Like many cities whose economies once relied on manufacturing, sections of Youngstown, Ohio, have fallen into disarray. But the city had a plan to revive Youngstown’s East Side, where steel manufacturing once ruled: Joseph Co. International would build a $20 million dollar campus to produce Chill-Can, the world’s first self-cooling beverage can, create jobs, and revive the city. In a collaboration between Youngstown’s Business Journal and ProPublica, reporter Dan O’Brien writes about this ambitious, failed saga of product development and urban renewal, and the difficult bargain cities and corporations make. Youngstown bulldozed homes to build the campus. They gave Joseph a $1.5 million grant, which included funds officials took from sewer and water projects. “This is going to revolutionize the beverage industry,” Joseph’s CEO told one publication. “There will be no other facility like it in the world.” But as O’Brien reports, the facility remains unfinished, and no jobs have been created. The problem involves the city’s approach to redevelopment, which reaches far beyond Chill-Can.
While some firms failed to deliver, officials acknowledge, Youngstown’s program has ultimately leveraged private investments of more than $755 million and has helped create a total of 2,493 jobs out of a promised 2,861, according to city records. Still, The Business Journal and ProPublica found that more than half of those jobs were created by just five companies, including a Toys R Us distribution center and Exal Corp., which manufactures aluminum cans and bottles. Exal has since reduced its workforce, while the Toys R Us warehouse closed. (That facility is now occupied by HMS Manufacturing, which employs far fewer workers than the toyseller did at its peak).
Now, Youngstown’s approach to economic development is coming under greater scrutiny as the city’s former finance director and a prominent developer prepare to face trial on public corruption charges. At the heart of the case are allegations that officials steered taxpayer funds to favored projects in exchange for bribes. The defendants have pleaded not guilty. Separately, the state auditor has alleged that officials misappropriated money from the city’s water and wastewater funds and used it to spur a number of development deals, including Chill-Can. The city is now fighting a directive from that office to repay millions of dollars, arguing, in part, that such a move would plunge Youngstown into fiscal peril.
First Ward Councilman Julius Oliver, who represents a portion of the East Side neighborhood where Chill-Can is located, describes Youngstown’s incentives system as “broken” and has pushed for more accountability against companies that have not met their promised job goals.
“We have people within our city government that could be doing more, and quite frankly, they’re not,” Oliver said. “You can’t keep using the same excuse over and over again.”
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