A RENAISSANCE IN CLEVELAND
The Mistake by the Lake. Not the most flattering description of a city and one the city of Cleveland is likely ready to leave behind. Thankfully, from an economic development perspective this area is beginning to experience a rebound fueled by several diverse factors.
Jobs & Housing
As recently as 2011, according to Kathleen Cosner in The American Genius, Cleveland was in decline. Job losses, companies leaving the area, and houses that were selling for a third of their value were all factors plaguing the city. Contributing to the demise of the housing market was mortgage fraud. Today this sector of Cleveland’s economy is on the upswing due to growing consumer confidence, low mortgage rates, and city leaders holding those responsible for mortgage fraud accountable for the demolition costs of abandoned homes. Interestingly enough, the rental housing marketing is booming in Cleveland with renting becoming more popular than buying for 18-to-34-year-olds. Michelle Jarboe writes in The Plain Dealer that to meet the demand for high-end rentals, developers are turning older office buildings into residences. The lure of downtown living will likely bring back some of the 20,000 downtown jobs lost between 2002-2014 when many jobs migrated to the suburbs. However, large employers such as IBM and New York Life Insurance Company will need to be instrumental in bringing those jobs back and, in turn, spurring interest in working and living downtown. Cleveland currently boasts a rental vacancy rate of only 3 percent, with new high-end rentals being added continually. Wages for those downtown workers have increased and the average annual wage currently over $73,000.
Cleveland and bioscience? While the Cleveland Clinic is long known as the standard in health care, it is now also a catalyst for Cleveland’s economic upturn. Tom Thriveni wrote on OZY.com that the Clinic has spun out such partnerships as Cleveland Heartlab, which is patenting technologies to test for heart disease. Many of the researchers at Heartlab came directly from Cleveland Clinic and are working on innovations that will turn into commercially viable medical products; a win-win for both Heartlab and for Cleveland Clinic. The Clinic is housed within a stretch of Cleveland’s downtown called the Health-Tech Corridor, which covers 1,600 acres and is home to various other healthcare and higher education institutions. Several incubators lease space within the Corridor and provide consulting and other business development services for the bioscience industry. The Corridor is now attracting new bioscience businesses to the region. In fact, since Heartlab opened in the Corridor’s first building, eight additional buildings have opened. Bioscience has been a huge factor in Cleveland’s economic revival. While the area saw a 41 percent decline in manufacturing employment between 1990 and 2012, healthcare employment saw an increase of 55 percent, spurring gains in professional, scientific, and technical service jobs. Overall, the bioscience sector will continue to help diversify Cleveland’s economy helping offset past losses in the manufacturing sector.
No discussion of a renaissance in Cleveland would be complete without mentioning the impact of Cleveland’s professional sports teams on the state’s economy. Of course, everyone is aware of the NBA title recently won by the Cavaliers; the state’s first professional title in over 50 years. As described by Phil Helsel on nbcnews.com, the Cavaliers did more than win a title; they ended what has been called a curse. From The Fumble by Ernest Byner to The Decision by LeBron James to leave Cleveland for Miami to the heartbreaking game seven World Series loss by the Indians in 1997, it seemed as though Cleveland was cursed in the arena of professional sports. But a new day has dawned. LeBron is back and brought home a championship, the Indians are atop the American League Central, and the Browns…well, time will tell if they can move past Johnny Football and find success again. Regardless, the effect of success in sports on Cleveland’s economy can’t be understated. Over one million fans flocked downtown to watch the victory parade for the Cavs and many of those fans were eating and drinking at local establishments and spending money in retail shops afterward. At Progressive Field, the Indians have been experiencing record crowds, something almost unheard of until very recently.
Whether resulting from the rebound of the housing market, the impact of the Bioscience sector, or the allure of successful professional sports teams, Cleveland’s renaissance is the real deal and its success is sure to have the same positive ripple effect on the rest of the Midwest.