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Port in a Storm

How years of bungling and self-interest robbed Cleveland of its future

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John Carney's eyes glowed with excitement that cold December night in 2007 at a community center on East 82nd Street. An air of triumph washed over the chairman of the Cleveland-Cuyahoga County Port Authority as he revealed plans for a new port that would create 25,000 jobs and $2 billion in economic development for the region. Rest easy, fellow citizens: The dawn of a new and prosperous era was upon us.

Then, in a burst of reckless arrogance, Carney announced that there would be no questions from the public, even though the meeting was held for that very reason. A manipulation of the law exempted him essentially from answering to anyone.

The project included the creation of a 200-acre port relocated from downtown to East 55th Street, with a massive adjoining industrial zone to attract business and international trade.

On the lakefront land vacated by the current port, an exciting waterfront development would blossom.

That was the fairy tale.

The real tale of the waterfront is one of conflict, greed, wasted public money, and sheer incompetence on the part of the port board, city hall, and the county commissioners. It epitomizes what Clevelanders have had to endure for decades, if not a century.

The promise of a vibrant lakefront that would literally reinvent the city — with marinas, restaurants, and hotels interspersed with a working port — has long been used as a political come-on by scores of public officeholders who tease and cajole with the promise of turning our dour metropolis magically into a waterfront as majestic as any in the world.

Playing on this desire, Carney, a downtown developer, worked behind the scenes for four years to position a plan that would advance his real-estate interests with the aid of public money, while headlines touted the importance of the project to the community. In the end, the plan collapsed because it had been ill-conceived and outrageously expensive, and offered no real economic return.

Carney's actions and those of the port authority board wasted millions in public money on worthless planning and the salaries of a bloated port staff. It resulted in the further loss of public confidence in yet another government body and embarrassed those dedicated to the port's future.

It is such a sensitive situation that many sources with ties to it have requested anonymity for this story. Cleveland, it seems, is populated not by outspoken visionaries, but by many who suffer in silence, fearing ostracism or political and civic retribution.

In a way, it is a sad tale of a city adrift with failed leaders in almost every quarter of the community, people who have squandered the dream of a world-class waterfront and a better place to live.

A Plan to Please Everyone

The Cleveland-Cuyahoga County Port Authority subsists as a small and obscure bureaucracy that arises every five years to beg the public to vote for a levy that would sustain it. Campaigns for the levies consist largely of lawn signs that boldly proclaim that the port authority means jobs, without actually specifying what jobs.

For years, the port authority went largely unnoticed partly because the media found little news or vitality in its existence. As shipping declined on the Great Lakes and maritime activity became less of an economic factor, the port turned to issuing bonds as its primary function. For all the virtues and lip service given to the city's location on water, the maritime business around the port had dissipated — a victim of indifference as well as circumstance.

Meanwhile, Mayor Jane Campbell mounted one of the most ambitious public waterfront campaigns in history when she spent nearly $2 million on what would be known as the 2004 Waterfront District Plan. Her efforts were such that some 5,000 people in 125 meetings over four years actually thought they were making a difference. So did virtually every civic and political entity that came forth with support, including the port authority.

Part of the emerging 2004 plan called for moving the current port and building a new facility on the break wall just north of the Cuyahoga River with the idea of freeing up more lakefront land for development. The whole idea was unsettling to the port authority, which savored its anonymity.

The meetings and publicity apparently disturbed the Cuyahoga County commissioners. Headlines about lakefront development were titillating because nothing grasps the public imagination like the waterfront. They needed a piece of that action.

So on June 8, 2004, a letter addressed to Mayor Campbell from the commissioners suggested it was time to work together on a waterfront plan. Of course, by the time the letter arrived, Campbell's plan had been under way for 30 months and already cost $1.8 million.

It was no secret that there was friction between city hall and the county — especially between Campbell and Commissioner Jimmy Dimora. One former city hall source said it was so bad that they nearly came to blows at a breakfast meeting.

Their dispute centered around the port authority. Dimora wanted the county to have more representation on the board than the three members that had been selected; city hall had six seats on the board. When Campbell was a county commissioner, she agreed with Dimora on the issue, but as mayor shereversed course.

The rap by some on the 2004 Waterfront District Plan was that it was more political than real. Planners were upset that almost every suggestion by the public was added to the schematic, creating a montage rather than a workable plan.

