The Outstater: The ‘Secret’ to Local Economic Development

September 4, 2014

“Whatever you do will be insignificant, but it is very important that you do it.” — Mahatma Gandhi

THOSE WHO BELIEVE that their town’s economic development plan is working also read the bar charts in the Chamber of Commerce newsletter and trust that the utility company is figuring their bill accurately. The rest of us have our doubts.

So it was encouraging to hear an old friend, an accomplished mayor and legislator, recall in a self-effacing way how his Indiana city learned that a strong community spirit guided by well-grounded leadership can turn disaster into triumph. And that is true irrespective of PowerPoint presentations, complex rebate formulas and other institutional cleverness.

Actually, there were dual disasters. Fort Wayne had been defined for generations by the International Harvester plant. In the early 1980s, however, the company was crippled by what at the time was the longest strike in the history of the United Auto Workers. The plant closed, and, while that news was still being absorbed, a once-in-a-century flood inundated the city.

Winfield Moses, a local businessman, had just been elected mayor. He remembers doubting there was much that government in itself could do to overcome so much bad fortune. But he felt it was important that his office be seen trying, and in ways easily understood by a hard-pressed and anxious citizenry.

It seemed that an idea a day came flying out of City Hall. The mayor was regularly in the newspapers, on radio and television discussing a wide range of economic-development and relief options — plainly and without posture or pretense.

Most remarkable, his administration didn’t seem interested in gathering the usual suspects — corporate executives, bankers, congressmen and such. Instead, Moses met informally and quietly with men and women with a life-or-death stake in the community. They were shop owners, car dealers, real-estate brokers and the like — people too busy keeping their businesses afloat to serve on formal boards or emergency task forces.

Some of the ideas worked; some didn’t. The mayor and his staff gained confidence, whichever the case, in their ability to tell the difference. And most important, citizens began to feel that City Hall was doing what could reasonably, realistically be done.

And then — boom — came the announcement that the county had been chosen as the site of a much-coveted General Motors small-truck plant, far bigger and better than the old IH facility in every way. The city not only was saved but restored to its former high place on the manufacturing ladder.

Was it the staff’s spot-on color-slide presentation? Did the county’s responsive and generous tax incentive do the trick? Was it the fact-filled brochure from the Chamber? The blue-collar authenticity of the union delegation? OK, then, surely the brilliant business instincts of our friend the mayor?

No, none of that. It was the flood — or how Fort Wayne reacted to it.

General Motors executives had been impressed by the community spirit apparent in national news stories telling how the city had met the flood head-on without so much as a whimper. Fort Wayne was a city, seemingly, where nobody waited around for some official to file the appropriate disaster-relief documents.

There was a Reader’s Digest article referring to “the city that saved itself.” That was soon followed by a presidential visit, with all the attendant hoopla. A local paper won the Pulitzer Prize for its flood coverage. GM is said to have incorporated Fort Wayne’s example of self-reliance into its leadership-training programs at the time.

We know some of that because Randy Schmidt, former UAW president here, has a mischievous streak. He had heard so many local politicians claim credit for winning the GM site that he promised himself he would learn the truth if he got the chance.

The chance came several years after the plant was up and running. Schmidt attended a union-management event with General Motors’ chairman Bob Stempel. He made sure to sit next to Stempel so that he could ask outright who, exactly, deserved credit for bringing GM to town.

Stempel recognized only one of the local politicians whom Schmidt suggested. He remembered the name Moses because the company chairman at the time of the site decision, Roger Smith, mentioned it when the list of sites had narrowed to only a few. “We ought to go with the town with a mayor named Moses who can part the waters,” Smith reportedly quipped.

So, the fact-filled presentations that the economic-development experts had so carefully assembled may have been appreciated and useful but, in the end, were secondary. It was that enduring image in a chief executive’s head of neighborhood volunteers standing with a mayor named Moses to defy the waters.

And you thought the secret was tax-increment financing with a value-capture plan that internalized the positive externalities of public investments.

— Craig Ladwig

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