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CHAPTER TWO

Forging Growth Partnerships

The 1970 census took Pittsburghers by surprise. Mayor Pete Flaherty, who had taken office that January, knew the city had lost residents—nearly 92,000—over the previous decade. But suburban mayors and county officials had not anticipated that the Pittsburgh metropolitan area would be the only one among the country’s twenty-five largest to lose population in 1970. The New York Times marked the occasion with a feature article that highlighted disparities between the recently completed Golden Triangle and Pittsburgh’s declining neighborhoods and mill towns. The Times reported that U.S. Steel was about to move into a gleaming new headquarters building downtown and that the Pirates would soon open a playoff series in Pittsburgh’s newly completed, state-of-the-art baseball stadium. Outside the Golden Triangle and in working-class neighborhoods near the city’s steel mills, however, local businessmen complained that their stores were closing and the city was becoming “a plywood jungle.” Flaherty fretted that Pittsburgh needed more taxpayers, telling the Times that the biggest problem facing his city was “financial survival—whether we can get through without going broke.” For Pittsburgh’s corporate leaders, however, slow growth and declining manufacturing jobs were signs of good things to come. In the eyes of local executives, the shift from manufacturing to nonmanufacturing employment heralded “a new era of white-collar stability for Pittsburgh as a service and distribution center.” One senior executive who had been “active in community affairs” confidently asserted, “the lack of growth lets you get your arms around the problem.”¹

Pittsburgh’s population fell by about 15 percent between 1960 and 1970, but Hamilton’s increased by more than 30 percent over the same period, from approximately 385,000 in 1961 to nearly half a million in 1971. That year, city officials said that Hamilton had reached a crossroads between its industrial past and postindustrial future. Canada’s steel town, planners reported, “had undertaken ambitious programs to shed this role and develop strong commercial and cultural sectors.” They expected publicly funded urban renewal programs and private high-rise construction to revitalize downtown. The expansion of McMaster University, the establishment of Mohawk College, and the construction of a theater-auditorium complex signaled “that the educational and cultural side of Hamilton will be significant forces in shaping the city’s future.”² The city’s economic development staff urged Mayor Vic Copps to pursue jobs in commercial and non-industrial sectors. “While manufacturing will always be the foundation of our city’s economy,” they noted, “in the future the big growth in our jobs will come from the service sector. Already the city’s economic base is changing and Hamilton should see its future growth and development spread out into the whole economic unit of which this city is the natural center.”³ Planners’ enthusiasm about Hamilton’s future was somewhat tempered, however, by their assessment that downtown building conditions remained “generally fair to poor.”⁴

Within a few years, public officials’ optimism was shattered by upheavals in the federal relationship with cities, made worse for Pittsburgh and Hamilton by the near-simultaneous restructuring of the international steel industry in the wake of the 1973 oil crisis. Between 1973 and the early 1980s recession, the basic steel industry experienced a series of crises of global overproduction.⁵ In the United States, integrated steel producers responded to changing competitive conditions by intensifying disinvestment practices already underway and laying off large portions of the workforce, shutting down mills in Pittsburgh, Youngstown, and Chicago. In Canada, the steel industry downsized and automated to remain competitive. On both sides of the U.S.-Canadian border, urban tax bases shrank as industrial and population decentralization accelerated, and local governments could no longer rely on predictable funding streams from higher levels of government.

In Pittsburgh and Hamilton, public officials responded to manufacturing decline and federal retrenchment from urban development by trying to form (in Hamilton) or resuscitate (in Pittsburgh) the public-private partnerships that, from their perspective, successfully remade manufacturing centers after World War II. They did so in a decade in which national policy formulation in the United States and Canada reflected common concerns about intergovernmental relations, the future of industrial cities, and the public versus private role in urban and economic development. In both countries, national policy orientations pointed toward accelerated privatization and decentralization by the end of the decade. The very different public-private partnerships that guided development in Pittsburgh and Hamilton over the course of the 1970s shaped—and were shaped by—national policymakers’ ideas about the future of industrial cities and the proper role of the government in urban and economic development.

Pittsburgh’s New Partnership

Pennsylvania governor Milton Shapp had been right to be concerned about the effects of Nixon’s revenue-sharing programs on the fiscal health of Pennsylvania’s cities: the amount of revenue shared was not enough to meet the needs of state or local governments. The Nixon administration had structured general revenue sharing such that booming southern and western states received more federal funds than did cash-strapped northern industrial states.⁶ After revenue sharing went into effect, Shapp sought to make up budget shortfalls by raising state taxes. He tried to secure support for tax hikes at the local level by promising mayors that he would increase state funding for cities. Flaherty’s response must have come as something of a shock to a New Deal liberal like Shapp: Flaherty told him to keep the money and maintain tax rates.⁷ When Flaherty took office in 1970, Pittsburgh’s seminal postwar urban renewal program had just wound down. Between 1965 and 1968, Pittsburgh had received over $100 million in federal grants-in-aid, an average of slightly more than $25 million a year. Pittsburgh’s debt burden was up in 1970, but city planners predicted that the federal funds they expected to receive, along with anticipated new private investment, ensured a rosy fiscal outlook into 1975.⁸ The planners did not account for funding changes under Nixon’s revenue-sharing proposals, and, between 1970 and 1977, the year Flaherty left office, the federal government slashed the amount of aid it sent to Pittsburgh by a third.⁹ Flaherty took up the challenge of a reduced city budget and greater debt by implementing austerity policies, eliminating public-sector jobs, and reducing some city services.