"Hey, you want a golf course next to the airport? Put a golf course in," said one planner derisively.

The Waterfront District Plan was exciting in its promise, but behind the facade there was no money to execute the plan, despite the fact that the city planning commission, a truly moribund organization, officially approved it on December 17, 2004. In the end, that approval signified nothing.

As Campbell's plan faded, the commissioners took the initiative, ordering the Cuyahoga County Planning Commission to put together an independent study of the waterfront's future. The county authorized $200,000 for the commission to hire consultants to determine the economic future of the port — a sensible first step.

When the county embarked on its lakefront study, it was made clear that it was to be independent and not skewed to the interests of the city — particularly the port authority. "The credibility of the final study demands that the public perceive the study as entirely objective and independent of any single agency," the commissioners said in a letter to the county planning commission dated June 2004.

Before any true lakefront development could be pursued, it was vital to study the economic future of the port in order to determine the "right size" of the facility, based on the anticipated future of maritime business on the Great Lakes.

For years afterward, that multitude of citizens who campaigned for a better lakefront clung to Campbell's Waterfront District Plan as if it were a heavenly mandate. The truth was, Campbell's loss to Mayor Frank Jackson doomed the plan. No one bothered to tell the thousands who embraced it.

Carney Expands His Empire

When government officials hid the fate of the Waterfront District Plan, its disappearance energized civic and environmental groups in protest.

Nobody looked more foolish than the city planning commission and its director, Robert N. Brown, who, after approving the plan, said he did not know how it disappeared. He could not explain how after briefing Mayor Jackson on its details, the mayor said virtually nothing, consigning it to the stacks of yellowed plans that had defined Cleveland as a city of failed dreams.

Jackson wanted a plan of his own to embrace and claim as his legacy. He chose to empower Carney and the port authority to take the lead for him. Through his characteristic indifference, Jackson's blunder cost the city time that it could not afford.

One businessman asked how any serious investment could be made in the city when it has the inability to create an intelligent plan and execute it.

There is no official documentation that details what happened next, but one of the commissioners notified the county planning commission that the lakefront study should be put on hold, according to a source in county government who asked not to be identified. The timing of the dictate coincided with the reelection of Tim Hagan as a commissioner, who took office in January 2005.

Hagan was a longtime Democrat and also the former brother-in-law of John Carney, who had sat on the port authority board since 1998.

In July 1998, Carney purchased the Bridgeview Apartments on West Ninth Street, which overlooked the lakefront and the port. He already had interests in the Grand Arcade Condominiums at St. Clair and West Sixth, and the Perry Payne Condominiums on West Superior.

Carney descends from a family steeped in the use of political manipulation for personal enhancement. His father and uncle were subjects of countless newspaper headlines in the 1950s and 1960s over their political and business dealings. Carney's uncle, James, was the first chairman of the port authority. The month Hagan took office, Carney was reappointed to another term to the port authority board.

Behind the scenes was a cunning manipulation that escaped public view. In 2002, while spending nearly $100,000 with its lobbying firm, the Success Group, the port duped the state legislature into changing a law freeing the port authority from holding public hearings involving its actions on waterfront development.

A hard core of activists drawn to the lakefront issues complained along with city council, and the port — in an effort to quell the protest — agreed to hold public hearings through a stipulation in its rules and regulations.

On January 21, 2005, emboldened by the lack of scrutiny, the port board quietly voted to strike from its rules the need for public hearings with respect to its waterfront facilities, thus cloaking its operations in a veil of secrecy.

One year later, Carney purchased the Water Street Condominiums at West Sixth and Lakeside for $6.4 million. The property sat adjacent to what would become the port's lakefront development.

A few months after that, Carney was named chairman of the port authority board. With it came charges of conflict of interest in his new role. He promised not to vote on any measures involving the well-publicized Wolstein Flats East Bank project, which was seeking financing from the port.

With that, Carney's stewardship had begun, a vague and vexing era full of promises of prosperity and flashes of the future that mesmerized the port board and mostly engaged it in playing a sort of Monopoly, moving ports, rebuilding downtown, creating a waterfront of such majesty that it made them feel good about their mission.

Paradoxically, at a port board meeting on July 21, 2006, Carney denied he had a conflict but recused himself from voting on the Wolstein project because he owns property nearby. From his first days as chairman, Carney was sending mixed messages, playing cat and mouse with propriety.

