East Cleveland’s largest employer. The city fell back into the state’s fiscal emergency status in 2012 and ended the year about $5 million in the red. Other employers have also left since. Property tax collection has fallen too, since home values in the city still haven’t recovered from the Great Recession. Fines from traffic cameras propped up the city budget for several years, but the state severely restricted their use in 2014.

Norton, East Cleveland’s mayor since 2010, began pushing to explore annexation to Cleveland in early 2015, after years of shrinking revenue, layoffs, rising healthcare costs and nearly frozen wages. He’s shrunk the city’s workforce to 120 people, down from 240. That includes 40 police officers, about half as many as in 2010, and 35 firefighters, down from 46. Norton says there just isn’t much tax base left to tax; only 5,000 workers pay income tax in the city of 17,800, and their average income is $20,000.

“We were juggling bills,” Norton says. “There was always something unpaid. I finally had to say, if I take self-interest out of this, if this were another city, what would I say to the mayor of another city? The best thing to do is consider a merger.”

CIVIC RESPONSIBILITY OR MORAL HAZARD?

What’s in it for Cleveland to take in its ailing neighbor? Protecting its border and making something of an endangered, historic community, argues Cleveland City Councilman Jeff Johnson. His ward borders East Cleveland, and he says he’ll campaign door-to-door in East Cleveland for annexation.

“It drags that part of my ward down when there’s chuckholes on the other side, when [they’re unable] to have enough fire services, police services,” Johnson says.

Johnson thinks East Cleveland’s housing stock could be a long-term asset to Cleveland, from its many century-old homes to its several dozen “Rockefeller homes” (French Norman houses commissioned by John D. Rockefeller Jr. in the 1930s).

“Architecturally speaking, it’s a beautiful city, and what’s going on over there is sad and tragic,” Johnson says. “Part of the reason I want a merger is to physically save it.”

But the more Johnson has explored annexing East Cleveland, the more he’s convinced that Cleveland can’t shoulder the burden of saving it alone. Cleveland is more than 20 times the size of East Cleveland in both area and population, and it has the stable tax base that East Cleveland lacks: a surviving industrial base, a downtown full of commuters paying income tax. But parts of Cleveland, especially its poorer, predominantly African-American east side, suffer from the same stresses as East Cleveland: foreclosure, abandonment, crime. Cleveland, too, has shrunk radically in population, from a peak of 900,000 in 1950 to 396,000 in 2010. Its city services, from police to pothole-filling, are stretched thin.

“If we had to foot the full bill, it would be unfair and difficult,” Johnson says. “We have people, and the talent, and the know-how. We’re going to need millions of dollars.”

Cleveland City Council President Kevin Kelley says he’s open to the idea of annexing East Cleveland, but only if it doesn’t harm his city.

“Despite all the great things going on in the city, we’re still struggling in many ways,” Kelley says. “We’re not in a position to take on a very financially struggling community without any assistance. We’re just not.” This November, Cleveland officials will ask voters to approve an income tax hike, from 2 percent to 2.5 percent. One reason is the city’s consent decree with the Department of Justice, which requires it to retrain its police department to curb its pattern of excessive force.

But if Cleveland successfully takes in East Cleveland, it could create a precedent, Kelley says hopefully. There are 57 towns besides Cleveland and East Cleveland in Cuyahoga County. It’s widely acknowledged in Northeast Ohio’s good-government circles that 59 governments is too many, but no one seems to do anything about it. Four suburbs explored a merger a few years ago, but abandoned the effort. Cleveland hasn’t annexed a neighboring town since 1932.

“A lot of these inner-ring suburbs are small cities, but have big-city problems,” says Kelley. If Cleveland can improve East Cleveland, “[it could] let people know that becoming part of the city of Cleveland can really be in their best interest.”

Ohio auditor Dave Yost wants to help. His office oversees the fiscal commissions that advise the 22 Ohio municipalities currently in fiscal emergency. Most are there because of “a combination of limited management ability and economic headwinds,” says Yost. “East Cleveland is in a unique situation. I don’t see a way forward for them as an independent entity. Their tax base has continued to erode.”

