New Britain's Business ClimatePrepared by: William W. Hansen Prepared for: CANB·19
Chestnut Street Trinity Center for Neighborhoods AN OVERVIEW As the 1960s began New Britain was a thriving center of heavy industry based on the production of various kinds of hardware, machine tools, specialty steels and other metal products. This heavy industry was supported by a wide range of ancillary light industry that supplied specialized products and components both to the larger producers in town and elsewhere outside the city. The city's population, according to the 1960 United States Census, was 82,201. At the time there were approximately 24,000 people employed in industrial manufacturing, amounting to some sixty percent of the city's labor force. This was nearly one-third greater than the State of Connecticut as a whole, a state already with a much higher than average level of industrialization. Nearly seventy-five percent of these manufacturing workers were unionized and receiving union wages. This percentage of organized industrial workers was significantly higher than the average for the United States even during a period that represented the high point of American unionization. Even those New Britain workers not in unions were paid close to union scale because of the well known phenomenon that a highly unionized labor market causes a rise even in non-union wages. The multi-storied, red brick factories, constructed for the most part in the late nineteenth and early twentieth centuries, were located along an industrial corridor running west to east through the heart of the city and fanning out from there into New Britain's southern portions; generally along the lines where today are located the freeways - Route 72 West to I-84, and Route 9 South from where it intersects with Rt. 72 in the downtown area to a connection with I-91 south of New Britain. Located immediately adjacent to the factories was the downtown Central Business District; a bustling and prosperous regional commercial and retail center packed with shoppers and workers employed both in the retail establishments and the business offices concentrated there. One downtown department store itself employed over three hundred people. Radiating out from this industrial and business center were a series of neighborhoods that housed the workforce employed in the factories. Those neighborhoods closest to the plants were characterized, for the most part, by multi-family dwellings from which the workers, particularly in the days prior to the automobile, were able to walk to work, and even to walk home for the midday meal. This housing was then, and remains today, the oldest in New Britain; some of it dating from the late nineteenth century. With the advent of public transit and, later, the mass use of the automobile, working class neighborhoods, often ethnically cohesive - Polish, Italian, Irish, Ukrainian, German, Greek, African-American - were built further out from the business and industrial core. Generally these were owner occupied three-family units. Still further from the central core was a series of neat, tidy neighborhoods, generally developed after World War II, consisting for the most party of single-family working class housing. In overall terms, for the first decade and a half after the end of World War II New Britain was vital and economically prosperous. The wealthy industrial and financial leadership lived in gracious mansions concentrated in the southwest corner of the city to the west of Corbin Avenue. Factories, shops and offices dominated a thriving downtown that was the city's political, economic and cultural focus. Thousands of relatively well paid workers spent their money in the stores creating a well off class of merchants to complement the industrial and financial elite. A small pocket of the less well off lived in the older core area, but the rest of the city was made up of prosperous working class neighborhoods of multiple as well as single family housing. A City Planning Commission had been set up as early as 1921, but evidently very little actual planning ever took place. It was not until the late fifties that a City Planning Department, staffed with professionally trained personnel, was first established. Consequently, New Britain's growth was generally erratic and haphazard. Nevertheless, if unplanned, the city had grown organically into a very pleasant place to live. In terms of ethnicity (here referring to national origin) New Britain had long been quite diverse. There were successive waves of immigrants superimposed on the original Anglo-Connecticut Yankees (and a tiny African American community): first came the Irish at mid nineteenth century, then shortly thereafter the Germans, to be followed, in the forty years before World War I, by Poles, Jews, Swedes, Italians, Greeks, Hungarians and various others from Southern, Central and Eastern Europe. The reasons for these waves of immigrants was always the same: oppressive economic and political conditions in the old country and glowing reports of economic opportunity in America led them to emigrate in search of jobs. By the beginning of the twentieth century New Britain had already earned over the previous fifty years a worldwide reputation as a center of innovation and industrial production. In 1910 New Britain's population of 44,000 was fully forty-four percent foreign born. Another thirty-nine percent of the population had been born in the United States, but of foreign or mixed parentage. A city planning document of a half-century later claims that in 1960 52.7 percent of the population was "of foreign born stock." That these reports of unrestricted economic opportunity and immediate social acceptance in America were often grossly exaggerated is underlined by even a cursory examination of New Britain's nineteenth century history. Their own testimony as to how they were treated is attested to in letters and other documents that have been preserved from that period. Child labor (sometimes children under ten years old), particularly in the textile industry, was not uncommon. On occasion even some members of the upper classes were appalled at this grotesque level of exploitation and supported campaigns to ameliorate it. Immigrant laborers also frequently demanded legislation limiting the working day (six days a week) to ten hours. The very fact that the new immigrants immediately banded together, according to their various ethnic roots, into an assortment of political clubs, churches, burial societies, financial self-help organizations is ample evidence that these newcomers felt exploited and marginalized. These ethnically based political and social clubs are often looked upon more than a century later merely as vehicles for social contact and the preservation of some interesting and quaint "old world" customs in a new land; however, this is to belie their original fundamental purpose. They represented an ethnic community's banding together for self-protection against what was seen as a hostile larger social context; rational responses by the immigrant workers to exploitation, ethnic hostility, discrimination, and oppression. Often ethnic prejudice toward the latest newcomers was expressed by immigrant groups who had themselves endured the same experience upon their earlier arrival. Immigrants from Poland around the turn of the century were especially subjected to discriminatory treatment by earlier Irish and German arrivals as well as the longstanding Yankee population. The Poles were particularly victimized because by 1910 they constituted by far the largest immigrant group in New Britain; nearly twenty percent of the city's population. The anti-Polish feeling was so intense, in fact, that the Polish community was forced to organize directly to combat what were called "nativist" elements. As a direct consequence of this anti-Polish discrimination were the formation of institutions such as a Polish bank, a Polish language newspaper and the Pulaski Democratic Club. The most significant example, of course, of immigrant worker resistance to poverty and exploitation was the formation of trade unions. That the industrialists and factory bosses fiercely resisted these attempts is amply documented by New Britain's labor history. For example, a strike at the Styles and Reynolds Brick Co. saw the owners import impoverished African-American strikebreakers from the south. Workers who tried to organize were often fired and the companies waged campaigns of intimidation to break up unionizing efforts. Strikes and lockouts were a common occurrence and even labor related violence flared up occasionally. So difficult and oppressive were the lives of the immigrant workers that all the social problems identified with poverty had made their appearance before the beginning of the twentieth century: crime, prostitution, malnutrition, disease, gambling and alcoholism. At one point in the 1880s there was one saloon for every two hundred inhabitants with widespread public drunkenness. So bad had the conditions become that the city leadership spoke of a "crime wave" as the nineteenth century came to a close. In 1893 New Britain went so far as to ban the sale of alcohol on the grounds that it was the root cause of the rampant crime. It was commonplace for numerous immigrant families, or extended families, to be crowded into one filthy hovel built to accommodate a single family. Few attempts a century ago were made to address the issues of poverty, low income, substandard schools, filthy and overcrowded housing - all economically imposed conditions - as being the root cause of perceived social problems. Recently it has become "conventional wisdom" in some quarters to blame New Britain's present economic decline on the most recent influx of new immigrants, largely Hispanic and from Puerto Rico. Crime and various other social pathologies associated with immigrant poverty did not make their first appearance in New Britain in the late twentieth century. It has also become conventional wisdom to assume that earlier waves of immigrants, speaking a wide variety of languages, immediately set about to learn and perfect their English. This is a simplistic and overly romanticized view that conflates several generations with the hindsight of nearly a century. Neither does it have a great deal of historical validity. Rather, many first generation immigrants never learned to speak English properly and the second generation did only marginally better. Holding this romanticized, ahistorical view that waves of European immigrants, immediately upon arrival, devoted enormous amounts of time and energy to becoming fluent in English allows the modern day descendants of those very same people to be critical of late twentieth century immigrants whose English is sometimes less than perfect. In large ethnic communities like the Polish and Italian neighborhoods one could function very well without learning English, and very many never bothered. The churches, the shops, the social activities, the homes were all venues in which the "old country" language was spoken virtually exclusively. Even on the job in the factories the use of languages other than English was a common occurrence rather than an exception. An example of this (non-English) linguistic variety is underlined by the city's attempt to mount a clean up campaign in 1912; even then the upper classes in New Britain perceived those portions of the city inhabited by the immigrants to be filthy and unsightly. The city government distributed leaflets regarding the proposed campaign in six different languages: English, Polish, Yiddish, Italian, German and Swedish. Studies of immigrant language assimilation historically in America have shown that the initial generation has always had problems adapting to English. The following generation develops a general literacy, but it is not until the third generation that complete fluency is achieved. While it may contradict deeply held prejudices at the present time, the fact remains that deficiencies in English language abilities were greater among European immigrants at the beginning of the twentieth century than they are among Spanish speaking immigrants at century's end. Despite this long history of ethnic diversity, New