Unlike his Democratic predecessors, who were beholden to both the Allegheny Conference and the unions, Flaherty demonstrated a concern for the outsized influence of interest group politics that made him more like Jimmy Carter than like Lyndon Johnson. Former city planning director Morton Coleman recalled with some understatement that Flaherty “was not a big government person.”¹⁰ He was the first of a new breed of fiscal populists who emerged in the 1970s: liberal Democrats who embraced economic conservatism when faced with tax revolts and urban financial crises.¹¹ Democratic mayors like Flaherty and, later, Ed Koch in New York City, Diane Feinstein in San Francisco, and William Green in Philadelphia rejected the political legacy of the declining New Deal coalition and promoted instead new modes of governance that they saw as more consistent with their limited resources and emerging middle-class resistance to tax increases. Presaging the centrist New Democrats who seized control of the Democratic National Committee in the mid-1980s, these mayors remained socially liberal even as they attacked the large-scale social programs of their Democratic predecessors. Instead, Flaherty and mayors like him focused on government efficiency—often at the expense of public employees’ unions—and sought to placate welfare advocates and African American activists with symbolic but inexpensive programs and appointments of women and minorities to prominent positions.¹²

Pittsburgh’s well-oiled Democratic machine had never encountered the likes of Flaherty. Between World War II and 1970, Pittsburgh’s mayors (with the exception of Flaherty) were hand-selected by the Democratic Party. After four years on city council and a close relationship with party leaders, Flaherty rejected first an invitation to be Mayor Joseph Barr’s handpicked successor, beholden to the party for campaign money, and a subsequent effort by Allegheny Conference members to lure him onto the Republican ticket. He campaigned instead as an unendorsed, independent Democrat and beat the machine candidate in the Democratic primary; in the general election, he ran on the platform that he was “nobody’s boy.” He financed his campaign through donations, launched innovative billboard and newspaper advertising campaigns, and won handily. Four years later, after alienating the Democratic Party, organized labor, his predecessor, most of the city council, the police, the firefighters, corporate CEOs, African American leaders, and both of the city’s major newspapers, Flaherty ran unopposed for a second term, having secured both the Republican and Democratic nominations. The joke around town was that “nobody likes Pete except the voters.”¹³

Pittsburgh experienced problems common to North Atlantic manufacturing centers earlier and more acutely than other cities, and Flaherty’s focus on government efficiency and the austerity programs he implemented prefigured the more severe policies put in place in the middle of the decade in New York City. Flaherty eliminated a wage tax (which was later reinstated) and cut property taxes three times. He removed 18 percent of the nonuniformed workforce (nearly 2,000 workers) from the city payroll, largely through attrition and departmental reorganization. He fired Democratic Party officials from their longtime patronage positions and replaced them with young department heads tasked with increasing government efficiency. He was openly scornful of city council and saw no reason to respond to interview requests from journalists. He eliminated chauffeurs for city department heads; when Teamsters leader and city councilor Thomas Fagan challenged Flaherty’s decision, public opinion was firmly on Flaherty’s side.¹⁴ Flaherty improved some city services while allowing Pittsburgh’s aging infrastructure to collapse; he infuriated county officials, the Democratic Party, and the business community by blocking an unmanned light rail from downtown to the South Hills; and he severed the carefully nurtured relationship between city hall and the business community. At a time when other cities (New York, Cleveland) faced bankruptcy, Pittsburgh had a budget surplus.

Pittsburgh’s political and economic elites interpreted Flaherty’s campaign slogan, “nobody’s boy,” as a rebuke not only to the Democratic machine but also to the Allegheny Conference, its Republican members, and the Mellon family in particular, whom Flaherty believed had too much influence over local politics and urban development. He brought in a new city planning director from Philadelphia, Bob Paternoster, rather than appoint someone from within the existing ranks.¹⁵ He reassigned some Urban Redevelopment Authority (URA) staffers to the City Planning Department and imposed a series of professional indignities, such as mandatory Friday afternoon meetings, on those who remained.¹⁶ Not long after Flaherty took office, he evicted the Allegheny Conference from the URA-owned Civic Building, where city planning and the URA also kept offices. Flaherty cancelled the lease and gave the Allegheny Conference sixty days to clear out; Executive Director Robert Pease described the move as part of Flaherty’s strategy, in concert with appointing new heads of planning and the URA, to restrict the Allegheny Conference’s influence over public agencies.¹⁷

The URA, in particular, raised Flaherty’s hackles. Established to implement urban renewal programs, the URA from the outset carried out public undertakings (such as seizing property through eminent domain) in support of privately planned renewal schemes, typically at the behest of the Allegheny Conference. By 1970, the URA’s loyalties were divided between the Allegheny Conference and the Pennsylvania Department of Transportation. Flaherty saw the funds funneled through the URA as a mechanism for the state to foist the social consequences of highway construction on the city and was suspicious of the continued close relationship between that agency and the Allegheny Conference. “So we had to kind of change the position of the URA and a lot of the people, and change the people in Planning Department,” Flaherty recalled.¹⁸

