Toledo lures investors to let the good times roll

EVER SINCE John Denver sang "Saturday night in Toledo, Ohio is like being no place at all", this industrial Midwestern city has been struggling to put some shine into its relentlessly drab, blue-collar image.

In the 1970s and the 1980s, when oil crisis and recession dealt swingeing blows to the local economy, particularly the car industry, Toledo almost fell off the map altogether. Tens of thousands of workers were laid off, a quarter of the population fled, and downtown turned into a wasteland of cracked asphalt, boarded-up buildings and vacant lots.

Times are different now. The economy is booming and jobs are plentiful. The suburbs are sprouting offshoots, and life is even crawling back into the derelict centre of town.

But despite the city's best efforts to promote itself as a haven of prosperity, the sense of malaise has not entirely disappeared. As the recent General Motors strike illustrated - a labour relations dispute that brought a handful of cities to a standstill for almost two months - much of the Midwest is at the mercy of vast industrial conglomerates whose fluctuating fortunes and fluid investment priorities can bring either euphoria or devastation to local communities.

Like every other Midwestern city, Toledo can only guarantee its wellbeing by bending over backwards to accommodate the demands of the corporations. When Chrysler announced a couple of years ago that it was closing its Jeep assembly plant in northern Toledo and looking for a site to build a new one, the city authorities flew into a panic at the thought that the mainstay of the local economy might move to the suburbs or, worse still, over the state line into Michigan.

The upshot is that Jeep is staying, but at a cost to Toledo that has made many people here blanch. Not only is the city offering tax breaks galore for the next 10 years, it has also volunteered to buy up 83 houses next to the Jeep plant and donate the land to Chrysler to facilitate its expansion.

In all, Toledo will spend more than $250m (pounds 152m) to keep Jeep - and that for a scheme that will not provide a single extra job, but will in fact result in job losses. The new Chrysler plant will employ 4,700, compared with 5,500 now working at the old one.

In a city that does not exactly abound in municipal funds, that means eating up several years' worth of federal development funds and blowing a debt hole in the local budget incurring more than $3m in repayments each year.

"We have to look at what Toledo is going to lose," said Tobi Saad Bartels, a community development worker and researcher at the local university. "There will be no money for infrastructure improvements. Water rates will go up. The city will have to sell off agricultural land. Schools will suffer. And social programmes are sure to be cut."

As far as Toledo's ebullient mayor, Carty Finkbeiner, is concerned, such worries are little more than minor details. "We're putting up $250m or $300m to secure a $1.2bn investment by Chrysler. It's a win-win-win-win situation."

As long as the boom continues, and Toledo's other key manufacturers - of car parts and glass - continue to keep the city's head held high, that assessment may be true. Nobody believes Jeep should have been chased away. But if the economy should go into one of its periodic downturns, Mr Finkbeiner's detractors fear the city might be lumbered with more debt than it can handle.

"Toledo is caught between a rock and a hard place," said Neil Reid, an automotive specialist at the University of Toledo. "Companies in the Midwest are very good at playing one community off against another to secure the best deal. Jeep probably would have stayed in Toledo anyway, but the city could not risk being beaten by a better offer."

Although Toledo has notched up some notable public relations triumphs, being named an All-American City earlier this year and clinching an international Sister Cities conference in 2002, it has a long way to go to improve the sad, grey feel of its semi-derelict smokestack skyline. There is a sense of desperation in the city's planning decisions, that it would rather secure investment first, and ask questions about the desirability of new developments later. Thus a downtown block built in the 1920s, including the old Pantheon Theater, risks being knocked down and turned into a multi- storey car park. A famous battle site and a Native American burial ground at Fallen Timbers is in danger of being converted into a shopping mall.

In a region whose recent economic performance vies with Germany's, such decisions seem unnecessarily harsh and point to the fragility of the Midwest's success story. Money and real estate are the priority. Urban renewal is an elusive and more distant goal. Toledo may be on the road to recovery, but those Saturday nights of John Denver's are still far from glittering affairs.