Ohio has no emergency manager law for troubled cities, so Yost is out of tools to address East Cleveland’s insolvency. He’s the one who asked the state legislature to approve a $10 million grant to rebuild East Cleveland’s streets and other infrastructure if it agreed to be annexed. The state denied his request, but he is optimistic that it could be considered again at a later date. “Solutions are ultimately matters for local control and decision making,” Gov. John Kasich’s press secretary, Emmalee Kalmbach, wrote in a statement.

Yost says making annexation a condition of aid is the only way the state can help East Cleveland financially without creating what economists call a moral hazard. “If the state comes in and just gives money to East Cleveland, it’s going to discourage other cities facing hard choices from making those choices,” Yost says. “They will just keep on spending, knowing the state will bail them out.”

East Cleveland’s problems aren’t just due to economic factors beyond its control, Yost says. “There’s certainly some of that, but it’s compounded by reckless spending over decades, frankly, and also by incompetent management of City Hall.”

For instance, Yost says, when the Cleveland Clinic closed Huron Hospital, it agreed to contribute $7.8 million to the city to ease the financial blow. Norton, Yost says, should’ve downsized the city workforce sooner and used the one-time money to fix the city’s infrastructure and attract development. “That would be the competent thing to do,” Yost says, “but they spent every dime on current expenses or old expenses that hadn’t been paid.” (“That sounds reasonable in 2016,” Norton replies. “It’s easy to armchair-quarterback five years later.”)

Yost says encouraging a merger by offering infrastructure aid fits the state’s interest in reducing the number of local governments in Ohio, which has more layers of government than it needs. Cleveland and East Cleveland leaders say East Cleveland’s deferred infrastructure needs are far higher, up to $50 million. Yost says his $10 million figure is based on getting services up to Cleveland’s level — and what his staff thinks he might persuade the legislature to spend.

Yost says he’s hopeful state leaders will step up once the cities’ annexation talks progress. “The most common thing I heard from legislators and the administration is, ‘Well, we’re going to have to do something. I can probably be for this.’” But they won’t act until Cleveland and East Cleveland make the first move.

PLANNING ACROSS BORDERS

There are East Clevelands all over the country, poorer small cities or suburbs in danger of going broke. “Every city has multiple suburbs like this,” says Rebecca Hendrick, a professor of urban planning at the University of Illinois at Chicago. Hendrick paid special attention to Chicago’s most troubled suburbs when she researched her 2011 book on suburban government, Managing the Fiscal Metropolis.

Chicago, Hendrick says, has six to eight suburbs “at a point where they can’t function — they just don’t have the tax base they need to provide adequately for health, safety and welfare.” Most, including Harvey, Robbins, Ford Heights and Posen, are clustered together in southern Cook County. She says the stories she heard there — 40 percent of property owners not paying their property taxes, police being paid with vouchers — reminded her of a book she read in graduate school, Planning and Budgeting in Poor Countries. Southern Cook County boomed thanks to its heavy industry around World War II, then went bust as the economy shifted. “People who can move out do move out,” Hendrick says. “What’s left is a population that’s not mobile.”

The towns don’t have a lot of good options, Hendrick says. Cook County President Toni Preckwinkle has worked to encourage economic development in southern Cook’s poor towns, creating enterprise zones there in 2014. But if the towns can’t add to their tax base, Hendrick says, their only other options are a state takeover, unincorporating (which would leave local government responsibilities to the county), or merging with another city. But most cities won’t want to absorb a troubled neighbor, she says: “You’re just annexing more problems than you [gain in] revenue.”

In 2011, five Cleveland State University professors compared East Cleveland to distressed communities in three other states: Chester, Pennsylvania; Prichard, Alabama; and Inkster, Michigan. The study found that Chester’s economic development authority and Prichard’s housing authority had redeveloped parts of the city, while Inkster benefited from its city manager form of government. But the paper recommended that all four cities consider more drastic steps, including restructuring city government, regional service delivery, regional government and annexation.