Flaherty appointed his executive secretary Bruce Campbell head of the URA and replaced the corporate elites who had dominated the URA’s board since the agency’s inception with what he described as a mix of “downtown, political, and neighborhood people.” Jack Robin, long-time Democratic political boss and chairman of the URA first under Mayor David Lawrence and again under Flaherty’s successor Richard Caliguiri, accused Flaherty of trying to destroy the agency. In Robin’s recollection, Flaherty came to office “thinking that we were all engaged in some terrific conspiracy.”¹⁹ Flaherty and Campbell “did their best,” Robin charged, “to denigrate, to loot and remove the powers of the Authority.” Pease remembered that mayors traditionally attended Allegheny Conference meetings and stopped by to “just talk,” but Flaherty delegated that responsibility to Campbell. When Pease asked Campbell to tell Flaherty to let the Allegheny Conference know if he needed anything, Campbell scoffed, “He’ll never call you.”²⁰

The success of Flaherty’s attack on the URA and the Allegheny Conference rested in part on residents’ widespread dissatisfaction with the redevelopment partnership at the heart of the Pittsburgh Renaissance.²¹ While he undoubtedly would have liked to retain the federal-funding largesse of the 1960s, Flaherty’s belief that the city’s redevelopment partnership had removed too much power from the people aligned with Nixon’s devolutionary policies and with public opinion in Pittsburgh. Flaherty wanted to return power to the neighborhoods in much the same way Nixon wanted to restore autonomy to state and local governments. As part of his campaign to weaken the relationship between the city government and corporate elites, Flaherty reoriented the attentions of the URA and planning department toward neighborhood development and away from the Golden Triangle. Through the “more equitable distribution” of URA funds and tax revenue, Flaherty channeled more money and energy into the neighborhoods than any previous administration, “especially the small business areas and so forth,” he recalled, “to try to perk them up so they wouldn’t have the ghost-like quality of boarded up little neighborhood commercial centers.”²²

Most significantly, Flaherty redirected at least half of the city’s federal aid—primarily community development block grant money—into the neighborhoods. Flaherty also implemented a series of neighborhood-based programs: he installed new street lights as a crime reduction measure, provided low-interest home improvement loans in low-income areas, and reduced taxes through a balanced budget and surpluses in the city coffers. “I think the previous mayors had been ‘downtown-oriented,”’ Flaherty reflected. “Nothing wrong with that, but to be a bit too much ‘downtown-oriented’ was perhaps a mistake.”²³ Pease agreed, saying that, by the time Flaherty took office, the city was “exhausted” by the redevelopment that had taken place over the previous two and a half decades.²⁴ To ensure that Pittsburgh’s planning process focused on residential neighborhoods, Flaherty established a Community Planning Program in the City Planning Department in 1971, which institutionalized a citizen participation process through neighborhood-based advocacy planning.²⁵ Pease disparaged the community planning boards that developed in response as “pseudo-city planning,” and the Allegheny Conference made little effort to cooperate with them.²⁶

Flaherty’s focus on neighborhood planning did not, however, mean that he ignored large-scale projects, particularly those that would help remake industrial spaces for other kinds of uses. In fact, in the early 1970s, Flaherty’s Planning Department proposed many of the redevelopment projects that gained traction under his successor. Most prominently, planners sought ways to encourage the expansion of medical and educational complexes in Oakland and advocated using eminent domain to assemble land for industrial or commercial uses on the South Side, Herr’s Island, and in the Strip District, all sites that subsequently became centers of activity for Renaissance II.²⁷ Flaherty and the city planners had not yet abandoned heavy manufacturing uses within the city limits, but projects already underway pointed to historic preservation as a mechanism for redeveloping remnants of the industrial era for uses compatible with visions for a postindustrial city. By shifting his focus away from Golden Triangle construction projects toward decentralized and neighborhood-based development, Flaherty laid the groundwork for Caliguiri’s more ambitious city-wide vision for a second Renaissance. Flaherty’s fiscal austerity also created the budget surplus that made it possible for Caliguiri to contemplate such an undertaking. As Flaherty’s city treasurer, Joe Cosetti, recalled, “the Caliguiri administration never would have been able to get off a dime had Pete not gotten rid of the load of patronage. If that same payroll was there when Caliguiri became mayor, he would have gone under.”²⁸

Flaherty softened toward the Allegheny Conference in his second term. By 1976, the last year of Flaherty’s tenure, economic conditions in the city had deteriorated to the extent that he could no longer afford to sideline corporate leaders. That year, the Planning Department noted that the city government “in many ways feels helpless to alter the overriding national economic trends that negatively affect the City,” prefiguring the mantra of city, county, and state governments in the 1980s that they were impotent in the face of national economic problems and sectoral collapse. The Planning Department identified sustaining strong links between the city government and the corporate sector, maintaining a favorable tax climate, and supporting continued growth in the Golden Triangle and Oakland as the city’s key economic development concerns. The planners were likely reacting to recently released population data that suggested predictions based on the 1970 census had been inaccurate: the four-county region experienced 4 percent employment growth, but the city lost 9 percent of its jobs between 1960 and 1975, a figure the planners believed obscured “even more dramatic shifts by sector and geographic area.” In response, Flaherty established the Mayor’s Economic Development Committee, an advisory board he described as a coalition between business and government, to review and coordinate economic development efforts in the public and private sectors. The Economic Development Committee represented the first step toward reviving the public-private partnership that had been central to Pittsburgh’s postwar urban development.²⁹

