connecting the dots for urban revitalization: lessons from dortmund, germany

8/13/2019 Connecting the Dots for Urban Revitalization: Lessons from Dortmund, Germany

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URBAN PAPER SERIES 2014

CONNECTING THE DOTS FOR URBAN REVITALIZATION

LESSONS FROM DORTMUND, GERMANY

ALAN MALLACH


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2014 Te German Marshall Fund o the United States. All rights reserved.

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views o GMF. Comments rom readers are welcome; reply to the mailing address above or by e-mail to [email protected].

About GMF

Te German Marshall Fund o the United States(GMF) strengthens transatlantic cooperation on regional, national, andglobal challenges and opportunities in the spirit o the Marshall Plan. GMF does this by supporting individuals and institu-

tions working in the transatlantic sphere, by convening leaders and members o the policy and business communities,

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On the cover: Dortmund, Germany, skyline. Alissa Akins
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C D U R

L D, G

U P P S

J

Alan Mallach1

1 Alan Mallach is a senior non-resident fellow for the German Marshall Fund of the United States. In that role, he supportsGMFs Cities in Transition Initiative. This publication is part of the Cities in Transition Initiative, a three-year projectdesigned to build a sustained network of leading policymakers and practitioners in five older industrial U.S. cities: Detroitand Flint, Michigan; Cleveland and Youngstown, Ohio; and the greater Pittsburgh, Pennsylvania region. The initiative isgenerously supported by the Surdna Foundation and the Kresge Foundation.

Connecting the Dots: Defining Urban Regeneration. . . . . . . . . . . . . . . . . . . . . . 1Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Economic Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Physical Transformation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Dortmund Today: How Extensive has the Transformation Been? . . . . . . . . . . . . . 15

Future Challenges: Implications for U.S. Cities in Transition . . . . . . . . . . . . . . . . 19

References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
http://-/?-http://-/?-


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C D U R 1

C D:

D U R1

This case study grows out of the Cities in Tran-sition initiative of the German Marshall Fund

of the United States, through which close to

50 key planners, policymakers, and practitioners in

five United States older industrial cities Cleve-

land, OH; Detroit, MI; Flint, MI; Pittsburgh, PA;

and Youngstown, OH participated in a sustained

knowledge transfer effort from 2010 through 2012

through site visits and conversations with coun-

terparts in a number of European cities, including

Manchester, U.K.; Barcelona, Spain; and Leipzig

and Dortmund, Germany. The focus of the CIT

initiative was not only to provide the U.S. practi-tioners with the opportunity to learn about and

share specific projects and strategies, but to begin

thinking more holistically about the larger issues

associated with urban regeneration that they were

confronting in their cities.

Each of the three years of the CIT initiative focused

on a different part of the urban puzzle: the first

year on land use and redevelopment, the second

on economic development, and the third on the

alignment between workforce development and

economic development. The phrase connecting

the dots was used as a shorthand for the process of

integrating the learning from the three years, which

was the focus of the concluding workshop of the

CIT initiative held in May 2013 in Detroit. Roughly

two-thirds of the U.S. practitioners who had been

involved in some part of the initiative were present

at that workshop.

The threshold issue in the workshop and for

thinking about regeneration in general is to

adequately define urban regeneration. In the next

few pages, I will offer a framework for an integrated

way of thinking about urban regeneration. I willthen explain why a case study of Dortmund offers

both a useful way of applying that framework and

valuable lessons for the many United States cities

that it so closely resembles in important respects.

What Urban Regeneration is Not

Before discussing what urban regeneration is, it

is useful to address briefly what it is not. It is not

megaprojects, the so-called Bilbao effect notwith-

standing; it is not catalytic events and it is not the

statistical change reflected in a reversal of a popula-

tion decline trend.

Some facilities and events mayfurtherregeneration,

and a reversal of population loss may be evidence

of regeneration, but it also may not. One of the

United States most distressed smaller industrial

cities, Reading, Pennsylvania, has seen its long-

term population decline dramatically reversed since

the 1990s, and yet is poorer and struggling harder

than ever (Mallach 2012). A recent study found no

clear relationship at the metropolitan level between

population growth and GDP growth (Martin Pros-

perity Institute 2013).

An oft-cited example of an event heralded as a cata-

lyst of change was the IRA bombing of downtown

Manchester in northern England in June 1996. The

bomb, which destroyed or severely damaged over

1 million square feet of retail and office space, trig-

gered a rapid response from the citys political andcivic leadership. Planning for reconstruction was

underway before the end of the year, and by 2000,

the entire area had been rebuilt, in turn spurring

extensive redevelopment in surrounding areas.

While Manchester was already showing important

signs of change, there is little doubt that the recon-

struction helped spark additional regeneration.

Manchesters effective response to the bombing was

no accident. For more than a decade, city govern-

ment had been building its capacity and its part-

nerships with non-governmental entities, withoutwhich they could not have responded as effectively

to the challenge of reconstruction. That sustained

process, and not the bombing, was the essential

precondition for change, which gives the lie to

Chicago Mayor Rahm Emmanuels famous but

erroneous dictum, you never want a crisis to go to


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T G M F U S2

waste. Unless the capacity to respond effectively tothe crisis is already present, the crisis will inevitably

go to waste in whole or large part. Youngstowns

black Monday was as dramatic a crisis as the

Manchester bombing, yet prompted no meaningful

change.1While factors outside the citys control

were also involved, Youngstown lacked the leader-

ship, partnerships, resources, or technical sophisti-

cation to translate the crisis into change.

It is not the catalytic event that triggers change. The

ability to capitalize on a crisis or a catalytic event

is a function of the capacity and leadership already

in place. The same is true of major facilities such ascasinos, convention centers, and arenas, or for that

matter, the Guggenheim Museum in Bilbao.2Only

to the extent that they are integrated into a larger

strategy, which leverages whatever effects they may

bring to bear, can they contribute meaningfully to a

citys regeneration.

Defining Urban Regeneration

What, then, is urban regeneration? There is no

generally accepted definition. The term is used in

the literature in ways that vary from narrowly phys-

ical definitions such as slum clearance, to broader

holistic ones that embrace societal indicators. Simi-

larly, it is sometimes used to describe a process, as

in one paper that defines urban regeneration as a

process to improve the economical, physical, social,

and environmental condition of an area (Mehta

2008), or as outcomes. While the process by which

change takes place is of critical importance, the

1 On Monday, September 19, 1977, the Youngstown Sheet &Tube Company announced that it would be closing two of itsarea locations, the beginning of a decades-long out-migration of

steel jobs and resulting economic crisis.2 Writers who claim that the Guggenheim Museum turnedaround Bilbao fail to recognize the extent to which thatmuseum was only one part of a much larger integrated revital-ization strategy; an example appears in an otherwise thoughtfulbook by Bell and de-Shalit (2011, p3), who write Frank Gehrysspectacular museum in Bilbao almost single-handedly changedthe Spanish city from a declining industrial center into a meccafor tourism. For a more nuanced perspective, see Plger (2012).

outcomes ultimately determine whether the processhas been productive and whether the community

(however defined) is better off for it. As an over-

arching definition, I would therefore propose that

urban regeneration be defined as change to a citys

social, economic, and physical conditions in a way

that is both equitable and sustainable. That, in turn,

suggests that regeneration should encompass three

distinct pillars:

Building a new export-oriented economic

base in the city to replace the lost historic

manufacturing economy;

Changing the quality of life and the physical

environment of the city and its neighborhoods

to make them desirable to potential users, and

competitive in the regional marketplace; and

Improving the social and economic conditions

of the people who live in the city, ensuring that

they benefit from changes to the citys economic

and physical environment and compete

effectively in the regional marketplace.

