Specter of 'death spiral' clouds Baltimore rebirth Hopeful residents remain stalwart

May 17, 1992|By Kim Clark | Kim Clark,Staff Writer

In her blighted neighborhood, marooned between the remade Inner Harbor and the booming suburb of Towson, Gwendolyn Williams used to believe it was just a matter of time before prosperity seeped into the boarded-up homes and empty lots of the Oliver area.

But now, when people talk of Baltimore's renaissance, the executive director of the Oliver Community Association wonders: What renaissance?

After nearly two years of cutbacks in the public schools' budget, business failures and a rising crime rate, the mother of two sometimes contemplates abandoning Oliver, a neighborhood that adjoins the Green Mount Cemetery.

"I'm a hard-core Baltimorean," said Ms. Williams, who grew up in Oliver.

"I wouldn't go to the county if you paid me. But I don't think I can sacrifice my children's educational development while I wait for the schools to get it together."

Ms. Williams isn't alone in wondering what the recession did to Baltimore's much-touted urban rebirth.

The economic downturn that started in 1990 has wiped out more jobs than the city won back during the boom years of the 1980s.

And now that the nation is focusing on the long-ignored plight of inner cities, the question is: Which path will Baltimore follow? That of a city that reversed a job exodus and remade itself with a new waterfront in the 1980s? Or that of a city that in two years has lost one-twelfth of its jobs and has seen the number of drug-related crimes skyrocket?

There are many signs that the city can rebound: the improving national economy, recent investments in local train and light rail systems, a new baseball stadium that has won national accolades, plans for a new downtown biotechnology research center, and a renewed popular concern for urban conditions in the wake of the Los Angeles riots.

Indeed, economist Michael A. Conte expects local companies to start hiring back soon, allowing Baltimore to regain many of the jobs lost during the recession.

"We will gain about two-thirds of those jobs back" comparatively quickly, said the director of the France Center for Business and Economic Studies at the University of Baltimore.

Still, many fear that Baltimore will follow cities such as Detroit into what urban economists call a "death spiral," in which the departure of some businesses and residents drives ever more people and businesses out of the city.

The loss of more than 40,000 city jobs in two years shows that "the much ballyhooed urban renaissance was overstated," said Jon Teaford, author of "The Rough Road To Renaissance: Urban Revitalization in America," which was published by Johns Hopkins University Press in 1990.

"Really," he said, "things like Inner Harbors are just cosmetic overlays of the real problems of Baltimore."

People and jobs have been leaving cities for nearby open spaces for centuries. The poet Juvenal complained of the traffic jams, noise and crime in Rome 1,800 years ago.

When a city's center gets too crowded, dirty or dangerous, those who can afford it leave for bigger and better living and working spaces. That creates a kind of urban doughnut: A ring of prosperity surrounding a hole of urban blight.

Baltimore started suffering a population exodus in the 1950s, and jobs followed out to the suburbs about 20 years later.

"We recognized this a long time ago," said Walter Sondheim, former head of Baltimore's downtown development agency. And that's why political and business leaders have been trying for decades to inject new life into the city with projects such as Charles Center and the Inner Harbor, he said.

Although people continued to move to suburban homes, Baltimore did manage to reverse the job exodus of the 1970s.

The rebound of the 1980s, for example, increased the number of jobs in the city from 434,200 at the end of the 1982 recession to 472,900 in 1989, according to a survey by the federal Bureau of Labor Statistics.

But then the recession hit. Some of the city's most venerable employers disappeared: American National Can, Hutzler's department stores, Homewood Hospital Center-South and even an old joke shop, the Recreation Novelty Co.

Other important employers slashed their staffs: USF&G Corp., Maryland National Bank and Signet Bank, for example.

What happened to Baltimore's jobs? The city had boomed along with the finance, service and construction sectors during the 1980s. And those sectors got hammered during the recent recession, said Charles McMillion, a Washington economist who has studied Baltimore's economy. The number of construction jobs, for example, dropped by 17 percent, or 3,000, in 1991 alone.

Most troubling: About a quarter of the job losses were in services -- the one sector that actually grew during the 1981-1982 recession, he said.

And as the news got worse, more people and jobs streamed out of the city, raising the specter of a "death spiral."

Skip Briggs, for example, closed his downtown clothing store -- g.Briggs -- in 1990 because of layoffs among the white-collar workers who bought his shirts and ties.

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