Flaherty’s second-term priorities were very much in line with the pro-growth agenda articulated under Lawrence and Barr. They heralded the emergence of policy instruments associated with devolution and privatization that took shape first under Nixon and accelerated as the Carter and Reagan administrations increasingly withdrew federal resources from the urban sphere.³⁰ Pittsburgh’s urban development may have provided a model for Hamilton and other North American industrial centers, but it was Flaherty’s austerity policies and neighborhood planning initiatives that piqued the interest of U.S. officials in the late 1970s. Flaherty had been the first northern mayor to endorse Jimmy Carter in 1976, and he resigned his mayoral post to become a deputy attorney general in the Carter administration, a reward for his early and vigorous support. Flaherty’s fiscal populism in his years as mayor presaged Carter’s approach to solving the problems facing U.S. cities and pointed the way toward the centrist New Democrat platform that solidified in the 1980s. Faced with fiscal crises in the early 1970s, Flaherty and mayors like him across the political spectrum saw neighborhood groups’ demands for community control as an opportunity to shift some of the planning and service-provision functions of cash-strapped local governments to individuals and nonprofits. Carter drew heavily on these local experiments to develop and legitimate policies that privileged voluntarism and self-help over government programs and federal spending, and in the process laid the institutional foundation for Reagan’s neoliberal retrenchment.

With urban constituencies irate over nearly a decade of neglect from Washington, the formulation of a federal policy to aid socially and fiscally distressed cities had featured prominently in Carter’s campaign promises to mayors and civil rights groups. In March 1977, Carter convened a cabinet-level working group to review federal urban and regional development programs, consult with state and local government officials, and recommend administrative and legislative reforms.³¹ Carter also appointed a National Commission on Neighborhoods (NCN) in 1977 and sponsored a White House Conference on Balanced Growth and Economic Development (WH Conference) in 1978 to make recommendations about urban and economic development policy. Participants in both initiatives—individuals and groups from across the political spectrum and with a diversity of economic interests—pointed toward increased decentralization, privatization, and voluntarism as federal policy responses to urban decline.³²

In 1978, Carter presented what he described as the nation’s first comprehensive urban policy to Congress in a report titled A New Partnership to Conserve America’s Communities.³³ Carter’s much-anticipated national urban policy did not introduce major new federal programs or substantially increase funding levels for existing urban programs.³⁴ He and his advisors had used the NCN and WH Conference recommendations as political cover to support local-level voluntarism over increased federal funding. The most tangible result of the national urban policy, four executive orders issued in 1978, directed federal agencies to locate facilities in urban areas, emphasize procurement set-asides in areas with high unemployment, consider the impact of programs on urban areas, and establish an interagency council to implement the urban policy.³⁵ The legislative package attached to A New Partnership failed to gain traction because liberal Democrats were unhappy about limits to federal oversight, because of bipartisan political opposition to targeting aid to distressed cities, and because of concern over the financial implications of the proposed programs in a time of stagflation and tax revolts.³⁶ Most important, with his focus more fully on foreign policy and the economy, Carter did not push Congress to support the proposed legislation.³⁷

Carter’s distrust of “special interests” and concern for the “forgotten” white middle class led him to step back from expansive federal programs, to oppose increased federal urban spending, and to promote the capacity of the private sector (including both for-profit and nonprofit entities), rather than the government, to address urban problems.³⁸ Like Nixon, Carter attacked redundant programs and excessive paperwork and passed along as much oversight as possible for urban development to state and local governments. He rejected large-scale job creation programs and housing subsidies in favor of comparatively inexpensive programs such as the National Endowment for the Arts $35 million “Livable Cities” program for local public art and mural projects. In 1977, he introduced Urban Development Action Grants to stimulate private-sector urban redevelopment, and he instituted a countercyclical assistance program as part of an economic stimulus package to provide federal aid to states and localities particularly hard hit by the recession. The Carter administration also shifted a greater share of Community Development Block Grant funds to northeastern and midwestern cities. In general, however, Carter’s urban policy was an amplification of Nixon’s New Federalism.³⁹

For reasons of political expediency—Carter knew he would need to attract both the suburban and southern vote in 1980—the president wanted to emphasize programs that provided “incentives,” “leverage,” and “catalysts” for private sector activity, which were less of a political liability than increased direct federal expenditures in cities. When it was released, Carter’s urban policy unequivocally signaled to big city mayors that the federal government would not provide large federal outlays to reverse urban decline or temper the effects of industrial restructuring. Cities were “more than just simply centers of jobs, communications and commerce,” A New Partnership reminded its readers. They were also “centers of learning, centers of culture, centers of social services.”⁴⁰ It was this latter—postindustrial—assemblage of services that the Carter administration wanted to emphasize.

For Pittsburgh’s new mayor, Richard Caliguiri, the postindustrialism the Carter administration tacitly promoted was already a familiar paradigm. City council president Caliguiri became acting mayor when Flaherty left for Washington. Flaherty’s successor surely would have preferred a national urban policy that included increased federal funding, but his own view of the future of industrial cities hewed closely to that expressed in A New Partnership. The son of a milkman from Pittsburgh’s working-class, largely Italian Greenfield neighborhood, Caliguiri had followed Flaherty’s example and run for City Council as an independent in 1971, beating out the Democratic Party-endorsed candidate. When he ran for mayor in 1977 at the end of Flaherty’s term, the Democratic Party refused to support him. He again ran as an independent, backed by a group called “Pittsburghers for Caliguiri” that a suburban newspaper described as “a collection people, Democrats, independents, Republicans, volunteers, city payrollers and others not yet identified.”⁴¹ Even with broad support from his constituents, Caliguiri narrowly beat the Democratic candidate, popular Allegheny County commissioner Tom Foerster. When he ran for re-election in 1981 and 1985, he did so on the Democratic Party ticket and won by large margins.