These three pillars should be seen not as separate

goals, but as a package in which all three are needed

to bring about sustainable urban vitality. Moreover,

for a city to succeed in any or all of them it must

recognize the extent to which it is integrated into

the regional economy and the labor and housing

markets, and focus on competing successfully

within that regional market by identifying sectors

where the city has an identifiable comparative

advantage.

This last point is worth stressing. Autarchy is

not a recipe for economic success in todays

world, particularly when applied to cities that aredisproportionately poor and lacking in resources

compared to their region or the nation as a whole.

While import substitution activities, such as efforts

to retain resident purchasing power by creating

local retail hubs, mayhave some value, in the
http://gmfus.wpengine.netdna-cdn.com/wp-content/uploads/2012/12/Linda_Fowler_Framing_Paper.pdfhttp://gmfus.wpengine.netdna-cdn.com/wp-content/uploads/2012/12/Linda_Fowler_Framing_Paper.pdfhttp://gmfus.wpengine.netdna-cdn.com/wp-content/uploads/2012/12/Linda_Fowler_Framing_Paper.pdfhttp://gmfus.wpengine.netdna-cdn.com/wp-content/uploads/2012/12/Linda_Fowler_Framing_Paper.pdfhttp://gmfus.wpengine.netdna-cdn.com/wp-content/uploads/2012/12/Linda_Fowler_Framing_Paper.pdfhttp://gmfus.wpengine.netdna-cdn.com/wp-content/uploads/2012/12/Linda_Fowler_Framing_Paper.pdfhttp://gmfus.wpengine.netdna-cdn.com/wp-content/uploads/2012/12/Linda_Fowler_Framing_Paper.pdfhttp://gmfus.wpengine.netdna-cdn.com/wp-content/uploads/2012/12/Linda_Fowler_Framing_Paper.pdf


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C D U R 3

final analysis they are likely, even if successful, to

have more impact on residents quality of life than

on the citys economic strength. As an unnamed

pundit has been quoted as saying, You cant have

an economy by taking in each others laundry.

(Browne, 1986; Chicago Tribune, 2010)

Returning to GMFs Cities in Transition initia-tive, the three elements that formed that initiative

can been seen as three ways for operationalizing

an integrated approach to urban regeneration; as

Figure 1 shows, those three elements cut across

the three pillars. While each contributes toward

the overall goal of sustainable regeneration, that

contribution is not automatic. It is easy enough for

land use planners, economic developers, or work-

force specialists to work in silos. Ensuring that they

further an integrated body of goals, and that success

in one area does not lead to unanticipated negative

outcomes in another, happens only through inten-

tional and integrated strategies.

Implicit in improving the social and economic

conditions of the citys residents is the larger ques-

tion of social inclusion and equity. Any effort to

formulate a strategy for success needs to explicitly

address the complex issue of justice as it cuts across

all of the citys dimensions. The concept of the just

city can be encapsulated in a triple proposition:

that the city furthers democracy, diversity, and

equity (Fainstein, 2010). As will be discussed at the

end of this paper, this remains perhaps the single

greatest challenge facing cities in transition.

Why Dortmund?

Although these issues can be explored further as

general propositions, it is also useful to look at

how they play out in a real-life context through a

case study. In that respect, and in the context of the

CIT initiative, Dortmund offers some significant

advantages.3Dortmunds historic dependence on

heavy industry resembles many of the U.S. cities

that participated in the initiative more than most

of the other European cities that were the subject

of site visits, and shares more of their challenges.Moreover, one can point to and evaluate system-

3 See GMF website for further information on the third-yearCIT study tour to Dortmund, particularly the framing paper byLinda Fowler, available at http://gmfus.wpengine.netdna-cdn.com/wp-content/uploads/2012/12/Linda_Fowler_Framing_Paper.pdf.

Improving Social and

Economic Conditions

Competitive Local

Neighborhoods

Export-Oriented

Economic Base

Land Use Improving the quality of lifefor the people who live in thecity by addressing physical

environment and problemproperties

Making neighborhoods compet-itive by addressing physicalenvironment, problem proper-ties and quality of life

Making city a successfuleconomic center and destina-tion through property reuseand building on physical andhistoric assets

Economic

Development

Building job and businessopportunities in a strongerlocal economy based onregional strengths

A stronger local and regionaleconomy increases the marketbase and level of investment incity neighborhoods

An effective economic devel-opment strategy is neededto build new and sustainableeconomic engines

Workforce

Development

Providing city residents withthe job skills and educationalattainment they need in orderto compete effectively in theregional economy

Greater resident income andassets foster increased demandfor and investment in cityneighborhoods

More skilled workforcebecomes major assets increating new economicengines

Figure 1: Cross-Cutting Relationships Between City Initiatives and Urban Regeneration Pillars


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T G M F U S4

atic strategies that were pursued over an extendedperiod of time in all of the areas that were high-

lighted above in the discussion of urban regenera-

tion. Thus, it is possible to offer some assessment

of the outcomes of those strategies and identify key

remaining challenges. As will be seen, its achieve-

ments and challenges offer meaningful lessons for

similar U.S. cities.

The case study presented here should be seen as a

sketch, rather than a full-dress study, of Dortmund

and its strategies for change. It does not claim to

be an in-depth analysis, but reflects insights and

impressions from meetings with key participants andobservers of Dortmunds revitalization and devel-

opment activities and review of English-language

papers and articles.4Rather than provide detailed

4 To my regret, my command of German is not adequate toallow me to access the considerable body of relevant litera-ture in German, including by way of example a recent volumeedited by Hermann Bmer and his colleages at the DortmundTechnical University, Stadtentwicklung in Dortmund seit 1945[Urban Development in Dortmund since 1945] published by TUDortmund in 2010.

descriptions of those activities, it sketches thembriefly in order to offer a framework for the discus-

sion of issues and challenges and identify experi-

ences and lessons that can be useful for U.S. cities.5

5 As a result, it is likely to be subject to both errors of fact anderrors of interpretation, for both of which I take full respon-sibility. A number of errors of fact and interpretation thatappeared in the initial draft of this paper have been correctedthanks to the gracious assistance of Prof. Thorsten Wiechmannof TU Dortmund, who read and reviewed the initial draft.


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C D U R 5

Dortmund is located in the southeastern partof Germanys Ruhr Valley, historically one

of the most heavily industrialized regions

in the world. An important city during the Middle

Ages, Dortmunds modern history begins with

Germanys industrialization during the second half

of the 19thcentury. During that period, Dort-

mund became a major center for coal-mining and

steel-making.6Between 1850 and 1900, its popula-

tion increased 11 times, to over 150,000 (Jackson

1997); by 1930, the citys population had risen to

over 500,000. Today, Dortmunds population totals

almost 600,000.Dortmund was badly damaged by Allied bombing

during World War II; as Crouch and Herson (2010)

point out, [British] observers can find it difficult

to comprehend the full extent of destruction and

disruption that afflicted Dortmund and other

German cities at the end of World War II. Most

of the inner part of the city was reduced to rubble,

while the citys population dropped to 300,000.

Dortmunds recovery from the destruction of World

War II was unusually rapid, even by comparison

to other German cities. The demands of German

reconstruction, coupled with the rapid growth of the

German economy during the 1960s, fueled demand

for Dortmunds principal products, and coal and

steel production were both ramped up substantially

during the 1950s and 1960s. Population and employ-

ment both grew back rapidly; coal-mining employ-

6 As well as beer-making, which although far less significant as asource of employment or income, was an important part of thecitys image in the rest of Germany. In contrast to coal, which hascompletely disappeared, and steel, which is limited to small-scale processing facilities, one major brewery still operates inDortmund today.

ment peaked in 1956 at 40,000, while steel employ-ment peaked in 1961 at 38,000. During this period,

the citys population exceeded 600,000 for the first

time (Crouch and Herson 2010). The city center was

rapidly rebuilt, but as Kunzmann and his colleagues

point out, The speedy reconstruction of the inner

city in the 1950s is a heavy legacy and to a great

extent it is responsible for the poor aesthetical quality

of the city, a fact that contributes to the mediocre

urban image of Dortmund and to its low profile as

a target for urban tourism (Kunzmann, Tata and

Buchholtz 2003).