Britain, for most of its history, has been "racially" homogenous.1 That is to say, the people of New Britain were overwhelmingly of European origin and this largely remained the case until very recently; the mid to late sixties. According to the 1960 US Census the city's population was slightly more than ninety-seven percent white. The "non-white" (at the time acceptable Census terminology) population numbered fewer than 2,500 and was almost exclusively African-American. Virtually non-existent in 1960, New Britain's Hispanic population of nearly four decades ago consisted of only a few families who had emigrated from the area around San Germán in southwestern Puerto Rico. Two generations later, consistent with earlier immigrant populations, the descendants of these first families have achieved success, stability and language assimilation. If this were the idyllic picture of post war New Britain at the beginning of the sixties, by the mid-nineties, more than three and a half decades later, it had changed markedly. There had been some signs as early as the fifties that conditions would not remain forever the way the majority expected. The large industrialists had given increasingly broad hints that their plant and equipment was being rendered obsolete by technological and engineering advances. In part this relative technological backwardness was because the industrial giants had simply failed to invest in and modernize their aging facilities; choosing instead simply to run them into the ground. Once multi-storied factories had served industrial needs adequately because of the necessity to keep the point of production close to the available workforce. Increased worker mobility (the automobile) made it possible to build the more efficient one-story plants, occupying far more acreage on relatively inexpensive farmland. The industrial leaders were also not above employing a form of extortion by encouraging different localities to compete for the right to be their host through a variety of financial incentives that amounted to public subsidies of private enterprises. An example is the former American Hardware Co.; a company with roots in New Britain dating to the 1840s when it was founded by Philip and Frank Corbin. American Hardware (merged in 1964 with the Emhart Corp.) promised to remain in the city if: (1) the city would provide it with needed property in a new industrial park; (2) purchase the company's former property; and (3) provide funds to subsidize the cost of relocating, along with other financial incentives. Although the city was willing to comply, at the same time Berlin offered an even more lucrative package and the company moved out of town despite its promise. Although it retained many of its employees who were easily able to travel to the new site, New Britain lost a major taxpayer. In 1995 the Emhart Corp. (itself taken over by Black and Decker in 1989) paid $28.8 million in taxes to the town of Berlin. Another example is the case of Landers, Ferry and Clark. In 1961 it threatened to move because it required completely new facilities. The city paid the company $4.3 million for its downtown property and made available fifty acres elsewhere in the city. In exchange the company promised to stay. In 1965 General Electric bought out Landers and unilaterally abrogated the promise by moving out of town four years later. The public funds invested by the people of New Britain to induce it to remain were lost. There is also a great deal of evidence that the industrialists, knowing that to stay competitive they would have to overhaul their facilities completely and invest in new plant and equipment, influenced the decisions regarding the proposed right of way for the impending highway construction. In 1962 officials of The Stanley Works, North and Judd, and American Hardware testified in a public hearing in support of routing the proposed multi-lane highway through the heart of the city. Their claim was that such a routing would be economically advantageous; for whom was another question. By getting the state to pay them condemnation fees, the industrialists were relieved of having to bear the costs of modernizing their existing plant and equipment, or of having to dispose of them on the private market. Alternative routes that would have been cheaper, with the further advantage of not destroying the coherence of the downtown area, were rejected. Highway construction planning was coordinated in the 1960s with plans for the federally funded Urban Renewal program. Urban Renewal paid for the costs of razing significant portions of the areas immediately adjacent to downtown. This, of course, had the consequence of depriving the downtown shopping district of many of its natural customers. The highway subsequently trisected the core of the city and divided formerly contiguous neighborhoods from each other; what the current mayor, Lucian Pawlak, referred to as "tearing the heart out of the city." It had the further result of removing large areas of land from the Grand List and turning it into non-taxpaying public property. The downtown has deteriorated ever since. Nothing had been done prior to the sixties to make the downtown area more attractive as a retail center, so with the appearance of covered malls - first Corbin's Corners, then Westfarms Mall - shoppers deserted the area in droves. The overall result of Urban Renewal and highway construction was to rip out the organic core of the city and, in the process, pay inflated prices to the industrialists for their former properties; effectively a taxpayer subsidy for the cost of investing in new plant and equipment. For the most part city officials, business leaders and the community at large were oblivious to the early warning signs. Theirs was the assumption that these long time economic pillars would never leave, merge with outsiders, or close down. Consequently, they were completely unprepared when the massive hemorrhage of industrial jobs began in the early sixties. Of the 24,000 industrial jobs which employed sixty percent of New Britain's labor force at the close of the fifties, ninety percent were employed by nine large companies. By the close of the sixties - a mere ten years later - four of the five largest companies had closed or moved out of the city. It was only after this devastating wave of plant closures that Spanish speaking immigrants, primarily from Puerto Rico, began arriving in New Britain in any significant numbers. Therefore, to suggest the city's current problems have been caused by the increase in Puerto Rican immigration is not empirically substantiated. Although the Vietnam War served as a slight stimulus for industrial production during the late sixties and early seventies, particularly in the ball bearing industry, the rapid decline in manufacturing continued over the next two decades. A classic case in point is that of the former Fafnir Bearing Co. The Torrington Bearing Co., a division of the multi-national Ingersoll-Rand Co., was aware that Fafnir was ripe for a takeover in the early eighties. At its height Fafnir was running three shifts and employing several thousand workers; 2,200 as late as 1984. There had already been labor troubles between the company and the union, and this hostility grew worse as the workers resisted the company's pressures to reduce their wages; in the jargon of trade unionism what is known as a "giveback". Finally the union went out on strike to resist a reduction in their income and standard of living. Labor costs at Fafnir were only marginally higher than at the Torrington Co. It appears the company's strategy from the beginning was to buy out a competitor and close the plant. However, the company's public relations tactic was to blame the workers as being greedy and blame the plant closure on the strike in order to win public sympathy. Even today, in the mid-nineties, it is conventional wisdom among many of those concerned with economic development in New Britain to blame the union for the plant closure. As one prominent figure was quoted as saying: "The union pushed the envelope too far." The fact that the company initiated the conflict in an attempt to reduce the workers' standard of living and increase profits is ignored. Even when the possibility of this scenario is acknowledged the company's actions are seen as "legitimate" business practices and, therefore, to be understood and accepted. The workers, on the other hand, should have been more "realistic" and accepted a reduction in their wages. There are some dissenting voices. A lifelong New Britain resident, prominently involved in business and economic development strategies, commented that the company's attitude was one of complete contempt for the plant, for the workers, for the city. The latest official figures for manufacturing employment in New Britain (Connecticut Town Profiles: 1996-1997; a publication of the Connecticut Department of Economic and Community Development) places the number at 6,170. Another local New Britain source places it at slightly less than 5,000. Fewer than half these are unionized jobs. If one wants to understand at a glance what has happened to New Britain economically over the last thirty-five years, the answer lies there. From 24,000 manufacturing jobs, 18,000 of which were unionized and the rest at or near union scale, the city now has fewer than 3,000 such jobs. In 1984 the city's top two employers, and three of the top six (The Stanley Works, Fafnir Bearing and Litton Industries/New Britain Machine) were still private, unionized industrial manufacturing firms. Ten years later (1994) only The Stanley Works still existed in New Britain, by then second to the hospital in total employment, and employing only 53.7 percent of the number it had in 1984. Four of the city's top six employers in 1994 were non-profit organizations, and only two of the top fourteen employers were in manufacturing. The consequence has been a general economic and social deterioration. According to the latest figures (1996-1997) New Britain's per capita income is only 73.7 percent of the Connecticut statewide average. In some areas of the city this deterioration has been much more severe. Several neighborhoods have significant percentages of their population living in households at or below the federally defined poverty line of around $15,000 annually for a family of four.2 This three and a half decade period of economic decline has simultaneously witnessed a dramatic change in the "racial" composition of the city. Whereas New Britain's population was over ninety-seven percent of European origin in 1960, by the mid-nineties that figure declined to less than seventy-five percent, while the "Hispanic" population (overwhelmingly of Puerto Rican origin) rose to nearly seventeen percent and the African American population to slightly below eight percent.3 As with earlier waves of immigrants, it is among the most recent - in this case Puerto Ricans - that poverty and social dislocation are most heavily concentrated. The significant difference, however, that separates those earlier waves of immigration from the present one, is that during the first sixty years of the century the job/income base in New Britain was constantly, if unevenly, expanding. Since 1960 the job/income base has been in a state of gradual contraction. BUSINESS DEVELOPMENT As has been alluded to briefly in the first part of this study, and more extensively described in the earlier "New Britain: State of the City 1996", New Britain was one of the initial centers of industrial development in the United States. Although a relatively backward agricultural area in the eighteenth century, the city had become well known already by the 1830s for its manufacturing of various hardware-metal products: from doorknobs and hinges to sleigh bells and bridle buckles. New Britain's growing industry was simultaneously stimulated by several factors: technological and engineering breakthroughs regarding industrial production, the population increase in the United States as a whole, and the rapid westward expansion of the country's frontier. The Civil War (1861-1865) also provided an enormous stimulus as the city's industries grew in response to war induced demand. This pattern was