Caliguiri may have taken a page out of his predecessor’s playbook when he spurned the local Democratic machine, but his mayoral ambitions for a second Renaissance made him more like David Lawrence than like Flaherty. Where Flaherty sought at the outset of his first term to loosen the bonds between the city government and corporate leaders, Caliguiri set out instead to restore the city’s public-private partnership. His desire to do so was seemingly a pragmatic response to national policies that increasingly privileged partnerships for urban and economic development. Renaissance II’s success hinged on introducing a wide array of public incentives for private development to induce corporate leaders to undertake large-scale construction projects for downtown office buildings. Caliguiri established the Mayor’s Development Council, a more business-friendly version of Flaherty’s mayoral advisory committee, to plan Renaissance II; he instructed his department heads to cooperate with developers; and he merged the city’s Departments of Housing and Economic Development with the URA to centralize redevelopment activities. One of the new mayor’s first official acts was to call a meeting with the Allegheny Conference and ask for help fixing the roads Flaherty had allowed to fall into disrepair. Gulf Oil CEO Jerry McAffee offered to bring in a macadam expert from California and loan him to the city for six months. The following summer, Caliguiri repaved “something like 120 miles of street.” That gesture symbolically renewed the close relationship between the Allegheny Conference and the city government, and the Allegheny Conference resumed a leading role in planning urban development.⁴²

As soon as he restored the relationship between the city and the Allegheny Conference, Caliguiri launched his second Renaissance “to recover lost ground and to determine a new direction” for the city.⁴³ He and his Planning Department routinely tried to downplay the devastating effects of industrial restructuring on the urban economy and focused instead on cultural development, high technology, and service sector job creation.⁴⁴ “As in any mature city which is undertaking revitalization,” the mayor’s office announced, “Pittsburgh’s efforts are a mix of conserving, maintaining and nurturing its strengths on one hand while introducing new, creative and exciting activities on the other.”⁴⁵ Caliguiri’s staff optimistically pointed out that, while manufacturing work had disappeared, jobs in health, education, and professional and service sectors had increased, which they thought heralded the emergence of “a more diversified and, therefore, healthier” local economy.⁴⁶ Faced with difficult decisions about how to save a declining city, Caliguiri and his Planning Department chose to pursue a postindustrial redevelopment strategy without much apparent hand-wringing over its potential impact on low-income and working-class residents.

Caliguiri wanted to redevelop the city in a way that would make it more compatible with the perceived needs of young, white-collar workers. Renaissance II reflected the first Renaissance’s focus on downtown construction and improvement projects, but Caliguiri expanded the range of activities to include neighborhood stabilization, economic development, and large-scale projects well outside of the central business district.⁴⁷ His ambitious agenda for a second Renaissance benefitted from the Home Rule Charter Pittsburgh’s voters had approved in 1974. The charter secured for the city government the authority to carry out any function not expressly precluded by Pennsylvania state law or the U.S. or state constitutions. In this system of local government organization, the mayor was both executive and administrator, while the city council served a legislative function. The mayor independently appointed (and removed) the heads of city departments and members of public authorities and commissions, while the city council created commissions, passed resolutions, and established city ordinances. Under Home Rule, the mayor had veto power over city council decisions, rather than the other way around. Except in cases where Pittsburgh accepted state and federal funds, city officials were free of oversight from other levels of government and not compelled by anything other than political pressure to cooperate with the county government. The Planning Department’s land use and economic development decisions were largely autonomous. With few constraints on how he used public funds, Caliguiri issued a six-year, $323 million capital budget for Renaissance II four months after taking office, which he called a “blueprint” for Pittsburgh’s revival.⁴⁸

Caliguiri’s Renaissance II budget affirmed his commitment to working through what he described as a “city-citizen partnership.” When Caliguiri restored the relationship between city agencies and the corporate sector, he incorporated new members into Pittsburgh’s public-private partnership. “We believe that the City and the private sector are partners,” his office noted. “The City will do its share by providing direct services and projects. But you will have to do your share as well. You, the residents and the businessman, will have to make commitments and investments in your homes, your communities and your businesses.”⁴⁹ The “civic” partners included neighborhood groups (primarily community development corporations, or CDCs); the University of Pittsburgh and Carnegie Mellon University; and local foundations, especially those of the Mellon, Scaife, Heinz, and Hillman families; and the state government.⁵⁰

Pittsburgh’s reconstituted partnership reflected the institutional arrangements of the growth partnerships that took shape in North American and Western European cities between New York City’s 1975 near-bankruptcy and the end of the century. New York’s powerbrokers sprang to action when President Gerald Ford told New York City to “Drop Dead,” as the New York Daily News famously rendered Ford’s message to Mayor Abe Beame and Governor Hugh Carey that the federal government would not bail out the insolvent city. New York, like most other major U.S. cities, had worked through a redevelopment partnership to facilitate urban renewal projects in the 1950s and 1960s. New York’s partnership differed substantially from those in other cities which undertook large-scale urban renewal programs. In most places, renewal activities were directed by civic organizations modeled after the Allegheny Conference, such as the Greater Milwaukee Committee, the Chicago Central Area Committee, the Greater Baltimore Committee, Central Atlanta Progress, the Cleveland Development Foundation, and St. Louis’s Civic Progress. Instead, New York’s “master builder,” Robert Moses, remade the urban landscape through a series of public authorities. When Manhattan’s business elites decided in 1975 to work with the city and state government to solve urban problems, their focus was on the city’s looming bankruptcy rather than physical redevelopment through urban renewal.⁵¹ They set out to create a different set of institutions through which to confront a different set of circumstances.

