Inside Homewood’s Economic Development: 1950s - 1990s pt. 5

The End of the Corporation

Image Credit: Graves Design Group

HBRDC thrived under Mayor Richard Caliguiri, a man who built his image based on empowering the city’s neighborhoods. Caliguri was a forward-looking mayor whom the political and business leadership in Pittsburgh thought could help the city make the transition from an old industrial steel town to a modern and diverse commercial environment. In 1988 Caliguiri suddenly died in office, however, and was succeeded by a senior woman by the name of Sophie Masloff. Masloff had previously been the president of Pittsburgh’s city council, as a compromise candidate who was acceptable to younger ambitious factions within the council. Almost no one had expected Masloff to play a leadership role while in office. Young political upstarts saw her as a placeholder until they could build a strong enough power base to replace her.

While many Pittsburghers saw Masloff’s unpolished speech and mannerisms as endearing characteristics of Pittsburgh’s traditional blue collar ethnic communities, others felt that she was too old-fashioned, unimaginative and out-of-touch to steer the local economy into the post-industrial era. Young professionals in Pittsburgh found Masloff’s gaffes comical. When Bruce Springsteen came to town, she gushed about how thrilled she was that the city would be hosting “Bruce Bedspring.” Not knowing much about fans, known as “Deadheads,” who followed a band called the Grateful Dead around she warned the group that when they came to Pittsburgh, they had better keep their “Deadenders” under control. Homespun wisdom saturated Masloff's plans to revitalize Pittsburgh's economy. She promised to post street signs on every corner so that "no one will ever get lost in the city of Pittsburgh again."

By the time the mayoral election rolled around, in 1989, Masloff was determined to build a political power base and make her mark on the city. In 1992 she sought to combat the image that she was out-of-touch by tapping HBRDC’s executive director, Mulugetta Birru, to run the city’s primary agency responsible for urban planning, the Urban Redevelopment Authority (URA). Deprived of its leadership, and stymied by several executive directors under whose stewardship foundations and funding agencies raised questions about the organization’s missing money, HBRDC eventually closed down all of its operations. This was in the mid-1990s.

Pittsburgh historian Roy Lubove, in his book 20th Century Pittsburgh: The Post-Steel Era, argues that the rise in violent crime, during the early-through-mid 1990s, and increased concentration of poverty, made it difficult for businesses to function in the neighborhood. Lubove also argues that the inexperience of new business owners, even under the best of circumstances, have high rates of failure and that these were the primary factors that accounted for the undoing of HBRDC.

The internal weaknesses within the organization, along with steep challenges posed by the concentration of poverty, rising crime rates, and new small business owners with little experience, all contributed to the decline of Homewood’s business district following the brief success experienced during the hay days of the CDC.

There is another factor. Many developers, contractors, business owners and teachers pointed out that while it is possible to use grants and other subsidies to build or rehabilitate housing and refurbish commercial space the residents of a neighborhood must have disposable income to sustain commerce. Raising the minimum wage alone, they pointed out, will not provide this income because to the extent that they are capable of doing so, businesses will find ways to work around this, either through increased automation or by demanding higher productivity from a smaller workforce.