For instance, in June 2006 Carney met with his development partner, Bob Stark, as well as downtown councilman Joe Cimperman and mayoral assistant Valerie McCall to talk of lakefront development. Cimperman's ward includes the lakefront development area. (Scene's e-mail and phone requests to Cimperman to discuss the meeting and the possible conflict went unreturned.)

Carney later brushed off his appearance at the meeting, noting it was just an introductory session. But the fact that he was chairman of the port board lent a certain imprimatur to the proceedings — and was part of a growing trend of unbridled conflicts of interest.

Carney, now supported by the county commissioners, hijacked the waterfront planning and grabbed it for the port authority, which had neither expertise nor staff to engage in a venture of that scope. The commissioners themselves had warned against such a move in 2004 in a letter to the county planning commission.

In the same meeting that Carney denied any conflict, the port authority hired the consulting firm URS to study relocation of the port. Patrick Smock, an aide representing the commissioners, said in a meeting that the study should not be limited to sites that had been considered previously. He said the port had an obligation to the taxpayers — a statement that had the sincerity of a sneeze.

As time passed, it became evident that the only taxpayer to whom the port felt obligated was John Carney.

The report supplied to the port by URS ultimately cost $1.3 million. Records show that officials at the county planning commission were alarmed at the limited scope of the URS report, which cost six times the amount that had been budgeted for a lakefront study. For all that URS billed, it delivered only sketchy and unattainable conclusions, which have since been discarded as costly and unrealistic.

A letter from the county planning commission on August 16, 2006, warned county administrator Dennis Madden, the chief advisor to the commissioners, that the port study should not be launched until an economic analysis was completed. Without doing so, the letter intimated, the building of a port much larger than needed would result. The letter urged the county to oversee the economic analysis, which would lead to more exact planning.

Several other points concerning the study were raised, one challenging the uncoordinated nature of the study and its narrow scope. The letter implied that the study would be flawed, incomplete, and without merit. In the end, it was all of that and more.

Accompanying the URS study was another by Martin and Associates, commissioned by the port authority, called "Port Competition Analysis." This was a vague paper attempting to predict the future of container shipping on the Great Lakes. While the analysis concluded with the unscholarly reasoning that getting such business was "no slam dunk," its findings were used to support the construction of the new billion-dollar superport. Thus, the economic reasoning for the construction of the East 55th Street port was based on this flimsy report, which Carney promoted and which was purposely abridged by port officials, according to a source familiar with the study.

Selling the Dream

With the studies under way in the summer of 2006, there remained one necessary element to launch the port relocation: Somebody had to sell it. John Carney was no fool. He was not going to stake his reputation on a plan that he knew was a roll of loaded dice.

The front man — and the ultimate fall guy — would be Adam Wasserman, whose economic development experience in Hull, England, was touted by Carney and then-board chairman Michael Wager. Wasserman was paid more than $300,000 to assume the port's CEO post in December 2006, making him among the highest salaried public officials in the region.

His first clue that something was amiss should have come on January 21, 2007, when The Plain Dealer, in a page one story, raised the question of Carney's conflict of interest in owning downtown real estate near the Flats East Bank project and voting as a member of the port authority board on matters that could increase his property values.

Slugging Carney's Kool-Aid, and consumed by his salary and the prestige of his post, an arrogant Wasserman set about his task by hiring seven new port employees at a cost of nearly $1 million to help execute Carney's vision. It was soon apparent he was ensnarled by the intrigue and the grandeur of hopeless plans.

If one thing would taint the whole port relocation and lakefront redevelopment, it was Carney's four properties in the Warehouse District, which stood to increase in value once the plan sprung to life. Also lurking in the background was the public interest of Carney's partner, Bob Stark, in the lakefront development. With Carney able to control the port's position on development, his partner's interest gave the perception of a conflict.

Carney is a bluff, brazen, and beady-eyed man who shrugs off accusations of conflict the way a wet dog shakes off water. He ignored media reports and even questions from his fellow board members, whom he embarrassed with his actions. One board member who asked not to be named confronted Carney about his role and was dismissed.

The board went so far as to invite David E. Freel, executive director of the Ohio Ethics Commission, to speak regarding conflicts of interest on public boards in April 2010.

Everyone in attendance knew it was aimed at Carney, who sat through the lecture unblinking and unfazed, even though Freel's PowerPoint was uncomfortable in its conclusions as to the definition of "conflict."