repeated, more or less consistently, albeit with periods of severe contraction (1870s, 1890s, 1930s), for over a century. The factories belching smoke, employing workers and disgorging products had been there for as long as anyone could remember and seemed a permanent part of the New Britain landscape. According to Kenneth A. Malinowski, Executive Director of the city's Commission on Community and Neighborhood Development (CCND), "Prior to the mid-sixties there was no organized economic development. The factories were all running on three shifts and everyone thought, despite warning signs, it would go on forever." Thirty-five years ago, Malinowski argues, the city should have met with the industrialists and asked why they were closing down operations. He feels the city was simply unresponsive to their needs in areas in which cooperation could have retained at least some of these industries. He points to the Urban Renewal program as an example. The open land created by razing old housing could have been made available for the construction of modern facilities to replace the outmoded, multi-story redbricks. This, Malinowski argues, would have retained some of these companies as part of the city's tax base, thus relieving pressure on residential property taxes to fund the municipal budget. Instead the land was replaced by the highway. As public land it is untaxed. PAST PLANNING Malinowski describes the city as "floundering" and says, "The efforts put into economic development over the years since the sixties have been minimal. The greatest efforts have been put into things like tax abatements as a lure to retain and attract jobs. That minimal effort hasn't worked." Gail O'Keefe, Director of the Municipal Economic Development Agency (MEDA), says pessimism is pervasive in New Britain on the part of the political and business leadership, as well as the citizenry as a whole. George Brusznicki, President of the Central Connecticut Workforce Development Board, agrees with Malinowski that the city leadership of thirty-five years ago was hopelessly inept at anticipating the catastrophic decline in industrial employment that took place shortly thereafter. Even since then he says, "There never has been a real plan; and there isn't one today!" What has been called economic development planning over the past three decades, he suggests, has been a series of haphazard, ad hoc measures - "mostly symbolic and feeble" - that are more responses to immediate events than indications of long term planning. Brusznicki is an avid supporter of the current plans to develop the old Fafnir site for the pragmatic reason that, under current conditions, there is little alternative. The city needs the space and development of the property will provide at least some sorely needed jobs. However, the plan is hardly a solution to New Britain's long-term problems and, as conceived, a number of years ago was effectively a method of bailing the Torrington Co. out of an embarrassing situation. The Fafnir case is instructive as to the social and economic costs of what are justified as "market induced" decisions by companies to close their operations and move. The sale of the property to the City of New Britain for $1.00 would seem, at first glance, to be a magnanimous gesture. Twelve years ago there were still 2,200 mostly unionized workers producing goods at a profitable company. Then the operation was closed and there were several unsuccessful attempts to sell the property. A brochure from over a decade ago, put out by the Municipal Action Council, the predecessor of MEDA, advertised the property extensively. The brochure shows very attractive pictures of both internal and external aspects of an occupied facility (pictures obviously taken a number of years earlier) in what appears to be first class condition. There are accompanying architectural drawings that make it seem an attractive site. The brochure concludes with a variety of inducements:
Since heavy industrial production had been going on at the site for well over a century, long before any environmental regulations, the physical structures and the land on which they sat were extremely degraded environmentally. Current environmental regulations alone were a disincentive to any prospective buyer. Even though the site had been abandoned and the tax bill drastically reduced because there was nothing to tax except the land itself, the Torrinton (Fafnir) Co. had a tax bill of $100,000 per annum as long as they owned the property. The sale to the city for $1.00 relieved the company of even this burden. Had the city refused, on the other hand, the company could have simply abandoned the property and allowed the city to foreclose for non-payment of taxes, in which case it would still have become public property. By selling it for $1.00 the land came under city ownership (thus, no tax revenues) and the Torrington Co. gleaned enormous publicity for their ostensibly philanthropic act. The abandoned (now city owned) property has been there for a decade. The loss in taxes on it has been around $1 million. At current estimates it will cost the city, the state and the federal government around $8 million to clean it up and make it suitable for new investment; still several years away. After this has been accomplished the city and state plan to offer an entire range of tax inducements, low interest loans at below market interest rates, grants, etc. to induce new companies to invest in the area; effectively public subsidies to private enterprises. Another observer points to a similar example. New Britain Machine was taken over by Litton Industries, a large multinational conglomerate. In 1984 Litton/New Britain Machine still employed six hundred workers, a far cry from its heyday. A decade ago Litton simply closed the plant which has been sitting empty ever since. However, the company continues to pay taxes of about $200,000 per annum on the 97.5 acre site. This tax bill was characterized as "chickenfeed" for a company of that size. The company came into New Britain and simply absorbed the competition, following which, he says, it intentionally ran the business into the ground so there would be an excuse to close the plant. A deal in this case could also be worked out that would transfer the property to the city, but the cost of razing the buildings and bringing the extremely environmentally degraded property into compliance with federal and state regulations would be prohibitive. This person compares it with the infamous Love Canal near Niagara Falls, NY. He insists that if the city were really interested in doing something about this property it would finance an aggressive national campaign of political and legal harassment against Litton: "It would be easy to show that Litton came in here, raped the company and raped the town." To underscore New Britain's relative unpreparedness and consequent inability to respond effectively, both Kevin McCabe (Executive Vice-President of the Chamber of Commerce) and George Brusznicki, his predecessor, point to the fact that the city has never created a fund specifically devoted to recruitment of new business investment and the retention of already existing enterprises. New Britain's policy in this regard was contrasted negatively to strategies pursued by other similarly situated municipalities. Bristol is often given as an example of a city that did set aside funds for this purpose. As a consequence, it is argued, Bristol has been able to cope far better with similar negative economic trends. Jonathan Rosenthal, Executive Director of the Bristol Development Authority, agrees that the fund specifically devoted to this task has certainly been an advantage. Rosenthal cites several other factors, however, as also working to Bristol's advantage:
Rosenthal, however, is not convinced that Bristol's advantage is permanent; more likely it is simply a temporary set of fortuitous events. Rosenthal says he often asks himself if New Britain is not simply what Bristol will look like in the future. "We are unwilling as a society," he says, "to do what needs to be done." By this Rosenthal was referring to a massive job creation program. A New Britain informant argues that the city has often squandered what limited financial resources it has had at its disposal on high profile projects that will have little or no long-term economic benefits. An example given is the city's recently successful courtship of the New Britain Rock Cats minor league professional baseball team. The city spent about $12 million to build a new state of the art stadium when the Utah-based owner threatened to move his team if such were not provided. The city annually spends an additional $20,000 more on the facility than it receives, while the team owner collects most of the revenue. The stadium and team, it is claimed by these critics, do nothing for the city economically except possibly create a few dozen part-time minimum wage jobs selling hamburgers and soft drinks during the summer. The project was justified by saying that it would spark a broader-based economic development. Critics claim the same argument was used in justifying the Hartford Civic Center, but neither did that hoped for development ever come about. As one commented regarding Hartford: "Now the same people are making the same argument for a new arena in Hartford. It didn't work the last time and it won't work this time either!" It might be illustrative to point out that New Britain's baseball franchise was formerly located in Bristol before being lured to New Britain a number of years ago with an earlier set of subsidies. It did not spark an economic development then, and Bristol hardly seems to have suffered from the loss. In the past the various groups concerned with economic development - the city government, the Chamber of Commerce, MEDA, The Downtown District (a self-taxing organization of downtown businesses formed for the purpose of promoting the area) - all went in separate directions with different agendas. According to McCabe and O'Keefe, the latter three groups have since carried out a semi-merger and now coordinate their efforts. Their offices are located in the same suite and they share secretarial staff. Brusznicki insists that one important way to attract new businesses to New Britain and to eliminate poverty is to have a highly trained and educated workforce; i.e., recognize the fundamental economic changes that have taken place and systematically train and develop a workforce that will attract new kinds of investment. Just a few years ago, he says, he proposed to the Chamber of Commerce (at the time he was the Chamber's Executive Vice-President) that it push for the creation of job training centers in the Arch St. and Broad St. neighborhoods to recruit and train people for "tomorrow's jobs". He convinced the Chamber's members to support the proposal, but other community leaders opposed the project; insisting instead: "Level those neighborhoods! Throw 'em out! Make 'em move!" While this sort of response to a proposal to set up training programs may seem exaggerated, interviews with numerous business leaders reveal that such sentiment (i.e., move the poor out of town) seems to have strong support; a point to which we shall return later. O'Keefe (MEDA) echoes the comments of others with regard to the lack of a long term development plan that is carefully thought out and then adhered to over the long run. Presently, she suggests, development plans are not able to survive partisan politics, contradictory pressures from various constituent groups and changes in administration. O'Keefe goes even further in arguing that the present system is inefficient. Part of the problem, she says, is that department heads tend to be political appointees whose positions are often determined more by their political influence than by their technical qualifications. The fact that New Britain has never developed a coherent, long-term plan for economic development seems to be borne out by events. Most attempts appear to have been haphazard responses to immediate crises. It is less clear that any such long term plan was possible for a rapidly de-industrializing city of 75,000 caught in the throes of a radical re-structuring not only of the state