The combination of rapid physical reconstructioncoupled with renewed post-war dependence on

coal and steel as the economic base put off serious

consideration of structural change for a number of

decades; as late as 1976, manufacturing jobs still

represented one-third of the citys employment

base. By the 1980s, structural change was evident.

Coal mining had been declining since the 1970s,

and the last mine in the city closed in 1987. Steel

production peaked in 1974, and by the 1980s,

the industry was in crisis. Dortmunds popula-

tion slowly tailed off after 1981, and it has since

remained below 600,000. The citys population

appears stable today; 2011 data indicates that while

deaths exceeded births, in-migration exceeded

out-migration, resulting in a net positive balance of

roughly 500 people.7

7 This may be misleading; the just-released results of the 2011German census, the first in many decades, showed that thenational population tracking system had over-estimated thenations population by 1.5 million, largely, it appears, because ofsystemic under-reporting of out-migration by foreign nationals.

B

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T G M F U S6

Although it would be unfair to suggest that noplanning for a different economic future for

the city took place until the 1980s, the strat-

egies for economic development in place today did

not emerge until the 1980s and 1990s. The Technol-

ogie Zentrum Dortmund [TZDO], or Dortmund

Technology Center, was established in 1985, and

the Dortmund-Project was established in 2000.8

These two closely linked entities have driven the

citys economic development strategy for the past

decade, and are likely to continue doing so in the

future. This section will provide short descriptions

of the activities of these two entities and brieflydiscuss the citys use of culture as an economic

development strategy.

The Dortmund-Project

The Dortmund-Project is responsible for designing

and implementing economic development strate-

gies for the city.9Though it operates within the

citys economic development department, it is

accountable to the mayor and to a public-private

advisory board. It was established in 1999, when

the initial strategy was designed under the aegis

of a partnership between the steel conglomerateThyssenKrupp AG, the metalworkers union IG

Metall, and the city of Dortmund. This partnership

emerged from the negotiations that took place as a

result of ThyssenKrupps decision to close the West-

fallenhtte, the last steel mill in Dortmund (Muhge

et al 2006).10The strategy was put in place for an

initial ten-year period through 2010, and in the last

few years it has been restructured to some extent.

8 This followed the expansion and conversion of the citys

economic development office into an independent public corpo-ration in 1997.

9 According to one informant, the Dortmund economic develop-ment department is the largest municipal economic develop-ment office in Germany.

10 ThyssenKrupp paid to hire McKinsey & Company as theprincipal consultants charged with designing the strategy, withsupport from staff seconded from ThyssenKrupp.

The Dortmund-Project is designed to be a compre-hensive model of economic development, orga-

nized around a series of key technology clusters

integrated around four central elements:

Area and infrastructure: creating the physical

as well as organizational infrastructure to

accommodate new industry in the key clusters;

Innovative environment: fostering

entrepreneurship and innovation through

business start-ups;

People and skills: increasing the pool ofworkers with the skills to participate in the

emerging technology centers and reducing

unemployment; and

Capital: increasing access to both debt and

venture capital.

Four key clusters were identified as the focus of the

Dortmund-Project:11

Information technology

Micro- or nanotechnology

Logistics

Biotechnology

In partnership with TZDO and TU Dortmund,

the Dortmund-Project attempts to create distinct

comprehensive support systems for both start-ups

and existing businesses in these four sectors. This

system is based principally on the competence

centers comparable to U.S. incubators admin-

istered by TZDO and cluster staff within Dortmund-

Project. Cluster staff are recruited from the industrysector itself, rather than being economic develop-

ment or training generalists assigned to that sector.

11 Dortmund-Project provides support services in a numberof areas that are not formally designated as clusters, but thatare integrated into their strategy, including the creative sector,broadly defined, and health care. One such area, productiontechnology, also has a competence center in TZDO.

E S

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C D U R 7

In addition to direct support facilities and infra-structure, and its role as the developer of the

Phoenix Project and other major projects, the

Dortmund-Project sees two of its key tasks as

building a climate of entrepreneurship and linking

the workforce to emerging business and job oppor-

tunities. The principal vehicle for the former is the

Start2Grow competition, a high-profile business

plan competition, which draws between 200 and

300 competitors each year. With respect to work-

force development, since Germany already has a

highly developed system for vocational training,12

the principal role that the Dortmund-Project playsis to provide information, making students in the

local schools aware of the technology sectors and

the opportunities they offer, connecting students

and companies through internships, and encour-

aging training providers to orient their activities

more closely with emerging industry needs.

Since 2009, the Dortmund-Project has modified

their strategy to focus more on what they call cross-

clustering; that is, identifying emerging markets

where clusters can be linked to respond to the

needs of those markets. Examples of sectors include

simulation, mobility, or energy efficiency. Specific

product-oriented targets are shown in Figure 2. It

may be more accurate to think of the cross-clustering

approach as a refinement of the initial cluster

strategy, rather than a departure from it.

TechnologieZentrum Dortmund

The TZDO is the principal vehicle through which

facilities and infrastructure for the target clusters

12 The system, which is based on a combination of apprentice-ships and in-school education related to the field of the appren-ticeship and which is administered by the two principal businesschambers (Kammers), is generally held to be effective andwidely admired elsewhere. One informant suggested, however,that it is not as responsive to the needs of emerging technolo-gies as it should be. The two chambers are the Industrie- undHandelskammer (Chamber of Business and Industry) and theHandwerkskammer (Chamber of Crafts). While the former isoften translated as Chamber of Commerce their activities andtheir role in German society are substantially different fromthose of U.S. Chambers of Commerce.

are provided. It was established in 1985, on landowned by the city and TU Dortmund immediately

to the west of the university, reflecting its goal of

leveraging the growing talent pool represented

by the university.13The TZDO is a public-private

venture, led by the city of Dortmund (the largest

shareholder), the two Chambers, a consortium of

local lenders, and the citys two principal institu-

tions of higher education, TU Dortmund and the

Fachhochschule [University of Applied Sciences].14

The TZDO offers 10 different competence centers.

They are mostly located at the main facility near

the university, but the logistics center is located atthe port, while the micro-technology and produc-

tion technology centers are located in the flagship

Phoenix West development in the southern part of

the city. The facilities range from providing basic

start-up office space and services, such as the B1st

Software-Factory for start-up software designers, to

facilities with extensive lab equipment for biotech-

nology, and even prototype manufacturing capa-

bility for micro-technology. Altogether, TZDOs

facilities contain roughly 1.3 million square feet

(120,000 square meters) of space.15

In order to encourage growing firms to stay in

Dortmund after they have outgrown the compe-

tence centers, TZDO created a development arm,

TZ Investment Co., to build facilities for such

firms, formerly on land near the university and

increasingly on the TZDO land in the Phoenix

development. All in all, the TZDO estimates that

it has spun off some 520 firms, of which 280 are

still located in Dortmund. Those 280 firms employ

8,500 workers.

13 TU Dortmund was only established in 1968.

14 The Fachhochschule principally offers degrees in engineeringfields and computer science, although it also has programs ineconomics, social sciences, architecture, and design. Its enroll-ment is approximately 11,000, or somewhat less than half thesize of TU Dortmund.