After Ford rejected Beame and Carey’s bid for federal aid, Carey turned to the city’s corporate leaders for advice. The city’s bankers had long warned that Beame needed to cut spending and balance the budget if he hoped to keep New York City credit-worthy. In spring 1975, banks refused to issue new bonds to cover Beame’s budget shortfalls, and Carey loaned the city money to remain solvent; by June, New York City could not honor nearly $8 million in maturing securities. Carey asked investment banker Felix Rohatyn, managing director of Lazard Frères, to head an advisory committee composed of financiers, CEOs, and realtors to determine a course of action. Instead of creating a civic organization to work with city and state officials, the committee advised Carey to create a state-chartered independent corporation through which bankers could oversee the bailout. As a result, Carey created the Municipal Assistance Corporation for the City of New York (MAC) in June and appointed Rohatyn as chair of the nine-member board. MAC gained authority through the state legislature to issue bonds and use the money to restore the city to solvency. To support MAC’s activities, the state legislature converted New York City’s sales and stock transfer taxes into state taxes and used them to secure MAC bonds, mandated that the city balance its budget in three years, and established an Emergency Financial Control Board to monitor the city’s finances and ensure that MAC’s directives were met. If Rohatyn and his board thought that city officials were making poor budgeting decisions, MAC could suspend loans to the city and hold back tax revenue. Carey and Rohatyn’s efforts were not enough to resolve New York’s fiscal crisis; it took more than $2 billion in short-term federal loans and an agreement from public sector unions to buy $2.5 billion in city bonds to stabilize the city’s finances.⁵²

The financial details of New York’s bailout were only part of the story. With MAC, Carey transferred unprecedented control over public finances to private actors, some of whom were the same bankers who refused to extend additional credit to the city. In exchange for bond financing, Rohatyn and MAC demanded that New York City implement austerity measures as part of “best-practice” budgeting. These included tax hikes, wage freezes at levels below inflation, public-sector layoffs, cuts to public services, higher subway fares and, for the first time, tuition at City College. The social costs were immense: day-care centers and firehouses closed down. Six thousand teachers were laid off. Public sector unions lost power as their memberships declined; the same unions found themselves in the uncomfortable position of becoming creditors to their employer, which made strikes a difficult prospect.⁵³ Compared to many other U.S. cities, in the 1950s and 1960s New York had been a social-democratic stronghold, with an expansive welfare state, strong unions, and a liberal political culture.⁵⁴ MAC’s austerity measures tore apart the city’s social safety net, increased income inequality, and undermined organized labor. These were not, as Rohatyn claimed, unavoidable consequences of MAC’s efforts to forestall a bankruptcy that would have been worse for working- and middle-class families.⁵⁵ Instead, New York’s corporate elites seized leadership in a moment of crisis and pushed through a series of neoliberal reforms to reduce the size and power of what they had for decades considered a bloated welfare state.⁵⁶ Their activities marked the emergence of the growth partnerships that would proliferate in North Atlantic cities in coming decades, which had more flexible arrangements between their public and private members than did redevelopment partnerships rooted in federal urban renewal legislation.

The growth partnership that managed New York City’s bail-out represented what Timothy Weaver has called “neoliberalism by design”—an example of political and business elites using state power to implement a neoliberal political project—but not all such partnerships reflected the discernible influence of neoliberal ideology. Cities like Pittsburgh and Hamilton (in Weaver’s taxonomy) instead turned to “neoliberalism by default.” Members of their growth coalitions increasingly abandoned redistributive programs and pursued free-market solutions to urban problems because they did not perceive other politically viable options.⁵⁷ Caliguiri, for instance, was undoubtedly influenced by events in New York, but he and his allies in the Allegheny Conference did not set out to use Pittsburgh’s revived partnership to break unions, gut pensions, or roll back the welfare state as MAC had. Instead, the city’s redevelopment partnership retooled to contend with the changing political and fiscal conditions that accompanied industrial restructuring and federal retrenchment. If New York City and Pittsburgh’s growth partnerships’ intentions were different, the outcomes were similar. Pittsburgh’s postindustrial redevelopment under Renaissance II, like New York’s rebirth in the same period, produced hollowed-out manufacturing zones, gentrification of blue-collar neighborhoods, university expansions and new medical complexes, and the perpetual rebuilding of downtown as its role shifted from managing production to managing services and finance.

In Pittsburgh’s growth partnership, partners coordinated different aspects of redevelopment that had been centralized through the Allegheny Conference in the first Renaissance, and each shared or adopted Caliguiri’s postindustrial vision as a means to further its own institutional interests. “In Renaissance I the government got its ideas from the private sector, and commitment from the private sector was very important,” Robin remembered. “In Renaissance II, I think the government had learned how to sell the projects, which it originated, to the private investors. That was a major change.”⁵⁸ The imprimatur of junior partners in voluntary organizations, universities, and local foundations legitimated particular aspects of the postindustrial transformation envisioned by the primary partnership of local government officials and corporate elites. The growth partnership also reflected the mix of institutions the Carter administration hoped to see engaged with urban development. Yet only the Commonwealth of Pennsylvania, which like most U.S. states became increasingly involved in economic development in the 1970s, achieved a level of influence over development decisions commensurate to the role of the city government and local corporate elites.