and national economies, but of the global economy as well. On the positive side it can be said that New Britain has not fared as poorly as some other similarly situated cities; for example, Gary, Indiana or Youngstown, Ohio. A recurring theme when looking at past planning documents indicates a marked failure to predict trends. For example, a city "Master Plan" (dated July, 1971) assumes the continued overwhelmingly "European" ethnic character of the city, and notes that the small black population (2.9 percent in the previous Census) "has tended to limit the severity of racial problems." There appears to be no recognition whatsoever of the rapid increase in Puerto Rican immigration that was at that very time gaining momentum. The same plan projected an increased population growth that would reach 90,000 by 1990. Instead the city's population declined by nearly 12 percent during the seventies and appears to have stabilized over the last decade and a half at between 71-75,000. Overestimating the city's total population growth by nearly ten percent would seem to be a not insignificant miscalculation. Local planning for economic development in the eighties appears equally not to have taken into consideration already well-established trends. According to the "Central Connecticut Regional Economic Development Plan, 1995" the New Britain-Bristol Service Delivery Area lost 18.1 percent of its industrial jobs between 1988-1992 alone. Often the efforts that did take place seem to have been a combination of enthusiastic boosterism, hope that fortuitous lightening would strike, and a refusal to acknowledge macro-economic trends. As one prominent figure, who, for obvious reasons, wishes to remain anonymous, said: "Most of the business and political leadership is parochial, unimaginative and interested only in blaming someone else - primarily Puerto Ricans - for New Britain's problems." A New Britain "Master Plan" from 1984 says, for example, with regard to economic development, that the city's goals are to:
However, particularly with regard to the first two points, there is very little in the forty-seven page document that elaborates any specific measures other than several vague references to helping secure favorable financing from federal or state governments, and improvement of basic infrastructure. Particularly apparent in the document is the lack of recognition that fundamental economic changes were taking place. Much of the city's business leadership appears to have been seduced by the speculative property boom in the eighties. There are, as a consequence, references to grandiose future property development projects during that period, many of which failed to come to fruition. One of the major players, touted in numerous planning documents, was the infamous Colonial Realty Co. which, as it turned out, was little more than a criminal organization. Numerous extravagant proposals were made for the re-development of the downtown area which has continued to deteriorate to the present day. An example was the proposed Landmark Center which was to be built on a platform over the superhighway that cuts through the heart of the city. An 850,000 sq. ft. office tower was to be built that would bring jobs, customers and taxes to the area. Then the speculative property market collapsed and with it the unbuilt project. A 1994 report ("Downtown New Britain Vision and Action Plan") is forced to find positive news in the fact that "The city has been quite successful in slowing the decline of the retail base." The report acknowledges that one of the reasons for the downtown area's continuing decline is the oversupply of office space that resulted from precisely those extravagant property development projects of the previous decade. RECRUITMENT AND RETENTION Ken Malinowski's argument that most of New Britain's efforts over the years at recruitment and retention have been limited to tax abatements and various other financial concessions is underscored by the Urban Enterprise Zone program. Created by state legislation pushed by the administration of then Governor William O'Neill, New Britain's EZ was one of six original such zones (along with Bridgeport, Hartford, New Haven, New London and Norwalk) established with the expressed purpose of encouraging economic development and job creation in depressed urban areas. The program is devoted almost exclusively to tax incentives/abatements which vary, depending upon whether the proposed investment is manufacturing, research, commercial, retail, or residential development. Although these various tax breaks are obviously state and city subsidies to private enterprise, they were undertaken with the idea that such subsidies would have a positive social and economic impact; to induce businesses (existing or new) to invest in areas they would otherwise avoid and/or leave. However, as New Britain's current mayor, Lucian Pawlak pointed out, the EZs have seldom had the desired effect. Although specifically designed in their initial phase to help depressed urban areas, it was not long before many municipalities were eligible to have EZs in their community. The consequence of this, Mayor Pawlak argued, was that EZs end up being meaningless as far as producing social dividends and are simply a broad set of tax breaks for business. Kevin McCabe of the Chamber of Commerce makes the same point: "The Enterprise Zone was a good idea, but it's been turned against those it was designed to help; distressed cities. If places like Newington and Southington can create Enterprise Zones then the advantages that were supposed to go to places like New Britain are completely vitiated." Another unforseen consequence Pawlak pointed to was that companies often will only stay as long as the tax breaks exist and then move on to another town with its own Enterprise Zone. This pits various towns against each other trying to offer greater incentives to potential investors. Thus, said the Mayor, "Enterprise Zones, along with inconsistent tax codes, foster a 'beggar thy neighbor' sort of system in which various communities pursue private investors by offering bait for investment that might have gone to a neighboring town." He pointed out that the same policies at a higher level have the various states competing against each other and that it even goes on at the international level. Recent legislation has created a complementary category known as a Neighborhood Revitalization Zone. This program allows a neighborhood to constitute itself as an NRZ, which then applies to the City Council for "official recognition", allowing it to become a statutory entity. Several observers have their doubts as to what an NRZ will actually be able to accomplish; i.e., they suspect it is little more than yet another statement of grand intentions. Aside from becoming "recognized" by city statutes and, therefore, a sort of official advisory group, the basic idea behind the program seems to be that it pledges city, state and the NRZ to cooperate. It is envisioned that this may allow for the waiving or bending of various state and city laws, ordinances and regulations that might be seen as inhibiting any proposed revitalization plan. As it is only now in its initial stages it is difficult to forecast as to whether it will have any more beneficial effects than previous efforts. At the present time three NRZs (Arch St., Broad St., Park St.) in New Britain are in various stages of formation. COSTS OF DOING BUSINESS IN NEW BRITAIN 1. Cost and Availability of Real Estate. There are two countervailing factors at play in New Britain with regard to real estate cost and availability. On the one hand, existing real estate is now relatively cheap. In part this is due to the collapse of the property market over the last seven or eight years and, in part, because of the general thirty-five year decline in New Britain's economic fortunes. However, those people who were interviewed emphasized that the relatively low cost of real estate applies only to existing facilities; i.e., property that will not need extensive renovations before it can be utilized. On the other hand, everyone emphasized the fact that New Britain is an old industrial city and much of it has severe environmental problems. The cost of cleaning it up would be prohibitive from the point of view of private enterprise. The abandoned New Britain Machine Co. site is a prime example of this. The 97.5 acre site at the southern perimeter of the city is far larger than the 14.5 acre Fafnir site now being cleaned up at taxpayer expense for re-development. Numerous attempts have been made by Litton to sell or even auction the property with no takers. The city cannot undertake the cleanup process because, as Malinowski says, it simply cannot afford the enormous costs. An additional factor with regard to real estate costs is the lack of land in the city as a whole. At 13.3 sq. miles New Britain is one of the smallest towns in the state. It is a highly urbanized area with much of its land given over to residential communities. As Mayor Pawlak pointed out, "We are land poor. We have very little open space available for economic development and those areas that are available are scattered in small patches throughout the city." Kevin McCabe (Chamber) also cited New Britain's lack of available land as the single greatest obstacle to economic development. 2. Ease and Cost of Construction Construction costs in New Britain are no more nor less than they are elsewhere in Connecticut. Ken Malinowski explained that construction costs throughout New England are slightly more expensive than elsewhere because of the region's climate as well as higher labor costs. However, there are additional factors. A company that wants to build in New Britain is required to go through a very complicated set of zoning rules in order to set up business; a set of rules that Malinowski says are completely antiquated and in need of fundamental revision: "Instead of making the best use of property from an economic point of view, emotions and political pressures determine zoning decisions. Everybody wants economic development, but they all say 'not in my back yard'." New Britain's population density of 5,365.6 per sq. mile is nearly eight times greater than that of the state as a whole. Neighboring Berlin, for example, is twice as large as New Britain (26.4 sq. miles) with a population of only 16,787; i.e., only 648.4 people per sq. mile. As George Brusznicki points out: "A company who wants to invest in the area sees the complications of doing it in New Britain. They say we can get a piece of empty farmland in Berlin. Why don't we go there. It's a lot less trouble." 3. Utilities and Taxes. Utility costs are no more expensive in New Britain than they are anywhere else in Connecticut, but the aged infrastructure makes their delivery sometimes erratic. Property taxes are a problem as they are generally quite a bit higher than in the surrounding towns. New Britain, for example, has a mill rate of 49.46 per thousand dollars worth of assessed property: Berlin only 32.00; Southington 36.80; Newington 25.54; Bristol 26.23. Mayor Pawlak pointed out that "The budget drives the mill rate." He went on to say that people do not want to accept decreased services, but neither do they want to pay the increased taxes. For example, New Britain's education budget exceeds $70 million annually while Berlin and Farmington spend only a fraction of that. The costs are reflected in the city's budget and, consequently, in the mill rate. Mayor Pawlak acknowledges that taxes are too high, but says with a tone of resignation, "Taxes are going to have to be lowered, but that will force a further reduction in municipal services and the quality of life." Ken Malinowski points out that the city does have mechanisms for giving tax advantages to new investment through the Enterprise Zone and other programs. However, both he and the Mayor agree that these incentives merely shift more of the tax burden to the individual homeowner. 