15 The TZDO is also one of the three partners in the Kitz.DOproject, a hands-on technology learning center for children.


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T G M F U S8

The Regional Connection: A Short Note

While the greater part of Dortmunds economic

strategy appears to be driven by the local actors andis designed to focus specifically on the city as such,

it would be misleading to suggest that it is not part

of a larger regional strategy to which it contributes

and from which it benefits. Although the breadth

of the citys regional relationships and the extent

of regional activity in the Ruhr Valley is a major

subject well beyond the scope of this case study, it is

too important not to address at all.

Under the rubric of Metropoleruhr, a networkof regional organizations and agencies exists to

further regional strategies throughout the Ruhr

Valley. The Regionalverband Ruhr [Ruhr Regional

AssociationRVR] provides overall coordination

of municipal and regional planning, and manages

important regional assets such as the Industrial

Figure 2: Cross Clustering Around Markets

None Proposed Potential Actual

SOURCE: Adapted by author from presentation by Dr. Claudia Keides, Dortmund-Project

Market

Simulation Mobility Energy Resources

Cluster

BiotechnologyPharmacy studies Lab on a chip Biogass/mass

Industrial biotech-nology

Business servicesBusiness models

Business models fore-mobility

Energy contracting Efficiency contracting

CreativeSerious games Mobile apps Sustainabilityawareness-raising Green marketing

Health careMedical imaging

Ambient assistedliving

Hospital engi-neering

Hospital engineering

Information

technology CAD Mobile apps Smart grids Rapid prototyping

Logistics Supply chain simu-lation

e-mobility Green logistics RFID control

Micro-technologyMicro-sensors RFID transponders Energy harvesting New surfaces

Production

technology Production processsimulation

Mobile maintenanceIntelligent produc-

tion buildingsNew materials


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C D U R 9

Heritage and the Emscher Landscape Park. Withrespect to economic development, a regional quasi-

governmental corporation, the Wirtschaftsfrde-

rung [economic development] metropole Ruhr

GmbH, supports local efforts through a wide range

of planning, service provision, and promotion

activities. Regional transportation systems are coor-

dinated through the Verkehrsverbund Rhein-Ruhr,

while scientific and research coordination is

furthered through the Universittsallianz [Alliance

of Universities] Metropole Ruhr, an alliance of the

regions three major universities, including TU

Dortmund, established in 2007.At the state level, the Land of North Rhine-

Westphalia has adopted a strong cluster-oriented

economic development policy under the title of

ExcellenceNRW, grounded in a strategy of targeted

support to industrial clusters. The states efforts are

designed to support and foster public, privat,e and

institutional co-operation within 16 industries and

technology fields selected on the basis of growth

potential and state-level competitive advantage. The

presence of this policy, which is highly congruent

with the Dortmund-Project, and the level of state-

level support that it provides have both enhanced

the ability of Dortmund to pursue its local cluster-

based economic development strategy.

While it is hard to quantify, the value of being part

of an extensive and highly sophisticated network

of regional entities is likely to be considerable. The

Ruhr Valley was designated the European City of

Culture for 2010, and a regional strategy for maxi-

mizing the cultural assets of the entire region was

developed, in which Dortmund actively partici-

pated and from which it benefited. Conversely, the

Start2Grow competitions initiated in Dortmund,while initially limited to Dortmund-based entities,

have since taken on a regional focus, while still

being administered locally.

Other regional dimensions are even harder to

quantify but are just as important. The regional

focus on industrial heritage [industriekultur] hasbecome a major element of tourist and visitor

promotion, and is a culturally unifying theme for

people and projects in the entire region. This can

be seen in the extent to which the visual symbol of

the regions industrial heritage, the distinctively-

shaped mineshaft tower of the Zollverein colliery

in Essen (Figure 3), sometimes referred to as the

Eiffel Tower of the Ruhr, has started to be absorbed

into the regions popular visual vocabulary in such

areas as store signs, company logos, and refrigerator

magnets.

While Dortmunders have a strong sense of localidentity, their sense of being part of the Ruhr

region and sharing in the elusive quality referred

to as Ruhrpott may be even stronger. While their

continued economic rivalry with Essen is very real,

it is the rivalry of competitive colleagues.

Cultural and Creative Strategy

Although the technology-driven model of the

Dortmund-Project and TZDO represents the domi-

nant economic development model in Dortmund,

Figure 3: The Zollverein Tower In Essen

Source: Thomas Wolf (Wikimedia Commons)


13/30

T G M F U S10

ment of the Rheinischestrasse Quarter south of the

Dortmunder U as an arts district. Given that no

development of this type exists in Dortmund, the

citys goal is not only to accommodate artists desire

for a distinctive environment, but, as the director

of the Kulturbro commented, to make the city

interesting.

Dortmund cultural authorities see a strong recip-

rocal relationship between the citys push for a

high-technology economy and the arts. A key part

of the theory underlying the citys support for the

arts is that in so doing, they can create the type of

environment that will enable the city to retain a

healthy percentage of the large pool of arts-relatedgraduates from the citys universities, and make the

city attractive to the creative class as Florida broadly

defines it, thus serving the larger goal of retaining

and increasing the technology sector.

Figure 4: The Dortmunder U

Source: Mathias Bigge (Wikimedia Commons)

the city is also strongly focused on cultural andartistic development, and has recently pursued a

Richard Florida-esque approach to identifying and

promoting what can loosely be characterized as the

creative sectors of the local economy.16

The Kulturbetreib (department of cultural services)

is organized as an Eigenbetreib, or semi-autono-

mous agency of the city of Dortmund. The depart-

ment includes the bureau of culture (Kulturbro) as

well as a number of facilities and programs. These

include the Dortmunder U, described below, and

the Jedem Kind ein Instrument [Every child an

instrument] music school, which enrolls roughly8,000 children in its programs. The bureau of

culture tries to develop facilities and venues for

artists and to integrate culture and the arts into the

citys life. Bureau staff are proud of the fact that

they support a wide range of cultural and artistic

activities, including popular arts and new media,

in contrast to the high art focus that still remains

strong in much of German official cultural life.

The citys cultural flagship project is the Dort-

munder U, the conversion of a historic brewery at

the edge of the city center into an arts and mediacomplex (Figure 4). The project, which was the

citys principal contribution to the designation of

the Ruhr as the European Capital of Culture in

2010, contains a wide range of facilities to support

artists, including museums and gallery space,

hands-on workshops focusing on film and new

media, classrooms, and performance spaces. Films

are projected on its windows and the illuminated

U atop the tower a local landmark since initially

built in 1927 is visible from much of the city. The

Dortmunder U is only one of many arts-related

facilities that have been developed by or with theassistance of the city, including jazz clubs, media

centers, cultural centers, and artists residence/work

spaces. The city is currently exploring the develop-

16 Richard Florida identified that a key pillar of a citys economicgrowth is the ability to attract the creative class and success-fully integrate them into a local knowledge economy.


14/30

C D U R 11

While such a strategy may show results as long aspublic money is available to support it, it may have

difficulty becoming self-sustaining. Dortmund

suffers from some important constraints in that

respect; as the same individual noted, it is still

a relatively low-income city, with relatively few

affluent, educated households, yielding only a small

pool of serious arts consumers. As a result, artists

who stay in Dortmund have much more difficulty

making a living from their art than they might in a

city with a stronger, better-established art market.

Dortmund may be a good place for an artist to startout, but may not be a good place for an artist to

become establish.

The city has also begun to promote the creative

sector more broadly under the rubric of Dortmund.

Kreativ, including within not only traditional arts,

but sectors such as advertising, software design, and

media. It is not clear, however, to what extent this

has been integrated with other parts of the citys

economic development strategy.


15/30

T G M F U S12

character. Most residential areas are made up ofmodest and generally well-maintained small multi-

family buildings, as shown in Figure 5.