What the board failed to understand was that Carney drew scrutiny to the port authority on the part of the media, environmentalists, and civic activists. Every word he spoke was met with suspicion and cynicism. Over time, his presence eroded even the best efforts at lakefront development and the reputation of the board.

It did not help that the county had become the subject of one of the largest federal public corruption investigations in the nation. Carney failed to see that perception was as important as reality.

Wasserman had been in office for only a few months when he discovered that the U.S. Army Corps of Engineers, upon learning of the plans for East 55th Street, was unhappy with the legerdemain involved with the shifting of the port site from the mouth of the Cuyahoga.

E-mails between the Army Corps — the group charged with building the relocated port — and the port authority in spring 2007 show strong opposition to Carney's plan.

The 2004 Waterfront District Plan had called for the port to be relocated on a newly constructed dredge site north of the break wall at the mouth of the Cuyahoga. The state was ready to launch a transportation feasibility study for the site.

The city planning commission, Wasserman, and the port board told the public that the Waterfront District Plan could not work because studies showed that there were transportation problems on the West Side. Truth was, no such research had been completed. Port authority e-mails show that Wasserman unilaterally killed the study.

Even worse, despite spending more than $1 million on studies, no one at the port authority figured out how to pay for the relocation. When a board member occasionally raised the question, Carney would proclaim that there was plenty of government money available — and besides, they could sell the land on which the current port was situated for a considerable sum. But by law, the port's present site cannot be sold without approval by Cleveland voters. Estimated costs of relocation were as high as $500 million.

At one point in 2009, the Greater Cleveland Partnership floated a plan past city council that would have enabled the law to be bypassed and the land sold without public approval, giving the port authority control of the lakefront land. It failed.

In August of that year, Wasserman briefed Mayor Jackson with a chart that showed a new route to Cleveland from the Suez Canal. It was heady stuff for a man whose grasp rarely extended beyond St. Clair Avenue.

Wasserman's bobble-headed nods accompanied each Carney proclamation. Over the months, it would become a gesture of clueless frustration. He seemed to mirror what spectators at the board meetings were struggling with: Nothing made any sense.

A City Looks the Other Way

In the three-year odyssey of the east 55th Street relocation, there was no real tipping point — not even the sudden resignation of Wasserman in December 2009. The truth was the idea was doomed the moment Carney opened his mouth to announce it on the evening of December 10, 2007.

In early March 2008, the city planning commission, led by chairman Anthony Coyne, tried to force approval of the plan by rushing it past its members. It was clear that none of the commission members, including Coyne, ever read or reviewed the studies. The staff and director Robert Brown urged commission members to approve the plan, meaning Mayor Jackson wanted it done immediately. The commission and Coyne were clueless as to what the cost, environmental impact, or economic prospects of the East 55th Street project meant, but were willing to approve it anyway on March 7, 2008.

Earlier this summer, with the new convention center and medical mart about to materialize, Coyne was named chairman of a commission tasked with revisiting the historic Burnham Group Plan, the 100-year-old design concept for downtown's Mall. Coyne's inability to understand or challenge the errant port plan would seem to make him suspect in this new role. Who would put a football coach on a commission dealing with aesthetics unless it was to rubber-stamp some silliness?

For so stealthy and lengthy an exercise — the abolition of public hearings, the nefarious abandonment of the Waterfront District Plan, and the expensive and skewed studies — it had no chance to succeed because it could not work. Moreover, there was no money to make it work.

When Peter Raskin, the former head of National City Bank, took over as the port's volunteer interim CEO, replacing the embattled Wasserman, he studied the URS report and concluded: "The Port Authority's plan to move the port to East 55th Street was ill conceived and built upon layers of questionable assumptions. [It] was, unfortunately, never viable."

It is interesting that Raskin could clearly see the folly, as could others like Penny Jeffery of the League of Women Voters and Barbara Martin of the Dike 14 environmental group, both of which challenged the concept from the outset. Yet the nine-member board made up of lawyers, businessmen, financial analysts, and a labor leader were blind to reality.

With some exceptions, the board was largely mute and subordinate to Carney. Lawyers Richard Knopf, Anthony Moore, and Marc Krantz, businessmen Robert J. Smith, Steve Williams, and Paul Hoogenboom, and labor leader Robert Peto were all generally obliging, as were former members Michael Wager, Rose Bardwell, and Brian Hall.