4. Labor Costs On average labor costs in New England, particularly in Connecticut, are higher than they are elsewhere in the country. However, such costs in New Britain have been declining steadily for decades. The city has a long history of labor militancy and trade unions, but, as was pointed out above, the portion of the private sector workforce in unions has declined dramatically over the last thirty-five years and this has had a significant downward effect on the overall wage level. It should be pointed out that the public sector workforce in New Britain - federal, state and local - remains unionized. Were the various social service agencies that employ many of these unionized workers to be disbanded or moved out of town, as is advocated by some in the city's business leadership, the effect would be a further decline in the city's overall income level. Some of the city's leadership finds the unions at least partially to blame for New Britain's economic problems. There seems to be a curious double standard at play here. If workers try to defend their existing level of income they are seen as being greedy. Profitable companies, on the other hand, are often seen as acting in a perfectly understandable and justifiable way by completely closing down an operation and moving elsewhere simply to increase their profits. With regard to wage levels, Kevin McCabe noted with some satisfaction: "New Britain has a good, well-trained labor force that is willing to work at relatively low wages. They have adjusted to the loss of good, high wage, unionized jobs and no longer expect such wages. If more work were available there might come a labor crunch, but the facilities are in place to implement training programs. But the present availability of a cheap labor force is there. The fact that our workforce is non-union is a big plus when it comes to luring investment." 5. Infrastructure All who are familiar with the situation agree that New Britain's infrastructure is hopelessly antiquated. Many of the sewers, water mains and electrical wiring were built over a century ago. Malinowski notes that electricity and telecommunications lines need to be put underground because of the storms common to New England winters and the disruptions caused by them. Putting the conduits underground is more expensive as an immediate investment, but it is far cheaper in the long run. Yet, because of the fiscal crisis and the unwillingness to pay higher taxes, the necessary improvements are not undertaken. The consequence is that the long run costs are even greater. The road infrastructure is quite good, particularly the superhighways that trisect the city. Brusznicki commented cynically with regard to the highways, "They destroyed the heart of the city, so they might as well be used for something. The city, state and federal governments financed exit ramps - for example so New Britain Machine would have access to the freeways - then they closed the factories. We now have exit ramps to nowhere." Kevin McCabe, with regard to the highways, said "It should have been a big economic help to New Britain, but it hasn't turned out that way." Under any circumstances, all knowledgeable observers agree that New Britain's decaying and antiquated infrastructure will have to be completely upgraded and modernized before any serious, large scale economic development can get underway. The current political climate - federal, state and local - that opposes any such massive public investment would seem to preclude this modernization occurring any time soon. 6. Availability of Financing All agree that the availability of financing is a serious obstacle to economic progress. However, there are two distinct points of view as to why this is the case. The first blames primarily the federal government for undue restrictions. Federal, state and local governments should be partners with potential investors. Unfortunately they are not. Before they make a loan the banks are now asking that a prospective businessman be able to produce up front about 30-35 percent of the capital necessary for the proposed project. Furthermore, getting such a loan is a long drawn out process because the lending institutions are far more cautious as a consequence of the large scale bank and S & L failures in the eighties, the cost of which was borne by the taxpayer. In addition to the "up-front" capital of 30-35 percent, the prospective entrepreneur must have been in business for two years and be showing a profit before the banks will sanction a loan. The reason is that most new businesses fail in those first two years. Most prospective entrepreneurs either have or are only willing to put about 10 percent of the total cost into the initial investment. In the case of New Britain the city government's Commission on Community and Neighborhood Development tries to bridge this gap; i.e., the difference between the 10 percent that entrepreneur has and the 35 percent the bank demands. The CCND, as explained by its director, Ken Malinowski, attempts to facilitate an agreement between the lending source and the entrepreneur. Effectively, what it tries to do is guarantee the missing 25 percent. Bank interest rates are usually two points over the prime interest rate, while the CCND's guaranteed portion is about three points below the prime rate. This, of course, means the city is subsidizing the loan. Unfortunately his agency often does not have the funds available to make this sort of a guarantee, the consequence of which is that many proposals die for lack of financing. The Small Business Administration is in business to do precisely this kind of lending, but the bureaucratic hurdles are so formidable, Malinowski says, that many potential investors simply give up. The worst enemies, according to this first view, are all agencies of the federal government. It is their unnecessary, time consuming bureaucratic regulations that inhibit financing, including the renovation of residential property as an investment: the Department of Housing and Urban Development (HUD), the SBA, the Federal Housing Administration (FHA), and other federal entities such as Fannie Mae and Freddie Mac. For example, as applied to New Britain, Fannie Mae and Freddie Mac are restricted to loan guarantees that go to owner-occupied housing that is no more than four units. An investor/property owner might be induced to renovate these buildings if he/she could get the requisite financing. However, without the financing, the alternative is often simply to board up the buildings and abandon them. The city forecloses for non-payment of taxes and the properties go off the tax rolls. The alternative view places the blame on the banks and other lending institutions themselves. While agreeing that the availability of financing is terrible, it argues that the lending institutions themselves created this situation in the eighties with their extraordinary greed. The federal government was forced to bail out thousands of such failing institutions. Consequently, Washington had to crack down on some of the more odious practices, so they put restrictions on what kinds of guarantees would be available. Malinowski agrees that the speculative excesses of the Reagan era caused the problem in the first place. In order to prevent such a thing from happening again the federal government had to step in and impose regulations. However, he insists the new regulations are too broad and insufficiently flexible. As a consequence many worthy projects are delayed or denied financing altogether. This, he says, has contributed to the decline of central cities. A more flexible system of financial regulation would allow worthy projects to go forward, while simultaneously preventing the speculative excesses. A further element was the destruction of locally owned banks which was encouraged by the relaxation of regulations during the Reagan Administration. In former days there were many locally owned lending institutions, the heads of which lived in, and had a stake in, the community. Their loan decisions were made accordingly. Consolidation and merger has meant that these institutions are now units of huge financial corporations with headquarters in cities like Boston, Providence and New York. Consequently, they have no personal interest in a place like New Britain and the city suffers as a result. PROBLEMS AND OBSTACLES The following is a summary of the views of city officials, business leaders, political figures and others familiar with regard to what they see as the major obstacles to future economic development in New Britain. Some specific areas have been discussed earlier in this study - for example, real estate costs, construction, utilities, infrastructure, financing, taxes - and will not be repeated here. Rather, this is a summary of the findings. 1. Political Structure New Britain is ostensibly governed by what is generally called a "strong mayor" system; i.e., the mayor is the city's chief administrative officer and governs the city in accordance with state law and local regulations and ordinances passed by the Common Council. However, according to several observers, the political structure is not what it seems to be and, in fact, is very inefficient with administrative power diffused among various boards, agencies and commissions. This point was underlined by the current mayor, Lucian Pawlak. Mayor Pawlak argues that one factor inhibiting economic development lies in the city's charter itself. The city only appears to have a strong mayor system, but the charter disperses power among a large number of boards and commissions which must give approval regarding any municipal undertaking. He cites the zoning regulatory process as an example. If an investor wants to build on or change an existing property he must go to at least four (sometimes six) different commissions or boards for zoning approval. Each of these steps is time consuming and often influenced by various particular interest groups. The consequence is an excessive municipal bureaucracy that often keeps the city from moving fast enough to take advantage of an opportunity. Ken Malinowski (CCND) agrees with the Mayor's assessment. He decries the inefficiency of the municipal bureaucracy and cites many horror stories particularly with the process of getting zoning approval and the political influences brought to bear on this. The city government, he says, needs to be "streamlined", made "user friendly", with "one-stop shopping", particularly with regard to getting zoning approval. Although open to a City Manager form of government, Malinowski questions as to whether such a system would be the panacea some claim for it. He notes that city managers and their administrations are also subject to political influences. Gail O'Keefe (MEDA) is unequivocal with regard to having a City Manager form of government. A former member of the New Britain Common Council, she feels the current system is too susceptible to partisan political influences and the need of the mayor to get re-elected every two years. The consequence is that political connections, rather than administrative and policy expertise, often determine who is appointed to head agencies and sit on various boards and commissions. Because of the existing system agency heads are far more independent to go their own ways, thus making it difficult to implement a coordinated, overall policy. Furthermore, a City Manager form of government would allow for the creation of a long term economic development plan by insulating the city's administration from these diverse political pressures that cause constant changes in direction. When it was noted that Hartford has a City Manager form of government which has not seemed to have solved that city's economic problems, the comment was left unanswered. Furthermore, the arguments advanced often seem very willing to sacrifice citizen participation (democracy ?) in the interest of an assumed greater efficiency. A number of people also claim that the municipal unions detract from efficiency because they circumscribe the power of upper level administrators. Furthermore, their wages and benefits cost the city far more than it can afford. A related point regarding unions was brought up by another official; the Davis-Bacon Act. This federal legislation requires any enterprise receiving federal funds for renovation or construction in the form of a loan or a grant to pay prevailing union wages. The official was at pains to emphasize that he did not object to the application of Davis-Bacon to large scale projects employing large numbers of workers and costing millions of dollars. The union argument in favor of Davis-Bacon is that they do not want federal funds coming into an area and being used to drive down the overall wage level, something that would inevitably happen were it not for the law. The same official questioned the flexibility of the law. He feels that its blanket application to projects that utilize federal funds, no matter how small, results in situations that increase the cost of a proposed project for a small investor. The consequence is that individuals often decline to invest in renovation or expansion. 