The Nordstadt, the neighborhood immediately

north of the city center generally considered the

most distressed neighborhood in Dortmund, looks

little different from other parts of the city except in

subtle signs of graffiti and litter. The city is under-

taking revitalization projects in a number of areas,

including the Nordstadt, Hrde, and the Rheinisch-

estrasse quarter.

A drawback of the city from the standpoint ofeconomic development is the reality that while

not unattractive, Dortmund lacks variety. While

the overall standard of housing is adequate, little

Figure 5: Typical Housing Types In Dortmund

Near the city center

A more outlying neighborhood

SOURCE: Google Earth

In the course of recognizing the need foreconomic transformation beginning in the 1980s,

city officials also recognized the need for physical

transformation, particularly of the city center,

which had been rebuilt largely from scratch after

World War II. Although the buildings built during

the 1950s and 1960s are at best undistinguished,

they have two virtues. For the most part, the build-

ings form continuous street walls, and few of them

are more than five or six stories high. As a result,

the city was able to extensively reconfigure the city

center through urban design strategies. Since the

adoption of the City-Konzept 2000 plan in 1988,the city center has seen a profound transformation,

most visible in the network of interlocking attrac-

tive public squares and pedestrian ways that has

been created. A signature project to develop the

main train station into a nearly 1 million square

foot retail, entertainment, and services center was

first proposed in 1997 but was abandoned in 2007

when adequate financing did not materialize.

For all its attractive public spaces, the city center

continues to lack a distinctive character or a

coherent hub, while the city as a whole has few

notable buildings or monuments. Arguably the

single most prominent building in the city, one that

is well-known throughout Europe, is the Westfalen-

stadion, the 80,000 seat stadium built in 1974 where

Dortmunds famous Borussia football club plays.

Two notable downtown development projects are

the Philharmonic Hall and the glass atrium created

to link the old and new city government offices.

While both play a part in enhancing the quality of

life in the city center, neither functions as a central

organizing space.

Dortmund is a spread out city by German standards,reflecting its origins in a process by which a large

number of small, distinct villages and towns were

consolidated into a single city. Much of the area

between these former villages has been preserved

in open space, and the city takes pride in its green

P T

4


16/30

C D U R 13

is distinctive, and few neighborhoods can be saidto have a distinctive urban character of their own.

Only a handful of the citys neighborhoods, such

as the Gartenstadt Sd [Southern Garden City]

roughly 2 kilometers east of the city center (Figure

6), offer the larger flats or detached single-family

houses (villas) that might draw or retain more

affluent professionals or business people. Diversi-

fying the housing stock to that end was an impor-

tant driving force behind the residential dimension

of the Phoenix project.

The Phoenix project is the citys flagship redevelop-

ment project (Figure 7). The project is actually twosites linked by a green corridor containing a total

of 530 acres (214 hectares), divided by the center

of Hrde, a town roughly 4 kilometers southeast of

the city center, which was absorbed into the city of

Dortmund early in the 20thcentury. The two sites

were previously devoted to a single steel mill that

closed in 2001.

Site remediation and development has moved

ahead steadily, and a great deal of redevelopment

has taken place on both sites. Although much more

remains to be done, what remains now is almost

entirely a matter of building out development-ready

parcels. Reflecting this, the interdepartmental

Phoenix working group, which met almost weekly

for the past decade as the project gradually moved

forward, was dissolved in spring 2013.

Figure 7: The Phoenix Project

SOURCE: Stadt Dortmund / stegepartner

Figure 6: The Gartenstadt Sd



17/30

T G M F U S14

Phoenix East has undergone the most dramatic

change. In place of the steel mill, a 60 acre (24

hectare) lake nearly 4,500 feet (1,370 meters) long

has been created, surrounded by public open space

and terraced banks, on which expensive single

family houses are being constructed.17In the part

of the site closest to the center of Hrde, higher

density development is under way, principally

apartments with ground floor retail and services,

designed to connect with and reinforce the oldercenter. Ultimately, some 2,000 housing units are

planned for the site. As of spring 2013, develop-

ment of the areas along the northern and western

banks of the lake was more than halfway to comple-

17 According to one informant, prices for the houses run from700,000 and up.

tion, while development of the southern bank wasslated to begin that year.

In contrast to the area around the lake, Phoenix

West is being developed to support the continuing

growth of the citys technology sector, with a

combination of TZDO facilities, including the

micro-technology competence center, and sites

marketed to or developed for technology-oriented

firms, particularly those that have outgrown their

space in the competence centers. In addition to new

buildings, the western site contains a substantial

number of historic industrial buildings that were

preserved in the course of development, includingthe principal blast furnace of the old steel mill.

Maintaining and finding appropriate reuses for

these buildings, however, has become a difficult

challenge for the city, which continues to hold them

despite its desire to find private users for them.

The Phoenix project is well on a path to success,

and represents a significant achievement. Nonethe-

less, the city still contains large numbers of vacant

or underutilized brownfields sites, as well as rail-

road yards, which await redevelopment.18Whether

Dortmund will be able to mount future redevelop-ment initiatives on a comparable scale remains to

be seen.

18 According to Dortmund-Project staff, the city contains some1,500 acres (600 hectares), or over 2 square miles, of brownfieldssites.

Figure 8: New Development on Phoenixsee

SOURCE: Pelz (Wikimedia Commons)


18/30

C D U R 15

In many respects, Dortmund can be seen as amodel for other cities from an economic devel-

opment perspective. While they have pursued

economic development goals since the 1980s, since

the founding of the Dortmund-Project in 2000, the

city has organized its economic development efforts

around a coherent, well-defined strategic agenda

with consistency and focus that are rare in the

field of urban economic development, whether in

Germany, the United States, or elsewhere. During

these years, the city and its partners have made

major investments in physical facilities such as the

TZDO19

and the Phoenix project, while buildinghuman capital and fostering start-up businesses and

entrepreneurs.

Dortmund has also shown a highly networked

approach to its economic development strategy,

with strong cooperation and integration between

public and private entities. As one informant

commented, in the 1990s, we were so far down,

everybody agreed we had to work together. The

networks include not only governmental partner-

ships between the city and the land (state) of North

Rhine-Westphalia, and between the city and the

two Chambers, but also between those entities, the

two principal universities, the citys financial insti-

tutions, and others.

The role of the universities, particularly TU Dort-

mund, in the citys economic growth is a significant

one. They represent a principal means by which

the city gains a highly skilled workforce and a body

of emerging innovators and entrepreneurs. This is

very notable in the field of information technology,

where the relationship between TU Dortmund

and the TZDO is particularly close, and where the

strength of that program was a major element inthe Dortmund-Project decision to make IT one

of its major cluster targets. While no single strong

leader from among the many institutions involved

19 According to an informant, total public investment in theTZDO since its inception has been 160 million.

was identified by informants, decisions appear to bemade and effective and strategic actions are taken

with a strong level of consensus.

It is important to note, however, that this is very

much an elitenetwork. There appears to be little

systematic effort at broader public participa-

tion, while few non-governmental organizations

(NGOs) appear to play a substantial role in the

economic or physical planning process in the city.

This appears to be true in many other German

cities as well, although there are indications that it

may be changing.20Without suggesting that such

activities or organizations are a panacea, theirabsence may contribute to the difficulty the city

is finding in addressing some of its more complex

and, it appears, increasingly entrenched social and

economic problems.

With respect to employment, Dortmund has

made a significant, but arguably still incomplete

transition to a post-industrial economy. In 1976,

Dortmund had 227,000 jobs eligible for social

insurance,21of which approximately 75,000 were in

the manufacturing sector; this number, however,

already represents a decline from peak manufac-turing employment of the 1950s and 1960s. By

2006, the total number of jobs had dropped to

185,000, of which 25,000 were in the manufacturing

sector. Thus, during that 30-year period, growth in

other sectors replaced only a small percentage of

the jobs lost in manufacturing.