Mixed in with this group was an element of self-interest and hubris that added to the vacuum of reason.

Many were taken in by Carney — most notably Mayor Jackson. (Jackson continues to support the waterfront development plan. Requests for public documents showing his role in the relocation plan were promised to Scene but were never produced by the city's public records administrator.) Without Jackson's thoughtless indulgence, the fiasco would not have flowered. The Greater Cleveland Partnership stubbornly supported the plan and in doing so demonstrated its lack of business acumen; the venerable Cleveland Foundation funded a portion of the effort, displaying its lack of common sense.

The county commissioners had their own problems, as the FBI rifled the drawers of county government in its massive corruption investigation.

It is hard not to conclude that Carney's plan was more about conflict than community. During a particularly sanctimonious moment, he recused himself from a vote accepting a grant from the Cleveland Foundation because his wife was on its board.

But when his financial and business interests really counted, he not only voted but urged the actual plans be amended in a way that would benefit his real estate holdings in the Warehouse District.

The Spin Cycle Repeats

As the relocation plan was being trashed, the port authority hired the New York consultant firm Ehrenkrantz, Eckstut & Kuhn in April 2009 to produce a new plan for lakefront development at a cost of $365,000. Later, Stan Eckstut, resplendent in a bow tie and red-rimmed glasses, brought the compelling plan to life with all the magnetism of a television evangelist, wowing the assembled public the way only an East Coast consultant can a Cleveland audience.

Eckstut urged the city planning commission to move quickly, striking while enthusiasm was at its peak. But he was having some difficulties with John Carney.

Eckstut's original plans did not show West Sixth Street extended to the waterfront. Doing so would be a costly addition to an already expensive proposal requiring a viaduct that would awkwardly divide a planned park.

Minutes from a port authority committee meeting on August 11, 2009, quote Carney saying that Eckstut was resisting the extension and in doing so was resisting the desire of the community. He went on to insist that the port find the money somehow to construct the extension.

Later renderings of the lakefront development plan depicted the West Sixth extension, which, as one appraiser noted, would increase the value of Carney's properties in the nearby Warehouse District by as much as 45 percent. A city planner concurred, noting that rents would rise substantially thanks to the waterfront connection.

When a reporter pointed out to port authority board chairman Steve Williams that Carney, on his own, had altered the plan and unilaterally committed millions of public money to an extension that would increase his personal wealth, he just shrugged and said, "I can't do anything about it."

Carney responded to a reporter as advertised. He was incredulous that his actions should be questioned, let alone challenged. His response reflected the culture that public officials have operated under here for decades now — a culture unraveling with daily revelations as to why self-interest has made this such an undesirable place.

"To suggest that the waterfront development plan, including the extension of West Sixth Street to the north, was conceived or approved to benefit me personally is preposterous," Carney told Scene. "If the waterfront is developed, the entire Warehouse District, all of downtown, and the entire region stands to benefit. This proposal has been supported, endorsed, and advocated by numerous agencies, including the Warehouse District.

"There is no conspiracy here. This is good urban planning. It's a step toward improving lakefront access and connectivity. It's a good project that will be good for Cleveland, and I'm glad I supported it."

With Wasserman gone in December 2009 — bought out for more than $300,000 with the proviso that neither party publicly discuss the matter or the use of public money that bought the silence — the port authority continued on as if nothing had happened, unrelenting in its promotion of the lakefront redevelopment even though no one could determine where the millions that it would cost might be found.

On June 23, with the relocation trashed, Wasserman a bad and expensive memory, and a new CEO, Will Friedman, in place to salvage the wreck, Carney addressed the board and blamed the failure of the relocation on the fact that they were not united in their effort and failed to see the vision.

No one challenged Carney as he artfully passed the blame to the somnambulant panel, having earlier announced his retirement from the board at the end of the year.

It was perfectly clear that the board had failed. But it was not the vision it had missed, but a collective lack of intellect, insight, and integrity to see Carney's plan for what it was: a sham.

In that same meeting on June 23, the board voted unanimously to spend $415,000 on yet another study of the port by Martin & Associates — the same group that tried to project the possibility of a burgeoning container business that would create a 200-acre relocated port. A sense of déjà-vu descended on the meeting. Cleveland was back where it started four years ago, with nothing to show for it but the usual suspects in the boardroom, pondering our future.

Send feedback to scene@clevescene.com.

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