2. Consolidation and Regionalization The structure of municipal government as a whole in the State of Connecticut came in for severe criticism from virtually everyone interviewed. The fact that Connecticut has 169 different local governments, each with rather significant power including that of taxation, acts as a structural constraint against economic development and overall fairness. In Mayor Pawlak's words - and he is hardly the only one - the inconsistent system of local taxation fosters a "beggar thy neighbor" form of competition between and among towns. There must be a fundamental reform of the tax structure but, as he points out, this can only be accomplished by the State Legislature. Ken Malinowski makes the same point even more emphatically. There will have to be regionalization even if that amounts to the merger and consolidation of various independent municipalities. Some sort of regional government that will assume most of the tasks that are now undertaken locally will have to occur. The current system places an intolerable burden on a city like New Britain. The cost of services will have to be shared across town lines and taxes will have to be equalized. Malinowski cites the school system as an example: Farmington spends about $25 million annually on its schools, Berlin about $23 million, and New Britain nearly $73 million. New Britain does have more students than either Farmington or Berlin, but the greater burden falls more heavily on a population with far lower incomes. Kevin McCabe of the Chamber of Commerce also emphasizes the need for regionalization and a more equitable sharing of the tax burden. Such a sharing will make municipal services far more efficient than they are presently. McCabe acknowledged that such a consolidation at the present time is politically unrealistic, but: "At the end - maybe in twenty years - the only way this pooling of services and sharing their costs will come about is through governmental consolidation. That's the only way the problems of local government will be solved." 3. Lack of Available Land as an Impediment to Development The problem of an inadequate supply of available empty real estate has been touched upon several times earlier in this study. Mayor Pawlak refers to the city as "land poor" and that which is available is scattered in small patches around the city. Kevin McCabe of the Chamber of Commerce, Gail O'Keefe of MEDA, and Ken Malinowski of the CCND also emphasize this problem. In part it is the consequence of New Britain's historical development; factories in the center and a profusion of residential housing immediately surrounding them to the point that most of New Britain's 13.3 sq. miles are already occupied. In other areas of the country cities have sometimes addressed this problem by annexing unincorporated land in the vicinity. This is not an alternative in Connecticut where there is no unincorporated land. In part, the question of land scarcity is related to the above discussion of "political consolidation". In lieu of something along those lines, New Britain is consigned in perpetuity to be on 13.3 sq. miles; and, therefore, to land scarcity. The City has made some attempts to rectify this problem by reclaiming land that has been abandoned in the past by companies moving elsewhere. However, the City's lack of funds has acted as a constraint even on this. The aforementioned New Britain Machine Co. land, comprising 97.5 acres, is an example. The land is so degraded environmentally that the cost of cleaning it up, either for the City or a private company, is so prohibitive that it stands idle. Many of those who emphasize the cost problem are also extremely critical of federal and state environmental regulations, which they claim are far too stringent and, thus, prohibitively expensive. Consequently, government becomes the culprit. Few of these people are willing to place the blame on the companies that poisoned the land in the first place and then fled to greener (and cleaner) pastures. Many in New Britain place a great deal of hope in the redevelopment of the old Fafnir Co. site. The plan is to turn the 14.3 acres adjacent to the downtown area into what Gail O'Keefe calls a "Smart Park". They envision luring up to twenty "high tech" companies to the area with each company creating about 75-100 new jobs. Asked if she expected those 1,500-2,000 new jobs to go to the un- and underemployed poor of New Britain, O'Keefe avoided answering the question directly by saying that New Britain must have a highly skilled labor force to attract new investment. Asked if she thought these envisioned 1,500-2,000 new jobs would pay the relatively high wages that had formerly gone to the unionized workforce at Fafnir's, O'Keefe said she doubted it. George Brusznicki of the Workforce Development Board thinks this is an overly optimistic scenario and that the numbers of jobs created will be between 750-1,000 at the most. There are other proposals for making more land available, but they involve far more politically contentious policies; primarily the razing of older housing near the City's core, as well as the public housing projects. Ken Malinowski concedes that needed real estate would certainly be made available if the dilapidated public housing in New Britain were to be torn down. Furthermore, there is a lot of older, deteriorating private housing near the city center that could also be demolished. Although such a policy would be extremely difficult politically to implement, he thinks it could be done in a way that would be socially beneficial to those (the very poor) who would be moved, as well as stimulate the private rental market. For this to happen some sort of voucher plan would have to be created with sufficient funds for those whose homes were being demolished, enabling them to afford to move into better housing. Since the private rental market in New Britain is stagnant, such a plan would fill up vacancies as well as stimulate private investment in renovation efforts. Hopefully, the land then made available for development would create jobs that would be available to the poor who had been moved and allow them eventually to afford private rents without vouchers. Malinowski cites former HUD Secretary, Henry Cisneros, that "We've got to stop warehousing the poor." Others in the business leadership see the razing, not only of public housing, but of all deteriorating residential areas in a different way. In their minds such a program would have two beneficial aspects. On the one hand, it would create much needed open land that could be used for development. On the other it would deprive the poor of their housing, thus forcing them to move on somewhere else. The idea that New Britain's major problem is that too many poor people live in the city seems to be widespread within the business leadership. This problem would be solved, at least partially, by demolishing the housing in which these people live. For example, William Weber, President of the Downtown District and former President of the Chamber of Commerce, made precisely this point. He feels that New Britain has too many people in general and specifically has too many poor. Consequently, he supports a proposal that for every new housing construction permit issued an equal amount of older housing - preferably more than an equal number - should be torn down. This would have the effect of reducing the total housing stock that is presently available to the poor, the consequence of which would be to force them to move out of New Britain. He thinks a lot of this could be handled through the judicious use of zoning regulations. Otto Strobino, the current President of the Chamber of Commerce, takes a very similar position. According to Strobino, "Too many poor people have come to New Britain. They take too much out of the community and don't give much of anything back." Strobino feels that the elimination of public housing would force the wealthier neighboring communities to share more of the burden because some of the poor would begin moving to those towns. He did not elaborate as to where they would find housing in Farmington or Newington because, he said, they would no longer be New Britain's concern. If the above proposals sound somewhat draconian they seem to be supported by a significant number of people in the business community. Only Ken Malinowski, of those who specifically mentioned the need to get rid of the public housing stock, appeared to be concerned about the social consequences of demolishing peoples' homes. He insisted that before such a demolition could be implemented there had to be a plan in place to provide affordable housing for those who would be displaced. Most of the others saw the displacement as a method of forcing unwanted people to leave town where they would become someone else's problem. 4. Taxes That taxes in New Britain are too high is a comment made by everyone, whatever else they may agree or disagree on. Deputy Speaker of the Connecticut House of Representatives David Pudlin (elected from New Britain) has pointed out that municipal property taxes in Connecticut generate nearly half of all tax revenue collected by state and local government together; more than the sales tax and income tax combined. Connecticut's property tax burden is the fourth highest in the country; almost twice the national average. Property taxes are the source of funding for every municipal budget in the state. The burden is even more onerous for those who live in relatively poor urban municipalities because the overall demand for services - from schools, to street repair, to police and fire departments, to garbage pickup - is far greater. Forty years ago this was not such a significant problem in New Britain. With a large number of factories using expensive capital equipment the tax base was far larger than it is today; what is referred to as the "Grand List" - the list of taxable property in the city. With more or less full employment, the downtown area was a thriving commercial center. The profitable retail outlets also paid taxes on their property. These industrial and retail companies bore a considerable share of the tax burden. When the factories moved from the city they no longer paid local taxes. With far fewer workers downtown less was spent in the commercial center, in turn causing retail outlets to lay off workers, delay investment, and, ultimately, close down altogether. This further reduced the tax base. Unfortunately, the demand for municipal services did not decline. If anything, with a contracting economy, they increased. The consequence was that more and more of the burden of funding the municipal budget was shifted from the now departed industrial and commercial entities to the individual homeowner. This process has continued for the last quarter century in a sort of downward spiral that feeds on itself. As David Pudlin has pointed out, "High tax municipalities, like New Britain, have a dwindling commercial tax base simply because of the inequity of tax rates between towns." Residents of urban areas pay a far higher percentage of their income on property taxes than do the wealthier residents of the surrounding suburbs making these taxes fundamentally regressive. As the share of municipal taxes that fell on the individual homeowner continued to rise inexorably it further encouraged a flight from the city; particularly on the part of the middle class. This shifted the burden even more onto less well off property owners and has resulted in a significant deterioration of the overall housing stock. Ken Malinowski illustrates this by noting that five years ago the City of New Britain owned five miles of sidewalk; today the City owns thirteen frontage miles of property; mostly abandoned buildings taken over by the city for non-payment of taxes. The tax inequity between the surrounding wealthy suburbs and New Britain can be easily illustrated by looking at their respective mill rates.4 Then compare these figures with the relative per capita incomes of the various municipalities:
Source: Connecticut Town Profiles, 1996 The grossly regressive character of the taxation system is particularly illustrated by the fact that people who live in Farmington, for example, pay a property tax rate that is about half as much as that of New Britain while enjoying incomes that are nearly twice the size. However, urban areas like New Britain (and Hartford, Bridgeport, New Haven, Waterbury, etc.) are required to pay far more in municipal services than the suburban towns. Any plan for economic development and reduction of poverty that has a chance for success will have to address these disparities. 5. Work Force and Ethnicity Some of New Britain's business leadership holds what seems to be contradictory ideas with regard to the nature of the city's current workforce. On the one hand, it is often said that the city possesses a good, well trained workforce. Then, in the next breath, these same people will bemoan the fact that far too many potential workers have low skills, poor work habits and faulty language abilities. Although the point is generally not made explicitly, it is clear that such references are directed primarily at the Puerto Rican immigrant population. The comments about a good, well-trained workforce appear to be based on a certain nostalgic remembrance of a half century ago when heavy industrial work could be (and was) performed by thousands of European immigrants and for whom education beyond a certain basic literacy was not a requirement; the legendary Joe Sixpak! The great disjuncture between what was "skilled labor" in the context of fifty years ago and what would be considered skilled labor today is generally ignored. This allows the argument that earlier immigrants acquired skills, while the latest wave is unwilling to do so. As mentioned earlier in this report there seems to be a widely held, romanticized, if ahistorical, vision as to how quickly earlier waves of immigrants assimilated and became fluent in English. Ken Malinowski, himself the grandson of Polish immigrants, has severely criticized this Eurocentric view: "Hispanic immigrants," he says, "are no different from the Polish immigrants of years ago." He cites present day examples of numerous small machine shops in New Britain and surrounding areas where Polish is still spoken because the workers are only fluent in their mother tongue. In fact, the level of education and degree of English fluency in the first generation Hispanic population today is at least equal to, and probably greater, than that of any immigrant group that preceded it. The big difference between then and now, he says, is that there are no jobs for today's immigrants. According to the 1990 US Census 34 percent of the white population of New Britain over the age of twenty-five are high school dropouts; a figure nearly four percentage points higher than that for the black population in the same age group. The Hispanic dropout rate in that age cohort is indeed far higher than those for either blacks or whites; 55.8 percent. However, this figure must be placed in a historical context. The Hispanic population over the age of twenty-five without a high school diploma declined from 67 percent in 1980; a decline in the dropout rate by twelve percentage points. It should be emphasized that the 1980 figure for Hispanic educational levels (over twenty-five) represented significantly those who had immigrated to New Britain as adults; their education (or lack of it) achieved in their homeland prior to immigrating. Those who are critical of the educational levels of the Puerto Rican population often decry it by comparison with previous waves of European immigrants. They seem completely unaware that as late as 1980 nearly 44 percent of the white population over twenty-five had not received a high school diploma! There are no figures available for the percentages of first generation Irish, German, Italian, Ukrainian, Greek or Polish immigrant children earlier this century receiving a high school diploma, but one can safely assert that present first generation Hispanics have certainly exceeded their predecessors' educational levels. As the earlier New Britain study pointed out, the age and ethnic character of the city's population has been changing markedly over the last three decades. The "white" population is getting significantly older while the younger age cohort is becoming more Hispanic. The consequence of this is obvious: the workforce - those between the ages of twenty and sixty - is becoming increasingly Hispanic, particularly at the younger end of this forty year continuum. Consequently, the racial and ethnic attitudes of the business leadership toward this new immigrant population would seem to have some importance with regard to any future economic development. It would appear from numerous interviews that these attitudes leave something to be desired. It should be emphasized here that not all the business leadership of New Britain was interviewed, but it would appear that these negative views regarding (particularly) the Puerto Rican population are strongly felt in at least some quarters. For example, one person asked specifically what New Britain must do in the future that has not been done in the past, responded with three points:
Asked what should be done to supply affordable housing for those displaced when the public housing was razed, there was no specific response. When asked for specifics with regard to training a labor force, there were none. Instead the interviewee began a disquisition, accompanied only by anecdotal evidence, on the appalling lack of a "work ethic" on the part of "too many people." Puerto Ricans, it was insisted, show up at work irregularly and/or report to work late. Furthermore, they often work only long enough to save enough money to fly back to Puerto Rico. Then, when they need some more money, they show up back at their previous place of employment and expect to go back to work again. Another anecdote was used to explain what the person being interviewed referred to constantly as "negative cultural values". Cited was a local firm that produces frozen ravioli and has a constant shortage of workers, high absenteeism, and a heavy turnover. It appears that the firm's employees were primarily women, most with children. The person telling the anecdote acknowledged the work was physically strenuous and unpleasant. Asked about the hourly pay, it was said to be around $7.00 per hour. When it was pointed out that such a wage amounted to only $14,000 p.a.; extremely little for even a single person and hardly enough to support a family, the response was a look of surprise, followed by the comment: "People have to start somewhere!" Asked if there might be a connection between jobs at below poverty wages and "negative cultural values" the interviewee responded with a look of complete miscomprehension. As an anecdotal counterpoint, George Brusznicki (Workforce Development Board) recounted an instance in which a company contacted his office about setting up a training program for about fifty people, after completion of which they would be employed at $9.00 per hour; at $18,720 per annum still hardly a princely sum. There was no public announcement and the news was spread only by word of mouth. When he arrived the next morning to open his office there were several hundred people there already clamoring to be allowed into the proposed training program. Another prominent New Britain business leader, affiliated with both the Downtown District and the Chamber of Commerce, himself extremely pessimistic about the city's future, after a few comments about various past city administrations, addressed what he thought was the real problem: "The Hispanic population has poor language skills. They have bad work habits. They're always late for jobs. They take off from work when they feel like it, and, as a consequence, are very undependable." In this view New Britain's major problem is the Puerto Ricans. Asked what needed to be done in New Britain to improve the city, he cited six points:
Another prominent downtown business leader was even more obsessed than others with what he considered the "cultural problem". He was in complete agreement that New Britain had far too many poor people; that all the public and some of the private housing needed to be eliminated; that social service agencies acted as a magnet for the poor and should be closed down; that the surrounding communities should be forced by state legislation to take their "fair share" of the poor; what he called "diluting" the present concentration of unskilled people in New Britain. He acknowledged that in the past New Britain had had a highly skilled labor force. Over the past several years, however, this level of expertise has declined significantly. He agrees that there is a need for workforce training programs, but that is only a small part of the problem. In his view the source of the problem lies in the fact that "these people" do not have cohesive families, do not want to go to school and receive training, have no desire to learn personal responsibility. In his view workforce training programs, as such, would fail to solve anything since those who needed such training did not want to learn: "If they wanted education and training they could get it. The fact that they don't is their own fault." In his view the problem stems from an ensemble of elements he refers to as "culture". He complained that these new immigrants come from cultures that do not honor the family. History, he says, has shown that a society needs stable families to have a stable culture, this is lacking: "They accept things as okay that are unacceptable; they accept unstable families, too many children, lack of education, irresponsibility." Not only is New Britain affected by this problem, he said, but so to is the entire United States: "The United States has far more cultural diversity than other industrialized countries, and this has worked to our disadvantage. Back in my father's day there wasn't the ethnic diversity there is today, and this is a major source of our problem. Previous immigrants came to the United States from a semi-common culture. They had a drive to be educated, to learn English, to be responsible." To the comment that, after all, Puerto Ricans are citizens of the United States, his response was, "Yes they are. God help us!" Contradictions, of course, abound. On the one hand, this same informant insisted that the public schools must educate their students; teach values and skills. Immediately this was followed by arguing that the schools function too much as social service agencies: "They spend too much time teaching people values, and not enough on pure education." He then complained that television glorifies the lack of family values: "Through TV America has exported to the rest of the world this lack of values." In virtually the next breath he complained that what was ruining America was the fact that it was allowing foreigners from cultures that had no values to enter the United States and, in the process, diluting American values. He then proceeded to tell what he thought were the origins of the "Puerto Rican problem". The assumption was that it would have something to do with a mistaken US foreign policy after the Spanish-American War, nearly a century ago. No! It was all the fault of Vito Marcantonio!! "The Vito Marcantonio?", a New York City politician of more than a half century ago. He said, "Yes! Marcantonio wanted to build his constituency so he organized the importation of Puerto Ricans, and that was the beginning of our Puerto Rican problem." At first glance the above conversational vignettes would seem irrelevant to a report dealing with the problems of economic development in New Britain; simply the