Study co-author Benjamin Y. Clark, now a professor of public administration at the University of Oregon, says none of the four cities is in great shape five years later. In 2015, he argued in an op-ed for Cleveland’s Plain Dealer that East Cleveland should become part of Cleveland.

“The demand for service within East Cleveland is in excess of the amount of revenue they will ever be able to collect,” Clark says today. “They’ve been in this situation for a generation, and nothing has really changed. There’s not enough money to do anything. The state is not offering any real help besides saying, ‘We’re looking at your books, and it doesn’t look good.’”

East Cleveland is an extreme example of a common phenomenon in the Midwest: Urban sprawl leads to abandonment in the core, because the region’s population isn’t growing. Cuyahoga County is losing people; the metro area’s population count is stagnant. Norton, the mayor, who has partnered with the Cuyahoga Land Bank to get hundreds of decrepit houses torn down, knows the trend as well as anyone.

“There is a greater supply of housing than there is demand because of the population shrinkage,” Norton says. “In part as a result of that, we have more vacant and abandoned housing to deal with.”

Two abandoned homes in East Cleveland (AP Photo/Tony Dejak)

Cleveland doesn’t have a system of regional cooperation to counter urban sprawl, like Minneapolis-St. Paul’s regional revenue sharing and planning, or Indianapolis’ combined city-county government. (The Northeast Ohio Areawide Coordinating Agency allocates federal transportation money, but it can’t control land use. Ohio’s home-rule structure gives that power to cities and townships.) Columbus surpassed Cleveland as Ohio’s largest city long ago by making annexation a condition of extending its water and sewer systems. Cleveland, meanwhile, has barely grown for 80 years.

Elsewhere, as cities regain strength and places like East Cleveland begin to face chronic problems, regional approaches are gaining momentum. In June, two Bay Area government agencies voted to merge to allow for a more regional approach to planning. In 2014, Iowa and Nebraska reached across their common border to take a regional approach with planning in the Omaha-Council Bluffs metro area. Even Paris, by no means an ailing city, has embraced a regional approach. This year, the city came under a metropolitan governing board intended to help it overcome old divides and better compete with London, which already has a strong regional identity.

Harp, who’s studying economic development at Cleveland State University while running NOAH, hopes annexation of East Cleveland sparks more regional thinking. He’s seen the difference it can make: His wife is most recently from Minneapolis. “She didn’t know what a pothole looked like until she got here,” he says.

NEGOTIATING AGAINST A TICKING CLOCK

Even now, East Cleveland isn’t sure it wants to join Cleveland. Public opinion in the town is split. East Clevelanders like having their own small-town City Hall and police and fire departments. Many point to some Cleveland neighborhoods’ abandonment, aging roads and crime. Racial pride also plays a role: While Cleveland is 53 percent black, East Cleveland is 93 percent black. After East Cleveland chose to close two branch libraries rather than join the Cuyahoga County library system in 2012, the main library hung a Pan-African flag at its front door. A half-century of flight and abandonment has left many East Clevelanders suspicious of outsiders, and having to take their grievances to Cleveland City Hall, eight miles away, does not interest them.

“There’s a portion of the Bible that says the children of Israel were put in bondage because they couldn’t afford to pay their taxes,” says Rev. David L. Hunter of East Cleveland’s Bright Star Missionary Baptist Church, who’s lived in the town since 1967. “I equate that with East Cleveland. Why should a city that is strapped financially be taken over by people only for financial gains? Why not work to give those who want to stay, who are proud of their homes, like I am, a chance to see the city be a vital city like it used to be?”

Hunter is sitting at a table in NOAH’s offices, debating annexation with several of its members. “Glenville, Collinwood — their streets are no better than ours,” he says, naming east side Cleveland neighborhoods. “I have not seen that great divide that says if we come together, we’re going to gain this, gain that.”

Hank Smith disagrees. “As far as potholes, Cleveland pretty much stays on top of theirs,” he says. “Unfortunately, this city does not have any money.”