Caliguiri’s redevelopment plans remained heavily dependent on corporate participation, and the Allegheny Conference, as it had been during the first Renaissance, was the city’s most important partner. After R. K. Mellon’s 1970 death, Pease shaped both the vision and the programmatic activities of the Allegheny Conference. For much of that period, Pease ran the organization’s day-to-day operations from a corner office on the forty-fourth floor of the U.S. Steel Building, a position that hinted at the real power behind the Allegheny Conference. Pease was not a Pennsylvania native; raised in Nebraska, he arrived in Pittsburgh after World War II to attend Carnegie Mellon University (then the Carnegie Institute of Technology). After graduating with a civil engineering degree, Pease initially worked for the university on its postwar physical expansion, and in 1953 he went to work for the URA, where he oversaw a controversial urban renewal program in the city’s African American Hill District. Five years later, thirty-three-year-old Pease was named URA executive director, and in 1968 Mellon tapped him to helm the Allegheny Conference.⁵⁹

Until Pease’s 1991 retirement, the Allegheny Conference Executive Committee, composed of the city’s most powerful corporate and financial leaders, set the organization’s agenda based on his recommendations. The organization’s structure reflected a dense web of interrelationships between local and regional development organizations and Pittsburgh’s corporate elite. “I think that we have one of the finest spirits of cooperation and orientation toward community benefits in the Allegheny Conference that you’d find anywhere,” an Executive Committee member said in the mid-1980s. “There is camaraderie among CEOs that, I’m told, is quite lacking in New York, Chicago, Los Angeles or San Francisco. The CEOs of giant corporations in those other cities have no common discourse, they’re too busy, they’re not interested.”⁶⁰ In Pittsburgh, to the contrary, between 1968 and 1985, a Mellon Bank or Pittsburgh National Bank executive served as chairman of the Allegheny Conference, and the presidents and CEOs of U.S. Steel, Dravo, Koppers, Gulf, Alcoa, Heinz, and Pittsburgh Plate Glass were executive committee members. In 1977 alone, twenty-one of the twenty-six members of Mellon’s board of directors were also Allegheny Conference members, including James Higgins, who was at the time president of both Mellon Bank and the Allegheny Conference. Pittsburgh National Bank chairman Henry Hillman, Dravo CEO Robert Dickey, III, and Pittsburgh Plate Glass CEO L. Stanton Williams all served as Allegheny Conference chairmen or presidents; Higgins’s successor at Mellon, J. David Barnes, and U.S. Steel CEO David Roderick were vice presidents.⁶¹

The CEOs who guided decisions about regional disinvestment and plant closures were also instrumental in determining the urban and economic development agenda of the city’s growth partnership. The Allegheny Conference was a “long range kind of organization,” according to Pease. “There are no miracles in what we do day by day,” he said. “Some people, because of the early myth of what we did—you know, the Conference waved the wand and the smoke blew away—they sort of had the attitude that if the steel mills closed, the Conference would solve that issue.” On the eve of his retirement, Pease dismissed the notion that the organization he helmed could have done more than it had. “There is no way that any organization, even government, can solve an economic issue which is the result of global change,” he insisted, “and that’s what Pittsburgh faced in the mid-1970s and 1980s.”⁶²

While the Allegheny Conference in the 1970s did not wield the nearly unlimited power to control the physical development of the city that it held in its 1950s heyday, its influence remained significant. The Executive Committee members retained unparalleled access to the city and state governments and to Pittsburgh’s corporate decision-making structure. Executive Committee members typically sat on the boards of directors of Pittsburgh-based corporations and community development organizations. Williams, for example, was a board member at Dravo and Mellon Bank, a Carnegie Mellon trustee, and a board member of the Regional Industrial Development Corporation (RIDC) and Penn’s Southwest. Carnegie Mellon president Richard Cyert was on the Allegheny Conference Executive Committee, a member of both the RIDC and Penn’s Southwest, and on the boards of Heinz, Allegheny International, Koppers, and First Boston.⁶³

Representatives of local foundations, tied to corporate elites through board memberships, worked with Pease and the Allegheny Conference staff to achieve the growth partnership’s goal of creating new cultural institutions. Caliguiri targeted the development of a cultural district adjacent to the Golden Triangle as a way to attract additional downtown investment, appeal to executives considering locating their companies in Pittsburgh, and create a regional cultural center to capture a share of the money spent on leisure activities by suburbanites. Because cultural development was part of their institutional missions, Pittsburgh-based foundations such as the Carnegie, the Historical Society of Western Pennsylvania, and the Pittsburgh Cultural Trust used their funds to offset the public cost of developing cultural institutions that Caliguiri hoped would attract new residents and tourists.⁶⁴

The participation of CDCs, on the other hand, allowed Caliguiri to claim broad-based public support for the growth partnership’s plans. In return, neighborhood-based groups were able to influence and in some cases control development within their neighborhood boundaries.⁶⁵ Caliguiri expanded Flaherty’s neighborhood planning efforts, in no small part because neighborhood-based organizations were eligible to receive federal community development funds as well as newly available national and local foundation funding. Leaders of the historic preservation and neighborhood organizations that had fought the city’s urban renewal plans a decade earlier understood that to secure political support—and public and local foundation funding—for their own agendas, they needed to ensure that their development plans were compatible with the growth coalition’s vision for the city. Neighborhood groups legitimated the economic development plans of other organizations but were excluded from making meaningful contributions to the city’s physical and economic development agenda.⁶⁶ The largely privately funded CDC network channeled citizen participation in such a way that it delegitimized other forms of civic protest, including protests by groups of unemployed workers. The CDCs did not challenge the growth coalition’s visions for postindustrial Pittsburgh, and neighborhood groups’ activities—historic preservation, commercial district business development, infrastructure improvement, and housing rehabilitation—were largely compatible with the growth partnership’s focus on quality of life issues.⁶⁷