bizarre, contradictory statements of one particular person. Furthermore, it should be emphasized that these were personal responses from one person, and it would be unfair to impute to an entire group identical attitudes. One recognizes the danger of implying some sort of guilt by association. Yet, there seems to be some evidence that the general sentiments expressed by those interviewed have significant currency within the business leadership of New Britain. No one else expressed the "Marcantonio theory" for the origins of Puerto Rican immigration to the mainland United States. However, quite a few people referred negatively to the cultural, linguistic, and work ethic capacities of Puerto Rican immigrants. The person who made the above statements has consistently been selected for leadership positions in the business community despite the fact that his views appear to be relatively well known. Furthermore, when these remarks were repeated to others familiar with the business leadership the response was to acknowledge that such sentiments were common "downtown". ALTERNATIVE DEVELOPMENT PROPOSALS The stated purpose of this study is to provide information for the Arch Area Neighborhood Association to be used in affecting public policy with regard to improving economic life in New Britain, particularly with regard to the Arch Street area. It should be pointed out that documents going back at least as far the 1971 "City Master Plan" refer to the need to improve the Arch Area neighborhood. Even assuming the best of intentions on the part of those planners, as well as subsequent ones, very little has been accomplished in this regard over the intervening quarter century-plus. Unless the desired improvements are seen as merely the physical renovation of the neighborhood (the razing and/or renovation of deteriorating housing combined with infrastructural improvements, in which case many of the poorer residents would have to be moved out and housed elsewhere, simply relocating the problem) it must be recognized that any single neighborhood's improvement is organically connected to an overall economic improvement in New Britain. The foregoing pages have elaborated a variety of factors that have been offered in extensive interviews to explain the cause of this decline:
From these interviews with various people involved in the political and business leadership of the city, three broad strategies have emerged as to what should be done to bring long term improvement to the economic and social life of New Britain. It should be emphasized here that the following are only general strategies, culled from the information collected and, for the purposes of classification, placed in these categories. There are certainly overlaps. For example, no matter which of the three alternatives, everyone emphasizes the need for tax reform, but differs as to its specifics. All three think the tax rates should be equalized between urban and suburban towns. In this respect, all three call for some sort of regionalization that would eliminate the competition among municipalities in offering tax incentives, etc. Consolidation or regionalization, along with tax rate equalization, would eliminate the problem of "lack of available land" that noticeably applies to New Britain. All three advocate the elimination of substandard housing, but would differ as to how to re-accommodate those now living in such housing. All three recognize that New Britain's economic base in heavy industry has disappeared permanently and that the city should concentrate on basing a new growth phase on high tech industries. Strategy Number 1 - Downsizing This view is one that appears to be held by a number of people in the business community. The basic cause of New Britain's decline is the fact that too many poor people with limited skills, poor language abilities and little desire to work have migrated to the city. It is seldom said explicitly that there are too many Hispanics, but this is the only inference one can draw since the "language problem" always cited is the fact that "they" only want to speak Spanish. Statistically poverty is far more extensive among the Hispanic population (around 20 percent of the total) than it is among residents of European descent (between 70-75 percent). In overall economic terms the African American population (7-8 percent) lies somewhere in between. A variety of reasons are given for this influx of new immigrants:
New Britain, according to this point of view, has a tax base that is far too small to support the number of people living here. The only way to get the city moving again is to "downsize" it; i.e., follow a policy that will shrink the population by 25-30,000 people. It is envisioned that the bulk of the population downsizing would be the result of moving the poor elsewhere. This would be accomplished by the following policies:
Such policies would have multiple advantages. Eliminating cheaper housing would force the poor to move elsewhere, as would the removal of the social service agencies which only serve to attract more of them. It would also increase the amount of land available for economic development. Furthermore, since most of the housing to be removed is near the downtown area, it would make that area more attractive to investment, make it safer, and give it what one man calls a "professional feel" by attracting a "higher class of people". New businesses would enlarge the tax base, reduce the burden on the individual homeowner, and slow middle class flight. This would also attract a "better class of people" into the city to purchase homes. Because the poor would be moving out and the middle class back in, the schools would improve because they would attract a "better class of student". Strategy Number 2 - More Efficient Government to Slow the Decline What is labeled here as an alternative focus for economic development is primarily an eclectic set of policy proposals that reflect a recognition, reluctant though it may be, that New Britain's long-term decline is the consequence of a broad economic transformation far beyond the control of any single municipality. However, it also asserts that many mistakes have been made on the part of local leaders that could have made the transition less painful. It is referred to here as a separate strategy because it lies somewhere between the proposals for "forced removal" and "ethnic cleansing" that characterize Strategy Number 1 and the activist proposals that are the substance of Strategy Number 3. A first step would be a streamlining of local government that would make it what Ken Malinowski of the CCND calls "user friendly" with "one stop shopping". In this regard he would completely reorganize the zoning regulations so that an entire array of proposals from property renovation to new investment would be facilitated. Under current bureaucratic procedures many proposals simply die for lack of attention. Mayor Pawlak, in addition to revising zoning regulations, would revise the entire city charter because "It is, itself, an obstacle to economic development." In the Mayor's view New Britain's charter disperses power through a large number of boards, commissions and agencies. This diffusion of power impedes efficiency through excessive layers of bureaucracy and makes immediate response virtually impossible. O'Keefe of MEDA thinks that the adoption of a City Manager form of government would go a long way to solving the problem of inefficiency. There must be a fundamental revision in the tax code, but this can only be accomplished at the level of state government. Property taxes vary radically from town to town fostering, in Mayor Pawlak's words, "a beggar thy neighbor" competition between municipalities. He suggests state and federal legislation that would prevent this. While insisting there must be a reduction in taxes, the Mayor recognizes there will be negative tradeoff: "In order to encourage economic development taxes will have to be reduced, but that will cut the heart out of the city." Pawlak's point here is that in order to lower taxes, city services will also have to be reduced. That might make the city more attractive economically, but its character would simultaneously be reduced. According to Malinowski excessive government regulation at all levels inhibits flexibility. He cites particularly the negative effect of stringent, inflexible environmental regulations (state and federal) as presenting obstacles to economic development. In a somewhat pessimistic scenario, Mayor Pawlak suggested that the overall quality of life, wages, living standards, etc. will probably have to continue to decline until another cycle of growth can take place. At some point in the indeterminate future things will get even worse for the people, but good enough for private enterprise that they will decide once again to invest in New Britain. Strategy Number 3 - A "New" New Deal George Brusznicki (Workforce Development Board) argues that New Britain's relative economic decline is the result of a long-term shift in the economy at the national and international level. Capitalism and the free market system, as it works today, pits community against community and worker against worker: "It's a race to the bottom." Brusznicki concedes that the skill and training level of the local workforce is inadequate for meeting the needs of modern high-tech industry, but this is true across racial and ethnic lines. One answer, he argues, is to put far more resources than is presently done into training and educational programs. David Pudlin (Connecticut House of Representatives) concurs. He dismisses the argument that New Britain has too many undereducated Hispanic immigrants whose alleged "negative cultural attitudes" are claimed by others to be holding the community back: "There are problems with low test scores, but these could be dealt with if there were the political will to deal with them. Low test scores are a consequence of the prevailing social conditions. Society as a whole determines the overall level of education, not individuals who choose or do not choose to get an education." Pudlin takes the position that Hartford and New Britain (and the surrounding areas) are one community with one interlocking economy. Presently, however, the region is at the bottom of the business cycle. It is not permanently down, however. Central Connecticut is at the mid-point of the entire Northeast region of the country and everything that happens in New England will have to pass through the region, including New Britain. In addition to vastly increasing training programs that will create a workforce with the necessary skills to work in modern high technology production, Brusznicki also advocates a massive jobs creation program: "What we really need in this country is a new WPA (Works Project Administration) program." He, furthermore, supports national legislation (preferably global) that would prevent in the future private corporations in the future from doing what they have done to New Britain over the last forty years. Another observer complained that wealth polarization had gone much too far to maintain a well off middle (working) class: "There is a crying need for some sort of redistribution of wealth." Pudlin offers a three point plan that would reinvigorate New Britain and any other declining industrial community in Connecticut:
When Pudlin's proposals were mentioned to Otto Strobino of the Chamber of Commerce, he responded: "It won't work. It sounds like socialism to me." In fact, what both Pudlin, Brusznicki and others are proposing is simply a latter-day version of Roosevelt's New Deal, tailored to the specific needs of the late nineties and the next century; a comparison they openly acknowledge. Few present day socialists would consider the New Deal an example of socialism. Strobino's comments are illustrative as to how much prevailing opinion has changed over the last half-century. In 1944, while running for President against Franklin Delano Roosevelt, the conservative Republican candidate, Thomas Dewey, said: "We Republicans are agreed that full employment shall be a first objective of national policy; achieved if necessary by government job creation."
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