Urban guerrillas: re-inventing our cities - includes related articles - Panel Discussion

Chief Executive, The, Oct, 1994 by Lorri Grube

The promise of re-inventing the federal government remains embarrassingly unfulfilled, but a new wave of U.S. mayors is redefining how cities can be run--and how they might be saved.

After the L.A. riots, ignited by the Rodney King verdict, Milwaukee Mayor John Norquist, a Democrat, attended an advisory committee meeting of the U.S. Conference of Mayors. There was a keen sense of anticipation among many participants, who thought Washington ought to recognize its obligation to check the continuing decline of U.S. cities. "I was saddened and puzzled by the mayors' reaction," Norquist later told a forum sponsored by the Manhattan Institute. "If anyone was likely to change his or her view of Los Angeles following the riots, it would not be politicians in Washington but bankers and investors."

Despite surface maneuvering by the federal government, Norquist's assessment has proved correct. Fed up with crime, rising taxes, and squalid schools, city dwellers are turning to a new breed of local politician with fresh ideas. Over the last three years, turnover among big-city mayors has accelerated. Republicans--traditionally the party of suburban America--now run five of the nation's 12 largest cities, including New York and Los Angeles. The GOP's urban guerrillas include Indianapolis Mayor Stephen Goldsmith and Jersey City Mayor Bret Schundler. "New" Democrats include Norquist of Milwaukee, Philadelphia's Ed Rendell, and Cleveland's Michael White. All were elected on platforms to downsize government, rein in powerful unions, reduce taxes, and privatize or de-monopolize city services.

Economic realities are mugging politics as usual. In the Information Age, as former Citicorp Chairman Walter Wriston observes, capital goes where it is wanted and stays where it is well-treated. It flees onerous regulations, high taxes, rampant crime, and poor quality of life. New York and other major cities must quickly create a climate that attracts financial and intellectual capital. Tough to do with government that Indianapolis' Goldsmith says spends too much and fails to earn its keep. That government is inefficient hardly shocks business leaders, who have endured a decade of restructuring to squeeze the last ounce of productivity from their organizations. But re-inventing government is not just a quibble over efficiency. It goes to the heart of how people live and work with one another.

This roundtable report focuses on three mayors who are making a difference: New York's Rudolph Giuliani, Philadelphia's Ed Rendell--because they run large U.S. cities with complex problems--and Jersey City's Bret Schundler, because his reform agenda is broadest in scope. Each is plagued by creaky finances; the exodus of jobs, businesses, and middle-class wage earners; and social afflictions wrought by poor schools. To varying degrees, each mayor has broken with past practices, seeking market-oriented solutions to the delivery of services, and facing down unions and special interests.

In the following discussion--conducted in partnership with Cushman & Wakefield and held in its new corporate headquarters in New York--Jersey City's Schundler tells CEOs that reform must include expanded citizen choice about everything from the way schools are run to the way streets are cleaned, and limits on politicians' power to grant favors. At 35, the former Wall Street investment banker came to office on what seemed likely to be an interim basis: In a city that is more than three-quarters Democratic, he was elected following a special ballot held to replace a mayor who had gone to prison. Few expected Schundler to survive an all-out campaign against him in 1993, which attracted to the opposition cause such luminaries as Jesse Jackson and Sen. Bill Bradley. But having reduced taxes, cleaned up the financial ledger, and introduced an imaginative school-voucher plan, the incumbent struck a chord with an electorate hungry for change Schundler won handily with 68 percent of the vote.

On the CEO side, roundtable participants debate strategies to make reform stick and to increase the effectiveness of business/government partnerships. Most agree that prerequisite to re-modeling government is an effort to re-invent their approach to working within communities.

"Business has to look at cities as profit-making opportunities," says Bob Jackson, division president of real-estate developer K. Hovnanian Enterprises. Adds Cushman & Wakefield's Jerry Cohen: "We have to make it work. We don't have any options."

THE RIGHT TO CHOOSE

Bret Schundler (mayor of Jersey City): When I was elected mayor of Jersey City, my work was cut out for me. Jersey City had a $40 million deficit on a $290 million budget, with a 78 percent collection rate. The budget the City Council had prepared prior to my election in 1992 foresaw laying off 10 percent of the city work force and increasing the municipal part of the tax bill by 54 percent to cover the deficit. An average tax bill on a $100,000 house totalled $3,900. And citizens continued to complain about bad schools, dirty streets, and unsafe neighborhoods.