Caliguiri’s neighborhood stabilization goals became increasingly dependent on the ability of CDCs to acquire funding from philanthropic organizations and from state and federal sources, making neighborhood institutions central to privatization and decentralization on the ground in Pittsburgh in the way Carter had intended in his urban policy. The North Side’s Mexican War Streets provided Caliguiri with an especially instructive example of how neighborhood-based organizations might contribute to redevelopment without extensive public expenditures. As urban renewal projects tore apart the North Side’s social fabric and residents moved to the suburbs in the early postwar years, the neighborhood’s buildings fell into disrepair, and its Victorian homes were subdivided into rental properties. In the mid-1960s, the City Planning Department targeted the neighborhood for demolition. Local residents, the Mexican War Streets Society, and the Pittsburgh History and Landmarks Foundation (Landmarks) worked together to challenge the urban redevelopment plans and ultimately convinced the city to abandon the project. Local residents began to purchase and rehabilitate the homes with financial assistance from Landmarks, and by 1972 philanthropies such as the Heinz Foundation underwrote redevelopment activity in the neighborhood.⁶⁸

The lesson Caliguiri took from the Mexican War Streets was that neighborhood-based redevelopment could occur without extensive financial or institutional commitments from the city government. The reduction of state and federal community development funds in the 1970s, particularly for housing, meant that the nonprofit sector and CDCs would have to play an increasingly important role in planning, developing, and securing financing for neighborhood-based housing, recreation, and commercial district improvement projects. Caliguiri invoked the rhetoric of partnership and self-help that was becoming increasingly prominent in national discourse about cities under the Carter administration when he informed residents that the city’s future depended on “the individual” and that “the job is far beyond government alone, it requires a partnership.”⁶⁹

Pittsburgh’s research universities also played an important role in Renaissance II. The University of Pittsburgh and Carnegie Mellon partnered with the state government and local industry to attract advanced technology enterprises. Such partnerships helped state and local officials realize their desires to establish high-tech industry while advancing the universities’ expansion plans and bolstering efforts to improve their national rankings. Entrepreneurial university presidents—Carnegie Mellon president James Cyert and University of Pittsburgh chancellor Wesley Posvar (both longtime Allegheny Conference members)—encouraged their institutions to provide services-for-hire to both the public and private sectors.⁷⁰ Under Cyert and Posvar, both universities collaborated with local firms to take advantage of state funding for advanced technology research and to attract federal funds for such undertakings as a robotics institute, software design center, and supercomputing site.⁷¹

Like the redevelopment partnership forged by Lawrence and the Allegheny Conference in the urban renewal era, Caliguiri’s growth partnership became an international model for postindustrial urban regeneration at the end of the twentieth century. In 1988, Pittsburgh hosted a conference on “Remaking Cities,” which brought together public officials, developers, and civic leaders from the United States and the UK to share their strategies for confronting industrial restructuring and creating postindustrial cities.⁷² In the 1980s, Bilbao’s public officials invited experts from Pittsburgh to Spain to discuss their experiences with industrial restructuring. One outcome of the visit was the inauguration of formal and informal exchanges between Pittsburgh, Glasgow, Lille, the Ruhr region, and Bilbao, circuits that were well worn by the 1990s. Policy tourists between the cities participated in workshops with public officials and business leaders, training exchange programs, and study tours.⁷³ Pease, after his 1991 retirement from the Allegheny Conference, served as a consultant on urban redevelopment projects in Japan, India, Ireland, and the UK.⁷⁴ Canadian cities, too, remained interested in Pittsburgh’s redevelopment tactics. Despite fundamental differences between the political and institutional frameworks governing public policy, Hamilton, like other declining North Atlantic manufacturing centers, emulated Pittsburgh’s postindustrial rebirth and the partnership behind it, with very different results.⁷⁵

Slouching Toward Partnership in Hamilton

When Pete Flaherty took office in 1970, Pittsburgh’s first Renaissance and the partnership that facilitated it had just wound down; across the border, however, Vic Copps’s redevelopment efforts in Hamilton had finally begun to pick up steam. Copps had already inaugurated an urban renewal program intended to create a new civic square, but federal and provincial wrangling over urban and economic development and the province’s subordination of Hamilton’s commercial district to Toronto’s meant that the project was by no means guaranteed to succeed. Yet, as early as 1972, city officials congratulated themselves for the “ambitious programs” underway “to shed [Hamilton’s historic] role and develop strong commercial and cultural sectors.” Their plans included establishing a secondary commercial and industrial district on previously undeveloped urban land and a downtown building program tailored to the perceived needs of corporate headquarters and financial institutions. That year, Toronto’s Globe and Mail ran a feature on Hamilton’s downtown facelift, noting that the city’s “building plans for the Nineteen Seventies are directed toward reshaping Hamilton as the business and cultural focus for more than a million residents of Southwestern Ontario.”⁷⁶ Copps aggressively promoted a postindustrial vision of the city, but Hamilton lacked a public-private partnership through which to realize his plans.