20 This also appears to be the case in Leipzig, as it appeared fromthe meetings and presentations during the first CIT study tour.While mechanisms for public participation exist in German lawand practice (Friesecke 2011), they do not appear to play a majorrole in decision-making in Dortmund, judging from informantsresponses to my questions. To be fair, it should be noted that

the scope of the case study did not al low for examination of thecitys neighborhood-scale planning and redevelopment efforts. Itis also worth noting that in recent years, both national and stategovernments have placed greater emphasis on civic participa-tion, although the NGO infrastructure remains limited bycomparison to the United States.

21 This figure, which reflects full-time wage employment, isthe most commonly used employment statistic in Germany. Itappears to represent about 70 percent of all workers.

D T: H E

T B5


19/30

T G M F U S16

total job growth inrecent years. Even so,

the total number of

jobs in 2012 was still 10

percent below the 1976

level.

While Figure 9 suggests

that the growth in jobs

has had some effect

on the unemployment

rate, unemployment in

Dortmund has remained

stubbornly high. At13.3 percent, it is nearly

double the national

unemployment rate,

while the actual number

of unemployed has

remained unchanged

from 2007 through the

spring of 2013. Nearly

half of the unemployed

have been so for the

long term,24continuously for one year or longer.

While this is a very high percentage by United

States standards,25it is close to the German nationa

average, and does not appear to reflect any specific

local conditions.

The persistence of high unemployment in Dort-

mund appears to be closely associated with the

growing problem of concentrated poverty, which

is in turn disproportionately associated with

non-ethnic German and immigrant populations.

This reflects the problems of social exclusion, and

the potential for increasing ethnic and economic

divergence in the city, something which may beexacerbated rather than reduced by the focus

24 While high, this is well below the estimates made by someinformants.

25 The percentage of long-term unemployed in the United Statesusing a much broader def inition namely, those unemployed27 weeks or longer was 37.6 percent in May 2013.

Figure 9: Jobs in Dortmund 2000-2011

SOURCE: Schulze and Ellwein (2012)

This trend appears to have reversed significantly in

recent years. While the target of 70,000 new jobs in

ten years set by the Dortmund-Project in 2000 waspatently unrealistic and not achieved, some prog-

ress has been made. Figure 9 shows the number of

jobs eligible for social insurance in Dortmund, an

increase of 18,500 jobs, or 10 percent, between 2006

and 2011.22Technology-related23jobs, although

making up only 9 percent of the citys total job base,

represented 27 percent of the increase between

2008 and 2012. Since these are heavily export-

oriented jobs, their multiplier is likely to account

for a significant percentage of the increase in other

sectors. It appears not unreasonable to suggest that

technology has driven half or more of the citys

22 The curve of job decline and growth shown in Figure 9 closelyparallels national trends during this period.

23 The category freiberufliche, wissenschaftliche, und tech-nische Dienstleistungen [free-lance, scientific, and technicalservices].


20/30

C D U R 17

on technology-driven economic development,

particularly if as appears to be the case the

local labor market is not able to provide the special-

ized workforce that this sector needs to sustain its

growth.26The percentage of jobs in Dortmund held

by commuters from outside the city has increasedfrom 38 percent in 2000 to nearly 44 percent in

2012.27

A similar issue is posed by the development of

the Phoenix project and its potential impact on

the social and demographic character of Hrde,

one of the citys lowest income neighborhoods.

Gentrification and the potential displacement of

lower income Hrde residents would appear to be

a highly probable outcome of the success of the

26

One informant reported that many of Dortmunds technologyfirms are importing workers with specialized skills from over-seas, particularly India and China.

27 This is a considerably smaller commuter share than incomparable cities in the United States, and reflects both the lesspronounced long-distance commuting patterns of the Germanworkforce as well as the very large geographic area covered bythe city of Dortmund (280.4 square kilometers or 108.3 squaremiles.)

Phoenix project. Indeed,it is hard to imagine

circumstances under

which significant

change is notlikely to

happen. The center of

Hrde, in addition to

providing the nearest

shopping district, is

the hub of the public

transportation services

that will be used by

the residents of thePhoenix development,

and, moreover, is an

area that retains rather

more of its Wilhelmine

charm and walkability

than most other parts of

Dortmund (Figure 11).

While significant evidence of gentrification has yet

to emerge, the city has yet to respond to its poten-

tial in the near future. As is true in many similar

United States cities where overall property values

and housing costs are low by national standards,

the tension between addressing gentrification and

the compelling goal of fostering stronger property

values and a more diverse housing market remains

unresolved.

Figure 10: Unemployment In Dortmund 2000-2012

SOURCE: Schulze and Ellwein (2012)

Figure 11: Downtown Hrde



21/30

T G M F U S18

Dortmund today is a very different city than itwas 50 or 100 years ago, although it is a city that

continues to be in transition rather than one that

has clearly established its 21stcentury role. It is a

far cleaner and greener city, it offers a better quality

of life to its residents, and can boast a potentially

strong emerging technologically-driven economy

than before. At the same time, as Couch (2010)

writes, Dortmund has made considerable progresstoward competitiveness. [] The problem is that it

started from a position of disadvantage compared

with other regional cities such as Dusseldorf, Kln,

or Frankfurt, and these cities have not stood still

either, so there has been little change in the relative

position of Dortmund. That leads to Dortmunds

ongoing challenges.


22/30

C D U R 19

The Central Economic Challenge

Couchs observation exemplifies the central

challenge to Dortmunds economic devel-

opment. Dortmund has demonstrated

that it can go a considerable way to building a

technology sector in the local economy, creating

in the process a fairly substantial number of jobs

through a massive and focused investment of

public resources. It should also be emphasized

that public resources are not limited to financial

resources. One of the great strengths of the way in

which Dortmund has executed its strategy is in the

manner in which it has mobilized highly skilledand often specialized human capital to further the

growth of its target clusters.

Notwithstanding continuing challenges, the inten-

tionality and focus of Dortmunds determined effort

to build a new technologically driven local economy

are impressive, and many features of this effort are

worth serious consideration by economic develop-

ment planners in the United States, independent of

the level of public resources available. While there

is undoubtedly some difference between the level

of public resources devoted to economic develop-ment in Germany compared to the United States,

that difference should not be exaggerated or seen

as making the Dortmund experience less relevant.

Cities in the United States spend substantial sums on

economic development, both with respect to staffing

public and quasi-public development entities, and

in the form of often highly generous incentives for

development projects.

The central lesson of Dortmunds experience is the

extent to which it is afocusedstrategy focused

not only in the decision to prioritize a limited

number of technology clusters, but even more in

the many decisions about howto most effectively

use available resources to maximize outcomes in

those clusters. This focus is readily apparent in even

the small details of the staffing and operation of the

TZDO and its facilities.

At the same time, the question remains whetherDortmunds technology sector is either self-

sustaining or capable of further growth without

continued substantial public investment. Can

Dortmund hold its high-tech innovators and their

firms, or is the city incubating talent that will then

migrate to Dusseldorf, Munich, or Silicon Valley?

This issue is a critical one to older industrial cities

in the United States as well; while Pittsburgh, with

its massive eds and meds sector and exceptional

quality of life, may be on track to create a self-

sustaining critical mass of technology-oriented

growth, the same does not yet appear to be true ofthe other cities in the CIT initiative.28

Moretti (2012) has pointed out the many ways in

which a city, once behind in the skills and innova-

tion race, is likely to find it harder and harder to

catch up. Low housing prices and cost of living,

as well as a generically good quality of life both

of which Dortmund offers may not draw or

hold the technological innovators, or the pool of

highly skilled workforce that they need to succeed.