Hunter says he doesn’t want to lose the East Cleveland police. “They are sensitized to their people and neighborhood, more so than Cleveland,” he says. Cleveland, he notes, has had to pay millions of dollars in settlements to people injured by police, or the families of people killed by them.

Darrell Fields, an attorney who lives in East Cleveland, says the city could negotiate to make its police department a Cleveland police district after annexation. “The police [would] know who we are and understand who we are,” Fields says.

“All of that sounds good,” says Hunter. “[But once] we get merged in with the city of Cleveland, we’ll become to a lesser extent a community. That’s my fear.”

Houses string Pattison Park in East Cleveland. 

East Cleveland’s decision to seek annexation with Cleveland didn’t come easy. When the mayor circulated an annexation petition last year, the City Council successfully challenged it in court and argued that Norton should instead cut the payroll further and ask the state for a bailout. But this summer, as the budget problems mounted, the mayor and council reached an agreement: The mayor agreed to seek foundation funding for a study of alternatives, and the council appointed annexation commissioners.

“Everybody deserves an option,” says Wheeler, the council president, who helped broker the compromise. “I don’t want to give them merger as the only option. It’s that or raise your taxes — whatever options that are available, no matter how expensive they may be. I’m open, up to the day the last light is turned off in City Hall.”

But East Cleveland City Council botched its first move to join Cleveland, wounding the whole effort. Attached to its August 1 ordinance appointing the annexation commissioners was a long, demanding list of negotiating positions. The list — though mostly written by Fields — made the council look self-serving and unwilling to give up power. It declared that East Cleveland wants to be a “semi-autonomous ward” within Cleveland that keeps its municipal court and has a police and fire district to itself. It demanded enormous subsidies from state government: a $20 million housing rehab fund, $10 million in aid every year and a state-subsidized income tax cut for East Clevelanders only. It also called for East Cleveland’s current City Council to control a new development corporation that would own all the public land in town and continue to pay the council members their part-time $4,500 salaries.

“East Cleveland City Council this week absurdly asked for ransom in exchange for trying to save its life,” wrote Cleveland.com columnist Mark Naymik. “That’s right, council members want their rescuers to pay them first.”

East Cleveland’s own mayor rejected the demands. “They’re unrealistic, impractical and illegal in some cases,” Norton said. “The only things missing from the list are a moat, a drawbridge and a fire-breathing dragon.” Cleveland’s City Council president, Kelley, rejected them with polite understatement. “This is not a starting point,” he told Cleveland.com.

Chastened, East Cleveland City Council reappointed the annexation commissioners on August 31 with no negotiating points attached. That reset the clock.

Now Cleveland City Council has until early October to appoint annexation commissioners, or not. If it does, the negotiators will have four months to agree on a plan, which could go before both cities’ voters in November 2017.

Jeff Johnson, the Cleveland city councilman, says any plan’s success on the ballot will depend on state help. “It’s unfair to expect the city of Cleveland to go it alone and merge without the support of the state,” he says, “and it’d be difficult to get a majority vote from Clevelanders without transitional funding.”

If either city says no, East Cleveland’s plight will grow. Its current financial plan, approved by its state-appointed fiscal commission, calls for balancing the budget with another $1 million in cuts next year and more than $2 million in 2018.

“We’re all on the airplane, and the airplane’s going down,” says Wheeler. “We’ve got to cut a deal so we can land it, or we can argue about who’s going to take the controls when we crash.”

Our features are made possible with generous support from The Ford Foundation.

Erick Trickey is a freelance journalist in Boston. He's written for SmithsonianPolitico Magazine, Boston magazine and Cleveland Magazine.

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Walter Novak was born sometime in the mid-20th century in Czechoslovakia. He first picked up a camera in the late ’70s, taking pictures of the people and places around him.​ He’s since become an award-winning photographer who has shot the Rolling Stones, Bruce Springsteen and U2. His work has appeared in The Boston GlobeCleveland MagazineDer SpiegelThe New York Times and Ohio Magazine.