Morettis analysis is even more relevant to the

United States; as he writes:

There are three Americas. At one extreme

are the brain hubs cities with a well-

educated labor force and a strong innova-

tion sector. They are growing, adding good

jobs, and attracting even more skilled

workers. At the other extreme are cities once

dominated by traditional manufacturing,

which are declining rapidly, losing jobs and

residents. In the middle are a number of

cities that could go either way.

The question is whether history is destiny, and

whether a city can make the transition from one of

28 Although, among the four other cities, it is clear that Cleve-land and Detroit, for all their difficulties, have a significantedge in this respect over Flint and Youngstown. This highlightsthe additional extent to which small older industrial cities arearguably doubly disadvantaged in the competition for talent andsustainable growth.

F C: I

U.S. C T6


23/30

T G M F U S20

the Americas to another. Figure 12 shows recent job

trends for the five cities that were part of the GMF

initiative. As the figure shows, only one of the five

cities, Pittsburgh, showed overall job growth during

the last decade, although Clevelands job losseswere markedly less than those of the other three

cities, supported by growth of over 50 percent in

the education and health care sectors. Of the cities

shown, it is possible that Pittsburgh may be making

that transition; although it has only three-quarters

of the population of Cleveland and less than half

that of Detroit, it has more jobs than either. Pitts-

burghs growth is also heavily dependent on the

health care and education sectors; between 2002

and 2011, those sectors added over 30,000 jobs in

the city, offsetting a loss of 9,000 jobs in other parts

of the local economy. Pittsburgh also stands out

from the other cities in transition in terms of the

educational attainment of its workforce, as shown

in Figure 13.29This factor has been singled out

by Moretti (2012) and many others as a powerful

determinant of a city or regions growth potential.

The competitiveness challenge may become even

greater in coming years. Dortmund and those other

cities playing catch-up are likely to be affected

by the macroeconomic policies arising from the

continuing eurozone fiscal crisis, and this will likely

have an impact on social supports or discretionary

funds for continued investment in technology

sectors or large-scale redevelopment (Bmer 2005).

Not surprisingly, uncertainty over the sustain-

ability of their efforts was a recurrent theme in my

interviews with both practitioners and observers of

Dortmunds economic development efforts.

While U.S. cities in transition may have been ableto mobilize less public sector support for economic

development than German cities, the degree to

which both economic development and physical

29 The percentage of adults in Pittsburgh with a bachelors orhigher degree (34.4 percent) is significantly higher than thenational percentage (28.2 percent).

Figure 12: Job Trends in Five Cities 2002-20111

SOURCE: Bureau of the Census On-The-Map (city data); Bureau of Labor Statistics, Occupational Employment Statistics program

(national data)

1 These are the earliest and most recent years available from the Bureau of the Census On The Map site, the only data source to providejobs data that allows comparisons between municipalities.

2 The national data provided by the BLS uses somewhat different ways of categorizing jobs by sector, as a result of which there may besome inconsistency between the national and local data presented in Figure 7.

Jobs 2002 Jobs 2011 %

2002-

2011

Eds/Meds

share

2002

Eds/Meds

share

2011

% Eds/

Meds share

2002-2011

Cleveland 262,586 256,480 - 2.3% 22.6% 36.5% + 61.5%

Detroit 276,083 231,805 - 16.0 29.1 33.4 + 14.8

Flint 60,222 40,373 - 33.0 25.1 37.4 + 49.0

Pittsburgh 245,284 266,933 + 8.8 27.6 36.8 + 33.3

Youngstown 34,947 29,218 - 16.4 42.4 38.4 - 9.4United

States

127,523,760 128,278,550 + 0.6 13.42 15.5 + 15.7


24/30

C D U R 21

redevelopment in U.S. cities over the past decades

has been fueled by public sector resources should

not be underestimated. To the extent that those

resources are diminishing, it will also mean that

future growth will be largely limited to those

economic sectors and geographic areas, if any, that

have achieved economic take-off and no longer

require public sector support.

In many cities, that is likely to constrain development

of new economic engines and limit the ability of the

city to foster neighborhood revitalization or physical

redevelopment outside areas already seen as prime

locations, such as University Circle in Cleveland.

The Challenge of Physical Redevelopment

and Revitalization

While the Phoenix project, particularly Phoenix

East with its new lake, has been admirably

conceived and executed, one cannot say that itis unique or fundamentally different from many

successful brownfields redevelopment projects

in the United States. Steel industry sites have

been successfully redeveloped in Pittsburgh and

Youngstown, with Pittsburghs Washingtons

Landing or Summerset especially worthy of note.

Similarly, many olderindustrial cities in the

United States have seen

significant redevelop-

ment take place in their

downtowns and in areas

surrounding major

universities and medical

centers. Although

such development is

particularly notable in

Pittsburgh and Cleve-

land, cities such asYoungstown and Flint

have seen life begin to

return to their down-

towns in recent years

despite the persistence

of pressing problems.

As cities in transition redevelop downtowns and

other central core areas, they can learn a useful

lesson from Dortmund and other European cities

in their treatment of the public realm.

While U.S. downtowns have attractive public openspaces, such as Campus Martius in Detroit or Mellon

Square Park in Pittsburgh, they are relatively few

and rarely linked to a network of open spaces and

pedestrian connections. Such a network has enabled

Dortmund to create a city center that in many

respects is more appealing and livable than most

U.S. downtowns, despite the fact that its buildings

are far less distinguished than those found in most

downtowns of older cities in the United States. While

one can argue that this is another manifestation of

the greater level of public sector resources available

for that purpose in Germany, we would suggest thatit has more to do with a lack of serious attention to

the quality of the public realm in U.S. cities outside

signature projects like Campus Martius.

Certainly, cities like Cleveland, where billions of

dollars are being invested in mixed-use develop-

Figure 13: Percentage of Adults 25+ with a Bachelors or Higher Degree

SOURCE: Five-Year American Community Survey 2007-2011


25/30

T G M F U S22

ments in downtown and University Circle, and in

major medical and entertainment facilities,

could work with those developers to create a far

more vibrant public realm in those parts of the city.

The larger challenge facing cities in transition is

how to extend redevelopment and revitalization

beyond the central core the downtown and the

areas around major university and medical facili-

ties and a handful of closely linked residential

areas to the rest of the city in order to foster both

a better quality of life and greater market vitality

in the neighborhoods that represent both the lions

share of each citys land area and where the greatmajority of each citys population lives. Gentrifica-

tion is a far less important issue in cities in transi-

tion than is the spread of neighborhood decline and

abandonment. Using median house sales prices as a

proxy for market strength, Figure 14 illustrates the

Figure 14: Median Sales Price by Census Block Group in Cleveland 2012

SOURCE: The Reinvestment Fund/PolicyMap

Downtown,

Warehouse District,

Ohio City, and Tremont

University Circle

and Little Italy


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C D U R 23

pattern in Cleveland. All of the areas in the city thatcontain any significant market strength are in two

small clusters, one near downtown and the other

around the University Circle area. The vast majority

of the citys land area either has weak market condi-

tions, reflected in house prices that are often under

$30,000, or effectively no market, where there were

too few sales transactions in the course of the year

to enable the median to be calculated.

This pattern of small clusters of vitality surrounded

by large areas of weakness is typical of cities in

transition. In the case of Youngstown and Flint,

it is hard to characterize any of the citys residen-tial areas as truly strong market areas, although

some retain functional levels of market activity.30

A map of population growth would look very

similar; a few pockets of growth in many cases

from the in-migration of young single people

and couples (so-called millennials) and large

areas where population continues to decline. The

evidence strongly suggests that growth in eds and

meds employment and downtown revival does

not lead to broader neighborhood revival, as the

new in-migrants tend to cluster in high-density

mixed-use areas, and the new jobs created are filled

overwhelmingly by suburban commuters. As Aaron

Renn has aptly written, the creative class doesnt

have much in the way of coattails. (2013)

The question of these cities neighborhoods is inti-

mately linked to larger issues of poverty and race,

with substantial and in many cases growing

racial disparities of income, employment, and

educational attainment in cities in transition. The

importance of neighborhood effects in perpetu-

ating intergenerational poverty and unemploy-

ment has been well documented by recent research(Sampson 2012, Sharkey 2013). Unless this issue is

30 We would argue that at a minimum, a strong market areamust have house prices at or above replacement cost, and thus beadequate to motivate buyers to fix up vacant houses and devel-opers to utilize vacant lots for infill development. By this stan-dard, no part of either Flint or Youngstown even comes close.

confronted, and successfully addressed, a future inwhich these cities are made up of enclaves of pros-

perity surrounded by a sea of poverty and disinvest-

ment is not unrealistic.

The Challenge of Social Inclusion

The third challenge facing Dortmund and U.S.

cities in transition is the extent to which they are

divided by social, ethnic, and economic fault lines,

which may be growing rather than diminishing.

While poverty and unemployment in Dortmund

are far from exclusively the problem of ethnic

minorities, minorities are significantly over-represented in the ranks of the poor and unem-

ployed. Twenty-six percent of the unemployed in

Dortmund in 2013 were foreign nationals, roughly

double their population share. This includes many

of the children and grandchildren of the gstarbe-

iter, so-called guest workers who were recruited

to work in the mines and the steel mills during the

post-war ramping up of coal and steel production,

as well as more recent immigrants from the poorer

countries in the EU.

Although mitigated in its effects by a stronger

social safety net, the social profile visible in Dort-

mund is similar in many respects to that of U.S.

older industrial cities. The German educational

system, according to one informant, while highly

effective at teaching children from middle-class

households, or from households with supportive

and engaged parents, is far less effective with the

children of low-income households, particularly

those from dysfunctional households or non-

ethnic German backgrounds. Many students drop

out before receiving a vocational qualification,

sharply increasing the likelihood of their expe-riencing sustained unemployment and poverty

as adults. With the ethnic German population

aging, a growing percentage of the young people

in Dortmund are from other ethnic backgrounds,

and increasingly likely to be poor. According to the

same informant, roughly one-third of the children
http://www.censusscope.org/us/s26/rank_dissimilarity_white_black.htmlhttp://www.censusscope.org/us/s26/rank_dissimilarity_white_black.htmlhttp://www.censusscope.org/us/s26/rank_dissimilarity_white_black.htmlhttp://www.censusscope.org/us/s26/rank_dissimilarity_white_black.htmlhttp://www.censusscope.org/us/s26/rank_dissimilarity_white_black.html


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T G M F U S24

in the city live in familiesbelow the poverty level,

compared to 14 percent for

the state of North Rhine-

Westphalia.

Dortmunds social divide

translates into a spatial

divide, in which the

northern part of the city is

more a lower income area,

and the south more affluent.

Hrde, a lower income

area in the southern part ofthe city, is an exception to

this pattern, but it appears

to be at significant risk of

gentrification as a result of

the impacts of the Phoenix

development. While it is far

from a foregone conclusion, there is a significant

risk that the Dortmund of tomorrow will be a more

segregated city, socially, ethnically and spatially,

than the Dortmund of today. While similar cities

in the United States are already highly segregated

by race and economic status, it is likely that current

trends will tend to increase rather than mitigate

existing patterns of segregation.31

This challenge is two-fold. For any city to be able

to mount a sustained effort to tackle the issues of

economic and racial inequality and foster greater

social and economic inclusion, it will need to

maintain a steady level of economic growth. Their

ability to sustain economic growth, however, will

be affected by larger macroeconomic trends and

national (and in Europe, EU) policies. These trends

and policies will define overall levels of national andregional economic growth as well as the availability

31 Dissimilarity indices, a widely used measure of racial segrega-tion, are high in all five cities in the GMF initiative, ranging from79.4 in Cleveland and 76.8 in Flint to 64.2 in Youngstown and63.3 in Detroit. See http://www.censusscope.org/us/s26/rank_dissimilarity_white_black.html, accessed September 5, 2013.

of funds for continued investment at the local level,

and largely determine the extent to which older

industrial cities will be able to compete with other

economically more powerful cities throughout the

world. At the same time, as Dortmund has shown,

strong local strategies and sustained focus onwell-defined economic targets can influence a citys

outcome, albeit within the parameters established by

larger forces around them.

To varying degrees, U.S. cities in transition have

demonstrated the ability to foster both economic

and physical transformation. Pittsburghs reuse

of brownfields sites for mixed-use development,

Youngstowns industrial redevelopment, and the

development of University Circle and the Euclid

Avenue corridor in Cleveland, are all significant

achievements. At the same time, all of these cities

continue to demonstrate significant and growingdisparities in economic and social condition,

disparities that are considerably exacerbated by

race, as illustrated in Figure 15.

The central challenge for all of these cities and

their European counterparts is to find the key to

Figure 15: Percentage of Adults 25+ with a Bachelors or Higher Degree

SOURCE: Five-Year American Community Survey 2007-2011


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C D U R 25

leveraging their successful efforts at economic andphysical revitalization in order to reduce, rather

than exacerbate, racial and economic disparities,

and better link the citys population to emerging

opportunities. Although not entirely a function

of workforce and human capital development

strategies, such strategies are a critical element in

the picture. They must be multifaceted, and may

include any and all of the following:

Expanding early childhood education;

Improving K-12 schools, and providing better

links between public education and the workworld;

Better mobilizing the resources of training

programs and community colleges to

improve the workforce skills in lower income

communities;

Better linking economic development activities

with workforce development programs;

Working with major area employers to hire

more city residents, including development of

career ladders to offer opportunities for upward

mobility in areas such as the health care sector;

Enacting local hire or first source ordinances

requiring firms receiving discretionary benefits

from local government to hire locally;32and

Improving transportation access for urban

workers to major suburban job centers.

32 A number of cities have also enacted living wage ordinances,which mandate that firms receiving some form of discretionaryassistance from the city pay their workers a living wage, which,although varying from city to city, is significantly higher thanthe statutory minimum wage. There is considerable disagree-ment over whether such ordinances provide greater benefitby increasing the earnings of low-wage workers, or harm bydiscouraging firms from locating in cities with such ordinances.In the final analysis, it is likely that the greater a citys competi-tive advantage, the more likely that the effects of the ordinancewill be positive. There is an extensive, but largely inconclusiveliterature of this subject.

Economic growth may be a necessary conditionfor addressing poverty, unemployment, and social

exclusion, but abundant evidence has shown that it is

not a sufficient condition. As Dortmunds experience

shows, but the experience of U.S. cities shows even

more powerfully, economic growth and selective

spatial revitalization do not solve these problems; a

rising tide does not lift all boats. Only by connecting

the dots in ways that explicitly confront these issues

is there any realistic hope of gaining ground. This

demands that a citys leaders engage with the wider

community, explicitly confront these issues, work to

foster inclusion in planning and decision-making,and muster the political will to implement inten-

tional strategies to overcome the widening economic

and social gaps affecting their cities.

Cities in the United States and Europe are facing

challenges that, however different they may look

on the surface, are actually closely related. Not

only Germany, but many other countries including

France and the U.K., are all facing the challenge of

integrating immigrant populations. As such, U.S.

and European cities have a great deal to learn from

one another by sharing information and by collabo-

rating with one another on projects that integrate

transatlantic knowledge-sharing into their design

and execution, focused on the central question of

connecting the dots, both in the narrower sense

of connecting working development, economic

development, and physical change, and in the larger

sense of fostering equity and inclusion in the cities of

tomorrow. We are hopeful that the German Marshall

Funds Cities in Transition initiative will be the

beginning of a sustained effort in this direction.
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